/raid1/www/Hosts/bankrupt/TCR_Public/090324.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, March 24, 2009, Vol. 13, No. 82
Headlines
1031 TAX GROUP: Edward Okun Convicted of Wire Fraud
ADVANCE PUBLICATIONS: Ann Arbor to Cease Publication in July
AMERICAN INT'L: To Rebrand Property-Casualty Operations as AIU
AMERICAN INT'L: 15 of Top 20 Employees Will Return Bonuses
AMERISTAR CASINOS: S&P Gives Stable Outlook; Affirms 'BB' Rating
ARLINGTON RIDGE: Court Confirms Amended Joint Chapter 11 Plan
ATHEROGENICS INC: Auction Today, Disclosure Hearing Next Week
AUTOBACS STRAUSS: Court OKs GOB Sales for 12 Stores
AVENTINE RENEWABLE: S&P Eyes Firm's Bankruptcy in April
BANK OF AMERICA: CEO Kenneth Lewis Against Bonus Tax
BEARINGPOINT INC: To Sell Business Units to Deloitte, PwC
BERNARD L. MADOFF: Civil Suit Filed Against Auditor Freihling
BI-LO LLC: Case Summary & 20 Largest Unsecured Creditors
CALTEX HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
CATALYST ENERGY: Clients Can File Claim With Trustee Until May 20
CENVEO INC: S&P Downgrades Corporate Credit Rating to 'B+'
CITIGROUP INC: CEO Vikram Pandit Against Bonus Tax
CITIGROUP INC: Names Gary Crittenden as Citi Holdings' Chairman
DENNIS SPIELBAUER: Section 341(a) Meeting Slated for April 1
CHEMTURA CORP: Expects Objections to Roll-Up Facility
CHESAPEAKE CORP: Court Approves Sale to Investor Group
CONSTAR INTERNATIONAL: Confirmation Hearing Reset to April 28
DORAL FINANCIAL: Fitch Affirms 'CCC' Issuer Default Rating
DORAL FINANCIAL: S&P Cuts Pref. Shares' Rating on Dividends Halt
DREIER LLP: Marc Dreier's Lawyer Expects Client's Guilty Plea
DRUG FAIR: Endorses Epiq Bankruptcy as Notice and Claims Agent
DRUG FAIR: Section 341(a) Meeting Slated for May 8 in Delaware
FAIRCHILD CORP: Taps Epiq Bankruptcy as Claims and Noticing Agent
FORD MOTOR CREDIT: To Raise Cash Tender Offer for Term Loan Debt
FORWARD FOODS: Wins Final Approval of $4-Mil. DIP Loan from Owner
FRONTIER AIRLINES: Court Approves $4OMM DIP Facility Refinancing
FRONTIER AIRLINES: Seeks to Enforce Restructuring Pact With Union
FRONTIER AIRLINES: Seeks to Transfer Aircraft to Q Aviation
FRONTIER AIRLINES: Wins Court OK to Ink Operating Lease With CIT
GENERAL GROWTH: Four Executives to Resign from Posts
GENERAL GROWTH: Lender to Seize Oakwood Shopping Center
GENERAL GROWTH: Moody's Corrects Ratings; Cuts Ratings to 'C'
GHOST TOWN: Creditors Meeting Slated for April 15 in N. Carolina
GHOST TOWN: U.S. Bankruptcy Court Approves David Gray as Counsel
GOODY'S LLC: Gets Court Nod to Sell Spring Merchandise
GOTTSCHALKS INC: May Receive 3 'Going Concern' Bids
GREENBRIER HOTEL: Can Access $4MM DIP Financing from CSX Corp.
GREEKTOWN CASINO: Gets Court OK to Incur Another $46MM DIP Loan
GREEKTOWN CASINO: Seeks Authority to Employ Randy Fine as CEO
GREEKTOWN CASINO: To Assume Detroit Development Agreement
GREYSTONE STAFFING: Files for Chapter 11 Bankruptcy Protection
GROUP 1 AUTOMOTIVE: Moody's Cuts Corporate Family Rating to 'B1'
HARRAH'S ENTERTAINMENT: Extends Debt Tender Offer Until Wednesday
HAWAIIAN TELCOM: Court Sets April 27 General Claims Bar Date
HAWAIIAN TELCOM: Seeks Court OK to Pay $6MM in Bonuses to Workers
HANESBRANDS INC: Moody's Affirms 'Ba3' Corporate Famaily Rating
INDALEX HOLDINGS: Files for Chapter 11 Bankruptcy Protection
INLET RETAIL: Files for Chapter 11 Bankruptcy Protection
INLET RETAIL: Case Summary & 20 Largest Unsecured Creditors
INN OF THE MOUNTAIN: Moody's Downgrades Corp. Rating to 'Ca'
INTERFACE INC: Moody's Gives Negative Outlook; Affirms 'B1' Rating
INTERMET CORP: Creditors Committee Opposes Bonuses for Managers
JEFFERSON COUNTY: S&P Keeps 'C' Rating on Sewer Revenue Bonds
JOURNAL REGISTER: Can Access Cash Collateral on Final Basis
JOURNAL REGISTER: Disclosure Statement Hearing Set for March 31
KRONOS INT'L: S&P Junks Rating on Potential Covenant Violations
LAMAR MEDIA: S&P Cuts Subordinated Debt Issue-Level Rating to 'B-'
LEHMAN BROTHERS: Reaches Deal for Return of Gift Merchandise
LEXINGTON PRECISION: Mediator to Negotiate Enterprise Value
LOUISIANA LOCAL: Moody's Pares Rating on Revenue Bonds to 'Ba1'
LYONDELL CHEMICAL: NJ Appeals Court to Decide on $200M Bond Snafu
LYONDELL CHEMICAL: U.S. Trustee Appoints Two More Panel Members
LYONDELL CHEMICAL: ISDA to Publish Protocol for Lyondellbasell
LYONDELL CHEMICAL: Wants to Prosecute Pre-Bankruptcy Claims
LYONDELL CHEMICAL: Wants California Counties' Suit Stayed
MAGNA ENTERTAINMENT: Court Declines to Restrict Bond Trading
MANASSEH BLDG: May Use PNC/FFBH's Cash Collateral Until April 10
MASONITE INT'L: S&P Cuts Sr. Debt Rating to 'D' on Ch. 11 Filing
MEADOWCRAFT INC: Involuntary Chapter 11 Case Summary
MGM MIRAGE: Dubai World Seeks to Limit Exposure to City Center
MILLENNIUM TRANSIT: Can Obtain 4th DIP Loan from James Ludvik
NEW CENTURY ENERGY: Files 1st Amended Ch. 11 Reorganization Plan
OFFICEMAX INC: S&P Downgrades Corporate Credit Rating to 'B'
PAUL REINHART: Can Use Wells Fargo's Cash Collateral Until July 4
PERRY ELLIS: S&P Puts 'B+' Corporate Rating on Negative Watch
PETTERS GROUP: To Give Up Polaroid Domain Names to Genii Capital
PILGRIM'S PRIDE: Amends DIP Pact to Reflect Cost of Idling Plants
PILGRIM'S PRIDE: Asks Court to Fix June 1 as Claims Bar Date
PILGRIM'S PRIDE: Creditors Panel Says CoBank's Liens Invalid
PILGRIM'S PRIDE: Shareholders Seek Representation in Case
PILGRIM'S PRIDE: To Sell Plant City Center for $2.1 Million
PITTSBURGH CORNING: Sets May 29 Plan Hearing for 9-Year Case
PRATT-READ CORP: Files Bare-bones Chapter 11 Petition
QUVIS INC: Involuntary Chapter 11 Case Summary
RIDGE OF THE FOUNTAIN: Case Summary & 20 Largest Unsec. Creditors
RITZ CAMERA: Will Collect $40MM From GOB Sales at 129 Stores
SEMGROUP LP: Seeks June 17 Extension of Exclusive Periods
SEMGROUP LP: Panel Has Until April 9 to Challenge Lenders' Liens
SEMGROUP LP: Producers Seek to Retain Andrews Kurth as Counsel
SEMGROUP LP: Producers Seek to Retain Lain Faulkner as Accountant
SPORTSMAN'S WAREHOUSE: Files for Chapter 11 Bankruptcy Protection
STATION CASINOS: S&P Cuts Sr. Notes Ratings to D on Missed Payment
SYNTAX-BRILLIAN: To Begin Soliciting Support on Chapter 11 Plan
TAPESTRY PHARMACEUTICALS: Files for Chapter 11 Bankruptcy
TECK COMINCO: S&P Downgrades Corporate Credit Rating to 'BB+'
TRANSMERIDIAN EXPLORATION: Case Summary & 20 Unsecured Creditors
TOUSA INC: Revises Operational Plan; To Sell Some Operations
TOWN SPORTS: Moody's Affirms Corporate Family Rating to 'B1'
TROPICANA ENTERTAINMENT: Judge Directs Talks on Name Ownership
TRUE TEMPER: Moody's Downgrades Default Rating to 'Ca/LD'
US ACQUISITIONS: Wants Cohen Seglias as Bankruptcy Counsel
VALHI INC: Potential Pact Violation Cues S&P's Junk Rating
WATERFORD LOAN: Case Summary & 20 Largest Unsecured Creditors
WELLCARE HEALTH: S&P Affirms 'B-' Counterparty Credit Rating
WOLF BLOCK: To Dissolve Due to Economic Crisis & Credit Crunch
* Moelis Taps Steve Panagos as Vice Chairman & Managing Director
* Nat'l Loan Launches US Court Audit for Bankruptcy Judges
* U.S. Treasury to Help Investors Buy $500BB of Toxic Assets
* Large Companies With Insolvent Balance Sheets
*********
1031 TAX GROUP: Edward Okun Convicted of Wire Fraud
---------------------------------------------------
Edward Okun, the principal behind 1031 Tax Group LLC, was
convicted of conspiracy, wire fraud, money laundering, smuggling
and perjury following a three-week trial, Bloomberg's Bill
Rochelle reported, citing a statement by Acting Assistant U.S.
Attorney General Rita M. Glavin.
According to the report, the Company was a "qualified
intermediary" helping individuals avoid capital gains taxes by
holding proceeds from the sale of real estate until a replacement
property was purchased. The Company ended up in bankruptcy after
Okun caused 1031 improperly to loan $130 million to other
companies he controlled, according to customers' allegations.
While, Mr. Okun had already turned over much of his property to
creditors, a federal grand jury in Richmond, Virginia, indicted
Mr. Okun on charges of mail fraud, bulk cash smuggling and making
false statements.
Headquartered in Richmond, Virginia, The 1031 Tax Group LLC --
http://www.ixg1031.com/-- is a privately held consolidated group
of qualified intermediaries created to serve real property
exchanges under Section 1031 of the Internal Revenue Code. The
company and 15 of its affiliates filed for Chapter 11 protection
on May 14, 2007 (Bankr. S.D.N.Y. Case No. 07-11447 through
07-11462). Paul Traub, Esq., Norman N. Kinel, Esq., and Steven E.
Fox, Esq., at Dreier LLP, represent the Debtors in their
restructuring efforts. Thomas J. Weber, Esq., Melanie L.
Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig,
LLP, represent the Official Committee of Unsecured Creditors. As
of Sept. 30, 2007, the Debtors had total assets of $164,231,012
and total liabilities of $168,126,294, resulting in a total
stockholders' deficit of $3,895,282.
ADVANCE PUBLICATIONS: Ann Arbor to Cease Publication in July
------------------------------------------------------------
Russell Adams at The Wall Street Journal reports that Advance
Publications Inc. said that its Ann Arbor News will stop
publication in July and will be replaced by community-oriented Web
site AnnArbor.com LLC.
WSJ quoted Advance Publications' Internet arm chairperson Steve
Newhouse as saying, "We're certainly facing unprecedented economic
challenges, especially in Michigan. What we announced today is
our best shot."
AnnArbor.com, says WSJ, will combine staff reporting with
contributions from community members. According to WSJ, a print
edition of AnnArbor.com will be published Thursday and Sunday.
WSJ notes that the changes at Ann Arbor News will lead to job
losses.
Advance Publications, according to WSJ, will also limit printing
of three Eastern Michigan dailies to three days a week and
consolidate functions at its four remaining papers. WSJ relates
that Advance Publications said on Monday that it would furlough
workers at most of its newspapers outside Michigan for 10 days and
freeze pensions at most of its papers.
WSJ states that Advance Publications has cut costs dramatically at
some of its papers as the ads dropped, squeezing once-healthy
profits. The publisher threatened last year to sell or close the
Star-Ledger unless it won major labor concessions, but the paper
was saved after cutting 40% of its newsroom through buyouts, WSJ
notes.
Advance Publications, Inc., is an American media company owned by
the descendants of S.I. Newhouse. It is named after the Staten
Island Advance, the first newspaper owned by the Newhouse family.
AMERICAN INT'L: To Rebrand Property-Casualty Operations as AIU
--------------------------------------------------------------
Lilla Zuill at Reuters reports that American International Group
has taken down the AIG sign at the entrance of its property-
casualty offices in Manhattan.
According to Reuters, AIG will rename that operation as AIU
Holdings Ltd. Citing an AIG spokesperson, Reuters says that the
move is aimed at distinguishing "these well-capitalized businesses
from AIG." WSJ notes that a rebranding to distance the Company's
sprawling operations across 130 countries away from the AIG name
would continue. According to the report, AIG CEO Edward Liddy
told a U.S. House of Representatives subcommittee, "I think the
AIG name is so thoroughly wounded and disgraced that we're
probably going to have to change it."
Bailout Gives AIG Advantage, Competitors Say
Liam Pleven and Sudeep Reddy at The Wall Street Journal reports
that AIG's competitors are claiming that the financial aid that
the Company gets from the government is giving it advantage over
them in the commercial-insurance market. According to WSJ, AIG's
rivals complained to Federal Reserve Chairperson Ben Bernanke and
asked him to stop AIG from using the government rescue to win an
advantage, particularly by cutting prices. People familiar with
the matter said that Mr. Bernanke said he would look into the
complaints, WSJ states.
WSJ notes that some of AIG's competitors figured that they would
be able to take away AIG clients due to its struggles. WSJ
relates that three days after AIG's bailout, ACE Ltd. said that it
was increasing the size of big-ticket policies it would sell, but
AIG used its federal backing to try to reassure clients.
AIG posted last year a presentation on its Web site that compared
the Company with rivals that include ACE and Chubb Corp., based on
key measures of insurers' capital, WSJ states. According to the
report, AIG boasted in the presentation that the government deal
"strengthens [AIG's] capital position" and "lowers [its] cost of
capital."
WSJ states that ACE's chief executive officer said in October 2008
that "one large player who is under stress," which he didn't name,
is "an outlier right now in the pricing environment today. They
are aggressively cutting pricing in an irresponsible way to
maintain business. And it's worrisome."
WSJ quoted Chubb vice chairperson John Degnan as saying in
January, "We are stunned by the degree to which [AIG] will reduce
prices . . . to hold onto the business." Chubb wouldn't match any
prices it considered "irresponsible," the report states, citing
Mr. Degnan.
WSJ, citing an AIG commercial-insurance executive, relates that
competitors are also pricing aggressively to win AIG's clients and
AIG has lost competitions where it wasn't low bidder.
According to WSJ, the Pennsylvania Insurance Department is looking
into competitive issues. WSJ reports that Joel Ario, the state's
insurance commissioner, said that in the cases he has examined,
AIG has had a "reasonable basis" for its pricing.
Goldman Sachs Says Losses Minimal if AIG Had Failed
Peter Edmonston at The New York Times reports that Goldman Sachs
Group Inc. has insisted that its direct losses would have been
minimal if AIG had failed. The NY Times relates that Goldman
Sachs was hoping to reduce speculation over its role in the
bailout of AIG.
Goldman Sachs, according to The NY Times, said that it started to
have "collateral disputes" with AIG in July 2007 as the companies
disagreed on the value of the mortgage-backed securities that were
the basis of multibillion-dollar contracts between them.
The government has set aside more than $180 billion to support AIG
since September 2008, The NY Times says, citing the Government
Accountability Office. According to the report, a significant
part of that money has flowed through AIG to various trading
counterparties, including Goldman Sachs, which accepted $12.9
billion.
Goldman has said that its exposure to AIG's troubles was
immaterial due to "outside hedges" that would have protected it,
The NY Times states. Serena Ng at WSJ relates that before the
government rescue, Goldman Sachs had a $10 billion exposure to AIG
under financial contracts that AIG had sold Goldman Sachs,
insuring the bank on $20 billion of mostly mortgage-related
assets. According to WSJ, Goldman Sachs Chief Financial Officer
David Viniar said that the company was holding $7.5 billion in
collateral from AIG against those positions at that time, and had
protected its remaining $2.5 billion exposure using credit-default
swaps and other instruments.
WSJ relates that Goldman Sachs received $8.1 billion from AIG and
the U.S. government between September and year-end 2008 on swaps
tied to mortgage assets.
Citing Mr. Viniar, Goldman Sachs still has $6 billion in trading
bets outstanding with AIG but had adequately protected itself from
problems at the insurer before it almost collapsed last year. Mr.
Viniar, according to WSJ, Goldman Sachs pried billions in cash
collateral from AIG and purchased large amounts of credit
derivatives that would pay out if AIG defaulted on its obligations
or filed for bankruptcy.
WSJ notes reports that critics have questioned why Goldman Sachs
accepted those payments when its AIG exposure was hedged. Goldman
Sachs's transactions with AIG were "commercial contracts," WSJ
relates, citing Mr. Viniar. According to the report, Mr. Viniar
said that Goldman Sachs sought to protect its shareholders.
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 consolidated
assets and $950.9 billion in 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: 15 of Top 20 Employees Will Return Bonuses
----------------------------------------------------------
Liz Rappaport at The Wall Street Journal reports that New York
Attorney General Andrew Cuomo said that 15 of the top 20 American
International Group Inc. employees who received $165 million in
retention bonuses from the Financial Products unit have agreed to
return $50 million of the money.
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.
WSJ relates that AIG's financial products unit had asked employees
to let it know by 5 p.m. on Monday if they plan to return all or
part of bonuses.
Citing Mr. Cuomo, WSJ notes that 47% or about $80 million of the
bonuses was given to Americans. Mr. Cuomo, according to WSJ, is
aiming to recover that amount for AIG. Some non-Americans, beyond
the reach of his jurisdiction, have returned their bonuses, WSJ
states, citing Mr. Cuomo.
The TCR reported on March 20, 2009, that Mr. Cuomo said that he
received from AIG the list of workers who received retention
bonuses.
According to WSJ, Mr. Cuomo said that he sees no public interest
in disclosing the names of people who return their bonuses.
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.
AMERISTAR CASINOS: S&P Gives Stable Outlook; Affirms 'BB' Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its rating
outlook on Las Vegas-based Ameristar Casinos Inc. to stable from
negative. S&P affirmed the ratings on the company, including the
'BB' corporate credit rating.
"The outlook revision reflects the increased cushion under the
senior leverage covenant as a result of an amendment to the
company's senior credit facilities executed on March 13, 2009,"
explained Standard & Poor's credit analyst Melissa Long. The
senior leverage covenant was amended to 5.75x and remains at that
level through March 31, 2010, before stepping down to 5.25x by the
end of 2010. S&P's negative outlook spoke to its concern about
the limited covenant cushion under the senior leverage covenant
and the company's ability to meet scheduled step-downs in the
covenant in 2009. "This amendment, coupled with our expectation
of relatively stable EBITDA generation in 2009, eases those
concerns and supports the stable outlook," said Ms. Long.
ARLINGTON RIDGE: Court Confirms Amended Joint Chapter 11 Plan
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
confirmed on March 12 Arlington Ridge LLC and its debtor-
affiliates' Amended Joint Chapter 11 Plan of Reorganization dated
as of January 14, 2009, and all its modifications.
As reported by the Troubled Company Reporter on January 27, 2009,
the Plan contemplates the wind-down of the Debtors' business
operations and the transfer of most of the Debtors' real estate
and any related permits and entitlements, to Wachovia Bank, the
principal secured creditors of the Debtors.
The Plan, as amended, provides for the payment in full of the
general unsecured claims of all non-insider creditors. It leaves
unimpaired the claims of the Arlington Ridge Community Development
District (CDD), a public entity created pursuant to the Florida
Statutes, and the claims of the Lake County Tax Collector for ad
valorem real property taxes.
Wachovia will take title to the Debtors' real property free and
clear of all general unsecured claims, junior lien claims, and any
interests of the Debtors or their equity holders. Under the Plan,
the Debtors will retain title only to the parcels of real estate
that are pre-sold to purchasers, and the Debtors will use existing
loan proceeds to assure the completion of those Units and the
delivery to the purchasers of title to those Units. The Wachovia
DIP Loan Claims will be paid in full.
To permit the Plan to be confirmed, the Prepetition Claims of
Insiders and Affiliates will be cancelled, and the Insider DIP
Lender will waive its right to any distribution under the Plan.
On the Plan's Effective Date, M. Steven Sembler and Robert B.
Young will deposit monies into an account to fund distributions in
full to non-insider unsecured creditors. Except as otherwise
expressly provided in the Plan, the Reorganized Debtors will be
revested with all of their assets free and clear of any and all
liens, debts, obligations, claims, cure claims, liabilities,
interests, and all other interests.
To permit the Plan to be confirmed, the Prepetition Claims of
Insiders and Affiliates will be cancelled, and the Insider DIP
Lender will waive its right to any distribution under the Plan.
A full-text copy of the disclosure statement explaining the
Amended Plan is available for free at:
http://bankrupt.com/misc/ArlingtonRidgeAmendedDS.pdf
A full-text copy of the Court's Plan confirmation order, signed
March 12, 2009, is available at:
http://bankrupt.com/misc/ArlingtonRidge.ConfirmationOrder.pdf
About Arlington Ridge
Saint Petersburg, Florida-based Arlington Ridge LLC operates a
retirement community. Arlington Ridge and its affiliates filed
for Chapter 11 protection on Oct. 8, 2008 (Bankr. M. D. Fla., Case
No. 08-15678). Amy Denton Harris, Esq., Harley E. Riedel, Esq.,
and Susan H. Sharp, Esq., at Stichter, Riedel, Blain & Prosser,
represent the Debtors as counsel. In its schedules, Arlington
listed total assets of $84,045 and total debts of $17,539,779.
ATHEROGENICS INC: Auction Today, Disclosure Hearing Next Week
-------------------------------------------------------------
According to Bloomberg's Bill Rochelle, AtheroGenics Inc. has
signed a contract to sell its non-cash assets for $2 million,
subject to higher and better offers. Competing bids were due
yesterday, March 23. The Debtor is to conduct an auction today if
rival offers are received. The hearing to consider approval of
the sale will take place on the afternoon of March 24.
Bill Rochelle also said that AtheroGenics is scheduled to seek
approval of the disclosure statement to its proposed liquidating
Chapter 11 plan on March 31. The disclosure statement, according
to the report, doesn't tell creditors how much they can expect to
receive.
As reported by the Troubled Company Reporter on March 16, 2009,
Atherogenics presented proposed sale procedures for its primary
non-cash assets AGI-10167, an anti-oxicant and anti-inflammatory
drug candidate. The Debtor informed the U.S. Bankruptcy Court for
the Northern District of Georgia about its negotiations with King
& Spalding LLP, designated stalking-horse bidder, regarding the
sale of its assets. The Debtor said at that time that it was
nearing an agreement that will provide for these terms:
-- Purchase Price: $2,000,000, paid in immediately available
funds at closing;
-- Purchased Assets: substantially all of the Debtor's assets
other than cash;
-- Assumed Liabilities: include "cure" payments under assumed
contracts and certain pro-rated costs, expenses and
liabilities;
-- Deposit: $200,000, tendered on the execution date of the
Agreement; and
-- Post-Closing Indemnification: none.
Competing bidders must submit an initial overbid plus a $200,000
deposit before the bid deadline to (i) AtheroGenics, Inc., 8995
Westside Parkway, Alpharetta, Georgia 30004, Attention: Joseph M.
Gaynor, Jr.; (ii) King & Spalding LLP, 1180 Peachtree Street,
Atlanta, Georgia 30309, Attention: Paul Ferdinands, counsel for
the Debtor; (iii) Office of the United States Trustee, 75 Spring
Street, S.W., Atlanta, Georgia 30303; and (iv) Akin Gump Strauss
Hauer & Feld, LLP, One Bryant Park, New York, New York 10036,
Attention: David A. Botter, counsel for the Official Committee of
Unsecured Creditors.
King & Spalding will receive $200,000 break-up fee in the event
the Debtor consummates the sale to another party as bid
protections.
The sale will enable it to preserve and maximize the value of the
assets for the benefit of its creditors, the Debtor says.
A full-text copy of the Debtor's asset purchase agreement is
available for free at http://ResearchArchives.com/t/s?3a48
Merriman Curhan & Ford Co. was retained by the Debtor to assist in
marketing its assets.
About Atherogenics
Headquartered in Alpharetta, Georgia, AtheroGenics, Inc. --
http://www.atherogenics.com/-- is a research-based pharmaceutical
company focused on the discovery, development and
commercialization of drugs for the treatment of chronic
inflammatory diseases, including diabetes and coronary heart
disease. It has one late stage clinical drug development program.
On September 15, 2008, five creditors holding claims totaling
$20,413,000 pursuant to the company's 4.5% Convertible Notes Due
2008 filed an involuntary Chapter 7 petition against the Debtor
(Bankr. N.D. Georgia Case No. 08-78200). The petitioning
noteholders were:
-- AQR Absolute Return Master Account, L.P.;
-- CNH CA Master Account, L.P.;
-- Tamalpais Global Partner Master Fund, LTD;
-- Tang Capital Partners, LP; and
-- Zazove High Yield Convertible Securities Fund, L.P.
On October 6, the Debtor filed its consent to entry for order for
relief and motion to convert its Chapter 7 case to one under
Chapter 11 (Bankr. N.D. Ga. Case No. 08-78200). James A. Pardo,
Jr., Esq., and Michelle Carter, Esq., at King & Spalding, LLP,
represent the Debtor as counsel. Akin Gump, Esq., at Strauss
Hauer & Feld LLP, and Frank W. DeBorde, Esq., at Morris, Manning &
Martin, LLP, represent the Official Committee of Unsecured
Creditors as counsel. The Debtor selected Administar Services
Group LLC as Claims Agent.
As reported in the Troubled Company Reporter on Feb. 21, 2009, at
December 31, 2008, the Debtor had total assets of $51,659,219,
total liabilities of $307,171,466, and a stockholders' deficit of
$255,512,247.
AUTOBACS STRAUSS: Court OKs GOB Sales for 12 Stores
---------------------------------------------------
Autobacs Strauss Inc., doing business as Strauss Discount Auto,
was authorized by the U.S. Bankruptcy Court for the District of
Delaware to conduct going-out-of-business sales at 12 stores,
Bloomberg News reported.
The Debtor, Bloomberg's Bill Rochelle notes, will conduct the GOB
sales by itself, without help from a liquidator.
Headquartered in South River, New Jersey, Autobacs Strauss Inc. --
http://www.straussauto.com/-- sells after-market automotive parts
and accessories, and operate automotive service centers located in
New York, New Jersey, Philadelphia, Bethlehem and Pennsylvania.
The Debtor operate 86 retail store locations and has about 1,450
employees. The Debtor filed for Chapter 11 protection on Feb. 4,
2009, (Bankr. D. Del. Case No.: 09-10358). Edward J. Kosmowski,
Esq. at Young Conaway Stargatt & Taylor, LLP represents the Debtor
in its restructuring efforts. As of Jan. 3, 2009, the Debtor had
total assets of $75,000,000 and total debts of $72,000,000.
AVENTINE RENEWABLE: S&P Eyes Firm's Bankruptcy in April
-------------------------------------------------------
Bill Rochelle reports that Standard & Poor's said that it expects
Aventine Renewable Energy Holdings Inc. would default or file
bankruptcy by April, unless the Company can complete the
outstanding distressed exchange offer.
According to Bill Rochelle, Aventine Renewable failed to pay
contractors $24 million on two uncompleted plants. Bill Rochelle
states that the subsequent liens in favor of the contractors
breached covenants in the $300 million in senior notes of 2017.
Aventine Renewable, Bill Rochelle relates, owes $15 million in
interest on the notes on April 1.
Citing S&P, Bill Rochelle reports that the "proposed exchange does
not significantly improve the capital structure." Bill Rochelle
says that the offer would exchange the $300 million in 10%
unsecured term notes for the same amount of notes paying interest
with more notes until April 2010.
Headquartered in Pekin, Illinois, Aventine Renewable Energy
Holdings Inc. (NYSE:AVR) -- http://www.aventinerei.com--
produces and markets ethanol in the United States, based on both
the number of gallons produced and the number of gallons sold.
Through its own production facilities, marketing alliances with
other ethanol producers and its purchase or resale operations, the
company marketed and distributed 695.8 million gallons of ethanol
during the year ended Dec. 31, 2006. For 2006, Aventine sold
approximately 12.9% of the total volume of ethanol sold in the
United States. The company markets and distributes ethanol to
energy companies in the United States, including Royal Dutch Shell
and its affiliates, Marathon Petroleum, BP, ConocoPhillips, Valero
Marketing and Supply Company, Exxon/Mobil, and Texaco/Chevron. In
addition to producing ethanol, the company's facilities also
produce several co-products, such as distillers' grain, corn
gluten feed, corn germ and brewers' yeast.
As reported by the Troubled Company Reporter on March 18, 2009,
Moody's Investors Service downgraded Aventine Renewable Energy
Holdings, Inc.'s Corporate Family Rating to Ca from Caa2 and the
rating on its senior unsecured notes to C from Caa3.
According to the TCR on March 3, 2009, Standard & Poor's had put a
'CCC+' corporate credit rating on Aventine Renewable Energy
Holdings Inc., and placed a 'CCC' senior unsecured rating on the
company with a projection that that the debtholders would recover
as much as 30 percent following payment default.
BANK OF AMERICA: CEO Kenneth Lewis Against Bonus Tax
----------------------------------------------------
Joe Bel Bruno and Matthias Rieker at The Wall Street Journal
report that Citigroup Inc. CEO Vikram Pandit and Bank of America
Corp.'s Kenneth Lewis have criticized a legislation that would
heavily tax bonuses.
Messrs. Pandit and Lewis believe that the tax would make it hard
to retain workers, WSJ relates.
According to WSJ, the House passed legislation on Thursday to
impose a 90% surtax on bonuses granted to workers with household
income of more than $250,000 at firms that got at least
$5 billion from the government's financial rescue program. The
report says that the Senate is considering a similar plan.
Citigroup, JPMorgan, Bank of America, Goldman Sachs Group Inc.,
Morgan Stanley, PNC Financial Services Group Inc., and U.S.
Bancorp have each received more than $5 billion from the
government's Troubled Asset Relief Plan, the report states.
The proposals would affect countless workers who would find it
difficult to repay their bonuses, WSJ relates, citing Mr. Pandit.
The report quoted Mr. Pandit as saying, "The work we have all done
to try to stabilize the financial system and to get this economy
moving again would be significantly set back if we lose our
talented people because Congress imposes a special tax on
financial services employees."
According to WSJ, Mr. Lewis said that many employees, he said,
"had nothing to do with creating today's problems," and "I am
concerned about our ability to retain some of out most valuable"
employees. WSJ relates that Bank of America is eliminating 30,000
to 35,000 workers.
"I also believe that these proposals have the potential to damage
the ability of the government to engineer a financial recovery.
Many of the government's plans depend on the private sector being
willing to contract with the government. If investors or
companies in the private sector believe that the rules can change
quickly and indiscriminately, they will be unwilling to
participate," WSJ quoted Mr. Lewis as saying.
About Bank of America
Bank of America is one of the world's largest financial
institutions, serving individual consumers, small and middle
market businesses and large corporations with a full range of
banking, investing, asset management and other financial and risk-
management products and services. The company provides unmatched
convenience in the United States, serving more than
59 million consumer and small business relationships with more
than 6,100 retail banking offices, nearly 18,700 ATMs and award-
winning online banking with nearly 29 million active users.
Following the acquisition of Merrill Lynch on January 1, 2009,
Bank of America is among the world's leading wealth management
companies and is a global leader in corporate and investment
banking and trading across a broad range of asset classes serving
corporations, governments, institutions and individuals around the
world. Bank of America offers industry-leading support to more
than 4 million small business owners through a suite of
innovative, easy-to-use online products and services. The company
serves clients in more than 40 countries. Bank of America
Corporation stock is a component of the Dow Jones Industrial
Average and is listed on the New York Stock Exchange.
The bank needed the government's financial help in completing its
acquisition of Merrill Lynch.
Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth
management, capital markets and advisory companies with offices in
40 countries and territories. As an investment bank, it is a
leading global trader and underwriter of securities and
derivatives across a broad range of asset classes and serves as a
strategic advisor to corporations, governments, institutions and
individuals worldwide. Merrill Lynch owns approximately half of
BlackRock, one of the world's largest publicly traded investment
management companies with more than $1 trillion in assets under
management. Merrill Lynch's operations are organized into two
business segments: Global Markets and Investment Banking (GMI) and
Global Wealth Management (GWM).
BEARINGPOINT INC: To Sell Business Units to Deloitte, PwC
---------------------------------------------------------
BearingPoint, Inc., unveiled an update to its reorganization plan
involving the planned sale of substantially all of its businesses
to a number of parties.
BearingPoint and Deloitte have entered into an asset purchase
agreement by which Deloitte will purchase a significant portion of
BearingPoint's largest business unit, Public Services, for a price
of $350 million, subject to adjustment and customary closing
conditions. The purchase agreement is subject to the rules of the
existing financial restructuring process, which, among other
things, require that the Company consider all "higher and better"
offers from other potential buyers and obtain Court approval.
There can be no assurance that the transaction will be approved by
the Court or completed. Subsequent sales of other portions of the
Company may be subject to a similar approval process.
In addition, BearingPoint has signed a non-binding letter of
intent to sell a substantial portion of its North American
Commercial Services business, including its Financial Services
segment, to PricewaterhouseCoopers LLP for $25 million. PwC
Advisory Co., Ltd. (PwC Japan), a PricewaterhouseCoopers firm
operating in Japan, is also in advanced negotiations to acquire
the Company's consulting practice in Japan.
BearingPoint is in late-stage negotiations with its local
management teams to sell its European and Latin America practices.
Further, BearingPoint is in separate negotiations with other
parties and local management to sell various Asia Pacific
practices, separate from Japan. There can be no assurance that the
Company can enter into definitive agreements regarding such sales
or that any transaction will be completed.
"Since we entered the restructuring process, we've been committed
to evaluating all strategic options with the goal of charting the
best possible course for the people, clients and creditors of
BearingPoint," said Ed Harbach, BearingPoint's CEO.
"We have concluded that a sale of the Company's business units
maximizes value and provides the greatest stability for all
interested parties. We are pleased that several parties have
expressed interest in purchasing the majority of the Company,"
continued Mr. Harbach. "These offers reflect the inherent value of
our business and the world-class service we continue to provide
our clients."
"We remain steadfast in our commitment to the clients we serve as
we transition through this process and beyond," concluded Mr.
Harbach.
AlixPartners, LLP and Greenhill & Co. are acting as financial
advisors to the Company. Davis Polk & Wardwell is acting as legal
counsel to the Company in connection with the sale of its Public
Services business to Deloitte. Weil, Gotshal & Manges LLP is
acting as legal counsel in connection with the Company's
restructuring process.
PwC's Statement
The United States firm of PricewaterhouseCoopers LLP has reached
an agreement in principle with BearingPoint, Inc. to acquire
portions of BearingPoint's North American Commercial Services
practice, which includes its financial services segment. At the
same time, PwC Advisory Co., Ltd. (PwC Japan), a PwC firm
operating in Japan, has reached an agreement in principle to
acquire and integrate with BearingPoint's entire Japan practice
consulting business, which has a leading position in the business
consulting market.
In the United States, the proposed transaction will integrate
selected contracts and assets of BearingPoint into PwC's Advisory
practice, while bringing to the firm client service professionals
with significant business and consulting expertise in industries
including energy, utilities, insurance, pharmaceuticals and life
sciences.
In Japan, the strength of BearingPoint's business means that this
transaction will create a combined team of over 1,500
professionals which will be one of the largest advisory practices
in the Japanese market.
The U.S. transaction is subject to execution of a definitive asset
purchase agreement and Bankruptcy Court approval and the Japanese
transaction is subject to execution of a definitive purchase
agreement.
About PricewaterhouseCoopers
PricewaterhouseCoopers -- http://www.pwc.com/-- provides
industry-focused assurance, tax and advisory services to build
public trust and enhance value for its clients and their
stakeholders. More than 155,000 people in 153 countries across our
network share their thinking, experience and solutions to develop
fresh perspectives and practical advice.
About BearingPoint
BearingPoint, Inc. -- http://www.BearingPoint.com-- is currently
one of the world's largest providers of management and technology
consulting services to Global 2000 companies and government
organizations in more than 60 countries worldwide. Based in
McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP
-- has approximately 15,000 employees focusing on the Public
Services, Commercial Services and Financial Services industries.
BearingPoint professionals have built a reputation for knowing
what it takes to help clients achieve their goals, and working
closely with them to get the job done. The Company's service
offerings are designed to help clients generate revenue, increase
cost-effectiveness, manage regulatory compliance, integrate
information and transition to "next-generation" technology.
BearingPoint, Inc., fka KPMG Consulting, Inc., together with its
units, filed for Chapter 11 on February 18, 2009 (Bankr. S.D.
N.Y., Case No. 09-10691). Alfredo R. Perez, Esq. at Weil Gotshal
& Manges LLP, has been tapped as counsel. Greenhill & Co., LLC,
and AP Services LLC, have also been tapped as advisors. Davis
Polk & Wardell is special corporate counsel. BearingPoint
disclosed total assets of $1,762,689,000, and debts of
$2,231,839,000 as of Sept. 30, 2008.
Contemporaneous with their bankruptcy petitions, the Debtors filed
a pre-packaged Joint Plan of Reorganization under Chapter to
implement the terms of their agreement with the secured lenders.
Under the Plan, the Debtors propose to exchange general unsecured
claims for equity in the reorganized company. Existing
shareholders are out of the money. The Plan and the explanatory
disclosure statement remain subject to approval by the Bankruptcy
Court.
BERNARD L. MADOFF: Civil Suit Filed Against Auditor Freihling
-------------------------------------------------------------
The Securities and Exchange Commission on March 18, 2009, charged
the auditors of Bernard Madoff's broker-dealer firm with
committing securities fraud by representing that they had
conducted legitimate audits, when in fact they had not.
In its complaint filed in federal court in Manhattan, the SEC
alleges that from 1991 through 2008, certified public accountant
David G. Friehling and his firm, Friehling & Horowitz, CPAs, P.C.
(F&H), purported to audit financial statements and disclosures of
Bernard L. Madoff Investment Securities LLC (BMIS). The SEC
previously charged Madoff and BMIS with committing securities
fraud through a multi-billion dollar Ponzi scheme perpetrated on
advisory and brokerage customers of his firm.
"As the new Chairman, I will ensure that we continue this
investigation and hold accountable all those who helped to
facilitate this massive fraud," said SEC Chairman Mary L.
Schapiro, who took office in January.
James Clarkson, Acting Director of the SEC's New York Regional
Office, said, "As we allege in our complaint, Friehling's and
F&H's misconduct is egregious. Friehling essentially sold his
license to Madoff for more than 17 years while Madoff's Ponzi
scheme went undetected. For all those years, Friehling deceived
investors and regulators by declaring that Madoff's enterprise had
a clean audit record."
The SEC's complaint alleges that Friehling enabled Madoff's Ponzi
scheme by falsely stating, in annual audit reports, that F&H
audited BMIS financial statements pursuant to Generally Accepted
Auditing Standards (GAAS), including the requirements to maintain
auditor independence and perform audit procedures regarding
custody of securities.
F&H also made representations that BMIS financial statements were
presented in conformity with Generally Accepted Accounting
Principles (GAAP) and that Friehling reviewed internal controls at
BMIS, including controls over the custody of assets, and found no
material inadequacies. According to the SEC's complaint, Friehling
knew that BMIS regularly distributed the annual audit reports to
Madoff customers and that the reports were filed with the SEC and
other regulators.
The SEC's complaint alleges that all of these statements were
materially false because Friehling and F&H did not perform a
meaningful audit of BMIS, and did not perform procedures to
confirm that the securities BMIS purportedly held on behalf of its
customers even existed.
The SEC alleges that Friehling merely pretended to conduct minimal
audit procedures of certain accounts to make it seem like he was
conducting an audit, and then failed to document his purported
findings and conclusions as required under GAAS. If properly
stated, those financial statements, along with BMIS related
disclosures regarding reserve requirements, would have shown that
BMIS owed tens of billions of dollars in additional liabilities to
its customers and was therefore insolvent.
According to the SEC's complaint, Friehling similarly did not
conduct any audit procedures with respect to BMIS internal
controls, and had no basis to represent that BMIS had no material
inadequacies. Afraid that his work for BMIS would be subject to
peer review, as required of accountants who conduct audits,
Friehling lied to the American Institute of Certified Public
Accountants for years and denied that he conducted any audit work.
The SEC further alleges that Friehling and F&H obtained ill-gotten
gains through compensation from Madoff and BMIS, and also from
withdrawing returns from accounts held at BMIS in the name of
Friehling and his family members.
The SEC's complaint specifically alleges that Friehling and F&H
violated Section 17(a) of the Securities Act, violated and aided
and abetted violations of Section 10(b) of the Exchange Act and
Rule 10b-5 thereunder, and aided and abetted violations of
Sections 206(1) and 206(2) of the Advisers Act, Section 15(c) of
the Exchange Act and Rule 10b-3 thereunder, and Section 17 of the
Exchange Act and Rule 17a-5 thereunder. Among other things, the
SEC's complaint seeks financial penalties and a court order
requiring both Friehling and F&H to disgorge their ill-gotten
gains.
The SEC acknowledges the assistance of the U.S. Attorney's Office
for the Southern District of New York and the Federal Bureau of
Investigation. The SEC's investigation is continuing.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC was a market maker in
U.S. stocks, including all of the S&P 500 and more than 350 Nasdaq
stocks. The firm moved large blocks of stock for institutional
clients by splitting up orders or arranging off-exchange
transactions between parties. It also performed clearing and
settlement services. Clients included brokerages, banks, and
other financial institutions. In addition, Madoff Securities
managed assets for high-net-worth individuals, hedge funds, and
other institutional investors.
The firm is being liquidated in the aftermath of a fraud scandal
involving founder Bernard L. Madoff.
As reported by the Troubled Company Reporter on Dec. 15, 2008, the
Securities and Exchange Commission charged Bernard L. Madoff and
his investment firm, Bernard L. Madoff Investment Securities LLC,
with securities fraud for a multi-billion dollar Ponzi scheme that
he perpetrated on advisory clients of his firm. The estimated
losses from Madoff's fraud were allegedly at least
$50 billion.
Also on Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S.
District Court for the Southern District of New York granted the
application of the Securities Investor Protection Corporation for
a decree adjudicating that the customers of BLMIS are in need of
the protection afforded by the Securities Investor Protection Act
of 1970. Irving H. Picard, Esq., was appointed as trustee for the
liquidation of BLMIS, and Baker & Hostetler LLP was appointed as
counsel.
Mr. Madoff, if found guilty of all counts, would be imprisoned for
150 years, but legal experts expect the actual sentence to be much
lower and would still be an effective life sentence for the 70-
year-old defendant, WSJ notes. Mr. Madoff, WSJ relates, would
also face millions of dollars in possible criminal fines. The
report says that Mr. Madoff has been free on bail since his arrest
on December 11, 2008. There was no plea agreement with Mr. Madoff
in which leniency in sentencing might be recommended, the report
states, citing prosecutors.
BI-LO LLC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: BI-LO, LLC
208 Bi-Lo Blvd.
Greenville, SC 29607
Bankruptcy Case No.: 09-02140
Debtor-affiliates filing subject to Chapter 11 petitions:
Entity Case No.
------ --------
BI-LO Holding, LLC 09-02142
BG Cards, LLC 09-02143
ARP Ballentine LLC 09-02144
ARP Chickamauga LLC 09-02146
ARP Hartsville LLC 09-02147
ARP James Island LLC 09-02149
ARP Moonville LLC 09-02150
ARP Morganton LLC 09-02152
ARP Winston Salem LLC 09-02154
Type of Business: Founded in 1964 by Frank Outlaw, the Debtors
operate more than 220 supermarkets around South
Carolina, North Carolina, Georgia and
Tennessee. The Debtors have about 17,000
employees.
See http://my.bi-lo.com/
Chapter 11 Petition Date: March 23, 2009
Court: District of South Carolina (Spartanburg)
Judge: Helen E. Burris
Debtor's Counsel: Betsy Johnson Burn, Esq.
Betsy.Burn@nelsonmullins.com
Frank B.B. Knowlton, Esq.
frank.knowlton@nelsonmullins.com
George Barry Cauthen, Esq.
George.Cauthen@nelsonmullins.com
Jody A. Bedenbaugh, Esq.
jody.bedenbaugh@nelsonmullins.com
Nelson, Mullins, Riley and Scarborough
P.O. Box 11070
Columbia, SC 29211
Tel: (803) 255-9820
Fax: (803) 256-7500
Investment Banker: William Blair & Company, L.L.C.
Estimated Assets: $100 million to $500 million
Estimated Debts: $100 million to $500 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
C&S Wholesale dba C&S trade $16,723,369
Wholesale Services Inc.
7 Corporate Drive
Keene, NN 03431
Tel: (603) 354-1000
Fax: (603) 354-4690
Pepsi Cola Company trade $3,074,146
Post Office Box 75960
Chicago, IL 60675-5960
Tel: (800) 789-2626
Fax: (914) 253-2070
Piedmont Coca-Cola Bottling trade $2,386,524
P.O. Box 751356
Charlotte, NC 28275-1356
Frito Lay Inc. trade $2,372,005
P.O. Box 643102
Pittsburg, PA 15264-3102
Tel: (972) 334-7864
Fax: (972) 994-7491
Cardinal Health Inc. trade $2,001,414
555 Glendon Court
Dublin, OH 43016-0000
Tel: (614) 757-7979
Fax: (614) 757-6000
The News Group trade $1,291,332
4070 Shirley Drive SW
Atlanta, GA 30336-000
Tel: (770) 863-9000
Fax: (700) 863-9001
Nabisco Biscuit Co. trade $1,101,668
P.O. Box 13475
Newark, NJ 07188-0475
Tel: (847) 646-2000
Fax: (847) 646-6005
Coca Cola Bottling trade $933,817
PO Box 11407
Draw 0585
Birmingham, AL 35246-0000
Tel: (704) 557-4469
Fax: (704) 557-4186
Coca Cola Bottling Co. trade $841,721
PO Box 751356
Charlotte, NC 28275-1356
Tel: (704) 557-4469
Fax: (704) 557-4186
Kellogs Snacks trade $822,993
PO Box 905861
Charlotte, NC 28290-5861
Tel: (269) 961-2000
Fax: (269) 961-2871
Earthgrains Baking Co- trade $767,006
Regular
PO Box 945624
Atlanta, GA 30394-5624
Tel: (404) 244-4500
(314) 506-3560
Fax: (404) 244-4464
Pepsi Greenville trade $658,268
PO Box 3567 Park Pl.
Branch
Greenville, SC 29608-0000
Tel: (864) 242-6041
Fax: (914) 253-2070
Earthgrains Baking Co- trade $652,962
Regular
PO Box 945624
Atlanta, GA 30394-5624
Tel: (314) 506-3560
Fax: (404) 244-4464
McKee Baking Company trade $639,951
PO Box 2118
Collegedale, TN 37315-2118
Tel: (615) 396-2151
Fax: (423) 238-7127
Flowers Baking Co-Hig trade $446,062
Edy's Grand Ice Cream trade $355,599
Kehe Foods Dist. Inc. trade $349,879
Coca Cola Augusta trade $338,906
Interstate Brands trade $328,711
George Weston Bakeries trade $313,617
The petition was signed by Brian P. Carney, chief financial
officer.
CALTEX HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: CalTex Holdings LP
18511 Old Beaumont Highway
Houston, TX 77049
Tel: (281) 5915400
Bankruptcy Case No.: 09-31875
Chapter 11 Petition Date: March 20, 2009
Court: Southern District of Texas (Houston)
Judge: Wesley W. Steen
Debtor's Counsel: H. Rey Stroube, III, Esq.
rstroube3@earthlink.net
Attorney at Law
18510 Kingsland Blvd.
Houston, TX 77094
Tel: (281) 599-3011
Fax: (281) 599-3011
Estimated Assets: $50 million to $100 million
Estimated Debts: $10 million to $50 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Eagle Environmental Inc. contract $1,184,962
891 W. Robinson Dr. #4
North Salt Lake, UT 84054
Tel: (801) 936-115
New Century Capital Partners contract $1,000,000
1999 Avenue of the Stars
Suite 1100
Los Angeles, CA 90067
Tel: (310) 356-4641
M&M Scrap Metal Processors contract $600,000
1120 Lockwood Drive
Houston, TX 77020
Professional Services Inc. contract $116,223
Plant & Machinery Inc. auction contract $100,000
A&B Import Export Inc. contract $89,437
Reliant Energy utility $53,312
Allied Barton contract $39,942
BH Industries Inc. $26,452
Hunter Heavy Equipment trade $22,109
Andrews Kurth LLP lender legal $13,776
Paseo Partners LLC $11,958
Bowne of Los Angeles Inc. $8,947
Sun Coast Resources $8,116
Flat Iron Capital Corp. fees $4,384
Michael P. Fleming PC fees $2,651
Texas Department of State $2,288
Health Sciences
Edward Millier Real Estate fees $2,250
Appraisal Services
Railroad Management Co. $2,186
AT&T $2,171
The petition was signed by Scott Jarnagin, president of the
company.
CATALYST ENERGY: Clients Can File Claim With Trustee Until May 20
-----------------------------------------------------------------
Margaret Newkirk at The Atlanta Journal-Constitution reports that
Catalyst Energy Group, Inc., clients who are owed money by the
Company have until May 20 to file a claim with the trustee, Fred
Tully of Hays Financial Consulting.
The Atlanta Journal-Constitution relates that the court, in
cooperation with Mr. Tully and the Georgia Public Service
Commission, has created a simplified way for clients to file
claims against Catalyst Energy. The report states that after
filing for bankruptcy in October 2008, Catalyst Energy's customers
were sold to MX Energy.
According to The Atlanta Journal-Constitution, the PSC and
bankruptcy court made sure that the pre-paid customers of Catalyst
Energy, who had a unique niche in Georgia's gas market serving
immigrants and low-income clients with a pre-paid gas plan, got
their money back.
Based in Atlanta, Georgia, Catalyst Energy Group, Inc.
-- http://www.catalystenergy.com/-- and its affiliates, Catalyst
Natural Gas, LLC, and Catalyst Supply Services, Inc, are energy
providers. The Company and its affiliates filed for Chapter 11
protection on Oct. 1, 2008 (Bankr. N. D. Ga. Lead Case No.
08-79392). Leon S. Jones, Esq., at Jones & Walden, LLC,
represents the Debtors in their restructuring efforts.
Catalyst Energy listed assets of less than $50,000. According to
The Atlanta Journal-Constitution, the Company said that it has
$20 million in liabilities.
CENVEO INC: S&P Downgrades Corporate Credit Rating to 'B+'
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Stamford, Connecticut-based Cenveo Inc. to 'B+' from
'BB-'. The rating outlook is negative.
At the same time, S&P revised its recovery rating on Cenveo
Corp.'s senior secured credit facilities to '2', indicating its
expectation of substantial (70% to 90%) recovery for lenders in
the event of a payment default, from '1'. The issue-level rating
on this debt was lowered to 'BB-' (one notch higher than the 'B+'
corporate credit rating on the parent company) from 'BB+', in
accordance with S&P's notching criteria for a '2' recovery rating.
In addition, S&P revised its recovery rating on Cenveo Corp.'s
$175 million senior notes to '6', indicating S&P's expectation of
negligible (0% to 10%) recovery in the event of a payment default,
from '4'. The issue-level rating on this debt was lowered to 'B-'
(two notches lower than the 'B+' corporate credit rating) from
'BB-', in accordance with S&P's notching criteria for a '6'
recovery rating.
Finally, S&P lowered the issue-level rating on Cenveo Corp.'s
subordinated debt to 'B-' from 'B'. The recovery rating on this
debt remains unchanged at '6'.
"The ratings downgrade reflects the negative impact of the
economic recession, and S&P's expectation that volume declines and
pricing pressures will meaningfully reduce the Company's revenue
and EBITDA in 2009," said Standard & Poor's credit analyst Michael
Listner.
S&P expects this will result in the Company reporting meaningfully
higher debt leverage by the end of 2009 than S&P had previously
factored into the 'BB-' rating. In addition, the Company has
announced that it is currently exploring an amendment to the
financial covenants of its senior credit facility that S&P
anticipates would be accompanied by higher pricing, resulting in a
decline in interest coverage. The expectation incorporated into
the previous 'BB-' rating was that the Company would reduce
leverage and avoid a violation of its total leverage covenant at
the time of its step-down in June 2009.
The current 'B+' rating incorporates S&P's expectation that,
during 2009, revenue will decline in the low-teens percentage area
and that EBITDA will decline by 20% to 25% from 2008 levels.
Based on S&P's estimate for increased pricing of Cenveo's revolver
and term debt, given an expected amendment to the facilities, S&P
believes that interest coverage (incorporating S&P's adjustments)
will decline to around 2x by year-end 2009. S&P anticipates total
debt to EBITDA (after S&P's adjustments) will rise to about 6x as
of Dec. 31, 2009. These credit measures are more closely aligned
with the new 'B+' corporate credit rating. The rating
incorporates the expectation that the Company will begin to
experience a recovery in 2010.
S&P anticipates that in 2009, Cenveo will limit capital
expenditures to about $20 million and will generate about
$95 million of discretionary cash flow. Management has
communicated an intent to pursue acquisitions in the coming
quarters, and ratings could be pressured further if acquisitions
are funded in a manner that weakens credit measures. S&P will
assess the strategic benefits to any acquisition if and when a
potential target is identified. S&P expects that Cenveo will
continue to use free cash flow to repay debt, absent any
acquisitions.
The 'B+' corporate credit rating reflects Cenveo's high debt
leverage and participation in highly competitive and cyclical
printing markets. Improvements in recent years in the firm's cash
flow generation, increased cash flow diversity as a result of
recent acquisitions, and success in integrating and realizing
synergies from these acquisitions somewhat offset these factors.
CITIGROUP INC: CEO Vikram Pandit Against Bonus Tax
--------------------------------------------------
Joe Bel Bruno and Matthias Rieker at The Wall Street Journal
report that Citigroup Inc. CEO Vikram Pandit and Bank of America
Corp.'s Kenneth Lewis have criticized a legislation that would
heavily tax bonuses.
Messrs. Pandit and Lewis believe that the tax would make it hard
to retain workers, WSJ relates.
According to WSJ, the House passed legislation on Thursday to
impose a 90% surtax on bonuses granted to workers with household
income of more than $250,000 at firms that got at least
$5 billion from the government's financial rescue program. The
report says that the Senate is considering a similar plan.
Citigroup, JPMorgan, Bank of America, Goldman Sachs Group Inc.,
Morgan Stanley, PNC Financial Services Group Inc., and U.S.
Bancorp have each received more than $5 billion from the
government's Troubled Asset Relief Plan, the report states.
The proposals would affect countless workers who would find it
difficult to repay their bonuses, WSJ relates, citing Mr. Pandit.
The report quoted Mr. Pandit as saying, "The work we have all done
to try to stabilize the financial system and to get this economy
moving again would be significantly set back if we lose our
talented people because Congress imposes a special tax on
financial services employees."
According to WSJ, Mr. Lewis said that many employees, he said,
"had nothing to do with creating today's problems," and "I am
concerned about our ability to retain some of out most valuable"
employees. WSJ relates that Bank of America is eliminating 30,000
to 35,000 workers.
"I also believe that these proposals have the potential to damage
the ability of the government to engineer a financial recovery.
Many of the government's plans depend on the private sector being
willing to contract with the government. If investors or
companies in the private sector believe that the rules can change
quickly and indiscriminately, they will be unwilling to
participate," WSJ quoted Mr. Lewis as saying.
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.
CITIGROUP INC: Names Gary Crittenden as Citi Holdings' Chairman
---------------------------------------------------------------
Matthias Rieker and David Enrich at The Wall Street Journal report
that Citigroup Inc. has appointed its chief financial officer,
Gary Crittenden, as Citi Holdings chairperson.
WSJ relates that Citi Holdings is trying to shed noncore assets so
the rest of the company can focus on its investment bank and
retail-banking operations. According to WSJ, Citi Holdings
includes Citigroup's sizable consumer-finance operations, like
CitiFinancial and CitiMortgage, and the Company's stake in the
joint venture that would combine its brokerage operations and
Morgan Stanley. WSJ states that Citigroup said that it can live
without those businesses.
Citing people familiar with the situation, WSJ relates that
Mr. Crittenden decided to scale back his workload due to a health
issue in his family. WSJ says that top executives and directors
had been urging Mr. Crittenden to remain finance chief.
According to WSJ, Edward Kelly will succeed Mr. Crittenden as
finance chief. Mr. Kelly is the chief of global banking at
Citigroup. WSJ, citing people familiar with the matter, states
that Mr. Pandit had informed Mr. Kelly that he would be appointed
for the CFO position.
WSJ relates that Mr. Kelly orchestrated Citigroup's decision to
split its business in core and non-core operations, and to ask
preferred shareholders to convert their stake into common stock.
Mr. Kelly, says WSJ, has been Citigroup's key pointman dealing
with regulators in recent months. Mr. Kelly might succeed Mr.
Pandit as Citigroup's CEO, WSJ reports, citing people inside and
outside the Company.
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.
DENNIS SPIELBAUER: Section 341(a) Meeting Slated for April 1
------------------------------------------------------------
The U.S. Trustee for Region 17 will convene a meeting of creditors
in Dennis S. Spielbauer's Chapter 11 case on April 1, 2009, at
11:30 a.m., at San Jose Room 130, U.S. Federal Bldg., 280 S 1st
St. No. 130, San Jose, California.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Creditors have until June 30, 2009, to file proofs of claim.
About Dennis S. Spielbauer
Headquartered in San Jose, California, Dennis S. Spielbauer dba
Royal Pacific Properties, Golden Gate Financial Management filed
for Chapter 11 protection on March 10, 2009, (Bankr. N.D. Calif.
Case No.: 09-51654) David A. Boone, Esq. represents the Debtor in
its restructuring efforts. the Debtor listed estimated assets of
$10 million to $50 million and estimated debts of $1 million to
$10 million.
CHEMTURA CORP: Expects Objections to Roll-Up Facility
-----------------------------------------------------
Chemtura Corp. expects objections to its proposed $400 million
financing, Bloomberg's Bill Rochelle reports. According to the
report, the credit in part converts pre-bankruptcy debt into post-
bankruptcy obligations that bring greater rights and profits for
the lenders.
The U.S. Bankruptcy Court for the Southern District of New York
has granted Chemtura interim approval to access $190 million of
its $400 million Debtor-in-Possession financing from Citibank,
N.A., as administrative agent. The DIP, combined with cash from
the Company's ongoing operations, will provide Chemtura with
financial flexibility to operate its business in the ordinary
course, including funding post-petition payments to suppliers and
meeting other customary business obligations, during the financial
restructuring process.
According to Bill Rochelle, on an interim basis, the loan would
consist of a $25 million revolving credit and a $165 million term
loan, both to refinance existing obligations. On final approval,
the $400 million loan would include a $250 million term loan, a
$63.5 million revolving credit, and so-called rollup of $86.5
million of pre-bankruptcy debt.
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.
CHESAPEAKE CORP: Court Approves Sale to Investor Group
------------------------------------------------------
Chesapeake Corporation said the U.S. Bankruptcy Court for the
Eastern District of Virginia in Richmond entered an order
approving the sale of its operating businesses to a group of
investors, including affiliates of Irving Place Capital
Management, L.P. and Oaktree Capital Management, L.P.
The transaction remains subject to the satisfaction of standard
and customary conditions of closing, including the receipt of
regulatory approvals. The company expects the transaction to close
by mid-April 2009.
The company's financial advisor is Goldman Sachs & Co., its
restructuring advisor is Alvarez & Marsal, and its legal advisor
in the U.S. is Hunton & Williams LLP.
As reported by the Troubled Company Reporter on March 18, 2009,
Chesapeake received no qualifying bids to compete with the offer
to acquire all of its operating businesses submitted by a group of
investors, including affiliates of Irving Place Capital
Management, L.P., and Oaktree Capital Management, L.P.
The deadline for submitting qualifying bids under the bid
procedures order entered by the U.S. Bankruptcy Court for the
Eastern District of Virginia in Richmond passed as of noon
(Eastern Time) March 17, 2009, with no other qualifying bids
submitted. As a result, the company declared the investor group
the successful bidder and the auction scheduled to begin at 9:00
a.m. (Eastern Time) on Thursday, March 19, 2009, was cancelled.
Closing of the deal is conditioned on the material accuracy of the
representations and warranties of the parties; material compliance
by the parties with their obligations under the Asset Purchase
Agreement among the company, the U.S. Operating Subsidiaries and
the Purchasers; and the absence of a material adverse change with
respect to the company since September 28, 2008.
As reported by the Troubled Company Reporter in January 2009,
Chesapeake reached a deal with a group of investors, including
affiliates of Irving Place Capital Management LP and Oaktree
Capital Management LP to sell itself for about $485 million,
without certain obligations.
The TCR said on March 4, 2009, that the Debtors' unsecured
creditors want an investigation on the proposed sale of the
Company, saying they had reservations as to whether the sale
negotiations were conducted in good faith. The official committee
of unsecured creditors said Chesapeake's requests for court
approval of its bankruptcy financing and sale procedures may have
been commenced for the benefit of Chesapeake, the lead group
bidding on its assets, and Wachovia, at the expense of the
unsecured creditors. The committee said it wanted to make sure
Chesapeake hadn't been improperly "coaxed" into selling all of its
assets.
Headquartered in Richmond, Virginia, Chesapeake Corporation (NYSE:
CSK) -- http://www.cskcorp.com-- supplies specialty paperboard
packaging products in Europe and an international supplier of
plastic packaging products to niche end-use markets. The Debtors
have 44 locations in Europe, North America, Africa and Asia and
employs approximately 5,400 people worldwide. The company
directly owns 100% of each of the other Debtors.
The company owns, directly or indirectly, 100% of each of the non-
debtor subsidiaries except: (i) Chesapeake Plastics Kft, a
Hungarian joint venture which is 49% owned by Chemark Kft; and
(ii) Rotam Boxmore Packaging Co. Ltd., a British Virgin Islands
company which is 50% owned by Canada Rotam International Co. Ltd.
The company's certificate of authorization authorizes the issuance
of 60,000,000 shares of common stock. About 20,559,115 shares of
common stock are issued and outstanding with par value of $1.00
per share as of Dec. 26, 2008. Moreover, the company's
certificate allows the issuance of 500,000 shares of preferred
stock, and no shares are outstanding.
As of Dec. 31, 2007, Dimensional Fund Advisors LLP owns 7.98% of
the company; T. Rowe Price Associates Inc., 8.4%; and Wells Fargo
& Company, 14.71%. Edelmann GmbH & Co. KG and Joachim W. Dziallas
owns 13.5% of the company as of Sept. 19, 2008.
New York Stock Exchange suspended the listing of the company's
common stock effective Oct. 8, 2008, due to its inability to meet
the global market capitalization requirements for continued
listing on the exchange. Subsequently, the company's stock began
to be quoted on the over-the-counter bulletin board under the
trading symbol "CSKE.PK."
Chesapeake Corporation, and 18 affiliates filed Chapter 11
petitions (Bankr. E.D. Virginia, Lead Case No. 08-336642) on
Dec. 29, 2008. Chesapeake has tapped Alvarez and Marsal North
America LLC, and Goldman Sachs & Co. as financial advisors.
It also brought along Tavenner & Beran PLC as conflicts counsel
and Hammonds LLP as special counsel. Its claims agent is Kurtzman
Carson Consultants LLC. The United States Trustee for Region 4
appointed seven creditors to serve on an Official Committee of
Unsecured Creditors for the Debtors' Chapter 11 cases.
As of September 30, 2008, Chesapeake's consolidated balance sheets
showed $936.4 million in total assets, including
$340.7 million in current assets; and $937.1 million in total
liabilities, including $469.2 million in current liabilities,
resulting in $500,000 in stockholders' deficit.
CONSTAR INTERNATIONAL: Confirmation Hearing Reset to April 28
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
rescheduled the confirmation hearing on Constar International Inc.
and its debtor-affiliates' Second Amended Plan to April 28, 2009,
at 2:00 p.m. The plan confirmation hearing was originally
scheduled for April 29.
As reported in the Troubled Company Reporter on February 4, 2009,
the Hon. Peter J. Walsh approved the second amended disclosure
statement explaining the Debtors' second amended Chapter 11 plan
of reorganization dated Feb. 3, 2009.
Pursuant to the Plan terms, general unsecured claims will be paid
in full in cash on the later of (i) the plan's effective date, or
(ii) when said unsecured claim would be paid in the ordinary
course of the Reorganized Debtors' business. Equity interest
claims will be canceled and extinguished.
A full-text copy of the Debtors' Second Amended Disclosure
Statement is available for free at:
http://ResearchArchives.com/t/s?3917
A full-text copy of the Debtors' Second Amended Chapter 11 Plan of
Reorganization is available for free at
http://ResearchArchives.com/t/s?3918
Headquartered in Philadelphia, Pennsylvania, Constar International
Inc. (NASDAQ: CNST) -- http://www.constar.net/-- produces
polyethylene terephthalate plastic containers for food, soft
drinks and water. The company provides full-service packaging
services. The company and five of its affiliates filed for
Chapter 11 protection on Dec. 30, 2008 (Bankr. D. Del. Lead Case
No. 08-13432). Bayard, P.A. represents the Debtors as counsel.
Wilmer Cutler Pickering Hale and Dorr LLP represents the Debtors
as co-counsel. Goodwin Procter LLP, and Young, Conaway, Stargatt
& Taylor, LLP, are the Official Committee of Unsecured Creditors'
proposed counsel.
DORAL FINANCIAL: Fitch Affirms 'CCC' Issuer Default Rating
----------------------------------------------------------
Fitch Ratings has affirmed the Long-term Issuer Default Ratings of
Doral Financial Corporation and its subsidiary, Doral Bank.
Simultaneously, Fitch revises the Rating Outlook on Doral Bank to
Negative from Positive.
On March 20, 2009, DRL reported a large loss of $318.3 million in
2008 driven mainly by a $301.2 million increase in deferred tax
asset valuation allowance in 2008. Operating results reflected
continued negative credit trends, which pressured capital levels.
The company also announced the suspension of its preferred
dividends on all its cumulative (effective 2Q'09) and non-
cumulative preferred stock (effective April 2009). The perpetual
cumulative convertible preferred stock totaled $345 million at
Dec. 31, 2008 with a 4.75% coupon. The three series of non-
cumulative preferred stock totaled about $228 million at Dec. 31,
2008 and consisted of series A non-cumulative monthly income
preferred stock with a coupon of 7%, series B non-cumulative
monthly income preferred stock with a coupon of 8.35%, and series
C non-cumulative monthly income preferred stock with a coupon of
7.25%.
Doral's ratings had some positive momentum following the
recapitalization, the full payment of its maturing debt, and some
progress with regulatory and auditing issues. However, in the
past year, the worsening economic conditions have resulted in
further credit deterioration, and continued pressures on the
company's financial flexibility warrants the Negative Outlook.
Fitch affirms and removes the Positive Outlook from these ratings:
Doral Financial Corporation
-- Long-term IDR at 'CCC';
-- Senior debt at 'CCC/RR4'';
-- Preferred stock at 'C/RR6';
-- Short-term IDR at 'C'.
Fitch affirms these ratings:
Doral Financial Corporation
-- Support at '5';
-- Support Floor at 'NF';
-- Individual at 'E'.
Fitch affirms and revises Outlooks on these ratings to Negative
from Positive:
Doral Bank
-- Long-term IDR at 'B' ;
-- Long-term deposits at 'B+';
-- Short-term IDR at 'B';
-- Short-term deposit obligations at 'B'.
Fitch affirms these ratings:
Doral Bank
-- Support at '5';
-- Support Floor at 'NF';
-- Individual at 'D'
DORAL FINANCIAL: S&P Cuts Pref. Shares' Rating on Dividends Halt
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
ratings on all of Doral Financial Corp.'s preferred shares to 'C'
from 'CCC'. At the same time, S&P placed its 'B+' long-term
counterparty credit rating on Doral on CreditWatch with negative
implications.
"The rating actions follow the company's announcement that it is
suspending dividend payments on its preferred shares," said
Standard & Poor's credit analyst Robert Hansen, CFA. Credit
quality continued to deteriorate in the fourth quarter, notably
within the bank's mortgage portfolio. Although operating
performance improved in 2008, fourth-quarter results were hurt by
a large, noncash impairment on deferred tax assets and the
establishment of a $21.6 million reserve for exposure to Lehman
Brothers Inc.
S&P believes that the suspension of divided payments on the
preferred will reduce the drain on liquidity and capital.
However, S&P remain concerned that the positive implications from
the dividend suspension could be more than fully offset by the
bank's continued credit quality deterioration and sustained net
losses.
To resolve the CreditWatch, S&P will continue to evaluate Doral's
loan quality, securities portfolio, capital position, liquidity,
operating performance, and various accounting and regulatory
issues. S&P expects to resolve the CreditWatch within 90 days.
DREIER LLP: Marc Dreier's Lawyer Expects Client's Guilty Plea
-------------------------------------------------------------
The Associated Press reports that Gerald Shargel, Marc Dreier's
lawyer, expects his client to eventually plead guilty to a new
money laundering charge against him.
According to Debra Cassens Weiss at ABA Journal, Mr. Dreier is
accused of selling $700 million in phony securities to investors.
Mr. Dreier entered a plea of not guilty on March 19, the report
states.
Reuters relates that a lawyer representing unsecured creditors of
360networks is weighing claims against some Dreier lawyers. Court
documents say that Mr. Dreier called two partners and the
controller of his law firm from a jail cell in Canada where he was
first arrested to say he could sell his art collection to replace
missing law firm funds, which included cash from
$38.6 million held in escrow on behalf of unsecured creditors.
Steven Reisman, appointed to investigate for 360networks'
unsecured creditors, said in court documents, "It is apparent from
evidence available to date that other Dreier LLP employees had
indications of questionable activity." According to ABA Journal,
Mr. Reisman and his law firm will seek evidence on who may have
aided Mr. Dreier.
Dreier LLP's controller, John Provenzano, said in a statement to
the U.S. Securities and Exchange Commission that he refused to
wire up to $10 million in escrow funds to the Company after his
Canadian arrest. Dreier LLP owed $38 million to customers in
connection with its representation of 360networks, ABA Journal
relates, citing Mr. Provenzano. According to the report, Mr.
Provenzano said that the escrow accounts contained half of the
needed money.
About Dreier LLP
Marc Dreier founded New York-based law firm Dreier LLP --
http://www.dreierllp.com/-- in 1996.
On Dec. 8, 2008, the U.S. Securities and Exchange Commission filed
a suit, alleging that Mr. Dreier made fraudulent offers and sales
of securities in several cities, selling fake promissory notes to
hedge and other private investment funds. The SEC asserted that
Mr. Dreier also distributed phony financial statements and audit
opinions, and recruited accomplices in connection with that
scheme. Mr. Dreier has been charged by the U.S. government for
conspiracy, securities fraud and wire fraud before the U.S.
District Court for the Southern District of New York (Manhattan)
(Case No. 09-cr-00085-JSR).
Dreier LLP filed for Chapter 11 on Dec. 16, 2008 (Bankr. S. D.
N.Y., Case No. 08-15051). Judge Robert E. Gerber handles the
case. Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton
& Garrison LLP, has been retained as counsel. The Debtor listed
assets between $100 million to $500 million, and debts between $10
million to $50 million in its filing.
Wachovia Bank National Association, Sheila M. Gowan as trustee for
Chapter 11 estate of Dreier LLP, and Steven J. Reisman as
postconfirmation representative of the bankruptcy estate of
360networks (USA) Inc. signed a petition that sent Mr. Dreier to
bankruptcy under Chapter 7 on Jan. 26, 2009 (Bankr. S.D. N.Y.,
Case No. 09-10371).
DRUG FAIR: Endorses Epiq Bankruptcy as Notice and Claims Agent
--------------------------------------------------------------
Drug Fair Group, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for authority to
employ Epiq Bankruptcy Solutions, LLC, as notice, claims and
balloting agent.
Epiq will perform notice, claims and balloting services in
connection with these Chapter 11 cases, including additional
services at the request of the Debtors or the Clerk's Office.
Daniel McElhinney, Esq., executive director of Epiq, tells the
Court that the firm received a $25,000 retainer to be applied in
satisfaction of obligations incurred.
Mr. McElhinney assures the Court that Epiq is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Court.
About Drug Fair Group, Inc.
Headquartered in Somerset, New Jersey, Drug Fair Group, Inc. --
http://www.drugfair.com/-- fka Community Distributors, Inc.,
sells dietary health supplements.
Drug Fair and CDI Group, Inc. filed for Chapter 11 protection on
March 18, 2009, (Bankr. D. Del. Case No.: 09-10897 to 09-10898)
Domenic E. Pacitti, Esq. and Michael W. Yurkewicz, Esq. at Klehr
Harrison Harvey Branzburg & Ellers represent the Debtors in their
restructuring efforts. The Debtors propose to employ Epiq
Bankruptcy Solutions, LLC as claims agent. The Debtors listed
estimated assets of $50 million to $100 million and estimated
debts of $100 million to $500 million.
DRUG FAIR: Section 341(a) Meeting Slated for May 8 in Delaware
--------------------------------------------------------------
Roberta A. DeAngelis, acting U.S. Trustee for Region 3, will
convene a meeting of creditors in Drug Fair Group, Inc. and CDI
Group, Inc.'s Chapter 11 case on May 8, 2009, at 10:30 a.m., at
J. Caleb Boggs Federal Building, 2nd Floor, Room 2112, Wilmington,
Delaware.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Somerset, New Jersey, Drug Fair Group, Inc. --
http://www.drugfair.com/or http://www.costcuttersonline.com/--
fka Community Distributors, Inc. operates pharmacies and general
merchandise stores in northern and central New Jersey. Founded in
1954, the Company has two divisions: Drug Fair and Cost Cutters.
The Drug Fair division includes stores which sell both
pharmaceuticals and general merchandise and the Cost Cutters
division which are larger format stores that offer value-oriented,
general merchandise.
The Debtor and CDI Group, Inc. filed for Chapter 11 protection on
March 18, 2009, (Bankr. D. Del. Case No.: 09-10897 to 09-10898)
Domenic E. Pacitti, Esq. and Michael W. Yurkewicz, Esq. at Klehr
Harrison Harvey Branzburg & Ellers represent the Debtors in their
restructuring efforts. The Debtors propose to employ Epiq
Bankruptcy Solutions, LLC, as claims agent. The Debtors listed
estimated assets of $50 million to $100 million and estimated
debts of $100 million to $500 million.
FAIRCHILD CORP: Taps Epiq Bankruptcy as Claims and Noticing Agent
-----------------------------------------------------------------
The Fairchild Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for authority to
employ Epiq Bankruptcy Solutions, LLC, as notice, claims and
solicitation agent.
Epiq will provide certain noticing, claims processing and
balloting administration services. In addition, Epiq will provide
other noticing, claims, balloting and related administrative
services as the Debtors or Clerk's Office may request from time to
time.
Daniel McElhinney, executive director of Epiq, tells the Court
that the hourly rates of professionals are:
Title Rate Range Average Rate
Clerk $40 - $60 $50
Case Manager (Level 1) $125 - $175 $142
IT Programming Consultant $140 - $190 $165
Case Manager (Level 2) $185 - $220 $202
Senior Case Manager $225 - $275 $247
Senior Consultant TBD TBD*
* The services of senior consultant will vary by engagement.
Mr. McElhinney assures the Court that Epiq is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About 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.
FORD MOTOR CREDIT: To Raise Cash Tender Offer for Term Loan Debt
----------------------------------------------------------------
Ford Motor Credit Company has disclosed the results of its
previously announced $500 million cash tender offer (the "Term
Loan Offer") for Ford Motor Company's senior secured term loan
debt (the "Term Loan Debt") and the early tender results as of
March 19, 2009, of its previously disclosed $1.3 billion cash
tender offer (the "Notes Tender Offer") for Ford's unsecured, non-
convertible debt securities (the "Notes").
The Notes Tender Offer remains open until 9:00 a.m., New York City
time, on April 3, 2009. In addition, Ford's previously announced
Conversion Offer for its 4.25% Senior Convertible Notes due
December 15, 2036, remains open until 9:00 a.m., New York City
time, on April 3, 2009.
"We are very pleased with the results to date of our debt
restructuring initiatives," said Ford Treasurer Neil Schloss.
"The cash tender offer by Ford Credit for Ford's senior secured
term loan debt has been over-subscribed, and the decision was made
to increase the amount of cash used so Ford Credit could purchase
additional term loan debt. In addition, the cash tender offer by
Ford Credit for Ford's unsecured, non-convertible notes has
resulted in nearly $3.4 billion principal amount of notes being
tendered so far. With these tenders, we have taken significant
steps towards reducing Ford's long-term debt and strengthening our
balance sheet."
Results of Term Loan Offer
The Term Loan Offer was conducted on a "Dutch auction" basis
whereby term loan lenders were invited to submit bids to sell
their Term Loan Debt within a price range of not less than 38% of
par, nor greater than 47% of par. As a result of the bids
submitted by term loan lenders on or prior to the March 19, 2009
expiration date, Ford Credit made the decision to increase the
amount of cash it would use for the Term Loan Offer from
$500 million to $1 billion. This will allow Ford Credit to
purchase $2.2 billion principal amount of Ford's Term Loan Debt at
a price of 47% of par (the "Clearing Price"), which represents all
Term Loan Debt tendered at or below the Clearing Price. The Term
Loan Debt acquired by Ford Credit will be distributed to its
parent, Ford Holdings LLC, and forgiven. These distributions by
Ford Credit are consistent with its previously announced plans to
pay distributions to Ford of about $2 billion through 2010.
Results to Date of Notes Tender Offer
As of March 19, approximately $3.4 billion principal amount of
Notes had been validly tendered, according to information provided
by Global Bondholder Services Corporation, the Depositary and
Information Agent. Notes tendered pursuant to the Notes Tender
Offer may not be withdrawn, unless otherwise required by law.
The $3.4 billion principal amount of Notes tendered as of the
early tender date will result in an aggregate purchase price for
those Notes of approximately $1.1 billion if those Notes are all
accepted for purchase and not subject to proration after the
Expiration Date. In accordance with the terms of the Notes Tender
Offer, additional Notes may be tendered until 9:00 a.m., New York
City time, on April 3, 2009, unless extended or earlier
terminated.
Once the final results are known after April 3, the Notes validly
tendered and accepted for purchase will be purchased in accordance
with the Acceptance Priority Level (in numerical priority order)
as set forth in the table below and as described in the offer to
purchase (the "Notes Offer to Purchase") and related letter of
transmittal (the "Notes Letter of Transmittal"), each dated March
4, 2009. The final proration factors and the amount of tendered
Notes that will be accepted for purchase based on those proration
factors will not be known until after the Expiration Date.
Holders of Notes that validly tendered their Notes by the Early
Tender Date and whose Notes are accepted for purchase will receive
the previously announced Total Consideration. Holders of Notes
that are validly tendered after 5:00 p.m., New York City time, on
the Early Tender Date and prior to the Expiration Date and
accepted for purchase will receive the previously announced Tender
Offer Consideration only. The Notes Tender Offer is not subject
to any minimum amount of tenders. Notes subject to the Notes
Tender Offer that have been tendered but not accepted for purchase
after the Expiration Date will be returned to the tendering
holder.
The complete terms and conditions of the Notes Tender Offer are
set forth in the Notes Offer to Purchase and the Notes Letter of
Transmittal that were sent to holders of the Notes. Holders are
urged to read the Notes Tender Offer documents carefully. Copies
of the Notes Offer to Purchase and Notes Letter of Transmittal may
be obtained from the Information Agent for the Notes Tender Offer,
Global Bondholder Services Corporation, by calling (866) 470-4300.
Consummation of the Notes Tender Offer is subject to, and
conditioned upon the satisfaction or, where applicable, waiver of
certain conditions set forth in the Notes Offer to Purchase. Ford
Credit may amend, extend, or terminate the Notes Tender Offer at
any time.
About Ford Motor Credit Company
Ford Motor Credit Company LLC -- http://www.fordcredit.com-- is
one of the world's largest automotive finance companies and has
supported the sale of Ford Motor Company products since 1959. Ford
Motor Credit is an indirect, wholly owned subsidiary of Ford. It
provides automotive financing for Ford, Lincoln, Mercury and Volvo
dealers and customers.
About Ford Motor
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles in
200 markets across six continents. With about 260,000 employees
and about 100 plants worldwide, the company's core and affiliated
automotive brands include Ford, Jaguar, Land Rover, Lincoln,
Mercury, Volvo, Aston Martin, and Mazda. The company provides
financial services through Ford Motor Credit Company.
The company has operations in Japan in the Asia Pacific region. In
Europe, the company maintains a presence in Sweden, and the United
Kingdom. The company also distributes its brands in various
Latin-American regions, including Argentina and Brazil.
* * *
Moody's Investors Service in December 2008 lowered the Corporate
Family Rating and Probability of Default Rating of Ford Motor
Company to Caa3 from Caa1 and lowered the company's Speculative
Grade Liquidity rating to SGL-4 from SGL-3. The outlook is
negative. The downgrade reflects the increased risk that Ford
will have to undertake some form of balance sheet restructuring in
order to achieve the same UAW concessions that General Motors and
Chrysler are likely to achieve as a result of the recently-
approved government bailout loans. Such a balance sheet
restructuring would likely entail a loss for bond holders and
would be viewed by Moody's as a distressed exchange and
consequently treated as a default for analytic purposes.
FORWARD FOODS: Wins Final Approval of $4-Mil. DIP Loan from Owner
-----------------------------------------------------------------
Forward Foods LLC has received from the U.S. Bankruptcy
Court for the District of Delaware final approval of a $4 million
loan from Emigrant Capital Corp., the private-equity investor that
bought the business in 2006 from Bluegrass Bars LLC, Bloomberg's
Bill Rochelle reported.
According to the report, the Bankruptcy Court also approved a
settlement with Bluegrass resolving disputes arising from the
acquisition. Bluegrass will pay $975,000 to Forward while turning
$6.5 million in secured and unsecured acquisition notes over to
Emigrant.
Minden, Nevada-based Forward Foods LLC is a manufacturer of
protein bars. Forward is primarily owned by private-equity
investor Emigrant Capital Corp. which purchased the protein bar
business in 2006 from Bluegrass Bars LLC. Forward's petition
listed assets of $21.3 million against debt totaling $25.4
million, including $18.6 million in secured claims.
Forward Foods LLC filed a Chapter 11 petition February 17 in
Delaware after recalling 75% of its products on account of using
peanuts from Peanut Corp. of America. PCA had earlier filed for
Chapter 7 liquidation, after closing its plants due to salmonella
poisoning on its products.
FRONTIER AIRLINES: Court Approves $4OMM DIP Facility Refinancing
----------------------------------------------------------------
Judge Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York, authorized on March 20, 2009,
Frontier Airlines Holdings, Inc. and its debtor-affiliates, to
obtain postpetition financing of up to $40 million under the
Amended and Restated DIP Credit Facility, among the Debtors, as
borrowers, and Republic Airways Holdings Inc., as lender, and
Wells Fargo Bank Northwest, National Association, as
administrative agent and collateral agent for the Lender.
The Amended and Restated DIP Credit Facility, which expires on
December 1, 2009, permits the disposition of up to four A318
aircraft and retention of up to $1.2 million of proceeds. It
allows the Debtors to enter into other agreements contemplating
the sale, leaseback and acquisition of various aircraft.
The Court also permitted the Debtors to grant security interests,
liens and superpriority claims to the Wells Fargo, on behalf of
and for the benefit of itself and the Republic Airways, pursuant
to Sections 364(c)(1), 2) and (3) of the Bankruptcy Code, to
secure amounts owing under the Amended and Restated DIP loan
documents.
The Court further allowed Republic Airlines' prepetition, non-
priority, unsecured Claim Nos. 1373 and 1374 against the Debtors
at $150,000,000 each, in full and complete satisfaction of any
and all claims that Republic Airlines may have in connection
with, or relating, to the Airlines Service Agreement. The Claims
are not subject to offset, recoupment, deduction, counterclaim,
reconsideration, or objection by any party.
Subject only to the Carve-Out to the extent provided in the
Amended and Restated DIP Credit Agreement, no costs or expenses
of administration that have or may be incurred prior to the
Petition Date, in the Chapter 11 cases or in any conversion of
the Debtors' cases to Chapter 7 of the Bankruptcy Code will be
charged against the Administrative Agent or the DIP Lender.
Judge Drain directed the Debtors to pay Qwest Communications
Corporation any amounts owed with respect to goods dated as of
April 21, 2008, that constitute valid reclamation claims that
Qwest delivered to, and were received by, the Debtors.
The Court held that the Amended and Restated DIP Facility will
not constitute an agreement, admission or acknowledgement by any
union that any concessions with respect to, or any changes to,
any collective bargaining agreement are necessary or appropriate.
All unions reserve all rights with respect to any claim that the
terms of the Amended and Restated DIP Credit Facility do not
constitute a valid basis under Section 1113 of the Bankruptcy
Code.
The Order does not relieve the Debtors of any obligation with
respect to the requirements of Section 1113, Judge Drain
clarified.
A full-text copy of the Order approving the Amended and Restated
DIP Facility is available at no charge at:
http://bankrupt.com/misc/Frontier_ORDERRefinancedDIP.pdf
Frontier Seeks More Financing Sponsors
In an interview with Joshua Freed of the Associated Press on
March 12, 2009, Sean Menke, chief executive of Frontier Airlines,
disclosed that while the Company has gained commitment for an
extended bankruptcy loan under the Amended and Restated DIP
Facility, it has been negotiating with a financier to take them
out of bankruptcy.
"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 told Mr. Freed.
In an e-mail to The AP, Republic Airways spokesman Carlo
Bertolini noted that the DIP Loan "is fully secured and will
generate a solid return on our investment," but did not comment
on whether it is considering an exit financing deal with
Frontier.
"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," Mr. Menke told The AP, adding that he is scheduling
meetings "with more potential investors . . . in [the] coming
weeks."
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)
FRONTIER AIRLINES: Seeks to Enforce Restructuring Pact With Union
-----------------------------------------------------------------
Frontier Airlines Inc. and its affiliates ask Judge Robert D.
Drain of the U.S. Bankruptcy Court for the Southern District of
New York to enforce a restructuring agreement Frontier entered
into with the Frontier Airlines Pilots Association dated as of
January 13, 2009, which was ratified by the FAPA membership on
January 5, and approved by the Court on January 13.
The Restructuring Agreement was agreed by Frontier and FAPA
leaders in December 2008, to effectuate the modified terms in the
Union's collective bargaining agreement with the airline, which
extends certain wage and benefit concessions through December
2011. It provides for reductions in pay and benefits of Frontier
pilots, which, according to the Debtors, will result in labor
cost savings of approximately $25 million over the duration of
the Agreement.
Pursuant to the Agreement, FAPA was granted an allowed general
non-priority unsecured claim for $28,957,432 in the Debtors'
cases pursuant to Section 502 of the Bankruptcy Code. The Union
asserts the FAPA Claim on account of the concessions it made to
the Debtors under an interim wage agreement in October 2008, and
the Restructuring Agreement.
FAPA was given the sole authority and responsibility to determine
the manner of allocation among pilots on account of the FAPA
Claim. In this regard, no FAPA-represented pilot will have any
claim or cause of action on account of the FAPA Interim Agreement
or the FAPA Restructuring Agreement.
Notwithstanding the provisions of the FAPA Agreements and the
FAPA Order, FAPA has sought to claw back millions of dollars in
savings it granted to the Company in concessionary agreements
that provided for the temporary suspension of Frontier's 401(k)
Matching Program for its pilots, Benjamin S. Kaminetzky, Esq., at
Davis Polk & Wardwell, in New York, relates on behalf of the
Debtors.
Moreover, despite FAPA's express agreement to the suspension the
401(k) Matching Program under the FAPA Agreement, Frontier
received notices of dispute from three pilots in early February
2009, alleging that the Company (i) failed to properly "true up"
its matching contributions to those pilots' 401(k) Plans, and
(ii) was required to make a full annual match to the 401(k) Plan
match for the period from June through December 2008, Mr.
Kaminetzky adds.
"While Frontier has explained to the Union that the matching
contributions were suspended for portions of 2008 pursuant to the
express terms of the FAPA Agreements, the Union has insisted that
a 'true up' clause contained in the original CBA magically
obligates Frontier to match pilot contributions at the end of
each calendar year in full," Mr. Kaminetzky complains.
FAPA has argued that the Agreements only allow Frontier to defer
the payments to the end of each calendar year, but that
Frontier's prepetition obligation to match pilot contributions is
otherwise unchanged. In response, Frontier has informed FAPA
that the True Up provision of the CBA -- which is addressed
solely to ensure that contributing pilots receive the full
benefit of the matching contributions that the Company is
otherwise obligated to make -- does not apply when Frontier's
matching obligations have been suspended, Mr. Kaminetzky
elaborates.
According to Mr. Kaminetzky, FAPA has rejected the Debtors'
arguments, ignored the clear language of the FAPA Interim
Agreement, FAPA Restructuring Agreement, and the FAPA Order. In
fact, the Union has indicated that it will prosecute its
grievance actions or bring a lawsuit either before the Bankruptcy
Court or in Denver, Colorado.
Against this backdrop, Frontier seeks a declaratory judgment from
the Court confirming that:
(1) no Matching Contributions are owed by Frontier to the
401(k) Plan for the portions of 2008 during which the Plan
was suspended and for 2009, and that only reduced matching
amounts are due for 2010 through 2012, as the Court-
approved FAPA Agreements provide; and
(2) notices of dispute, grievance actions or other litigation
brought by FAPA or its members seeking additional payments
to the 401(k) Plan are barred, as provided by the FAPA
Order.
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)
FRONTIER AIRLINES: Seeks to Transfer Aircraft to Q Aviation
-----------------------------------------------------------
Frontier Airlines Inc. and its affiliates sought and obtained
authority from Judge Robert D. Drain of the U.S. Bankruptcy Court
for the Southern District of New York to enter into a transaction
with Q Aviation, LCC, which contemplates:
(1) the transfer of one Airbus A318 airframe, Tail No. MSN
3038, complete with two CFM International, Inc. CFM56-
5B8/P engines bearing Serial Nos. 697155 and 697156, by
Frontier to Q Aviation or one or more of its
affiliates, free and clear of all liens, claims and
encumbrances; and
(2) the release of all of Frontier's outstanding obligations
under the loan agreement, related security agreement
and other documents pursuant to which Q Aviation loaned
certain amounts to Frontier, and holds a lien on the Q
Aviation Aircraft securing repayment of the amounts.
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York,
relates that the Debtors own the Q Aviation Aircraft, which is
subject to first priority security interest in favor of Wells
Fargo Bank Northwest, National Association, as collateral agent
for Q318, LLC.
The Q Aviation Term Sheet contemplates that Frontier will
transfer the Q Aviation Aircraft to Q Aviation in exchange for:
-- satisfaction in full of all amounts due under the Loan
Documents and release from all obligation; and
-- payment from Q Aviation to Frontier of an excess amount,
which amount is confidential but is contained in the Q
Aviation Term Sheet provided to the Court, the U.S. Trustee
and the Official Committee of Unsecured Creditors.
Upon the Court's approval of the Q Aviation Transaction, Frontier
and Q Aviation expect that the ferry of the Q Aviation Aircraft
to the delivery location will have taken place by April 30, 2009.
At Q Aviation's option, Frontier will remove (i) one or both
Engines from the Q Aviation Aircraft and (ii) the inlet cowl,
hydraulic pump, integrated drive generators from one or both
Engines. The closing date of the Q Aviation Transaction will
occur no later than May 8, 2009, after Frontier completes, or is
released by Q Aviation from its obligation to complete, the
Engine/Engine Accessories Removal and QEC/EBU Tagging.
On the Ferry Date, Q Aviation will deposit the Excess Amount into
an escrow account. On the Closing Date, Q Aviation will
authorize the escrow agent to release the Excess Amount to
Frontier, and will pay the Loan Amount directly to the Lender.
However, upon at least five business days' prior written notice
by Q Aviation to Frontier and if Q Aviation has first obtained
the written consent of the Lender, Q Aviation may elect to
satisfy payment of the Loan Amount by assuming Frontier's
obligations under the Loan Documents.
Following a Loan Assumption Election or payment of the Loan
Amount, Frontier will have no further payment obligations owing
under the Loan Documents and will be released from all other
obligations.
The closing of the Q Aviation Transaction is subject to certain
conditions precedent, including:
* the execution and delivery of definitive documentation with
respect to the Q Aviation Transaction;
* the delivery by Frontier of bills of sale in customary form;
* the Airframe and each of the Engines, as of the Ferry Date
and immediately prior to the Final Inspection;
* the absence of actual or threatened litigation by any party
to enjoin the Q Aviation Transaction or otherwise affecting
the Q Aviation Aircraft;
* the Delivery Location and the location on the Closing Date
for the Airframe and each of the Engines being an acceptable
jurisdiction to Frontier and Q Aviation from a tax and
reporting perspective; and
* the Airframe and each of the Engines being located on the
Closing Date in a jurisdiction acceptable to Frontier and Q
Aviation with respect to the non-applicability of any sales,
transfer or similar tax.
Following execution of the Q Aviation Term Sheet, the parties
will enter into an Aircraft Purchase Agreement incorporating
terms substantially consistent with the Q Aviation Term Sheet.
Mr. Hubner notes that the Debtors are filing the Transfer Motion
contemporaneously with the request to enter into an Aircraft
Lease Agreement with C.I.T. Leasing Corporation, through which
the Debtors seek authorization to, among other things, lease from
CIT one Airbus A320-214 aircraft for 60 calendar months.
In this regard, a key benefit of the proposed Aircraft Transfer
is that the Debtors will replace the Q Aviation Aircraft with a
better model. The Debtors have determined that the CIT Aircraft
is well-suited to the Debtors' long-term business plan and
rationalization efforts.
The Debtors also believe that the price they are receiving for
the Q Aviation Aircraft is favorable to the Debtors based on
current market prices.
Additionally, he says, the larger size and increased capacity of
the CIT Aircraft allows it to carry a larger passenger load than
the Q Aviation Aircraft, thus providing the opportunity for
increased efficiency and enhanced revenue streams for the
Debtors.
Mr. Huebner says the proposed Aircraft Transfer is an important
part of the Debtors' long-term restructuring efforts. "It is not
a transfer made in haste at a discounted price to generate cash,
but a thoroughly-considered transaction that will generate
material liquidity for the benefit of the Debtors, their estates
and creditors," he says.
The Court held that, upon consummation of the Aircraft Transfer,
all persons and entities holding liens, claims, interests or
encumbrances with respect to the Q Aviation Aircraft -- with the
exception of Q Aviation in the event it makes a Loan Assumption
Election - are forever barred and permanently enjoined from
asserting the Liens against the Q Aviation Aircraft, the Debtors
or Q Aviation.
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)
FRONTIER AIRLINES: Wins Court OK to Ink Operating Lease With CIT
----------------------------------------------------------------
Judge Robert D. Drain of the U.S. Bankruptcy Court has authorized
Frontier Airlines Inc. and its affiliates to enter into an
operating lease transaction with C.I.T. Leasing Corporation dated
February 27, 2009.
The CIT Term Sheet contemplates that Frontier will lease from CIT
one Airbus A320-214 aircraft bearing manufacturer Serial No.
1806, complete with two CFM International, Inc. CFM56-5B4/P
engines. The Lease is effective for 60 calendar months from the
delivery date with rent payable monthly in advance commencing on
June 15, 2009.
The CIT Aircraft will be delivered to Frontier on or about
March 31, 2009, allowing the Debtors adequate time to modify the
CIT Aircraft for induction into their fleet by April 15, 2009.
Pursuant to the terms of the CIT Term Sheet, Frontier will pay an
Initial Deposit equal to one month's Basic Rent within two
business days following execution of the CIT Term Sheet. A
Subsequent Deposit of two months' Basic Rent is payable within
three business days following the date of the Approval Order, and
a final Delivery Deposit of one month's Basic Rent is payable on
or before the Delivery Date.
The Security Deposits are deemed confidential as contained in the
CIT Term Sheet, which has been provided to the Court, the U.S.
Trustee and the Official Committee of Unsecured Creditors.
Frontier obtained the consent of the Creditors' Committee to pay
the Commitment Amount on March 2, 2009. The Commitment Amount is
refundable if the CIT Aircraft is not tendered on the Delivery
Date, in breach of CIT's obligations under the CIT Term Sheet.
Furthermore, the CIT Term Sheet provides for the payment of a
commitment amount of $100,000 by Frontier to CIT by March 2,
2009, in order for CIT to take the CIT Aircraft off the market.
The closing of the Operating Lease Transaction is subject to
certain conditions precedent, including:
-- the execution and delivery of definitive documentations
with respect to the Operating Lease Transaction;
-- a satisfactory initial physical inspection of the CIT
Aircraft and its records by Frontier on or before March 13,
2009;
-- delivery by Frontier of the customary closing
Documentation;
-- the absence of an Event of Loss with respect to the CIT
Aircraft or either engine between the date of inspection
and the Delivery Date;
-- mutual representations as of the Delivery Date of the
absence of actual or threatened litigation enjoining the
Operating Lease Transaction or otherwise affecting the
Aircraft; and
-- the location of the CIT Aircraft in a tax jurisdiction
acceptable to CIT and Frontier; and
-- approval by Frontier's Board of Directors of the Operating
Lease Transaction.
According to Marshall S. Huebner, Esq., at Davis Polk & Wardwell,
in New York, the Debtors' fleet consisted of 72 aircraft as of
the Petition Date. The Debtors operate a fleet of 61 aircraft,
consisting of 38 Airbus A319 aircraft, 11 Airbus A318 aircraft,
two Airbus A320 aircraft and 10 Bombardier Q400 aircraft.
Mr. Huebner relates that the Debtors own the Q Aviation Aircraft,
which is subject to a first priority security interest in favor
of Wells Fargo Bank Northwest, National Association, as
collateral agent for Q318, LLC. As part of the Debtors' ongoing
efforts to rationalize their fleet, they have determined that
continued ownership of the Q Aviation Aircraft is uneconomical
for the Debtors.
Because the Q Aviation aircraft is unnecessary to their
operations in light of other alternatives for leasing aircraft in
the current market, the Debtors have entered into negotiations to
transfer the Q Aviation Aircraft to Q Aviation.
Mr. Huebner continues that while the divestiture of the Q
Aviation Aircraft from the Debtors' fleet will enhance liquidity
to the Debtors' estates by providing net cash proceeds, the
Debtors need to replace the Q Aviation Aircraft with a more
efficient alternative in order for the Debtors to continue
operations without interruption.
The Debtors have assessed various aircraft lease and purchase
options within the context of the ongoing development of the
Debtors' fleet and overall business plan, and have determined
that the CIT Aircraft is best suited to the Debtors' long-term
business plan and rationalization efforts.
Mr. Huebner specifies that the pricing terms of the Operating
Lease Transaction are significantly more favorable to the Debtors
than continued ownership of the Q Aviation Aircraft or other
market leasing alternatives. Additionally, the larger size and
increased capacity of the CIT Aircraft allows it to carry larger
passenger loads than the Q Aviation Aircraft, thus providing the
Debtors with an opportunity for increased efficiency and enhanced
revenue streams.
The Debtors expect that the Fleet Rationalization Transactions
will contribute significant cash flows to the 2009 operating
plan, enabling them to continue implementing their operational
strategy and providing more cash flow and less risk than any
other alternative plan to sell or lease aircraft in the market.
The Court ruled that upon the occurrence of a default under the
terms of the Agreements contemplated by the CIT Term Sheet, the
automatic stay imposed by Section 362(a) of the Bankruptcy Code
will be modified to the extent necessary to permit CIT to enforce
any and all of its rights and remedies, including the suspension
of and performance and termination of the Agreements under
Section 1110 of the Bankruptcy Code.
Prior to the Court's entry of its approval, the Debtors filed a
certificate of no objection with respect to their Motion.
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)
GENERAL GROWTH: Four Executives to Resign from Posts
----------------------------------------------------
Kris Hudson at The Wall Street Journal reports that four
executives will leave General Growth Properties Inc.
WSJ says that these executives will leave the Company:
-- Jean Schlemmer, chief development officer;
-- Alex Berman, senior vice president of international
division;
-- human-resources chief Judy Herbst; and
-- investor-relations director Tim Goebel.
According to WSJ, the changes are the latest implemented by Adam
Metz and Thomas Nolan after the former board members took over as
General Growth's CEO and president, respectively, in October 2008.
WSJ states that General Growth promoted Sharon Polonia to
executive vice president of asset management from senior vice
president.
WSJ relates that General Growth is seeking to cut costs and
reshape its operations as it negotiates with lenders for more time
to pay past-due debts.
About General Growth
Based in Chicago, Illinois, General Growth Properties, Inc.
(NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S.
mall owner, having ownership interest in, or management
responsibility for, more than 200 regional shopping malls in 44
states, as well as ownership in master planned community
developments and commercial office buildings. The Company's
portfolio totals roughly 200 million square feet of retail space
and includes more than 24,000 retail stores nationwide. General
Growth is a self-administered and self-managed real estate
investment trust.
General Growth said in a regulatory filing Sept. 30 that its
potential inability to address its 2008 or 2009 debt maturities in
a satisfactory fashion raises substantial doubts as to its ability
to continue as a going concern.
* * *
As reported by the Troubled Company Reporter on Dec. 11, 2008,
Fitch Ratings, has downgraded the Issuer Default Ratings and
outstanding debt ratings of General Growth Properties to 'C'
from 'B'.
GENERAL GROWTH: Lender to Seize Oakwood Shopping Center
-------------------------------------------------------
Sandra M. Jones at Chicago Tribune reports that the 24th Judicial
District Court for Jefferson Parish has ordered the seizure and
sale of General Growth Properties Inc.'s Oakwood shopping center.
Citigroup said in a statement that its unit, Citicorp, filed a
petition on Tuesday for the shopping center's seizure. Chicago
Tribune relates that General Growth missed payment on a
$95 million loan from Citicorp, which matured last week.
According to Chicago Tribune, Citigroup said that the court
ordered that Jefferson Parish take control of the shopping center
and sell it.
Chicago Tribune states that a General Growth spokesperson said
that the Company is "evaluating appropriate responses."
Citing Citigroup and General Growth, Chicago Tribune relates that
Oakwood Center will remain open.
Kris Hudson at The Wall Street Journal reports that General Growth
continues to seek payment-deadline extensions from its mortgage
holders, who can move to seize property pledged as collateral for
their loans if the borrower fails to pay. Citing people familiar
with the matter, WSJ relates that the foreclosure wouldn't trigger
"cross default" provisions.
General Growth Still in Talks With Bondholders
General Growth is still trying to convince bondholders to accept
reduced terms, WSJ states. The report says that General Growth
has been trying for months to dig out of $27 billion of debt.
According to WSJ, General Growth has $2.25 billion in bonds due
between March 22, 2009, and 2013. WSJ states that any of those
bondholders could demand immediate payment, because the bonds have
cross-default provisions.
General Growth, WSJ relates, will stop paying interest and
principal on the bonds. WSJ notes that General Growth has
proposed to pay bondholders a fee in exchange for their not
demanding payment through the end of this year. According to the
report, the proposed quarterly fee would be 62.5 cents per $1,000
of bonds, less than the interest that they would be owed. The
report states that the interest would continue to accrue, but
would be added to the bonds' principal for payment later.
WSJ relates that after failing to get the targeted percentage of
bondholders agreeing to its offer, General Growth's options
include:
-- amending the offer to increase the quarterly fee,
-- extending the acceptance deadline without changing the
fee, or
-- settling for the percentages of bondholders who already
have agreed, and close the offer.
General Growth, under any of those options, would continue
operating under the threat that any of its bondholders could
demand immediate payment at any time.
WSJ quoted CRT Capital Group LLC analysts Kevin Starke and Amer
Tiwana as saying, Given that [General Growth] appears to be aiming
to treat all similarly situated creditors equally, and that it is
working toward a comprehensive restructuring, it is not a foregone
conclusion that a judge would grant relief [to creditors] in an
involuntary filing."
About General Growth
Based in Chicago, Illinois, General Growth Properties, Inc.
(NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S.
mall owner, having ownership interest in, or management
responsibility for, more than 200 regional shopping malls in 44
states, as well as ownership in master planned community
developments and commercial office buildings. The Company's
portfolio totals roughly 200 million square feet of retail space
and includes more than 24,000 retail stores nationwide. General
Growth is a self-administered and self-managed real estate
investment trust.
General Growth said in a regulatory filing Sept. 30 that its
potential inability to address its 2008 or 2009 debt maturities in
a satisfactory fashion raises substantial doubts as to its ability
to continue as a going concern.
* * *
As reported by the Troubled Company Reporter on Dec. 11, 2008,
Fitch Ratings, has downgraded the Issuer Default Ratings and
outstanding debt ratings of General Growth Properties to 'C'
from 'B'.
GENERAL GROWTH: Moody's Corrects Ratings; Cuts Ratings to 'C'
-------------------------------------------------------------
Correction to text: Substitute "March 16, 2009" for "March 16,
2008" in the second paragraph, second sentence, "The REIT's
failure to repay $395mm in senior unsecured debt bonds at the
Rouse Company LP level on March 16, 2009"
Revised press release:
Moody's Investors Service has downgraded the ratings on General
Growth Properties, Inc., certain of its subsidiaries and The Rouse
Company LP to C from Ca senior secured bank debt; to C from Ca
senior unsecured debt. This concludes Moody's review.
The rating action reflects a heightened likelihood of economic
default and the potential for above-average loss severity on
General Growth and Rouse debt. The REIT's failure to repay $395mm
in senior unsecured debt bonds at the Rouse Company LP level on
March 16, 2009, coupled with approximately $1.2 billion in past-
due mortgage debt, including $900 million related to mortgage
loans secured by the Fashion Show and Palazzo shopping centers in
Las Vegas, will likely trigger an imminent acceleration of the
Rouse bonds and the GGP senior secured bank debt.
Although the REIT has received consents from the requisite lenders
on March 16th waiving certain identified events of default under
the 2006 Senior Credit Agreement and forbearing from exercise
certain of the lenders' default related rights and remedies with
respect to such identified events of default until December 31,
2009, the REIT is still seeking consents from the holders of
Rouse's unsecured notes (five series with an aggregate outstanding
principal amount of approximately $2.25 billion at December 31,
2008) to forbear from exercising remedies until December 31, 2009.
Importantly, the effectiveness of the forbearance under the 2006
Senior Credit Agreement depends on the successful completion of
the consent solicitation relating to the Rouse notes. Moody's
stressed that funding and liquidity challenges that lie ahead for
the REIT are burdensome in an increasingly depressed capital
environment.
Moody's also expects more earnings pressure on GGP's operating
retail properties due to the underlying economic conditions,
despite the quality of the portfolio and thus far stable operating
performance. The master planned community assets will continue to
experience significant operating challenges.
These ratings were downgraded:
-- GGP Limited Partnership - Senior secured bank debt to C from
Ca, and senior unsecured debt shelf to (P)C from (P)Ca.
-- General Growth Properties, Inc. - Senior secured bank debt to
C from Ca, and senior unsecured debt shelf to (P)C from
(P)Ca.
-- The Rouse Company LP - Senior unsecured debt to C from Ca.
Moody's last rating action with respect to General Growth was on
December 15, 2008, when Moody's downgraded the ratings on General
Growth Properties, Inc., certain of its subsidiaries and The Rouse
Company LP (to Ca from Caa2 senior secured bank debt; to Ca from
Caa2 senior unsecured debt). The ratings remained on review for
further possible downgrade.
General Growth Properties, Inc. is headquartered in Chicago,
Illinois, and is one of the largest owners and operators of
regional malls in the United States. The REIT reported assets of
$29.6 billion, and equity of $1.8 billion, at December 31, 2008.
GHOST TOWN: Creditors Meeting Slated for April 15 in N. Carolina
----------------------------------------------------------------
The Bankruptcy Administrator will convene a meeting of creditors
in Ghost Town Partners, LLC's Chapter 11 case on April 15, 2009,
at 1:00 p.m., at the Bankruptcy Courtroom, First Floor, 100 Otis
Street, Asheville, North Carolina.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Based in Waynesville, North Carolina, Ghost Town Partners, LLC
operates an amusement park. The Debtor filed for Chapter 11
protection on March 11, 2009, (Bankr. W. D. N.C. Case No.: 09-
10271) David G. Gray, Esq. at Westall, Gray, Connolly & Davis,
P.A. represents the Debtor in its restructuring efforts. The
Debtor listed total assets of $13,035,300 and total debts of
$12,305,672.
GHOST TOWN: U.S. Bankruptcy Court Approves David Gray as Counsel
----------------------------------------------------------------
Hon. George R. Hodges of the U.S. Bankruptcy Court for the Western
District of North Carolina authorized Ghost Town Partners, LLC to
employ David G. Gray, Esq. as counsel.
Mr. Gray is expected to:
a) give legal advice with respect to its powers and duties in
the continued operation of its business and management of
its property;
b) prepare necessary applications, answers, orders, reports
and other legal papers; and
c) perform all other legal services which may be necessary
herein.
The application did not disclose the Debtor's fee arrangements
with Mr. Gray.
To the best of the Debtor's knowledge, Mr. Gray is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Mr. Gray can be reached at:
Westall, Gray, Connolly & Davis, P.A.
81 Central Avenue
Asheville, NC 28801
Tel: (828) 254-6315
Fax: (828) 255-0305
About Ghost Town Partners, LLC
Based in Waynesville, North Carolina, Ghost Town Partners, LLC
operates an amusement park. The Debtor filed for Chapter 11
protection on March 11, 2009, (Bankr. W. D. N.C. Case No.: 09-
10271) David G. Gray, Esq. at Westall, Gray, Connolly & Davis,
P.A. represents the Debtor in its restructuring efforts. The
Debtor listed total assets of $13,035,300 and total debts of
$12,305,672.
GOODY'S LLC: Gets Court Nod to Sell Spring Merchandise
------------------------------------------------------
Goody's LLC was authorized by the U.S. Bankruptcy Court for the
District of Delaware to take $380,000 for spring merchandise
purchased for $2.1 million, Bloomberg's Bill Rochelle reported.
According to the report, the buyers must pay customs duties and
storage charges totaling an additional $746,000. The sale, the
report adds, will generate an additional $255,000 for Goody's
through the refund of deposits given freight forwarders.
Goody's LLC, returned to Chapter 11 three months after
confirmation a reorganization plan. It has conducted going-out-
of-business sales for its stores.
Headquartered in Wilmington, Delaware, Goody's LLC, successor to
Goody's Family Clothing Inc., operates a chain of clothing stores.
Goody's LLC and 13 of its affiliates filed for Chapter 11
protection on January 13, 2009 (Bankr. D. Del. Lead Case No. 09-
10124). Young, Conaway, Stargatt & Taylor, LLP, and Bass Berry &
Sims PLC represent the Debtors as counsel. Skadden, Arps, Slate
Meagher & Flom, LLP is the Debtors' special counsel; FTI
Consulting Inc. is the Debtors' financial advisor.
Goody's Family Clothing Inc., as of May 31, 2008, operated 355
stores in several states with approximately 9,868 personnel of
which 170 employees are covered under a collective bargaining
agreement. Goody's Family and 19 of its affiliates filed for
Chapter 11 protection on June 9, 2008 (Bankr. D. Del. Lead Case
No. 08-11133). Gregg M. Galardi, Esq., and Marion M. Quirk, Esq.,
at Skadden Arps Slate Meagher & Flom LLP, and Paul G. Jennings,
Esq., at Bass, Berry & Sims PLC, represented the Debtors.
The Company emerged from bankruptcy Oct. 20, 2008, after closing
more than 70 stores. The reorganized entity was named Goody's
LLC.
GOTTSCHALKS INC: May Receive 3 'Going Concern' Bids
---------------------------------------------------
Gottschalks Inc. may avoid the fate of retailers who were
liquidated in Chapter 11, Bloomberg's Bill Rochelle reported.
Possibly three going-concern bidders could participate in the
March 30 auction, the report said, citing two people with
knowledge of the matter.
Gottschalks has appointed a joint venture comprised of liquidators
SB Capital Group LLC, Tiger Capital Group LLC, Great American
Group LLC, and Hudson Capital Partners LLC as a "stalking horse"
bidder.
The U.S. Bankruptcy Court for the District of Delaware has set an
April 1, 2009 hearing to confirm the results of the auction and
approve the sale of substantially all of Gottschalks' assets to
the prevailing bidders at the auction.
The auction will be held at the offices of Richards, Layton &
Finger, P.A., 920 N. King Street, Wilmington, Delaware 1980, on
March 30, at 10:00 a.m. (EDT).
Objections to the sale motion that are specific to any individual
bidders will be filed and served no later than 5:00 p.m. (EDT) on
March 31.
On March 4, 2009, the Court approved the sales procedures for a
going concern of all or substantially all of the Debtor's assets
or a full chain liquidation sale of the Debtor's inventory and
equipment.
About Gottschalks Inc.
Headquartered in Fresno, California, Gottschalks Inc. (Pink
Sheets: GOTTQ.PK) -- http://www.gottschalks.com-- is a regional
department store chain, operating 58 department stores and three
specialty apparel stores in six western states. Gottschalks
offers better to moderate brand-name fashion apparel, cosmetics,
shoes, accessories and home merchandise.
The xompany filed for Chapter 11 protection on January 14, 2009
(Bankr. D. Del. Case No. 09-10157). O'Melveny & Myers LLP
represents the Debtor in its Chapter 11 case. Lee E. Kaufman,
Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger,
P.A., will serve as the Debtors' co-counsel. The Debtor selected
Kurtzman Carson Consultants LLC as its claims agent. The U.S.
Trustee for Region 3 appointed seven creditors to serve on an
Official Committee of Unsecured Creditors. When the Debtor filed
for protection from its creditors, it listed $288,438,000 in total
assets and $197,072,000 in total debts as of January 3, 2009.
GREENBRIER HOTEL: Can Access $4MM DIP Financing from CSX Corp.
--------------------------------------------------------------
Hon. Kevin R. Huennekens of the U.S. Bankruptcy Court for the
Eastern District of Virginia authorized, on an interim basis,
Greenbrier Hotel Corporation and its debtor-affiliates to:
i) execute and deliver (1) the revolving DIP loan agreement
dated as of March 20, 2009, among Greenbrier, the other
Debtors and CSX Corporation, as the DIP lender; and (2) the
other DIP Documents as may be necessary or appropriate in
connection therewith;
ii) obtain credit under the DIP Documents on an interim basis in
an aggregate principal amount of up to $4,000,000 plus
interest, fees, expenses and other amounts payable in
connection therewith;
iii) pay the principal, interest, fees, expenses and other
amounts payable under the DIP Documents, as the amounts
become due, and to perform the other and further acts as
may be necessary or appropriate in connection with the DIP
Documents;
iv) grant the DIP Lender of allowed superpriority administrative
expense claim status in each of the Chapter 11 cases for all
obligations of the Debtors under the DIP Documents;
v) grant the DIP Lender of automatically perfected security
interests in and liens on all of the DIP Collateral,
including, without limitation, all property constituting
cash collateral, including, without limitation, any cash,
securities or other property maintained in any account or
accounts with any depository institution, which liens will
be subject to the priorities;
vi) pay the principal, interest, fees, expenses and other
amounts payable under the DIP Documents as they become due;
and
vii) use Cash Collateral.
As of the Petition Date, Greenbrier and Greenbrier IA, Inc., were
indebted and liable, without defense, counterclaim or offset of
any kind, to CSX Corporation in the amounts of $91 million and
$277,863, owing under the Cash and Exposure Management Plan
adopted by resolution of the board of directors of CSX Corporation
on Oct. 14, 1987;
The CSX Prepetition Indebtedness is not secured by liens on or
security interests in any assets of the Debtors; the CSX
Prepetition Indebtedness constitutes the legal, valid and binding
obligation of the respective Cash Pool Borrowers in the amounts
stated in subsection (a) hereof, enforceable in accordance with
its terms, and no portion of the CSX Prepetition Indebtedness or
any payments made to the Prepetition Lender or applied to the
obligations owing under the Prepetition Loan Documents prior to
the Petition Date is subject to avoidance, subordination,
recharacterization, recovery, attack, offset, counterclaim,
defense or claim of any kind pursuant to the Bankruptcy Code or
applicable nonbankruptcy law.
The Debtors will use proceeds advanced under the DIP loan
agreement and any Cash Collateral, in order to, among other
things, finance working capital requirements of the Debtors, pay
fees and expenses associated with the Cases and for general
corporate purposes of the Debtors.
The Debtors relate that the financing is the sole means of
sustaining the Debtors' ongoing operations while the Debtors seek
to consummate a sale.
Salient Terms of the DIP Facility
DIP Lender: CSX Corporation
Commitment: $19 million revolving Credit Facility,
with $4 million available on an interim
basis.
Maturity The earliest of (i) June 30, 2009, (ii)
April 13, 2009, if the final order has
not been entered by the date; (iii) the
effective date of a Plan or
Reorganization in the Debtors' cases;
(iv) the date of a sale, transfer, or
disposition of substantially all of the
borrowers assets; or (v) date of
acceleration under the terms of the
credit agreement.
Priority and Liens The DIP facility will be secured by a
first priority lien on all of the
Debtors' unencumbered assets, and a
second priority lien on any encumbered
assets, subject only to the permitted
encumbrances existing as of the petition
date and the Carve Out.
In addition, the DIP facility will
constitute a superpriority administrative
expense claim over any and all other
administrative expenses.
Carve Out After an event of default, (i) accrued
and unpaid professional fees and expenses
incurred by the Debtors and any official
committee of unsecured creditors in the
Debtors' Chapter 11 cases, as and when
allowed on a final basis; (ii) all fees
required to be paid to the U.S. Trustee.
Available Fee For the Debtors non-use of available
funds, a fee in an amount equal to (i) 2%
per annum multiplied by (ii) (A) the
maximum amount minus (B) the average for
the period of the daily closing balances
of the revolving loans outstanding during
the period for which the fee is due.
Interest Rate Simple interest in arrears at the rate of
10% per annum, based on the aggregate
principal amount of revolving loans
outstanding from time to time.
Default Interest The rate otherwise in effect plus 2.0%
Forecast: Rolling 13-week cash revenue and expense
forecast of the Debtors and their
subsidiaries beginning from and including
the effective date, to be delivered to
the DIP Lender and updates from time to
time.
About Greenbrier Hotel Corporation
Based in White Sulphur Springs, West Virginia, Greenbrier Hotel
Corporation -- http://www.greenbrier.com-- fka CSX Hotels, Inc.,
The White Sulphur Springs Co. is a wholly owned subsidiary of The
Greenbrier Resort and Management Corporation, which is wholly
owned by CSX Corporation.
The Debtor and its debtor-affiliates filed for Chapter 11
protection on March 19, 2009, (Bankr. E. D. Va. Lead Case No.: 09-
31703) Dion W. Hayes, Esq. and Patrick L. Hayden, Esq. at
McGuireWoods LLP represent the Debtors in their restructuring
efforts. The Debtors propose to employ Huddleston Bolen LLP as
corporate counsel; Dinsmore & Shohl LLP as special labor counsel;
Kurtzman Carson Consultants LLC as claims agent. The Debtors
listed estimated assets of $50 million to $100 million and
estimated debts of $100 million to $500 million.
GREEKTOWN CASINO: Gets Court OK to Incur Another $46MM DIP Loan
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan
authorized Greektown Holdings LLC and its debtor-affiliates to
obtain an additional postpetition financing of up to $46 million,
on a final basis, which consist of a new $26 million Tranche A-1
term loan and a new $20 million Tranche B-1 term loan.
The Additional DIP Loans will be used for the completion of a
400-room luxury hotel and for the construction and operating
costs of the Luxury Hotel.
The Tranche B-1 Loans will be available only upon satisfaction of
the Additional DIP Milestones, which include, among others, (1) a
May 1, 2009 deadline for the Debtors to execute an asset purchase
agreement with respect to their operating assets or deliver a
reorganization plan term sheet.
If the Debtors want to pursue a reorganization plan, the DIP Loan
Documents require that the plan be filed with the Court no later
than June 1, 2009. They are also required under the DIP Loan
Documents to complete a sale of their assets or consummate a plan
of reorganization by September 1, 2009.
The Additional Loans will mature on the earlier of:
(i) June 1, 2009;
(ii) the effective date of a plan of reorganization of the
Debtors;
(iii) any sale or transfer of a substantial portion of the
Debtors' casino or hotel; or
(iv) 60 days after an interim order is entered by the Court,
if an amended final order is not entered within the 60-
day period.
Postpetition Liens securing the Debtors' postpetition obligations
related to the Additional DIP Loans will be senior to all other
postpetition obligations, the Court ruled. The DIP Obligations
is granted a first lien on all of the Debtors' unencumbered
property. All DIP Obligations constitute allowed administrative
expense claims under Section 503(b) of the Bankruptcy Code and
allowed superpriority claims that are entitled to superpriority
treatment under Section 364(c)(1) of the Bankruptcy Code.
The Debtors are also authorized to pay fees and expenses required
under the DIP Loan Documents.
A full-text copy of the Final Additional DIP Order is available
for free at: http://bankrupt.com/misc/GreekFinalDIPOrd.pdf
In line the approved Additional DIP Loans, the Court also
permitted the Debtors to use the Cash Collateral of their
Prepetition Lenders, on a final basis, in accordance with a
rolling 13-week budget, as may be modified from time to time with
the consent of the DIP Lenders.
The Prepetition Lenders are granted adequate protection of their
interests in the Prepetition Collateral for and equal in amount
to the aggregate diminution in the value of that interest by
reason of use of the Cash Collateral, the priming of the
Prepetition Liens, and postpetition changes in the value of the
Prepetition Collateral, among others.
About Greektown Casino
Based in Detroit, Michigan, Greektown Holdings, LLC and its
affiliates -- http://www.greektowncasino.com/-- operates world-
class casino gaming facilities located in Detroit's historic
Greektown district featuring more than 75,000 square feet of
casino gaming space with more than 2,400 slot machines, over 70
tables games, a 12,500-square foot salon dedicated to high limit
gaming and the largest live poker room in the metropolitan Detroit
gaming market.
Greektown Casino employs approximately 1,971 employees, and
estimates that it attracts over 15,800 patrons each day, many of
whom make regular visits to its casino complex and related
properties. In 2007, Greektown Casino achieved a 25.6% market
share of the metropolitan Detroit gaming market. Greektown Casino
has also been rated as the "Best Casino in Michigan" and "Best
Casino in Detroit" numerous times in annual readers' polls in
Detroit's two largest newspapers.
The company and seven of its affiliates filed for Chapter 11
protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No.
08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and
Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the
Debtors in their restructuring efforts. Judy B. Calton, Esq., at
Honigman Miller Schwartz and Cohn LLP, represents the Debtors as
their special counsel. The Debtors chose Conway MacKenzie &
Dunleavy as their financial advisor, and Kurtzman Carson
Consultants LLC as claims, noticing, and balloting agent.
When the Debtor filed for protection from its creditors, it listed
consolidated estimated assets and debts of $100 million to
$500 million.
(Greektown Casino Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
GREEKTOWN CASINO: Seeks Authority to Employ Randy Fine as CEO
-------------------------------------------------------------
Nathan Hurst of The Detroit News reports that the U.S. Bankruptcy
Court for the Eastern District of Michigan has given Greektown
Holdings, LLC and its affiliates permission to employ:
(a) Randy Fine as their chief executive officer,
(b) Amanda Totaro as their vice president of marketing, and
(c) Chris Colwell general manager.
According to Daniel J. Weiner, Esq., at Schafer and Weiner PLLC,
in Bloomfield Hills, Michigan, Messrs. Fine and Colwell and Ms.
Torato are currently employed by the Fine Point Group, the
Debtors' gaming consultants.
Although they believe that the employment of the Individuals as
officers are in the ordinary course of business, the Debtors
nevertheless in an abundance of caution, seek Court authority for
the retentions and seek to satisfy the requirements of certain
other orders entered by the Court and certain other agreements
entered into among the Debtors and other parties.
The Debtors assert that they have a need for seasoned gaming
experts to manage the operations of their newly expanded casino
and new hotel operations. He also contends that the Proposed
Officers have been selected not only for their gaming expertise,
but also for their expertise in turnaround management of casinos.
About Greektown Casino
Based in Detroit, Michigan, Greektown Holdings, LLC and its
affiliates -- http://www.greektowncasino.com/-- operates world-
class casino gaming facilities located in Detroit's historic
Greektown district featuring more than 75,000 square feet of
casino gaming space with more than 2,400 slot machines, over 70
tables games, a 12,500-square foot salon dedicated to high limit
gaming and the largest live poker room in the metropolitan Detroit
gaming market.
Greektown Casino employs approximately 1,971 employees, and
estimates that it attracts over 15,800 patrons each day, many of
whom make regular visits to its casino complex and related
properties. In 2007, Greektown Casino achieved a 25.6% market
share of the metropolitan Detroit gaming market. Greektown Casino
has also been rated as the "Best Casino in Michigan" and "Best
Casino in Detroit" numerous times in annual readers' polls in
Detroit's two largest newspapers.
The company and seven of its affiliates filed for Chapter 11
protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No.
08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and
Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the
Debtors in their restructuring efforts. Judy B. Calton, Esq., at
Honigman Miller Schwartz and Cohn LLP, represents the Debtors as
their special counsel. The Debtors chose Conway MacKenzie &
Dunleavy as their financial advisor, and Kurtzman Carson
Consultants LLC as claims, noticing, and balloting agent.
When the Debtor filed for protection from its creditors, it listed
consolidated estimated assets and debts of $100 million to
$500 million.
(Greektown Casino Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
GREEKTOWN CASINO: To Assume Detroit Development Agreement
---------------------------------------------------------
Greektown Holdings LLC and its affiliates ask the U.S. Bankruptcy
Court for the Eastern District of Michigan for authority to assume
a revised Development Agreement among Debtor Greektown Casino LLC,
the City of Detroit, and the Economic Development Corporation of
the City of Detroit.
According to Daniel J. Weiner, Esq., at Schafer and Weiner PLLC,
in Bloomfield Hills, Michigan, the Debtor entered into the
Agreement for the construction and operation of the Greektown
Casino, which includes a 400-room hotel and certain other
amenities. The Hotel opened on February 15, 2009. The Greektown
Casino Entertainment Complex is now fully operational and has
been compliance with the Development Agreement for 30 days now,
he notes.
Mr. Weiner tells the Court that the opening of the Hotel and
Casino triggered a right for the Debtor to receive a 5% rollback
of the wagering tax rate under Michigan law, from 24% of adjusted
gross receipts to 19% of adjusted gross receipts. "This tax
rollback is worth an estimated $15 million dollars annually to
Greektown Casino," he discloses. The Tax Rollback would greatly
increase the going concern value of the Debtors' businesses, he
adds.
Without the tax rollback, the Debtor pays higher gaming taxes
than its competitors, placing it at a severe, competitive
disadvantage, Mr. Weiner contends.
The Michigan Gaming Control Board is charged by statute with
certifying a casino for a tax rollback once it determines that
the casino is eligible. The MGCB is authorized by statute to
make the casino's eligibility for a rollback on its own, but has
chosen to rely on the City for confirmation that the Casino is in
compliance with its development agreement, Mr. Weiner notes.
However, he tells the Court, the City has not cooperated.
Instead, the City, through its outside counsel, authored a letter
to the Debtors, copying the MGCB, claiming that the Debtor is
"out of compliance" with the Development Agreement.
Because the City claims that the Debtor is out of compliance with
the Development Agreement and since deprivation of the tax
rollback will cause daily prejudice to its estate, the Debtor
seeks the Court's authority to assume the Development Agreement.
Mr. Weiner emphasizes that the Debtor has provided enormous
benefits to the City under the Development Agreement and the City
has benefitted handsomely, and is not permitted to deprive the
Debtor of its gaming tax rollback.
Expedited Hearing Request
The Debtors have sought expedited hearing on their request. Mr.
Weiner asserted that the need for the timely award of the tax
rollback is extremely urgent because, without it, the value of the
Debtors' business as a going concern could be depressed by
millions of dollars at a critical juncture of the Chapter 11
cases. He added that the Debtors have obtained initial
expressions of interest from certain parties for the purchase of
their businesses.
The Court will hold a hearing later today, March 24, 2009.
The City of Detroit has related that its counsel drafted a
response to the Debtors' request for an expedited hearing,
asserting that the Debtors failed to demonstrate any legitimate
cause for its request. The Court though ruled on a March 24
hearing, while the City was preparing to file its response.
On the City's behalf, Cezar M. Froelich, Esq., at Shefsky &
Froelich Ltd., in Chicago, Illinois, Froelich argues that the
Court's ruling was premature and the City was denied an
opportunity to be adequately heard. The City thus urged the
Court to review its response before entering a final order.
The City also seeks authority to file its responses under seal.
Mr. Froelich said the City needs to utilize documentation subject
to a confidentiality agreement to support its arguments against
the Debtors' requests.
Depositions
The Debtors and Detroit have agreed that before the March 24
hearing, the Debtors will only be entitled to take these
depositions:
1. The deposition of Cezar Froelich, a representative of the
City, as to communications on behalf of the City with
bidders or prospective bidders for the purchase of
Greektown Casino LLC's assets concerning the Tax Rollback;
And
2. A deposition of the City pursuant to Rule 30(b)(6) of the
Federal Rules of Civil Procedure regarding the City's
bases as to why the Debtors should not be permitted to
assume the Development Agreement. The deposition will take
place at the Theodore Levin Federal Courthouse, at 231 West
Lafayette, in Detroit unless the parties mutually agree
otherwise.
With regard to Detroit, it will only be allowed to take these
depositions:
1. A deposition of Debtor Greektown Casino LLC, through its
designated representative under Civil Rule 30(b)(6),
limited to the issue of the status of the Event Center at
the Greektown Casino complex; and
2. Depositions of Thane Carlston and David Groban of Moelis &
Company as to communications with bidders or prospective
bidders for the purchase of Greektown Casino LLC's assets
concerning the Tax Rollback.
The Debtors will permit the City to have access to the electronic
dataroom they maintain for use by certain bidders or prospective
bidders, until April 15, 2009. The City will not be in violation
of the prohibition if it communicates with a person who is not
known to the City to be a bidder or prospective bidder, but to
the extent that the City learns during a communication that a
person is a bidder or prospective bidder, the City is required to
terminate such communication.
By March 23, 2009, the Debtors and the City will have exchanged
their proposed hearing exhibits, and will identify any witnesses
they propose to call at the scheduled hearing on the Debtors'
request.
About Greektown Casino
Based in Detroit, Michigan, Greektown Holdings, LLC and its
affiliates -- http://www.greektowncasino.com/-- operates world-
class casino gaming facilities located in Detroit's historic
Greektown district featuring more than 75,000 square feet of
casino gaming space with more than 2,400 slot machines, over 70
tables games, a 12,500-square foot salon dedicated to high limit
gaming and the largest live poker room in the metropolitan Detroit
gaming market.
Greektown Casino employs approximately 1,971 employees, and
estimates that it attracts over 15,800 patrons each day, many of
whom make regular visits to its casino complex and related
properties. In 2007, Greektown Casino achieved a 25.6% market
share of the metropolitan Detroit gaming market. Greektown Casino
has also been rated as the "Best Casino in Michigan" and "Best
Casino in Detroit" numerous times in annual readers' polls in
Detroit's two largest newspapers.
The company and seven of its affiliates filed for Chapter 11
protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No.
08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and
Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the
Debtors in their restructuring efforts. Judy B. Calton, Esq., at
Honigman Miller Schwartz and Cohn LLP, represents the Debtors as
their special counsel. The Debtors chose Conway MacKenzie &
Dunleavy as their financial advisor, and Kurtzman Carson
Consultants LLC as claims, noticing, and balloting agent.
When the Debtor filed for protection from its creditors, it listed
consolidated estimated assets and debts of $100 million to
$500 million.
(Greektown Casino Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
GREYSTONE STAFFING: Files for Chapter 11 Bankruptcy Protection
--------------------------------------------------------------
Carrie Mason-Draffen at Newsday reports that GreyStone Staffing,
Inc., has filed for Chapter 11 bankruptcy protection in the U.S.
Bankruptcy Court for the Eastern District of New York.
Newsday relates that GreyStone Staffing has $2.9 million in debts.
According to Newsday, GreyStone Staffing listed the Internal
Revenue Service as its biggest creditor and said that it owes the
agency $1.7 million in payroll taxes. GreyStone Staffing, court
documents say, has less than $50,000 in assets.
Kenneth Reynolds at McBreen & Kopko, who represents GreyStone
Staffing in its restructuring effort, said that the Company won't
lay off workers, Newsday states. According to the report, Mr.
Reynolds traced GreyStone Staffing's financial problems back to
the economic crunch after Sept. 11, 2001. GreyStone Staffing may
try to negotiate a lower amount, the report says, citing Mr.
Reynolds.
About GreyStone Staffing
Massapequa, New York-based GreyStone Staffing, Inc. --
http://www.greystonestaffing.com-- 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. The Company filed
for Chapter 11 bankruptcy protection on March 16, 2009 (Bankr.
E.D. N.Y. Case No. 09-71715).
GROUP 1 AUTOMOTIVE: Moody's Cuts Corporate Family Rating to 'B1'
----------------------------------------------------------------
Moody's Investors Service downgraded Group 1 Automotive's
corporate family rating to B1 from Ba3. The outlook is negative.
These actions conclude the review for possible downgrade initiated
on November 19, 2008.
The downgrade considers Group 1's weak operating performance,
which when combined with increased debt from 2007's acquisitions
and share repurchases, results in.credit metrics that are no
longer consistent with a Ba3 rating. For the year ended 12/31/08,
due to reductions in EBITDA, leverage as measured by debt/EBITDA
increased materially to 6.4 times, and remains at the weak end of
the new B1 rating category.
The negative outlook reflects Moody's concern that Group 1 may
have difficulty reducing this leverage materially by the end of
fiscal 2009, which would be necessary to better represent the B1
rating category.
"Moody's credit opinion from June 2008 indicated the expectation
of leverage reducing below 5.5 times to hold the Ba3 rating. The
fact that leverage at FYE December 2008 is almost one turn higher,
in an operating environment that will likely be more challenging
in 2009, creates concern that credit metrics may not recover in
the short term," stated Moody's Senior Analyst Charlie O'Shea.
The B1 rating considers Group 1's weak credit metrics, as well as
its strong market position in the still very fragmented auto
retailing segment. The rating also considers Group 1's
historically-favorable brand mix, with 81% of new vehicle sales
coming from luxury and import brands, and its operating profit
trend away from new vehicle sales. Group 1's business model, with
solid parts and service and finance and insurance segments,
reduces reliance on new car sales. Finally, Group 1 is moderately
diverse geographically, with stores in more than a dozen U.S.
states and the United Kingdom.
Ratings downgraded include these:
-- Corporate family rating to B1 from Ba3;
-- Probability of default rating to B1 from Ba3;
-- Sr. Subordinated Notes to B3 (LGD5, 87%) from B2 (LGD5, 84%),
and
-- Senior Unsecured Shelf to (P)B3 (LGD5, 84%) from (P)B1 (LGD5,
79%)
-- Senior Subordinated Shelf to (P)B3 (LGD5, 87%) from (P)B2
(LGD5, 84%)
-- Preferred Shelf to (P)B3 (LGD 6, 97%) from (P)B2 (LGD6, 97%)
The last rating action for Group 1 was the November 19, 2008
placement of the ratings under review for possible downgrade.
Group 1 Automotive, headquartered in Houston, Texas, is a leading
auto retailer with 133 franchises, and generates annual revenues
of around $5.6 billion.
HARRAH'S ENTERTAINMENT: Extends Debt Tender Offer Until Wednesday
-----------------------------------------------------------------
Harrah's Entertainment, Inc. on March 19, 2009, issued a statement
announcing, among other things, a March 25 extension of its early
tender date for each of its previously announced cash tender
offers to exchange up to $2.8 billion aggregate principal amount
of new 10.0% second-priority senior secured notes due 2018 for 10
different issues of senior and subordinated notes.
Priority is given to the holders of earlier-maturing debt issued
by Harrah's Operating Company, Inc.:
Acceptance
Old Notes Priority Level
--------- --------------
5.50% Senior Notes due 2010 1
7.875% Senior Subordinated Notes due 2010 1
8.0% Senior Notes due 2011 1
8.125% Senior Subordinated Notes due 2011 1
5.375% Senior Notes due 2013 1
5.625% Senior Notes due 2015 2
6.5% Senior Notes due 2016 2
5.75% Senior Notes due 2017 2
10.75%/11.5% Senior Toggle Notes due 2018 3
10.75% Senior Notes due 2016 3
As of 5:00 p.m., New York City time, March 18, 2009, (i)
$4.5 billion principal amount of Old Notes had been validly
tendered and not withdrawn for exchange for New Second Lien Notes.
In addition, approximately $416 million principal amount of Old
Notes as having an Acceptance Priority Level of 2 had been validly
tendered and not withdrawn in connection with a previous tender
offer.
In addition, on March 19, 2009, Harrah's Entertainment was
informed by Hamlet Tender, LLC and Hamlet FW LLC that their
previously announced cash tender offers for HOC's 10% Second-
Priority Senior Secured Notes due 2015 and 10% Second-Priority
Senior Secured Notes due 2018 have been increased to $350 million
from $250 million.
The maximum tender offer amount has been lifted to $946 million
from $676 million of the existing notes.
According to Bloomberg's Bill Rochelle, the new swap offer follows
on the heels of an exchange in November when senior unsecured and
subordinated debt was switched for second-lien notes maturing in
2015. Harrah's in February drew down the remaining $740 million
on its $2 billion revolving credit.
Annual Results
Harrah's disclosed a net loss of $5.1 billion on $9.37 billion of
net revenues for the period January 28, 2008, through Dec. 31,
2008. Harrah's disclosed consolidated assets of $23,36 billion
and debts of $16.68 billion as of Dec. 31, 2008. A full text copy
of the annual report on form 10-K is available for free at:
http://researcharchives.com/t/s?3a8c
Meanwhile, Harrah's has submitted a document providing pro forma
financial information for the year ended December 31, 2008, which
gives pro forma effect to the acquisition of Harrah's
Entertainment, which occurred on January 28, 2008, and related
transactions as if they had occurred on January 1 of the year
presented. A copy of that document is available at:
http://researcharchives.com/t/s?3a8b
On January 28, 2008, Harrah's Entertainment was acquired by
affiliates of Apollo Global Management, LLC and TPG Capital, LP in
an all-cash transaction, valued at approximately $30.7 billion.
About Harrah's Entertainment
Las Vegas, Nevada-based Harrah's Entertainment, Inc. --
http://www.harrahs.com-- operates nearly 40 casinos across the
United States, primarily under the Harrah's(R), Caesars(R) and
Horseshoe(R) brand names; Harrah's also owns the London Clubs
International family of casinos and the World Series of Poker(R).
Private equity firms Apollo Global Management and TPG Capital LP
acquired Harrah's in January for $31 billion.
At Sept. 30, 2008, the company's consolidated condensed balance
sheets showed total assets of $37.0 billion, total liabilities of
$33.4 billion and stockholders' equity of $3.6 billion.
For three months ended Sept. 30, 2008, the company reported net
loss of $129.7 million compared with net income of $244.4 million
for the same period in the previous year.
For nine months ended Sept. 30, 2008, the company posted net loss
of $100.9 million compared with net income of $667.2 million for
the same period in the previous year.
The company's cash and cash equivalents, including funds borrowed
during the quarter under its credit facilities, totaled
approximately $1.0 billion at Sept. 30, 2008, compared to
$654.7 million at Sept. 30, 2007.
* * *
As reported by the TCR on March 10, 2009, Standard & Poor's
Ratings Services lowered its corporate credit rating on Las Vegas-
based Harrah's Entertainment Inc. and its wholly owned subsidiary,
Harrah's Operating Co. Inc., to 'CC' from 'CCC'. The rating
outlook is negative. At the same time, S&P lowered the issue-
level rating on each of HOC's outstanding senior secured second-
priority and senior unsecured debt issues to 'C', from 'CCC-' and
'CC', respectively. S&P also lowered the issue-level rating on
Caesars Entertainment Inc.'s subordinated debt issues to 'C' from
'CC'. In addition, S&P placed the 'B-' issue-level rating for
HOC's senior secured first-lien credit facilities on CreditWatch
with negative implications. These actions follow Harrah's
announcement that it is offering to exchange up to $2.8 billion of
new 10% senior secured second- priority notes due 2018 for a
portion (or potentially all in some cases) of each of the
outstanding senior unsecured and subordinated notes in the
company's capital structure.
As reported by the TCR on March 19, Moody's Investors Service
downgraded Harrah's Entertainment's Probability of Default rating
to Ca from Caa3 following its announcement that it commenced a
second private debt exchange offer. Moody's also placed Harrah's
PDR, Corporate Family, and all other ratings on review for
possible downgrade. HET's Speculative Grade Liquidity rating of
SGL-3 was affirmed.
HAWAIIAN TELCOM: Court Sets April 27 General Claims Bar Date
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Hawaii has
established April 27, 2009, as the deadline for all entities who
hold claims against the Debtors that arose prior to December 1,
2009, to file proofs of claim in the Debtors' jointly administered
cases.
Governmental units have until June 1, 2009, to file proofs of
claim.
Proofs of claim must be filed by U.S. mail, by hand delivery, or
electronically through the Court's CM/ECF system, on or before the
applicable bar dates, to:
Clerk of the Court
U.S. Bankruptcy Court
District of Hawaii
1132 Bishop Street, Suite 250L
Honolulu, HI 96813
For further information, please call the Debtors' restructuring
hotline at (888) 733-1409, or visit the Debtors' restructuring
website at http://www.kccllc.net/hawaiiantel
Parties may also write to:
Hawaiian Telcom Communications, Inc. Processing
c/o Kurtzman Carson Consultants LLC
2335 Alaska Avenue
El Segundo, California 90245
Based in Honolulu, Hawaii, Hawaiian Telecom Communications, Inc.
-- http://www.hawaiiantel.com/-- operates a telecommunications
company, which offers an array of telecommunications products and
services including local and long distance service, high-speed
Internet, wireless services, and print directory and Internet
directory services.
The company and seven of its affiliates filed for Chapter 11
protection on Dec. 1, 2008 (Bankr. D. Del. Lead Case No. 08-
13086). As reported by the Troubled Company Reporter on
December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court
for the District of Delaware approved the transfer of the Chapter
11 cases to the U.S. Bankruptcy Court for the District of Hawaii
before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005).
Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J.
Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in
their restructuring efforts. The Debtors proposed Lazard Freres &
Co. LLC as investment banker; Zolfo Cooper Management LLC as
business advisor; Deloitte & Touche LLP as independent auditors;
and Kurztman Carson Consultants LLC as notice and claims agent.
An official committee of unsecured creditors has been appointed in
the case. The committee is represented by Christopher J. Muzzi,
Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu,
Hawaii.
When the Debtors filed for protection from their creditors, they
listed total assets of $1,352,000,000 and total debts of
$1,269,000,000 as of Sept. 30, 2008.
Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by Hawaiian Telcom Communications, Inc. and seven of
its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
HAWAIIAN TELCOM: Seeks Court OK to Pay $6MM in Bonuses to Workers
-----------------------------------------------------------------
Rick Daysog at The Honolulu Advertiser reports that Hawaiian
Telcom Inc. has sought a court approval to pay out bonuses
totaling about $6 million to its 1,400 workers.
Hawaiian Telcom's senior managers will receive $70,000 each, or a
total of $420,000, The Honolulu Advertiser relates. The Honolulu
Advertiser states that almost $3.6 million of the bonus money is
intended for non-senior management employees. Hawaiian Telcom,
according to the report, said that its unionized workers qualify
for $2 million in incentive pay under the terms of their
collective bargaining agreement signed in October 2008.
Hawaiian Telcom said in court documents that its employees are
eligible for the bonuses because the Company reached performance
targets for revenue, cash flow, and other measures in 2008. The
Honolulu Advertiser quoted Hawaiian Telcom chairperson Walter Dods
as saying, "Our employees are key to our long-term success and our
ability to emerge from Chapter 11, so I, and the rest of the board
members, have determined that it is critical that we stand behind
their accomplishments and honor our commitment to them."
According to The Honolulu Advertiser, Gov. Linda Lingle said that
the bonuses are "unconscionable," and that her administration will
oppose them in court. "Hawaiian Telcom is the critical
communications backbone for our state, and its action to pay
millions in bonuses puts the Company in a precarious position that
jeopardizes its long-term viability, as well as threatens
Hawai'i's economic recovery," the report quoted Gov. Lingle as
saying.
The Honolulu Advertiser states that Gov. Lingle said, "The fact
that company president and CEO Eric Yeaman himself turned down a
bonus shows that he clearly recognized bonuses were wrong and
counterproductive to Hawaiian Telcom's efforts to restructure its
finances and operations. He could have and should have put an
immediate stop to this outrageous action." The Honolulu
Advertiser relates that Mr. Yeaman agreed to waive $609,000 in
bonus payments that he's entitled to this year.
Six of Hawaiian Telcom's senior managers have also agreed to defer
half of any awards they get until after the Company emerges from
bankruptcy protection, The Honolulu Advertiser reports.
Citing Mr. Dods, The Honolulu Advertiser states that the payments,
don't involve taxpayer money and Hawaiian Telcom is trying to
fulfill obligations it made to workers even before it filed for
bankruptcy.
About Hawaiian Telcom
Based in Honolulu, Hawaii, Hawaiian Telecom Communications, Inc.
-- http://www.hawaiiantel.com/-- operates a telecommunications
company, which offers an array of telecommunications products and
services including local and long distance service, high-speed
Internet, wireless services, and print directory and Internet
directory services.
The company and seven of its affiliates filed for Chapter 11
protection on Dec. 1, 2008 (Bankr. D. Del. Lead Case No. 08-
13086). As reported by the Troubled Company Reporter on
December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court
for the District of Delaware approved the transfer of the Chapter
11 cases to the U.S. Bankruptcy Court for the District of Hawaii
before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005).
Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J.
Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in
their restructuring efforts. The Debtors proposed Lazard Freres &
Co. LLC as investment banker; Zolfo Cooper Management LLC as
business advisor; Deloitte & Touche LLP as independent auditors;
and Kurztman Carson Consultants LLC as notice and claims agent.
An official committee of unsecured creditors has been appointed in
the case. The committee is represented by Christopher J. Muzzi,
Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu,
Hawaii.
When the Debtors filed for protection from their creditors, they
listed total assets of $1,352,000,000 and total debts of
$1,269,000,000 as of Sept. 30, 2008.
Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by Hawaiian Telcom Communications, Inc. and seven of
its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
HANESBRANDS INC: Moody's Affirms 'Ba3' Corporate Famaily Rating
---------------------------------------------------------------
Moody's Investors Service affirmed all of Hanesbrands Inc.'s
ratings -- including its Ba3 Corporate Family and Probability of
Default Ratings-- and revised the outlook to negative from stable.
The company's Speculative Grade Liquidity rating of SGL-2 was also
affirmed.
The outlook revision was primarily triggered by the softening
sales performance in the back half of 2008 and expectations that
negative trends are likely to persist into 2009. Hanesbrands'
revenues fell more than 10% in the fourth quarter of 2008 and the
company has stated this trend has continued into the first quarter
of 2009.
"Our current ratings reflect expectations that the company will
maintain relatively stable performance which mitigates its high
financial leverage. Thus rising negative pressure on sales is
tempering those fundamental expectations, and hence are a concern"
said Moody's Vice President & Senior Analyst Scott Tuhy. He added
"While Moody's expect Hanesbrands to reduce debt during 2009,
negative rating pressure would build if the company's efforts to
maintain margins in the face of weakening sales volumes are not
successful."
Moody's affirmation of the company's SGL-2 Speculative Grade
Liquidity rating reflects the positive impact on the company's
liquidity from its recent amendments to its credit agreements
which provide it with a greater level of headroom under its
financial covenants. The company's liquidity is somewhat
constrained by its reliance on a short term account receivable
credit facility, whose term was recently shortened to March, 2010.
These ratings were affirmed and LGD assessments amended:
-- Corporate Family Rating at Ba3
-- Probability of Default Rating at Ba3
-- Speculate Grade Liquidity Rating at SGL-2
-- 1st lien credit facilities ($500 million Revolving Credit
Facility and $990 million Term Loans) at Ba2 (LGD 2, 27%)
-- $450 million 2nd lien term loan at B1 (LGD 4, 60%)
-- $494 million unsecured notes at B2 (LGD 5, 84%)
Moody's last rating action on Hanesbrands is from November 18,
2008 when the Speculative Grade Liquidity Rating was downgraded
from SGL-1 to SGL-2 and all other ratings were affirmed.
Hanesbrands Inc., headquartered in Winston-Salem NC, is a major
manufacturer and marketer of branded innerwear and outerwear
apparel. The company markets products under the "Hanes",
"Champion", "Playtex", "Bali", "Wonderbra" and "L'eggs" brands.
HOHHThe company reported sales of approximately $4.2 billion for
the fiscal year ending January 3, 2009.
INDALEX HOLDINGS: Files for Chapter 11 Bankruptcy Protection
------------------------------------------------------------
Indalex Holdings Finance, Inc., and each of its four affiliated
U.S. entities have filed voluntary petitions for Chapter 11
reorganization in the U.S. Bankruptcy Court for the District of
Delaware. Indalex Limited, through which the Company's Canadian
operations are run, has not filed at this time. The Company is
working with its lenders and exploring all options for its
Canadian operations, and will advise of the progress in the coming
days.
In the Chapter 11 filing, the Company cited financial constraints
caused by the global economic slowdown and resulting declines in
demand, earnings and liquidity.
"Seeking court protection is the best option to provide us the
time needed to financially restructure our organization," said
Timothy Stubbs, President and Chief Executive Officer of Indalex
Finance. "As we announced on February 3, 2009, we have engaged
Jefferies & Company as an advisor to help us evaluate strategic
alternatives to reduce our overall debt level. Chapter 11
provides a structured process through which that effort can
continue in a court-supervised way."
"Indalex has a sound underlying business," Mr. Stubbs stated. "We
are continuing to operate as normal with a continued focus on
providing superior quality extruded aluminum components and value-
added solutions to meet the needs of our customers. Our customers
should be confident in our commitment and ability to deliver
quality extrusions on time with specified lead times to meet their
needs. I am also pleased to announce that our new 6,000 ton press
in Connersville, Indiana, began trial operations this week. This
addition will be the most efficient press in our network and
exemplifies our commitment to meet our customers' needs for cost-
effective supply solutions."
During the process, the Company will fund its North American
operations by utilizing its own cash flow. The Company is
currently engaged in active negotiations with senior lenders for
debtor-in-possession (DIP) financing, and those negotiations are
progressing.
In addition, the Company is seeking court approval for a variety
of first day motions that will allow it to continue managing
operations in the ordinary course, including making wage and
salary payment and other benefits to employees and honoring
customer programs. This relief will allow the Company to operate
its business without interruption, while it continues
restructuring in a controlled process.
These motions are typical of the restructuring process, and
approval is regularly granted. The Company intends to pay all
providers of goods and services delivered post-petition in the
ordinary course of business.
Indalex has invested more than $200 million this decade to
modernize its manufacturing operations and tailor its North
American manufacturing footprint to market demand. Despite
closing four plants and idling a fifth plant during 2007-2008 in
anticipation of market conditions, the company maintained total
capacity through strategic investments and continuous improvement
processes.
About Indalex
Indalex Holdings Finance, Inc. -- http://www.indalex.com/-- and
its affiliates, through their operating subsidiaries Indalex Inc.
and Indalex Ltd., with headquarters in Lincolnshire, Illinois,
produce soft alloy aluminum extrusion products in North America.
The Debtors' aluminum extrusion products are used throughout
industrial, commercial, and residential applications. The
Companies' North American network includes 11 extrusion
facilities, 31 extrusion presses with circle sizes up to 14
inches, a variety of fabrication and close tolerance capabilities,
two anodizing operations, two billet casting facilities, and six
electrostatic paint lines, including powder coat capability.
The Companies filed for Chapter 11 bankruptcy protection on
March 20, 2009, (Bankr. D. Delaware Case No. 09-10982). Donald J.
Bowman, Jr., Esq., and Michael R. Nestor, Esq., at Young, Conaway,
Stargatt & Taylor assist the Companies in their restructuring
efforts. The Companies' claims agent is Epiq Bankruptcy Solutions
LLC. The Companies listed $365,000,000 in assets and $456,000,000
in debts as of December 31, 2009.
INLET RETAIL: Files for Chapter 11 Bankruptcy Protection
--------------------------------------------------------
Court documents say that Inlet Retail Associates, LLC, has filed
for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court
for the District of South Carolina, after failing to come to terms
with its creditors.
According to court documents, Inlet Retail listed $24.9 million in
liabilities. Jessica Foster at The Sun News reports that Inlet
Retail managing member Nathan Fishkin blamed Inlet Retail's
financial problems on the economic downturn.
The Sun News relates that Inlet Retail had been negotiating with
potential buyers since 2008 after defaulting on the loan it got to
acquire and renovate the Inlet Square mall. There was interest in
the property but no agreement was reached, the report states,
citing Mr. Fishkin. The report quoted Mr. Fishkin as saying,
"We've been trying to work out issues with the bank and our
creditors, and we just weren't able to do that."
According to The Sun News, RAIT Partnership LP, Inlet Retail's
biggest creditor, had financed the sale and renovation of the
mall. The report states that Inlet Retail owes RAIT about
$18.7 million. "It would've worked out had the economy not gone
the direction it's gone. We were halfway through the project . .
. when the economy got soft and our conversations started with
RAIT," the report quoted Mr. Fishkin as saying.
Irvine, California-based Inlet Retail Associates, LLC, owns the
Inlet Square Mall located at Highway 17 Business and Highway l7
Bypass on the south end of the Grand Strand in Murrells Inlet,
S.C. The mall is home to Books-A-Million, Friedman Jewelers,
Hibbet Sports, JC Penney, Kmart, CATA, Belk, and other merchants.
There are also various eateries at the food court within the mall,
as well as Outback Steakhouse, Lone Star Steakhouse, Applebees,
TGI Fridays, and Hooters surrounding the mall. The shopping
center also hosts many community events, including Fall Bike Rally
events, the South Strand Business Expo, and other enjoyable
seasonable programs.
The Company filed for Chapter 11 bankruptcy protection on
March 19, 2009 (Bankr. D. S.C. Case No. 09-02066). Ivan N.
Nossokoff, Esq., at Ivan N. Nossokoff, LLC, represents the Company
in its restructuring effort. The Company listed
$10 million to $50 million in assets.
INLET RETAIL: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Inlet Retail Associates, LLC
4199 Campus Drive, Ste 550
Irvine, CA 92612
Bankruptcy Case No.: 09-02083
Chapter 11 Petition Date: March 20, 2009
Court: District of South Carolina (Charleston)
Judge: John E. Waites
Debtor's Counsel: Ivan N. Nossokoff, Esq.
inn@nosslaw.com
Ivan N. Nossokoff, LLC
1470 Tobias Gadson Blvd., Suite 107
Charleston, SC 29407
Tel: (843) 571-5442
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Rait Partnership, LP Mortgage, UCCs; $18,667,377
Attn: Mike Beatty Value: $ 280,991;
2929 Arch St, 17th Floor Net Unsecured:
Tel: 215-243-9078 $18,386,385
Vratsinas Construction Co. Mechanics Lien $4,590,441
1000 Abernathy Rd NE f/Jan. 4, 2008;
Georgetown SC 29442 Net Unsecured:
Tel: 770-225-1900 $4,590,441
Baker Roofing Company Mechanics Lien $554,183
517 Mercury St f/Apr. 15-17 '08;
Raleigh, NC 27603 Net Unsecured:
Tel: 919-828-2975 $554,183
Precision Walls Inc. Mechanics Lien $189,053
f/Dec. 14, 2007;
Net Unsecured:
$189,053
Jones Lang LaSalle Mgmt Fees, Lease $185,612
Commissions
Service Management Systems Housekeeping Svcs $98,950
Cupkovic Architecture LLC Mechanics Lien $84,189
f/March 12, 2008
Net Unsecured:
$84,189
IPC International Corp Security Svcs $78,627
Voss Cook & Thel LLP $49,824
Thorson Baker & Associates $30,814
MB Kahn Construction Co., Inc. Mechanics Lien $25,235
f/June 4, 2008
Net Unsecured:
$25,235
General Landscape Maintenance $18,750
DDC Engineers Inc $15,976
Sun Publishing/Sun News $7,458
Nathan P Fishkin Unreimbursed $6,957
expenses
Charles E Fancher, Jr. Unreimbursed $4,234
expenses
Harvest Recovery Services $4,041
SiteStuff Inc $3,115
We Sweep Parking Lot $2,950
Sweeping
Next Media Radio Operations $1,881
The petition was signed by Nathan P. Fishkin, manager.
INN OF THE MOUNTAIN: Moody's Downgrades Corp. Rating to 'Ca'
------------------------------------------------------------
Moody's Investors Service downgraded Inn of the Mountain Gods
Resorts and Casino's corporate family rating, probability of
default rating and senior unsecured notes rating to Ca from Caa2.
The outlook remains negative.
The downgrade and negative outlook anticipate that IMGRC's cash on
hand, excluding cage cash, and cash flow from operations may not
be sufficient to cover the $12 million May 15, 2009 scheduled
interest payment on the $200 million senior unsecured notes due
November 2010. The company does not have a revolving credit
facility or other form of external liquidity in place. The rating
action also assumes below-average recovery prospects for the notes
in a default scenario.
If IMGRC fails to pay its interest before the expiration of the
30-day grace period on June 15, 2009, or completes a distressed
exchange transaction, the probability of default rating will be
lowered to D. IMGRC has formally engaged financial advisors to
assist the company with the evaluation and implementation of
financial and strategic alternatives.
These ratings were downgraded:
-- Corporate family rating to Ca from Caa2
-- Probability of default rating to Ca from Caa2
-- Senior unsecured notes to Ca (LGD4, 67%) from Caa2 (LGD4,
52%)
The last rating action was on December 17, 2008, when Moody's
lowered the corporate family rating to Caa2 from B3.
IMGRC includes all of the gaming and resort enterprises of the
Mescalero Apache Tribe, a federally recognized Indian tribe
located in south-central New Mexico. The company currently
generates $119 million in annual net revenues.
INTERFACE INC: Moody's Gives Negative Outlook; Affirms 'B1' Rating
------------------------------------------------------------------
Moody's Investors Service revised Interface Inc.'s rating outlook
to negative from stable, while affirming all ratings, including
its corporate family and probability of default ratings at B1,
senior unsecured note rating of B1, and subordinated note rating
of B3.
The outlook change to negative reflects Interface's weakened
operating performance in the fourth quarter of 2008, and Moody's
belief that the severe decline in global spending on building
renovation and construction projects will continue through 2009,
further pressuring its operating results and credit metrics. The
negative outlook also reflects increasing refinancing risk as its
$152.6 senior notes mature February 1, 2010.
Interface's B1 corporate family rating continues to reflect the
company's good credit metrics, with modest cushion for adverse
fluctuations in the current challenging economic environment. The
rating also reflects its leading market position in the modular
carpet segment, strong brand recognition and increased
diversification away from the corporate office market segment.
Liquidity is supported by about $72 million of balance sheet cash
and $85 million of availability under its revolving credit
facilities as of December 28, 2008, along with the expectation for
strong free cash flow generation in 2009. The rating remains
constrained by Interface's heavy exposure to the cyclical
corporate interiors market and its narrow business focus with
about 90% of revenues and the bulk of operating income derived
from the modular carpet business.
Interface's ratings could be downgraded over the near term if
liquidity, particularly free cash flow, falls below expectations.
Refinancing risk aside, downward pressure could also stem from
weak operating performance resulting in debt/EBITDA increasing
above 4.5x and EBITA/IE falling below 2.0x. Stabilization of the
outlook would require refinancing of the maturing notes while
maintaining appropriate credit metrics.
Ratings affirmed:
-- Corporate Family Rating at B1;
-- Probability of Default Rating at B1;
-- 10.375% guaranteed senior unsecured notes due 2010 at B1 (LGD
3, 45%);
-- 9.5% guaranteed senior subordinated notes due 2014 at B3 (LGD
5, 85%).
The prior rating action on Interface occurred on November 22,
2006, when Moody's upgraded the company's CFR to B1 with a stable
outlook.
Interface, Inc., based in Atlanta, Georgia, is a worldwide leader
in the design, production and sales of modular carpet. The
company also holds a strong position in the high end, designer-
oriented segment of the broadloom carpet market. Brand names
include InterfaceFLOR, FLOR, Huega, Bently Prince Street, Bently
Prince Street House and Home and Intercept. Revenues for the year
ended December 28, 2008 approached $1.1 billion.
INTERMET CORP: Creditors Committee Opposes Bonuses for Managers
---------------------------------------------------------------
The official committee of unsecured creditors of Intermet Corp.
balks at the proposed payment of $150,000 in retention bonuses to
seven supervisors at the Debtors' headquarters in Fort Worth,
Texas, Bloomberg's Bill Rochelle said.
According to the Bloomberg report, the Creditors Committee
complains that it hasn't been given the names of the eligible
employees, their salaries, their job descriptions, or the amounts
of their proposed bonuses. The Committee says that the bonuses
should not be awarded to select managers at a time when the
Company is in "extreme financial distress" and workers had their
retiree benefits terminated.
As reported by the Troubled Company Reporter on March 20, Intermet
has filed with 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. The
hearing on the motion is scheduled for March 23.
Intermet's 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,"
says the Company's counsel, Laura Davis Jones, Esq., at Pachulski
Stang Ziehl & Jones, LLP.
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.
JEFFERSON COUNTY: S&P Keeps 'C' Rating on Sewer Revenue Bonds
-------------------------------------------------------------
Standard & Poor's Ratings Services has kept the ratings on
Jefferson County, Alabama's series 1997A, 2001A, 2003-B-8, 2003 B-
1-A through series 2003 B-1-E, and series 2003 C-1 through 2003 C-
10 sewer system revenue bonds ('C' underlying rating) on
CreditWatch negative, where they were placed Sept. 16, 2008, due
to previous draws against the system's cash and surety reserves
beginning in September 2008 and S&P's uncertainty of the system's
continued timely payment on the obligations.
Although the system depleted its cash reserves and a portion of
its surety reserves in late 2008, the trustee indicates there have
been no additional draws against its surety reserves since last
year. The trustee estimates the system currently has
$176 million remaining in total combined surety reserves with
Financial Guaranty Insurance Co. (FGIC; CCC/Negative), Syncora
Guarantee Inc. (CC/Negative), and Financial Security Assurance
Inc. (AAA/Watch Neg), which can be applied on a pro rata basis to
any parity debt.
In letters to the county dated Oct. 15, 2008, Nov.14, 2008, and
Dec. 19, 2008, the trustee notified the system of events of
default due to the system's failure to apply net system revenue
toward debt service, failure to comply with its rate covenant,
failure to restore the debt service reserves to the reserve
requirement, and failure to replace certain surety policies, as
required by the indenture. In a letter to the county dated
Feb. 17, 2008, the trustee also notified the system of its failure
to comply with its covenant to increase rates by the beginning of
the year. According to the trust indenture, if the system fails
to remedy such events of default within 30 days, the trustee could
declare all parity debt immediately due and payable, sue for
payment, and seek the appointment of a receiver by a court order
to administer and operate the system. On
Sept. 23, 2008, the trustee, FGIC, and Syncora filed a motion
against the county seeking appointment of a receiver over the
system. A federal judge has appointed two special masters to
review the matter and provide recommendations to the court; the
special masters provided a report to the court on Feb. 10, 2009.
S&P believes that increased interest rates in conjunction with
accelerated principal repayments under the standby warrant
purchase agreements, termination events of the swap agreements,
and the system's very high debt burden have placed significant
financial pressure on the county's sewer system. The system has
not raised sewer rates to offset increased costs. Interest
payments on the auction-rate sewer revenue obligations are due on
a near-daily basis throughout the month while interest on the
variable-rate demand warrants are due at the first of each month.
Regularly scheduled principal payments are due Feb. 1 of each
year. In the event the system fails to make a principal or
interest payment on the bonds when due, S&P expects to lower the
SPURs on the bonds to 'D'.
On April 1, 2008, Standard & Poor's lowered its SPUR on Jefferson
County, Alabama's variable-rate demand series 2003 B-2 through
2003 B-7 sewer revenue refunding warrants to 'D' from 'CCC' due to
the sewer system's failure to make a principal payment on the bank
warrants when due on April 1, 2008, in accordance with the terms
of the standby warrant purchase agreement.
JOURNAL REGISTER: Can Access Cash Collateral on Final Basis
-----------------------------------------------------------
The Hon. Allan L. Gropper of the United States Bankruptcy Court
for the Southern District of New York authorized Journal Register
Company and its debtor-affiliates to access, on a final basis,
cash securing repayment of secured loans to their prepetition
lenders.
According to the Troubled Company Reporter on March 2, 2009, the
Debtors will use cash solely in compliance with the cash flow
forecast for the period February 20, 2009 to May 29, 2009. The
budget forecasts that total receipts for that period will be
$91,120,000. The Debtors are allowed to spend up to $88,416,000,
including payment of $578,000 to The Associated Press, and
$6,030,000 for advisor fees.
While the Court approved the Stipulation, a line -- that said the
$695,175,145 owed to pre-bankruptcy secured lenders constitutes an
allowed claim against JRC -- was deleted from the stipulation.
Before filing for bankruptcy, JRC negotiated terms of a plan of
reorganization with secured lenders. JPMorgan Chase Bank, N.A.
and lenders holding 77% of the aggregate principal amount of the
indebtedness outstanding under the January 25, 2006 secured credit
agreement have committed support to JRC's plan. The Plan provides
for no distribution or zero recovery to holders of unsecured
claims and owners of equity interests in JRC. Secured lenders
will receive, among other things, 100% of the shares of new stock
of JRC. The disclosure statement to the Plan says that the
secured lenders are impaired, i.e., they are not getting full
recovery on their claims.
A full-text copy of the cash collateral budget is available for
free at: http://ResearchArchives.com/t/s?3a87
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 United States Trustee for Region 2 appointed three creditors
to serve on an Official Committee of Unsecured Creditors. William
M. Silverman, Esq., Scott L. Hazan, Esq., and Jenette A. Barrow-
Bosshart, Esq., Otterbourg, Steindler, Houston & Rosen, P.C.,
represent the Committee in these cases. The company listed $100
million to $500 million in total assets and $500 million to $1
billion in total debts.
JOURNAL REGISTER: Disclosure Statement Hearing Set for March 31
---------------------------------------------------------------
Journal Register Company and its debtor-affiliates will present on
April 2, 2009, at 10:00 p.m., before the Hon. Allan L. Gropper of
the United States Bankruptcy Court for the Southern District of
New York, the disclosure statement to their proposed joint Chapter
11 plan of reorganization. Objections to the adequacy of the
information in the disclosure statement are due March 31, 2009, by
4:00 p.m.
JRC says the Plan designed to maximize recovery by stakeholders.
The Plan provides for a balance sheet restructuring that exchanges
existing secured debt for new term loans and equity in reorganized
JRC. The Debtors' existing common stock has no value and will be
cancelled.
Upon emergence, all of reorganized Debtors' new common stock will
be owned by the secured lenders, and will be subject to dilution
only by:
a) the options to purchase the new common stock that may be
issued to the directors, officers and employees following
the effective date of the Plan; and
b) the warrant shares issued upon exercise of certain
"revolving facility warrants."
Holders of general unsecured claims and existing common stock will
receive no distributions under the Plan.
JRC believes that if the Plan is consummated it will emerge as a
financially viable company.
A full-text copy of the Debtors' Chapter 11 Plan is available for
free at http://bankrupt.com/misc/JRC_Ch11_Plan.pdf
A full text copy of the Debtors' Disclosure Statement is available
for free at:
http://bankrupt.com/misc/JRC_DiscStatement.pdf
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 United States Trustee for Region 2 appointed three creditors
to serve on an Official Committee of Unsecured Creditors. William
M. Silverman, Esq., Scott L. Hazan, Esq., and Jenette A. Barrow-
Bosshart, Esq., Otterbourg, Steindler, Houston & Rosen, P.C.,
represent the Committee in these cases. The company listed $100
million to $500 million in total assets and $500 million to $1
billion in total debts.
KRONOS INT'L: S&P Junks Rating on Potential Covenant Violations
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
corporate credit rating on Dallas-based Valhi Inc. and its
subsidiary, Kronos International Inc., two notches to 'CCC' from
'B-'.
At the same time, S&P lowered Kronos International's
EUR400 million senior secured notes due 2013 to 'CCC-' (one notch
below the corporate credit rating) from 'CCC+', with a recovery
rating of '5', indicating the expectation of modest recovery (10%-
30%) in the event of default.
S&P removed the ratings from CreditWatch, where they were placed
with negative implications on Feb. 18, 2009, pending review of the
company's fourth-quarter results and prospects for 2009. The
outlook is negative.
"The downgrade reflects a potential covenant violation related to
one of its facilities and S&P's heightened concern about the
company's liquidity and financial flexibility as it navigates
through a challenging business environment this year," said
Standard & Poor's credit analyst Henry Fukuchi.
S&P is particularly concerned about the first quarter of 2009,
where a covenant violation may occur if the company does not
obtain relief from its lenders or reduce the outstanding debt
through other sources. Valhi is currently in negotiations with its
lenders to resolve the issue, and it is also exploring other
alternatives to alleviate near-term liquidity concerns.
While covenant relief may be a temporary solution, S&P expects
that overall financial flexibility could become problematic
because of significant capital expenditures planned for this year
coupled with near-term maturities and weak cash flow generation
that could deteriorate liquidity meaningfully. In addition, the
downgrade reflects S&P's expectation that credit metrics will
continue to deteriorate this year, beyond the level appropriate
for the former ratings, due to weak profitability in its core
titanium dioxide business and the likelihood that debt reduction
may not be feasible owing to cash and cash generation limitations.
Valhi has about $1.5 billion in sales and approximately
$841 million in total debt, adjusted for operating leases,
postretirement benefit obligations, environmental remediation, and
excluding Snake River Sugar Co. debt.
LAMAR MEDIA: S&P Cuts Subordinated Debt Issue-Level Rating to 'B-'
------------------------------------------------------------------
On March 20, 2009, Standard & Poor's Ratings Services lowered its
issue-level rating on Lamar Media Corp.'s subordinated debt to
'B-' (two notches lower than the 'B+' corporate credit rating on
holding company parent Lamar Advertising Co.) from 'B+'. The
recovery rating on these securities was revised to '6', indicating
S&P's expectation of negligible (0% to 10%) recovery for
debtholders in the event of a payment default, from '4'.
The issue-level rating on Lamar Media's senior secured credit
facilities remains unchanged at 'BB' (two notches higher than the
'B+' corporate credit rating). The recovery rating on these loans
remains at '1', indicating S&P's expectation of very high (90% to
100%) recovery for lenders in the event of a payment default.
Also, S&P affirmed the issue-level rating on Lamar Media's planned
$350 million 9.75% senior unsecured notes due 2014 (gross proceeds
of $315 million, up from the originally proposed
$250 million) at 'BB-' (one notch higher than the 'B+' corporate
credit rating). The recovery rating on these securities remains
at '2', indicating S&P's expectation of substantial (70% to 90%)
recovery in the event of a payment default.
The revised subordinated debt issue-level and recovery ratings
reflect an increase in the amount of debt that will be senior to
the subordinated debt as a result of the new senior unsecured
notes and a reduction in cash flow in S&P's simulated default
scenario from the level used in S&P's previous analysis.
Ratings List
Lamar Advertising Co.
Lamar Media Corp.
Corporate Credit Rating B+/Negative/--
Downgraded
Lamar Media Corp.
To From
-- ----
Subordinated B- B+
Recovery Rating 6 4
LEHMAN BROTHERS: Reaches Deal for Return of Gift Merchandise
------------------------------------------------------------
Lehman Brothers Holdings Inc., has signed a stipulation with
Barclays Capital Inc., regarding the return of certain gift
merchandise, much of which was branded with Lehman's trademarks.
On September 20, 2008, five days into LBHI's bankruptcy filing,
the U.S. Bankruptcy Court for the Southern District of New York
approved the sale of LBHI's brokerage business, two buildings and
other assets to Barclays.
Barclays said that since the sale, it has borne certain of the
costs of storage of the merchandise (i) in a warehouse
located at 409 Joyce Kilmer Avenue, New Brunswick, NJ 08901, (ii)
in a gift closet located on the 40th Floor at 1271 6th Avenue (the
"Closet"), (iii) with Scarborough & Tweed, 40 Clinton Street,
Pleasantville, NY 10570, (iv) with American Quality Embroidery, 5
John Walsh Blvd., Peekskill, NY 10566 and (v) in office locations
in Boston, San Francisco and Chicago.
LBHI has asserted that the Gift Merchandise constitutes property
of their estates, and Barclays has maintained that the items were
part of the Asset Purchase Agreement.
In a stipulation presented to the Bankruptcy Court, the parties
agree that LBHI may recover the Gift Merchandise provided that it
reimburses Barclays $33,880 in costs associated with storage.
A list of the Gift Merchandise if available at:
http://bankrupt.com/misc/Lehman_Gift_Merchandise.pdf
According to Bloomberg's Bill Rochelle, thousand of trinkets used
for marketing by LBHI appear headed for sale on EBay. The items,
it notes, include tote bags, golf umbrellas, stress balls and
paperweights.
LEXINGTON PRECISION: Mediator to Negotiate Enterprise Value
-----------------------------------------------------------
Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern
District of New York has appointed Seymour Preston from Goldin
Associates to mediate the dispute over the "enterprise value" of
Lexington Precision Corp.
According to the Bloomberg's Bill Rochelle, Lexington Precision
has been at loggerheads with the official committee of unsecured
creditors in the case regarding the value of the Company when
reorganized. The Creditors Committee, the same report adds,
"vehemently disagrees" with the Company's belief there is
"substantial value for equity."
Bloomberg said the parties are to begin reporting to Judge Glenn
by April 3 about their success or lack of success in mediation.
The discussions in mediation are to be confidential.
Lexington has the exclusive right to file a Chapter 11 plan until
April 30.
About Lexington Precision
Headquartered in New York, Lexington Precision Corp.
-- http://www.lexingtonprecision.com/-- manufactures tight-
tolerance rubber and metal components for use in medical,
automotive, and industrial applications. As of Feb. 29, 2008, the
Company employed about 651 regular and 22 temporary personnel.
The Company and its affiliate, Lexington Rubber Group Inc., filed
for Chapter 11 protection on April 1, 2008 (Bankr. S.D.N.Y. Lead
Case No.08-11153). Christopher J. Marcus, Esq., and Victoria
Vron, Esq., at Weil, Gotshal & Manges, represent the Debtors in
their restructuring efforts. The Debtors selected Epiq Systems -
Bankruptcy Solutions LLC as claims agent. The U.S. Trustee for
Region 2 appointed six creditors to serve on an Official Committee
of Unsecured Creditors. Paul N. Silverstein, Esq., and Jonathan
Levine, Esq., at Andrews Kurth LLP, represent the Committee as
counsel.
At December 31, 2008, the Debtors had total assets of $53,354,000,
total liabilities of $100,061,000, and a stockholders' deficit of
$46,707,000.
LOUISIANA LOCAL: Moody's Pares Rating on Revenue Bonds to 'Ba1'
---------------------------------------------------------------
Moody's Investors Service has downgraded to Ba1 from Baa3 rating
of the Louisiana Local Government Environmental Facility and
Community Development Authority Multifamily Housing Revenue bonds
(Park East / Bellemont Victoria / Bellemont Victoria II Apartments
(Projects)) Senior Series 2002A bonds. This rating action affects
approximately $12.7 million of debt outstanding. This rating
action was prompted by Moody's review of MBIA Inc. and MBIA
Insurance Corporation (currently rated Ba1/ DEV and B3 / DEV,
respectively), which hold the debt service reserve fund of the
Projects in a Guaranteed Investment Contract. Non-performance of
the GIC provider is a risk to bondholders in transactions where
bond payments rely wholly or partially on a GIC. Moody's also
rates Series 2002C bonds (Ba2 / STA; approximately $710,000
outstanding), which are not affected by this rating action.
The last rating action was on October 8, 2008 when Moody's
affirmed Baa3 rating with a stable outlook to the Series 2002A
bonds.
LYONDELL CHEMICAL: NJ Appeals Court to Decide on $200M Bond Snafu
-----------------------------------------------------------------
Whether Lyondell Chemical Co. will realize a $200 million windfall
by a ministerial action taken by a state court clerk is an issue
to be decided by the New Jersey appellate court, as the result of
a 34-page decision handed down by Judge Robert E. Gerber of the
U.S. Bankruptcy Court for the Southern District of New York,
Bloomberg's Bill Rochelle said.
Lyondell Chemical had asked the Bankruptcy Court to "enforce the
automatic stay" to block actions by (1) BASF Corporation, which
secured a $170 million judgment against Lyondell in an action in
New Jersey's Superior Court for Morris County, enforcement of
which was stayed after Lyondell posted a $200 million supersedeas
bond, and by (2) the New Jersey Appellate Division, before whom
Lyondell's appeal of BASF's judgment was pending when the Chapter
11 cases were filed.
At the same time, BASF sought relief from the stay to effect the
continuation of Lyondell's appeal of BASF's judgment -- or
alternatively, relief from the stay to permit the Appellate
Division to construe, reconsider, or modify orders the Appellate
Division entered after it learned of the filing of Lyondell's
Chapter 11 case, and to permit New Jersey's courts to rule on the
implications of the Appellate Division's actions. The first
order -- the "Dismissal Order" -- signed by a clerk in the name
of the Appellate Division's Presiding Judge for Administration,
dismissed the appeal without prejudice to renewal -- in contrast
to merely staying it. The second order -- the "Reinstatement
Order" -- entered on a request for emergent relief, temporarily
reinstated the appeal; ordered Lyondell to keep the Supersedeas
Bond in effect; and enjoined the Sureties from returning the
Supersedeas Bond's annual premium, all pending receipt and review
of opposition from Lyondell, and until further order of the
Appellate Division.
On March 18, 2009, Judge Gerber issued a bench ruling:
(i) granting Lyondell Chemical Corporation's request to
enforce the automatic stay and the Bankruptcy Court's
order enforcing the automatic stay;
(ii) denying as moot Lyondell's request to direct BASF
to withdraw its application for emergent relief filed with
the New Jersey Appellate Division;
(iii) stating that he is abstaining from directing BASF to
withdraw its instruction to the sureties not to refund
Lyondell the pro-rata amounts of the $200 million Appeal
Bond posted by Lyondell;
(iv) finding that the Dismissal Order was not a violation of
the automatic stay;
(v) stating that he is abstaining from finding that, as a
result of the Appellate Court's order dismissing the
Appeal, the Appeal Bond has been terminated by its own
terms and the assets backing the Appeal Bond are property
of the estate free of any lien of the Sureties.
Judge Gerber also denied BASF's motion to lift stay to permit
Lyondell to proceed with its Appeal at this time. He explains
that Lyondell is entitled to a breathing spell in deciding when
it should proceed with the Appeal, in light of the burdens of its
reorganization efforts. So long as Lyondell understands that
under the U.S. Court of Appeals for the Second Circuit's decision
in Teachers Insurance & Annuity Association of America v. Butler,
Lyondell is bound by the Superior Court judgment -- unless and
until that judgment is reversed or modified by a higher New
Jersey court -- Lyondell is entitled to a breathing spell even to
decide whether it wishes to appeal, he added.
Judge Gerber explained that the Dismissal Order was not violative
of the automatic stay so long as the Appeal can be resumed where
it left off and no further burdens are placed on the debtor, the
needs and concerns of the debtor, and the bankruptcy court, are
equally satisfactorily addressed by either means of responding to
the automatic stay. Similarly, he determined that the entry of
the Reinstatement Order was not a violation of the automatic stay
because it did not place the Appeal back on track for
disposition, or subject Lyondell to the pressures of dealing with
the Appeal on the merits. Rather, the Reinstatement Order
provided only that pending receipt and review of opposition from
Lyondell to the motion of BASF and further order of the Appellate
Court, the Appeal is temporarily reinstated and Lyondell is
ordered to maintain the Appeal Bond in full force and effect.
The Reinstatement Order simply restored the parties back to the
status quo as it existed before the Appellate Division, he noted.
However, Judge Gerber disagreed with Lyondell that the Appellate
Division's Dismissal Order was a purely ministerial action. The
Reinstatement Order was simply a different functional equivalent
of continuing the automatic stay, he said.
Judge Gerber lifted the automatic stay to the extent necessary
for the New Jersey courts to determine the continuing viability
of the Appeal Bond. He found the language of the Appeal Bond as
ambiguous and held that the New Jersey courts provide the most
appropriate forum for the construction exercise to be undertaken.
More importantly, he opined that the New Jersey courts have a
strong interest in regulating and interpreting the bonds that
secure enforcement of their judgments, and any decision the
Bankruptcy Court might issue could have a dramatic effect on New
Jersey practice. New Jersey's courts are in the best position to
decide the extent, if any, to which their court rules should be
relevant to interpreting a contract whose purpose was to comply
with those rules, and they will be aware of any rules that
require certain language to be used, or set forth ends to be
achieved, he concluded.
A full-text copy of Judge Gerber's 34-page Bench Ruling is
available for free at:
http://bankrupt.com/misc/Lyondell_BenchRulingreBASFStay.pdf
About Lyondell Chemical
Basell AF and Lyondell Chemical Company merged operations
in 2007 to form LyondellBasell Industries --
http://www.lyondellbasell.com/-- the world's third largest
independent chemical company. Lyondellbasell produces
polypropylene and advanced polyolefins products, is a leading
supplier of polyethylene, and a global leader in the development
and licensing of polypropylene and polyethylene processes and
related catalyst sales.
LyondellBasell became saddled with debt as part of the
US$12.7 billion merger. About a year after completing the merger,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code on January 6, 2009, to facilitate a restructuring
of the company's debts. The case is In re Lyondell Chemical
Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023).
Seventy-nine Lyondell entities, including Equistar Chemicals, LP,
Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt
Industries, Inc., filed for Chapter 11. LyondellBasell is not
part of the bankruptcy filing. LyondellBasell's non-U.S.
operating entities are also not included in the Chapter 11 filing.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities.
Lyondell Chemical estimated that consolidated assets total
US$27.12 billion and debts total US$19.34 billion as of the
bankruptcy filing date.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LYONDELL CHEMICAL: U.S. Trustee Appoints Two More Panel Members
---------------------------------------------------------------
Pursuant to Section 1102 of the Bankruptcy Code, Diana G. Adams,
United States Trustee for Region 2, appointed on March 16, 2009,
two more creditors to serve as members of the Official Committee
of Unsecured Creditors in Lyondell Chemical Company and its 78
debtor-affiliates' Chapter 11 cases:
(1) James Schorr
8781 La Palma Ln
Naples, FL 34108
Tel. No. (239) 593-1043
(2) Bernard Sander
14818 Sparkling Bay
Houston, TX 77062
Tel. No. (281) 480-0704
The U.S. Trustee appointed on January 16, 2009, Wilmington Trust,
FSB, Law Debenture Trust of New York, Pension Benefit Guaranty
Corporation, BASF Corporation, Air Liquide Large Industries
U.S.LP, Veolia ES Industrial Services and United Steel Workers as
members of the Creditors Committee.
About Lyondell Chemical
Basell AF and Lyondell Chemical Company merged operations
in 2007 to form LyondellBasell Industries --
http://www.lyondellbasell.com/-- the world's third largest
independent chemical company. Lyondellbasell produces
polypropylene and advanced polyolefins products, is a leading
supplier of polyethylene, and a global leader in the development
and licensing of polypropylene and polyethylene processes and
related catalyst sales.
LyondellBasell became saddled with debt as part of the
US$12.7 billion merger. About a year after completing the merger,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code on January 6, 2009, to facilitate a restructuring
of the company's debts. The case is In re Lyondell Chemical
Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023).
Seventy-nine Lyondell entities, including Equistar Chemicals, LP,
Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt
Industries, Inc., filed for Chapter 11. LyondellBasell is not
part of the bankruptcy filing. LyondellBasell's non-U.S.
operating entities are also not included in the Chapter 11 filing.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities.
Lyondell Chemical estimated that consolidated assets total
US$27.12 billion and debts total US$19.34 billion as of the
bankruptcy filing date.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LYONDELL CHEMICAL: ISDA to Publish Protocol for Lyondellbasell
--------------------------------------------------------------
The International Swaps and Derivatives Association, Inc., will
launch a CDS auction protocol to facilitate the settlement of
credit derivatives trades referencing LyondellBasell Industries AF
SCA, the Netherlands-based petrochemicals producer.
LyondellBasell Industries AF SCA was reported to have failed to
pay interest on $679 million of bonds maturing in 2015. The
company missed a payment due on February 15 and a 30-day grace
period expired on March 19.
ISDA will facilitate the process by publishing the Protocol and
auction terms on its Web site http://www.isda.org/-- in due
course. The Protocol will be open to ISDA members and non-members
alike. Markit and Creditex will administer the auction, scheduled
for April 16, 2009, which will determine the final price for the
LyondellBasell Industries bonds.
About ISDA
ISDA -- http://www.isda.org/-- which represents participants in
the privately negotiated derivatives industry, is among the
world's largest global financial trade associations as measured by
number of member firms. ISDA was chartered in 1985, and today has
over 820 member institutions from 57 countries on six continents.
These members include most of the world?s major institutions that
deal in privately negotiated derivatives, as well as many of the
businesses, governmental entities and other end users that rely on
over-the-counter derivatives to manage efficiently the financial
market risks inherent in their core economic activities.
About Lyondell Chemical
Basell AF and Lyondell Chemical Company merged operations
in 2007 to form LyondellBasell Industries --
http://www.lyondellbasell.com/-- the world's third largest
independent chemical company. Lyondellbasell produces
polypropylene and advanced polyolefins products, is a leading
supplier of polyethylene, and a global leader in the development
and licensing of polypropylene and polyethylene processes and
related catalyst sales.
LyondellBasell became saddled with debt as part of the
US$12.7 billion merger. About a year after completing the merger,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code on January 6, 2009, to facilitate a restructuring
of the company's debts. The case is In re Lyondell Chemical
Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023).
Seventy-nine Lyondell entities, including Equistar Chemicals, LP,
Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt
Industries, Inc., filed for Chapter 11. LyondellBasell is not
part of the bankruptcy filing. LyondellBasell's non-U.S.
operating entities are also not included in the Chapter 11 filing.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities.
Lyondell Chemical estimated that consolidated assets total
US$27.12 billion and debts total US$19.34 billion as of the
bankruptcy filing date.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LYONDELL CHEMICAL: Wants to Prosecute Pre-Bankruptcy Claims
-----------------------------------------------------------
Lyondell Chemical Company and its 78 debtor-affiliates ask the
U.S. Bankruptcy Court for the Southern District of New York to:
(i) modify the automatic stay to permit certain prepetition
litigation claims to proceed to settlement or judgment,
provided that payment on those claims is made in
accordance with a confirmed plan of reorganization; and
(ii) allow them access to insurance coverage to cover defense
costs in connection to the Permitted Cases and to pay or
reimburse those prepetition claims for defense costs that
are covered by insurance.
Andrew M. Troop, Esq., at Cadwalader, Wickersham & Taft LLP, in
New York, relates that the Debtors are party to thousands of
pending lawsuits involving claims for personal injury as well as
claims by governmental entities, including public nuisance.
Moreover, due to various acquisitions and dispositions of
businesses, the Debtors were either (i) obligated to indemnify
and assume the defense of third-parties in connection with the
types of claims wherein the disposition of those claims will
indirectly give rise to claims against the Debtors' estates even
though a Debtor is not a named defendant, and (ii) entitled to be
indemnified with respect to claims where a Debtor is a named
defendant.
As of the Petition Date, certain actions against the Debtors were
automatically stayed, except for the certain governmental actions
relating to a Debtors' production of methyl tertiary butyl ether.
Mr. Troop discloses that no Debtor has been found liable for any
claims based upon exposure to lead pigment or has settled any
lead paint lawsuit. Given that litigation track-record,
permitting those claims to be liquidated will not prejudice the
Debtors' estates because Section 157(b)(2)(B) and (b)(5) of the
Judicial and Judiciary Procedures Code requires that personal
injury claims be liquidated by a court other than the Bankruptcy
Court, he notes. He further states that since certain of the
claims asserted against the Debtors and its indemnities has
insurance which covers litigation costs and fees, the cost of
liquidating those claims will be minimal, and an allowed access
to insurance coverage or indemnities will be beneficial to the
Debtors.
Moreover, Mr. Troop relates that since the existence and extent
of insurance coverage is often used strategically in litigation
against a defendant, the Debtors have jealously guarded details
relating to insurance or indemnities to the fullest extent
permitted by applicable non-bankruptcy law. Accordingly, the
Debtors propose these procedures to identify to the Court and
parties-in-interest those cases to which the Debtors will consent
to modify the automatic stay and continue to assume the defense
of a third-party pursuant to a prepetition indemnity obligation:
(a) the Debtors will file with the Court a monthly report
listing the Permitted Cases, which report will include a
description of each Permitted Case, including its venue,
claims asserted, damages claimed and status of the action;
(b) the Debtors will provide the U.S. Trustee, DIP Agents and
Official Committee of Unsecured Creditors a confidential
report identifying the Permitted Cases in connection with
which defense costs are being covered, either directly or
through reimbursement, by insurance coverage or indemnity;
(c) in order to preserve the confidentiality of the scope of a
Debtor's insurance coverage or entitlement to indemnity,
any objections to the Permitted Case Report will be filed
under seal and within 10 days of receipt of a Permitted
Case Report.
(d) in the absence of timely objection, the automatic stay
will be deemed modified to permit the continuation of a
Permitted Case to liquidate a claim against a Debtor or
its indemnitee, provided that a recovery on any resulting
claim against a Debtor be in accordance with a Plan; and
(e) If there is a timely objection, the automatic stay will
remain in place with respect to the Permitted Case pending
further order.
About Lyondell Chemical
Basell AF and Lyondell Chemical Company merged operations
in 2007 to form LyondellBasell Industries --
http://www.lyondellbasell.com/-- the world's third largest
independent chemical company. Lyondellbasell produces
polypropylene and advanced polyolefins products, is a leading
supplier of polyethylene, and a global leader in the development
and licensing of polypropylene and polyethylene processes and
related catalyst sales.
LyondellBasell became saddled with debt as part of the
US$12.7 billion merger. About a year after completing the merger,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code on January 6, 2009, to facilitate a restructuring
of the company's debts. The case is In re Lyondell Chemical
Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023).
Seventy-nine Lyondell entities, including Equistar Chemicals, LP,
Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt
Industries, Inc., filed for Chapter 11. LyondellBasell is not
part of the bankruptcy filing. LyondellBasell's non-U.S.
operating entities are also not included in the Chapter 11 filing.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities.
Lyondell Chemical estimated that consolidated assets total
US$27.12 billion and debts total US$19.34 billion as of the
bankruptcy filing date.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LYONDELL CHEMICAL: Wants California Counties' Suit Stayed
---------------------------------------------------------
Pursuant to Sections 362(a) and 105(a) of the Bankruptcy Code,
Lyondell Chemical Company and its 78 debtor-affiliates ask the
U.S. Bankruptcy Court for the Southern District of New York (i) to
enforce the automatic stay and the Court's Stay Order and (ii)
enjoin the County of Santa Clara, the County of Solano, the County
of Alameda, the County of Monterey, the County of San Mateo, the
City and County of San Francisco, the City of Oakland, the City of
San Diego, and the City of Los Angeles from prosecuting a lawsuit
against Debtor Millennium Holdings LLC pending in the Superior
Court of California.
In March 2000, the California Parties joined a syndicate of
private plaintiffs' law firms including Motley Rice LLP that
initiated a public nuisance lawsuit against former lead pigment
manufacturers including The Glidden Company, Millennium's
predecessor-in-interest in California state court. The trial
court initially dismissed the action, but the appellate court
reversed and reinstated the public nuisance claim. The
California Supreme Court declined further review and remanded the
case to the trial court. In 2007, the California Parties sought
and received leave to file a Fourth Amended Complaint against
Millennium, which replaced as defendant Millennium Inorganics
Chemicals Inc., a former and non-debtor affiliate of Millennium,
Atlantic Richfield Company, American Cyanamid Company, Conagra
Grocery Products Company, E.I. Du Pont De Nemours and Company, NL
Industries, Inc., The Sherwin-Williams Company, Armstrong
Containers, and Cytec Industries, Inc.
Andrew M. Troop, Esq., at Cadwalader, Wickersham & Taft LLP, in
New York, relates that Section 362(b)(4) provides that the filing
of a bankruptcy petition does not operate as a stay against
commencement or continuation of an action by a governmental unit
to enforce its regulatory power, except for a complaint that is
not brought pursuant to the governmental unit's regulatory
powers. In this case, the Santa Clara Lawsuit asserts a public
nuisance claim which sounds common law tort and does not allege
that Millennium is violating any applicable law governing the
behavior of debtors. Having failed to allege that Millennium has
violated any regulatory scheme, the California Parties cannot
argue that public nuisance actions are exercises of regulatory
powers, he cites. Moreover, the Santa Clara Lawsuit's seeking to
enforce private rights cannot be reconciled with the notion that
the governmental entities are exercising their police and
regulatory power. He notes that the California Parties intend to
abate a nuisance on behalf of citizens of their jurisdictions but
it is evident that lead paint is not present in every residence
of those counties.
Mr. Troop cites that the Santa Clara Lawsuit would also not be
exempted by Section 362(b)(4) because the California Parties are
seeking to protect their pecuniary interest. He asserts that the
Santa Clara Lawsuit is primarily about obtaining money from a
debtor as a remedy for past conduct and has nothing to do with
deterring any future conduct of a debtor. He explains that the
California Parties seek to have the alleged public nuisance
abated from all public and private homes and property affected
throughout the State of California, however, none of the
defendants, including Millennium, has the ability to abate lead
from properties that they do not own, control, or have a legal
right to enter. The Santa Clara Lawsuit thus suggested the
defendants pay money into a large common fund from which the
costs of abatement and inspection efforts would be paid. Given
that suggestion, it is evident that the California Parties' sole
purpose in the Santa Clara Lawsuit is to extract a large monetary
judgment from the defendants under the guise of an injunctive
abatement plan, he argues.
Mr. Troop stresses that if the California Parties were to
prevail, the Santa Clara Lawsuit would require Millennium to pay
potentially billions of dollars. More importantly, the Santa
Clara Lawsuit would consume the Debtors' management's time and
divert resources to the detriment of their estates. The
existence of the Santa Clara Lawsuit outside the bankruptcy
process, with its attendant delay, and uncertainty poses a burden
on the Debtors' estates that issuance of a Section 105(a)
injunction would redress, he maintains.
About Lyondell Chemical
Basell AF and Lyondell Chemical Company merged operations
in 2007 to form LyondellBasell Industries --
http://www.lyondellbasell.com/-- the world's third largest
independent chemical company. Lyondellbasell produces
polypropylene and advanced polyolefins products, is a leading
supplier of polyethylene, and a global leader in the development
and licensing of polypropylene and polyethylene processes and
related catalyst sales.
LyondellBasell became saddled with debt as part of the
US$12.7 billion merger. About a year after completing the merger,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code on January 6, 2009, to facilitate a restructuring
of the company's debts. The case is In re Lyondell Chemical
Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023).
Seventy-nine Lyondell entities, including Equistar Chemicals, LP,
Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt
Industries, Inc., filed for Chapter 11. LyondellBasell is not
part of the bankruptcy filing. LyondellBasell's non-U.S.
operating entities are also not included in the Chapter 11 filing.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities.
Lyondell Chemical estimated that consolidated assets total
US$27.12 billion and debts total US$19.34 billion as of the
bankruptcy filing date.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MAGNA ENTERTAINMENT: Court Declines to Restrict Bond Trading
------------------------------------------------------------
Judge Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware didn't approve in its entirety a proposal to
stop large trades in stock of, and claims against, Magna
Entertainment Corp. According to Bloomberg's Bill Rochelle,
although Judge Walrath in an order precluded trades of large block
of stock, she refused to stop bondholders from selling or buying
debt. Magna had wanted to preclude debt trading by anyone owning
upward of 5 percent of the debt without the company's permission.
Magna proposed to restrict trading of shares and claims for fear
of touching off a change-in-control resulting in the loss of tax-
loss carryforwards. According to Bill Rochelle, it's become
almost standard procedure in major reorganizations for the
bankrupt company to prevail on the bankruptcy judge to stop large
trades in stock or claims for fear of touching off a change-in-
control resulting in the loss of tax-loss carryforwards.
Magna Entertainment has signed a contract to sell the tracks to MI
Developments Inc., its controlling shareholder and creditor, for
$44.17 million cash and an exchange of $135.63 million in debt.
Magna Entertainment will hold a July 16 auction to consider
competing bids, if any, for the race tracks.
Magna Entertainment has also submitted to the Court a proposal to
auction off seven remaining assets and other properties, although
no stalking horse bidder has been selected for these assets. The
Debtors propose a July 8 bidding deadline and a July 30 auction
for:
a) the seven racetracks;
b) MEC's joint venture interests in The Shops at Santa Anita,
TrackNet Media, and HorseRacing TV; and
c) The Ocala Property in Ocala, Florida, the Dixon Property in
Dixon, California, Fex Straw Manufacturing and StreuFex, and
the Bowie Training Center in Prince George's County,
Maryland.
About Magna Entertainment
Based in Aurora, Ontario, Magna Entertainment Corp. is North
America's largest owner and operator of horse racetracks, based on
revenue. The Company develops, owns and operates horse racetracks
and related pari-mutuel wagering operations, including off-track
betting facilities. MEC also develops, owns and operates casinos
in conjunction with its racetracks where permitted by law.
MEC owns and operates AmTote International, Inc., a provider of
totalisator services to the pari-mutuel industry, XpressBet(R), a
national Internet and telephone account wagering system, as well
as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC
has a fifty percent interest in HorseRacing TV(R), a 24-hour horse
racing television network, and TrackNet Media Group LLC, a content
management company formed for distribution of the full breadth of
MEC's horse racing content.
As of December 31, 2008, the Company had total assets of
$1,049,387,000 and total debts of $958,591,000.
Following its failure to meet obligations to lenders led by PNC
Bank, National Association, and Wells Fargo Bank, National
Association, and controlling shareholder MI Developments Inc.'s
decision not to provide further financial backing, Magna
Entertainment Corp. and 24 affiliates filed for Chapter 11 on
March 5, 2009 (Bankr. D. Del., Lead Case No. 09-10720).
Marcia L. Goldstein, Esq., Brian S. Rosen, Esq., at Weil, Gotshal
& Manges LLP, have been engaged as bankruptcy counsel. L.
Katherine Good, Esq., and Mark D. Collins, Esq., at Richards,
Layton & Finger, P.A., are the Debtors' local counsel. Miller
Buckfire & Co. LLC, has been tapped as financial advisor and
Kurtzman Carson Consultants LLC, as claims agent.
MANASSEH BLDG: May Use PNC/FFBH's Cash Collateral Until April 10
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
granted Manasseh Building Group, Inc., authority to use cash
collateral of PNC ARCS/ARCS Commercial Mortgage Co., L.P., and
First Bank of Beveral Hills. The Court granted the Debtor to use,
on an interim basis, cash through April 10, 2009, in accordance
with a budget.
In addition to any rights and liens which PNC and FBBH may have
pursuant to the loan documents with the Debtor, PNC, as to the
real property located at 7323 Winnetka Avenue, Winnetka,
California, and FBBH, as to the real property located at 22761
Vanowen Street, West Hills, California and 6737 DeSoto Avenue,
Woodland Hills, California, are granted replacement liens on
postpetition rents, issues and profits on said properties to the
extent of any diminution of cash collateral.
A copy of Manasseh Building's 16-week cash budget is available at:
http://bankrupt.com/misc/ManassehBuilding16-WeekBudget.pdf
About Manasseh Building
Based in Oak Park, California, Manasseh Building Group, Inc., also
known as MBG and Pacific Planning and Design, operates a real
estate business. The Debtor filed for Chapter 11 protection on
March 9, 2009, (Bankr. C.D. Calif. Case No.: 09-12507). Joseph A.
Eisenberg, Esq., at Jeffer, Mangels, Butler & Marmaro LLP
represents the Debtors in its restructuring efforts. The Debtor
listed assets of between $10 million and $50 million and the same
range of debts.
MASONITE INT'L: S&P Cuts Sr. Debt Rating to 'D' on Ch. 11 Filing
----------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its issue-level
ratings on Masonite International Inc.'s senior secured debt to
'D' from 'CC'. At the same time, S&P withdrew all the ratings on
the Company.
The rating actions reflect Masonite's filing for bankruptcy
protection earlier this week.
MEADOWCRAFT INC: Involuntary Chapter 11 Case Summary
----------------------------------------------------
Alleged Debtor: Meadowcraft, Inc.
151 Narrows Parkway, Suite D
Birmingham, AL 35242
Case Number: 09-10988
Type of Business: The Debtor sells iron casual outdoor furniture,
accessories, cushions, and umbrellas.
See: http://www.meadowcraft.com/
Involuntary Petition Date: March 30, 2009
Court: District of Delaware (Delaware)
Judge: Brendan Linehan Shannon
Petitioner's Counsel: Donald J. Detweiler, Esq.
bankruptcydel@gtlaw.com
Greenberg Traurig, LLP
1007 North Orange Street
The Nemours Building
Wilmington, DE 19801
Tel: (302) -661-7000
Fax: (302) 661-7360
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Wells Fargo Bank, NA loan $63,651,952
119 West 40th Street
New York, NY 10018
RZB Finance LLC loan $63,651,952
24 Grassy Plain Street
Bethel, CT 06801
Burdale Financial Limited loan $63,651,952
c/o Burdale Capital Finance
Inc.
300 First Stamford Place
Stamford, CT 06902
MGM MIRAGE: Dubai World Seeks to Limit Exposure to City Center
--------------------------------------------------------------
Jeffrey McCracken and Tamara Audi at The Wall Street Journal
report that Dubai World has filed a lawsuit in Delaware Chancery
Court against MGM Mirage, seeking to limit its exposure to
Infinity World.
Infinity World is an MGM Mirage-Dubai World joint venture that
develops the $8.6 billion City Center project on the Las Vegas
Strip.
According to WSJ, Dubai World asked the Court to free it from
making future payments and fulfilling other obligations under its
partnership deal with MGM Mirage, which it blames for massive cost
overruns on City Center. WSJ relates that Dubai World implied in
the lawsuit that it probably won't make a $100 million payment on
the City Center project that is due Friday, increasing the
financial pressure on the project and on MGM Mirage.
WSJ states that Dubai World paid two years ago about $5 billion
for half of the City Center project, plus a 9.5% stake in MGM
Mirage. WSJ relates that Dubai World claimed that it has had to
"make capital contributions far in excess of the levels originally
estimated by MGM. Essentially it is being asked to pay
significantly more and getting less, with only uncertainty about
MGM's future." According to the report, the complex originally
was projected to cost $7.48 billion. The price tag has increased
to $8.6 billion, even though parts of the project have been scaled
back, the report says.
Dubai World said in a statement, "The current path of the project
is simply unsustainable given our partner's financial troubles."
Dubai World's general counsel George Dalton said that his client
was worried that MGM Mirage and City Center might be forced to
file for bankruptcy, WSJ states.
WSJ notes that MGM Mirage and City Center are struggling to meet
debt obligations. WSJ says that failure to make the payment could
risk City Center's ability to pay its debt and halt the project,
possibly pushing it into bankruptcy proceedings.
Dubai World, according to WSJ, blamed MGM Mirage for cost overruns
on the project. WSJ states that MGM Mirage has about
$13 billion in debt and won a temporary reprieve from lenders last
week. MGM Mirage said that it faces potential default on loan
obligations coming due in May, WSJ relates. WSJ notes that losing
a key financing partner for City Center could force it to rush
efforts to raise cash by selling off key casinos.
About MGM Mirage
Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM) --
http://www.mgmmirage.com/-- is a hotel and gaming company. It
owns and operates 17 properties located in Nevada, Mississippi
and Michigan, and has investments in three other properties in
Nevada, New Jersey and Illinois.
* * *
As reported by the Troubled Company Reporter on March 23, 2009,
Moody's Investors Service downgraded MGM MIRAGE's Probability of
Default Rating to Caa3 from Caa2 and its Corporate Family Rating
to Caa2 from Caa1.
According to the TCR on March 23, 2009, Standard & Poor's Ratings
Services lowered its corporate credit and issue-level ratings on
Las Vegas-based MGM MIRAGE and its subsidiaries by two notches;
the corporate credit rating was lowered to 'CCC' from 'B-'. These
ratings were removed from CreditWatch, where they were initially
placed with negative implications on Jan. 30, 2009. S&P said that
the rating outlook is negative.
MILLENNIUM TRANSIT: Can Obtain 4th DIP Loan from James Ludvik
-------------------------------------------------------------
Millennium Transit Services, LLC obtained on March 2, 2009,
permission from the U.S. Bankruptcy Court for the District of New
Mexico to incur its fourth postpetition loan from James A. Ludvik
in the amount of $117,384.
The Fourth DIP Loan would be on the same terms as the previous
debtor-in-possession loans made by Mr. Ludvik in the amount of
$354,832 (Oct. 16, 2008), $395,023 (Nov. 25), and $186,728
(Jan. 27, 2009). Mr. Ludvik is an insider of the Debtor.
As with the three earlier loans, the Fourth DIP Loan would be
secured by a second lien on all estate property.
The basic terms of the proposed financing are:
Amount: Up to $117,384
Interest Rate: 10%
Repayment Schedule: On plan confirmation or case
conversion
Collateral Second lien on all assets of the
Debtor, except for avoidance actions
Pioneer Bank holds the first lien on the DIP Collateral, securing
a loan with a current principal balance of approximately
$3,500,000.
Roswel, New Mexico-based Millennium Transit Services LLC is a bus
manufacturer. The company filed for Chapter 11 relief on Aug. 29,
2008 (Bankr. D. N.M. Case No. 08-12848). Judge Mark B.
McFeeley presides over the case. David T. Thuma, Esq., at
Jacobvitz, Thuma & Walker, represents the Debtor as counsel.
George M. Moore, Esq., at Moore, Berkson & Gandarilla, P.C.,
represents the Official Committee of Unsecured Creditors as
counsel. When the Debtor filed for protection from its creditors,
it listed assets of between $10 million and $50 million and the
same range in debts.
NEW CENTURY ENERGY: Files 1st Amended Ch. 11 Reorganization Plan
----------------------------------------------------------------
Gulf Coast Oil Corp., Century Resources, Inc., and New Century
Energy Corp. filed with the U.S. Bankruptcy Court for the Southern
District of Texas on March 13, 2009, a First Amended Disclosure
Statement explaining the Debtors' First Amended Chapter 11 Joint
Plan of Reorganization.
On November 7, 2008, the Debtors filed their Joint Plan of
Reorganization. The Original Plan contemplated the restructuring
under the Notes by the issuance of new notes that would pay in
full the obligations to Laurus. Because of the continuing
decrease in oil and gas prices during the later half of 2008 and
continuing into 2009, the Debtors determined that it could not
confirm the Oringinal Plan, and thus withrew the Original Plan.
Plan Terms
The plan calls for the orderly liquidation of the Debtors'
business. On the Plan's Effective Date, the Debtors will be
dissolved and will cease doing business. The Debtors' assets,
including its cash on hand, will be sold under Sec. 363 of the
Bankruptcy Code with the sale to be conducted at the Confirmation
Hearing.
Laurus Master Fund, Ltd. has agreed to credit bid for the Debtors'
assets for up to $75 million. If the sale of the Debtors' assets
results in net proceeds in excess of $75 million, then $75 million
will be distributed to Laurus, and any remaining proceeds will be
distributed to holders of General Unsecured Claims. The Debtors,
however, do not anticipate that the sale of the Debtors' assets
will exceed $75 million.
Under the Plan, Secured Lender Claims under Classes 2A, 2B and 2C
will receive a Ratable Portion of the proceeds of the sale of the
Debtors' assets. General Unsecured Claims under Classes 4A, 4B
and 4C will receive Cash equal to their ratable share of the
Unsecured Creditors Fund. The Unsecured Fund refers to the fund
that will be established for the payment of Allowed Unsecured
Claims in the amount of $25,000.
Administrative Claims and Priority Tax Claims, which are not
classified in accordance with Sec. 1123(a)(1) of the Bankruptcy
Code, will be paid in full. All other claims against or Interests
in the Debtors have been placed into thirteeen classes:
Estimated
Class Description Status Recovery
-------- ------------------------ ---------- ---------
Class 1 Priority Non-Tax Claims Unimpaired 100.0%
Class 2A Secured Lender Claims of Impaired 33.3%
Gulf Coast
Class 2B Secured Lender Claims of Impaired 33.3%
Century Resources
Class 2C Secured Lender Claims of Impaired 33.3%
New Century
Class 3A Other Secured Claims of Unimpaired 100.0%
Gulf Coast
Class 3B Other Secured Claims of Unimpaired 100.0%
Century Resources
Class 3C Other Secured Claims of Unimpaired 100.0%
New Century
Class 4A General Unsecured Claims Impaired 10.0%
of Gulf Coast
Class 4B General Unsecured Claims Impaired 10.0%
of Century Resources
Class 4C General Unsecured Claims Impaired 10.0%
of New Century
Class 5 Equity Interests in Impaired
Century Resources
Class 6 Equity Interests in Impaired
Gulf Coast Oil
Class 7 Equity Interests in Impaired
New Century
Holders of Priority Non-Tax Claims under Class 1 and Other Secured
Claims under Classes 3A, 3B and 3C, which are unimpaired under the
Plan, are conclusively presumed to have accepted the Plan, and
will not be entitled to vote.
Holders of Interests in Classes 5, 6 and 7 shall receive nothing
under the Plan and are deemed to reject the Plan, and are thus not
entitled to vote.
Secured Lender Claims under Classes 2a, 2B and 2C and General
Unsecured Claims under Classes 4A, 4B and 4c are impaired and are
entitled to asccept or reject the Plan.
"Cramdown" Provisions
The Debtors reserve the right to seek confirmation of the Plan
pursuant to the "cramdown" provisions under Sec. 1129 of the
Bankruptcy Code. Under said provision of the Bankrupcty Code, a
plan may still be confirmed notwithstanding the non-acceptance
thereof by one or more impaired classes, provided that it does not
"discriminate unfairly" and is "fair and equitable" with respect
to each non-accepting class.
A full-text copy of the Debtors' First Amended Disclosure
Statement is available at:
http://bankrupt.com/misc/NewCentury.FirstAmendedDS.pdf
A full-text copy of the Debtors' First Amended Plan of
Reorganization is available at:
http://bankrupt.com/misc/NewCentury.FirstAmendedPlan.pdf
About New Century Energy
Based in Houston, Gulf Coast Oil Corp., Century Resources, Inc.
and New Century Energy Corp. are engaged in independent oil and
gas exploration and production. The Debtors' major areas of
operations are located onshore United States, primarily in
McMullen, Matagorda, Wharton, Goliad and Jim Hogg Counties in
Texas.
All of the Debtors oil and gas properties are operated by Century
Resources, a wholly owned operating subsidiary of New Century.
Title ownership of the various oil and gas properties are held in
three entities - Gulf Coast Oil, another wholly owned
subsidiary of New Century; New Century and Century Resources, with
all field operations conducted under the name of Century
Resources. The working interest ownership of the various
operated properties range from 80% in the Sargent South Field in
Matagorda County, Texas, to 100% in the San Miguel Creek Field
(McMullen County, Texas), Mustang Creek Field (McMullen and
Atascosa Counties, Texas), Prado Field (Jim Hogg County, Texas),
Soleberg Wilcox Field (Goliad County, Texas), and Tenna Field
(Wharton County, Texas). Additionally, the Debtors own a 15.20%
non-operated working interest with a 12.214% net revenue interest
in the Wishbone Field in McMullen County, Texas.
The Debtors filed separate petitions for Chapter 11 relief on
July 28, 2008 (Bankr. S.D. Tex. Lead Case No. 08-50213). Chasless
L. Yancy, Esq., and David A. Zdunkewicz, Esq., at Andrews & Kurth
LLP represent the Debtors as counsel. As of March 31, 2008, Gulf
Coast had total assets of $51,901,717 and total debts of
$75,326,678.
OFFICEMAX INC: S&P Downgrades Corporate Credit Rating to 'B'
------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate
credit and senior unsecured debt ratings on Naperville, Illinois-
based OfficeMax Inc. and its subsidiary American & Foreign Power
Inc. to 'B' from 'BB-'. The recovery ratings on the company's
senior unsecured debt remain unchanged at '4', indicating the
expectation for average (30%-50%) recovery in the event of a
payment default. The outlook is stable.
OfficeMax had about $354.4 million of reported debt outstanding at
Dec. 27, 2008.
"The rating action reflects our expectation that the protracted
slowdown in consumer and corporate spending," said Standard &
Poor's credit analyst Mark Salierno, "will continue to pressure
operating performance within the company's retail and contract
segments throughout 2009 and cause credit protection measures to
worsen from already weak current levels." For the fiscal year
ended Dec. 27, 2008, total debt to EBITDA increased to about 5x,
compared with about 3.6x at the end of fiscal 2007.
PAUL REINHART: Can Use Wells Fargo's Cash Collateral Until July 4
-----------------------------------------------------------------
Paul Reinhart, Inc., has served notice to U.S. Bankruptcy Court
for the Northern District of Texas that it has obtained consent
from its prepetition lenders to use cash collateral through
May 29, 2009, pursuant to a budget.
Wells Fargo HSBC Trade Bank, National Association, as agent for
itself and the prepetition secured lenders; the official committee
of unsecured creditors; and the Debtor signed a stipulation
outlining the terms of the cash collateral use. A summary of the
Debtor's projected receipts and disbursements for the 18-week
period ended July 4, 2009, is available at:
http://bankrupt.com/misc/PaulReinhart18WeekBudget.pdf
The Prepetition Lenders are comprised of Wells Fargo; Cooperatieve
Centrale Raiffeisen-Borenleenbank B.A., New York Branch; Natixis;
CoBank, ACB; Standard Chartered Bank; The Bank of Tokyo-Mitsubishi
UFJ, Ltd.; Bank of America, N.A.; and Australia and New Zealand
Banking Group Limited.
About Paul Reinhart
Based in Richardson, Texas, Paul Reinhart Inc. is a cotton
merchant serving organic and traditional growers and textile
mills. The company, which filed for Chapter 11 bankruptcy on
Oct. 15, 2008 (Bankr. N.D. Tex. Case No. 08-35283), blamed futures
losses and its inability to attain adequate financing for the
bankruptcy filing. Deborah M. Perry, Esq., and E. Lee Morris,
Esq., at Munsch Hardt Kopf & Harr, P.C.; and Joseph M. Coleman,
Esq., at Kane, Russell, Coleman & Logan, represent the Debtor as
counsel. The U.S. Trustee for Region 6 appointed creditors to
serve on an Official Committee of Unsecured Creditors in this
case. Michael R. Rochelle, Esq., and Sean Joseph McCaffity, Esq.,
at Rochelle McCullough L.L.P., represent the Committee as counsel.
In its schedules, the Debtor listed total assets of $143,943,710
and total debts of $247,421,595.
PERRY ELLIS: S&P Puts 'B+' Corporate Rating on Negative Watch
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it placed its ratings
on Perry Ellis International Inc., including the 'B+' corporate
credit rating, on CreditWatch with negative implications, meaning
that S&P could lower or affirm the ratings following S&P's review.
Based on preliminary results, S&P estimate the Miami, Florida-
based apparel company had about
$282 million in lease and pension-adjusted debt as of Jan. 31,
2009.
The CreditWatch placement follows the company's weaker-than-
expected fourth quarter operating results. Credit metrics
continued to deteriorate from fiscal year-end January 2008 levels
and increasing leverage remains a ratings concern.
"We will monitor developments and meet with PEI management to
review the company's ongoing operating strategies and financial
policy," said Standard & Poor's credit analyst Bea Chiem.
"Our resolution of the CreditWatch will focus on the company's
ability to improve its operating business trends and financial
metrics," she continued.
PETTERS GROUP: To Give Up Polaroid Domain Names to Genii Capital
----------------------------------------------------------------
Petters Group Worldwdie, LLC, asks the U.S. Bankruptcy Court for
the District of Minnesota for authority to transfer to Polaroid
Corporation its right, title and interests to the Polaroid
internet domain name registrations, free and clear of any interest
in said property, including the reservation of its rights to a
fair valuation and payment therefor.
PGW tells the Court that the Polaroid Domain Names have
questionable value to the PGW estate.
PGW is making this request to facilitate the pending sale of
Polaroid's business to PHC Acquisitions, LLC, an affiliate of
Genii Capital, S.A., a Luxembourg based private equity firm.
As reported in the Troubled Company Reporter on March 12, 2009,
PHC offered to purchase Polaroid's assets for $42,000,000 in cash
and the assumption of certain liabilities, subject to higher or
better offers. PHX has required that the Polaroid Domain Names
nominally registered to PGW be transferred to Polaroid as part of
the sale.
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).
Polaroid Corp., together with 11 affiliates, filed a 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.
About Petters Group Worldwide
Based in Minnetonka, Minn., Petters Group Worldwide LLC is named
for founder and chairman Tom Petters. The group is a collection
of some 20 companies, most of which make and market consumer
products. It also works with existing brands through licensing
agreements to further extend those brands into new product lines
and markets. Holdings include Fingerhut (consumer products via
its catalog and Web site), SoniqCast (maker of portable, WiFi MP3
devices), leading instant film and camera company Polaroid
(purchased for $426 million in 2005), Sun Country Airlines
(acquired in 2006), and Enable Holdings (online marketplace and
auction for consumers and manufacturers' overstock inventory).
Petters formed the company in 1988.
Petters Company, Inc. is the financing and capital-raising unit of
Petters Group Worldwide, LLC. Petters Company, Inc. and Petters
Group Worldwide, LLC, filed separate petitions for Chapter 11
relief on Oct. 11, 2008 (Bankr. D. Minn. Case No. 08-45257 and 08-
45258, respectively). James A. Lodoen, Esq., at Lindquist &
Vennum P.L.L.P., represents the Debtors as counsel. In its
petition, Petters Company, Inc. listed debts of between
$500 million and $1 billion, while its parent, Petters Group
Worldwide, LLC listed debts of not more than $50,000.
As reported in the Troubled Company Reporter on Oct. 7, 2008,
Petters Aviation, LLC,, and affiliates MN Airlines, LLC, doing
business as Sun Country Airlines, Inc., and MN Airline Holdings,
Inc., filed for Chapter 11 bankruptcy protection with the U.S.
Bankruptcy Court for the District of Minnesota on Oct. 6, 2008
(Lead Case No. 08-45136). Petters Aviation, LLC is a wholly owned
unit of Thomas Petters Inc. and owner of MN Airline Holdings,
Inc., Sun Country's parent company.
PILGRIM'S PRIDE: Amends DIP Pact to Reflect Cost of Idling Plants
-----------------------------------------------------------------
Pilgrim's Pride Corporation had disclosed with the U.S. Securities
and Exchange Commission that they have amended their DIP Credit
Agreement with a consortium of lenders led by Bank of Montreal, as
administrative agent, to reflect a modification of the definition
of "EBITDAR" and to permit the company to incur certain costs and
charges not to exceed $35,000,000, related to the idling of the
company's processing plants in Douglas, Georgia; El Dorado,
Arkansas; and Farmerville, Louisiana.
Accordingly, Pilgrim's Pride and its debtor affiliates sought
formal authority from the U.S. Bankruptcy Court for the Northern
District of Texas to enter into the DIP Amendment.
As part of their restructuring efforts, the Debtors have begun
the process of implementing various restructuring initiatives to
streamline their operations and right-size production. In
connection therewith, on February 27, 2009, the Debtors announced
plans to idle the three plants by mid-May 2009.
The idling of the Plants, according to Stephen A. Youngman, Esq.,
at Weil, Gotshal & Manges, LLP, in Dallas, Texas, is intended to
improve the Debtors' product mix and significantly reduce their
costs in the midst of an industry-wide oversupply of chicken,
weak consumer demand and a national recession. The Debtors plan
to keep the Plants idle until they believe that additional
production capacity is needed, Mr. Youngman says.
Prior to making the determination to idle the Plants, the Debtors
had substantial discussions about the decision with the Official
Committee of Unsecured Creditors, the DIP Lenders, and the
Debtors' prepetition senior lenders.
The Plants employ a total of approximately 3,000 people, or
roughly 7% of Pilgrim Pride's total U.S. employees. The Debtors
intend to provide transition programs to employees whose
positions are eliminated to assist them in securing new
employment, filing for unemployment and obtaining other
applicable benefits. The idling of the Plants will also affect
approximately 430 independent contract growers who supply birds
to the Plants. The Debtors, Mr. Youngman says, will be filing a
subsequent motion to reject the executory contracts with these
contract growers.
The Debtors do not anticipate any disruption in supply of product
to its retail, foodservice and industrial customers as a result
of the idling of the Plants. The Debtors anticipate that the
costs of idling the Plants, including the lease termination
costs, severance costs, and facility shutdown costs, will not
exceed $35 million. They expect, however, to generate annualized
net savings of approximately $110 million from idling the Plants.
Accordingly, the Debtors believe that idling the Plants at this
time, although unfortunate, is in the best interests of the
Debtors, their estates and their creditors, Mr. Youngman tells
the Court. The savings from idling the Plants significantly
outweigh the associated costs to the Debtors' estates.
To implement the idling of the Plants, the Debtors and the DIP
Lenders have agreed to amend the DIP Credit Agreement by amending
the definition of EBITDAR to include the costs, not to exceed $35
million, of idling the Plants. Without this amendment, the
Debtors will be in breach of the Minimum EBITDAR covenant as a
result of the idling of those Plants, Mr. Youngman says. No
additional fees are being paid to the DIP Lenders in connection
with the DIP Financing Amendment.
To the extent either Sections 364(c) or 364(d) of the Bankruptcy
Code are implicated by the DIP Financing Amendment, the DIP
Financing Amendment is appropriate and should be approved, Mr.
Youngman asserts. The Court, he points out, has already made
findings in the Final DIP Order that the Debtors are unable to
(a) procure sufficient financing (i) in the form of unsecured
credit allowable under Section 503(b)(1), (ii) as an
administrative expense under Section 364(a) or (b), (iii) in
exchange for the grant of a super-priority administrative expense
claim pursuant to Section 364(c)(1), (iv) without granting
priming liens pursuant to Section 364(d), or (b) obtain
postpetition financing or other financial accommodations from any
alternative prospective lender or group of lenders on more
favorable terms and conditions than those for which approval was
sought in the DIP Motion.
To the extent Section 364(e) is implicated by the DIP Financing
Amendment, Mr. Youngman asserts that the benefits of Section
364(e) should be accorded to the DIP Financing Amendment.
Section 364(e) provides that the "reversal or appeal of an
authorization . . . to obtain credit or incur debt, or of a grant
. . . of a priority or a lien, does not affect the validity of
any debt so incurred, or any priority or lien so granted, to an
entity that extended such credit in food faith, whether or not
such entity knew of the pendency of the appeal, unless such
authorization and the incurring of such debt, or the granting of
such priority or lien, were stayed pending appeal." The DIP
Financing Amendment was negotiated in good faith and at arms'
length, Mr. Youngman contends. Accordingly, he asserts the
benefits of Section 364(e) should be afforded to the DIP
Financing Amendment.
Growers Object
Approximately 130 Farmerville and El Dorado growers and creditors
inform the Court that no formal notice of the Motion was given to
any of the Growers despite representations in the Motion that
concerns possible use of asset out of the ordinary course of
business, pursuant to Section 363(b)(1) of the Bankruptcy Code.
The Growers' counsel, Mark Brodeur, Esq., at Brodeur Law Firm in
Dallas, Texas, relates that the Farmerville and El Dorado plants
are the chief business of the towns. The "idling of the Plants
at these locations will destroy the already ravaged economies of
these two towns," he asserts.
This idling will put the Growers out of business, points out Mr.
Brodeur, because Pilgrim's Pride is the only chicken producer in
the Farmerville and El Dorado areas. This idling will also put
the Growers out of business, causing bankruptcies and
foreclosures against Growers with millions of dollars of current
debt obligations in those areas.
These effects would be avoided if the Plants were sold rather
than "idled", allowing the Growers to transfer their growing
operations to PPC's purchaser and to repay their debts.
Douglas-Coffee County Industrial Authority; the City of Douglas,
a Georgia municipal corporation; Coffee County, Georgia, a
political subdivision under the laws of the State of Georgia; and
various growers of the Douglas Division of Pilgrim's Pride
Corporation, asks the Court to move the hearing on the Debtors'
request to amend the DIP Agreement from March 24, 2009, to three
weeks after the proposed date to provide the Douglas-Coffee
Parties time to prepare and take meaningful discovery with
regards to the DIP Amendment.
The Douglas-Coffee Parties and the El Dorado Parties, in separate
filings, ask the Court to compel the Debtors to operate in the
ordinary course of business and to cease idling the Douglas Plant
pending the approval of the DIP Amendment Motion.
The Parties relate that the Debtors "idling" without authority
from the Court will devastate not only the thousands of
livelihoods dependent on the plant, at the worst economic time,
but it will ensure the that the Debtors will effectively take for
themselves the relief they seek and make it impossible to
"unwind" that relief through a classic fait accompli. There will
be no point in the DIP Amendment Motion, and the rights of the
Douglas-Coffee Parties will be injured, as they will be prevented
from being heard on the DIP Amendment Motion.
The Parties request the Court to preserve the status quo pending
the Adjudication of the DIP Amendment Motion, and that the
Debtors comply with their obligation to obtain authority from the
Court prior to acting outside the ordinary course of business.
Further, the Parties ask the Court to direct the Debtor to
continue operating the Plant and to cease effectively "idling" it
as it has been, unless and until the Debtors' DIP Amendment
Motion is actually granted and not unilaterally taken by the
Debtors.
Hearing on April 14
After reviewing the motion and the responses, the Court concluded
that:
(1) the request to idle the plants, to the extent it is
opposed by the parties, very likely is appropriate within
the business judgment of the Debtors;
(2) the effect of granting the Idling Motion and implementing
the closure of the three plants is likely to be
financially catastrophic for the three communities;
accordingly,
(3) the Opposing Parties should have a full opportunity to
contest the Idling Motion; and
(4) the facts suggest that an effort to accommodate the
interests of both Debtors and the Opposing Parties is
consistent with the objectives of Chapter 11 and the
Bankruptcy Code.
Accordingly, the Court adjourns the hearing on the Idling Motion
to April 14, 2009, at 10:30 a.m.
Any deadline for responding to a discovery request respecting the
Idling Motion under Part VII of the Federal Rules of Bankruptcy
Procedure will be shortened to the earliest of (a) the time
provided by the applicable rule; (b) 10 days from receipt of the
request by the party from which discovery is sought; or (c)
April 7, 2009, provided that no party may request discovery
respecting the Idling Motion after March 31, 2009.
The schedule and order apply to all entity, which opposes the
Idling Motion.
All requests for discovery covered by the Order will be served on
the Official Committee of Unsecured Creditors and Bank of
Montreal.
Prior to April 14, all interested parties may agree to mediate
all issues raised by the Idling Motion. To facilitate the
mediation, Steven A. Felsenthal is appointed to serve as
mediator, and will be paid at a rate lesser than his hourly rate
of $550 and will be reimbursed of his expenses.
About Pilgrim's Pride Corp.
Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation
(Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- produces,
distributes and markets poultry processed products through
retailers, foodservice distributors and restaurants in the U.S.,
Mexico and in Puerto Rico. In addition, the company owns 34
processing plants in the United States and 3 processing plants in
Mexico. The processing plants are supported by 42 hatcheries, 31
feed mills and 12 rendering plants in the United States and 7
hatcheries, 4 feed mills and 2 rendering plants in Mexico.
Moreover, the company owns 12 prepared food production facilities
in the United States. The company employs about 40,000 people and
has major operations in Texas, Alabama, Arkansas, Georgia,
Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee,
Virginia, West Virginia, Mexico, and Puerto Rico, with other
facilities in Arizona, Florida, Iowa, Mississippi and Utah.
Pilgrim's Pride Corp. and six other affiliates filed Chapter 11
petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No.
08-45664). The Debtors' operations in Mexico and certain
operations in the United States were not included in the filing
and continue to operate as usual outside of the Chapter 11
process.
Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A.
Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges
LLP, as bankruptcy counsel. The Debtors have also tapped Baker &
McKenzie LLP as special counsel. Lazard Freres & Co., LLC is the
company's investment bankers and William K. Snyder of CRG Partners
Group LLC as chief restructuring officer. The company's claims
and noticing agent is Kurtzman Carson Consulting LLC.
A nine-member committee of unsecured creditors has been appointed
in the case.
As of December 27, 2008, the Company had $3,215,103,000 in total
assets, $612,682,000 in total current liabilities, $225,991,000 in
total long-term debt and other liabilities, and $2,253,391,000 in
liabilities subject to compromise.
Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
of Pilgrim's Pride Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
PILGRIM'S PRIDE: Asks Court to Fix June 1 as Claims Bar Date
------------------------------------------------------------
Standing Order 97-4 is a standing order concerning claim bar
dates in Chapter 11 Reorganization Cases where no bar date is
specifically set. The Order provides that unless ordered by the
court in a particular case, unsecured creditors or equity
security holders must file proofs of claim not later than 90
calendar days after the first date set for the meeting of
creditors called under Section 341 of the Bankruptcy Code, except
for claims filed by a governmental unit, which must be filed
within 180 days of the Petition Date. By its terms, General
Order 97-4 authorizes the Court to set deadlines for filing
Proofs of Claim that differ from those set forth in General Order
97-4.
Pursuant to Section 502(b)(9) of the Bankruptcy Code, Pilgrim's
Pride Corp. and its affiliates ask Judge D. Michael Lynn of the
U.S. Bankruptcy Court for the Northern District of Texas to
establish June 1, 2009, as the deadline for each person or entity
to file a proof of claim based on claims that arose prior to the
Petition Date.
Fixing the General Bar Date at June 1, 2009, will enable the
Debtors to receive, process and begin their analysis of
creditors' claims in a timely and efficient manner and proceed to
expeditiously conclude the administration of their Chapter 11
cases, Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP,
in Dallas, Texas, asserts.
The Debtors propose that any party that asserts a claim against
the Debtors that arose prior to the Petition Date must file a
written proof of claim to be received before the General Bar Date
by the Debtors' claims agent, Kurtzman Carson Consultants LLC, or
the Court. The Debtors emphasize that the original Proof of
Claim should be sent by first class mail, overnight mail, or hand
delivery to:
(1) Pilgrim's Pride Claims Processing Center
c/o Kurtzman Carson Consultants LLC
2335 Alaska Avenue, El Segundo
California 90245
(2) Clerk of the United States Bankruptcy Court
Attn: Pilgrim's Pride Claims Processing
United States Bankruptcy Court
Northern District of Texas, Forth Worth Division
501 West Tenth Street
Forth Worth, Texas 76102-3643
The Debtors ask the Court to provide that (i) Proofs of Claim
sent by facsimile, telecopy or electronic mail transmission will
not be accepted, and (ii) Proofs of Claim will be deemed timely
filed if these are actually received by KCC or the Court on or
before the General Bar Date.
Further, the Debtors propose that these parties are not required
to file Proofs of Claim on or before the General Bar Date:
(a) any person or entity whose claim is listed on the
Schedules of Assets and Liabilities, and whose claim is
not described as disputed, contingent, or unliquidated,
and who does not dispute the amount or nature of the claim
set forth in the Schedules;
(b) any person or entity whose claim has been paid in full by
the Debtors;
(c) any person or entity that holds an interest in the
Debtors, which interest is based exclusively upon the
ownership of common or preferred stock, membership
interests, partnership interests, or warrants or rights to
purchase, sell or subscribe to a security or interest;
provided, however, that interest holders who wish to
assert claims against the Debtors that arise out
of or relate to the ownership or purchase of an interest,
must file Proofs of Claim on or before the General Bar
Date, unless another exception applies;
(d) any person or entity that holds a claim that has been
allowed by an order of this Court entered on or before the
General Bar Date;
(e) any holder of a claim for which a separate deadline is
fixed by the Court;
(f) any holder of a claim who has already properly filed a
Proof of Claim with the Clerk of the Court or Debtors
claims agent against the Debtors, utilizing a claim form
which substantially conforms to the Proof of Claim Form;
and
(g) any holder of a claim under Sections 503(b) and 507(a)(2)
as an administrative expense of the Debtors' Chapter 11
cases.
Any person or entity that holds a claim that arises from the
rejection of an executory contract or unexpired lease must file a
Proof of Claim based on the rejection by the later of (i) the
General Bar Date or (ii) the date that is 30 days following the
effective date the rejection or be forever barred from doing so.
In the event the Debtors amend their Schedules to (a) designate a
claim as disputed, contingent, unliquidated or undetermined, (b)
change the amount of a claim, or (c) add a claim that was not
listed on the Schedules, the Debtors will notify the affected
claimant of the amendment and be granted the later of (i) the
General Bar Date and (ii) 30 days from the date of the
notification within which to file a claim or be forever barred
from doing so.
Additionally, pursuant to Rule 3003(c)(2) of the Federal Rules of
Bankruptcy Procedure, any holder of a claim who is required to
file a proof of claim in accordance with the Bar Date Order, but
fails to do so on or before the General Bar Date will be forever
barred, estopped, and enjoined from asserting the claim against
the Debtors, and the Debtors and their property will be forever
discharged from any and all indebtedness or liability with
respect to the claim, Mr. Youngman asserts. Moreover, the holder
of that Claim will not be permitted to vote to accept or reject
any Chapter 11 plan filed in the Debtors' Chapter 11 cases,
participate in any distribution on account of the Claim, or
receive further notice regarding the Claim.
The Debtors propose to mail a bar date notice for filing Proofs
of Claim to these parties:
(a) The United States Trustee for the Northern District of
Texas;
(b) attorneys for the Official Committee of Unsecured
Creditors;
(c) all known holders of claims listed on the Schedules at the
addresses stated;
(d) all parties known to the Debtors as having potential
claims against the Debtors' estates;
(e) all counterparties to the Debtors' executory contracts and
unexpired leases listed on the Schedules at the addresses
stated;
(f) all parties to litigation with the Debtors; and
(g) all parties who have requested notice pursuant to
Bankruptcy Rule 2002.
In addition, the Debtors propose to publish the Bar Date Notice
in the national edition of The Wall Street Journal, the USA
Today, The Mount Pleasant Daily Tribune, a Texas publication, and
the El Nuevo Dia, a Puerto Rican newspaper. KCC will also post
the Proof of Claim Form, along with instructions for filing
Proofs of Claim at: http://www.kccllc.net/pilgrimspride/
The Court will convene a hearing on this matter on March 31,
2009.
About Pilgrim's Pride Corp.
Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation
(Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- produces,
distributes and markets poultry processed products through
retailers, foodservice distributors and restaurants in the U.S.,
Mexico and in Puerto Rico. In addition, the company owns 34
processing plants in the United States and 3 processing plants in
Mexico. The processing plants are supported by 42 hatcheries, 31
feed mills and 12 rendering plants in the United States and 7
hatcheries, 4 feed mills and 2 rendering plants in Mexico.
Moreover, the company owns 12 prepared food production facilities
in the United States. The company employs about 40,000 people and
has major operations in Texas, Alabama, Arkansas, Georgia,
Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee,
Virginia, West Virginia, Mexico, and Puerto Rico, with other
facilities in Arizona, Florida, Iowa, Mississippi and Utah.
Pilgrim's Pride Corp. and six other affiliates filed Chapter 11
petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No.
08-45664). The Debtors' operations in Mexico and certain
operations in the United States were not included in the filing
and continue to operate as usual outside of the Chapter 11
process.
Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A.
Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges
LLP, as bankruptcy counsel. The Debtors have also tapped Baker &
McKenzie LLP as special counsel. Lazard Freres & Co., LLC is the
company's investment bankers and William K. Snyder of CRG Partners
Group LLC as chief restructuring officer. The company's claims
and noticing agent is Kurtzman Carson Consulting LLC.
A nine-member committee of unsecured creditors has been appointed
in the case.
As of December 27, 2008, the Company had $3,215,103,000 in total
assets, $612,682,000 in total current liabilities, $225,991,000 in
total long-term debt and other liabilities, and $2,253,391,000 in
liabilities subject to compromise.
Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
of Pilgrim's Pride Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
PILGRIM'S PRIDE: Creditors Panel Says CoBank's Liens Invalid
------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
bankruptcy cases of Pilgrim's Pride Corporation and its affiliates
asks the U.S. Bankruptcy Court for the Northern District of Texas
to:
(i) revoke its December 30, 2008 ruling with respect to its
finding that the mortgages, security interests and liens
granted to the Prepetition Agents for the ratable benefit
of the Pre-Petition Lenders under the Prepetition
Loan Documents are fully perfected Prepetition Credits -
the "Lien Finding;"
(ii) declare CoBank ACB's liens on the properties invalid; and
(iii) avoid CoBank's liens on the property at certain of the
Debtors' facilities
On September 21, 2006, the Debtors executed an amended security
and pledge agreement with CoBank, as Agent, Agriland, FCS as co-
syndication agent, and the other lenders. The Committee objects
to the Lien Finding with respect to the Prepetition CoBank Credit
Facilities and Prepetition CoBank Loan Documents on the grounds
that CoBank's lien on personal property located at certain of the
Debtors' facilities is not perfected
Pursuant to the Security Agreement, Pilgrim's Pride Corporation
granted a security interest to CoBank in these assets:
(a) all of PPC's equipment used in connection with the
"Pledged Facilities" and any replacements or
substitutions of these;
(b) all of PPC's right, title and interest to insurance
policies covering the Equipment;
(c) all books and records relating to the Equipment or
Insurance; and
(d) proceeds of these assets.
The term "Pledged Facilities" is defined in the Security
Agreement as the facilities listed specified in the agreement.
The facilities are located in Alabama, Arkansas, Florida,
Georgia, Kentucky, Louisiana, South Carolina, and Tennessee, Lee
County, North Carolina, Angelina and Nacogdoches, Texas, and a
tract located in Shelby, County, Texas. A full-text copy of the
"Pledged Facilities" is available for free at:
http://bankrupt.com/misc/ppc_pledged_facilities.pdf
CoBank filed a Uniform Commercial Code financing statement with
the Delaware Secretary of State on July 21, 2001, as amended on
August 20, 2001.
According to the Committee's counsel, Jason S. Brookner, Esq., at
Andrews Kurth, LLP, in Dallas, Texas, CoBank's UCC financing
statement is defective, and CoBank's lien is thus unperfected
because it does not include or cover the personal property
collateral located at these pledged facilities: Alabama,
Arkansas, Florida, Georgia, Kentucky, Louisiana, South Carolina,
and Tennessee; Lee County, North Carolina; Angelina and
Nacogdoches, Texas; and a tract located in Shelby County, Texas.
A full-text copy of CoBank's UCC financing statement is available
for free at: http://bankrupt.com/misc/ppc_cobank_uccfs.pdf
CoBank Responds
CoBank ACB asks the Court to deny the Committee's objection which
is based on the Committee's belief that CoBank's lien is
unperfected because it does not include or cover the Personal
Property Collateral located at the "Pledged Facilities."
Even if the balance of the Committee's assertions in the
Objection are factually correct, CoBank's liens remain perfected
with regard to any and all real property and the accompanying
fixtures that are part of the CoBank Collateral. Pursuant to the
Security Agreement and the Mortgages, CoBank received a security
interest in and liens upon all fixtures and equipment located on
or used in connection with the Land and the Pledged Facilities,
Louis R. Strubeck, Esq., at Fulbright & Jaworski L.L.P., in
Dallas, Texas, says.
The Court will convene a hearing on the DIP Amendments on
March 24, 2009.
About Pilgrim's Pride Corp.
Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation
(Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- produces,
distributes and markets poultry processed products through
retailers, foodservice distributors and restaurants in the U.S.,
Mexico and in Puerto Rico. In addition, the company owns 34
processing plants in the United States and 3 processing plants in
Mexico. The processing plants are supported by 42 hatcheries, 31
feed mills and 12 rendering plants in the United States and 7
hatcheries, 4 feed mills and 2 rendering plants in Mexico.
Moreover, the company owns 12 prepared food production facilities
in the United States. The company employs about 40,000 people and
has major operations in Texas, Alabama, Arkansas, Georgia,
Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee,
Virginia, West Virginia, Mexico, and Puerto Rico, with other
facilities in Arizona, Florida, Iowa, Mississippi and Utah.
Pilgrim's Pride Corp. and six other affiliates filed Chapter 11
petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No.
08-45664). The Debtors' operations in Mexico and certain
operations in the United States were not included in the filing
and continue to operate as usual outside of the Chapter 11
process.
Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A.
Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges
LLP, as bankruptcy counsel. The Debtors have also tapped Baker &
McKenzie LLP as special counsel. Lazard Freres & Co., LLC is the
company's investment bankers and William K. Snyder of CRG Partners
Group LLC as chief restructuring officer. The company's claims
and noticing agent is Kurtzman Carson Consulting LLC.
A nine-member committee of unsecured creditors has been appointed
in the case.
As of December 27, 2008, the Company had $3,215,103,000 in total
assets, $612,682,000 in total current liabilities, $225,991,000 in
total long-term debt and other liabilities, and $2,253,391,000 in
liabilities subject to compromise.
Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
of Pilgrim's Pride Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
PILGRIM'S PRIDE: Shareholders Seek Representation in Case
---------------------------------------------------------
An ad hoc shareholders group, comprised of certain holders of
common stock issued by Pilgrim's Pride Corporation, asks the U.S.
Bankruptcy Court for the Northern District of Texas to compel the
U.S. Trustee to appoint an official committee of equity security
holders in the Debtors' Chapter 11 cases.
The Ad Hoc Committee presently consists of M&G Investment
Management, Ltd., Pilgrim's Pride Corporation Retirement Savings
Plan, James Schwertner and Michael Cooper. These bondholders own
a total of 10,469,501 shares of PPC common stock.
The facts and circumstances of the Debtors' bankruptcy cases give
rise to a compelling need for the appointment of an official
equity committee to assure adequate representation of the
interests of PPC shareholders, Michael A. McConnell, Esq., at
Kelly Hart & Hallman, Esq., at Fort Worth, Texas, asserts.
The Debtors, Mr. McConnell notes, are not "hopelessly insolvent."
To the contrary, there is every indication that equity value may
total in the hundreds of millions of dollars.
Mr. McConnell asserts that the Official Committee of Unsecured
Creditors cannot adequately represent the interests of equity
holders in that its fiduciary duties run only to unsecured
creditors who, as the most junior class of creditors or interests
organized and represented in the bankruptcy cases, stand to
receive a significant windfall from the diversion of value away
from equity holders.
The Ad Hoc Committee also asks the Court to set March 31, 2009,
as status conference for scheduling purposes with regards to its
appointment request.
About Pilgrim's Pride Corp.
Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation
(Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- produces,
distributes and markets poultry processed products through
retailers, foodservice distributors and restaurants in the U.S.,
Mexico and in Puerto Rico. In addition, the company owns 34
processing plants in the United States and 3 processing plants in
Mexico. The processing plants are supported by 42 hatcheries, 31
feed mills and 12 rendering plants in the United States and 7
hatcheries, 4 feed mills and 2 rendering plants in Mexico.
Moreover, the company owns 12 prepared food production facilities
in the United States. The company employs about 40,000 people and
has major operations in Texas, Alabama, Arkansas, Georgia,
Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee,
Virginia, West Virginia, Mexico, and Puerto Rico, with other
facilities in Arizona, Florida, Iowa, Mississippi and Utah.
Pilgrim's Pride Corp. and six other affiliates filed Chapter 11
petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No.
08-45664). The Debtors' operations in Mexico and certain
operations in the United States were not included in the filing
and continue to operate as usual outside of the Chapter 11
process.
Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A.
Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges
LLP, as bankruptcy counsel. The Debtors have also tapped Baker &
McKenzie LLP as special counsel. Lazard Freres & Co., LLC is the
company's investment bankers and William K. Snyder of CRG Partners
Group LLC as chief restructuring officer. The company's claims
and noticing agent is Kurtzman Carson Consulting LLC.
A nine-member committee of unsecured creditors has been appointed
in the case.
As of December 27, 2008, the Company had $3,215,103,000 in total
assets, $612,682,000 in total current liabilities, $225,991,000 in
total long-term debt and other liabilities, and $2,253,391,000 in
liabilities subject to compromise.
Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
of Pilgrim's Pride Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
PILGRIM'S PRIDE: To Sell Plant City Center for $2.1 Million
-----------------------------------------------------------
Pursuant to Section 363 of the Bankruptcy Code, Pilgrim's Pride
Corp. and its affiliates seek permission from the U.S. Bankruptcy
Court for the Northern District of Texas to sell Debtor PFS
Distribution Company's distribution center in Plant City, Florida,
for $2,100,000 to Cheung Kong Holdings, Inc.
PFS Distribution owns the 54,160-square foot Plant City
distribution center. The Debtor also owns all the storage racks
contained in the building.
In March 2008, the Debtors closed a processing plant in North
Carolina and PFS closed several distributions centers, including
the Plant City Property. PFS stopped using the Plant City
Property in or around April 2008.
PFS, through its Listing Broker, began marketing the Plant City
Property in May 2008 through listing agreements. At that time,
PFS engaged Coldwell Banker Commercial Division to market the
Plant City Property. Since the commencement of the Brokers'
marketing efforts, PFS has received four offers for the Plant
City Property. The first two putative purchasers offering
$2,500,000 and $1,900,000 were never memorialized and the
putative buyers decided not to go through with the purchase.
On March 6, 2009, Cheung Kong Holdings made a third offer for the
Plant City Property. PFS and Cheung Kong then entered into a
purchase and sale agreement under which Cheung Kong agreed to
purchase the property for $2.1 million. During the negotiations
leading up to the Stalking Horse Agreement, PFS received a fourth
offer, of $1,500,000 for the Plant City Property, which the
Debtors did not consider.
The Stalking Horse Agreement requires the Debtors to reimburse
Cheung Kong up to $5,000 for its expenses. Pursuant to the terms
of the Listing Agreement with the Broker, the Broker will receive
a 6% commission and pay the Cooperative Broker 3% of his
commission.
A full-text copy of the Stalking Horse Agreement is available for
free at: http://bankrupt.com/misc/PPC_PFS_stalkinghorse_agr.pdf
In line with the proposed sale and to maximize the value of the
property, the Debtors also ask the Court to approve uniform
bidding procedures to govern an auction of the assets.
The Debtors propose that interested parties are required to
submit bids and good faith deposits with the Debtors on or before
May 4, 2009. The Good Faith Deposits will be equal to 10% of the
cash purchase price of the bid. Good Faith Deposits of all
bidders will be held in a separate interest-bearing account for
the Debtors' benefit until 11 days following the Sale Approval
Hearing after which the deposits will be released to the bidder.
If a Successful Bidder fails to consummate an approved sale
because of a breach or failure to perform on the part of that
Successful Bidder, the Debtors will not have any obligation to
return the Good Faith Deposit deposited by the Successful Bidder,
and the Good Faith Deposit will irrevocably become property of
the Debtors.
The Debtors ask the Court to schedule the auction of the assets
for May 13, 2009, to be conducted at the offices of Weil, Gotshal
& Manges LLP, at 200 Crescent Court, Suite 300, in Dallas, Texas.
If no bid other than that of the Stalking Horse is timely
submitted, the Debtors ask the Court to schedule a hearing to
consider approval of the sale of the property to the Stalking
Horse Bidder on May 18, 2009. Objections will be due by May 11,
2009.
Woodlawn Distribution Center For Sale
The Debtors also seek the Court's authority to sell Pilgrim's
Pride Corporation's distribution center located at 10419 Chester
Road, in Woodlawn, Ohio, including all land, improvements, office
furniture and equipment, free and clear of all liens, claims and
encumbrances, to Ralph Winterhalter through a private sale for a
purchase price of $675,000.
The Property includes a 32,800 square foot industrial warehouse
building that was constructed in 1956 and 4.613 acres of land.
The building includes office space, warehouse space,
refrigeration and loading docks.
The Property is not currently being used by the Debtors, having
been closed in April of 2008 when the Debtors closed a processing
plant in North Carolina and several other distributions centers.
The Debtors have been leasing, on a month to month basis, 600
square feet of the office space, 750 square feet of the warehouse
space and 11 loading docks to Bearcat Express, Inc., a company
owned and operated by Mr. Winterhalter.
The Property has been marketed by the Debtors since May 2008.
The Debtors entered into non-exclusive listing agreements with
several brokers, none of which presented any written offers,
Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, in
Dallas, Texas, relates. The initial listing price was
approximately $850,000. The only offers received by the Debtors,
other than the Buyer's offer, have been too low to warrant
further negotiation. The Debtors believe that the Buyer's offer
of $675,000 is the highest and best offer they will receive for
the Property.
There are no contracts or agreements that will be assumed and
assigned as part of the transaction, Mr. Youngman says.
The Debtors assert that sound business justification exists,
which merits judicial approval of the proposed sale. First, the
sale will allow the Debtors to be relieved of property they do
not need for an effective reorganization and will allow them
immediately to realize additional funds for their estates,
thereby increasing the pool of assets available for creditor
distribution. Second, the Property has been marketed and the
Buyer's offer is the highest, best and only offer available for
the Property after good-faith negotiations between the Debtors
and the Buyer.
Given the marketing efforts and the relatively low interest shown
in the Property thus far, the Debtors assert that a private sale
of the Property is the best way to maximize the value of the
Property without risking the loss of the Buyer. The delay and
costs associated with an auction process would reduce any benefit
to be derived through a public sale of the Property, Mr. Youngman
says. Furthermore, if the Debtors do not act quickly, they risk
losing the only buyer that appears to be interested in and able
to purchase the Property, he contends.
Mr. Youngman says other than the liens of the postpetition
lenders, the Debtors are not aware of any liens or interests held
by any party in respect of the Debtors' rights to the Property.
The Court will convene a hearing on the request on April 14, 2009.
Objections are due April 7.
About Pilgrim's Pride Corp.
Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation
(Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- produces,
distributes and markets poultry processed products through
retailers, foodservice distributors and restaurants in the U.S.,
Mexico and in Puerto Rico. In addition, the company owns 34
processing plants in the United States and 3 processing plants in
Mexico. The processing plants are supported by 42 hatcheries, 31
feed mills and 12 rendering plants in the United States and 7
hatcheries, 4 feed mills and 2 rendering plants in Mexico.
Moreover, the company owns 12 prepared food production facilities
in the United States. The company employs about 40,000 people and
has major operations in Texas, Alabama, Arkansas, Georgia,
Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee,
Virginia, West Virginia, Mexico, and Puerto Rico, with other
facilities in Arizona, Florida, Iowa, Mississippi and Utah.
Pilgrim's Pride Corp. and six other affiliates filed Chapter 11
petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No.
08-45664). The Debtors' operations in Mexico and certain
operations in the United States were not included in the filing
and continue to operate as usual outside of the Chapter 11
process.
Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A.
Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges
LLP, as bankruptcy counsel. The Debtors have also tapped Baker &
McKenzie LLP as special counsel. Lazard Freres & Co., LLC is the
company's investment bankers and William K. Snyder of CRG Partners
Group LLC as chief restructuring officer. The company's claims
and noticing agent is Kurtzman Carson Consulting LLC.
A nine-member committee of unsecured creditors has been appointed
in the case.
As of December 27, 2008, the Company had $3,215,103,000 in total
assets, $612,682,000 in total current liabilities, $225,991,000 in
total long-term debt and other liabilities, and $2,253,391,000 in
liabilities subject to compromise.
Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
of Pilgrim's Pride Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
PITTSBURGH CORNING: Sets May 29 Plan Hearing for 9-Year Case
------------------------------------------------------------
Pittsburgh Corning Corp. scheduled a May 29 hearing to consider
approval of the disclosure statement explaining the latest Chapter
11 plan version, Bloomberg's Bill Rochelle said. The proposed
solicitation schedule contemplates voting to be completed by late
August.
As reported by the Troubled Company Reporter, Pittsburgh Corning
filed a Modified Third Amended Plan of Reorganization with the
United States Bankruptcy Court for the Western District of
Pennsylvania on January 29, 2009, which will resolve certain
current and future asbestos claims against Corning Incorporated
and PPG Industries, Inc., arising from PCC products or activities.
Pittsburgh Corning is owned 50% by Corning Incorporated and 50% by
PPG Industries.
The Plan is subject to the approval of the federal bankruptcy
court in Pittsburgh, and a favorable vote of the asbestos
claimants voting on the Plan.
Pittsburgh Corning filed for Chapter 11 Bankruptcy protection in
2000. In its news statement, PPG Industries says that under the
terms of the amended plan, all current and future personal injury
claims against PPG relating to exposure to asbestos-containing
products manufactured, distributed or sold by Pittsburgh Corning
will be channeled to a trust for resolution. The amended plan is
subject to court approval and appeals processes, after which it
would become effective and payments to the trust by PPG and its
participating insurers would begin according to a modified PPG
settlement arrangement that is part of the amended plan.
In 2002, PPG entered into a settlement arrangement relating to
asbestos claims. The company has reserved approximately $900
million for that settlement arrangement. Under the modified
settlement arrangement, PPG's obligation is currently $735 million
for claims that will be channeled to the trust. PPG will retain
the approximately $165 million difference as a reserve for
asbestos-related claims that will not be channeled to the trust.
"This amended plan addresses the issues raised by the court in its
2006 opinion on the matter, and while we continue to believe PPG
is not responsible for injuries caused by Pittsburgh Corning
products, this amended plan would permanently resolve PPG's
asbestos liabilities associated with Pittsburgh Corning," said
James C. Diggs, PPG senior vice president, general counsel and
secretary. "We believe the modified settlement arrangement and
the remaining reserve are very advantageous for the company
because the vast majority of PPG's asbestos-related claims will be
paid or otherwise resolved by the trust."
Under the modified settlement arrangement, PPG's obligation to the
trust consists of cash payments over a 15-year period totaling
$825 million, about 1.4 million shares of PPG stock or cash
equivalent, and its shares in Pittsburgh Corning and Pittsburgh
Corning Europe. The obligation under the modified settlement
arrangement at December 31, 2008 totals $735 million or
approximately $460 million net of the associated tax benefit.
PPG's obligation under the modified settlement arrangement
includes the net present value of the cash payments of
$825 million, which will be adjusted quarterly to reflect the
accretion of interest. In addition, PPG's participating
historical insurance carriers will make cash payments to the trust
of approximately $1.6 billion in a series of payments ending in
2027.
Since the filing of the Pittsburgh Corning bankruptcy in 2000,
interested parties, including PPG, have engaged in extensive
negotiations, made numerous filings with the court and
participated in many hearings on this matter. In December 2006,
the court denied confirmation of the previous amended
reorganization plan for Pittsburgh Corning, on the basis that the
plan was too broad in the treatment of allegedly independent
asbestos claims not associated with Pittsburgh Corning. PPG
believes this amended plan meets the court's concerns.
In a separate statement, Corning says its contributions to the
settlement trust will begin after certain conditions are met, and
the Plan is approved and no longer subject to appeal. The
approval process could take one year or longer, Corning says.
About PPG Industries
Pittsburgh, Pennsylvania-based PPG Industries, Inc. --
http://www.ppg.com/-- is a global supplier of paints, coatings,
chemicals, optical products, specialty materials, glass and fiber
glass. The company has more than 140 manufacturing facilities and
equity affiliates and operates in more than 60 countries. Sales
in 2008 were $15.8 billion. PPG shares are traded on the New York
Stock Exchange (symbol: PPG).
About Corning
Corning Incorporated -- http://www.corning.com/-- makes specialty
and ceramics for more than 150 years. Its products include glass
substrates for LCD televisions, computer monitors and laptops;
ceramic substrates and filters for mobile emission control
systems; optical fiber, cable, hardware & equipment for
telecommunications networks; optical biosensors for drug
discovery; and other advanced optics and specialty glass solutions
for a number of industries including semiconductor, aerospace,
defense, astronomy and metrology.
About Pittsburgh Corning
Pittsburgh Corning Corporation filed for Chapter 11 bankruptcy
protection in 2000 (Bankr. W.D. Pa. Case No. 00-22876). The Hon.
Judith K. Fitzgerald presides over the case. The Bankruptcy Court
authorized the retention of Reed Smith LLP as counsel for the
Debtor under a general retainer, and the retention of Deloitte &
Touche LLP as accountants for the Debtor.
The United States Trustee appointed a Committee of Unsecured Trade
Creditors on April 28, 2000. The Bankruptcy Court authorized the
retention of Leech, Tishman, Fuscaldo & Lampl, LLC as counsel to
the Committee of Unsecured Trade Creditors, and Pascarella &
Wiker, LLP as financial advisor.
The United States Trustee appointed a Committee of Asbestos
Creditors on April 28, 2000. The Bankruptcy Court authorized the
retention of these professionals by the Committee of Asbestos
Creditors: (i) Caplin & Drysdale, Chartered as Committee Counsel;
(ii) Campbell & Levine as local counsel; (iii) Anderson Kill &
Olick, P.C. as special insurance counsel; (iv) Legal Analysis
Systems, Inc. as Asbestos-Related Bodily Injury Consultant; (v) L.
Tersigni Consulting, P.C. as financial advisor, and (vi) Professor
Elizabeth Warren, as a consultant to Caplin & Drysdale, Chartered.
On February 16, 2001, the Court approved the appointment of
Lawrence Fitzpatrick as the Future Claimants' Representative. The
Bankruptcy Court authorized the retention of Meyer, Unkovic &
Scott LLP as his counsel, Young Conaway Stargatt & Taylor, LLP as
his special counsel, and Analysis, Research and Planning
Corporation as his claims consultant.
In December 2006, the Bankruptcy Court denied confirmation of an
earlier version of the plan, citing that the plan was too broad in
addressing independent asbestos claims that were not associated
with the Debtor.
PRATT-READ CORP: Files Bare-bones Chapter 11 Petition
-----------------------------------------------------
Pratt-Read Corp. filed a bare-bones Chapter 11 petition March 19
in Bridgeport, Connecticut, saying assets and debt both exceed $10
million, Bloomberg's Bill Rochelle said.
James Berman, Esq., at Zeisler and Zeisler, has been tapped as
bankruptcy counsel.
Pratt-Read Corp. produces 20 million screwdrivers a year.
The company, based in Shelton, Connecticut, has 25 percent
of the screwdriver market, according to its Web site.
QUVIS INC: Involuntary Chapter 11 Case Summary
----------------------------------------------
Alleged Debtor: QuVIS, Inc.
2931 SW Wanamaker Dr., Suite 201
Topeka, KS 66614
Case Number: 09-10706
Type of Business: The Debtor provides digital motion imaging
services.
Involuntary Petition Date: March 20, 2009
Court: District of Kansas (Wichita)
Judge: Robert E. Nugent
Petitioner's Counsel: William B. Sorensen, Jr., Esq.
wsorensen@morrislaing.com
Morris Laing Evans Brock And Kennedy
Old Town Square
300 N. Mead Suite 200
Wichita, KS 67202-2722
Tel: (316) 262-2671
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Douglas A. Friesen business loan $679,526
10014 W. Greenspoint St.
Wichita, KS 67205
Marilyn R. Friesen Greenbush business loan $387,276
4323 N Rogers Rd
Spring Valley, CA 91977
Douglas A. Cusick business loan $319,878
1120 South Sandalwood
Wichita, KS 67230
RIDGE OF THE FOUNTAIN: Case Summary & 20 Largest Unsec. Creditors
-----------------------------------------------------------------
Debtor: Ridge of the Fountain, LLC
Warnicke & Littler, PLC
1411 N. Third Street
Phoenix, AZ 85004
Tel: (602) 256-0400
Bankruptcy Case No.: 09- 05263
Chapter 11 Petition Date: March 20, 2009
Court: District of Arizona (Phoenix)
Judge: James M. Marlar
Debtor's Counsel: Robert C. Warnicke, Esq.
administrator@warnickelittler.com
Warnicke & Littler PLC
1411 North Third Street
Phoenix, AZ 85004
Tel: (602) 256-0400
Fax: (602) 256-0345
Estimated Assets: $1 million to $100 million
Estimated Debts: $1 million to $100 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Clancy Real Estate $570,000
3507 North Central Ave. #500
Phoenix, AZ 85012
Maricopa County Treasurer $39,128
PO Box 52133
Phoenix, AZ 85072-2133
Arizona Public Service $8,256
PO Box 2906
Phoenix, AZ 86062
Jerry's Air Conditioning $2,285
The Home Depot Supply $1,918
Decorating Trends $1,163
US Waste Industries $1,028
US Waste Industries LLC $1,028
The Riley Kraus Group LLC $608
Frederico S. Pacheco $560
Norma Rodriguez Carrasco $432
Concepcion Hernandez Salazar $347
Sunrise Sweeping $340
Enriqueta Ramos $324
Eliseo Leon Leon $315
Safeguard Business Systems $281
The Terminix International $252
Eve De Lira $250
Chemical Services & Sales Inc. $227
Quest $180
The petition was signed by George V. Clancy, member.
RITZ CAMERA: Will Collect $40MM From GOB Sales at 129 Stores
------------------------------------------------------------
Ritz Camera Centers Inc., was given permission to conduct going-
out-of-business sales at its 129 Boater's World Marine Centers,
Bloomberg's Bill Rochelle reported.
Bloomberg News reports that Ritz Camera Centers Inc.'s lawyer,
Irving Walker, told the Hon. Mary Walrath of the U.S. Bankruptcy
Court for the District of Delaware that the Company should collect
$40 million from going-out-of business sales at 129 Boater's World
stores.
As reported by the Troubled Company Reporter on March 12, 2009,
Ritz Camera received authorization from the Court to hold a
March 17 auction for the assets of Boater's World Marine Centers.
Gordon Brothers, according to Bloomberg, won an auction for the
right to conduct the going-out-of business sales by guaranteeing
that Ritz Camera would get at least 90% of the value of the goods
sold during the liquidation. The report says that Judge Walrath
gave Ritz Camera permission to hire store liquidator Gordon
Brothers to shut down the Boater's World chain, which has seven
stores in the Baltimore metropolitan area.
Bloomberg states that Ritz Camera has secured the Court's approval
to liquidate the stores.
Ritz Camera would close more than half of its 800 remaining camera
stores and reorganize the rest, Bloomberg relates, citing Norman
Pernick, the Company's other attorney.
Graeme Moore at Carolinalive.com reports that the stores will
close on June 30, as part of a Chapter 11 bankruptcy
reorganization plan.
About Ritz Camera Centers Inc
Headquartered in Beltsville, Maryland, Ritz Camera Centers Inc. --
http://www.ritzcamera.com-- sells digital cameras and
accessories, and electronic products. The company filed for
Chapter 11 protection on February 22, 2009 (Bankr. D. Del. Case
No. 09-10617). Karen M. McKinley, Esq., and Norman L. Pernick,
Esq., at Cole Scholtz Meisel Forman Leonard, P.A., represent the
Debtor in its restructuring efforts. The Debtor proposed Thomas &
Libowitz PA as corporate counsel; FTI Consulting Inc. t/a FTI
Palladium Partners as financial advisor; and Kurtzman Carson
Consultants LLC as claims agent. When the Debtor filed for
protection from its creditors, it listed assets and debts between
$100 million and $500 million.
SEMGROUP LP: Seeks June 17 Extension of Exclusive Periods
---------------------------------------------------------
SemCrude, L.P., its parent, SemGroup, L.P., and their debtor
affiliates ask Judge Brendan Linehan Shannon of the U.S.
Bankruptcy Court for the District of Delaware to extend the time
within which they have the exclusive right file a Chapter 11 plan
of reorganization until June 17, 2009, and the time within which
they have exclusive right to solicit votes for that plan until
August 17, 2009.
Martin A. Sosland, Esq., at Weil, Gotshal & Manges, LLP, in
Dallas, Texas, relates that since the Court entered the first
exclusive periods extension order in December 2008, the Debtors
have worked diligently on a number of time-consuming tasks
necessary to the administration of the bankruptcy cases,
including:
(a) rejecting about 1,400 executory contracts pursuant
to more than 20 omnibus rejection notices;
(b) filing amended schedules of assets and liabilities
regarding reclamation claims;
(c) filing a motion to establish reclamation claims processing
procedures, resulting in the Debtors receiving about 435
valid reclamation notices;
(d) filing the schedules of assets and liabilities and
statement of financial affairs for SemCap, LLC, and
amended schedules for the remaining Debtors to resolve
issues relating to claims asserted under Section 503(b)(9)
of the Bankruptcy Code;
(e) filing and obtaining approval of the Bar Date Order;
(f) reconciling proofs of claims filed against the Debtors;
(g) exercising business judgment on the assumption or
rejection of hundreds of non-residential real property
leases in accordance with Court order;
(h) assisting the Examiner's investigation by providing access
to thousands of the Debtors' hard-copy and electronic
documents and responding to numerous informational
requests, and facilitating interviews of Debtors' current
and former employees by the Examiner;
(i) working with the U.S. Trustee to provide requested
financial information and comply with reporting
requirements under the Bankruptcy Code;
(j) developing five-year business plans for each of the
Debtors' business units; and
(k) improving the efficiency of existing business operations.
The Debtors, Mr. Sosland adds, have also successfully negotiated
a settlement with SemGroup Energy Partners, LP, a non-debtor
publicly traded master limited partnership. Through the SGLP
Settlement, the Debtors and SGLP consensually resolved
significant outstanding legal and financial issues between the
parties including issues related to title to assets claimed by
both SGLP and the Debtors and issues regarding potential
avoidance actions, he says.
Moreover, the Debtors expect to receive second round bids for
substantially all of their business units by the end of April
2009. Certain parties have expressed interest in investing in
the Debtors' entire enterprise, Mr. Sosland tells the Court. The
Debtors are working with those parties on the possibility of an
investment in the Debtors in connection with confirmation of a
plan of reorganization and their emergence from Chapter 11, he
says.
Additionally, the Debtors have finalized an outline for a plan of
reorganization around certain of their core business units in
January 2009, which efforts started in November and December
2008, with their preparation of a detailed business plan for each
of their business units and the presentation of these plans to
their lenders and the various committees.
Mr. Sosland relates that in a series of meetings in February and
March 2009, the Debtors presented their proposal for a Chapter 11
plan structure to Bank of America, as agent to their secured
lenders, the Steering Committee for the Prepetition Secured
Lenders, and the Committees, which meetings resulted to revisions
to their initial proposal. Mr. Sosland says the Debtors have
recently provided copies of a revised plan proposal to the key
creditor constituencies and will continue to negotiate with these
Key Creditor Constituencies in hopes of reaching consensus on a
Chapter 11 Reorganization Plan as expeditiously as possible.
Furthermore, the Debtors are in the process of preparing the
disclosure statement that must accompany a plan of
reorganization, including a proforma balance sheet, financial
projections, and a liquidation analysis for purposes of
demonstrating satisfaction of the best interests test under
Section 1129(a)(7), Mr. Sosland says.
Despite considerable progress toward a plan, however, certain key
legal issues must still be solved before meaningful distributions
to creditors can be made, Mr. Sosland states. He says conflict
in claims of priority between the Debtors' prepetition secured
lenders and certain producers of oil and gas products, operators
of oil and gas wells, and interest and royalty owners in oil and
gas properties continue to hamper the Debtors' efforts to propose
a plan of reorganization especially since resolution of the lien
priority issues will determine, in part, the amount of claims
entitled to priority under Section 503(b)(9).
In this regard, Mr. Sosland says the Debtors have encouraged the
Producers and the prepetition secured lenders to settle their
differences, without need for a hearing and the Debtors have
incorporated elements of a settlement in their plan proposal. As
of March 19, 2009, the Producers and prepetition secured lenders
have not reached an agreement, he reveals.
"Although the Debtors can file and the Court can confirm a plan
of reorganization prior to resolution of the Priority Lien Claim
disputes, resolution of the disputes may facilitate earlier and
meaningful distributions to creditors," Mr. Sosland emphasizes.
Mr. Sosland further discloses that the Debtors have approached
and have been approached by various parties regarding exit
financing, including the Debtors' existing prepetition and
postpetition lenders and certain producers of oil and gas. But
until final elements of a plan are known, formal discussions with
potential providers of exit financing are not practical, he
avers.
The Debtors say they have received comments to their initial
proposed capital structure from the Agent and the Creditors
Committee, and have also considered oral comments received during
their meetings with the OPC and their representatives.
The Debtors assure the Court have been and will continue to pay
their bills as they become due, citing that they have sufficient
liquidity in the form of cash balances and availability under
their postpetition financing arrangements to carry on normal
course of business.
In light of the unresolved legal issues and state law claims
asserted by producers and suppliers, Mr. Collins points out that
termination of the exclusive periods could give rise to the
threat of multiple plans and a contentious confirmation process,
resulting in increased administrative expenses and diminished
returns to the Debtors' secured and unsecured creditors.
The Debtors hope that the proposed extension of the exclusivity
periods will provide the necessary breathing period for them to
secure reasonable and adequate exit financing.
The Court has scheduled a hearing to consider the extension of
the Exclusive Plan Periods on April 14, 2009, at 4:00 p.m. By
application of Rule 9006-2 of the Local Rules of Bankruptcy
Practice and Procedures of the United States Bankruptcy Court for
the District of Delaware, the Debtors' Exclusive Plan Periods are
automatically extended until the conclusion of that hearing.
Objections to the Debtors' request are due on or before April 7,
2009.
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: Panel Has Until April 9 to Challenge Lenders' Liens
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved a
stipulation between the Official Committee of Unsecured Creditors
appointed in the bankruptcy cases of SemGroup, L.P., and its
affiliates; and Bank of America, N.A., as DIP Agent and as
Prepetition Administrative Agent, extending until April 9, 2009,
the deadline for the Committee to file an adversary proceeding or
contested matter:
(a) challenging the amount, validity, enforceability, priority
or extent of the Prepetition Indebtedness or the
Prepetition Secured Parties' security interests in and
liens on the Prepetition Collateral; or
(b) otherwise asserting any claims or causes of action against
the Prepetition Secured Parties on behalf of the Debtors'
estates.
Separately, the Court authorized the Unsecured Creditors Committee
to commence an action or actions on behalf of the Debtors' estate
asserting all claims or causes of actions of the estate, whether
derivative or otherwise, against Thomas L. Kivisto, Westback
Purchasing Co., LLC, Gregory C. Wallace, and VAP-IV, LLC on
account of alleged wrongful conversion or dissipation of the
Debtors' assets.
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 Seek to Retain Andrews Kurth as Counsel
--------------------------------------------------------------
The Official Producers' Committee appointed in the bankruptcy
cases of SemGroup, L.P., and its affiliates sought and obtained
authority from the U.S. Bankruptcy Court for the District of
Delaware to retain Andrews Kurth LLP as its bankruptcy counsel,
nunc pro tunc to October 30, 2008.
As bankruptcy counsel, Andrews Kurth will:
(a) advise the OPC with respect to its rights, powers, and
duties in the bankruptcy cases;
(b) assist and advise the OPC in its consultations with the
Debtors regarding administration of the cases, as it
relates to the producers and their interests;
(c) assist the OPC in analyzing the claims of the SemGroup
Companies' secured and unsecured creditors and in
negotiating with those creditors as they relate to the
priority of liens, constructive trust interests and
administrative priorities of the producers;
(d) assist with the OPC's investigation of the acts, conduct,
assets, liabilities, intercompany relationships and claims
and financial condition of the SemGroup Companies, the
existence of estate causes of action and the operation of
their businesses;
(e) assist the OPC in protecting, preserving and maximizing
the value of the Debtors' estates to the extent those
values relate to the producers' claims;
(f) assist the OPC in its analysis of, and negotiations with,
the Debtors or any third party concerning matters related
to, among other things, the terms of a Chapter 11 plan for
the Debtors;
(g) assist and advise the OPC with respect to its
communications with its creditor or constituency regarding
significant matters in the bankruptcy cases;
(h) represent the OPC at all hearings and other proceedings,
unless attendance by the OPC's co-counsel would be more
efficient;
(i) review and analyze all applications, orders, statements of
operations, and schedules filed with the Court and advise
the OPC with respect thereto;
(j) prepare pleadings and applications as may be necessary in
furtherance of the OPC's interests and objectives; and
(k) perform such other legal services as may be required and
are in the interests of the OPC in accordance with the
OPC's rights, powers, and duties as set forth in the
Bankruptcy Code.
Andrews Kurth will be paid in accordance on an hourly basis, plus
reimbursed of actual, necessary expenses and other charges.
Currently, hourly rates for Andrews Kurth professionals are:
Partners $480 to $910
Other attorneys $225 to $800
Legal assistants $40 to $275
These Andrews Kurth professionals will take primarily
responsibility in representing the OPC in the Debtors' Chapter
cases:
Hugh Ray, Esq. (Partner) $700
Peter Goodman, Esq. (Partner) $700
Cassandra Porsch, Esq. (Associate) $325
Timothy Davidson, Esq. (Associate) $450
Basil Umari, Esq. (Associate) $425
Hugh M. Ray, Esq., a partner at Andrews Kurth, assures the Court
that his firm is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code, and does not represent
any interest adverse to the Debtors, their estates, and the
producers.
However, Mr. Ray discloses that prior to the appointment of the
OPC, his firm represented Dixie Pipeline Company, Mid-America
Pipeline, LLC, Mont Belvieu Caverns, LLC, Magellan Pipeline
Company, L.P., Magellan Pipeline Terminals, L.P., Magellan Asset
Services, L.P. and Magellan Midstream Partners, L.P. He says
Andrews Kurth's representation of the Creditors ceased upon being
retained by the OPC. In addition, prior to the appointment of
the OPC, Andrews Kurth provided analysis and advice regarding the
Debtors' bankruptcy cases to an equity investor of the publicly
traded non-debtor affiliate, SemGroup Energy Partners, L.P.
Andrews Kurth representation of this equity investor has ceased
since its retention by the OPC, Mr. Ray says.
Objections
The Official Committee of Unsecured Creditors objects to the
expansive scope contained in the retention application insofar as
the OPC's proposed scope is duplicative of the Creditors'
Committee's efforts.
The Creditors' Committee points out that, for one, the OPC's
proposed task for Andrews Kurth involves the investigation of the
acts of the SemGroup Companies, which task is duplicative of the
task of the Creditors' Committee and the Chapter 11 Examiner.
Thus, to avoid unnecessary, duplicative administrative expense,
the Creditors' Committee asks the Court to approve the retention
application with a limited scope.
Bank of America, N.A., as administrative DIP agent, supports the
Creditors' Committee's concern that the retention application
sets forth a broad list of services, which essentially mirrors
the description of services contained in the retention
applications of the Creditors' Committee's professionals.
Parties Resolve Concerns
To resolve the concerns of the Creditors' Committee and BofA, the
parties submitted with the Court a revised proposed order, which
provides that Andrews Kurth's services were modified by the Court
during a hearing held on December 9, 2008, and the firm will work
pursuant to a plan, a full-text copy of which is available for
free at: http://bankrupt.com/misc/ak_workplan.pdf
The Court signed the revised proposed order.
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 Seek to Retain Lain Faulkner as Accountant
-----------------------------------------------------------------
The Official Producers' Committee in the bankruptcy cases of
SemGroup, L.P., and its debtor affiliates sought and obtained
permission from Judge Brendan Linehan Shannon of the U.S.
Bankruptcy Court for the District of Delaware to retain Lain,
Faulkner & Co., P.C., as its forensic accountant, nunc pro tunc
November 4, 2008.
As forensic accountant, Lain Faulkner will, among others:
(a) assist the Producers in matters as it affects their rights
and claims as a whole including representing the Producers
in matters involving motions to set off on oil and gas
purchases and sales by the Debtors, the scheduling of
Section 503(b)(9) claims and reclamation claims and
rights;
(b) gather, preserve and analyze information supporting the
Producers' statutory lien and constructive trust claims
and their proceeds as against the Debtors, first and
second purchasers and others to effectively respond to
motions and procedural orders that affect the rights of
Producers;
(c) assist the OPC in understanding the amount of the
Producers' claims as a class vis-a-vis the Debtors;
(d) assist the OPC in understanding and responding to the
Debtors' business and proposed business plan and its
impact on the Producers' claims as a class;
(e) meet with and confer with the OPC, the Debtors and their
management, the bank lenders on issues affecting the
Producers;
(f) assist the OPC in the analysis of the Debtors' financial
position, assets, and liabilities as it relates to
Producers' class recovery; and
(g) advise and assist the OPC in connection with any potential
sales of assets as it may affect the Producers' class
recovery right.
Lain Faulkner will be paid according to its hourly rates, which
are currently at:
Shareholders $300-$375
Senior accountants $210-$275
Staff accountants $140-$195
Clerks & bookkeepers $70-$90
Lain Faulkner's necessary out-of-pocket expenses will also be
reimbursed.
Dan B. Lain, a shareholder at Lain Faulkner, assures the Court
that his firm is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code, and does not represent
any interest adverse to the Debtors, their estates, and the
producers.
Prior to the entry of the order, the Debtors, the Official
Committee of Unsecured Creditors, and Bank of America, N.A.,
objected to the retention application.
The Debtors asserted that Lain Faulkner's services should be
limited because they will potentially duplicate the services
offered by the professionals hired by the Creditors' Committee.
The Creditors' Committee raised the same concerns as the Debtors.
BofA also asserted that Lain Faulkner's application contains
broad list of services, no proposed fee cap, and no proposal on
limited funding.
To resolve the concerns, the OPC submitted with the Court a
revised proposed order containing its agreements with the
Debtors, the Creditors' Committee, and BofA.
A full-text copy of the revised proposed order, which the Court
subsequently approved, is available for free at:
http://bankrupt.com/misc/lf_revisedord.pdf
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)
SPORTSMAN'S WAREHOUSE: Files for Chapter 11 Bankruptcy Protection
-----------------------------------------------------------------
Bill Schneider at New West Network reports that Sportsman's
Warehouse, Inc., has filed for Chapter 11 bankruptcy protection in
the U.S. Bankruptcy Court for the District of Delaware.
Court documents say that Sportsman's Warehouse listed
$436.4 million in assets and $452.1 million in liabilities.
According to New West, Sportsman's Warehouse blamed its collapse
on a liquidity crisis triggered by dropping sales and the global
economic slowdown.
Sportsman's Warehouse CEO Stu Utgaard said two weeks ago that the
Company closed 23 stores and sold 15 stores to UFA Cooperative
Limited of Alberta to avert bankruptcy, New West states.
Reuters relates that Sportsman's Warehouse said that it will
operate 29 stores "as a going concern." The stores, says Reuters,
will remain open for business at least temporarily.
Midvale, Utah-based Sportsman's Warehouse, Inc. --
http://www.sportsmanswarehouse.com/-- and its affiliates sell
indoors and outdoor gears and equipment. The Companies filed for
Chapter 11 bankruptcy protection on March 20, 2009 (Bankr. D.
Delaware Bankr. Case No. 09-10990). Gregg M. Galardi, Esq., at
Skadden, Arps, Slate, Meagher assists the Companies in their
restructuring efforts. Kurtzman Carson Consultants, LLC, is the
Companies' claims agent.
STATION CASINOS: S&P Cuts Sr. Notes Ratings to D on Missed Payment
------------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its issue-
level rating on Las Vegas-based Station Casinos Inc.'s 6.625%
senior subordinated notes to 'D' from 'C'. The rating action
reflects the missed March 15, 2009 interest payment on the notes.
A payment default has not occurred relative to the legal
provisions of the notes, because there is a 30-day grace period to
make the payment. However, S&P considers a default to have
occurred, even if a grace period exists, when the nonpayment is a
function of the borrower being under financial stress--unless S&P
is confident that the company will make the payment in full during
the grace period.
This rating action follows S&P's Feb. 4, 2009 research report in
which S&P lowered its corporate credit rating on Station and S&P's
issue-level rating on its 6.5% senior subordinated notes to 'D'
following the missed Feb. 1, 2009 interest payment on the 6.5%
senior subordinated notes. At that time, Station also announced a
solicitation for votes from eligible institutional holders of its
senior unsecured and senior subordinated notes for a restructuring
plan under Chapter 11 of the U.S. Bankruptcy Code. S&P also
subsequently lowered S&P's rating on Station's 7.75% senior notes
and 6.875% senior subordinated notes to 'D', following missed Feb.
15 and March 1 interest payments on those notes, respectively.
In connection with the missed interest payment on the 6.875%
senior subordinated notes on March 1, 2009, Station also announced
that it has entered into forbearance agreements with holders of
its five notes issues and its bank group. Under the terms of the
forbearance agreement, noteholders have agreed to forbear from
exercising remedies with respect to certain events of default,
including the company's failure to pay interest due, until the
earlier of April 15, 2009 or the date on which the forbearance
agreement terminates pursuant to the terms of the agreement.
Under the terms of the credit facility forbearance agreement,
lenders have agreed to grant a limited waiver with respect to the
Dec. 31, 2008 covenant violation and have agreed to forbear from
exercising their default-related rights against the company
through April 15, 2009 and against certain subsidiaries of the
company that guaranteed the credit agreement through Oct. 10,
2009.
S&P expects Station to miss the April 1 interest payment on the 6%
senior notes. If and as this interest payment is not made, S&P
will also lower the issue-level rating on these notes to 'D'.
Issue-level ratings on these notes and on the company's credit
facility currently remain on CreditWatch, where S&P placed them
with negative implications on Dec. 15, 2008.
Ratings List
Station Casinos Inc.
Corporate Credit Rating D/--/--
Downgraded
Station Casinos Inc.
To From
-- ----
6.625% sr sub nts D C/Watch Neg
Recovery Rating 6 6
SYNTAX-BRILLIAN: To Begin Soliciting Support on Chapter 11 Plan
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
approved the disclosure statement explaining the terms of Syntax-
Brillian Corp., and its debtor-affiliates' Second Amended Chapter
11 Liquidating Plan, dated March 11, 2009. Solicitation packages
may now be sent to holders of impaired claims entitled to vote
under the Plan.
The Court established April 13, at 5:00 p.m. (Eastern Time) as the
deadline by which all ballots accepting or rejecting the Plan must
be received.
A hearing to consider confirmation of the Plan is set for
April 21. Objections, if any, to confirmation of the Plan is due
on before April 13.
Under the Plan, general unsecured claims will receive pro rata
distributions from a liquidating trust after payment of the
trust's expenses and a "liquidating trust funding reimbursement."
Holders of allowed prepetition credit facility claims will receive
their pro rata distributions from a lender trust, after payment in
full of allowed DIP facility claims.
Acceptances of the Plan are being solicited only from holders of
prepetition credit facility claims and general unsecured claims.
Holders of equity Interests are deemed to reject the Plan because
they won't be receiving any distributions. A full-text copy of
the Second Amended Disclosure Statement is available at:
http://bankrupt.com/misc/Syntax-Brillian2ndAmendedDS.pdf
Based in Tempe, Arizona, Syntax-Brillian Corporation (Nasdaq:
BRLC) -- http://www.syntaxbrillian.com/-- and its affiliated
debtors, Syntax-Brillian SPE, Inc. and Syntax Groups Corp. design,
develop, and distribute high-definition televisions (HDTVs)
utilizing liquid crystal display (LCD) and, formerly, liquid
crystal (LCoS) technologies. The Debtors sell their HDTVs under
the Olevia brand name. SBC is also the sole shareholder of
Vivitar Corp., a suplier of film cameras and a line of digital
imaging products, including digital cameras.
The Debtors filed separate petitions for Chapter 11 relief on
July 8, 2008 (Bankr. D. Del. Lead Case No. 08-11407). Nancy A.
Mitchell, Esq., Allen G. Kadish, Esq., and John W. Weiss, Esq., at
Greenberg Traurig LLP in New York, represent the Debtors as
counsel. Victoria Counihan, Esq., at Greenburg Traurig LLP in
Wilmington, Delaware, represents the Debtors as Delaware counsel.
Five members compose the Official Committee of Unsecured
Creditors. Pepper Hamilton, LLP represents the Committee as
counsel. Epiq Bankruptcy Solutions, LLC is the Debtors'
balloting, notice, and claims agent.
Syntax-Brillian cut a deal to sell its business assets to Olevia
International Group LLC. On Sept. 10, 2008, OIG told the
Bankruptcy Court that it won't pursue the deal, contending that
the Debtors irreparably breached various covenants and
representations contained in the Purchase Agreement, causing
various Closing Conditions to fail, and rendering it unable to
comply with its obligations under the Purchase Agreement. OIG
also accused the Debtors of violating their sale contract by
losing business from Target Corp., the Debtors' main customer.
The following day, the Debtors filed a lawsuit asking the Court to
compel Olevia International to complete the purchase. On
Oct. 10, the Bankruptcy Court denied OIG's emergency request to
excuse it from its obligations. OIG has taken an appeal of that
order.
When the Debtors filed for protection from their creditors, they
listed total assets of $175,714,000 and total debts of
$259,389,000.
TAPESTRY PHARMACEUTICALS: Files for Chapter 11 Bankruptcy
---------------------------------------------------------
Aldo Svaldi at The Denver Post reports that Tapestry
Pharmaceuticals has filed for Chapter 11 bankruptcy protection.
According to Denver Post, Tapestry listed less than $100,000 in
assets and $1 million to $10 million in liabilities.
Denver Post relates that Tapestry said in February 2008 that it
had run out of cash and was preparing for bankruptcy.
Based in Boulder, Colorado, Tapestry Pharmaceuticals Inc. --
http://www.tapestrypharma.com/-- is a biopharmaceutical company
focused on the development of proprietary therapies for the
treatment of cancer. Tapestry's lead candidate, TPI 287 is in
multiple Phase 2 clinical studies funded by a development partner.
At Sept. 26, 2007, the company's consolidated balance sheet showed
$11.9 million in total assets, $3.7 million in total liabilities,
and $8.2 million in total stockholders' equity.
TECK COMINCO: S&P Downgrades Corporate Credit Rating to 'BB+'
-------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered the long-term
corporate credit and senior unsecured debt ratings on Teck Cominco
Ltd. to 'BB+' from 'BBB-'. At the same time, S&P assigned a
recovery rating of '3' to the company's unsecured notes,
indicating S&P's opinion as to an expectation of meaningful
recovery (50% to 70%) in the event of default.
Standard & Poor's also placed all the ratings on Teck on
CreditWatch with negative implications because the company faces
significant near-term maturities.
"The downgrade reflects our assessment that the company will
likely carry a high debt level through the next two to three
years," said Standard & Poor's credit analyst Donald Marleau.
"S&P believes that the current poor conditions in Teck's core
markets will likely persist through 2009, resulting in weaker-
than-expected profitability and cash flow," Mr. Marleau added.
As a result, Standard & Poor's view is that the company will carry
more debt for a longer period than S&P expected at the time of its
debt-financed acquisition of the Elk Valley Coal Partnership
assets. S&P continues to believe the company will need to fund or
refinance about US$3.5 billion of its remaining US$5.3 billion
bridge facility due October 2009, and S&P's expectation is largely
unchanged since its last rating action on Jan. 13, 2009.
Nevertheless, the time horizon for executing a refinancing plan
has shortened, and it is increasingly likely that the company will
not be able to rely on improved end-market commodity prices to
bolster internal cash flow.
Weaker profitability and cash flows will likely slow the pace of
Teck's debt reduction, leading to persistently high leverage and
coverage measures that are in S&P's view commensurate with a
speculative-grade rating. Furthermore, S&P believes the company's
financial performance is exposed to the normal instability of
metals prices.
The ratings on Teck reflect S&P's assessment of the company's
heavy debt load, which it incurred in October 2008 to acquire the
60% of Elk Valley it did not already own, compounded by a rapid
decline in prices for its key cash flow drivers, notably copper,
zinc, metallurgical coal, and lead. These risks are
counterbalanced by what S&P believes is a satisfactory business
risk profile, reflecting Teck's position as a diversified metals
and mining company with low-cost, long-lived mines. S&P expects
that the quality of the company's assets will enable it to
generate robust operating cash flow in the near term, even though
prices for its key metals have dropped significantly after a long
cyclical upswing.
Standard & Poor's expects to resolve the CreditWatch on Teck
within 60 days, after assessing the company's progress on
addressing its maturity profile. S&P could lower the ratings --
likely by several notches -- if the company does not make progress
in managing its near-term maturities within this 60-day time
frame, which S&P believes will most likely be achieved through any
combination of new financing, a maturity extension, or asset
sales. In addition, S&P could lower the ratings if, following its
review of first-quarter 2009 performance (including prospects for
met coal prices), Teck is unable to sustain free operating cash
flow of at least C$1 billion for debt reduction, which is a level
that S&P believes should enable the company to modestly reduce
debt. Even if the company's maturity risks are well managed, S&P
could lower the ratings further if S&P believes that leverage will
increase to beyond 4x or EBITDA interest coverage will drop to 3x
for more than a year.
TRANSMERIDIAN EXPLORATION: Case Summary & 20 Unsecured Creditors
----------------------------------------------------------------
Debtor: Transmeridian Exploration Incorporated
109 North Post Oak Lane, Suite 422
Houston, TX 77024
Bankruptcy Case No.: 09-31859
Debtor-affiliates filing subject to Chapter 11 petitions:
Entity Case No.
------ --------
Transmeridian Exploration Incorporated 09-31859
Transmeridian Exploration, Inc. (BVI) 09-31864
Bramex Management, Inc. 09-31866
Type of Business: Transmeridian explores oil and gas in the
Caspian Sea region.
Chapter 11 Petition Date: March 20, 2009
Court: Southern District of Texas (Houston)
Judge: Marvin Isgur
Debtor's Counsel: John Wesley Wauson, Esq.
jwwauson@w-plaw.com
Matthew Brian Probus, Esq.
mbprobus@w-plaw.com
Wauson & Probus
One Sugar Creek Ctr., Blvd., Ste. 880
Sugar Land, TX 77498
Tel: (281) 242-0303
The Debtors' financial condition as of September 30, 2008:
Total Assets: $377,902,000
Total Debts: $451,678,000
The Debtor's Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Jefferies & Company, Inc. $3,574,951
111000 Santa Monica Blvd., 12th Floor
Los Angeles, CA 90025
Akin, Gump, Strauss, Hauer & $757,614
Feld, LLP
1111 Louisiana Street
44th Floor
Houston, TX 77002
San Felipe Plaza, LP $607,749
5847 San Felipe Road
Houston, TX 77057
RR Donnelley $ 232,448
P.O. Box 730216
Dallas, TX 75373
Thompson & Knight, LLP $128,875
UHY LLP $95,840
Lorrie T. Oliver $58,333
Calvetti, Ferguson & Wagner, PC $50,933
Global Bondholder Services $48,507
Chase Business Card $41,986
Earl W. McNiel $37,500
Baker Botts, LLP $37,043
Bruce A. Falkenstein $29,704
Ralph E. Davis Associates, Inc. $29,462
Williams Petroleum Consulting $25,625
Nicolas Evanhoff $25,002
Edward G. Brantley $20,784
James H. Dorman $20,000
Kissinger McLarty Associates $20,000
The petition was signed by Fred Zeidman, chairman.
TOUSA INC: Revises Operational Plan; To Sell Some Operations
------------------------------------------------------------
TOUSA, Inc. (OTC Pink Sheets: TOUSQ), said that, due to the severe
economic environment, the Company is suspending efforts to
generate new build-to-order sales. TOUSA's primary focus is now
on completing and closing homes currently under construction,
selling its remaining inventory of spec homes, and monetizing its
land assets over time. The Company will continue to market and
solicit offers for its assets during this process.
Additionally, TOUSA is in discussions with various parties
regarding a sale of its financial services businesses Universal
Land Title, Inc., Preferred Home Mortgage Company, and Alliance
Insurance Information Services. The Company is also in
discussions with various parties regarding a sale of its
homebuilding operations in Texas, which serve the Houston, San
Antonio, and Austin markets under the Newmark and Trophy brands.
Customers with homes under construction can be assured that their
homes will be completed. In some cases, homes where construction
has yet to begin will not be started and customers will receive a
full refund of their deposits.
"We are proud that the TOUSA brands have been providing the dream
of home ownership across the Country for over 40 years. While the
market environment has impaired our ability to maintain our
historical operating platform, we will continue to build out homes
and sell our existing inventory during this process," said John
Boken, Chief Executive Officer and Chief Restructuring Officer.
"We expect that this process will continue for a few years in
order to maximize value for our creditors as well as to ensure
that we continue to deliver quality homes to our existing
customers."
TOUSA's trade partners and suppliers will continue to be an
important resource during this process as the Company completes
homes. Since the Company's Chapter 11 filing, TOUSA has worked
closely with these partners to ensure ongoing payment for their
products and services in the normal course of business. Vendors
and suppliers can be assured that payment schedules will remain
the same.
As part of this process, TOUSA will continue downsizing procedures
at its corporate offices and in its divisions. In keeping with the
Company's existing practices, TOUSA will be providing severance
packages to all associates who will not be continuing on with the
Company through this process.
"The dedication, commitment and tireless work of our associates
over the last 18 months resulted in the Company outperforming
market expectations. And, while we would have preferred a
different outcome, their efforts were impactful and very much
appreciated," added Boken. "We can all be proud of what we have
been able to accomplish on behalf of our creditors and our
customers in this unprecedented market environment."
The Company will continue to utilize its cash collateral to fund
operations during this period.
Homeowners, customers, vendors and suppliers, or other interested
parties may contact the TOUSA toll-free information hotline, (866)
588-9290 or visit www.tousa.com for additional information.
About TOUSA Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic
U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark
Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading
homebuilder in the United States, operating in various
metropolitan markets in 10 states located in four major geographic
regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA
designs, builds, and markets high-quality detached single-family
residences, town homes, and condominiums to a diverse group of
homebuyers, such as "first-time" homebuyers, "move-up" homebuyers,
homebuyers who are relocating to a new city or state, buyers of
second or vacation homes, active-adult homebuyers, and homebuyers
with grown children who want a smaller home. It also provides
financial services to its homebuyers and to others through its
subsidiaries, Preferred Home Mortgage Company and Universal Land
Title Inc.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No. 08-
10928). The Debtors have selected M. Natasha Labovitz, Esq.,
Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta,
Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at
Berger Singerman, to represent them in their restructuring
efforts. Lazard Freres & Co. LLC is the Debtors' investment
banker. Ernst & Young LLP is the Debtors' independent auditor and
tax services provider. Kurtzman Carson Consultants LLC acts as
the Debtors' Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008,
(Bankr. S.D. Fla. Case No.: 08-20746). It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.
The Official Committee of Unsecured Creditors hired Patricia A.
Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff &
Sitterson, P.A., as its local counsel.
TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets
of $1,734,422,756 and total liabilities of $2,300,053,979.
Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by TOUSA Inc. and its affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
TOWN SPORTS: Moody's Affirms Corporate Family Rating to 'B1'
------------------------------------------------------------
Moody's Investors Service affirmed Town Sports International
Holdings, Inc.'s B1 corporate family rating but revised its
ratings outlook to negative from stable. Moody's also affirmed
the B3 rating on TSI Holdings' senior discount notes and the Ba2
ratings on the senior secured credit facility of Town Sports
International, LLC, a wholly-owned subsidiary of TSI Holdings.
The outlook revision was prompted by a decline in the company's
financial results for the quarter ended December 31, 2008 over the
same period in 2007. This deterioration was largely driven by
weak economic conditions, which adversely affected comparable club
revenues and restrained net membership growth. Moody's also
believes that financial performance will remain under pressure
during 2009. However, the affirmation of the B1 CFR is supported
by Moody's expectation that the company will maintain adequate
near-term liquidity, the company's intention to lower capital
expenditures by reducing club expansion plans and its ongoing cost
containment initiatives.
These ratings were affirmed:
Town Sports International Holdings, Inc.:
-- Corporate Family Rating at B1;
-- Probability of Default Rating at B1;
-- $137 million of 11% senior discount notes due 2014 at B3
(LGD5, 88%).
Town Sports International, LLC:
-- $185M Senior Secured Term Loan due 2013 at Ba2 (LGD2, 23%);
-- $75M Senior Secured Revolver due 2012 at Ba2 (LGD2, 23%).
The last rating action was on February 1st, 2007 when Moody's
upgraded the CFR of TSI Holdings to B1 from B2, upgraded the
rating on its senior discount notes to B3 from Caa1, and assigned
a Ba2 rating to TSI's senior secured credit facility.
Town Sports International Holdings, Inc., through its wholly-owned
operating subsidiary Town Sports International, LLC, is one of the
two leading owners and operators of fitness clubs in the Northeast
and Mid-Atlantic regions of the United States. Revenues for the
fiscal-year ended December 31, 2008 were $507 million.
TROPICANA ENTERTAINMENT: Judge Directs Talks on Name Ownership
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey has
granted Tropicana Entertainment LLC and its affiliates an
extension of their deadline to solicit acceptances of their
Chapter 11 plans. The Debtors have filed proposed Chapter 11
plans, which would split Atlantic City and Las Vegas casino
operations.
According to Bloomberg's Bill Rochelle, in granting an extension
of so-called exclusivity to the later of plan confirmation or July
17, the bankruptcy judge in Delaware signed an order requiring the
parties to "negotiate and endeavor in good faith to resolve
potential disputes regarding the intellectual property rights."
Onex Corp., the largest buyout firm in Canada, filed an objection
to the extension due to a dispute with respect to the ownership of
the "Tropicana" name. Onex said the extension should be denied so
that it "can file an alternative plan of reorganization that is
not tainted by recently-materialized conflicts of interest on the
part of the Debtors' existing management and professionals."
Onex is the beneficial owner of more 40% of the outstanding $440
million senior secured LandCo Credit Facility, which is an
obligation of and secured by all of the assets of the LandCo
Debtors. Onex is the largest known creditor of the LandCo estates
and will be largest shareholder of the reorganized LandCo
enterprise. Onex has been actively involved in the negotiation of
the LandCo Plan and supported the Court's approval of the LandCo
Disclosure Statement.
Onex's ire came after it received, just after the hearing on the
Disclosure Statement, a term sheet to an OpCo-LandCo Trademark
License Agreement, which has these provisions:
-- The OpCo Debtors will license to the LandCo Debtors use of
the TROPICANA trademark;
-- The OpCo Debtors will grant the LandCo Debtors a royalty-
bearing, exclusive, non-transferable license to use the
TROPICANA trademark and logo solely in connection with (a)
the operation of the casino and hotel located at 3801 Las
Vegas Boulevard South, Las Vegas, Nevada 891909, (b) the
marketing and advertising of the stie, and (c) merchandise
provided solely onsite at the site.
-- The LandCo Debtors will pay to the OpCo Debtors a royalty
in the amount of $2 million per year per term.
-- The license will be in effect for a period of five years,
and the parties may mutually agree to an extension.
-- The LandCo Debtors may terminate the Agreement for its
convenience upon 180 days' notice. During the initial
three years of the term, the licensee will pay to the OpCo
Debtors a termination fee of $3 million; during the fourth
year of the term, a fee of $2 million; and, during the
fight year, licensee will pay $1 million.
A copy of the Term Sheet is available for free at:
http://bankrupt.com/misc/Tropicana_Trademark_TermSheet.pdf
The proposed OpCo-LandCo Trademark License Agreement is
"outrageous and unjustified," said Onex's counsel, Robert S.
Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware.
Mr. Brady, pointed out, among other things, predecessors of the
LandCo Debtors (not the OpCo Debtors) were the owners and first
users of the "Tropicana" marks and have used them continuously for
more than 50 years (indeed, the Tropicana is a Las Vegas landmark,
so much so that the hotel and casino are located on a major
thoroughfare now named "Tropicana Avenue"), and neither the LandCo
Debtors nor their predecessors have ever executed any license or
paid any royalties with respect to the marks (to OpCo or anyone
else).
Indeed, the LandCo Debtors, according to Mr. Brady, unequivocally
represented and warranted to the LandCo Lenders that their
collateral included all rights used in the LandCo business, and
the LandCo Debtors' initial filed Disclosure Statement
specifically recognized that the LandCo Debtors, at a minimum,
"have registered several service marks and trademarks with the
United States Patent and Trademark Office or otherwise have
acquired licenses to use those which are material to the conduct
of our business."
"In light of these facts, it is inconceivable that anyone owing a
fiduciary duty or any allegiance at all to the LandCo Debtors
would make such a proposal. Because the proposal was made by the
LandCo Debtors' management and counsel, the inescapable conclusion
is that the LandCo Debtors' fiduciaries (e.g., their counsel,
management and board of directors) have abdicated their fiduciary
duties to the LandCo Debtors and their creditors," Mr. Brady
asserts.
To make matters worse, the LandCo Debtors are attempting to use
plan exclusivity to advance the interests of OpCo to the detriment
of LandCo constituents, Mr. Brady asserted. In particular, with
continued exclusivity, the LandCo Debtors are able to threaten
further delay with ongoing and mounting operational losses and
professional fees continually diminishing the LandCo Lenders'
recovery -- as a means to extract unjustified concessions from the
LandCo Lenders with respect to the Tropicana trademark and other
issues.
Since the Debtors and the LandCo Lenders (and the OpCo Lenders)
agree that the Chapter 11 cases need to be concluded as promptly
as possible, Onex has proposed that inter-Debtor conflicts like
the right to the trademark be left for resolution between the
reorganized LandCo and OpCo entities (which will soon be separate
companies with separate boards of directors, separate management,
and separate and unconflicted counsel), with each entity retaining
whatever rights they currently have. The Debtors have not even
responded to Onex's straightforward proposal, Mr. Brady tells the
Court.
About Tropicana Entertainment
Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC --
http://www.tropicanacasinos.com/-- is an indirect subsidiary of
Tropicana Casinos and Resorts. The company is one of the largest
privately-held gaming entertainment providers in the United
States. Tropicana Entertainment owns eleven casino properties in
eight distinct gaming markets with premier properties in Las
Vegas, Nevada, and Atlantic City, New Jersey.
Tropicana Entertainment LLC filed for Chapter 11 protection on
May 5, 2008, (Bankr. D. Del. Case No. 08-10856). Its debtor-
affiliates filed for separate Chapter 11 petitions but with no
case numbers assigned yet. Kirkland & Ellis LLP and Mark D.
Collins, Esq., at Richards Layton & Finger, represent the Debtors
in their restructuring efforts. Their financial advisor is Lazard
Ltd. Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor.
Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell
LLP represent the Official Committee of Unsecured Creditors in
this case. Capstone Advisory Group LLC is financial advisor to
the Creditors' Committee.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the chapter 11
restructuring proceedings commenced by Tropicana Entertainment
LLC and its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
TRUE TEMPER: Moody's Downgrades Default Rating to 'Ca/LD'
---------------------------------------------------------
Moody's Investors Service downgraded True Temper Sports, Inc.'s
probability-of-default rating to Ca/LD from Caa2 and the corporate
family rating to Ca from Caa2. Moody's also downgraded the rating
on the senior subordinated notes to C from Caa3 and the rating on
the first lien term loan to B3 from B1.
The downgrade of the probability-of-default rating to Ca/LD was
prompted by True Temper's recent announcement that it did not make
the $20 million principal payment on the revolving credit facility
that was due on March 16, 2009. The failure to make this payment
resulted in an event of default under the first lien credit
agreement. As of March 16, 2009, the company had $102 million
outstanding under the first lien revolving credit facility and
term loan. Additionally, on March 16, 2009, the company did not
pay the interest due on the 8.375% senior subordinated notes due
2011. Failure to pay interest within 30 days of this date
constitutes an event of default under the indenture. These issues
heighten Moody's concern over the potential for a bankruptcy or
debt restructuring.
The company also recently announced that it retained the
investment banking firm, Lazard Middle Market, to assist it in
exploring alternatives for the capital structure.
These ratings were downgraded:
-- Corporate family rating to Ca from Caa2;
-- Probability-of-default rating to Ca/LD from Caa2;
-- $125 million senior subordinated notes due 2011 to C (LGD5,
80%) from Caa3 (LGD5, 80%).
-- $85 million senior secured term loan B due 2011 to B3 (LGD2,
15%) from B1 (LGD2, 16%).
The last rating action was on November 19, 2007 when Moody's
downgraded True Temper's corporate family rating to Caa2 from Caa1
and its senior subordinated notes rating to Caa3 from Caa2.
Moody's also affirmed the B1 rating on the company's first lien
senior secured credit facilities. The ratings outlook was revised
to negative from stable.
Headquartered in Memphis, Tennessee, True Temper is the leading
manufacturer of steel golf club shafts. The company reported
revenues of approximately $127 million for the twelve months ended
September 28, 2008.
US ACQUISITIONS: Wants Cohen Seglias as Bankruptcy Counsel
----------------------------------------------------------
U.S. Acquisitions & Oil, Inc., seeks permission from the U.S.
Bankruptcy Court for the District of Delaware to employ Cohen
Seglias Pallas Greenhall & Furman, PC, as counsel.
Cohen Seglias will:
-- advise the Debtor with respect to its duties and powers in
this case;
-- assist the Debtor in its investigation of the acts, conduct,
assets, liabilities, and financial condition of the Debtor,
the operation of the Debtor's business and the desirability
of the continuance of the business, and any other matter
relevant to the case or to the formulation of a plan;
-- participate, along with the Debtor, in the formulation of a
plan; and
-- perform other legal services as may be required and in the
interest of the creditors.
Eric John Monzo, Esq., a partner at Cohen Seglias, tells the Court
that the Debtor will employ the firm under a general retainer.
Mr. Monzo assures the Court that Cohen Seglias is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Mr. Monzo can be reached at:
Cohen Seglias Pallas Greenhall & Furman, PC
Nemours Building
1007 Orange Street, Suite 1130
Wilmington, DE 19801
Tel: (302) 425-5089
Fax: (302) 425-5097
About U.S. Acquisitions & Oil, Inc.
Headquartered in Shawano, Wisconsin, U.S. Acquisitions & Oil, Inc.
operates gasoline service stations. The Debtor and its debtor-
affiliates filed for Chapter 11 protection on March 16, 2009,
(Bankr. D. Del. Lead Case No.: 09-10875). The Debtors estimated
assets of $10 million to $50 million and estimated debts of $1
million to $10 million.
VALHI INC: Potential Pact Violation Cues S&P's Junk Rating
----------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
corporate credit rating on Dallas-based Valhi Inc. and its
subsidiary, Kronos International Inc., two notches to 'CCC' from
'B-'.
At the same time, S&P lowered Kronos International's
EUR400 million senior secured notes due 2013 to 'CCC-' (one notch
below the corporate credit rating) from 'CCC+', with a recovery
rating of '5', indicating the expectation of modest recovery (10%-
30%) in the event of default.
S&P removed the ratings from CreditWatch, where they were placed
with negative implications on Feb. 18, 2009, pending review of the
company's fourth-quarter results and prospects for 2009. The
outlook is negative.
"The downgrade reflects a potential covenant violation related to
one of its facilities and S&P's heightened concern about the
company's liquidity and financial flexibility as it navigates
through a challenging business environment this year," said
Standard & Poor's credit analyst Henry Fukuchi.
S&P is particularly concerned about the first quarter of 2009,
where a covenant violation may occur if the company does not
obtain relief from its lenders or reduce the outstanding debt
through other sources. Valhi is currently in negotiations with its
lenders to resolve the issue, and it is also exploring other
alternatives to alleviate near-term liquidity concerns.
While covenant relief may be a temporary solution, S&P expects
that overall financial flexibility could become problematic
because of significant capital expenditures planned for this year
coupled with near-term maturities and weak cash flow generation
that could deteriorate liquidity meaningfully. In addition, the
downgrade reflects S&P's expectation that credit metrics will
continue to deteriorate this year, beyond the level appropriate
for the former ratings, due to weak profitability in its core
titanium dioxide business and the likelihood that debt reduction
may not be feasible owing to cash and cash generation limitations.
Valhi has about $1.5 billion in sales and approximately
$841 million in total debt, adjusted for operating leases,
postretirement benefit obligations, environmental remediation, and
excluding Snake River Sugar Co. debt.
WATERFORD LOAN: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Waterford Loan Fund, LLC
920 East Woodoak Lane, Suite 201
Salt Lake City, UT 84117
Bankruptcy Case No.: 09-22583
Debtor-affiliates filing subject to Chapter 11 petitions:
Entity Case No.
------ --------
Waterford Funding, LLC 09-22584
Type of Business: The Debtors specialize in solving the short-term
cash flow problems of new, early-stage and
established commercial enterprises through real-
estate based loans.
See: http://www.waterfordfunding.com/
Chapter 11 Petition Date: March 20, 2009
Court: District of Utah (Salt Lake City)
Judge: William T. Thurman
Debtor's Counsel: James W. Anderson, Esq.
anderson@mmglegal.com
Miller Guymon, PC
165 South Regent Street
Salt Lake City, UT 84111
Tel: (801) 363-5600
Fax: (801) 363-5601
Estimated Assets: $1 million to $10 million
Estimated Debts: $50 million to $100 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Gerald Lambourne $7,498,586
2640 Milo Way
Salt Lake City, UT 84117
Talbot Lloyd $4,956,852
7389 Lost Canyon Circle
Salt Lake City, UT 84121
Sierra Loan Professionals LLC $3,336,785
2868 Prospect Park Drive #6000
Rancho Cordova, CA 95670
Gleen Westphal $3,145,512
PO Box 682330
Park City, UT 84068
A Ross Bowen $2,473,027
791 Draper Heights Way
Draper, UT 84020
Humphrey Revocable Living Trust $2,177,058
2111 Jefferson Davis Hwy. #417S
Arlington, VA 22202
Richard Folkerson $2,061,632
3161 South Bountiful Blvd.
Bountiful, UT 84101
Black Hawke Construction LLC $2,000,000
460 South Fitness
Eagle, ID 83616
Altherton Park LLC $1,917,805
791 Draper Heights Way
Draper, UT 84020
Heather Lloyd $1,750,000
1883 E. Hickory Ridge Court
Draper, UT 84020
Roundy Family Living Trust $1,742,217
1450 East Green Road
Kaysville, UT 84037
Brandon Walker $1,605,197
7750 Westridge Lane
Emmett, ID 83617
SRG LLC $1,411,365
5 East 4800 South
Salt Lake City, UT 84107
Progressive Services LLC $1,358,130
6329 Howey Drive
Salt Lake City, UT 84121
Clear Image LC $1,306,124
2896 Old Colony Circle
Salt Lake City, UT 84117
MJB, Ltd. $1,299,433
586 Fine Drive
Salt Lake City, UT 84115
Michael Serpa $1,297,731
749 Birch Street
Pocatello, ID 83201
B&SI Investments LC $1,271,234
920 East Woodoak Lane, #200
Salt Lake City, UT 84117
Bodell Construction Company $1,000,000
586 Fine Drive
Salt Lake City, UT 84115
The petition was signed by Daniel A. Scarlet, manager.
WELLCARE HEALTH: S&P Affirms 'B-' Counterparty Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B-'
counterparty credit rating on WellCare Health Plans Inc. and
removed the rating from CreditWatch, where it had been placed with
negative implications on Oct. 25, 2007. The outlook is negative.
"The affirmation and removal from CreditWatch assume that WellCare
will maintain its operating scale and will not be barred, by
regulatory or legislative intervention, from operating in its core
markets because of the ongoing investigation," said Standard &
Poor's credit analyst Hema Singh. "The rating actions also
reflect S&P's expectation for strong cash flow in 2009, as the
company has demonstrated in the past two years when it generated
gross cash flow of about 5% of premium."
Standard & Poor's expects the group's capital adequacy to remain
as a relative strength to the rating in 2009 at the 'BBB' level.
Risk associated with WellCare's business profile has been partly
mitigated by several contract renewals and a service-area
expansion in 2008, which removes some of the uncertainty regarding
marketplace sustainability.
S&P had originally placed the rating on WellCare on CreditWatch
negative in October 2007 in connection with an investigation
initiated by the U.S. Department of Health and Human Services
Office of Inspector General and the Florida Attorney General's
Medicaid Fraud Control unit. Since then, S&P has lowered its
ratings to reflect the company's deteriorating creditworthiness.
WOLF BLOCK: To Dissolve Due to Economic Crisis & Credit Crunch
--------------------------------------------------------------
Ashby Jones at The Wall Street Journal reports that Wolf Block LLP
has decided to dissolve the firm, blaming it on factors that
include the economic recession and the constriction of credit.
WSJ quoted Wolf Block as saying, "Continued efforts to finance the
firm's operations in the face of these obstacles was unwise."
Wolf Block, according to WSJ, had seen in recent months
significant declines in real estate and public finance, two of its
major practice areas. Key partners had also left Wolf Block after
the failure of two highly publicized attempts to merge with other
law firms, WSJ notes. Wolf Block's lack of growth in recent years
had helped cast it in a precarious place, WSJ states, citing
Altman Weil Inc. consultant Ward Bower.
Wolf Block said that it would remain in business for several
months to wind down operations, WSJ states. Wolf Block, says the
report, has hired Hildebrandt International Inc. consultant Brad
Hildebrandt to manage its dissolution.
Wolf Block LLP is a 300-lawyer firm based in Philadelphia. It was
founded in 1903.
* Moelis Taps Steve Panagos as Vice Chairman & Managing Director
----------------------------------------------------------------
Jeffrey McCracken at The Wall Street Journal reports Steve Panagos
will join Moelis & Co. as its vice chairperson and managing
director of its restructuring group.
WSJ relates that Moelis began its restructuring group in April
2008 when it hired two restructuring heads from Jefferies & Co.
The firm has 25 full-time employees, adding seven managing
directors in 2009, WSJ states. Moelis, says WSJ, is working on
turnarounds at aluminum-producer Aleris International Inc. and
phone-directory publisher Idearc Inc.
Mr. Panagos, says WSJ, is a former managing director and national
practice leader of turnaround firm Kroll Zolfo Cooper. According
to WSJ, Mr. Panagos had tried in 2008 to launch a distressed-debt
fund. "It was a horrendous time to go and raise money. It's a
great time to invest, but I was sick of beating my head against
the wall," the report quoted Mr. Panagos as saying.
Mr. Panagos, while at Zolfo Cooper, handled several major
bankruptcies and turnarounds, serving as president at Krispy Kreme
donuts, and chief restructuring officer at Metromedia Fiber
Networks, WSJ notes.
About Moelis & Company
Moelis & Company -- http://www.moelis.com-- is an investment bank
that provides financial advisory services and capital raising
solutions to clients in connection with mergers and acquisitions,
restructurings and other strategic matters. The firm also manages
investment funds that integrate capital with its advisory
expertise. Moelis & Company serves a broad client base through
its offices in New York, Boston, Chicago, London and Los Angeles.
* Nat'l Loan Launches US Court Audit for Bankruptcy Judges
----------------------------------------------------------
National Loan Auditors, a specialist in providing forensic loan
audits for attorneys and financial institutions, has developed a
new product designed for bankruptcy attorneys, judges, and
trustees, who will soon be operating under a law allowing judges
to restructure residential mortgages in bankruptcy proceedings.
Industry analysts predict that the pending legislation, which has
passed the House and is expected to win Senate approval, will
produce a surge in bankruptcy filings, as financially-pressed
borrowers seek bankruptcy protection in an effort to avoid
foreclosure.
"Already crowded court dockets will become more crowded and
bankruptcy judges and trustees will face increasing pressure to
manage a growing case load," August Blass, founder and CEO of NLA,
said. "US Court Audit will enable judges to quickly review
pending cases, readily extract relevant information from our
report and review a reliable, accurate mortgage settlement
recommendation, so they can provide the expeditious, equitable
relief consumers and lenders will be seeking."
US Court Audit incorporates key features of NLA's state-of-the-art
forensic loan audit. Analyzing all aspects of the loan file, the
audit focuses objectively on both sides of the transaction to
uncover improprieties by lenders and evidence of fraud by
consumers. The audit identifies:
* Violations of state and federal laws and regulations;
* Misrepresentations (of income, employment or identity) by
the borrower;
* Pertinent details about the loan and the property securing
it; and
* Potential problems with the origination process as well as
with the underwriting of the loan.
Audit reports can consist of approximately 100+ pages of
information. In order to expedite the review process, a concise,
two-page summary of the audit will highlight all relevant
information about the transaction and the parties involved in it.
"Judges can see at a glance who did (or did not) do what to whom
and can quickly determine the appropriate equitable relief in the
cases before them," Mr. Blass noted. A page reference for each
item in the summary directs judges and trustees to the section of
the full report where they can find the detailed analysis and
supporting documentation for that item.
Designed with the pending bankruptcy changes in mind, US Court
Audit provides the specific information the new law will require
judges and trustees to consider. For example, as currently
drafted, the proposed law:
* Requires borrowers to request a modification from their
lender before filing for bankruptcy protection.
* The audit summary lists the dates and results of any
previous modification requests.
* Allows judges to "cram down" a mortgage, taking into
account the merits of the case and the current market value
of the property.
* The audit includes a property valuation model indicating
current low-, mid-, and high-range price estimates and
describing neighborhood conditions (recent sales, number of
foreclosures, number of REO properties) affecting those
estimates.
* Requires judges to consider an individual's income in
relation to current loan payments in determining how (or
if) to restructure the loan.
* The audit summary notes and compares the borrower's true
income, as reported on tax returns or W2's at the time of
the loan application, with the stated income that may have
been used on the loan application. The summary also lists
the purchase price of the property, the borrower's current
monthly payments and current debt-to-income ratios.
"Our audits are recognized as the gold standard in the industry
because of their scope, their objectivity, and the level of detail
they provide," Mr. Blass said. "US Court Audit adapts our audit
to address the needs of attorneys, bankruptcy judges and trustees,
giving them a powerful analytical tool that can help them meet the
challenges the new bankruptcy law will create for them."
About National Loan Auditors
Founded by August Blass, a financial services veteran with more
than 20 years of executive experience in the field, Walnut Creek,
California-based National Loan Auditors provides quality control
pre-close and post-close auditing, risk assessment consulting and
fraud prevention services to the mortgage and banking industries.
A neutral third party, NLA provides audits and consulting services
to financial institutions, attorneys, and consumers nationwide.
* U.S. Treasury to Help Investors Buy $500BB of Toxic Assets
------------------------------------------------------------
Greg Robb at MarketWatch reports that the Treasury Department has
disclosed a plan designed to help investors buy $500 billion worth
of toxic assets that remain on bank balance sheets.
According to MarketWatch, the program will use $75 billion to $100
billion in capital from the Troubled Asset Relief Program and
capital from private investors. MarketWatch notes that the
Treasury and private capital will provide equity financing. The
Federal Deposit Insurance Corp., says the report, will provide a
guarantee for debt financing issued by the public-private
investment funds to finance asset purchases.
The Treasury said in a statement, "The goal of this program is to
restart the market for legacy securities, allowing banks and other
financial institutions to free up capital and stimulate the
extension of new credit."
MarketWatch relates that private investors could lose their entire
investment and taxpayers could share in profits. The government
should create a "bad bank" and buy the toxic securities, the
report states, citing experts. The Treasury said that under the
"bad bank" approach, taxpayers would take on all the risk and the
government might overpay for the assets, according to the report.
MarketWatch notes that the program would involve these steps:
-- A bank decides what pool of assets they would like to
sell.
-- After determining that it would be willing to leverage
the pool, the FDIC will conduct an auction.
-- Of the $84, the FDIC would provide guarantees for $72 of
financing, leaving $12 of equity.
-- The Treasury would then provide 50% of the equity
financing.
-- The private investor would manage the servicing of the
asset pool using managers approved by the FDIC.
According to MarketWatch, the Treasury and the Federal Reserve
disclosed a new lending program tied into the Term Asset-Backed
Securities Loan Facility. MarketWatch states that non-recourse
loans will be made available to investors to acquire some toxic
securitization assets. MarketWatch relates that the Treasury said
that it will approve up to five asset managers to set up
investment funds to raise private capital to purchase toxic
assets.
Laura Meckler at The Wall Street Journal reports that
administration officials dismissed suggestions that the Congress'
anger over American International Group Inc.'s bonus payouts would
make private firms hesitate to participate in the government's
plan to rid the financial system of toxic assets. Firms that will
join the program would be those which are helping fix the
problems, WSJ states, citing Christina Romer, a top economic
adviser to President Barack Obama. "They are firms that are being
the good guys here -- coming into a market that hasn't existed to
try and help us get toxic assets off banks' balance sheets," the
report quoted Ms. Romer as saying.
Firms will join the program if the government lays out clear
rules, WSJ relates, citing Council of Economic Advisers member
Austan Goolsbee.
* Large Companies With Insolvent Balance Sheets
-----------------------------------------------
Total
Share- Total
Total holders Working
Assets Equity Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------ ------- -------
ABSOLUTE SOFTWRE ABT CN 107 (7) 24
ARBITRON INC ARB US 200 (14) (29)
AUTOZONE INC AZO US 5,235 (187) 112
BARE ESCENTUALS BARE US 300 (0) 146
BLOUNT INTL BLT US 500 (44) 128
BOEING CO BAB BB 53,779 (1,294) (4,961)
BOEING CO BA US 53,779 (1,294) (4,961)
BOEING CO-CED BA AR 53,779 (1,294) (4,961)
CABLEVISION SYS CVC US 9,383 (5,354) (438)
CENTENNIAL COMM CYCL US 1,432 (1,021) 101
CHENIERE ENERGY CQP US 1,979 (352) 139
CHENIERE ENERGY LNG US 2,922 (354) 350
CHOICE HOTELS CHH US 328 (138) (15)
CLOROX CO CLX US 4,398 (403) (389)
COCA-COLA ENTER CCE US 15,589 (31) (491)
CV THERAPEUTICS CVTX US 364 (222) 246
DELTEK INC PROJ US 193 (54) 35
DEXCOM DXCM US 44 (39) 17
DISH NETWORK-A DISH US 6,460 (1,949) (882)
DOMINO'S PIZZA DPZ US 464 (1,425) 105
DUN & BRADSTREET DNB US 1,586 (851) (213)
EMBARQ CORP EQ US 8,371 (608) (6)
ENERGY SAV INCOM SIF-U CN 552 (423) (162)
EXELIXIS INC EXEL US 402 (56) 82
EXTENDICARE REAL EXE-U CN 1,806 (40) 95
GARTNER INC IT US 1,093 (21) (238)
GENERAL MOTORS GM US 91,047 (85,340) (32,482)
GENTEK INC GETI US 425 (22) 88
HEALTHSOUTH CORP HLS US 1,998 (700) (64)
IMAX CORP IMX CN 238 (91) 41
IMAX CORP IMAX US 238 (91) 41
IMS HEALTH INC RX US 2,087 (153) 231
INDEVUS PHARMACE IDEV US 256 (136) 8
INTERMUNE INC ITMN US 172 (125) 97
IPCS INC IPCS US 538 (48) 49
JOHN BEAN TECH JBT US 591 (9) 93
LINEAR TECH CORP LLTC US 1,494 (310) 992
MEAD JOHNSON-A MJN US 1,372 (1,346) (1,870)
MEDIACOM COMM-A MCCC US 3,719 (347) (274)
MOODY'S CORP MCO US 1,773 (994) (584)
NATIONAL CINEMED NCMI US 610 (526) 96
NAVISTAR INTL NAV US 9,623 (1,493) 1,367
NPS PHARM INC NPSP US 204 (215) 97
OCH-ZIFF CAPIT-A OZM US 2,003 (219) -
OSIRIS THERAPEUT OSIR US 137 (5) 71
OVERSTOCK.COM OSTK US 172 (3) 40
PALM INC PALM US 656 (84) 31
PDL BIOPHARMA IN PDLI US 191 (353) 149
QWEST COMMUNICAT Q US 20,182 (1,449) (883)
REGAL ENTERTAI-A RGC US 2,600 (242) (93)
RENAISSANCE LEA RLRN US 57 (5) (15)
SALLY BEAUTY HOL SBH US 1,489 (720) 365
SONIC CORP SONC US 818 (55) (9)
STAR SCIENTIFIC STSI US 12 (0) 6
SUCCESSFACTORS I SFSF US 170 (5) 3
SUN COMMUNITIES SUI US 1,207 (28) -
TAUBMAN CENTERS TCO US 3,072 (163) -
TEAL EXPLORATION TEL SJ 50 (72) (105)
THERAVANCE THRX US 236 (135) 166
UAL CORP UAUA US 19,461 (2,465) (2,420)
UNITED RENTALS URI US 4,191 (29) 276
VERIFONE HOLDING VF2 GR 840 (38) 308
VERIFONE HOLDING PAY US 840 (38) 308
VERIFONE HOLDING PAY IT 840 (38) 308
WEIGHT WATCHERS WTW US 1,107 (888) (270)
WESTERN UNION WU US 5,578 (8) 528
WR GRACE & CO GRA US 3,876 (354) 965
YUM! BRANDS INC YUM US 6,527 (108) (771)
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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.
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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.
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