/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090401.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, April 1, 2009, Vol. 13, No. 90 Headlines 11500 LLC: Case Summary & 20 Largest Unsecured Creditors ACTIVE WALLACE: Blames Over-Expansion for Bankruptcy Filing AES CORPORATION: Fitch Assigns 'BB' Rating on $350 Mil. Debt AES CORPORATION: Moody's Assigns 'B1' Rating on $350 Mil. Notes AFFINITY BANK: Weiss Ratings Assigns "Very Weak" E- Rating AHERN RENTALS: S&P Downgrades Corporate Credit Rating to 'B' ALERIS INT'L: Wants to Stay Suits by Fired Employees vs. Managers ALLIANCE CAPITAL: Fitch Downgrades Rating on Class B Notes to 'C' AMERICAN INT'L: Congress Asks Justice Dept. & SEC for Reports ARAMARK CORPORATION: Fitch Affirms Issuer Default Rating at 'B' ARK HOLDINGS: Creditors File Petition for Chapter 7 Liquidation BANK OF AMERICA: Merrill Ordered to Pay $39.8M to Masonic Fund BAYOU GROUP: New Settlements Presage Madoff Clawback Suits BERNARD L. MADOFF: New Bayou Settlements Presage Clawback Suits BEST BRANDS: S&P Raises Corporate Credit Rating to 'CCC+' BEXAR COUNTY: Moody's Downgrades Ratings on 2000A Bonds to 'B1' BIV RETAIL: Files for Chapter 7 Bankruptcy Protection BON TON STORES: Weak Q4 Results Cues Moody's Junk Corp. Rating BUFFETS INC: S&P Assigns Corporate Credit Rating at 'B-' CALIFORNIA NATIONAL: Weiss Ratings Assigns "Very Weak" E- Rating CAPITALSOUTH BANK: Weiss Ratings Assigns "Very Weak" E- Rating CARIBE MEDIA: S&P Changes Outlook to Negative; Affirms 'B' Rating CDX GAS: Cash Use to Expire Absent EnerVest Sale Deal by Apr. 17 CENTRO NP: Fitch Affirms 'CCC' Rating on Debt Stabilization Plan CENTURY BANK: Weiss Ratings Assigns "Very Weak" E- Rating CHARTER COMMUNICATIONS: JPMorgan Sues 2 Units on False Statements CHIQUITA BRANDS: Moody's Gives Stable Outlook; Keeps 'B3' Rating CIRCLE C: Files for Chapter 11 Bankruptcy, To Liquidate COLONIAL PROPERTIES: S&P Cuts Corporate Credit Rating to 'BB+' COMMERCIAL VEHICLE: Liquidity Concerns Cue Moody's Junk Rating CONGOLEUM CORP: Lost $6.4M in Q4, Aims for '09, Early '10 Exit CORUS BANK: Weiss Ratings Assigns "Very Weak" E- Rating DELPHI CORP: Court Moves Exclusive Plan Filing Deadline to May 31 DELPHI CORP: Clarifies Transfer of Steering Biz; Hearing Tomorrow DELPHI CORP: Court OKs Changes to JPMorgan L/C Reimbursement Pact DELPHI CORP: Seeks to Amend Appaloosa Suit; Proposes June Trial DELPHI CORP: To Sell Suspension and Brakes Unit to BeijingWest DENNIS S SPIELBAUER: Court Moves Schedules Deadline to April 24 DHP HOLDINGS: May Sell FMI Contractor Business to FMI Products DMI INDUSTRIES: Files for Chapter 11 Bankruptcy Protection DREIER LLP: Founder Pleads Not Guilty to $700-Mil. Laundering ENCORE ACQUISITION: Moody's Gives Neg. Outlook; Keeps Ba3 Rating FEDERAL TRUST: Weiss Ratings Assigns "Very Weak" E- Rating FIRST BANK: Weiss Ratings Assigns "Very Weak" E- Rating FIRST DATA: Fitch Downgrades Issuer Default Rating to 'B' FIRST FINANCIAL: Receives NASDAQ Non-Compliance Letter FIRST MARINER: Weiss Ratings Assigns "Very Weak" E- Rating FLEETWOOD ENTERPRISES: S&P Withdraws 'D' Ratings on Liquidation FLUID ROUTING: Completes Sale to Sun Capital Affiliate FORD MOTOR: Frets on Operations Due to Rivals' Likely Bankruptcy FORD MOTOR: Seeks Debt Swap to Avert Bankruptcy or Gov't Bailout FREESCALE SEMICONDUCTOR: S&P Raises Corp. Credit Rating to 'B-' GENERAL GROWTH: Bankruptcy Filing Not Imminent, Says WSJ GENERAL MOTORS: Six Directors May be Replaced, Says WSJ GENERAL MOTORS: Government Funds Won't Affect S&P's 'CC' Rating GENERAL MOTORS: Launches Customer Protection Package GENERAL MOTORS: Rick Wagoner Finally Steps Down as CEO GENERAL MOTORS: Hike in Orders Tone Down Opel Bankr. Concerns GIBRALTAR INDUSTRIES: S&P Cuts Corporate Credit Rating to 'B+' GOODY'S LLC: Debtors File Schedules of Assets and Liabilities GOODY'S LLC: May Use Junior Lenders' Cash Collateral Until Aug. 1 GOODY'S LLC: Retains Streambank to Sell Duck Head and Other Brands GOTTSCHALKS INC: "Going Concern" Bidder Absent at Auction GOTTSCHALKS INC: Completes Auction; Liquidation Hearing Today HAMMOCKS LLC: Court Approves David G. Gray as Bankruptcy Counsel HAMMOCKS LLC: U.S. Trustee Sets Sec. 341(a) Meeting for April 29 HRP MYRTLE: Court Refuses to Okay Hard Rock's Sale to FPI MB IDEARC INC: Files for Bankruptcy; to Submit Exit Plan in 30 Days IDEARC INC: Case Summary & 50 Largest Unsecured Creditors INFOGROUP INC: Macro Agreement Won't Affect S&P's 'BB' Rating INTER SAVINGS: Weiss Ratings Assigns "Very Weak" E- Rating IXP INC: Files for Chapter 11 Bankruptcy Protection in Colorado JOHNS MANVILLE: High Court Questions Judges' Power to Block Suits JPT AUTOMOTIVE: Case Summary & 20 Largest Unsecured Creditors JUNIPER GENERATION: Moody's Cuts Senior Secured Rating to 'Ba3' KS REALTY: Judge Deasy Sets July 21 as Proofs of Claim Bar Date KS REALTY: U.S. Trustee Sets Section 341(a) Meeting for April 24 KULICKE & SOFFA: S&P Withdraws Corporate Credit Rating to 'B+' LEHMAN BROTHERS BANK: Weiss Ratings Assigns "Very Weak" E- Rating LENNAR CORP: Posts $155.9 Million Net Loss in First Quarter 2009 LINCOLN BANK: Weiss Ratings Assigns "Very Weak" E- Rating LOCAL INSIGHT: S&P Changes Outlook to Negative; Keeps 'B' Rating MARC HOTELS: Chapter 11 Bankruptcy Case Transferred to Honolulu MERCER INTERNATIONAL: S&P Affirms 'B-' Corporate Credit Rating MERUELO MADDUX: Receives Delisting Notification From Nasdaq MIDWAY GAMES: U.S. Trustee Balks at Bonuses for Top Employees MINERVA SA: Fitch Puts 'B+' Issuer Rating on Negative Watch MONEYGRAM INTERNATIONAL: Fitch Affirms Issuer Rating at 'B+' MOUNT SINAI: Moody's Downgrades Long-Term Rating on Debt to 'Ba2' MUTUAL BANK: Weiss Ratings Assigns "Very Weak" E- Rating MW SEWALL: Files for Chapter 11 Bankruptcy Protection NATIONAL WHOLESALE: GE Capital Sues Former Chief Financial Officer NATIONWIDE HEALTH: S&P Gives Positive Outlook; Keeps 'BB' Rating NORTH FOREST: Moody's Cuts Rating on $63.2 Million Debt to 'Ba3' NORTH PORT: Case Summary & 20 Largest Unsecured Creditors NOVA BIOSOURCE: Files for Bankruptcy; Brent King Named CRO OSHKOSH CORPORATION: Moody's Confirms Corp. Family Rating at 'B2' PACIFIC NATIONAL: Weiss Ratings Assigns "Very Weak" E- Rating PANTRY INC: S&P Changes Outlook to Positive, Affirms 'B+' Rating PECOS CAPITAL: Files List of Creditors Holding Unsecured Claims PECOS CAPITAL: Section 341(a) Meeting Slated for April 28 PEOPLES COMMUNITY: Weiss Ratings Assigns "Very Weak" E- Rating PHILADELPHIA NEWSPAPERS: Top Executives Got Bonuses Before Filing PHILIP J MARTIN: Wants Schedules and Statements Filing Extended PILGRIM'S PRIDE: Court Extends Plan Filing Deadline to Sept. 30 PILGRIM'S PRIDE: Court Extends Lease Decision Deadline to June 29 PILGRIM'S PRIDE: Seeks to Hire Colliers as Real Estate Consultant PILGRIM'S PRIDE: Creditors Object to Equity Panel Appointment PMC MARKETING: Wants Charles A. Cupril as Bankruptcy Counsel POLYMER GROUP: Moody's Gives Stable Outlook; Keeps 'B1' Rating PRECISION PARTS: In Dispute With Cerion Over Purchase Price PRICE TRUCKING: Section 341(a) Meeting Slated for April 29 PRICE TRUCKING: Wants Schedules Deadline Moved to April 24 PRICE TRUCKING: Wants Whiteford Taylor as Bankruptcy Counsel PRIMUS TELECOM: Protocol Limiting Trading In Securities Okayed PROPEX INC: Emerges From Bankruptcy After 14 Months PROPEX INC: Wayzata's $82 Million Offer Tops Bidding PROPEX INC: Parties Balk at Assumption of Pacts as Part of Sale QIMONDA NA: To Seek Final Approval of $40-Mil DIP Loan on April 13 QUEBECOR WORLD: Posts $654.0 Million Fourth Quarter Loss ROBBINS BROS: Gets Final OK to Use Sec. Lenders Cash Collateral ROBBINS BROS: Sec. 341(a) Meeting of Creditors Set for April 15 ROBBINS BROS: U.S. Trustee Appoints 7-Member Creditors Panel S&K FAMOUS: Pays Off Secured Debt & Sells Headquarters SABRE HOLDINGS: S&P Downgrades Corporate Credit Rating to 'B' SPANSION INC: Bankruptcy No Reason for Drastic Redesign SPANSION INC: Sec. 341 Meeting of Creditors Set for April 14 SPANSION INC: Can Use Lenders' Cash Collateral Until May 19 SPANSION INC: Commences Review on Leases; Rejects Equipment Pacts SPANSION INC: Seeks to Employ Duane Morris as Delaware Counsel SPORTSMAN'S WAREHOUSE: Section 341(a) Meeting Slated for April 16 STANDARD PACIFIC: S&P Cuts Ratings on Senior Notes to 'CCC-' STARWOOD HOTELS: Moody's Downgrades Senior Ratings to 'Ba1' STRATEGIC CAPITAL: Weiss Ratings Assigns "Very Weak" E- Rating SUN-TIMES MEDIA: Files for Chapter 11; to Divest Assets SUN-TIMES MEDIA: Case Summary & 30 Largest Unsecured Creditors SUSSER HOLDINGS: S&P Gives Stable Outlook; Affirms 'B+' Rating TEREX CORPORATION: Moody's Cuts Corporate Family Rating to 'Ba3' TOWER HILL: Moody's Downgrades Ratings on Five Classes of Notes TPG-AUSTIN PORTFOLIO: Moody's Downgrades Senior Ratings to 'C' TRIBUNE CO: Files Schedules of Assets and Liabilities TRIBUNE CO: LA Times Files Schedules of Assets and Liabilities TRIBUNE CO: Amends $225M Barclays Asset-Backed Securitization Loan TRIBUNE CO: Seeks Stay of Suit by Former LA Times Workers TRIBUNE CO: To Sell Westline Asset to Summit Westline for $7MM UCI HOLDCO: Moody's Junks Corporate Family Rating from 'B3' UNITED COMMERCIAL: Moody's Cuts Bank Strength Rating to 'D-' UNITED SUBCONTRACTORS: Case Summary & 30 Largest Unsec. Creditors US TELEPACIFIC: Moody's Gives Negative Outlook; Keeps 'B3' Rating VARIG LOGSTICA: Voluntary Chapter 15 Case Summary VINEYARD BANK: Weiss Ratings Assigns "Very Weak" E- Rating VISTEON CORP: Files Annual Report; PwC Issues Going Concern Doubt VISTEON CORP: UK Affiliate Commences Insolvency Proceedings VISTEON CORP: Gets Waiver Until May 30 Under Credit Facilities W.R. GRACE: Seeks to Keep CEO Alfred Festa for Another 4 Years W.R. GRACE: To Implement 2009-2011 Key Employee Incentive Plan W.R. GRACE: Hires Seale to Advise on Sale of Gas Equipment Unit W.R. GRACE: Former Employees Testify on Asbestos in Libby Mine WARREN BANK: Weiss Ratings Assigns "Very Weak" E- Rating WILBRAHAM CBO: Fitch Junks Ratings on Two Classes of Notes WILLOUGHBY'S APPLIANCE: In the Process of Filing for Bankruptcy WOODLANDS COMMERICAL: Weiss Ratings Assigns "Very Weak" E- Rating ZOUNDS INC: Case Summary & 20 Largest Unsecured Creditors * Fitch Comments on Restaurant Industry's Performance in Crisis * BaddebtBankruptcy.com Offers Bankruptcy Consultation * Equity Risk Partners Launches Executive Advisory Series * NewOak Names Sam Warren as RMBS Structured Solutions Director * Stroock Adds Daniel Ginsberg to Financial Restructuring Group * Upcoming Meetings, Conferences and Seminars ********* 11500 LLC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: 11500, LLC 31 N. Tijon, Suite 500 Colorado Springs, CO 80903 Tel: (719) 473-4530 Bankruptcy Case No.: 09-41367 Chapter 11 Petition Date: March 30, 2009 Court: Western District of Missouri (Kansas City) Debtor's Counsel: Donald G. Scott, Esq. dscott@mcdowellrice.com McDowell Rice Smith & Buchanan 605 W. 47th St., Ste 350 Kansas City, MO 64112 Tel: (816) 753-5400 Fax: (816) 753-9996 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Chevron TCI, Inc. $3,734,133 345 California Street, 30th Fl. San Francisco, CA 94104 Platte County Tax $200,000 415 Third St., Suite 40 Platte City, MO 64079 Knopke Contracting Services $140,000 PO Box 414973 Kansas City, MO 64141 LinCare $110,000 LVI Environmental $95,000 Hoy Excavating $50,000 Tevis Architects $35,000 Family Environmental Services $27,000 KCP&L $20,000 Trane $18,000 Engineers Consortium Inc. $15,000 Synbiotics $14,944 Seminole Energy Services $13,000 Interstate Electrical $10,000 KCCBS $7,000 King Hershey PC $6,045 AMAI Architects $5,400 Hilb Regal & Hobbs Insurance $5,000 AmSan $4,318 Ambius Inc. $3,003 The petition was signed by Gregory Timm, member. ACTIVE WALLACE: Blames Over-Expansion for Bankruptcy Filing ----------------------------------------------------------- Active Wallace Group filed a Chapter 11 petition after reporting a $7.7 million net loss last year on revenues of almost $60 million. According to Bloomberg's Bill Rochelle, Chief Executive John Wallace said in court papers that the bankruptcy resulted from over-expansion. He said the number of the Company's stores doubled while sales remained constant. The Debtor will seek debtor-in-possession financing from Merrill Lynch Commercial Finance Corp. The company owes $4.2 million to the secured lender, a unit of Merrill Lynch & Co. The Debtor said the unsecured creditor with the largest claim is Nike USA, owed $1.5 million. Active Wallace Group owns Mira Loma, California-based Active Ride Shop, a retailer of skateboarding and surfing wear. Active Wallace filed for Chapter 11 on March 23 (Bankr. C.D. Calif., Case No. 09-15370). Garrick A. Hollander, Esq., and Marc J. Winthrop, Esq., have been tapped as counsel. In its bankruptcy petition, the Company estimated assets and debts of $10 million to $50 million. AES CORPORATION: Fitch Assigns 'BB' Rating on $350 Mil. Debt ------------------------------------------------------------ Fitch Ratings has assigned its 'BB' rating to the anticipated issuance by The AES Corporation of $350 million unsecured debt in a private placement. The new notes are unsecured and rank equally with existing and future unsecured debt of AES. The Issuer Default Rating of AES is 'B+'. The Rating Outlook is Stable. AES CORPORATION: Moody's Assigns 'B1' Rating on $350 Mil. Notes --------------------------------------------------------------- Moody's Investors Service has assigned a B1 rating to The AES Corporation's (B1 Corporate Family Rating) proposed issuance of up to $350 million of senior unsecured notes due 2016. The rating outlook is stable. Proceeds from the proposed offering will be used to enhance AES's liquidity profile as several maturities approach. Specifically, AES faces a $154 million senior note due June 2009, the termination of a $600 million senior unsecured revolver in March 2010 and a $214 million senior note due September 2010. Proceeds from the proposed offering are likely to be used to refinance any combination of these maturities. AES's ratings consider the company's high leverage and the structural subordination of its recourse debt to the significant level of non-recourse debt in its consolidated capital structure and a weakened power price environment that is expected to reduce cash flow from its New York-based AES Eastern Energy subsidiary. Structural constraints are somewhat mitigated by the diversification provided by AES's large number of subsidiaries, their wide geographic distribution and balanced fuel mix, and the significant proportion of the company's cash flows that are subject to stable regulation or long-term contracts. Moody's calculates AES's adjusted parent operating cash flow (POCF, which is net of parent level interest expense, parent overhead expenses, income taxes and development charges) to parent level debt of approximately 3% in 2008 (approximately 6% when excluding development costs) and the ratio of adjusted parent operating cash flow interest coverage of approximately 1.4 times. These metrics weakened relative to 2007 performance (approximately 6%, 8% and 1.8 times, respectively) due to increased parent overhead expenses and interest expense and a modest reduction in parent level dividends received from subsidiaries. Parent overhead costs have increased as AES has sought to address challenges relating to material weaknesses in its financial reporting that have resulted in filing delays and necessitated restatements of its audited financial statements over the last couple of years. As a result, the company has been successful in this endeavor as evidenced by the timely filing of its 2008 10-K without any material weaknesses noted. Moody's is of the opinion that 2008 reduced parent level financial performance was temporary and anticipate considerable improvement beginning in 2009 due to anticipated increased subsidiary distributions emanating from new projects/investments and reduced overhead costs. Failure to improve its financial performance in 2009 could have negative rating implications. AES announced last week an amendment to its senior secured revolver that includes a one-year extension to its expiration date to July 2011 for $605 million of its recently expanded $785 million of commitments. The last rating action on AES occurred on May 14, 2008, when Moody's affirmed the company's ratings, including its B1 Corporate Family Rating. AES' ratings were assigned by evaluating factors believed to be relevant to its credit profile, such as i) the business risk and competitive position of AES versus others within its industry or sector, ii) the capital structure and financial risk of AES, iii) the projected performance of AES over the near to intermediate term, and iv) AES' history of achieving consistent operating performance and meeting financial plan goals. These attributes were compared against other issuers both within and outside of AES' core peer group and AES' ratings are believed to be comparable to ratings assigned to other issuers of similar credit risk. The AES Corporation is a global power company with generation and distribution assets in Europe, Asia, Latin America, Africa and the United States. Its consolidated revenues totaled $13.6 billion during fiscal year 2007. AFFINITY BANK: Weiss Ratings Assigns "Very Weak" E- Rating ---------------------------------------------------------- Weiss Ratings has assigned its E- rating to Ventura, Calif.-based Affinity Bank. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." Affinity Bank is not a member of the Federal Reserve, and is primarily regulated by the Federal Deposit Insurance Corporation. The institution was established on Sept. 19, 1982, and deposits have been insured by the FDIC since March 14, 1988. Affinity Bank maintains a Web site at http://www.affinitybank.com/and has 10 branches in California. AHERN RENTALS: S&P Downgrades Corporate Credit Rating to 'B' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on Ahern Rentals Inc., including the long-term corporate credit rating to 'B' from 'B+'. All ratings were removed from CreditWatch, where they were placed with negative implications on Dec. 16, 2008. The outlook is negative. "The downgrade and negative outlook reflect our concerns about continuing weakness in the company's end markets and its ability to maintain adequate liquidity and potential covenant pressure in the near term," said Standard & Poor's credit analyst John R. Sico. S&P is concerned that continued weakness in nonresidential construction markets may have an adverse affect on the company's cash flow. While Ahern has not yet reduced capital spending to the level that S&P would anticipate in such a situation, S&P expects it to begin to decrease capital spending and generate positive free cash flow to pay down debt and maintain adequate liquidity. Ahern needs to maintain minimum liquidity of $25 million on its credit facility or it becomes subject to a total leverage test. The company would have been in compliance at Dec. 31, 2008. An expected step down in leverage to 4.5x from 4.6x will reduce headroom on this covenant, and may well need to be tested if availability were to decline below $25 million. The ratings on Las Vegas-based Ahern Rentals reflect its position as a relatively small regional operator in the highly fragmented and competitive equipment-rental industry. The business is also highly capital intensive: Ahern must continually make large equipment purchases and has limited diversity and somewhat limited financial flexibility. The company's good market presence in commercial markets and somewhat expanded presence beyond the southwestern U.S. offsets these risks. The credit profile also benefits from the company's focus on customer service and strong EBITDA margin. The company is leveraged with debt to EBITDA at about 4.4x as of Dec. 31, 2008 (adjusted for operating leases). Funds from operations to lease adjusted debt is about 16%. With minimum cash balances and limited availability on its asset-based loan revolver the company's financial flexibility is limited. S&P could lower the rating on the company if credit metrics continue to weaken and availability on the revolver deteriorates. Because of challenging industry conditions in 2009, Ahern's operating performance could deteriorate and possibly reduce liquidity and threaten covenant compliance. In response to these conditions, S&P expects Ahern to cut back on capital expenditures to generate free cash flow. S&P believes a 20% decline in construction spending in key end markets is likely. Therefore, S&P could take a negative rating action if Ahern does not achieve free cash flow to reduce debt and improve availability on its credit facility and headroom on covenants. Upside rating potential is unlikely at this point in the cycle. ALERIS INT'L: Wants to Stay Suits by Fired Employees vs. Managers ----------------------------------------------------------------- Before Aleris International Inc.'s bankruptcy filing, three former employees commenced complaints for alleged damages arising from the termination of their employment by one of the Debtors: 1. David Hagan sued Debtor Alchem Aluminum Inc. and Gary Merritt in the 10th Circuit for the County of Saginaw, Michigan. Mr. Merritt is the plant manager at Alchem's Saginaw, Michigan facility and Mr. Hagan's direct supervisor. 2. Ralph Rosenlieb sued Debtor Rock Creek Aluminum Inc. in the Circuit Court for Wood County, West Virginia, for alleged violations of public policy for his termination by Rock Creek, and Eric Reynolds, Mr. Rosenlieb's direct supervisor, for alleged direct participation in the alleged violation. 3. Robert McIntyre sued Debtor Rock Creek and two of its Employees, Trevor Hayes, an environmental safety manager, and Eric Reynolds, Mr. Rosenlieb's direct supervisor, for alleged violation of public policy and tortious interference with an employment relationship. The allegations against the Employee Defendants arise solely from the performance of their duties as employees of the Debtors. However, the stay under Section 362 of the Bankruptcy Code does not automatically extend to the Employee Defendants, Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, points out. Thus, the Debtors ask the U.S. Bankruptcy Court for the District of Delaware to extend the automatic stay applicable to enjoin the prosecution of the Prepetition Lawsuits against the Employee Defendants for the duration of the automatic stay in effect as to the Debtors. Mr. Karotkin contends that if the automatic stay is not extended with respect to the Employee Defendants or the Prepetition Lawsuits are not otherwise enjoined, the Debtors and their estates will be irreparably harmed and the purposes of the Bankruptcy Code will be frustrated because: (1) the Debtors could be subject to substantial collateral estoppel risks effectively compelling them to monitor and participate in the Prepetition Lawsuits and thereby, incur substantial costs and cause distraction to the Employee Defendants; (2) judgments against the Employee Defendants in the Prepetition Lawsuits could increase the likelihood of judgments against the Debtors; (3) the Debtors have obligations to pay the costs of defense of the Prepetition Lawsuits and to indemnify the Employee Defendants for actions taken within the scope of their employments with the Debtors; (4) continued prosecution could affect employee morale and could create tension in the workforce, compelling employees to seek employment elsewhere; and (5) the Employee Defendants may be distracted from continuing to perform their duties on the Debtors' behalf. About Aleris International Aleris International, Inc. produces and sells aluminum rolled and extruded products. Aleris operates primarily through two reportable business segments: (i) global rolled and extruded products and (ii) global recycling. Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates over 40 production facilities in North America, Europe, South America and Asia, and employs approximately 8,400 employees. Aleris operates 27 production facilities in the United States with eight production facilities that provided rolled and extruded aluminum products and 19 recycling production plants. Aleris International, Inc., aka IMCO Recycling Inc., and various affiliates filed for bankruptcy on February 12, 2009 (Bankr. D. Del. Case No. 09-10478). The Hon. Brendan Linehan Shannon presides over the cases. Stephen Karotkin, Esq., and Debra A. Dandeneau, Esq., at Weil, Gotshal & Manges LLP in New York, serve as lead counsel for the Debtors. L. Katherine Good, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A. In Wilmington, Delaware, serves as local counsel. Moelis & Company LLC, acts as financial advisors; Alvarez & Marsal LLC a as restructuring advisors, and Kurtzman Carson Consultants LLC as claims and noticing agent for the Debtors. As of Dec. 31, 2008, the Debtors had total assets of $4,168,700,000; and total debts of $3,978,699,000. Bankruptcy Creditors' Service, Inc., publishes Aleris International Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Aleris International, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) ALLIANCE CAPITAL: Fitch Downgrades Rating on Class B Notes to 'C' ----------------------------------------------------------------- Fitch Ratings has downgraded and revised the Recovery Rating on this class of notes issued by Alliance Capital Funding, LLC: -- $33,321,229 class B notes to 'C/RR6' from 'CC/DR4'. Alliance Capital Funding, a limited liability company that closed on Dec. 3, 1997, is managed by Alliance Bernstein, L.P. Alliance Capital Funding is composed of primarily corporate high-yield bonds and loans and a small portion of emerging market debt. The final maturity for this transaction is Feb. 15, 2010. Payments are made semi-annually in February and August and the reinvestment period ended in August 2002. According to the March 10, 2009 trustee report, all coverage tests failed. The overcollateralization test failed at 11.8% with a trigger of 150%, and the B interest coverage test failed at 6.8% with a trigger of 110%. The downgrade on the class B notes is due to the undercollateralization of the class and the diversion of principal proceeds to pay interest due on the class. The trustee reported $54,000 in the principal collections account and a portfolio collateral balance of $8.5 million, of which $5.3 million is defaulted. Fitch expects the class B notes to recover little to no principal at maturity. On the Feb. 15, 2009 payment date, principal proceeds were used to pay the remaining interest on the class B notes. Further undercollateralization for the class B notes is expected as this continued diversion of principal to pay interest progresses over time. The rating of the class B notes addresses the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The Distressed Recovery Rating on the classes of notes has been revised to RR to reflect Fitch's updated Rating Definitions Criteria released March 3, 2009. Fitch's current and revised criteria for rating corporate collateralized debt obligations was released on April 30, 2008. However, due to the high obligor concentration within the portfolio, Fitch used a more deterministic approach in analyzing the portfolio rather than utilizing the Corporate Portfolio Credit Model. Fitch's probability of default was based upon issuer default ratings and term to maturity. The recovery rates were based either upon specified underlying securities' RR, comparable recovery ratings, or the PCM assumed recovery rate depending upon the seniority of each of the underlying bonds. AMERICAN INT'L: Congress Asks Justice Dept. & SEC for Reports ------------------------------------------------------------- The House Committee on Oversight and Government Reform has asked Justice Department and the U.S. Securities and Exchange Commission to forward confidential reports prepared by a lawyer charged with monitoring American International Group Inc. over the past four years, Peter Lattman at The Wall Street Journal reports, citing people familiar with the matter. According to WSJ, the congress is probing on AIG's collapse and subsequent federal rescue in September 2008. WSJ relates that AIG has paid lawyer James Cole and his firm, Bryan Cave LLP, about $20 million to supervise its business practices. WSJ states that Mr. Cole's reports on AIG's progress were periodically delivered to federal regulators since 2005 and aren't public. The House Committee, says WSJ, has asked that the SEC and Justice Department forward the reports by April 1. WSJ quoted the House Committee as saying, "With the taxpayers now having an 80% stake in AIG, we believe that review of these reports is critical for Congress to better understand how AIG became financially crippled and in assessing whether taxpayer dollars are being properly used for the stabilization of this once prosperous company." WSJ relates that a Justice Department spokesperson said that the agency hasn't yet received the Congress' request. AIG was alleged to have sold products that helped firms manipulate their financial earnings, WSJ notes. The Justice Department, according to the report, agreed not to pursue criminal charges against AIG in exchange for its implementing reforms and the review of certain financial transactions by Mr. Cole. About American International Based in New York, American International Group, Inc. (AIG), is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. During the third quarter of 2008, requirements to post collateral in connection with AIG Financial Products Corp.'s credit default swap portfolio and other AIGFP transactions and to fund returns of securities lending collateral placed stress on AIG's liquidity. AIG's stock price declined from $22.76 on September 8, 2008, to $4.76 on September 15, 2008. On that date, AIG's long-term debt ratings were downgraded by Standard & Poor's, a division of The McGraw-Hill Companies, Inc., Moody's Investors Service and Fitch Ratings, which triggered additional requirements for liquidity. These and other events severely limited AIG's access to debt and equity markets. On September 22, 2008, AIG entered into an $85 billion revolving credit agreement with the Federal Reserve Bank of New York and, pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000 shares of Series C Perpetual, Convertible, Participating Preferred Stock to a trust for the benefit of the United States Treasury. At September 30, 2008, amounts owed under the facility created pursuant to the Fed Credit Agreement totaled $63 billion, including accrued fees and interest. Since September 30, AIG has borrowed additional amounts under the Fed Facility and has announced plans to sell assets and businesses to repay amounts owed in connection with the Fed Credit Agreement. In addition, subsequent to September 30, 2008, certain of AIG's domestic life insurance subsidiaries entered into an agreement with the NY Fed pursuant to which the NY Fed has borrowed, in return for cash collateral, investment grade fixed maturity securities from the insurance subsidiaries. On Nov. 10, 2008, the U.S. Treasury agreed to purchase, through its Troubled Asset Relief Program, $40 billion of newly issued AIG perpetual preferred shares and warrants to purchase a number of shares of common stock of AIG equal to 2% of the issued and outstanding shares as of the purchase date. All of the proceeds will be used to pay down a portion of the Federal Reserve Bank of New York credit facility. The perpetual preferred shares will carry a 10% coupon with cumulative dividends. AIG and the Fed also agreed to revise the existing FRBNY credit facility. The loan terms were extended from two to five years to give AIG time to complete its planned asset sales in an orderly manner. The equity interest that taxpayers will hold in AIG, coupled with the warrants, will total 79.9%. At September 30, 2008, AIG had $1.022 trillion in total consolidated assets and $950.9 billion in total debts. Shareholders' equity was $71.18 billion, including the addition of $23 billion of consideration received for preferred stock not yet issued. The Troubled Company Reporter reported on March 4, 2009, that Moody's Investors Service confirmed the A3 senior unsecured debt and Prime-1 short-term debt ratings of American International Group, Inc. AIG's subordinated debt rating has been downgraded to Ba2 from Baa1. The rating outlook for AIG is negative. This rating action follows AIG's announcement of net losses of $62 billion for the fourth quarter and $99 billion for the full year of 2008, along with a revised restructuring plan supported by the US Treasury and the Federal Reserve. This concludes a review for possible downgrade that was initiated on September 15, 2008. ARAMARK CORPORATION: Fitch Affirms Issuer Default Rating at 'B' --------------------------------------------------------------- Fitch Ratings has affirmed these ratings for ARAMARK Corporation: -- Long-term Issuer Default Rating 'B'; -- Senior secured credit facilities 'BB-/RR2'. Fitch has simultaneously downgraded these ratings: -- Senior unsecured notes due 2015 to 'CCC/RR6' from 'B-/RR5'; -- Senior unsecured notes due 2012 to 'CCC/RR6' from 'CCC+/RR6'. The Rating Outlook is Stable. These rating actions affect approximately $6.0 billion of debt at Jan. 2, 2009. ARAMARK's ratings reflect its high financial leverage, its strong market share positions and its high client retention rate. Although the company's revenue is being negatively impacted by the economic recession, its diversified customer base and ability to reduce costs should mitigate downside risk on operating earnings and cash flow. A significant portion of ARAMARK's revenue is generated from less economically sensitive sectors; such as Education, Healthcare and Corrections. Furthermore, no single client represented more than 1% of the $13.5 billion of total sales it generated at the fiscal year ended Oct. 3, 2008. Fitch views ARAMARK's operating structure as more recession resistant than others in the foodservice industry given this diversity, the contract nature of its business and its highly variable cost structure. The downgrade of the company's 2015 and 2012 senior unsecured notes is driven by Fitch's recovery analysis for companies with IDR ratings of 'B+' or below. The recovery ratings for ARAMARK's debt consider bondholder recovery in a distressed situation while incorporating the fact that, in the current environment, recovery rates have declined across most industries. Fitch anticipates 71%-90% or superior recovery for ARAMARK's secured bank debt and negligible recovery for unsecured bondholders. ARAMARK's credit profile is supported by its lack of near term maturities and its good liquidity. The company's most significant upcoming maturity is $250 million of 5% unsecured notes due June 1, 2012. During the latest 12 month period ended Jan. 2, 2009, ARAMARK generated $63 million of free cash flow (cash flow from operations less capital expenditures and dividends) and at Jan. 30, 2009 the company had $520 million available under its $600 million revolver which expires January 2013. ARAMARK's credit statistics are currently adequate for the rating category. For the LTM period ended Jan. 2, 2009, total debt-to- operating earnings before interest, taxes, depreciation and amortization was 5.6 times, operating EBITDA-to-gross interest expense was 2.1x and funds from operations fixed charge coverage was 1.8x. Total adjusted debt-to-operating earnings before interest, taxes, depreciation, amortization and rental expense, which accounts for operating leases and balances outstanding under ARAMARK's $250 million accounts receivable securitization program, was 6.1x. ARAMARK is in compliance with all of its debt covenants. ARAMARK's maximum consolidated secured debt ratio of 5.5x steps down by 0.25x increments annually every June 30 until 2013. At Jan. 2, 2009, the ratio (as defined by its credit agreement) was 3.77x, leaving the company significant cushion. ARAMARK's ability to incur additional debt and make restricted payments is limited by a minimum interest coverage ratio of 2.0x. At Jan. 2, 2009, the ratio (as defined by its credit agreement) was 2.2x. Given ARAMARK's current level of liquidity, lack of near-term maturities and its balanced financial strategy, Fitch does not anticipate a need to incur incremental debt. ARK HOLDINGS: Creditors File Petition for Chapter 7 Liquidation --------------------------------------------------------------- According to Bloomberg's Bill Rochelle, three creditors saying they are owed almost $15.5 million, filed an involuntary Chapter 7 bankruptcy petition on March 20 against Ark Asset Holdings Inc., the owner of investment adviser Ark Asset Management Co. The petitioning creditors are C. Charles Hetzel, William David, Heather Wiener and S. Jay Mermelstein. They want a trustee appointed to take over Ark's estates. The petitioners say New York-based Ark sold assets in February to Smith Graham & Co. Investment Advisors and may be dissipating the assets. They recite how Ark previously said it would be filing bankruptcy yet hasn't so far. Bill Rochelle said that Houston-based Smith Graham issued a statement on Feb. 27 saying the Ark acquisition doubled its assets under management to almost $6 billion. BANK OF AMERICA: Merrill Ordered to Pay $39.8M to Masonic Fund -------------------------------------------------------------- Suzanne Barlyn at The Wall Street Journal reports that the Financial Industry Regulatory Authority has ruled that Merrill Lynch & Co. must pay $39.8 million -- $30.6 million in compensatory damages and $9.2 million in interest -- to the trustees of the Masonic Hall and Asylum Fund in Utica. WSJ relates that Masonic Hall filed a claim against Merrill Lynch asserting that Merrill's subsidiary broker-dealer advised the fund to buy a limited partnership interest in Sphinx Managed Futures Index Fund LP, a privately held fund in a business unit of Refco Inc. WSJ states that Refco collapsed after disclosing in 2005 that its CEO hid $430 million in bad debts from the company's auditors. Merrill Lynch, according to WSJ, said that the case arose from investments that predated the Company's 2005 acquisition of a regional broker-dealer, Advest, which had provided Masonic Hall with investment advice. WSJ says that Merrill Lynch, receiving the panel's go signal, will pursue damages in bankruptcy proceedings for the Refco unit that ran the Sphinx fund. 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). As reported by the Troubled Company Reporter on March 27, 2009, Moody's Investors Service lowered the senior debt rating of Bank of America Corporation to A2 from A1, the senior subordinated debt rating to A3 from A2, and the junior subordinated debt rating to Baa3 from A2. The preferred stock rating was downgraded to B3 from Baa1. The holding company's short-term rating was affirmed at Prime-1. BAYOU GROUP: New Settlements Presage Madoff Clawback Suits ---------------------------------------------------------- Bloomberg's Bill Rochelle said that more settlements were announced by the trustee for Bayou Group LLC that could presage future stories about recoveries from investors in Bernard L. Madoff Investment Securities Inc. According to the report, the trustee for Bayou, a hedge fund that in reality was a Ponzi scheme, recovered more money from investors who managed to take out profit or principal before the fraud was discovered. The Bayou trustee said last week he will receive another $5.6 million from 24 investors who agreed to settle. The new settlements are on top of $30 million previously recovered from 89 former Bayou investors. The lawsuits to recover fictitious profits or principal are often referred to as clawbacks, Mr. Rochelle relates. He added that the new Bayou settlements were the only alternative to an appeal from a ruling made by U.S. Bankruptcy Judge Adlai Hardin in October. He said everyone, even those who had no idea a fraud was being conducted, is obliged by fraudulent transfer law to give back fictitious profits. Investors who were able to recover principal must give it back, too, if they had seen "red flags" indicating a fraud was being conducted. Pursuant to the new settlements, 22 entailed giving back 100% of the profits. Among those who the bankruptcy judge found to have had an inkling there was a fraud, the Bayou trustee allowed the investors to keep no more than 25% of repaid principal. According to the report, when evidence came to light indicating Bayou was being operated as a Ponzi scheme, a federal district judge in White Plains, New York, appointed a receiver for the fund in April 2006. The receiver put Bayou in Chapter 11 the next month and later filed the lawsuits against investors who were able to take out their investments before the fraud surfaced. The receiver continued running Bayou during the Chapter 11 proceeding. About Bayou Group Based in Chicago, Illinois, Bayou Group LLC operates and manages hedge funds. The company and its affiliates filed for chapter 11 protection on May 30, 2006 (Bankr. S.D.N.Y. Lead Case No. 06- 22306) in order to pursue recoveries for the benefit of defrauded investors. Elise Scherr Frejka, Esq., at Dechert LLP, represents the Debtors in their restructuring efforts. Joseph A. Gershman, Esq., and Robert M. Novick, Esq., at Kasowitz, Benson, Torres & Friedman, LLP, represent the Official Committee of Unsecured Creditors. Kasowitz, Benson, Torres & Friedman LLP is counsel to the Unofficial Committee of the Bayou Onshore Funds. Sonnenschein Nath & Rosenthal LLP represents certain investors. When the Debtors filed for protection from their creditors, they reported estimated assets and debts of more than $100 million. Bayou also filed lawsuits against former investors who allegedly received fictitious profits and an inequitably large return of their principal investments. Jeff J. Marwil, Esq., at Jenner & Block, was appointed on April 28, 2006, as the federal equity receiver. As reported in the Troubled Company Reporter on April 16, 2008, Bayou Group and its debtor-affiliates delivered 47 adversary complaints to the Honorable Adlai S. Hardin Jr. of the U.S. Bankruptcy Court for the Southern District of New York, seeking to recover certain fraudulent transfers made by investors against the Debtors. The Bayou entities include Bayou Management LLC, Bayou Advisors LLC, Bayou Equities LLC, Bayou Fund LLC, Bayou Superfund, Bayou No Leverage Fund LLC, Bayou Affiliates Fund LLC, and Bayou Accredited Fund LLC. The Debtors said the adversary proceedings arose from a massive fraudulent investment scheme committed by the Bayou entities, which controlled private pooled investment hedge funds. 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 Mr. Madoff and his investment firm 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. istrict 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. BERNARD L. MADOFF: New Bayou Settlements Presage Clawback Suits --------------------------------------------------------------- Bloomberg's Bill Rochelle said that more settlements were announced by the trustee for Bayou Group LLC that could presage future stories about recoveries from investors in Bernard L. Madoff Investment Securities Inc. According to the report, the trustee for Bayou, a hedge fund that in reality was a Ponzi scheme, recovered more money from investors who managed to take out profit or principal before the fraud was discovered. The Bayou trustee said last week he will receive another $5.6 million from 24 investors who agreed to settle. The new settlements are on top of $30 million previously recovered from 89 former Bayou investors. The lawsuits to recover fictitious profits or principal are often referred to as clawbacks, Mr. Rochelle relates. He added that the new Bayou settlements were the only alternative to an appeal from a ruling made by U.S. Bankruptcy Judge Adlai Hardin in October. He said everyone, even those who had no idea a fraud was being conducted, is obliged by fraudulent transfer law to give back fictitious profits. Investors who were able to recover principal must give it back, too, if they had seen "red flags" indicating a fraud was being conducted. Pursuant to the new settlements, 22 entailed giving back 100% of the profits. Among those who the bankruptcy judge found to have had an inkling there was a fraud, the Bayou trustee allowed the investors to keep no more than 25% of repaid principal. According to the report, when evidence came to light indicating Bayou was being operated as a Ponzi scheme, a federal district judge in White Plains, New York, appointed a receiver for the fund in April 2006. The receiver put Bayou in Chapter 11 the next month and later filed the lawsuits against investors who were able to take out their investments before the fraud surfaced. The receiver continued running Bayou during the Chapter 11 proceeding. About Bayou Group Based in Chicago, Illinois, Bayou Group LLC operates and manages hedge funds. The company and its affiliates filed for chapter 11 protection on May 30, 2006 (Bankr. S.D.N.Y. Lead Case No. 06- 22306) in order to pursue recoveries for the benefit of defrauded investors. Elise Scherr Frejka, Esq., at Dechert LLP, represents the Debtors in their restructuring efforts. Joseph A. Gershman, Esq., and Robert M. Novick, Esq., at Kasowitz, Benson, Torres & Friedman, LLP, represent the Official Committee of Unsecured Creditors. Kasowitz, Benson, Torres & Friedman LLP is counsel to the Unofficial Committee of the Bayou Onshore Funds. Sonnenschein Nath & Rosenthal LLP represents certain investors. When the Debtors filed for protection from their creditors, they reported estimated assets and debts of more than $100 million. Bayou also filed lawsuits against former investors who allegedly received fictitious profits and an inequitably large return of their principal investments. Jeff J. Marwil, Esq., at Jenner & Block, was appointed on April 28, 2006, as the federal equity receiver. As reported in the Troubled Company Reporter on April 16, 2008, Bayou Group and its debtor-affiliates delivered 47 adversary complaints to the Honorable Adlai S. Hardin Jr. of the U.S. Bankruptcy Court for the Southern District of New York, seeking to recover certain fraudulent transfers made by investors against the Debtors. The Bayou entities include Bayou Management LLC, Bayou Advisors LLC, Bayou Equities LLC, Bayou Fund LLC, Bayou Superfund, Bayou No Leverage Fund LLC, Bayou Affiliates Fund LLC, and Bayou Accredited Fund LLC. The Debtors said the adversary proceedings arose from a massive fraudulent investment scheme committed by the Bayou entities, which controlled private pooled investment hedge funds. 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 Mr. Madoff and his investment firm 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. istrict 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. BEST BRANDS: S&P Raises Corporate Credit Rating to 'CCC+' --------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its ratings on Minnetonka, Minnesota-based Best Brands Corp. by one notch, including the corporate credit rating, which S&P raised to 'CCC+' from 'CCC'. Standard & Poor's also revised the outlook to developing from negative. As of Feb. 28, 2009, the company had about $202 million of total debt. The upgrade follows Best Brands' receipt of a waiver and fourth amendment to its credit facility. S&P believes the waiver and amendment alleviate S&P's near-term liquidity concerns. The amendment, among other terms, waived all events of default and relaxed financial covenants, while also reducing the revolver commitment to $25 million from $30 million. The ratings on Best Brands reflect the company's highly leveraged capital structure, narrow product focus, small size relative to financially stronger competitors, and customer concentration. Operating performance only recently has begun to meet S&P's expectations, due in large part to lower commodity costs in recent periods. "We would consider a ratings upgrade if Best Brands can demonstrate consistent, sustained improvement in operating performance and maintain strong covenant cushion and liquidity, while reducing leverage," said Standard & Poor's credit analyst Alison Sullivan. "We could lower the ratings if Best Brands does not meet covenants and/or loses access to its revolver," she continued. S&P estimates that about a 20% reduction in EBITDA could cause Best Brands to trip its leverage covenant. BEXAR COUNTY: Moody's Downgrades Ratings on 2000A Bonds to 'B1' --------------------------------------------------------------- Moody's Investors Service has downgraded the rating on Bexar County Housing Finance Corporation's (Honey Creek/Austin Point Apartments) Multifamily Housing Revenue Bonds Series 2000A to B1 from Ba2 and downgraded Series 2000C to B3 from B1. The outlook remains negative. The rating downgrades are based upon the expectation that the debt service reserve fund for 2000C will be tapped on the next debt service payment date and the inherent weakness this demonstrates. The negative outlook reflects forecasts for weak occupancy and negative rent growth for the submarket in the near term. Legal Security: The bonds are limited obligations payable solely from the revenues, receipts and security pledged in the Trust Indenture. Recent Developments/Results Occupancy has improved to 95% daily average for February 2009. This is roughly inline with the monthly average of 96.1% experienced in 2008, which is above the average of 92.2% for the North Central San Antonio submarket, according to Torto Wheaton Research. In 2006, the property received a transfer from its owner, Community Housing Corporation of America, which with surplus funds allowed debt service payments to be made. In 2007 (audited statements), operations improved and the debt service coverage ratio for 2000A was 1.23x and 1.10x for 2000C. Interim statements for 2008 indicate net operating income has improved slightly over 2007. However, this does not include what was categorized as capital expenditures as an expense. Since the reserve and replacement fund has a $0 balance (3/24/2009), it is possible that those expenses categorized as capital expenses are being funded from NOI. With these expenses netted from NOI, 2008 DSC for 2000A is 1.18x and 1.06x for 2000C. The trustee indicates the debt service fund for 2000A is fully funded and 2000C has a $0 balance (as of 3/24/2009), indicating that coverage for 2000C is actually less than 1.0x and that the interim statements overstate debt service coverage. Moody's considers interim financial statements less reliable than audited statements and is incorporating trust balances into the rating assignments. CHC of America has indicated it will allow the DSRF for 2000C be tapped on the next debt service payment date but will likely transfer money if the DSRF is ever insufficient to make debt service payments. Moody's downgrade of 2000A to B1 reflects the inherent weakness associated with the projected tapping of the DSRF on 2000C, a depleted reserve and replacement fund and the uncertainty surrounding the interim statements. It also reflects the fact that its debt service fund is fully funded. Moody's downgrade of 2000C to B3 reflects the expectation that the DSRF will be tapped, but not completely depleted, on the next debt service payment date. It also reflects CHC's indication it will transfer money to the trustee to prevent a payment default. The last rating action was on January 31, 2008 when the ratings were downgraded to Ba2 (2000A) and B1 (2000C). Outlook The outlook for the bonds is negative based upon negative rent growth forecast and potential the owner will not transfer funds to the project in the future. The $0 balance in the reserve and replacement fund was also considered. BIV RETAIL: Files for Chapter 7 Bankruptcy Protection ----------------------------------------------------- Katie Shands at WBIR.com reports that has filed for Chapter 7 bankruptcy protection. According to WBIR.com, BIV Retail is facing expenses that exceed its assets. The report states that BIV Retail is behind the Belle Island Village project, which has been dealing with increasing financial problems for months. WBIR.com states that the Debbie Reynolds Museum is planned on the Belle Island Village. WBIR.com says that the museum's organizers said that they believe that the project will continue with new financing. BIV Retail is the developer of a massive resort project in Sevier County. BON TON STORES: Weak Q4 Results Cues Moody's Junk Corp. Rating -------------------------------------------------------------- Moody's Investors Service lowered its Corporate Family and Probability of Default ratings for Bon Ton Stores, Inc., to Caa2 from B3. The rating on the company's senior unsecured notes was also lowered to Caa3 from Caa1. Bon Ton's Speculative Grade Liquidity rating is affirmed at SGL-3. The rating outlook remains negative. The rating downgrade takes into consideration the company's weaker than anticipated fourth quarter operating performance, with total sales declining by 9.4% and income from operations (excluding impairment charges) falling nearly 40%. As a result, the company's debt/EBITDA was in the mid 7 times range for the most recently ended fiscal year. Due to continued challenging macro economic conditions, Bon Ton has stated it anticipates comparable store sales to fall in the range of 6.5-9.0% during 2009 with EBITDA expected to decline further from the weak levels reported in 2008. As a result Moody's anticipates that leverage will remain at elevated levels for an extended period of time. The two notch downgrade reflects not only Bon Ton's weaker operating performance but also Moody's concern with the company's liquidity profile over the intermediate term and with its capital structure which Moody's considers to be increasingly unsustainable given the current level of performance. Bon Ton's existing Asset Based Lending Facility expires in March, 2011 and Moody's believes that Bon-Ton will need to begin negotiations to extend or replace this facility during 2010. As a result Moody's believes the company's risk profile and probability of default has increased and will remain elevated until such time as it addresses the renewal, extension, or restructuring of this facility. While Bon Ton's current and expected leverage is not consistent with its previous B3 rating, should the company successfully extend or renew its credit facility and demonstrate that its capital structure is sustainable, ratings could be modestly upgraded. Moody's believes the company's liquidity will remain adequate over the next year. This assumes that Bon Ton will continue to receive vendor support consistent with historical patterns. Moody's do note that Bon Ton's current level of availability under the asset based lending facility has moderated from historical levels due to a reduction in appraised inventory values, as well as due to a deliberate decision to reduce inventory levels in the current environment. These ratings were downgraded and LGD Assessments amended: -- Corporate Family Rating to Caa2 from B3 -- Probability of Default Rating to Caa2 from B3 -- Senior Notes due 2014 to Caa3 (LGD 5, 80%) from Caa1 (LGD 5, 76%) This rating was affirmed: -- Speculative Grade Liquidity Rating at SGL 3 Moody's last rating action on Bon Ton Stores, Inc., was on January 21, 2009 when the company's corporate family rating was lowered to B3 from B2 with a negative rating outlook. The Bon-Ton Stores, Inc., is a regional department store chain, headquartered in York, Pennsylvania. The company operates 280 stores in 23 Northeastern, Midwestern, and upper Great Plains states under Bon-Ton, Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger's and Younkers nameplates and, under the Parisian nameplate, stores in the Detroit, Michigan area. Revenues for the fiscal year ending January 31, 2009, were approximately $3.1 billion BUFFETS INC: S&P Assigns Corporate Credit Rating at 'B-' -------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B-' corporate credit rating to Eagan, Minnesota-based Buffets Inc. The outlook is stable. At the same time, S&P assigned a '2' recovery rating and 'B' issue-level rating, one notch above the corporate credit rating, to the company's proposed $120 senior secured term loan, which is part of the company's exit financing from Chapter 11 bankruptcy reorganization. The '2' recovery rating indicates S&P's expectation of substantial (70%-90%) recovery in the event of another default. The ratings on Buffets reflect its vulnerable position in the very competitive restaurant industry, its highly leveraged capital structure, and limited financial flexibility. The financing will be used to pay off the company's existing debtor-in-possession loan, pay administrative bankruptcy expenses, cover fees associated with the transaction, and provide cash for the company's balance sheet. The borrowers will have a perfected lien on all of the property and assets of the credit parties, both tangible and intangible, including all the outstanding stock of the company and each of its subsidiaries. The facility will be guaranteed by the borrower's present and future acquired domestic subsidiaries. "In the very near term, overall profitability may improve as a result of better operating margins," said Standard & Poor's credit analyst Charles Pinson-Rose, "but the company has not been able to reverse its negative sales trends." CALIFORNIA NATIONAL: Weiss Ratings Assigns "Very Weak" E- Rating ---------------------------------------------------------------- Weiss Ratings has assigned its E- rating to Los Angeles, Calif.- based California National Bank. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." California National Bank is chartered as a National Bank, primarily regulated by the Office of the Comptroller of the Currency. The institution was established on Jan. 2, 1998, and deposits have been insured by the Federal Deposit Insurance Corporation since that date. California National Bank maintains a Web site at http://www.calnationalbank.com/and has 68 branches in California. At Dec. 31, 2008, California National Bank disclosed $6.3 billion in assets and $5.9 billion in liabilities in its regulatory filings. CAPITALSOUTH BANK: Weiss Ratings Assigns "Very Weak" E- Rating -------------------------------------------------------------- Weiss Ratings has assigned its E- rating to Birmingham, Ala.-based CapitalSouth Bank. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." CapitalSouth is a member of the Federal Reserve, and is primarily regulated by the Federal Reserve Board. The institution was established on Oct. 1, 1975, and deposits have been insured by the Federal Deposit Insurance Corporation since that date. CapitalSouth maintains a Web site at http://www.capitalsouthbank.com/and has 13 branches, nine in Alabama and four in Florida. At Dec. 31, 2008, CapitalSouth disclosed $663 million in assets and $619 million in liabilities in its regulatory filings. CARIBE MEDIA: S&P Changes Outlook to Negative; Affirms 'B' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its rating outlook on Caribe Media Inc. to negative from stable. At the same time, S&P affirmed its 'B' corporate credit rating. S&P also lowered its issue-level rating on Caribe's senior secured credit facilities to 'B' (at the same level as the 'B' corporate credit rating on the company), from 'B+'. S&P revised the recovery rating on these loans to '3' from '2'. The '3' recovery rating indicates S&P's expectation of meaningful (50%-70%) recovery for lenders in the event of a payment default. "The outlook revision reflects our expectation that credit measures, based on the family of companies owned by Caribe's indirect parent Local Insight Media Holdings, LP, will weaken in the intermediate term," said Standard & Poor's credit analyst Ariel Silverberg, "given our belief that the consumer-driven nature of the current recession will weaken print ad sales-which S&P believes are already in secular decline-to a greater extent than in the previous few quarters." She added that the company will be challenged to replace these lost ad sales dollars with sufficient digital sales at a comparable profit margin. CDX GAS: Cash Use to Expire Absent EnerVest Sale Deal by Apr. 17 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas granted CDX Gas, LLC, et al., authority to use cash collateral of Bank of Montreal and Credit Suisse for the period from March 27 to June 19, 2009, in accordance with a budget. Bank of Montreal is administrative agent for certain lenders backed by first priority security interests in the Debtors' assets and certain secured swap parties. Credit Suisse is the administrative agent for lenders backed by second-priority security interests in the same collateral. As of January 9, 2009, the Debtors owe not less than $118,999,309 to the first lien lenders and approximately $423,000,000 to the second lien lenders. To the extent of the actual diminution in the value of their collateral, the first lien lenders are granted, first priority replacement liens in all personal property of the Debtors, subject only to existing non-avoidable liens and the "carve out." They are also granted allowed supepriority administrative claims, junior only to the carve-out, allowed Chapter 7 administrative claims, and priority claims of the U.S. Trustee. They will also receive adequate protection payments from the Debtors. To the extent of any diminution in the value of their collateral, the second lien lenders are granted replacement lien, which lien will be a second-priority lien, subject to the replacement security interests granted to the first lien lenders. They are also granted allowed superpriority administrative claims, junior in priority only to the superpriority administrative claims granted to the first lien lenders. The use of cash collateral may be terminated upon the occurrence of certain termination events, including if the Debtors have not: i) by April 17, 2009, entered into a definitive agreement with EnerVest for the sale of the assets and filed a motion with the Court seeking approval of EnerVest, Ltd. as a stalking horse bidder and the bidding procedures mandated by the terms of the EnverVest APA; or ii) by May 15, 2009, received and presented to the First Lien Agent and Second Lien Agent, one or more unqualified written commitment letters, providing for (1) an offer to purchase some or all of the Debtors' assets, (2) debt financing and asset sales, (3) equity financing, or (4) some combination of equity, debt financing and asset sales, on the effective date of any confirmed plan in an amount sufficient to satisffy the remaining First Lien indebtedness in full following consummation of the EnerVest APA. A full-text copy of the Court's Cash Collateral Order, including a projected cash flow through June 19, 2009, is available at: http://bankrupt.com/misc/CDXGAS.CashCollateralOrder.pdf Based in Houston, Texas, CDX Gas LLC -- http://www.cdxgas.com/-- is an independent gas company that explores, develops, and produces onshore North American unconventional natural gas resources located in coal, shale, and tight gas sandstone formations. The Company and 19 of its affiliates filed for Chapter 11 protection on Dec. 12, 2008 (Bankr. S.D. Tex. Lead Case No. 08-37922). Harry Perrin, Esq., D. Bobbitt Noel, Esq., John E. Mitchell, Esq., and Michaela C. Crocker, Esq., at Vinson Elkins LLP, represent the Debtors in their restructuring efforts. In its schedules, CDX listed total assets of $996,308,606 and total debts of $831,259,526. CENTRO NP: Fitch Affirms 'CCC' Rating on Debt Stabilization Plan ---------------------------------------------------------------- While Centro NP LLC (formerly New Plan Excel Realty Trust) continues to be weighed down by debt concerns longer term, recent entry into a finalized debt stabilization plan should provide temporary relief for Centro through the remainder of this year, according to Fitch Ratings, which has affirmed and removed from Rating Watch Centro NP's 'CCC' Issuer Default Rating. Additionally, Fitch has also placed these ratings on Rating Watch Positive: -- $350 million revolving bank credit facility 'CC/RR6'; -- $830.2 million senior unsecured notes 'CC/RR6'. The Rating Outlook is Negative. As a result of this stabilization, Fitch believes that Centro NP will be able to meet its 2009 debt maturities ($327.1 million) primarily with existing liquidity sources and to a lesser extent, mortgage loan extensions and asset sales. However, the Negative Outlook reflects the significant challenges Centro NP will face in addressing 2010 debt maturities of $437 million after existing liquidity sources have been exhausted, particularly if the difficult conditions in the real estate debt capital markets persist. The Rating Watch Positive on the $350 million revolving bank credit facility reflects the increased probability of an upgrade based on improved recovery prospects. As part of the successive debt extension agreements reached during 2008, Centro NP has collateralized certain assets to support repayment of this facility. The Rating Watch Positive for the senior unsecured notes also reflects the increased probability of an upgrade based on Fitch's review of potential recoveries. In this case, Fitch's recovery analysis in the event of default will be based on the assumption of substantive consolidation of Centro NP's operations with that of its direct parent, Super LLC, rather than their ultimate parent, CNP. Despite the rating affirmation and Rating Watch removal of Centro NP's IDR, there remain continued concerns surrounding the company's ability to meet debt maturities over the next two years, as well as the significant leverage at its direct parent company, Super LLC. The ratings also reflect weakening of the stand-alone financial profile of Centro NP since the acquisition by Centro Properties Group due to the transfer of unencumbered assets to a partially-owned joint venture, as well as sizeable net losses related to impairments of real estate and intangible assets. These factors have weakened Centro NP's coverage ratios, capitalization adequacy and unencumbered asset coverage. In addition, weaknesses in the property fundamentals of the retail real estate sector are also factored into the ratings. Based on preliminary Dec. 31, 2008 figures disclosed by CNP, portfolio occupancy and base rents have begun to weaken. The preliminary estimate for year-end 2008 occupancy on the total portfolio including joint ventures was 87.9%, reflecting a significant decline from Dec. 31, 2007 (92%). Further deterioration is likely, but should be somewhat buffered by Centro NP's historically defensive portfolio characterized by a high concentration of needs-based retailers, such as supermarkets, as well as national discount chains. As part of CNP's financing of the Centro NP acquisition in 2007, Super LLC obtained a $2.6 billion bridge loan (the 'Super Bridge Loan') and the remaining financing sources were obtained by CNP affiliates. CNP had intended on repaying this obligation using a portion of Centro NP's unencumbered assets as collateral. Towards that aim, CNP transferred assets to a joint venture, Centro NP Residual Holding LLC, which is owned by Centro NP (49%) and Super LLC (51%). Due to difficulties in the commercial real estate debt markets, CNP was unable to obtain long-term financing to refinance certain debt maturities, including Super Bridge Loan, and CNP entered into its first of several extensions on Dec. 16, 2007. At the same time, Centro NP's $350 million revolving facility, which is cross- defaulted with Super Bridge Loan, was also extended. CNP and Centro NP received several successive short term extensions until a longer term agreement was finalized on Jan. 15, 2009. These components of the agreement directly relate to Super LLC and Centro NP: -- The Super Bridge Loan ($1.8 billion outstanding as of Sept. 30, 2008) was converted into term loans and extended through Dec. 31, 2010; -- A new facility of $370 million was provided to Super LLC with a maturity of Dec. 31, 2010, at a rate of LIBOR + 375 basis points. This facility is collateralized by 48 properties, which were transferred from Centro NP to Residual JV. Funds drawn from this facility may be used to provide funds for the repayment of upcoming Centro NP debt maturities and additional working capital to the extent that the Residual JV agrees; -- The maturity of Centro NP's outstanding revolving facility ($306.8 million outstanding as of Sept. 30, 2008) was extended through Dec. 31, 2010; -- The maturity of Residual JV's $105 million liquidity facility (Preston Ridge facility) was extended through Dec. 31, 2010. Centro NP's credit profile has been weakening as a result of the ongoing transfer of unencumbered assets from Centro NP to Residual JV, as well as pressures on the retail sector. While Centro NP's operating cash flow remains sufficient to cover its interest expense, coverage has been declining in line with the reduction in the consolidated income-producing portfolio. Following the most recent transfer of assets to Residual JV, Centro NP's consolidated portfolio is comprised of 166 properties ($2.6 billion of undepreciated book value as of Sept. 30, 2008) down from 262 properties ($3.9 billion) as of Dec. 31, 2007. As a result, recurring EBITDA to interest incurred, proforma for the transfer of assets from Centro NP to Residual JV, declined to 1.7 times for the nine months ended Sept. 30, 2008 from 2.9x for the year ended Dec. 31, 2007. Moreover, it is likely that the remaining consolidated unencumbered asset pool is comparatively weaker than those assets transferred to Residual JV, given that these assets have been transferred as part of debt negotiations with lenders. Centro NP's leverage and unencumbered asset coverage have also deteriorated as a result of the continued transfer of unencumbered assets to Residual JV and significant net losses, which are also considered in the ratings. Debt to annualized recurring EBITDA rose from 5.6x at Dec. 31, 2007 to 9.5x pro forma for the transfer of assets from Centro NP to Residual JV for the nine months ended Sept. 30, 2008. Centro NP is a real estate company focusing on the ownership, management and development of community and neighborhood shopping centers with total assets of US$4.2 billion at Dec. 31, 2008. Centro NP operates a national portfolio of community and neighborhood shopping centers across the U.S. CNP is a Melbourne- based company focused on the ownership, management, and development of retail shopping centers. Centro has $17.7 billion of retail property assets as of Dec. 31, 2008, of which $12.1 billion were located in New York. CENTURY BANK: Weiss Ratings Assigns "Very Weak" E- Rating --------------------------------------------------------- Weiss Ratings has assigned its E- rating to Sarasota, Fla.-based Century Bank, a Federal Savings Bank. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." Century Bank is chartered as a Savings Association, and is primarily regulated by the Office of Thrift Supervision. The institution was established on Jan. 23, 1985, and deposits have been insured by the Federal Deposit Insurance Corporation since that date. Century Bank maintains a Web site at http://www.centurybankfl.com/and has 11 branches located in Broward, Manatee and Sarasota counties. At June 30, 2008, Century Bank disclosed deposits totalling $687 million in its regulatory filings. CHARTER COMMUNICATIONS: JPMorgan Sues 2 Units on False Statements ----------------------------------------------------------------- Bankruptcy Law360 reports that JPMorgan Chase Bank NA has filed an adversary complaint against two subsidiaries of Charter Communications Inc. -- Charter Communications Operating LLC and CCO Holdings. JPMorgan alleged that the subsidiaries made false statements in securing $750 million in loans under an existing credit facility. Based in St. Louis, Missouri, Charter Communications, Inc. (NASDAQ: CHTR) -- http://www.charter.com/-- is a broadband communications company and the fourth-largest cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. On March 16, 2009, Charter Communications filed its annual report on Form 10-K, which contained a going concern modification to the audit opinion from its independent registered public accounting firm. Charter Communications and more than a hundred affiliates filed voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D. N.Y. Case No. 09-11435). The Hon. James M. Peck presides over the cases. Richard M. Cieri, Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at Kirkland & Ellis LLP, in New York, serve as counsel to the Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at Togut, Segal & Segal LLP in New York, serves as Charter Investment, Inc.'s bankruptcy counsel. Curtis, Mallet- Prevost, Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel. Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the Debtors' independent auditors. The Debtors' valuation consultants are Duff & Phelps LLC; the Debtors' financial advisors are Lazard Freres & Co. LLC; and the Debtors' restructuring consultants are AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims agent is Kurtzman Carson Consultants LLC. As of Dec. 31, 2008, the Debtors had total assets of $13,881,617,723, and total liabilities of $24,185,668,550. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHIQUITA BRANDS: Moody's Gives Stable Outlook; Keeps 'B3' Rating ---------------------------------------------------------------- Moody's Investors Service changed the rating outlook of Chiquita Brands International, Inc., to stable from negative, based on improved credit metrics in fiscal 2008 due to better pricing in both of its major segments and higher volumes in North American bananas. The company's ratings, including its B3 corporate family and probability of default ratings, were affirmed. Ratings affirmed, and certain LGD percentages adjusted: Chiquita Brands International, Inc.: -- Corporate family rating at B3 -- Probability of default rating at B3 -- $250 million 7.5% senior unsecured notes due 2014 at Caa2 (LGD5, 82%) -- $225 million 8.875% senior unsecured notes due 2105 at Caa2 (LGD5, 82%) Chiquita Brands, LLC: -- $150 million senior secured revolving credit agreement at Ba3 (LGD2); LGD percentage to 12% from 19% -- $200 million senior secured term loan at Ba3 (LGD2); LGD percentage to 12% from 19% The change in outlook reflects continued improvement in leverage from stronger operating profitability for the past two years. Reported EBITDA, proforma for impairment charges, rose from $123 million in fiscal 2007 to $197 million in fiscal 2008. Chiquita was able to pass on higher prices and achieve modest volume growth in its North American banana segment, as the company holds the number one market share in large U.S. supermarkets and number two position in North America. Consolidated debt to EBITDA, proforma for an impairment charge of $375 million in the salads and healthy snacks segment, fell to 4.9 times. While the fourth fiscal quarter was weak in the company's salad and healthy snacks business, that segment would have broken even for all of fiscal 2008 on a comparable basis where it not for the investments made in expanding the distribution of its relatively young Just Fruit in a Bottle to six European countries. The multi-year application of asset sale proceeds to debt reduction also contributed to the leverage improvement. "The stable rating outlook anticipates that profitability will remain fairly steady in the near term since the supply of, and demand for, Latin American bananas are generally in balance, and consumer banana demand is unlikely to be materially diminished despite the economic recession," said Elaine Francolino, Vice President -- Senior Credit Officer. Moody's also expects modest improvement in the salads and healthy snacks segment as Chiquita continues to eliminate unprofitable food service contracts. Nonetheless, returns in this segment are likely to remain anemic in the near term. In addition, pricing in the important European banana market is not certain given the expected lower value of the Euro, and represents another potential near term challenge to margins. The affirmation of Chiquita's B3 corporate family and probability of default ratings is based on Moody's expectation that credit metrics will remain anemic for a company with Chiquita's volatility. Chiquita's strong market shares in all its product lines give the company the ability to pass along higher prices as needed, and allow continued access to major retailers. However, leverage remains high at 4.9 times, EBITA to interest low at 1.4 times and free cash flow generation marginal, all proforma for 2008's impairment charge. Moody's most recent rating action for Chiquita on February 29, 2008 upgraded the ratings on the company's bank agreements, assigned ratings to proposed new bank agreements, and affirmed the company's corporate family rating, probability of default rating and holding company debt ratings. The negative rating outlook was maintained. Headquartered in Cincinnati, Ohio, Chiquita Brands International, Inc., is a global producer and marketer of bananas (57% of fiscal 2008 consolidated net sales), salads and healthy snacks (36%), and other produce (7%). Revenues for the fiscal year ended December 31, 2008, were approximately $3.6 billion. CIRCLE C: Files for Chapter 11 Bankruptcy, To Liquidate ------------------------------------------------------- The Birmingham News reports that Circle C Stores has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in Decatur and will liquidate. The Birmingham News quoted Kevin Heard, the attorney for Circle C as saying, "This economy is hurting companies with good track records. When these folks lost credit, the company just imploded from within." Court documents say that Circle C listed $1 million to $10 million in debts and less than $500,000 in assets. Csnews.com relates that Circle C listed creditors of between 50 and 99, the largest of which include: -- GE Commercial for a store and office building totaling $800,000 -- $450,000 of which is secured; -- Benson for a personal loan of $700,000; and -- the Internal Revenue Service for $500,000. Csnews.com relates that other creditors listed petroleum marketers, including: -- Benson Oil, -- Citgo Petroleum, -- Conoco, and -- Marathon Petroleum. According to court documents, Circle C was kept alive in recent years by an $800,000 injection of funds from founder Johnny Benson. Circle C will close stores, sell assets, and pay creditors what it can, Csnews.com states. Privately held Circle C Stores operates 25 convenience stores in Huntsville, Alabama. COLONIAL PROPERTIES: S&P Cuts Corporate Credit Rating to 'BB+' -------------------------------------------------------------- Standard & Poor's Ratings Services said it has lowered its corporate credit ratings on Colonial Properties Trust and Colonial Realty L.P. to 'BB+' from 'BBB-'. S&P also assigned a recovery rating of '3' to the rated senior unsecured notes, indicating that lenders can expect meaningful recovery (50% to 70%) in the event of a payment default. This recovery rating results in S&P's lowering its credit rating on the roughly $1.35 billion of senior unsecured notes to 'BB+' from 'BBB-'. S&P lowered its preferred stock rating to 'B+' from 'BB'. S&P also removed all of its ratings on the company from CreditWatch, where it had been placed with negative implications on Feb. 5, 2009. The outlook is stable. "The downgrade reflects our expectation that the company's debt- protection measures will remain low over the next two years as a result of operating weakness in Colonial's core apartment holdings, dilutive asset sales, and continuing, although lower, development spending," said Standard & Poor's credit analyst Elizabeth Campbell. Recent financings have bolstered Colonial's liquidity, and S&P believes the company is now adequately positioned to meet its 2009 and 2010 debt maturities (both on- and off-balance-sheet). However, S&P remains concerned that market characteristics will continue to present a significant impediment to the company's efforts to improve its debt-service coverage measures in the near term. Birmingham, Alabama-based Colonial is a moderately sized real estate investment trust with a market capitalization of $2.4 billion at year-end 2008. The company owns and manages 35,504 apartment units. Following a June 2007 portfolio repositioning (by selling some retail assets outright and contributing its office and remaining retail properties into joint ventures), Colonial maintains an interest in 16.5 million square feet of office space and 8.9 million sq. ft. of retail space. Colonial retained a 15% interest in the joint ventures (as well as the leasing and management responsibilities); as a result, its financial risk profile has become more complex. Colonial expects multifamily properties to continue to constitute 75% to 80% of its net operating income. Colonial's portfolio is concentrated in the Sunbelt region; the Charlotte, Atlanta, and Orlando markets contribute the largest share of NOI (about 15%, 12%, and 7%, respectively). The company's multifamily operating portfolio produced essentially flat same-property NOI during the fourth quarter of 2008, as occupancy declined 180 basis points (to 94.3%) because of job loss acceleration in the second half of 2008 in many of Colonial's southeastern markets. The company projects a further decline of 3% to 5% same-property NOI in 2009, which may be optimistic if the economy continues to shed jobs. S&P believes Colonial's debt- service and fixed-charge coverage levels will likely remain weak this year and next year as higher unemployment and competition from single-family homes weigh on Colonial's NOI and occupancy rates. In addition, the company recorded aggregate noncash impairment charges of $117 million during fourth-quarter 2008 related to certain for-sale residential properties, land held for future development, and one retail property. Liquidity is adequate. Colonial recently raised $350 million (through a Federal National Mortgage Assn.-backed secured credit facility), bolstering liquidity sources that also include cash ($9 million at year-end 2008), and has $363 million available on its $675 million unsecured revolving credit facility (due 2012). These sources should be sufficient to meet the REIT's needs for the next two years, which include $320 million of debt maturities in 2010, recurring capital expenditures of about $25 million annually, and development funding requirements. Colonial has pared its development pursuits, and its current remaining pipeline (five active projects) had a total budgeted cost of $207 million as of year-end 2008, with $37 million remaining to be funded. The outlook is stable. There is tolerance at the lower rating category for Colonial's debt-coverage measures to remain at their lower level. The company's recent capital raise, dividend cut, and paring of development and overhead have bolstered liquidity and position Colonial to better weather the weak operating fundamentals it expects for 2009 and 2010. S&P would lower its ratings further if debt-service coverage declined below 1.7x, which could happen because of a larger-than- expected drop in occupancy and net operating income. S&P's expectations for debt-coverage measures to remain weak preclude any positive momentum in the near term, as S&P believes higher unemployment and competition from single-family homes will weigh on Colonial's portfolio for the next several quarters. COMMERCIAL VEHICLE: Liquidity Concerns Cue Moody's Junk Rating -------------------------------------------------------------- Moody's downgraded Commercial Vehicle Group, Inc.'s ratings including the corporate family rating which was lowered to Caa2 from B3 and the probability of default rating which was lowered to Caa3 from B3. The rating outlook remains negative. The SGL-4 speculative grade liquidity rating was affirmed. The downgrades reflect Moody's concerns about CVGI's near-term liquidity amidst the severe, ongoing deterioration in the commercial vehicle market. Furthermore, the actions reflect Moody's revised expectation for performance which is likely to be materially below what Moody's previously anticipated. While the ratings favorably consider the company's implementation of its restructuring program, Moody's believes that CVGI may have operating losses over the near-term which may result in cash consumption and non-compliance with financial covenants. Given these concerns, Moody's believes that the company may have limited time and limited financial flexibility to execute a meaningful turnaround within its current capital structure. The SGL-4 rating indicates Moody's expectations for weak liquidity over the next twelve months particularly given the likelihood, in Moody's opinion, that CVGI will continue to rely heavily on its revolving credit facility. Moody's expects that access to the facility may be constrained by non-compliance with financial covenants despite the recent amendment to the credit agreement. The negative outlook reflects Moody's concerns regarding the execution risk associated with the necessary operational improvements. The ratings could be lowered if CVGI is unable to maintain orderly access to its revolver or if there were a material change in the capital structure. The ratings actions were: -- Corporate Family Rating lowered to Caa2 from B3 -- Probability of Default Rating lowered to Caa3 from B3 -- Senior unsecured note rating lowered to Caa3 (LGD 3; 43%) from Caa1 (LGD 4; 63%) -- Outlook remains negative -- Speculative Grade Liquidity Rating (SGL) affirmed at SGL -- 4 The last rating action was on January 26, 2009 when the ratings of Commercial Vehicle Group were lowered (including the B3 corporate family rating). Commercial Vehicle Group, Inc., is a provider of customized products for the commercial vehicle market. The company had revenues of approximately $763 million for 2008. CONGOLEUM CORP: Lost $6.4M in Q4, Aims for '09, Early '10 Exit -------------------------------------------------------------- Congoleum Corporation reported its financial results for the fourth quarter ended December 31, 2008. Sales for the three months ended December 31, 2008 were $31.7 million, compared with sales of $43.8 million reported in the fourth quarter of 2007, a decrease of 27.6%. The net loss for the quarter was $6.4 million, compared with a net loss of $2.4 million in the fourth quarter of 2007. Net loss per share was $0.77 in the fourth quarter of 2008 compared with net loss of $0.29 per share in the fourth quarter of 2007. Sales for the year ended December 31, 2008, were $172.6 million, compared with sales of $204.3 million in 2007. The net loss for the year ended December 31, 2008, was $14.6 million, or $1.77 per share, versus a net loss of $0.7 million, or $.08 per share, in 2007. The net loss for 2008 includes an $11.5 million charge taken during the third quarter of 2008 to increase reserves for estimated legal and related expenses in connection with the reorganization proceedings. The net loss for the year ended December 31, 2007, included four adjustments that were recorded to reflect revised estimates of costs and cost recoveries associated with the Chapter 11 proceedings and related matters. First, Congoleum reversed $41.0 million of post-petition interest expense it had accrued on its 8 5/8% Senior Notes. Payment of this interest had been contemplated under earlier plans of reorganization, but has been eliminated under the terms of plans filed in 2007 and 2008. Second, Congoleum wrote off $14.9 million in formerly anticipated legal fee recoveries. These recoveries had likewise been anticipated under earlier plans but not under the terms of plans filed in 2007 and 2008. Third, based on the expected timing and cost to obtain confirmation of its most recent plan at the time, Congoleum recorded a $26.4 million charge to increase its reserves for estimated legal and related expenses. Finally, the tax impact of these adjustments gave rise to a net deferred tax liability of $1.7 million, which was recorded as tax expense. Excluding these charges and credits, Congoleum's net income in 2007 would have been $1.4 million, which included a $1.3 million gain on replacement of a production line. Roger S. Marcus, Chairman of the Board, commented, "Before addressing our 2008 results and the status of our reorganization, let me begin with the economy and how it has affected our business. Nearly all of our products are purchased for use in three end markets. The first is the new residential construction market which has been depressed for some time now. The second market is manufactured housing, which includes recreational vehicles and motor homes. This market seemed to be holding up relatively well in the early part of 2008, but began deteriorating rapidly later in the year due to the combined impact of the economy and high gas prices, with production coming to a virtual standstill by December. Forecasts for 2009 predict this market may be down as much as 50% from 2008. Our third market is residential retail, which serves consumer remodel and replacement demand. While this market has been relatively better than the other two, it is also economically sensitive and was down well into double digits in 2008 from 2007. "The current economic downturn and its impact on our industry are unprecedented in recent decades, and our operating results for 2008 suffered accordingly. Although our sales decrease was significant, it was consistent with conditions in our end markets and we believe we maintained our share of these markets during the year. Excluding the charge for asbestos reorganization costs, we lost $4.8 million. We incurred some one-time costs in 2008 that contributed to the loss. First, we invested over $2 million in display systems during the fourth quarter of 2008 to expand our position in major home centers, although little sales benefit was anticipated before 2009. Second, we spent over $1 million on samples, displays, and merchandising in connection with the introduction of several new products in late fall 2008, likewise for the primary benefit of 2009. Finally, we reduced costs aggressively during the year, including shrinking our workforce by 19%. Severance charges related to these layoffs affected 2008 results by $1.3 million. Without these steps and the charge related to the reorganization proceedings, our results for 2008 would have been close to breaking even. Our overall performance was an extraordinary feat in light of the economy and resulting sales decrease. It speaks volumes about the dedication and resourcefulness of our employees." Mr. Marcus continued, "Despite these challenging market conditions, we have continued to make selective investments where we think we can mitigate the current demand weakness and improve our position as the economy recovers. During the fourth quarter of 2008, as mentioned, we increased our presence significantly in the major home center channel and launched three new product lines. While we anticipate 2009 will be another very difficult year, we believe our products offer excellent value to consumers willing to spend in this environment." Mr. Marcus concluded, "As we reported earlier this month, the Bankruptcy Court found some legal deficiencies in our latest reorganization plan, and we are seeking to resolve those through the appellate process as the Bankruptcy Judge suggested. I'm encouraged that this will give all parties the guidance necessary to reach agreement on a confirmable plan, which we hope will enable us to emerge in late 2009 or early 2010." About Congoleum Based in Mercerville, New Jersey, Congoleum Corporation (AMEX:CGM) -- http://www.congoleum.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The company filed for chapter 11 protection on Dec. 31, 2003 (Bankr. N.J. Case No. 03- 51524) as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennan, Esq., at Pillsbury Winthrop Shaw Pittman LLP, and Paul S. Hollander, Esq., and James L. DeLuca, Esq., at Okin, Hollander & DeLuca, LLP, represent the Debtors. The Asbestos Claimants' Committee is represented by Peter Van N. Lockwood, Esq., and Ronald Reinsel, Esq., at Caplin & Drysdale, Chtd. The Bondholders' Committee is represented by Michael S. Stamer, Esq., and James R. Savin, Esq., at Akin Gump Strauss Hauer & Feld LLP. Nancy Isaacson, Esq., at Goldstein Isaacson, PC, represents the Official Committee of Unsecured Creditors. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, the Court-appointed Futures Claimants Representative, is represented by Roger Frankel, Esq., Richard Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick Herrington & Sutcliffe LLP, and Stephen B. Ravin, Esq., at Forman Holt Eliades & Ravin LLC. American Biltrite, Inc. (AMEX: ABL), which owns 55% of Congoleum, is represented by Matthew Ward, Esq., Mark S. Chehi, Esq., Christopher S. Chow, Esq., and Matthew P. Ward, Esq., at Skadden Arps Slate Meagher & Flom. Congoleum, together with its bondholders, filed a revised plan of reorganization on Nov. 20, 2008. CORUS BANK: Weiss Ratings Assigns "Very Weak" E- Rating ------------------------------------------------------- Weiss Ratings has assigned its E- rating to Chicago, Illinois- based Corus Bank, National Association. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." Corus Bank is chartered as a National Bank, primarily regulated by the Office of the Comptroller of the Currency. The institution was established on Dec. 31, 1913; deposits have been insured by the Federal Deposit Insurance Corporation since January 11, 1934. Corus maintains a Web site at http://www.corusbank.com/and has 14 offices all located in Illinois. At Dec. 31, 2008, Corus Bank disclosed $8.3 billion in assets and $7.7 billion in liabilities in its regulatory filings. DELPHI CORP: Court Moves Exclusive Plan Filing Deadline to May 31 ----------------------------------------------------------------- Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York grants Delphi Corp. and its affiliates, together with the Official Committee of Unsecured Creditors and the Official Committee of Equity Security Holders, the exclusive right file a plan of reorganization in the Debtors' cases, through and including May 31, 2009. The Debtors and the Statutory Committees have until July 31, 2009, to solicit acceptances of that plan. The Debtors sought an extension of the Exclusivity Periods in line with the milestones set forth in their DIP Accommodation Agreement with JP Morgan Chase Bank, N.A., and certain lenders under the $4.35 billion DIP Credit Facility, as amended. The Amended DIP Accommodation Agreement permits the Debtors' continued use of certain of the DIP Credit Facility proceeds through June 30, 2009, subject to certain conditions including (1) the filing of further modifications to the Confirmed Plan by April 2, 2009, and (2) the approval the disclosure statement accompanying those plan modifications by May 2, 2009. The Debtors told Judge Drain that they expect to use the intervening time period between now and the end of the accommodation period on June 30, 2009, to negotiate with their constituents to facilitate consensual modifications to the plan, confirmation of the resulting plan, and emergence from Chapter 11. The Debtors assured the Court that they will marshal all their resources to continue to deliver high-quality products to its customers globally and will preserve and continue the strategic growth of its non-U.S. operations. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Pursuant to the deadline agreed upon with lenders under its $4.35 billion debtor-in-possession financing facility, and General Motors Corp., Delphi is scheduled to seek approval of disclosure materials in connection with a revised Chapter 11 plan April 23. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: Clarifies Transfer of Steering Biz; Hearing Tomorrow ----------------------------------------------------------------- On behalf of Delphi Corp. and its affiliates, John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, told the U.S. Bankruptcy Court for the Southern District of New York that the sale of Delphi's steering business to General Motor's business optionee is subject of a separate motion to be heard at a subsequent hearing. He said if the Court approves the Option Exercise Agreement Motion, the Debtors will file on or before April 3, 2009, a separate motion seeking approval of the sale of the Steering Business and assumption and assignment of the contracts related to the Steering Business. Mr. Butler made the statement in response to objections by various parties to Delphi's request for approval of the Option Exercise Agreement with GM, which contemplates the sale of the Debtors' steering business to GM or its optionee. Mr. Butler said the Option Exercise Agreement has terms that are distinct from the Steering Business sale and the assumption and assignment issues will be dealt later. He said all parties-in- interest will have the opportunity to object to motion seeking approval of the Steering Business sale and that the Option Exercise Agreement does not eliminate or limit those entities' rights to raise objections. The Court should retain its ability to determine the preclusive effect of its order granting the Option Exercise Agreement Motion in the event it does not approve any motion seeking approval of the sale of the Steering Business, he continued. Mr. Butler said while the definitive documentation of the Steering MSPA remains incomplete as of March 23, 2009, the Debtors have exercised their best efforts to enter into that documentation. He argued that the Debtors will provide the definitive documents, if available, to the objectors and the Court by the March 24, 2009 hearing, or, will provide those definitive documents along with the separate motion contemplated of the Option Exercise Agreement at a later date. He nevertheless clarified that the Option Exercise Agreement is not a comprehensive agreement for the sale of the Steering Business and the Debtors are not seeking the Court's approval of the sale in the Option Exercise Agreement Motion. Mr. Butler also asserted that GM is not an insider and that the Court has approved several agreements between the Debtors and GM without subjecting those agreements to the heightened scrutiny urged by the Tranche C DIP Lenders. As reported by the Troubled Company Reporter, these parties objected to the Debtors' request: * The Official Committee of Unsecured Creditors, * JPMorgan Chase Bank, N.A., * Tranche C DIP Lenders, * Wilmington Trust Company, * Pension Benefit Guaranty Corporation, and * Michigan Department of Environmental Quality The Creditors Committee contends that it cannot agree that the sale of the Steering Business to GM is reasonable and in the best interests of the Debtors and their unsecured creditors if it is not able to review a definitive purchase agreement. The Committee said it has not seen an Asset Transfer Term Sheet, expected to have been filed on March 9, 2009, covering the transfer of certain other Delphi facilities to GM and which would have been a fundamental part of the Debtors' Chapter 11 plan modifications. The Committee is gravely concerned that the sale of the Steering Business to GM may be just the first of many future allegedly separate transfers of additional Delphi businesses and facilities to GM outside the context a Chapter 11 plan, and that the Debtors may not receive adequate consideration from GM in exchange for those additional businesses if the transfers are done on a "one- off" basis. Robert J. Rosenberg, Esq., at Latham & Watkins LLP, in New York, said those future transfers to GM may negatively impact recoveries to unsecured creditors, and may render the Debtors incapable of proposing a confirmable Chapter 11 plan, he argues. The Committee asked the Court to either adjourn the hearing on the Steering Biz Sale Motion, or reserve its ruling on the Motion until a subsequent hearing when the sale itself would be considered. JPMorgan, the administrative agent under the Debtors' $4.35 billion DIP Credit Facilities, expressed concerns with respect to a "DIP Paydown." On behalf of JPMorgan, Brian M. Resnick, Esq., at Davis Polk & Wardwell, in New York, said the Option Exercise Agreement provides a paydown estimated at $150 million to $200 million to JPMorgan for the benefit of the DIP Lenders at closing. The paydown is a non-refundable amount equal to the reduction in available receivables, available inventory and fixed asset component of the Delphi DIP borrowing base. However, the Debtors and GM have not yet finalized their discussions on the proper calculation of the DIP Paydown, and JPMorgan does not know whether the transaction would adequately compensate the Debtors for the transferred assets and would leave them with sufficient liquidity to operate, Mr. Resnick told the Court. JPMorgan reserves its right to raise concerns to the extent it is not satisfied of the proposed DIP Paydown calculation or if it believes the Debtors will not have sufficient liquidity to continue to operate their businesses. It also reserves its rights to join in any objections filed by the DIP Lenders. Moreover, in the event the Court approves the GM Steering MSPA, JPMorgan asked the Court to include a language in the order stating that neither the approval of the GM Steering MSPA Motion nor the failure of any party to raise objection will prejudice that party's right to raise any objections to the GM Steering MSPA Motion. A group of 12 Tranche C DIP Lenders, which consists of Anchorage Capital Master Offshore, Ltd.; Anchorage Crossover Credit Finance, Ltd.; Double Black Diamond Offshore Ltd.; Black Diamond Offshore Ltd.; Monarch Master Funding Ltd.; Greywolf Capital Partners II LP; Greywolf Capital Overseas Master Fund; GCOF SPV I, GCP II SPV I, Greywolf Structured Products Master Fund, Ltd.; Greywolf CLO I, Ltd.; and SPCP Group, LLC, questions if it is in the Debtors' sound business judgment to cede to GM, at this time, an asset that is clearly strategic to GM's continued viability outside of a final deal. The Tranche C DIP Lenders' counsel, Richard Mancino, Esq., at Wilkie Farr & Gallagher LLP, in New York, pointed out that the Debtors have not made any discernible effort to market the Steering Business recently and were unable to say that a current or potential future supplier would not be able to place a greater value on the Steering Business than GM. As material terms of the transaction remain unresolved, including the treatment of U.S. salaried employees, the Tranche C DIP Lenders maintained they cannot make a complete analysis of the proposed sale at this time. The Tranche C DIP Lenders argue that the Debtors will only maximize the value of their assets sought by GM by marshaling them together in the final negotiations, rather than allowing GM to cherry-pick the assets it wants, when it wants them. Wilmington Trust, as indenture trustee for the senior notes and debentures aggregating $2 billion issued by Delphi Corporation, is concerned that if the Debtors continue to supply parts to GM at a loss or allow GM to acquire the plants at which those parts are manufactured, GM will have no financial incentive to provide the Debtors with the funding necessary to finance the Debtors' plan of reorganization. Instead, GM will simply continue to fund the Debtors short-term liquidity needs in order to ensure an uninterrupted supply of parts and will either resource those same parts away from the Debtors or will eventually acquire the plants which produce the parts it needs when the Debtors are eventually forced to liquidate, Wilmington Trust stresses. Approving the Steering Biz Sale Motion would thus undermine the Debtors' ability to propose, finance, and consummate an amended plan of reorganization that provides a meaningful recovery to their creditors, Wilmington Trust says. Thus, Wilmington Trust asked the Court to deny the Debtors' sale request in its entirety outside the context of a confirmed and effective plan of reorganization. PBGC said while it supported the Amended Master Restructuring Agreement, the economic realities of the Debtors' Chapter 11 cases have changed substantially over the past six months. Substantial concerns exist on whether GM will satisfy its commitments under the Amended MRA to undertake the Debtors' pension liabilities for hourly workers and whether the Debtors have the ability to satisfy their obligations to fund the Salaried Retirees Plan, PBGC notes. More importantly, PBGC noted that the Steering Biz Sale Motion does not sufficiently describe the Steering Business or a schedule of assets to be sold. PBGC is thus concerned about whether the Debtors will attempt to transfer assets of their foreign affiliates, free and clear of PBGC's liens which extend to the assets of those foreign affiliates. Any sale of the foreign assets, free and clear of liens, would therefore diminish PBGC's ability to recover on its claims both for unpaid minimum funding contributions and for the underfunding of the Plans if the Plans terminate, Craig A. Wolfe, Esq., at Kelley Drye & Warren LLP, in New York, related. PBGC asked the Court to condition approval of the Option Exercise Agreement on the preservation of its right to object to the sale of the Steering Business that purport to be free and clear of PBGC's liens on the assets of the Foreign Affiliates. The Environmental Department said GM is and will remain jointly and severally liable for the contamination at the Saginaw, Michigan plants that are likely to be the subject of the option and subsequent sale of the Steering Business. The Environmental Department also objects because the sale is taking place outside of a confirmed plan. The Environmental Department asserts that the Debtors' Confirmed Plan of Reorganization was never consummated, cannot now be implemented and the Debtors are currently in negotiations to modify the Confirmed Plan. More importantly, the Debtors must comply with state and local laws that are protective of the environment, public health and safety and therefore must perform and continue to comply with state regulations, the Environmental Department asserts. The Michigan Environmental Department asked the Court to condition that any order approving the Option Exercise Agreement should (i) include provision that makes it clear that the contemplated transaction will not relieve GM of its independent liabilities and obligations with regard to any contamination at the steering facilities; and (ii) require the Debtors to agree to make adequate provisions in any modified plan to ensure that any response activities that are required at any of the steering facilities is completed. In his response to the Objections, Mr. Butler said the Debtors have a long and extensive history of marketing and attempting to divest the Steering Business on the most favorable terms possible. He reminded the Court that the Debtors have attempted to close the sale of the Steering Business to Steering Solutions Corporation, Platinum Equity, LLC's affiliate, but was unable to do so. The Platinum MSPA was mutually terminated in March 2009. He also maintained that the Debtors were able to demonstrate that the terms of the option in the Amended MRA and modified in the Option Exercise Agreement are more favorable than the Platinum MSPA when viewed in the context of GM's related agreement to provide an additional $100 million in liquidity support under Amendment No.5 to the GM-Delphi Agreement. More importantly, he added, the Debtors have cited reasons justifying the timing of the Option Exercise Agreement, including that the closing of the sale will result to $50 million cash savings for the Debtors. Subsequently, Mr. Butler said, the Debtors have settled the objections of Michigan Environmental Department and PBGC by adding a provision to the proposed order to the Option Exercise Agreement with GM. Under the Proposed Order, the Michigan Environmental Department reserves its rights to assert that the sale of the Steering Business will not relieve GM of any environmental liabilities at the properties subject to the Option Exercise Agreement. Moreover, PBGC's right to object to any provision in the Option Exercise Motion will not be prejudiced by the Proposed Order. Mr. Butler said the objections filed by the Committee, WTC, the Tranche C DIP Lenders and JPMorgan have not been resolved. A summary of the Debtors' response to the Objections is available for free at: http://bankrupt.com/misc/Delphi_SteeringObjsSummary.pdf The Debtors ask the Court to: (i) overrule the unresolved objections asserted by the Committee, WTC, the Tranche C DIP Lenders and JPMorgan; (ii) grant the Option Exercise Agreement Motion; and (iii) approve the proposed order with changes negotiated with Michigan Environment Department and PBGC. The Court adjourned hearing on the Option Exercise Agreement Motion to April 2, 2009. The adjournment is line with the U.S. Department Treasury Department's comment that it is premature to seek approval of the Option Exercise Agreement, as noted in the Debtors' public statement dated March 24, 2009. The Treasury needs a more thorough review of Delphi's cash flow needs, Mr. Butler told Bloomberg. Mr. Butler stated that had the Debtors proceeded with the scheduled March 24, 2009 hearing, the Treasury would have objected. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Pursuant to the deadline agreed upon with lenders under its $4.35 billion debtor-in-possession financing facility, and General Motors Corp., Delphi is scheduled to seek approval of disclosure materials in connection with a revised Chapter 11 plan April 23. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: Court OKs Changes to JPMorgan L/C Reimbursement Pact ----------------------------------------------------------------- Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York authorized Delphi Corp. and its affiliates to enter into an amended and restated reimbursement agreement with respect to certain Letters of Credit with JPMorgan Chase Bank, N.A., as issuing bank. The Court approved the Amended Reimbursement Agreement, which contemplates the modification of the automatic stay to permit JPMorgan to exercise rights and remedies in the event of default. A full-text copy of the Court-approved Amended Reimbursement Agreement is available for free at: http://bankrupt.com/misc/Delphi_JPMorganLOCReimbursmntAgr.pdf According to the Troubled Company Reporter on March 11, 2009, the Debtors were entitled to seek the issuance of letters of credit from the DIP Lenders and the DIP Administrative Agent, JPMorgan, under their Second Amended and Restated DIP Credit Agreement before December 12, 2008, or the date the DIP Accommodation Agreement was made effective. Upon the effectivity of the DIP Accommodation Agreement, the Debtors could no longer obtain additional loans or LOCs under the DIP Facilities. They were, however, allowed to replace or continue outstanding LOCs that existed before December 12, 2008, when they expire for $125 million, and those LOCs may be secured by first priority liens on cash collateral for $135 million. Thus, since the Accommodation Agreement Effective Date, the Debtors have obtained or continued LOCs from JPMorgan, as issuing bank, for use in the ordinary course of their businesses. The LOCs the Debtors obtained from JPMorgan as of Dec. 12, 2008, aggregate $13.55 million, according to John Wm. Butler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois. Overall, the Debtors have $93 million in outstanding LOCs under their DIP Credit Facilities, he adds. The Debtors expect the need to obtain more LOCs for the second quarter of 2009 and beyond. The Debtors noted that the LOCs issued by JPMorgan is subject to a reimbursement agreement, by which the Debtors have provided cash collateral equal to 105% of the amount of all unmatured and contingent LOCs issued or continued as a security for their obligations under the LOCs. JPMorgan has also sought certain protections that would have been available to a lender who had issued a LOC under the DIP Credit Facilities. In an event of default under the DIP Credit Facilities, the automatic stay would be modified to permit the lender to exercise remedies available. The Debtors' LOC Facility, however, is now separate from the DIP Credit Facilities and JPMorgan, as the issuing bank, would not exercise remedies on behalf of the LOCs. JPMorgan is the only bank issuing LOCs on the Debtors' behalf, Mr. Butler clarifies. Accordingly, to allow the Debtors to continue to obtain LOCs, the Debtors and JPMorgan entered into an Amended and Restated Reimbursement Agreement. The salient terms of the Amended Reimbursement Agreement are: (a) Should there be an event of default under the Amended Reimbursement Agreement or a Future Reimbursement Agreement: -- JPMorgan would have the right to immediately exercise the applicable default-related remedies available under the agreement without having to seek relief from the automatic stay, provided that JPMorgan gives the Debtors a five-day notice before exercising any rights or remedies against the collateral securing the Debtors' obligations under the agreement; and -- the only argument for the Debtors to oppose the exercise of remedies is to dispute that an event of default had occurred and is continuing under the agreement. (b) Upon the occurrence of an Event of Default under the Amended Reimbursement Agreement, JPMorgan would be permitted to apply cash collateral to the payment of all relevant obligations. (c) In the event JPMorgan has foreclosed on the cash collateral and the aggregate amount of the LOCs issued under the Amended Reimbursement Agreement is reduced due to the expiration or termination of the LOCs, JPMorgan, after applying cash to the payment of drawn LOCs, will hold only up to 105% of the aggregate amount of the LOCs remaining and excess funds will be returned to the Debtors periodically. (d) As an added protection, the Debtors and JPMorgan have agreed to carve the Amended Reimbursement Agreement out of the definition of "Loan Documents" under the DIP Credit Facilities, thereby removing the risk of a DIP Facility cross-default should there be a Reimbursement Agreement Event of Default. Mr. Butler said the Amended Reimbursement Agreement and any order approving the Agreement would not affect LOCs issued before the Accommodation Effective Date because those LOCs were issued under the DIP Credit Facilities and JPMorgan, as DIP Agent, can enforce the rights of the issuers of those LOCs. To the extent the DIP Agent agrees to permit the LOCs that were in effect before the Accommodation Effective Date to continue beyond their expiration dates that were in effect on the Accommodation Effective Date, then those LOCs would become LOCs under the Amended Reimbursement Agreement upon their extension. Mr. Butler also clarified that the Debtors' request will not have any impact on the seniority or priority of liens granted under the DIP Accommodation Agreement Order. The LOCs in favor of JPMorgan, aggregating $135 million, are granted first priority liens and the LOC Cash Collateral will not be subject to the DIP Carve Out. Moreover, he pointed out, to avoid confusion of JPMorgan's role as DIP Agent and as a LOC Issuing Bank, JPMorgan's LOC cash collateral will be deposited in an account apart from the other DIP Credit Facilities cash collateral. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Pursuant to the deadline agreed upon with lenders under its $4.35 billion debtor-in-possession financing facility, and General Motors Corp., Delphi is scheduled to seek approval of disclosure materials in connection with a revised Chapter 11 plan April 23. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: Seeks to Amend Appaloosa Suit; Proposes June Trial --------------------------------------------------------------- Delphi Corp. and its affiliates ask Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York for leave to file an amended complaint against Appaloosa Management LP and other investors under the parties' Equity Purchase and Commitment Agreement. If granted, the amendment will be the first amendment to the Debtors' Complaint against Appaloosa and the other plan investors. Edward A. Friedman, Esq., at Friedman Kaplan Seiler & Adelman LLP, in New York, relates that the Debtors served to the Appaloosa Defendants a proposed amended complaint on February 20, 2009, and sought the Defendants' consent to their filing of the Amended Complaint. At a February 25, 2009 meeting, the Appaloosa Defendants sought an opportunity to review the Debtors' proposed order before deciding whether to consent to any amendment. The Debtors subsequently provided the Appaloosa Defendants the proposed order. Upon review, A-D Acquisition Holdings, LLC, and AMLP informed the Debtors that their proposed order was not acceptable and instead, proposed to dismiss the Debtors' claims for "veil piercing, specific performance, disregarding the liability caps in the Equity and Purchase Agreement, and equitable subordination and disallowance." Except for Goldman Sachs & Co., none of the other Appaloosa Defendants has consented to the Debtors' filing of the Amended Complaint or proposed order, according to Mr. Friedman. By their Amended Complaint, the Debtors seek to delete this paragraph from the original Complaint: In addition, on March 26, 2008, the Debtors were shocked to learn from a credible source that certain of their committed equity investors had been trying to avoid their obligations by seeking to persuade exit financing lenders to withdraw their commitments, in an effort to render the Debtors unable to satisfy the financing condition under the EPCA. This source advised the Debtors, and the Debtors allege, that the direct communications with exit lenders were engaged in by certain of the Additional Investors, not by AMLP itself, because AMLP was too smart to engage in that conduct directly. Initial Investors remain legally responsible for the misconduct of the Additional Investors. That misconduct also includes short-selling of the Debtors' securities - which could only have had the purpose of depressing the value of the Debtors and making it only more difficult for them to obtain the exit financing needed for consummation of the Plan - all in violation of the EPCA. Mr. Friedman contends that allegations concerning what credible source advised the Debtors about attempted interference with the Delphi exit financing have largely been substantiated by discovery. In his September 18, 2008 deposition, Delphi Chief Restructuring Officer John Sheehan said he received a telephone call on March 26, 2008 from an "exit lender" who told him that the lender had received two phone calls from two "Additional Investors" asking that lender to withdraw its commitment to the Delphi exit financing. Mr. Sheehan also said that the lender told him that it was "Additional Investors," not Plan Investors, who made the contact, and that the lender stated that AMLP was too smart to engage in that conduct directly. Mr. Sheehan's account was corroborated by the lender in its Dec. 23, 2008 deposition. The lender, who agreed to participate in the Debtors' exit financing in 2008, testified that he received a telephone call around March 2008 from a person who identified himself as an "equity investor." According to the lender, the equity investor told him that the equity investor was forming a group to ask the Debtors and JPMorgan Chase Bank, N.A., for tougher terms than the terms upon which the lender had previously agreed to participate. Specifically, the investor asked the lender not to commit to the specific financing terms that the Debtors are seeking but to seek a higher interest rate. The lender also said that he was concerned that the transaction would not be consummated because he was aware that there was an interest expense cap in the EPCA; and that if the exit financing carried an interest rate that was too high, the deal would not go through. The lender stated he then called up Mr. Sheehan and informed him of the phone call with the equity investor. Mr. Friedman notes that the lender was unable, however, to identify the equity investor, either by name or firm. Moreover, the lender said that AMLP was not mentioned on the call and that nothing about the call suggested that AMLP or any Plan Investor knew about the call. The lender also mentioned that he did not recall saying to Mr. Sheehan that "AMLP was too smart to engage in that conduct directly," although he was unsure that he did not say that information. The lender only recalled one phone call from an equity investor, and did not recall telling Mr. Sheehan that he had received calls from two Additional Investors. Thus, while the Debtors had sufficient basis to allege the facts set at the time the Original Complaint was filed, the Debtors have not been able to obtain evidence in the discovery process beyond the information originally provided to Mr. Sheehan. Accordingly, the Debtors deleted the allegation concerning what the lender said to Mr. Sheehan, Mr. Friedman explains. Similarly, while there is evidence of short-selling, the Debtors do not believe that the evidence obtained from discovery would warrant findings as to willful misconduct based on interference with exit financing by AMLP or other Appaloosa Defendants or based on the short selling of the Debtors' securities. Thus, the Debtors removed the short-selling allegation as well, Mr. Friedman relates. Nevertheless, the Debtors continue to believe that they have been deceived and defrauded by AMLP, and that AMLP's intentional misconduct and willful failure to honor its commitment, as alleged in the Amended Complaint and as supported by the evidence from discovery, provide a basis for the Amended Complaint. The Court will hear the Debtors' request on April 17, 2009. Objections are due April 10. Any response to the Original Complaint will be deemed served in response to the Amended Complaint. A full-text copy of the Debtors' Proposed Amended Complaint is available for free at: http://bankrupt.com/misc/Delphi_PropAmAppaloosaComplaint.pdf Debtors Propose Scheduling Order, Seek a June 2009 Trial Date On behalf of the Debtors, Mr. Friedman served the Court a proposed case management order taking into consideration the discussion on a March 9, 2009 status conference. He explains that the only substantive changes proposed on the CMO are: (i) the extension of the ready trial date by 30 days from May 8, 2009 to June 8, 2009; and (ii) the inclusion of a provision directing the parties to meet and confer with respect to the schedule for summary judgment motions. A full-text copy of the Debtors' Proposed Scheduling Order is available for free at: http://bankrupt.com/misc/Delphi_PropSchedulingOrder.pdf Mr. Friedman relates that the issues discussed at the March 9 status conference were (1) the Appaloosa Defendants' request for an additional day to depose John Wm. Butler, Esq.; (2) the scope of the Debtors' obligations, if any, to provide a corporate representative on certain additional topics listed in AMLP's deposition notice; and (3) the Appaloosa Defendants' request for an extension of the schedule for expert discovery and trial. As previously reported, ADAH, AMLP, Harbinger and Merrill Lynch asked permission from the Court to depose Mr. Butler for another day. The Debtors argued that what ADAH and AMLP were asking was an exception to the seven-hour limit on depositions and that ADAH and AMLP wanted Mr. Butler to testify on "wildly overboard" topics. ADAH and AMLP also asked the Court to schedule a hearing to their request to compel production of Mr. Butler as witness. The Debtors said they intend to ask the Court to schedule an argument on Mr. Butler's issue at a later date. To address the dispute on the Butler re-deposition, the Court directed the Debtors to: (i) produce Mr. Butler for an additional deposition, and (ii) hold a conference by March 10, 2009 with respect to the Appaloosa Defendants' request for one or more additional witnesses under Rule 30(b)(6) of the Federal Rules of Civil Procedure on topics selected by AMLP. The Court has also granted the Appaloosa Defendants' request to extend the ready trial date through May 8, 2009. By the Court's directive, the Debtors scheduled a conference call with the Appaloosa Defendants on March 10, 2009, and accepted clarifications from the Appaloosa Defendants, according to Mr. Friedman. The Debtors then proposed March 26, 2009, as the date for the continuation of Mr. Butler's deposition and March 25 as the date for Mr. Sheehan's deposition on the remaining Rule 30(b)(6) topics. AMLP rejected both dates, citing a scheduling conflict involving its counsel's schedule, but did not propose any alternatives. The Debtors told AMLP that Messrs. Butler and Sheehan also had difficult schedules because of the approaching deadline of plan modifications. Still, the Debtors proposed a March 27 deposition for Mr. Butler and a March 28 deposition for Mr. Sheehan. The parties agreed to Mr. Butler's schedule, but not as to Mr. Sheehan's schedule. Upon AMLP's request for other additional deposition dates for Mr. Sheehan, the Debtors proposed March 29 and April 1, 2009. Mr. Friedman says the Debtors subsequently provided via e-mail on March 23, 2009, the Proposed Scheduling Order to the counsel for the Appaloosa Defendants. None of the Appaloosa Defendants, however, consented to the proposed CMO. Moreover, AMLP said it is not prepared to agree on any date until the depositions under Rule 30(b)(6) of the Federal Rules of Civil Procedure are completed, and suggested that the remaining dates may need to be extended even further because all fact discovery was not completed within 10 days after the March 9 status conference. The Debtors maintain that they acted expeditiously and properly after the March 9 conference to resolve all outstanding issues. Accordingly, they ask the Court to approve their Proposed Scheduling Order. ADAH & AMLP Oppose Debtors' Scheduling Order Representing ADAH and AMLP, J. Christopher Shore, Esq., at White & Case LLP, in New York, stresses that the Debtors' Proposed Scheduling Order simply does not work and the Debtors could have waited for the parties' comments before submitting the proposed order. He points out that the initial extension of the expert report date and the trial ready date were to permit the Appaloosa Defendants to have four weeks from the completion of fact discovery to begin the process of expert disclosures. He notes that Mr. Sheehan is not scheduled for deposition nor has he provided testimony for the Debtors. Given scheduling exigencies in the Debtors' Chapter 11 cases, it is possible that the Appaloosa Defendants could have filed reports before the Debtors even complete their fact discovery, Mr. Shore asserts. He argues that there is no basis for allowing the Debtors, which defaulted on their discovery obligations, to dictate the schedule of a deposition of a key witness. Instead, he stresses, the Appaloosa Defendants should be afforded more than one exact date to take a deposition. Accordingly, ADAH and AMLP ask the Court to defer approval of the Debtors' Proposed Scheduling Order until after the depositions are completed and the parties have agreed on a workable schedule. In the alternative, ADAH and AMLP ask the Court to order that all dates in the scheduling order be keyed off to a date 30 days after the completion of the last deposition to allow the Appaloosa Defendants the same period to prepare and submit expert reports. AMLP& ADAH Only Seek to Prolong Trial, Debtors Argue "Notwithstanding ADAH and AMLP's allegation that they have no desire to hold up the process, that is precisely what they are doing by using a scheduling conflict of their own making as an excuse to try to extend the trial date even further than as directed by the Court during the March 9 conference call," Mr. Friedman argues on the Debtors' behalf. The Debtors remain that they have accommodated AMLP's requests by offering alternative deadlines, including April 1, 2009, for Mr. Sheehan's deposition. The only reason why Mr. Sheehan's deposition has not been scheduled by now is that AMLP has not confirmed the date it requested or any of the proposed dates, the Debtors point out. Mr. Friedman states that ADAH and AMLP's Letter confirms that they are seeking to postpone the trial date and are unwilling to agree on a scheduling order until after the completion of a deposition that they themselves have failed to schedule. Mr. Friedman contends that if all dates are extended 30 days after Mr. Sheehan's deposition, ADAH and AMLP will effectively be given discretion to further delay the trial simply by further delaying the scheduling of the deposition. Moreover, Mr. Friedman clarifies that the Debtors did not deny discovery of the Appaloosa Defendants on the Debtors' damages as the categories of damages have been disclosed in June 2008. The Appaloosa Defendants had the opportunity to question any number of the Debtors' witnesses about those damages. The Appaloosa Defendants have deposed Mr. Sheehan for more than 14 hours. Although Mr. Sheehan was designated and prepared to testify in January 2009 on all allegations in the Complaint, including the Debtors' claim for damages, the Appaloosa Defendants inexplicably chose not to question Mr. Sheehan in his Rule 30(b)(6) capacity at all, Mr. Friedman points out. The Debtors assert that the Appaloosa Defendants have not been denied discovery on the subject damages and thus, their failure to ask Mr. Sheehan about it should not work to their advantage now. Accordingly, the Debtors ask the Court to overrule ADAH and AMLP's objection and approve their scheduling order. Harbinger Supports ADAH & AMLP's Position Harbinger Del-Auto Investment Company, Ltd., and Harbinger Capital Partners Master Fund I, Ltd., believe that a March 27 redeposition of Mr. Butler itself requires an extension of time for the submission of initial expert reports beyond April 15, 2009. Representing Harbinger, Myron Kirschbaum, Esq., at Kaye Scholer LLP, in New York, relates that the Appaloosa Defendants anticipate Mr. Butler's remaining testimony under Rule 30(b)(6) to be relevant to the preparation of one or more of the Appaloosa Defendants' expert reports. An April 15 expert report submission deadline will leave the Appaloosa Defendants with only 12 days to prepare their expert reports, Mr. Kirschbaum stresses. He also contends that the Debtors failed to point out that their initial proposed dates of Messrs. Sheehan's and Butler's depositions missed the 10-day timeframe, and so were their subsequent proposals. On the Debtors' assertion that Mr. Sheehan could have been asked about damages during his previous deposition, Mr. Kirschbaum comments that the fact that the Debtors chose to designate Mr. Sheehan as that witness does not make that testimony any less necessary to the development of the Appaloosa Defendants' expert testimony regarding damages. Harbinger thus asks the Court to deny approval of the Debtors' proposed scheduling order. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Pursuant to the deadline agreed upon with lenders under its $4.35 billion debtor-in-possession financing facility, and General Motors Corp., Delphi is scheduled to seek approval of disclosure materials in connection with a revised Chapter 11 plan April 23. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: To Sell Suspension and Brakes Unit to BeijingWest -------------------------------------------------------------- Delphi Corporation has made further progress with its portfolio transformation and has entered into an asset sale and purchase agreement with BeijingWest Industries Co., Ltd. for the sale of Delphi's remaining global suspension and brakes business. As part of the company's transformation plan unveiled on March 31, 2006, Delphi identified its brakes and suspension business as non- core product lines that no longer fit into the Company's future strategic framework and could become more profitable and competitive as stand-alone businesses or as part of another organization with the working capital to invest in and support these businesses. Having concluded asset sales and business transfers with Bosch, Tenneco and TRW in North America, as well as asset sales and business transfers with SEVA in South America, the proposed sale of the suspension and brakes business represents further substantial progress towards the completion of Delphi's transformation plan announced three years ago. Delphi will file a motion with the U.S. Bankruptcy Court for the Southern District of New York requesting a hearing on April 23, 2009, to approve bidding procedures, and a hearing on May 21, 2009, authorizing and approving the sale of assets. The final sale of the business is subject to court approval and other closing conditions. Delphi anticipates the sale closing during the fourth quarter of 2009. Under the sale and purchase agreement, BeijingWest Industries Co., Ltd. will acquire machinery and equipment, intellectual property and certain real property. Assignment and assumption of certain customer and supplier contracts will also transfer to BeijingWest Industries Co., Ltd. Delphi will carefully manage the transition of the business, and the sale will be completed in coordination with Delphi's customers, employees, unions and other stakeholders. The business is comprised of approximately 3,000 employees, primarily located in Poland, China, Mexico, France and the United States. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Pursuant to the deadline agreed upon with lenders under its $4.35 billion debtor-in-possession financing facility, and General Motors Corp., Delphi is scheduled to seek approval of disclosure materials in connection with a revised Chapter 11 plan April 23. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DENNIS S SPIELBAUER: Court Moves Schedules Deadline to April 24 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California has agreed to extend until April 24, 2009, the time within which Dennis S. Spielbauer must file its schedules of assets and liabilities and statement of financial affairs. The Debtor related that the extension would give it sufficient time to assemble and complete the necessary schedules. 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 assets of $10 million to $50 million and debts of $1 million to $10 million. DHP HOLDINGS: May Sell FMI Contractor Business to FMI Products -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved on March 23, 2009, the sale of DHP Holdings II Corporation and its debtor-affiliates' FMI Contractor Business Assets to FMI Products, LLC, free and clear of all liens and encumbrances. Debtors are also authorized to assume and assigned contracts to the buyer. The Cancilla Cure Claim and any other cure claims will be paid by the buyer in full on the closing date. A full-text copy of the Asset Purchase Agreement, dated as of February 11, 2009, is available at: http://bankrupt.com/misc/DHP.AssetPurchaseAgreement.pdf As reported on February 23, 2009, the Court approved competitive bidding procedures for the sale of DHP Holdings II Corporation and its affiliates' assets related to their FMI contractor business. The FMI Contractor Business consists of the manufacture of vented and vent free gas fireplace systems, vented and vent free gas log sets, wood burning fireplace, wood burning fireplaces and stoves, and other hearth related products and accessories for distribution to contractors, specialty hearth dealerships, manufactured housing and other specialty -- marine/RV -- original equipment manufacturers. FMI Products, LLC, was the stalking horse bidder for the assets. FMI Products offered to pay $4,700,000 in cash, subject to certain adjustments, plus the assumption of certain liabilities. About DHP Holdings Headquartered in Bowling Green, Kentucky, DHP Holdings II Corporation is the parent of DESA Heating, which sells and distributes heating commercial products in Europe and Mexico under brand names including ReddyHeater, Comfort Glow and Master Portable Heaters. The company has manufacturing, storage and distribution facilities in Alabama and California. DHP Holdings II and six of its affiliates filed for Chapter 11 protection on December 29, 2008 (Bankr. D. Del. Lead Case No. 08-13422). The company's international arm, HIG-DHP Barbados, has not filed for bankruptcy. HIG-DHP Barbados holds 100% of the equity of all foreign nondebtor subsidiaries, which manufacture, distribute and sell commercial and consumer goods in Europe, Mexico, and Canada. Bruce Grohsgal, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl Young & Jones LLP, represent the Debtors. The Debtor proposed AEG Partners as restructuring consultants, and Craig S. Dean as chief restructuring officer and Kevin Willis as assistant chief restructuring officer. The Debtora also proposed Epiq Bankruptcy Solutions LLC as claims agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million to $500 million each. According to Reuters, as of Nov. 29, the company, along with its nondebtor subsidiaries and affiliates, had assets of $132.5 million and liabilities of $133.2 million. DESA Holdings Corporation and DESA International LLC filed voluntary petitions on June 8, 2002. HIG-DESA Acquisition nka DESA LLC acquired on Dec. 13, 2002, substantially all assets of the DESA Entities for $198 million comprised of $185 million in cash plus unsecured subordinated notes in the original aggregate amount of $13 million priced at 10% per annum due payable on Dec. 24, 2007. The sale closed on Dec. 24, 2002. The Chapter 11 cases of the form DESA Entities is still active; However, activity occurring in those cases consists of limited claims resolution, and required filing of necessary postconfirmation reports and payment of postconfirmation fees. No claims of ther issues remain open between the Debtors and the former DESA Entities. According to the Troubled Company Reporter on April 22, 2005, the Hon. Walter Shapero of the United States Bankruptcy Court for the District of Delaware confirmed the Second Amended Joint Plan of Liquidation of DESA Holdings Corporation and its debtor- affiliate -- DESA International LLC. The Court confirmed the Plan on April 1, 2005, and Plan took effect the same day. Kirkland & Ellis, LLP, and Pachulski, Stang, Ziehl Young Jones & Weintraub, P.C., represented the DESA entities. DMI INDUSTRIES: Files for Chapter 11 Bankruptcy Protection ---------------------------------------------------------- Paul Brinkmann at South Florida Business Journal reports that DMI Industries, Ltd., has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Florida. Court documents say that DMI Industries listed $10 million to $50 million in assets, and $10 million to $50 million in liabilities to more than 200 creditors, which include: -- AOC LLC Florida, with $280,426 in trade debt; -- Waterway Plastics, with $286,437; and -- FW Supply LLC, with $227,998. Business Journal relates that a list of equity security holders showed Jean-Luc Maury-Laribiere as a limited partner, holding 30% of securities, and MAS Investments as general partner, holding 70% of securities. Alan Goldberg of Miami-based Crisis Management Inc. is DMI Industries' restructuring officer, Business Journal states. Opa-Locka, Florida-based DM Industries, Ltd., makes portable redwood spas, tubs, and showers spas. The Company filed for Chapter 11 bankruptcy protection on March 27, 2009 (Bankr. S.D. Fla. Case No. 09-15533). Arthur J. Spector, Esq., at Berger Singerman, P.A., assists the Company in its restructuring effort. DREIER LLP: Founder Pleads Not Guilty to $700-Mil. Laundering ------------------------------------------------------------- Bloomberg reports that Marc Dreier, the New York law firm founder charged with selling phony promissory notes to hedge funds, pleaded not guilty to a charge that he laundered $700 million as part of the alleged scheme. The money-laundering charge was added to the criminal case against Dreier on March 17. Bob Van Voris of Bloomoberg relates that Mr. Dreier previously pleaded not guilty to conspiracy, securities fraud and wire fraud. U.S. prosecutors claim Mr. Dreier sold more than $700 million in phony notes to at least 13 hedge funds and three individuals. Source says that in a hearing in federal court in New York, U.S. District Judge Jed Rakoff set a June 15 trial date in the case. Dreier's lawyer, Gerald Shargel, has said he expects his client to plead guilty before trial. Assistant U.S. Attorney Jonathan Streeter told Judge Rakoff that prosecutors want to sell Dreier's luxury East Side Manhattan apartment as soon as possible, to preserve assets for his victims. According to the report, Mr. Streeter said the apartment, where Dreier is confined and watched around the clock by armed guards, costs as much as $35,000 a month in mortgage interest and condominium fees. According to the report, Judge Rakoff said he will decide the issue, if the parties can't agree, after both sides file briefs on the issue. 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). ENCORE ACQUISITION: Moody's Gives Neg. Outlook; Keeps Ba3 Rating ---------------------------------------------------------------- Moody's Investors Service changed Encore Acquisition Corporation's rating outlook to negative from developing. Moody's affirmed the Ba3 Corporate Family Rating and Probability of Default Rating, and the B1, LGD5 (79% changed from 81%) ratings on the company's senior subordinated notes. "Encore has high leverage for its Ba3 rating, and the negative outlook reflects the risks that the company will not sustain its planned debt reduction in 2009," commented Pete Speer, Moody's Vice-President. "The $190 million of proceeds from the recent hedge monetization provides a substantial down payment on debt reduction, but that leaves Encore with only a small amount of hedged oil production for the remainder of the year." In order for the outlook to be stabilized, leverage metrics must improve from current levels, pro forma for the debt reduction achieved through the hedge monetization. The company also needs to demonstrate its ability to limit capital expenditures to within cash flows while lowering operating and capital costs to levels that enable the company to internally fund sequential production growth after 2009. The ratings could be downgraded if Encore's debt or leverage levels increase or if the company does not achieve its production targets for 2009. During 2009, Moody's will particularly focus on debt/average daily production, as this will provide early indications of the company's capital productivity during 2009 for its reduced pace of capital expenditures. Any large acquisitions without substantial equity funding could result in a ratings downgrade. There is no room in the ratings for share repurchases or other shareholder friendly actions. Encore's Ba3 CFR is supported by its portfolio of long-lived oil properties with relatively shallow declines and a seasoned management team. Following the hedge monetization, Encore still has 2009 hedges in place for a large portion of its natural gas production and for 2009 oil production at Encore Energy Partners. The company also has meaningful prospective acreage in the Bakken and Haynesville Shale. The last rating action was on May 22, 2008, when Encore's outlook was changed to developing from negative in response to Encore's announcement that it was exploring strategic alternatives to increase shareholder value, including, but not limited to, a sale or a merger of the company. Encore Acquisition Company is an independent exploration and production company headquartered in Forth Worth, Texas. Encore also owns the general partner interest and approximately 67 percent of the common units of Encore Energy Partners LP, a publicly traded E&P MLP. FEDERAL TRUST: Weiss Ratings Assigns "Very Weak" E- Rating ---------------------------------------------------------- Weiss Ratings has assigned its E- rating to Sanford, Florida-based Federal Trust Bank. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." Federal Trust Bank is chartered as a Savings Association, primarily regulated by the Office of Thrift Supervision. The institution was established on May 3, 1088; deposits have been insured by the Federal Deposit Insurance Corporation since that date. Federal Trust Bank maintains a Web site at http://www.federaltrust.com/and has eleven offices in Florida. At June 30, 2008, Federal Trust Bank disclosed deposits totalling $430 million in its regulatory filings. FIRST BANK: Weiss Ratings Assigns "Very Weak" E- Rating ------------------------------------------------------- Weiss Ratings has assigned its E- rating to Calabasas, California- based First Bank of Beverly Hills. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." First Bank is not a member of the Federal Reserve, and is primarily regulated by the Federal Deposit Insurance Corporation. The institution was established on Jan. 1, 1979, and deposits have been insured by the FDIC since Dec. 23, 1980. First Bank maintains a Web site at http://www.fbbh.com/and has one branch in California. FIRST DATA: Fitch Downgrades Issuer Default Rating to 'B' --------------------------------------------------------- Fitch Ratings has downgraded these ratings for First Data Corp.: -- Long-term Issuer Default Rating to 'B' from 'B+'; -- $2 billion senior secured revolving credit facility due 2013 to 'BB-/RR2' from 'BB/RR2'; -- $13 billion senior secured term loan B due 2014 to 'BB-/RR2' from 'BB/RR2'; -- $3.75 billion 9.875% senior unsecured notes due 2015 to 'CCC/RR6' from 'B-/RR6'; -- $3 billion 10.55% senior unsecured notes with four-year mandatory PIK interest due 2015 to 'CCC/RR6' from 'B-/RR6'; and -- $2.5 billion 11.25% senior subordinated notes due 2016 to 'CC/RR6' from 'CCC+/RR6'. The Rating Outlook has been revised to Stable from Negative. The ratings downgrade reflects these considerations: -- The weak global economic environment is expected to lead to a decline in consumer spending in 2009 in the U.S. and many developed economies which is expected to negatively impact FDC's revenue and profitability to a degree not previously anticipated; -- Consumer spending in the U.S. during the economic downturn has been and is expected to continue to be heavily weighted to large discount retailers relative to normal spending patterns which negatively impacts FDC's revenue and profitability as it receives lower payments per transactions from large retailers. Higher growth in PIN debit card usage relative to credit cards (which itself is partly a reflection of the shift in spending to large retailers) has a further, albeit modest, negative impact on revenue and profitability as FDC typically derives slightly lower net revenue per PIN debit transaction than credit; -- As a result of the economic decline and mix shift issues cited above, Fitch expects FDC to report a decline in EBITDA on modest revenue growth in 2009; -- Fitch expects FDC's leverage (total debt to operating EBITDA) to increase to 10.0 times (x) in 2009 from 9.2x at the end of 2008 as debt increases from PIK interest and the previously mentioned expected decline in EBITDA. Prior expectation for a net reduction in debt by 2010 is likely delayed until at least 2011. The Stable Outlook reflects these considerations: -- The aforementioned trends are partially mitigated by a continued shift in mix of payment type to card-based payments which Fitch expects, as a secular growth trend, will continue to enable FDC to grow revenue faster than the broader economy; -- Expectations for positively trending credit protection measures beyond 2009 from profitability improvement and eventual debt reduction; -- FDC remains the largest provider of merchant processing services worldwide with healthy total segment EBITDA margins near 25% and expectations for a return to positive free cash flow, in excess of PIK interest, in 2011; -- FDC has achieved roughly $300 million of annualized savings as of December 2008, more than originally anticipated. The company expects to recognize an additional $125 million of future annual cost savings in 2009 and beyond, further enabling profitability improvement. A trend towards the resumption of normalized growth and EBITDA margins is important for FDC in 2010 and 2011 as Fitch believes the company needs to generate sufficient incremental cash flow to manage future higher cash interest expense. Specifically, the company's $3.0 billion of 10.55% PIK notes convert to cash pay after September 2011 and the company's $12.7 billion senior secured term loan will need to be refinanced (or paid down through equity issuance) in September 2014. Fitch believes the growth necessary to meet these future cash needs is reasonably achievable at the current time but susceptible to a prolonged economic downturn beyond 2009. Positive rating actions could occur as FDC begins to de-leverage its balance sheet and generate positive FCF sufficient to effect a net reduction in debt. Current PIK interest of over $300 million per year enables the company to report positive FCF but has driven increasing debt balances since the 2007 LBO. Negative rating actions could occur if the economic downturn is longer than expected or mix shift issues continue to negatively impact FDC to a degree that Fitch believes would reasonably be expected to prevent the company from generating enough cash to meet current or future expected levels of cash interest expense. Liquidity as of Dec. 31, 2008, was adequate with $406 million in cash plus $1.7 billion available under a $1.8 billion secured revolving credit facility which expires September 2013. FDC's cash balance at the end of the year was negatively impacted by a delay in receiving payment on an approximate $246 million receivable which was subsequently received on Jan. 2, 2009. Total debt as of Dec. 31, 2008, was approximately $22.6 billion and consisted primarily of these: i) $18 million outstanding under a $1.8 billion secured revolving credit facility expiring September 2013; ii) $12.7 billion outstanding under a secured term loan B maturing September 2014; iii) $3.75 billion in 9.875% senior unsecured notes maturing September 2015; iv) $3 billion in 10.55% notes maturing September 2015 with mandatory PIK interest through September 2011 and cash interest thereafter; and v) $2.5 billion of 11.25% senior subordinated notes maturing September 2016. In addition, a subsidiary of New Omaha Holdings L.P. (the parent company of FDC) has outstanding $1 billion original value senior unsecured PIK notes due 2016. These notes are not obligations of FDC, and FDC provides no credit support of these notes which, as a result, are not included in either the calculation of total indebtedness for FDC or leverage ratios. Rating strengths include: -- Stable business model, largely driven by growth in the volume of electronic payments which as an increasing mix of overall consumer payment methods, represents a mitigating factor against the risk of a general economic decline; -- Significant portion of FDC's Financial Services revenue stream is under long-term contract, is recurring in nature and carries high contract renewal rates; -- Strong revenue diversification in terms of products and customers with the largest customer representing less than 3.5% of total revenue in 2007. In 2008, only the Financial Services segment had a customer in excess of 10% of segment revenue (12% specifically which includes reimbursable revenue). FDC also benefits from increasing geographic diversification resulting from its higher growth international business; -- Significant growth opportunities in international markets which are heavily fragmented competitively and generally nascent opportunities in terms of the penetration of electronic payments; -- FDC has leading market share in its primary businesses with an inherent advantage in its significant scale and scope of operations relative to its nearest competitors. Rating concerns include: -- Limited financial flexibility to manage adverse changes to its operating model given leverage (total debt/operating EBITDA) of 9.2x and cash interest coverage of 1.4x as of December 2008; -- The dissolution of Chase Paymentech creates a significant competitor in JP Morgan Chase which did not previously exist in the merchant acquisition space and could lead to market share loss and/or pressure on profitability; -- On-going consolidation among financial institutions could lead to customer losses or pressure on profitability in the card processing business from banks' increased leverage in price negotiation; -- Continued execution risk from data center and processing platform consolidation initiatives which if improperly managed could significantly impair profitability; -- FDC continues to evaluate selective acquisitions, a portion of which could be debt financed. Fitch does not expect the recently completed dissolution of FDC's Chase Paymentech joint venture to have a material impact on the company's EBITDA and cash flow in the intermediate term. However, a material decline in the business assumed by FDC following the dissolution of the joint venture could negatively impact ratings in the future. In 2007, Fitch estimates that Chase Paymentech's standalone EBITDA was approximately $650 million. FDC held a 49% equity interest in the joint venture. The Recovery Ratings for FDC reflect Fitch's recovery expectations under a distressed scenario, as well as Fitch's expectation that the enterprise value of FDC, and hence recovery rates for its creditors, will be maximized in a restructuring scenario (as a going concern) rather than a liquidation scenario. In deriving a distressed enterprise value, Fitch applies a 15% discount to FDC's estimated operating EBITDA (adjusted for equity earnings in affiliates) of approximately $2.5 billion for the latest 12 months ended Dec. 31, 2008 which is equivalent to Fitch's estimate of FDC's total interest expense and maintenance capital spending. Fitch then applies a 6x distressed EBITDA multiple, which considers FDC's prior public trading multiple and that a stress event would likely lead to multiple contraction. As is standard with Fitch's recovery analysis, the revolver is fully drawn and cash balances fully depleted to reflect a stress event. The 'RR2' for FDC's secured bank facility reflects Fitch's belief that 71%- 90% recovery is realistic. The 'RR6' for FDC's senior and subordinated notes reflect Fitch's belief that 0%-10% recovery is realistic. The 'CC/RR6' rating for the subordinated notes reflects the minimal recovery prospects and inherent subordination in a recovery scenario. FIRST FINANCIAL: Receives NASDAQ Non-Compliance Letter ------------------------------------------------------ Terre Haute, Indiana-based First Financial Corporation received on March 26, 2009, a letter from the NASDAQ Listing Qualifications Department informing it that solely as a result of a single real estate transaction with one of its "independent" directors, that director would no longer be considered an "independent" director as defined by the NASDAQ Marketplace Rules. Consequently, the composition of First Financial's Board of Directors no longer complies with the NASDAQ Marketplace Rule 4350, which requires that a majority of the board of directors be comprised of independent directors as defined in the NASDAQ Marketplace Rule 4200. The Board of Directors of First Financial is now considered to be comprised of five "independent" directors and five directors that are not considered "independent" under the NASDAQ Marketplace Rule 4200. In the letter, NASDAQ requested that First Financial provide a specific plan and timetable to achieve compliance with the NASDAQ Marketplace Rules on or before April 10, 2009. First Financial is exploring its alternatives and will comply with this request. First Financial Corporation is the holding company for First Financial Bank NA in Indiana and Illinois, The Morris Plan Company of Terre Haute and Forrest Sherer Inc. in Indiana. FIRST MARINER: Weiss Ratings Assigns "Very Weak" E- Rating ---------------------------------------------------------- Weiss Ratings has assigned its E- rating to Baltimore, Md.-based First Mariner Bank. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." First Mariner Bank is not a member of the Federal Reserve, and is primarily regulated by the Federal Deposit Insurance Corporation. The institution was established on Jan. 1, 1920, and deposits have been insured by the FDIC since Nov. 26, 1962. First Mariner Bank maintains a Web site at http://www.1stmarinerbank.com/and has 26 branches, 25 in Maryland and one in Pennsylvania At Dec. 31, 2008, First Mariner Bank disclosed $1.2 billion in assets and $1.1 billion in liabilities in its regulatory filings. FLEETWOOD ENTERPRISES: S&P Withdraws 'D' Ratings on Liquidation --------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on Fleetwood Enterprises Inc. The withdrawals reflect S&P's opinion that this bankrupt company will liquidate rather than restructure its operations. Riverside, California-based Fleetwood filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code on March 10, 2009. At that time, this manufactured homebuilder and recreational vehicle producer announced its intention to close or seek buyers for several of its business segments. Fleetwood had been operating under extremely challenging conditions as weak consumer confidence and a constrained financing environment weighed on sales in both of the company's end markets. Ratings Withdrawn Fleetwood Enterprises Inc. To From -- ---- Corporate credit NR D/--/-- Convertible trust pref'd NR D FLUID ROUTING: Completes Sale to Sun Capital Affiliate ------------------------------------------------------ Fluid Routing Solutions, Inc., has completed the sale of its fuel systems and hose extrusion operations to an affiliate of Sun Capital Partners, Inc. The parent company of FRS filed for voluntary protection under Chapter 11 of the Bankruptcy Code on February 6, 2009, in the U.S. Bankruptcy Court for the District of Delaware due to liquidity constraints primarily caused by a severe contraction in automotive industry volumes. To facilitate the restructuring process and allow for a sale of the ongoing business, an affiliate of Sun Capital agreed to provide a debtor- in-possession loan facility to FRS upon the bankruptcy filing. The DIP financing allowed FRS to continue to pay employees and vendors, thus providing operational and financial stability as it proceeded with the sale process of the fuel and hose extrusion businesses. An affiliate of Sun Capital served as the stalking horse bidder for the fuel and hose extrusion assets under Section 363 of the U.S. Bankruptcy Code, won the auction, and the Bankruptcy Court approved the sale on March 24, 2009. The fuel and hose business will retain the FRS name. "With Sun Capital's DIP financing and acquisition of the fuel and hose extrusion operations, we were able to successfully emerge from our reorganization under Chapter 11, while maintaining normal operations in all of our facilities, save approximately 900 jobs which would have been otherwise lost, and provide continuity of supply to our customers," said Mike Laisure, Chief Executive Officer, Fluid Routing Solutions. "We are pleased that we can continue to focus on serving our customers, with a strong balance sheet and a leaner and more focused organization that will position FRS to compete more effectively in our fuel systems and hose product categories." About Fluid Routing Headquartered in Rochester Hills, Michigan, Fluid Routing Solutions Inc. -- http://www.markivauto.com-- makes automobile parts and accessories. The company has manufacturing facilities located in Lexington, Tennessee; Big Rapids, Michigan; Oscala, Florida; and Easley, South Carolina. The Company's Detroit facility closed in 2008. The company had 1,039 employees before it filed for bankruptcy. Fluid Routing Solutions, Inc., and three affiliates filed for Chapter 11 on Feb. 6 (Bank. D. Del., Lead Case No. (09-10384). Judge Christopher Sonchi handles the case. Michael R. Nestor, Esq., and Kenneth J. Enos, Esq., at Young Conaway Stargatt & Taylor LLP, and Neil E. Herman, Esq., at Morgan Lewis & Bockuis LLP, are the Debtors' counsel. Mesirow Financial Interim Management, LLC, is the Debtors' financial advisors. Fluid Routing in its bankruptcy petition estimated assets of $10 million to $50 million and debts of $50 million to $100 million. FORD MOTOR: Frets on Operations Due to Rivals' Likely Bankruptcy ---------------------------------------------------------------- Matthew Dolan at The Wall Street Journal reports that the possible bankruptcy of General Motors Corp. and Chrysler LLC has caused Ford Motor Co. to fret. According to WSJ, Ford Motor officials worry that a bankruptcy filing by either of Chrysler or GM could severely disrupt the Company's operations. WSJ states that any of the rival's bankruptcy filing could damage the networks of suppliers and dealers, throwing uncertainty into Ford Motor's parts deliveries and retail operation. Ford Motor officials, WSJ relates, are concerned that bankruptcy could let GM or Chrysler restructure more fundamentally and exact deeper concessions from unions and bondholders, which could leave a rival in better competitive shape than the Company, unless it can gain the same concessions. WSJ says that Ford Motor has already reached agreements with its union to cut wages and restructure retiree health care costs. According to WSJ, Ford Motor will offer buyouts to 42,000 of its U.S. hourly workers, but company officials expect a relatively low take rate because workers worry it may be difficult for them to find other jobs. WSJ relates that Ford Motor also offered bondholders a deal to reduce debt. WSJ quoted Ford Motor CEO Alan Mulally as saying, "The collapse of one of our competitors would have a severe impact on Ford and our transformation plan, because the domestic auto industry is highly interdependent. It would also have devastating ripple effects across the entire U.S. economy." According to WSJ, some Ford Motor officials fear that even without a bankruptcy filing from its rivals, the uncertainty surrounding the car makers over the next few months could keep shoppers from considering a vehicle from a domestic maker. WSJ states that Ford Motor sales chief Jim Farley has downplayed the potential impact of a GM or Chrysler bankruptcy on the Company, saying, "I think it's more important that in the last 60 days, we've gotten more consideration for our new products." WSJ relates that Mr. Farley, citing CNW Marketing research, said that in the first two months of the year, 19% of consumers who had planned to buy a GM car instead bought a Ford, Lincoln or Mercury, while some 15% of people who set out to buy a Chrysler or Dodge in January instead switched to one of Ford's brands. Ford Motor Launches Program to Boost Consumers' Confidence Ford Motor is introducing a program to boost consumers' buying confidence and begin rebuilding the American economy with the new Ford Advantage Plan. The plan gives customers another reason to "Drive One" with payment protection of up to 12 months on any new Ford, Lincoln or Mercury vehicle, 0 percent financing on select vehicles and added local charity support. "Consumers remain anxious about the economy and their own outlook for the future. We at Ford want to do our part to rebuild faith in the marketplace by offering payment protection on every new Ford, Lincoln or Mercury vehicle for up to a year if our customers lose their jobs," said Ken Czubay, vice president of Sales and Marketing. "Just as important is additional charity support we will provide in conjunction with our local dealers, who are mindful of how non- profit organizations are struggling during this economic downturn," Mr. Czubay said. "Ford and our dealers have always stepped up to take an active lead role in the community, and that's why we are also including a charity element as part of the Ford Advantage Plan." All Ford, Lincoln and Mercury vehicles are covered under the Ford Advantage Plan. The program runs from March 31 through June 1. In addition to providing 12 months of payment protection of up to $700 per month, customers can take advantage of 0 percent financing on select Ford, Lincoln and Mercury vehicles through Ford's financing partner, Ford Motor Credit. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The Company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported by the Troubled Company Reporter on March 6, 2009, Standard & Poor's Ratings Services said it lowered its corporate credit rating on Ford Motor Co. to 'CC' from 'CCC+'. S&P also lowered the issue-level ratings on the company's senior secured term loan, senior unsecured debt, and subordinated debt, while leaving the issue-level rating on Ford's senior secured revolving credit facility unchanged. In addition, the counterparty credit ratings and issue-level ratings on Ford Motor Credit Co. (Ford Credit) and FCE Bank PLC remain unchanged. The outlooks on Ford and Ford Credit are negative. Moody's Investors Service in December 2008 lowered the Corporate Family Rating and Probability of Default Rating of Ford Motor Company to Caa3 from Caa1 and lowered the company's Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring in order to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently- approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. FORD MOTOR: Seeks Debt Swap to Avert Bankruptcy or Gov't Bailout ---------------------------------------------------------------- Pierre Paulden and Keith Naughton at Bloomberg News report that Ford Motor Co. has asked investors to swap debt at a premium to trading prices to help it avoid bankruptcy or a government bailout. According to Bloomberg, Ford Motor is relying on $23.4 billion of debt arranged in 2006 before credit markets seized up. Bloomberg states that Ford Motor offered to pay bondholders $1.3 billion for a portion of their $8.9 billion in unsecured debt, and asked to repurchase $500 million of its $7 billion bank loan maturing in 2013 at a range of 38 cents to 47 cents on the dollar. Bloomberg relates that Ford Motor's finance arm said that it would double to $1 billion the amount it will spend to repurchase its term-loan debt. London-based pricing service Markit shows that the bank loan rose 18 cents from March 2 to 49 cents of face value on March 27. According to Bloomberg, Ford Motor said it currently expects to purchase $2.2 billion of the principal amount at 47% of face value. Citing KDP Investment Advisors Inc. analyst Kip Penniman Jr., Bloomberg states that the offer to buy the unsecured debt was "nearly fully subscribed." Mei-Wei Cheng to Leave Chinese Unit Mei-Wei Cheng will retire as group vice president and Ford China executive chairperson on Wednesday, Dow Jones Newswires reports, citing Ford Motor Co. According to Dow Jones, Ford Motor appointed Robert J. Graziano, Ford Motor China President and CEO, to assume Mr. Cheng's responsibilities. Dow Jones states that Mr. Cheng joined Ford Motor in 1998 and was chairperson and CEO of Ford Motor China for 10 years before assuming his current position early in 2008. According to the report, Mr. Cheng is responsible for Ford Motor China's business strategy and in strengthening strategic partnerships and government relations. Mr. Cheng, says the report is vice chairman of Jiangling Motor Co. and vice chairman of Changan Ford Automobile Corp. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The Company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported by the Troubled Company Reporter on March 6, 2009, Standard & Poor's Ratings Services said it lowered its corporate credit rating on Ford Motor Co. to 'CC' from 'CCC+'. S&P also lowered the issue-level ratings on the company's senior secured term loan, senior unsecured debt, and subordinated debt, while leaving the issue-level rating on Ford's senior secured revolving credit facility unchanged. In addition, the counterparty credit ratings and issue-level ratings on Ford Motor Credit Co. (Ford Credit) and FCE Bank PLC remain unchanged. The outlooks on Ford and Ford Credit are negative. Moody's Investors Service in December 2008 lowered the Corporate Family Rating and Probability of Default Rating of Ford Motor Company to Caa3 from Caa1 and lowered the company's Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring in order to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently- approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. FREESCALE SEMICONDUCTOR: S&P Raises Corp. Credit Rating to 'B-' --------------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its corporate credit rating on Austin, Texas-based Freescale Semiconductor Inc. to 'B-' from 'SD'. The rating outlook is negative. At the same time, S&P raised its senior unsecured and subordinated debt ratings to 'CCC' from 'D'. These rating actions are in accordance with S&P's criteria for distressed debt exchange (see "Rating Implications of Exchange Offers and Similar Restructurings," published Jan. 28, 2009) and follow the company's closing of its note invitation offer. In addition, S&P assigned Freescale's new $924 million senior secured term loan S&P's issue-level rating of 'B-' (at the same level as the 'B-' corporate credit rating on the company) with a recovery rating of '4', indicating S&P's expectation of average (30%-50%) recovery for lenders in the event of a payment default. Lastly, S&P revised its recovery rating on Freescale's secured debt to '4' from '3', and affirmed its 'B-' issue-level rating on this debt. Demand dynamics in Freescale's key markets are likely to be difficult over the next six quarters, and S&P expects the company to generate poor profitability during this time frame, with debt measures that remain weak for the rating, despite the debt exchange that reduced debt by about $2 billion. Liquidity measures provide key support for the rating during this interval. "We would consider a downgrade if the company appears to be on a path that would decrease its cash balances to below $1 billion, regardless of its cash position at that time, or if the outlook for the U.S. automotive industry for 2009 or 2010 dims further," said Standard & Poor's credit analyst Lucy Patricola. Increased restructuring costs or steeper revenue declines could result in negative cash flows that are higher than S&P's current forecast and prompt a downgrade. "An outlook revision to stable is unlikely in the near term without a meaningful reduction in leverage," she continued. GENERAL GROWTH: Bankruptcy Filing Not Imminent, Says WSJ -------------------------------------------------------- A bankruptcy filing isn't imminent for General Growth Properties Inc., despite its failure to convince bondholders for a debt extension, Kris Hudson at The Wall Street Journal reports, citing people familiar with the mater. According to WSJ, General Growth said on Monday that it concluded efforts to get holders of $2.25 billion of bonds to grant it a nine-month reprieve from paying principal and interest on those bonds, after extending for the third time the deadline on its "consent solicitation" because not enough bond holders signed up. WSJ says that General Growth offered the bondholders quarterly payments of 62.5 cents for every $1,000 of bonds, with interest accruing, which the bondholders didn't accept. Citing people familiar with the matter, the report says that many bondholders were unwilling to forfeit their ability to demand immediate payment for nine months. As reported by the Troubled Company Reporter on March 31, 2009, General Growth said that it was continuing discussions with the ad hoc committee of the holders of all series of The Rouse Company LP unsecured notes and its syndicate of lenders under the 2006 Senior Credit Agreement, since TRCLP did not achieve the minimum acceptance levels for the previously announced consent solicitation from the holders TRCLP Notes to forbear from exercising remedies with respect to various payment and other defaults under the TRCLP Notes. Accordingly, the consent solicitation expired as of 5:00 p.m., New York City time, on March 27, 2009, in accordance with its terms. WSJ relates that bondholders haven't forced General Growth into bankruptcy court. WSJ states that creditors have been willing to let deadlines pass, believing that there is little to be gained and much to be lost through a bankruptcy. Many bondholders, as what General Growth told them, hope for a greater recovery outside of bankruptcy court, WSJ says. Some creditors, according to a person familiar with the matter, are angry, but it is possible that they didn't go along with the consent solicitation mainly due to fear that making such a pledge would reduce the value of their bonds, WSJ reports. WSJ states that some holders purchased the bonds at face value and are hoping for a recovery, while others bought the bonds at depressed prices and might want to force a liquidation to receive a quicker payout. WSJ states that General Growth may still be forced to seek bankruptcy protection. General Growth, according to WSJ, was in negotiations primarily with dozens of banks on more than $4 billion of past-due debt and debt that could become due because of other defaults until this month. Now, General Growth must negotiate with hundreds of bondholders as well, says the report. Bankruptcy, according to WSJ, wouldn't bring immediate payment of General Growth's debts. WSJ quoted Heidi Sorvino -- a lawyer leading the bankruptcy practice of law firm Smith, Gambrell & Russell LLP -- as saying, "It's such a large company that the bankruptcy would definitely last at least a couple of years." Citing Ms. Sorvino, WSJ states that the timeframe could be shorter if General Growth did a prepackaged bankruptcy. Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self-administered and self-managed real estate investment trust. General Growth said in a regulatory filing Sept. 30 that its potential inability to address its 2008 or 2009 debt maturities in a satisfactory fashion raises substantial doubts as to its ability to continue as a going concern. * * * As reported by the Troubled Company Reporter on Dec. 11, 2008, Fitch Ratings, has downgraded the Issuer Default Ratings and outstanding debt ratings of General Growth Properties to 'C' from 'B'. GENERAL MOTORS: Six Directors May be Replaced, Says WSJ ------------------------------------------------------- Joann S. Lublin at The Wall Street Journal relates that at least six directors at General Motors Corp. may be replaced. According to WSJ, the Obama administration said that GM aims to replace "a majority of the board over the coming months." WSJ relates that the board was described as "a collection of failed CEOs," and was blamed for not prompting GM management to move faster in restructuring the Company. WSJ notes that some governance experts consider GM's board fairly weak as it lacks individuals with auto-industry expertise and includes several retirees without recent corporate-management experience. WSJ relates that GM's board members who may be vulnerable include lead director George Fisher -- a retired chairperson and CEO of Eastman Kodak Co. -- and Eckhard Pfeiffer, who was forced out as Compaq Computer Corp.'s CEO in 1999. Mr. Fisher, WSJ states, has been supporting former GM CEO Rick Wagoner as the Company racked up billions of dollars in losses in recent years. Citing people familiar with the matter, WSJ says that Mr. Wagoner relied on Mr. Fisher for advice. WSJ relates that Mr. Pfeiffer was also a confidant of Mr. Wagoner. WSJ states that other members of GM's board include: -- E. Neville Isdell, Coca-Cola Co.'s chairperson and former CEO, is the newest member and was appointed last year; -- Erskine Bowles, chief of staff for former President Bill Clinton and now president of the University of North Carolina; -- John H. Bryan, for instance, retired in 2001 as CEO of Sara Lee Corp. and has been on GM's board since 2003; and -- Philip A. Laskawy, Ernst & Young's retired chairperson and CEO, and who leads GM's audit committee. GM director Kent Kresa said in a statement that the GM board will nominate a slate of directors for the next annual meeting in August. According to Mr. Kresa, the specific individuals who will be nominated or choose not to run or leave the board are not yet known. Mr. Kresa was appointed as the Company's interim board chairperson, WSJ says, citing federal officials. According to WSJ, Mr. Kresa was CEO of defense contractor Northrop Grumman Corp. between 1990 and 2003, and previously served on the board of Chrysler Corp. A source said that Mr. Kresa was "a safe choice," because he was one of the few GM directors who had run a major industrial company, WSJ states. Citing a GM spokesperson, WSJ relates that GM's new CEO, Frederick Henderson, will likely be nominated as a director. Ralph Ward, an author of books about governance and editor of the publication Boardroom Insider, said that directors with extensive GM service are unlikely to survive the boardroom shake-up, because "the longer you have been, the less likely you will be around," WSJ states. WSJ notes that the government may encourage GM to add directors with more automotive or industrial expertise. GM Euro-Denominated Debt Still Trades at Distressed Levels Dow Jones Newswires reports that GM's euro-denominated debt continued to trade at distressed levels on Monday. According to the report, GM's euro-denominated bonds due 2013 and 2033 were quoted at 15% and 25% of face value, respectively. Dow Jones quoted UniCredit analyst Sven Kreitmair as saying, "GM bonds were already trading relatively close to where people think recovery values will be. When the talk was of a two-thirds debt- for-equity swap, they traded at around 33% of face value. But as each new plan is suggested, the likely recovery rate for bondholders gets lower." Citing analysts, Dow Jones relates that trading in GM's euro- denominated bonds has been very light. "Very few people trade these names in Europe because some sort of debt exchange looks certain to take place, and the bonds have already fallen deep into distressed territory. If GM does file for Chapter 11 protection, the U.S. government becomes the debtor-in-possession, and DIP funding is the most senior in terms of recovery. GM's need for liquidity is still pretty high, so the more the U.S. government lends them, the more subordinated existing bondholders would become, in terms of the amount of debt ranking ahead of them," Dow Jones quoted Calyon auto credit analyst Christophe Boulanger as saying. According to WSJ, Mr. Kreitmair stated, "To force a significant debt reduction, a pre-packaged bankruptcy plan is certainly a possibility. The biggest worry if they file for Chapter 11 is the impact on GM car sales, but if the U.S. government stepped in to back warranties and support GM's business, it could be a solution." Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of US$110.425 billion, total liabilities of US$170.3 billion, resulting in a stockholders' deficit of US$59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of US$16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. GENERAL MOTORS: Government Funds Won't Affect S&P's 'CC' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on General Motors Corp. (CC/Negative/--) and Chrysler LLC (CC/Negative/--) are not affected by the Obama Administration's announcement that the plans these two U.S. automakers submitted do not establish a credible path to viability. The companies will receive near-term financial support while they pursue more aggressive restructuring plans, which the government expects to include, among other things, a Chrysler partnership with Fiat SpA and the departure of GM's chairman and CEO. GM, Chrysler, and Ford Motor Co. (CC/Negative/--) are all rated 'CC', reflecting S&P's view of prospects for distressed exchanges and very challenging economic conditions. As S&P noted previously, even with the additional funding the government will provide in the coming weeks, the risk of bankruptcy remains high, in S&P's opinion, for the remainder of 2009, and even in 2010. This is because of highly uncertain consumer demand and other serious risks, including persistently weak credit markets and potential auto supplier failures. S&P still believes the government's willingness to support these companies outside of bankruptcy is not open ended. In fact, the administration noted that a "structured" bankruptcy -- which S&P takes to mean a bankruptcy with heavy government involvement--may be the companies' best chance to successfully reduce their liabilities. S&P believes the government will act to avoid a disorganized bankruptcy process, which, in S&P's view, could lead to a liquidation of either or both companies caused in part by the tight credit markets. Although the government indicated a structured bankruptcy option ultimately may be necessary, it also indicated it will provide GM and Chrysler with additional funds for working capital -- for specified periods of time -- to formulate new plans for their long-term viability. GM has been granted 60 days to present a more aggressive operational restructuring plan. In S&P's view, the replacement of the company's chairman and CEO with a current member of senior management will not lead to a fundamental shift in strategy, nor will it sidetrack the company's efforts to secure concessions from bondholders or labor. GM has said it needs up to $16.6 billion in additional U.S. government funding to maintain adequate liquidity; however, the government did not indicate how much it might be willing to provide. Chrysler has been granted 30 days to reach a definitive agreement with Fiat, as well as to take other actions such as reducing "the vast majority" of its secured debt and obtaining greater concessions from labor. The government indicated it will consider giving Chrysler an additional $6 billion in the event of an agreement with Fiat and a sufficient viability plan. Short of any bankruptcy, S&P still expects GM and Chrysler to reach agreements with lenders to reduce debt at a substantial discount to par. S&P would view this outcome for either company as a distressed exchange under S&P's criteria and, therefore, akin to a default. The administration's determination that existing plans are insufficient and that additional U.S. government funding is needed -- on top of the $13.4 billion and $4.0 billion already extended to GM and Chrysler, respectively -- underscores the depressed state of U.S. and global auto demand. S&P currently expects U.S. light-vehicle sales of 9.8 million units in 2009, down 25% from 2008 and 39% from 2007. Ford has said it does not need government loans for now, although it has asked for a standby line of credit in case demand weakens further. The company is pursuing a substantial reduction of debt through offers that S&P also considers to be distressed exchanges under its criteria. GENERAL MOTORS: Launches Customer Protection Package ---------------------------------------------------- General Motors has launched "GM Total Confidence," a plan that protects a customer's paycheck, investment, vehicle and family. "Our Total Confidence plan is an unprecedented offer that reinvents the ownership experience in an extremely positive way," said Mark LaNeve, vice president, GM North America Vehicle Sales, Service and Marketing. "Unlike other programs out there, 'GM Total Confidence' provides comprehensive coverage for new vehicle owners -- from protecting their new vehicle investment to protecting their family's income. GM Total Confidence provides customers peace of mind in uncertain times." (Note: See accompanying chart) The 'GM Total Confidence' plan: * Protects Paycheck: 'Payment Protection' provides up to nine months of payments on vehicle loans or leases ($500 max/month) if the customer loses his or her job for economic reasons. * Protects Investment: Once the customer is halfway through his or her finance contract, the customer qualifies for 'Vehicle Value Protection.' This helps protect customers against uncertainty in the future used car market. For example, on a 60-month contract, the customer become eligible after the 30th month. Much as home prices decline in this tough market -- and homeowners may owe more than the current resale value of their house - 'Vehicle Value Protection' provides peace-of-mind for customers when they want to go purchase another GM vehicle. * Protects Vehicle: GM's 5 year/100,000 mile transferable powertrain limited warranty (whichever comes first) plus roadside assistance and courtesy transportation. GM protects the customer's vehicle with the best coverage in the business. * Protects Family: One Year OnStar 'Safety and Security' Package. With Automatic Crash Response, OnStar's cutting- edge technology that protects the customer's family when they travel. "By protecting a customer's payment, investment, vehicle and family, we are reinventing the customer experience," Mr. LaNeve stated. "The 'GM Total Confidence' plan addresses today's most pressing concerns for new car buyers . . . we asked customers what they wanted, and simply put, this package is it." The "GM Total Confidence" plan is available for vehicles purchased April 1 through April 30, 2009. More information is available at http://gmconfidence.com. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of US$110.425 billion, total liabilities of US$170.3 billion, resulting in a stockholders' deficit of US$59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of US$16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. GENERAL MOTORS: Rick Wagoner Finally Steps Down as CEO ------------------------------------------------------ Following a meeting with administration officials, Rick Wagoner said that they requested that he "step aside" as CEO of GM. ". . . and so I have," Mr. Wagoner said. Mr. Wagoner said Fritz Henderson is an excellent choice to be the next CEO of GM. He said that, having worked closely with Mr. Henderson for many years, he believes Mr. Henderson is the ideal person to lead the company through the completion of its restructuring efforts. "His knowledge of the global industry and the company are exceptional, and he has the intellect, energy, and support among GM'ers worldwide to succeed." Mr. Wagoner further stated, "I also want to extend my sincerest thanks to everyone who supported GM and me during my time as CEO. I deeply appreciate the excellent counsel and commitment of the GM Board and the strong support of our many partners including our terrific dealers, suppliers, and community leaders. I am grateful as well to the union leaders with whom I have had the chance to work closely to implement numerous tough but necessary restructuring agreements." Most important of all I want to express my deepest appreciation to the extraordinary team of GM employees around the world. You have been a tremendous source of inspiration and pride to me, and I will be forever grateful for the courage and commitment you have shown as we have confronted the unprecedented challenges of the past few years. GM is a great company with a storied history. Ignore the doubters because I know it is also a company with a great future." Reinvented GM Mr. Wagoner previously said that if General Motors survives, it won't resemble the money-losing behemoth that he brought before Congress in search of aid last year. GM is shedding the Saturn, Saab and Hummer brands and cutting 47,000 more workers worldwide -- leaving half as many as when Mr. Wagoner took over in 2000. Bloomberg said that the United Auto Workers union is giving up most of the expensive perks laid-off workers enjoyed to cushion economic downturns and taking on expensive health-care costs. According to Mr. Wagoner, the automaker plans to cut structural costs from about $53 billion now to $40 billion by 2010 and maintain that level until at least 2014. While governments will require some modifications, GM's global strategy will continue because the savings are "important to everyone", Bloomberg added. "This is really, in substance, about re-inventing General Motors," the CEO said in an interview. Mr. Wagoner, working for $1 a year since taking government money in December to avoid bankruptcy, according to the report said his primary focus has been to prove GM's viability to President Barack Obama's automotive task force so the company can keep $13.4 billion in U.S. aid and win permission to borrow as much as $16.6 billion more. Shrinking GM "is what they needed to do all along. It was only going to happen by disaster. This was GM's 'come to Jesus' moment," said Jim Hall, principal of 2953 Analytics auto- consulting company in Birmingham, Michigan, and a former GM engineer. As a result, "GM will be leaner and more flexible. We're going to have moved significantly to lean out our cost structure and address things that have been competitive disadvantages for years," Mr. Wagoner was quoted saying in the report. "GM will have to get used to being a smaller giant. The government rescue will keep the auto industry alive in the U.S. and it will be a lot more efficient GM. But GM will not be the force it was in the past," said Mirko Mikelic, senior portfolio manager at Fifth Third Asset management in Grand Rapids, Michigan. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. GM's common stock was considered the stock market's bellwether for many years, hence the saying "What's good for GM is good for America." * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. To 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the Company's rapidly diminishing liquidity position. Given the current liquidity level of US$16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. And General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. GENERAL MOTORS: Hike in Orders Tone Down Opel Bankr. Concerns ------------------------------------------------------------- Unlike its Swedish unit, General Motors Corp's German division, Opel might be able to avert bankruptcy. Simone Meier of Bloomberg reported that according to a report by Frankfurter Allgemeine Zeitung, citing an unidentified management member, GM's Opel division won't face possible bankruptcy for several months due to an increase in orders. As reported by the Troubled Company Reporter on March 23, German Chancellor Angela Merkel, according to Reuters, said the German government won't take a stake in General Motors Corp. subsidiary Opel. Reuters, cited Ms. Merkel as saying that a future business plan for Opel couldn't be formulated properly until GM's future was clear, Reuters states. According to the report, Economy Minister Karl-Theodor zu Guttenberg said that he was talking to potential investors in Opel, but their interest was tied to the quality of a rescue plan for GM. Marcus Walker at The Wall Street Journal relates that Ms. Merkel's conservative Christian Democrats rejected a call by their coalition partners, the Social Democrats, for the government to acquire a stake in Opel. According to WSJ, conservatives rejected a direct government stake in Opel. Christian Democrat parliamentary leader Volker Kauder insisted that the state couldn't bail out all companies, and that Opel shouldn't get special treatment, WSJ states. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of US$110.425 billion, total liabilities of US$170.3 billion, resulting in a stockholders' deficit of US$59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of US$16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. GIBRALTAR INDUSTRIES: S&P Cuts Corporate Credit Rating to 'B+' -------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its ratings on Gibraltar Industries Inc., including its corporate credit rating to 'B+' from 'BB-'. The outlook is negative. "The lower rating reflects our expectation that operating performance will remain weak in the next several quarters because of a further deterioration in the residential and automotive end- markets that Gibraltar serves," said Standard & Poor's credit analyst Tobias Crabtree. As a result, S&P is concerned about a thinning covenant cushion relative to the total leverage covenant of 4.25x in the company's credit agreement. Although, at this time, S&P is not expecting a covenant breach, S&P believes the cushion could decline below 5% by the third quarter of 2009. S&P expects that a waiver or amendment would be the most likely outcome of a violation, but this could lead to a repricing of the credit facility, thus weakening interest coverage. The ratings on Buffalo, New York-based building products manufacturer and metal processor Gibraltar reflect the company's mature and cyclical markets, volatile raw material costs, aggressive growth strategy, and weakening financial profile. Still, the company maintains a leading position in niche markets and benefits from a highly variable cost structure. GOODY'S LLC: Debtors File Schedules of Assets and Liabilities ------------------------------------------------------------- Goody's LLC and its affiliates filed with the U.S. Bankruptcy Court for the District of Delaware, their schedules of assets and liabilities, disclosing: Name of Debtor Assets Liabilities -------------- ------------ ------------ Goody's, LLC (Lead Case) $542,231,601 $510,471,005 New Goody's MS, L.P. $467,909,136 $492,580,068 New Goody's Holding TN, LLC $6,176 $61,650,692 New Goody's TNDC, L.P. $66,731,355 $115,171,572 New Goody's Retail MS, L.P. $71,585,441 $125,550,745 New Goody's ARDC, L.P. $28,035,031 $88,375,094 New GFCGA, L.P. $93,128,777 $168,973,677 New GFCTN, L.P. $62,201,053 $127,736,746 New Goody's IN, L.P. $73,890,077 $131,349,597 New GFCTX, L.P. $100,930,649 $175,435,671 New Goody's Giftco, LLC $11,634,041 $72,405,744 New GOFAMCLO LLC $16,956,528 $67,371,840 New Trebor of TN, LLC $1,962,914 $61,650,692 New SYNDOOG LLC $31,720,689 $63,612,951 Copies of Goody's, et al.'s SALs are available at: http://bankrupt.com/misc/Goody'sLLC.Schedules.pdf http://bankrupt.com/misc/NewGoody'sMS.Schedules.pdf http://bankrupt.com/misc/NewGoody'sHolding.Schedules.pdf http://bankrupt.com/misc/NewGoody'sTNDC.Schedules.pdf http://bankrupt.com/misc/NewGoody'sRetailMS.Schedules.pdf http://bankrupt.com/misc/NewGoody'sARDC.Schedules.pdf http://bankrupt.com/misc/NewGFCGA.Schedules.pdf http://bankrupt.com/misc/NewGFCTN.Schedules.pdf http://bankrupt.com/misc/NewGoody'sIN.Schedules.pdf http://bankrupt.com/misc/NewGFCTX.Schedules.pdf http://bankrupt.com/misc/NewGoody'sGiftco.Schedules.pdf http://bankrupt.com/misc/NewGOFAMCLO.Schedules.pdf http://bankrupt.com/misc/NewTreborofTN.Schedules.pdf http://bankrupt.com/misc/NewSYNDOOG.Schedules.pdf The schedules of assets and liabilities filed by the Debtors are unaudited and remain subject to further review and verification by the Debtors. The Debtors reserve their right to amend their schedules from time to time as may be necessary or appropriate. 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). M. Blake Cleary, Esq., at Young, Conaway, Stargatt & Taylor, LLP; Paul G. Jennings, Esq., Gene L. Humphreys, Esq., Edward C. Meade, Esq., and Kristen C. Wright, Esq., at 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. GOODY'S LLC: May Use Junior Lenders' Cash Collateral Until Aug. 1 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted Goody's LLC, et al., final authority to use cash collateral of all prepetition junior lenders through and including August 1, 2009, in accordance with a budget. As adequate protection for any diminution in value of their interests caused by the use of cash collateral, the prepetition secured lenders -- comprising the junior and senior lenders, are granted first priority security interests and replacement liens in all of the Debtors' properties and assets. The adequate protection Liens will include causes of action under Sec. 549 of the Bankruptcy Code, but will not include other causes of action under Chapter 5 of the Bankruptcy Code and will be subject only to (a) the Carve Out; (b) existing non-avoidable liens senior to the liens of the Prepetition Agents and Prepetition Secured Lenders as of the Petition Date; and (c) the quarterly fees payable to the United States Trustee and Clerk of Court and shall otherwise be senior to all other liens, claims, or interests in the Collateral. As additional adequate protection, the prepetition secured lenders are each granted an allowed superpriority administrative expense claim in each of the cases and any successor cases, which shall be junior only to the Carve Out. As additional adequate protection, the Debtors were also authorized to provide adequate protection payments to the prepetition secured lenders. The prepetition senior secured lenders are comprised of the prepetition term loan lenders (GB Merchant Partners, LLC, as agent and the lenders that are parties thereto) and the prepetition revolver lenders (GE Capital Markets, Inc.,, as lead arranger and bookrunner, and the lenders that are party thereto). As additional adequate protection for the Prepetition Tranche C Lenders, upon the occurrence of the Repayment Date, the Debtors are authorized and directed, subject to any limitations in the Intercreditor Agreement, to provide adequate protection payments to the Prepetition Tranche Lenders. A full-text copy of the Court's final cash collateral order is availabe at: http://bankrupt.com/misc/Goody'sFinalCashCollateralOrder.pdf A full-text copy of the Cash Collateral Budget is available at: http://bankrupt.com/misc/Goody'sLLC.CashCollateralBudget.pdf 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). M. Blake Cleary, Esq., at Young, Conaway, Stargatt & Taylor, LLP; Paul G. Jennings, Esq., Gene L. Humphreys, Esq., Edward C. Meade, Esq., and Kristen C. Wright, Esq., at 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. GOODY'S LLC: Retains Streambank to Sell Duck Head and Other Brands ------------------------------------------------------------------ Streambank, LLC, has been retained to undertake the marketing and sales efforts for the intellectual asset portfolio of Goody's Family Clothing. In January, Goody's filed for a second time for Chapter 11 bankruptcy protection, and announced it would liquidate its 282 remaining stores. "Goody's Family Clothing offers a unique and valuable trademark portfolio, including the storied Duck Head brand," said Gabe Fried, Managing Member and Founder, Streambank. "These brands, especially the Goody's name, fill a valuable niche in the apparel retail landscape and represent an opportunity for newcomers or existing firms to grow market share and margin quickly. Opportunities to acquire brands such as Duck Head don't come along very often, and with a successful history of licensing in place, the company management has ensured this brand will continue on for some time." Goody's traced its roots to 1953, when M.D. Goodfriend and a partner founded the Athens Outlet Store in Athens, Tennessee, selling closeout, irregular, and previous-year fashions. In 1972, the merchandise focus changed to current-season, first-quality and nationally-recognized brands offered at value prices. In recognition of this new strategic direction, the company became Goody's Family Clothing. Goody's grew rapidly, expanding from 12 stores and $3 million in annual sales in 1972, to more than 380 stores and over $1 billion in sales in 2006. The company, now headquartered in Knoxville, had more than 10,000 employees across 21 states in the Southeast, Southwest, Mid- Atlantic, and Midwest. Goody's prided itself on a 344,000-square- foot distribution center, which featured one of the industry's largest, most sophisticated and cost-efficient handling systems, capable of processing up to 350,000 units per day. Goody's target customers were value-conscious families with household incomes of $30,000 to $70,000. The company offered on- trend, brand-name fashions with an emphasis on the basics. In addition to Duck Head, Goody's offered other nationally-recognized brands and a host of house brands including Ivy Crew for men, OCI for young men, juniors, and children, Goodclothes and Mountain Lake for misses, and Baby Crew for infants and toddlers. These house brands, which accounted for over $300 million in retail sales in 2007, are now being offered for sale. "Goody's intangible asset portfolio represents over a century of brand building at its finest," said David Peek, Goody's CFO. "Goody's is one of the most recognized family clothing retailers in the Southeast, and is uniquely positioned in smaller towns where budget-minded shoppers seek both quality and fashion. The acquisition of these brands represents a unique opportunity." The marketing of Goody's assets recently commenced. An auction date will be determined in the near future. About Streambank Streambank LLC -- http://www.streambankllc.com/-- is an intellectual property consulting firm, specializing in intellectual asset valuation and disposition. Serving healthy and distressed businesses, Streambank identifies, preserves and extracts value for clients through the application of experience, diligence and creativity. The firm's experience spans a broad range of industries including apparel, automotive, consumer products, food, manufacturing, medical technologies, retail and textiles. Through partnerships with brand consultancies, turnaround management firms, attorneys, and finance professionals, Streambank provides sound advice on value maximization strategies and liquidity options. Streambank is headquartered in Needham, Massachusetts. GOTTSCHALKS INC: "Going Concern" Bidder Absent at Auction --------------------------------------------------------- Reports last week said that Gottschalks Inc. may save itself from liquidation after Shandong Commercial Group, a Chinese company with supermarkets and department stores, conveyed its intent to join the auction for Gottschalks' remaining stores. Two groups of liquidators have earlier submitted bids to conduct going-out-of business sales for Gottschalks stores. According to a March 31 report by Lauren Coleman-Lochner and Jonathan Keehner of Bloomberg News, Shandong did not show up at the auction, leaving two liquidators as the official bids. A purchase by liquidators would mean the end for the 104-year-old Fresno, California based chain, Bloomberg said. But a going concern sale would enable Gottschalks to avoid the fate of Mervyn's LLC, Goody's LLC and Circuit City Stores Inc., which closed down their stores over the past year due to their inability to find a buyer or form a business plan that would turn around themselves towards profitability. Shandong Commercial Group was approved last week to buy Gottschalks's 58 stores and keep them in operation. According to an earlier report by Bloomberg, Shandong made a bid to keep operating the remaining Gottschalks stores. Shandong said it would "contribute adequate operating capital" to Gottschalks. 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 Company 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. GOTTSCHALKS INC: Completes Auction; Liquidation Hearing Today ------------------------------------------------------------- Gottschalks Inc. said that, after completing the Court-supervised auction for its business, the Company, in consultation with the agent for its senior secured lenders and the unsecured creditors' committee, has agreed to the proposed liquidation of certain of the Company's assets by a joint venture comprised of SB Capital Group, LLC, Tiger Capital Group, LLC, Great American Group, LLC and Hudson Capital Partners, LLC. As proposed, the joint venture would be appointed by the Company to conduct the sale of merchandise located at the Company's retail stores and distribution center and to dispose of certain of the Company's furnishings, trade fixtures and equipment. The proposed liquidation remains subject to the approval of the Bankruptcy Court for the District of Delaware, which is scheduled to consider the proposed liquidation on Wednesday, April 1, 2009. If approved, the liquidation may begin as early as April 2, 2009, and is expected to conclude on or before July 15, 2009. Jim Famalette, Chairman and Chief Executive Officer of Gottschalks, stated, "Despite all our efforts at earnest negotiations, we were unable to reach an agreement with our creditors, lenders and bidders to structure a going concern bid by the Court-imposed deadline. Regrettably, liquidation is now the only path for our Company. We are deeply disappointed with this outcome and the impact it will have on our employees, customers, business partners and the communities we have served for 105- years." 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 Company 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. HAMMOCKS LLC: Court Approves David G. Gray as Bankruptcy Counsel ---------------------------------------------------------------- Hon. George R. Hodges of the U.S. Bankruptcy Court for the Western District of North Carolina authorized The Hammocks, LLC to employ David G. Gray, Esq., a partner at Westall, Gray, Connolly & Davis, P.A., as counsel. Mr. Gray is expected to: a) give legal advice with respect to the Debtor's powers and duties in the continued operation of its business and management of its property; b) prepare the necessary applications, answers, orders, reports and other legal papers; and c) perform all other legal services which may be necessary herein and it is necessary for the debtor/debtor-in- possession to employ an attorney for professional activities. The Debtors did not disclose the compensation for Mr. Gray's services. To the best of the Debtor's knowledge, Mr. Gray's 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 The Hammocks, LLC Asheville, North Carolina-based The Hammocks, LLC filed for Chapter 11 protection on March 25, 2009, (Bankr. W. D. N.C. Case No.: 09-10332) The Debtor listed total assets of $16,410,707 and total debts of $7,914,231. HAMMOCKS LLC: U.S. Trustee Sets Sec. 341(a) Meeting for April 29 ---------------------------------------------------------------- The U.S. Trustee for Region 14 will convene a meeting of creditors in The Hammocks, LLC's Chapter 11 case on April 29, 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. Asheville, North Carolina-based The Hammocks, LLC, filed for Chapter 11 protection on March 25, 2009, (Bankr. W. D. N.C. Case No.: 09-10332) David G. Gray, Esq., represents the Debtor in its restructuring effort. The Debtor listed total assets of $16,410,707 and total debts of $7,914,231. HRP MYRTLE: Court Refuses to Okay Hard Rock's Sale to FPI MB ------------------------------------------------------------ Bruce Smith at The Associated Press reports that Judge Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware has deferred final approval of Hard Rock Park's sale to FPI MB Entertainment LLC. According to The AP, Judge Carey ruled that Hard Rock's founders retain rights to some of the creative touches originally built into the theme park. As reported by the Troubled Company Reporter on March 31, 2009, HRP Creative Services, a corporation set up by HRP Myrtle Beach Holdings, requested an annual $500,000 licensing fee and royalties from Hard Rock Park's new owner, FPI MB. Hard Rock Park Founder Steve Goodwin sent an e-mail to FPI saying that he would consent to the park's reopening, as long as his group was paid 1.5% of gross revenues over $50 million and the annual "base creative services fee." According to Bloomberg's Bill Rochelle, FPI MB Entertainment LLC said in papers filed March 20 that Steve Goodwin, the rock 'n' roll-themed Hard Rock Park's principal, was attempting to "shamefully unravel" the sale. The buyer says it bought the intellectual property as part of the $25 million purchase of the park and its goodwill. The AP relates that FPI MB said that Judge Carey's ruling won't stop them from reopening the park on Memorial Day, but some attractions may get different names. FPI MB President Steve Baker said in a statement, "If anything, this provides us more of an opportunity to totally rebrand many areas in the Park we felt needed to be more family friendly and better represent everything we have to offer." Mr. Goodwin, The AP states, said that it would be impossible for new owners to reopen this year without using the original creative touches, which include themed areas and a replica of the Statue of Liberty holding a Zippo cigarette lighter with a Neil Young quote on the pedestal: "Keep On Rockin' in the Free World." Joe Gitto, the attorney for Goodwin, said that an agreement would have to be worked out between his client and the new owners over licensing if the park is to reopen, The AP reports. Based in Myrtle Beach, South Carolina, HRP Myrtle Beach Holdings, LLC -- owns and operates Hard Rock Park, a rock-n-roll theme park in Myrtle Beach, South Carolina, under a long-term license agreement with Hard Rock Cafe International (USA), Inc. The company and six of its affiliates filed for Chapter 11 protection on Sept. 24, 2008 (Bankr. D. Del. Lead Case No. 08-12193). Steven Goodwin will serve as the Debtors' chief executive officer. The U.S. Trustee for Region 3 has not appointed creditors to serve on an Official Committee of Unsecured Creditors. Richards, Layton & Finger represents the Debtors as counsel. Dorsey & Whitney LLP represents the Officiala Committee of Unsecured Creditors as counsel. When the Debtors filed for protection from their creditors, they listed assets and debts of between $100 million and $500 million each. The case was converted to liquidation proceedings under Chapter 7 in January 2009. IDEARC INC: Files for Bankruptcy; to Submit Exit Plan in 30 Days ---------------------------------------------------------------- Idearc Inc. and its domestic subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division. Idearc has reached an agreement in principle with the agent bank and a steering group of its secured lenders on certain critical elements of a plan of reorganization. The Company's total debt will be reduced from roughly $9 billion to a pro forma level of $3 billion of secured bank debt, with a 12% interest rate and a six-year term. The Company expects to be able to file a plan of reorganization in roughly 30 days, and if implemented as proposed, this plan will enable Idearc to significantly reduce its outstanding debt to a more suitable level upon emergence from the legal proceedings. Pursuant to the proposed plan, Idearc does not need nor intend to obtain debtor-in-possession financing during the reorganization, as the Company maintains substantial cash balances and continues to generate positive cash flow, and has reached an agreement on use of cash collateral. Idearc expects to operate business as usual throughout its restructuring process, with no interruption in the solutions and services it provides to hundreds of thousands of clients around the nation. "Today we take an important step forward as we continue to transform Idearc. Essentially we have a company with good potential being held back by a terminally ill balance sheet," said Scott W. Klein, chief executive officer of Idearc Inc. "We are not only open for business and serving our clients as usual, we are also continuing our focus on transforming Idearc for the future based on a bold strategy, including all of the new programs launched earlier this month. "The reorganization process will enable Idearc to quickly finalize and implement a debt restructuring plan that will strengthen our financial condition and position us to compete more effectively in a challenging and rapidly evolving economic environment," Mr. Klein said. "One of our most important priorities is to put in place an appropriate capital structure to support our strategic business plans and objectives. A new capital structure that can give all of our partners the confidence they need in us to be there for them in the years ahead provides us with the greatest chance for success." Under the agreement in principle with the agent bank and steering committee, mandatory amortization will be $60 million for each of the first two years following confirmation and $40 million per year thereafter. The Company will retain 32.5% of surplus cash flow, with the balance to be paid as additional amortization on the bank debt. At emergence from Chapter 11, the Company will have a cash balance of $150 million. Other terms of the plan are still to be negotiated, and it is anticipated that the remainder of the Company's bank debt and bonds will be converted to equity. Also, the agent bank and steering committee have agreed with the Company to continue to fund operations from all but $250 million of Idearc's more than $600 million cash collateral balance. The remaining $250 million of cash collateral will be paid to the secured lenders as adequate protection, subject to bankruptcy court approval of the Company's motion to use the cash collateral. Idearc has also filed a variety of other customary first day motions with the bankruptcy court to enable it to continue to conduct business as usual while it completes its reorganization. These include motions providing for employees to continue to receive compensation and benefits as usual and to maintain customer programs and guarantees. Idearc expects to file a motion with the bankruptcy court shortly seeking to assume executory contracts related to its 30-year publishing agreement and 30-year branding agreement with Verizon Communications, Inc. Idearc's legal advisor for the restructuring is Fulbright & Jaworski LLP and its financial advisor is Moelis & Company. More information about Idearc's restructuring is available at http://www.idearc.com/restructuring. Idearc clients can call (800) 555-4833 for more information. Information for vendors is available at (866) 967-0760 or by sending an email to IdearcInfo@kccllc.com. Idearc to continue operational plans to transform the company Idearc is in the process of implementing an innovative new strategy designed to drive consumer usage of its products and increase client loyalty. Among numerous other initiatives, earlier this month Idearc announced the SuperGuarantee(SM) program, a national consumer guarantee initiative designed to increase spending in local economies by lowering the risk associated with hiring contractors, plumbers, auto body repair shops and thousands of other eligible service provider category- based businesses. "These are challenging times for small and medium businesses" Klein said. "Since joining Idearc in June 2008, my team and I have strategically and tenaciously developed new programs and product enhancements, and created more efficient ways of doing business that will forever change how we serve our consumers and clients. "We have a unique opportunity to not only help our clients survive the current economic environment; we can actually help them grow. In effect we have declared our own war on the recession and are proving it with our actions -- not words." About Idearc Inc. Headquartered in Dallas, Texas, Idearc Inc. (NYSE: IAR) -- http://www.idearc.com/-- provides yellow and white page directories and related advertising products in the United States and the District of Columbia. Products include print yellow pages, print white pages, Superpages.com, Switchboard.com and LocalSearch.com, the company's online local search resources, and Superpages Mobile, its information directory for wireless subscribers. The company is the exclusive official publisher of Verizon print directories in the markets in which Verizon is currently the incumbent local exchange carrier. The company uses the Verizon brand on its print directories in its incumbent markets, as well as in its expansion markets. * * * Idearc Inc. reported 2008 net income of $183 million including impairment charges, a 57.3% decrease compared to the same period in 2007. On an adjusted basis, 2008 net income was $353 million, a 27.1% decrease versus the same period in 2007. The Company reported a fourth quarter net loss of $77 million including impairment charges. On an adjusted basis, fourth quarter net income was $74 million, a decrease of 32.7% versus the same period in 2007. As of December 31, 2008, the company had $1.8 billion in total assets and $10.3 billion in total liabilities, including $9.9 billion in current liabilities, resulting in a stockholders' deficit of $8.4 billion. In February 2009, Moody's Investors Service downgraded Idearc Inc.'s Corporate Family Rating to Caa2 and its Probability of Default Rating to Caa3, reflecting concerns that the company may determine that a complete debt restructuring represents the best alternative to address its currently challenged capital structure. Standard & Poor's Ratings Services also lowered its corporate credit and issue-level ratings on Idearc Inc.; the corporate credit rating was lowered to 'CCC' from 'B-'. At the same time, S&P removed these ratings from CreditWatch, where they were placed with negative implications Oct. 31, 2008. The rating outlook is negative. IDEARC INC: Case Summary & 50 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Idearc Inc. fka Verizon Directories Disposition Corporation 2200 West Airfield Drive DFW Airport, TX 75261 Tel: (214) 855-3906 Bankruptcy Case No.: 09-31828 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Idearc Information Services LLC Hale 09-31835 Idearc Media LLC Houser 09-31836 License Application Corporation Hale 09-31838 Second License Application Corporation Jernigan 09-31840 Idearc Media Sales - East Co. Jernigan 09-31841 Idearc Media Sales - East LLC Houser 09-31842 Idearc Media Services - West Inc. Hale 09-31843 Idearc Media Services - East Inc. Hale 09-31845 Idearc Media Sales - West Inc. Houser 09-31846 Related Information: The Debtors (NYSE: IAR) provides yellow and white page directories and related advertising products in the United States and the District of Columbia. Products include print yellow pages, print white pages, Superpages.com, Switchboard.com and LocalSearch.com, the company's online local search resources, and Superpages Mobile, their information directory for wireless subscribers. The Debtors are the exclusive official publisher of Verizon print directories in the markets in which Verizon is currently the incumbent local exchange carrier. The Debtors use the Verizon brand on their print directories in their incumbent markets, as well as in their expansion markets. In February 2009, Moody's Investors Service downgraded Idearc Inc.'s Corporate Family Rating to Caa2 and its Probability of Default Rating to Caa3, reflecting concerns that the company may determine that a complete debt restructuring represents the best alternative to address its currently challenged capital structure. Standard & Poor's Ratings Services also lowered its corporate credit and issue-level ratings on Idearc Inc.; the corporate credit rating was lowered to 'CCC' from 'B-'. At the same time, S&P removed these ratings from CreditWatch, where they were placed with negative implications Oct. 31, 2008. The rating outlook is negative. See http://www.idearc.com/ Chapter 11 Petition Date: March 31, 2009 Court: Barbara J. Houser Judge: Northern District of Texas (Dallas) Debtor's Counsel: Toby L. Gerber, Esq. tgerber@fulbright.com Fulbright & Jaworski, LLP 2200 Ross Avenue, Suite 2800 Dallas, TX 75201 Tel: (214) 855-7171 Fax: (214) 855-8200 Investment Banker: Moelis & Company Claims Agent: Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245 Tel: (866) 381-9100 The Debtors' financial condition as of December 31, 2008: Total Assets: $1,815,000,000 Total Debts: $9,515,000,000 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ US Bank National Association 8% senior notes $2,917,133,333 Trustee due Nov. 17, 2016 US Corporate Trust Services 2 Liberty Place 50 S. 16th Street, Ste. 2000 Tel: (215) 761-9313 Product Development Corp. trade debt $8,221,767 20 Ragsdale Dr., Ste. 100 Monterey, CA 93940 Tel: (831) 8333-1100 WP Network trade debt $7,424,455 PO Box 94564 Seattle, WA 98124-6864 Tel: (206) 975-5185 RR Donnelley & Sons Company trade debt $6,893,381 PO Box 13654 Newark, NJ 07188 Tel: (212) 503-1415 Google trade debt $2,720,698 Department 33654 PO Box 39000 San Francisco, CA 94139 Directory Distributing Ass. trade debt $2,024,217 Inc. 4363 Woodson Road St. Louis, MO 63134 Tel: (314) 592-8620 Alternate Postal Direct Inc. trade debt $1,195,049 12495 34th St. N. Ste. D Saint Petersburg, FL 33716-1833 Tel: (727) 556-0009 TAC Staffing Services trade debt $1,105,851 PO Box 4785 Boston, MA 02212 Tel: (562) 594-5178 Marchex trade debt $1,091,085 413 Pine St. Suite 500 Seattle, WA 98101 Tel: (206) 331-3303 ZipCodeZ trade debt $1,059,735 1158 26th St. #464 Santa Monica, CA 90403 Tel: (310) 556-4440 Yahoo trade debt $907,428 PO Box 89-4147 Los Angeles, CA 90189-4147 Tel: (818) 524-4799 Premier Delivery Services Inc. trade debt $777,852 2006 48th Ave., Ct. E Fife, WA 98424 Tel: (253) 872-4700 Amdocs trade debt $643,628 1390 Timberlake Manor Parkway Chesterfield, MO 63017 Tel: (972) 453-3523 Ask Jeeves trade debt $630,469 5858 Horton St. Suite 350 Emeryville, CA 94608 Tel: (510) 985-7630 US Postal Services trade debt $588,566 2700 Campus Drive San Mateo, CA 94497 Tel: (214) 267-3141 Catalyst Paper (USA) Inc. trade debt $520,231 5678 Collection Center Drive Chicago, IL 60693 Tel: (817) 488-9258 Local.com trade debt $500,479 One Technology Drive Irvine, CA 92618 Tel: (949) 789-5268 Oracle USA Inc. trade debt $469,912 MPI LLC trade debt $355,174 Advertising Network Solutions trade debt $337,060 Lycos Total trade debt $324,302 BI/Schoeneckers Inc. trade debt $297,549 GenieKnows trade debt $291,969 Leads and Feeds trade debt $258,477 Xeros Corporation trade debt $235,835 Schmidt Printing Inc. trade debt $198,478 V-Enable trade debt $186,899 Pratt Paper Company trade debt $172,476 Hellometro Inc. trade debt $159,750 Avizion Technologies Group trade debt $145,171 Traffic Engine trade debt $130,622 CitySearch trade debt $126,449 Maple Leaf Creative trade debt $123,060 Microsoft trade debt $118,927 Shiptransportal.com Inc. trade debt $106,168 Mastermind Marketing trade debt $106,050 TCS America trade debt $94,300 Clear Technologies Inc. trade debt $87,050 Ergonomic Group Inc. trade debt $80,975 Moore Wallace trade debt $79,791 Augmentation Inc. trade debt $70,328 Zurich North America trade debt $69,170 Cael trade debt $61,086 Creditwatch Inc. trade debt $60,628 Shopping.com trade debt $60,181 Saleforce.com trade debt $59,029 Shopzilla trade debt $58,711 Petoskey Plastics trade debt $56,425 adMarketPlace trade debt $55,571 The petition was signed by Samuel D. Jones, chief financial officer. INFOGROUP INC: Macro Agreement Won't Affect S&P's 'BB' Rating ------------------------------------------------------------- Standard & Poor's Ratings Services said that its rating and outlook on Omaha-based infoGROUP Inc. (BB/Negative/--) are not affected by the company's announcement that it has entered into an agreement to sell its wholly owned subsidiary, Macro International Inc., and that it intends to use all of the proceeds, net of taxes and other transaction-related items, from the sale to repay debt balances. (The cash gross proceeds are expected to be about $155 million.) While S&P expects the transaction to modestly reduce infoGROUP's leverage, as measured by adjusted debt to EBITDA, S&P continues to monitor developments related to the ongoing formal SEC investigation. While S&P does not presently expect the outcome will affect infoGROUP's credit quality, the negative outlook signals some uncertainty associated with this process. In addition, since S&P last published its expectations for infoGROUP's 2009 performance, the economic environment has worsened. In December, S&P cited its expectation for the company to report a mid-single-digit revenue decline in 2009, and relatively flat EBITDA due to various cost-cutting initiatives that were instituted in 2008. S&P now expects 2009 EBITDA, pro forma for the sale of Macro International, could decline modestly. The decline in EBITDA partially offsets expected debt reduction associated with the sale and therefore, S&P expects leverage to decline only modestly in 2009 to the mid- to high-2.0x area from about 2.9x at December 2008. S&P could revise the outlook to stable if the SEC's formal investigation gets resolved satisfactorily and the company continues to perform within S&P's expectations in this economic downturn. INTER SAVINGS: Weiss Ratings Assigns "Very Weak" E- Rating ---------------------------------------------------------- Weiss Ratings has assigned its E- rating to Maple Grove, Minn.- based Inter Savings Bank, FSB, dba Interbank, FSB. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." Inter Savings Bank is chartered as a Savings Association, primarily regulated by the Office of Thrift Supervision. The institution was established on July 26, 1965; deposits have been insured by the Federal Deposit Insurance Corporation since that date. Inter Savings Bank maintains a Web site at http://www.interbank.com/and has four offices in Dakota, Hennepin and Ramsey counties. At June 30, 2008, Inter Savings Bank disclosed deposits totalling $578 million in its regulatory filings. IXP INC: Files for Chapter 11 Bankruptcy Protection in Colorado --------------------------------------------------------------- Denver Business Journal reports that IXP Inc. has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Colorado. The Grand Junction Daily Sentinel relates that IXP vanished earlier this year, leaving behind a string of creditors in Colorado, Utah, and Wyoming. According to Business Journal, the Colorado Department of Revenue reportedly confiscated IXP property in December 2008 due to unpaid state payroll taxes. Business Journal states that IXP is representing itself in its bankruptcy case. IXP Inc. is a Grand Junction-area pipeline construction company, formerly based in Fruita. JOHNS MANVILLE: High Court Questions Judges' Power to Block Suits ----------------------------------------------------------------- Bankruptcy Law360 reports that U.S. Supreme Court justices expressed two key concerns during oral arguments Monday in In re Common Law Settlement Counsel, Petitioner v. Pearlie Bailey, et al., on whether asbestos claimants can sue insurer Travelers Indemnity Co. and affiliates, despite an order prohibiting the suits in the bankruptcy of policyholder Johns-Manville Corp. According to the report, the justices questioned whether bankruptcy judges were allowed to go too far in imposing decisions on non-debtor parties, and also whether more narrowly construing those powers could harm bankrupt companies. As reported by the Troubled Company Reporter, the U.S. Supreme Court on December 12, 2008, granted a petition by Travelers Indemnity Casualty and Surety, et al., for writ of certiorari. Travelers and the Common Law Settlement Counsel are the petitioners in the Supreme Court appeal. The respondents are Chubb Indemnity Insurance Company, the Asbestos Personal Injury Respondents, Pearlie Bailey, et al., and the Cascino Asbestos Claimants. Jagdeep S. Bhandari, et al., and the Future Claimants Representatives in the Manville case are also parties to the appeal. Chubb Indemnity Insurance Company, Pearlie Bailey, et al., and the Cascino Asbestos Claimants, among others, have filed briefs in the case. Direct Action Lawsuits Travelers served as Manville's primary insurer from 1947 through 1976. Travelers paid nearly $80,000,000 into the bankruptcy estate -- in addition to $20,000,000 already paid in litigation expenses on behalf of Manville -- in exchange for a "full and final release of Manville-related claims." Travelers' settlement, like those of other Manville insurers, was predicated upon the bankruptcy court issuing an injunction that barred suits against Manville's insurers -- including Travelers -- and directed litigation by potential claimants instead against the Manville Personal Injury Settlement Trust. The injunction -- embodied in a 1986 order confirming Manville's plan of reorganization and a separate 1986 Insurance Settlement Order -- channeled to the Manville Trust any and all claims that were based on, arose out of, or related to Manville's liability insurance policies. The linchpin of the reorganization was the contribution of tens of millions of dollars by the Petitioners and other insurers into a trust for payment of asbestos claims in exchange for protection from future claims against the insurers, all of which was intended to provide the Petitioners with full and final protection from suits relating to, arising from or in connection with the Petitioners' insurance relationship with Johns-Manville. The Manville confirmation order was affirmed in a final judgment rendered by the U.S. Court of Appeals for the Second Circuit in 1988. The confirmation order in Manville was subsequently ratified by the U.S. Congress and used as a model for Section 524(g) of the Bankruptcy Code. In the decades following the entry of the final judgment affirming the Manville plan of reorganization, and in reliance on the protections enacted by Congress, tens of billions of dollars have been paid into "524(g) trusts" for the benefit of hundreds of thousands of asbestos claimants. The Plan Confirmation Order enjoined "all persons" from commencing any action against any of the Settling Insurance Companies "for the purpose of, directly or indirectly, collecting, recovering or receiving payment of, on or with respect to any Claim . . . or Other Asbestos Obligation. . . ." Undeterred by the 1986 orders, various groups of plaintiffs sued Travelers and other insurers in several states based on statutory regulation of insurance practices and common law theories. The statutory claimants assert the rights of individuals who are dissatisfied with the settlements they received after negotiating with Travelers acting on behalf of Manville, or who declined to file personal injury suits against Manville because Travelers allegedly suppressed information about asbestos hazards and intentionally propagated an allegedly-fraudulent "state of the art" defense to frustrate the claimants' rights. The plaintiffs allege that Travelers acquired knowledge about the dangers of asbestos through early asbestosis claims from as far back as the 1950s, "recognized the potential for future escalation of asbestos litigation and . . . influence[d] Manville's purported failure to disclose knowledge about asbestos hazards." The common law claimants assert that Travelers violated alleged duties to disclose certain asbestos-related information it learned from Manville during Travelers' long tenure as Manville's primary insurer. Travelers Settlement In June 2002, Travelers asked the Bankruptcy Court to enjoin 26 independent actions pending in Louisiana, Massachusetts, Texas, and West Virginia state courts pursuant to the 1986 orders. After holding a series of hearings, the Bankruptcy Court referred the matter to mediation and appointed the Honorable Mario M. Cuomo, former Governor of the state of New York, as mediator. Three classes of plaintiffs settled with Travelers. The settlements, which totaled almost $500,000,000, were conditioned upon the Bankruptcy Court's entry of an order clarifying that the Direct Action lawsuits are, and have always been, prohibited by the 1986 orders. Bankruptcy Court Judge Burton Lifland, who oversees the Johns Manville cases, in August 2004 approved the Settlement Agreement and entered a clarifying order specifying that the Direct Action lawsuits against Travelers were barred by the 1986 orders. The U.S. District Court for the Southern District of New York affirmed the Bankruptcy Court's findings of fact and conclusions of law, calling the Direct Action Claims as "creatively pleaded attempts to collect indirectly against the Manville insurance policies." The District Court concluded that "barring these claims was a proper exercise of jurisdiction." Second Circuit Appeal Chubb Indemnity Insurance Company and a group of asbestos personal injury claimants elevated the matter to the Second Circuit, among others, arguing that the Bankruptcy Court was without jurisdiction to enjoin third-party non-debtor suits against Travelers. The Appellants argued that the Bankruptcy Court failed to properly distinguish between (a) claims that seek to recover directly from Travelers for Travelers' separate acts; and true Direct Action suits that seek to recover from an insurer contractually obligated to indemnify Manville for its misconduct. In February 2008, over two decades after the original orders became final, a different panel of the Second Circuit held that the Bankruptcy Court lacked authority in 1986 to enter a confirmation order that extended beyond the "res" of the debtor's estate, i.e., insurance policy proceeds. Circuit Judges Guido Calabresi, Sonia Sotomayor and Richard C. Wesley, in a 28-page opinion, vacated the order by the District Court. Travelers argued that the Bankruptcy Court was merely enforcing its prior order. The Second Circuit said the case concerns the outer reaches of a bankruptcy court's jurisdiction. "[W]hile there is no doubt that the bankruptcy court had jurisdiction to clarify its prior orders, that clarification cannot be used as a predicate to enjoin claims over which it had no jurisdiction," the Second Circuit said in its decision dated Feb. 15, 2008. The Second Circuit held that the lower courts appeared to view the jurisdictional inquiry as a factual one: if the direct actions "arose out of" or are "related to" the Manville-Travelers relationship, then the court had jurisdiction. The Second Circuit, however, noted that factual determination was only half of the equation, and that the nature and extent of Travelers' duty to the Direct Action plaintiffs is a function of state law. Neither the District Court nor the Bankruptcy Court looked to the laws of the states where the claims arose to determine if indeed Travelers did have an independent legal duty in its dealing with plaintiffs, notwithstanding the factual background in which the duty arose, the Second Circuit said. The Second Circuit remanded the case for the Bankruptcy Court to examine whether, in light of the appellate court's opinion, it had jurisdiction to enjoin claims against Travelers. Travelers asserted that if any portion of the Bankruptcy Court's clarifying order is vacated then all of the relevant settlements will terminate. The Second Circuit clarified that it is not offering any opinion on the matter and will leave it to the settling parties, with the aid of the Bankruptcy Court, to determine the status of their settlements. The question before the Supreme Court is whether the Court of Appeals erred in categorically holding that bankruptcy courts do not have jurisdiction to enter confirmation orders that extend beyond the "res" of a debtor's estate, despite the High Court's ruling that "[t]he Framers would have understood that laws 'on the subject of Bankruptcies' included laws providing, in certain respects, for more than simple adjudications of rights in the res," Central Virginia Community College v. Katz, 546 U.S. 356, 370 (2006), and whether the Court of Appeals compounded the error by: (a) failing to apply as written a federal statute (11 USC Sections 524(g) and (h)), by limiting the scope of relief in a manner that is contrary to the express terms and purposes of that statute; (b) failing to give effect to the Supremacy Clause and holdings of the Supreme Court that federal bankruptcy relief cannot be overridden by rights alleged to have been created under state law; and (c) failing to respect important principles of finality and repose, and the express provisions of Section 524(g), by failing to approve a federal court's enforcement of a confirmation order that was affirmed over two decades ago on direct appeal. Manville was, by most sources, the largest manufacturer of asbestos-containing products and the largest supplier of raw asbestos in the United States from the 1920s until the 1970s. Manville sold raw asbestos to manufacturers of asbestos-based products in 58 countries and distributed its own asbestos-based products "across the entire spectrum of industries and employment categories subject to asbestos exposure." As a result of studies linking asbestos with respiratory disease, Manville became the target of a growing number of products liability lawsuits in the 1960s and 1970s. Buckling under the weight of its asbestos liability, Manville filed for Chapter 11 protection on August 26, 1982, before Judge Lifland. To avoid the uncertainty of insurance litigation and to fund its plan of reorganization, Manville sought to settle its insurance claims. Manville obtained in excess of $850,000,000 from settlements with its insurers. The U.S. Bankruptcy Court for the Southern District of New York entered an order confirming the Debtors' Second Amended and Restated Plan of Reorganization on Dec. 22, 1986. JPT AUTOMOTIVE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: J.P.T. Automotive, Inc. dba Victory of Five Towns 696 Burnside Avenue Inwood, NY 11696 Bankruptcy Case No.: 09-72097 Type of Business: The Debtor is an automobile dealer. See http://www.fivetowntoyota.com/ Chapter 11 Petition Date: March 30, 2009 Court: Eastern District of New York (Central Islip) Judge: Dorothy Eisenberg Debtor's Counsel: Gary C. Fischoff, Esq. gcf@title11.net Steinberg, Fineo, Berger & Fischoff 40 Crossways Park Drive Woodbury, NY 11797 Tel: (516) 747-1136 The Debtor's financial condition as of February 23, 2009: Total Assets: $8,236,410 Total Debts: $10,659,530 The Debtor's Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Great American Insurance $107,303 9449 Balboa Ave Ste 300 San Diego, CA 92123 Portfolio Group $105,372 14651 Dallas Pkwy Ste 502 Dallas, TX 75254 Burnside Avenue Garage $44,010 686 Burnside Avenue Inwood, NY 11696 The New York Post $33,537 Wells Fargo Auto Finance $28,274 Newsday $27,656 M & T Bank $25,115 E & M Distributing $19,502 DAC $16,228 Magna Group $15,713 RPL Media $15,264 Groovecar Inc. $14,432 New York State Insurance Fund $13,993 Auto Trader.com LLC $13,200 Bank of America $12,376 Titan Outdoor $11,886 Avenue Sound $11,794 T & M Auto Parts Inc. $10,023 Toyota Financial Services $9,578 Federal Express Corp $9,464 The petition was signed by Richard Cirillo, president. JUNIPER GENERATION: Moody's Cuts Senior Secured Rating to 'Ba3' --------------------------------------------------------------- Moody's Investors Service downgraded Juniper Generation LLC's senior secured rating to Ba3 from Ba1. The rating outlook remains negative. The rating action reflects the proposed decision (ALJ PD) by California Public Utility Commission's Administrative Law Judge Yip-Kikugawa that could serve as a strong incentive for QFs to resolve their disputes regarding the implementation of the Market Index Formula. Moody's estimates that MIF could be finalized in 2009 in contrast to Moody's earlier view that the timing of MIF was highly uncertain and could take an extended period of time. Under the ALJ PD, the utility offtakers would recover the aggregate difference between the Transition Formula and the MIF made to qualified facilities since September 20, 2007 and the aggregate over/under payments would be recovered over a twelve- month period. An alternate proposed decision by Commissioner Peevey would have the MIF apply only on a forward basis. While it is still not clear whether the ALJ PD will be approved, the ALJ PD is expected to serve as an important driver in accelerating the completion of MIF and signals the CPUC's desire to finalize the MIF given the extensive delays already experienced to date. The rating action also incorporates Moody's view that the MIF could be implemented when the market heat rate in California is negatively pressured by the severe economic downturn resulting in Juniper's senior debt service coverage ratios falling below 1.0 times. That being said, Juniper's senior DSCR is expected to remain above 1.5 times until MIF is finalized. The negative outlook reflects the uncertainty on MIF's final form and date of completion, the ALJ PD, and Juniper's cash flow and metric metrics. The negative outlook also considers uncertainties on Juniper's ability to manage dispatch levels to improve cash flow once MIF is finalized and Juniper's likely exposure to the market heat rate under MIF. Juniper's credit rating could face negative rating pressure if Juniper's projects incur operating problems, if one of the projects were to lose its QF status or if Juniper is unable to extend or renew its expiring working capital or letter of credit facilities. Additionally, Juniper's rating could be downgraded if the ALJ PD or a similar decision is approved or if Juniper's post MIF cash flows are lower than expected. Juniper is a holding company for nine fully or partially owned gas-fired cogeneration projects in California with a net equity interest of 298 MWs, a related O&M service company, WCAC Operating Company California LLC and a related fuel supply services company, WCAC Gas Services, LLC. All nine projects operate as a Qualifying Facility as defined under the Public Utility Regulatory Policies Act of 1978. The projects sell energy and capacity to Pacific Gas and Electric (PG&E: A3 Sr Unsec, Stable Outlook) and Southern California Edison (SCE: A3 Sr Unsec, Stable Outlook). ArcLight Energy Partners Fund II, a fund managed by ArcLight Capital Partners, owns 100% of the equity interests in Juniper. The last rating action on Juniper occurred on January 27, 2009, when the Project's senior secured rating was downgraded to Ba1 from Baa3. KS REALTY: Judge Deasy Sets July 21 as Proofs of Claim Bar Date ---------------------------------------------------------------- Hon. J. Michael Deasy of the U.S. Bankruptcy Court for the District of New Hampshire set July 21, 2009, as the last day of creditors in KS Realty, Inc. and Pointe Luck, LLC's Chapter 11 cases to file proofs of claim. Proofs of claim must be filed with the Office of the Clerk, U.S. Bankruptcy Court, 1000 Elm Street, Suite 1001, Manchester, New Hampshire. Hopkinton, Massachusetts-based KS Realty, Inc. and Pointe Luck, LLC filed for separate Chapter 11 protection on March 23, 2009, (Bankr. D. N.H. Lead Case No.: 09-10918) Jennifer Rood at Bernstein Shur represents the Debtors in their restructuring efforts. The Debtors listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. KS REALTY: U.S. Trustee Sets Section 341(a) Meeting for April 24 --------------------------------------------------------------- The U.S. Trustee for Region 1 will convene a meeting of creditors in KS Realty, Inc., and Pointe Luck, LLC's Chapter 11 cases on April 24, 2009, at 10:00 a.m., at 1000 Elm Street, 7th Floor - Room 702, Manchester, New Hampshire. 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. Hopkinton, Massachusetts-based KS Realty, Inc., and Pointe Luck, LLC, filed for separate Chapter 11 protection on March 23, 2009, (Bankr. D. N.H. Lead Case No.: 09-10918). Jennifer Rood, Esq., at Bernstein Shur represents the Debtors in their restructuring efforts. The Debtors listed assets of $10 million to $50 million and debts of $10 million to $50 million. KULICKE & SOFFA: S&P Withdraws Corporate Credit Rating to 'B+' -------------------------------------------------------------- Standard & Poor's Ratings Services said that it withdrew its corporate credit and issue-level ratings on Ft. Washington, Pennsylvania-based Kulicke & Soffa Industries Inc., including the 'B+' corporate credit rating, at the company's request. Ratings List Kulicke & Soffa Ratings Withdrawn To From ----------------- -- ---- Corporate credit rating NR B+/Stable/-- LEHMAN BROTHERS BANK: Weiss Ratings Assigns "Very Weak" E- Rating ----------------------------------------------------------------- Weiss Ratings has assigned its E- rating to Wilmington, Delaware- based Lehman Brothers Bank, FSB. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." Lehman Brothers Bank is chartered as a Savings Association, primarily regulated by the Office of Thrift Supervision. The institution was established on January 1, 1921; deposits have been insured by the Federal Deposit Insurance Corporation since January 2, 1958. Lehman Brothers Bank maintains a Web site at http://www.lehmanbrothersbank.com/and has 2 offices, one in Wilmington, Del., and one in Jersey City, N.J. At Dec. 31, 2008, Lehman Brothers Bank disclosed $6.5 billion in assets and $6.0 billion in liabilities in its regulatory filings. LENNAR CORP: Posts $155.9 Million Net Loss in First Quarter 2009 ---------------------------------------------------------------- Lennar Corporation reported results for its first quarter ended February 28, 2009. First quarter net loss in 2009 was $155.9 million, or $0.98 per diluted share, compared to first quarter net loss of $88.2 million, or $0.56 per diluted share, in 2008. Stuart Miller, President and Chief Executive Officer of Lennar Corporation, said, "The housing market continued its downward trend throughout our first quarter. Despite historically low interest rates and some indicators pointing toward market stabilization, low consumer confidence, increased unemployment and growing foreclosure rates negatively impacted new home sales in most of our markets. While we are hopeful that the recent actions taken by the Federal government will help stimulate housing demand and restore consumer confidence, we continue to adjust our business to adapt to market conditions." Mr. Miller stated, "During the first quarter, we continued to focus on returning to profitability by concentrating on the basics of our homebuilding operations. We remained focused on repositioning our product to meet today's consumer demand for more affordable product. We reduced our construction costs by re- bidding and re-tooling our product and eliminated S, G & A expenses by restructuring our operations and consolidating operating divisions in the wake of declining volume levels." "We remain focused on maintaining strong liquidity as we ended our first quarter with $1.1 billion in cash, no outstanding borrowings under our credit facility and a responsible homebuilding debt-to- total capital ratio, net of homebuilding cash, of 37.4%. We also reduced the number of our unconsolidated joint ventures to 95 from 116 at November 30, 2008, and reduced our maximum unconsolidated joint venture recourse debt to $474 million from $520 million at November 30, 2008." Mr. Miller concluded, "As we continue to focus on homebuilding profitability and on cash generation, we are well positioned to weather the current challenges and to take advantage of opportunities as they present themselves." Results of Operations for Three Months Ended February 28, 2009 Homebuilding Revenues from home sales decreased 45% in the first quarter of 2009 to $522.8 million from $953.1 million in 2008. Revenues were lower primarily due to a 38% decrease in the number of home deliveries and a 12% decrease in the average sales price of homes delivered in 2009. New home deliveries, excluding unconsolidated entities, decreased to 2,136 homes in the first quarter of 2009 from 3,437 homes last year. In the first quarter of 2009, new home deliveries were lower in each of the Company's homebuilding segments and Homebuilding Other, compared to 2008. The average sales price of homes delivered decreased to $244,000 in the first quarter of 2009 from $278,000 in the same period last year, primarily due to reduced pricing. Sales incentives offered to homebuyers were $50,500 per home delivered in the first quarter of 2009, compared to $48,000 per home delivered in the first quarter of 2008. Gross margins on home sales excluding SFAS 144 valuation adjustments were $75.0 million, or 14.3%, in the first quarter of 2009, compared to $162.9 million, or 17.1%, in 2008. Gross margin percentage on home sales, excluding SFAS 144 valuation adjustments, decreased compared to last year, primarily due to higher sales incentives offered to homebuyers as a percentage of revenues from home sales. Gross margins on home sales were $34.2 million, or 6.5%, in the first quarter of 2009, which included $40.8 million of SFAS 144 valuation adjustments, compared to gross margins on home sales of $136.7 million, or 14.3%, in the first quarter of 2008, which included $26.2 million of SFAS 144 valuation adjustments. Gross margins on home sales excluding SFAS 144 valuation adjustments is a non-GAAP financial measure. This financial measure is disclosed by certain of the Company's competitors. The Company finds it useful and important in evaluating its performance because it discloses the Company's gross margins with regard to new homes the Company actually delivers in the periods presented. The Company believes that disclosing this information is helpful to readers of its financial statements by enabling them to compare the gross margins of new homes the Company actually delivers during the periods presented with those of its competitors. Selling, general and administrative expenses were reduced by $73.8 million, or 42%, in the first quarter of 2009, compared to the same period last year, primarily due to reduction in associate headcount, variable selling expenses and fixed costs. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 19.4% in the first quarter of 2009, from 18.4% in the first quarter of 2008, due to lower revenues. Losses on land sales totaled $10.5 million in the first quarter of 2009, which included $0.2 million of SFAS 144 valuation adjustments and $10.2 million of write-offs of deposits and pre- acquisition costs related to approximately 1,100 homesites under option that the Company does not intend to purchase. In the first quarter of 2008, losses on land sales totaled $26.5 million, which included $15.5 million of SFAS 144 valuation adjustments and $16.9 million of write-offs of deposits and pre-acquisition costs related to approximately 2,600 homesites that were under option. Equity in loss from unconsolidated entities was $2.9 million in the first quarter of 2009, compared to equity in loss from unconsolidated entities of $23.0 million in the first quarter of 2008, which included $18.9 million of SFAS 144 valuation adjustments related to assets of unconsolidated entities in which the Company has investments. Other income (expense), net, totaled ($47.8) million in the first quarter of 2009, which included $37.2 million of APB 18 valuation adjustments to the Company's investments in unconsolidated entities, compared to other income (expense), net, of ($21.8) million in the first quarter of 2008, which included $29.6 million of APB 18 valuation adjustments to the Company's investments in unconsolidated entities. Minority interest income (expense), net was $1.7 million and ($0.2) million, respectively, in the first quarter of 2009 and 2008. Sales of land, equity in loss from unconsolidated entities, other income (expense), net and minority interest income (expense), net may vary significantly from period to period depending on the timing of land sales and other transactions entered into by the Company and unconsolidated entities in which it has investments. Financial Services Operating earnings for the Financial Services segment was $0.5 million in the first quarter of 2009, compared to an operating loss of $9.7 million in the first quarter of 2008. The improvement in the Financial Services segment was primarily due to lower fixed costs as a result of the Company's focus on cost reductions in the segment's mortgage and title operations. Corporate General and Administrative Expenses Corporate general and administrative expenses were reduced by $6.8 million, or 20%, in the first quarter of 2009, compared to the first quarter of 2008. As a percentage of total revenues, corporate general and administrative expenses increased to 4.7% in the first quarter of 2009, from 3.3% in the first quarter of 2008, due to lower revenues. Deferred Tax Asset Valuation Allowance SFAS 109 requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on available evidence, it is more likely than not that such assets will not be realized. As a result of its net loss during the three months ended February 28, 2009, the Company generated deferred tax assets of $57.7 million and recorded a non-cash valuation allowance in accordance with SFAS 109 against the entire amount of deferred tax assets generated. About Lennar Corp. Based in Miami, Fla., Lennar Corporation (NYSE: LEN and LEN.B) -- http://www.lennar.com/-- builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar's Financial Services segment provides primarily mortgage financing, title insurance and closing services for both buyers of the company's homes and others. * * * As reported by the Troubled Company Reporter on June 11, 2008, Moody's Investors Service lowered all of the ratings of Lennar Corporation, including its corporate family rating to Ba3 from Ba1 and the ratings on its various issues of senior unsecured notes to Ba3 from Ba1. At the same time, a speculative grade liquidity rating of SGL-2 was assigned. The ratings outlook remains negative. As reported by the TCR on Dec. 16, 2008, Fitch Ratings downgraded Lennar Corp.'s Issuer Default Ratings and outstanding debt ratings: -- IDR to 'BB+' from 'BBB-'; -- Senior unsecured to 'BB+' from 'BBB-'; -- Unsecured bank credit facility to 'BB+' from 'BBB-'; -- Short Term IDR from 'F3' to 'B'; -- Commercial Paper from 'F3' to 'B'. Fitch said the rating outlook remains negative. LINCOLN BANK: Weiss Ratings Assigns "Very Weak" E- Rating --------------------------------------------------------- Weiss Ratings has assigned its E- rating to Plainfield, Ind.-based Lincoln Bank. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." Lincoln Bank is not a member of the Federal Reserve, and is primarily regulated by the Federal Deposit Insurance Corporation. The institution was established on Jan. 1, 1884, and deposits have been insured by the FDIC since June 25, 1935. Lincoln Bank maintains a Web site at http://www.lincolnbank.biz/and has 16 branches located in Indiana. At Dec. 31, 2008, Lincoln Bank disclosed $876 million in assets and $796 million in liabilities in its regulatory filings. LOCAL INSIGHT: S&P Changes Outlook to Negative; Keeps 'B' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Englewood, Colorado-based, Local Insight Regatta Holdings Inc. to negative from stable, and, at the same time, affirmed its 'B' corporate credit rating on the company. Standard & Poor's also lowered its issue-level rating on LIRH's senior secured credit facilities to 'B+' (one notch higher than the 'B' corporate credit rating) from 'BB-'. S&P revised the recovery rating on these loans to '2' from '1'. The '2' recovery rating indicates S&P's expectation of substantial (70%-90%) recovery for lenders in the event of a payment default. In addition, S&P lowered its issue-level rating on LIRH's senior subordinated notes to 'CCC+' (two notches lower than the 'B' corporate credit rating) from 'B'. S&P revised the recovery rating on these securities to '6' from '3'. The '6' recovery rating indicates S&P's expectation of negligible (0%-10%) recovery for lenders in the event of a payment default. "The outlook revision reflects our expectation that credit measures, based on the family of companies owned by Local Insight Media Holdings L.P., will weaken in the intermediate term," said Standard & Poor's credit analyst Ariel Silverberg, "given our belief that the consumer-driven nature of the current recession will weaken print ad sales (which S&P believes are already in secular decline) to a greater extent than in the previous few quarters." She added that the company will be challenged to replace these lost ad sales dollars with sufficient digital sales at a comparable profit margin. MARC HOTELS: Chapter 11 Bankruptcy Case Transferred to Honolulu --------------------------------------------------------------- Janis L. Magin at Pacific Business News reports that Marc Hotels and Resorts Inc. filed for Chapter 11 bankruptcy protection in a U.S. Bankruptcy Court in Phoenix, Arizona, but the case was transferred this week to Honolulu. According to Business Journal, the case was transferred on Wednesday at the request of Marc Hotels' two largest unsecured creditors -- Hawaiian Monarch Partners LLC and City Center LLC. The two creditors, says Business Journal, argued that the case should be heard in Honolulu because the Company is based in Hawaii and because the majority of its 20 largest creditors are in the islands. Marc Hotels and Resorts Inc. is a Hawaii hotel operator. It has two hotel and condominium properties each on Oahu, Kauai, and Molokai. MERCER INTERNATIONAL: S&P Affirms 'B-' Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' corporate credit rating and issue-level ratings on Vancouver-based Mercer International Inc. At the same time, S&P removed the ratings from CreditWatch with negative implications, where they were placed on Feb. 13, 2009. The outlook is negative. In addition, Standard & Poor's revised its recovery rating on Mercer's senior notes due 2013 to '4' from '3', indicating expectations for average (30%-50%) recovery in the event of a payment default. This action resulted from using a lower enterprise value in S&P's simulated default analysis because the normalized EBITDA is lower than previously thought due to the significant deterioration in pulp prices. "The affirmation reflects our expectation that while Mercer will continue to generate weak operating results because of reduced pulp demand and lower sales prices, the company will maintain sufficient liquidity over the next several quarters," said Standard & Poor's credit analyst Andy Sookram. S&P expects the company to maintain liquidity, including cash on hand and availability under committed credit lines, of about EUR60 million over the next several quarters, which S&P believes to be sufficient given current market conditions. The negative outlook reflects S&P's concerns that market conditions could weaken more than S&P expects, resulting in a steeper decline in cash flow and liquidity. Mercer, through its subsidiaries, produces northern bleached softwood kraft pulp. Its Rosenthal subsidiary, located in eastern Germany, produces an estimated 325,000 air-dried metric tons of annual capacity. The Celgar subsidiary in British Columba produces 480,000 ADMTs of annual capacity. MERUELO MADDUX: Receives Delisting Notification From Nasdaq ----------------------------------------------------------- Meruelo Maddux Properties has received a Nasdaq staff determination notice. The notice stated that the company was not in compliance with Nasdaq Marketplace Rules 4300, 4450(f) and IM- 4300 because the company and numerous subsidiaries filed voluntary petitions in California for relief under Chapter 11 of the United States Bankruptcy Code. Based on the notice, the company anticipates that its common stock will no longer be listed on The Nasdaq Global Market from and after the opening of business on April 7, 2009. The company is in discussions with market makers in its common stock about potential quotation of the common stock on the OTC Bulletin Board following delisting from The Nasdaq Global Market. About Meruelo Maddux Properties Meruelo Maddux Properties is a self-managed, full-service real estate company that develops, redevelops and owns commercial and residential properties in downtown Los Angeles and other densely populated urban areas in California that are undergoing demographic or economic changes. Meruelo Maddux Properties is committed to socially responsible investment. Through its predecessor business, Meruelo Maddux Properties has been investing in urban real estate since 1972. Meruelo Maddux Properties, Inc. and 52 affiliates filed for Chapter 11 protection on March 27, 2009 (Bankr. C.D. Calif. Lead Case No. 09-13356). Meruelo Maddux Properties - 12385 San Fernando Road LLC filed its Chapter 11 petition on March 26, 2009. Judge Kathleen Thompson oversees the cases. John J. Bingham, Jr., Esq., at Danning, Gill, Diamond & Kollitz, LLP, Los Angeles, serves as the Debtors' bankruptcy counsel. As of December 31, 2008, the Debtors had $681,769,000 in total assets and $342,022,000 in total debts. MIDWAY GAMES: U.S. Trustee Balks at Bonuses for Top Employees ------------------------------------------------------------- Luke Plunkett at Kotaku.com reports that a government-appointed trustee overseeing Midway Games Inc.'s financial and legal proceedings has opposed the Company's planned bonus payments to its top employees. According to Kotaku.com, Midway Games is still seeking ways to pay out almost $4 million in bonuses, despite poor sales and a bankruptcy filing. Kotaku.com relates that the trustee, along with a committee made up of representatives from the companies that Midway owes money to, said that "the notion that a bonus program designed to reward employees for past accomplishments could be considered an 'incentive' is simply disingenuous. Senior management should not be paid incentive bonus payments . . . to perform duties required to be performed by their obligations under the Bankruptcy Code. The Debtors seek authority to pay bonuses to a selected group of officers and managers which are four hundred percent greater than bonuses paid to the same group in 2008 when the Debtors were not before the Bankruptcy Court. Given the current state of the general economy, coupled with historical data related to incentive bonuses paid by these Debtors, the Motion constitutes an outrageous request and is not justified by the facts and circumstances of the case." "In a survey prepared by the Committee's financial advisor, FTI Consulting, of compensation plans proposed in some twenty comparable bankruptcy cases in recent years, the Proposed Plan is, by far, the richest compensation plan that has been proposed, despite the unusually poor conditions of the current economy," Kotaku.com quoted the trustee and the committee as saying. Midway Games executives, says Kotaku.com, have formulated a "revised" bonus plan, which should be disclosed later this week. Headquartered in Chicago, Illinois, Midway Games Inc. -- http://www.midway.com-- develops video games and sell them primarily in North America, Europe, Asia and Australia. The company and nine of its affiliates filed for Chapter 11 protection on Feb. 12, 2009 (Bankr. D. Del. Lead Case No. 09-10465). David W. Carickhoff, Jr., Esq., Michael David Debaecke, Esq., and Victoria A. Guilfoyle, Esq., at Blank Rome LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard as their investment banker, Dewey & LeBoeuf LLP as special counsel, and Epiq Bankruptcy Solutions LLC as claims agent. The Debtors' financial condition as of Sept. 30, 2008, showed $167,523,000 in total assets and $281,033,000 in total debts. MINERVA SA: Fitch Puts 'B+' Issuer Rating on Negative Watch ----------------------------------------------------------- Fitch Ratings has placed these ratings of Minerva S.A. (formerly Industria e Comercio de Carnes Minerva Ltda) and Minerva Overseas Ltd (a special-purpose vehicle wholly owned by Minerva and incorporated in the Cayman Islands) on Rating Watch Negative: Minerva S.A. -- Local currency Issuer Default Rating of 'B+'; -- Foreign currency IDR of 'B+'; -- National scale rating of 'BBB(bra)'. Minerva Overseas Ltd -- US$200 million senior unsecured notes due 2017 at 'B+/RR4'. The Rating Watch Negative follows the dramatic increase in leverage in the fourth quarter of 2008 due to weak operating trends, negative operating cash flow, significant capex expenditures, and the devaluation of the BRL. Also, liquidity declined substantially and it is not clear how the new BRL215 million in financings obtained in January 2009 from BNDES and Banco da Amazonia will help the company to extend debt maturities which include BRL358 million, BRL200 million and BRL194 million from 2009 to 2011, respectively. These low-rate fresh funds will be available to Minerva within the next six months. In 2008, net leverage (net debt/EBITDA) increased to 6.2 times from 3.2x in the last 12 months (LTM) ended Sept. 30, 2008 and 2x in 2007. Net debt increased by BRL418 million over the prior quarter to BRL932 million. In the fourth quarter cash on hand declined by BRL99 million to BRL467 million and debt increased by BRL319 million to BRL1.41 billion. The net debt increase is explained primarily by the BRL118 million capex and approximately BLR200 million jump in debt due to the 21% depreciation of the BRL in the fourth quarter as most of the company's debt is denominated in U.S. Dollars. In the fourth quarter of 2008 LTM EBITDA amounted to BLR153 million compared to BRL161 million in the third quarter. A weak economic climate, challenging credit environment and currency devaluation in key export markets for Minerva (including Minerva's largest export destination, Russia) drove significant volume declines (28% over a year ago and 37% over the prior quarter) primarily in the export market, which were offset by price increases. With good cost management and by temporarily closing production capacity the company was able to keep margins relatively stable. Fitch believes that 2009 will be a challenging year for Minerva because of its large exposure to the export market, the global recession, and lack of credit absent the Brazilian government banks. The resolution of the Rating Watch Negative depends on the incremental cash flow generation derived form the BRL351 million in investments in 2008 and the debt maturity schedule resulting from the refinancings from BNDES and Banco da Amazonia. In addition, pricing trends and market share in the domestic market now that several competitors have filed for Recuperacao Judicial (Chapter 11) as well as volumes and credit losses in the international market will also influence the Rating Watch Negative resolution. MONEYGRAM INTERNATIONAL: Fitch Affirms Issuer Rating at 'B+' ------------------------------------------------------------ Fitch Ratings has affirmed the Issuer Default Ratings for MoneyGram International Inc. and MoneyGram Payment Systems Worldwide, Inc., at 'B+'. Fitch has also upgraded these ratings for Worldwide: -- Senior secured first lien credit facility to 'BB+/RR1' from 'BB / RR2'; and -- Senior secured second lien notes to 'B+/RR4' from 'B/RR5'. The Rating Outlook is Negative. The Negative Outlook reflects: -- Expectations for continued global economic weakness negatively affecting remittance volumes which could reduce EBITDA to levels inconsistent with the company's financial covenants which limit senior secured leverage to 6.5 times through September 2009 and 6.0x through September 2010, and an implied minimum EBITDA level of approximately $150 million and $160 million, respectively; -- A further potential negative impact on profitability, although modest, as investment returns from the company's remaining asset backed securities decline as loan defaults increase as expected. Fitch estimates that MoneyGram still generates approximately one-third of its EBITDA from investment revenue. The upgrade of the senior secured first-lien and senior secured second-lien ratings reflects improved recovery expectations stemming from lower assumed funding gap needs to satisfy MoneyGram's payment service obligations in a stress event, which itself is a reflection of reduced risk in the company's restricted asset basket. Although the Outlook remains negative due primarily to the macroeconomic environment, Fitch notes that since MoneyGram's recapitalization in early 2008, the company has demonstrated stabilized profitability in both the Payment Systems and Global Funds Transfer businesses while significantly reducing exposure to risky assets in its investment portfolio, which has produced minimal realized and unrealized losses over the past two quarters. MoneyGram's ratings reflect these considerations: -- Continued limited financial flexibility given a relative high degree of leverage (total debt with equity credit to operating EBITDA) which Fitch estimates at 6.7x (7.3x when adjusted for operating leases), and cash interest coverage of 1.8x; -- Flat- to-declining revenue in 2009 (relative to pro forma 2008 results) as overall remittance transaction volumes are expected to decline due to the global economic slowdown, partially offset by a continued increase in market share; -- EBITDA in 2009 of at least $200 million (excluding potential investment gains or losses) with modest contribution expected from the PS segment; -- Positive free cash flow in 2009, although likely limited to under $100 million due to significant cash interest expense relative to EBITDA; -- No expected near-term reduction in debt with EBITDA growth necessary for incremental de-leveraging; -- MoneyGram will continue to limit risk in its investment portfolio consistent with covenants which currently restrict new investments to cash, cash equivalents and securities issued by U.S. government agencies with a maturity of 13 months or less. MoneyGram's investments under available for sale securities have been reduced to $439 million as of Dec. 31, 2008, from $4.2 billion as of Dec. 31, 2007 largely through the sale of a majority of the portfolio in the first quarter of 2008 (end March). Of the $439 million remaining, $392 million is held in residential mortgage backed securities consisting entirely of government agency securities; $30 million is held in other asset backed securities with a book value marked down to less than 5% of face value; and $17 million of other U.S. government agency securities. These investments, while outside the current covenant restriction on new investments, are legacy positions and can be held to maturity. Credit strengths include the solid market position of MoneyGram as the second largest global provider of international money transfers as well as Fitch's expectation for the long-term growth and stability of the money transfer industry. In addition, the remittance model has a largely variable cost structure which should help MoneyGram sustain its profit levels during the economic downturn. Rating concerns include: -- MoneyGram's ability to renew existing and attract new agent relationships given its highly levered balance sheet; -- a significant reliance on WalMart as a remittance agent, with WalMart accounting for 30% of GFT revenue in 2008; -- the company's ability to invest in new remittance technologies, such as mobile phone payments, which pose a long-term competitive threat. The ratings could be stabilized by flat-to-positive revenue and EBITDA results in both the GFT and PS segments. Conversely, the ratings could be negatively affected by additional investment portfolio losses or greater assumed risk in investment mix. The loss of significant market share in the remittance market, principally through the loss of significant agent relationships, could also negatively affect the ratings. Revenue adjusted to exclude securities gains and losses during 2008 was $1.3 billion with EBITDA of $173 million (13.6%). The GFT segment contributed $1.1 billion of revenue during 2008, excluding net investment losses, and EBITDA of $194 million (17.7%). The PS segment contributed $175 million in revenue and $13 million in EBITDA (7.3%). Segment EBITDA is offset by roughly $34 million in general corporate expenses. By comparison, in 2006, the last year unaffected by significant investment losses, revenue was $1.2 billion with EBITDA of $227 million (19.5%). GFT contributed $822 million in revenue with EBITDA of $187 million (22.8%). PS contributed $339 million in revenue with EBITDA of $46 million (13.6%). Note that GFT profitability is also negatively affected by the more conservative investment policy, as MoneyGram historically achieved a significant profit by investing the float associated with its retail money order product. Investment revenue for this product declined from $89 million in 2007 to $24 million in 2008, excluding investment losses. MoneyGram accounts for its entire cash balance as restricted due to the regulatory requirements of its PS business. As a result, traditional cash flow calculations do not yield meaningful results. Fitch estimates free cash flow from changes in the calculation of unrestricted assets (restricted cash plus receivables plus investments less payment service obligations) adjusted for items such as capital spending and net debt or equity proceeds. From this, Fitch estimates MoneyGram generated approximately $45 million in free cash flow during the second half of 2008, or $90 million on an annualized basis. This compares favorably with 2006 estimated free cash flow of $43 million although capital investments have declined from $81 million in 2006 to $38 million in 2008. Fitch estimates MoneyGram's total adjusted debt with equity credit as of Dec. 31, 2008, to be $1.2 billion and includes $145 million outstanding under the company's $250 million secured revolving credit facility which matures in March 2013; $350 million outstanding under secured term loans included in the revolving credit facility which also mature in March 2013; $500 million of 13.25% senior secured second lien notes which mature in March 2018; and $742 million in 10% series B preferred shares to which Fitch assigns 75% equity credit due to the strong- equity like characteristics of this particular instrument including its convertible and deferred interest features. All debt is currently issued out of Worldwide, which is a wholly owned subsidiary of MoneyGram. Fitch estimates liquidity to be adequate and includes approximately $100 million available under the company's revolving credit facility and $391 million in unrestricted assets. MoneyGram historically has categorized its entire cash balance as substantially restricted due to the liquidity requirements of its PS business. The Recovery Ratings for MoneyGram reflect Fitch's recovery expectations under a distressed scenario, as well as Fitch's expectation that the enterprise value of MoneyGram, and hence recovery rates for its creditors, will be maximized in a restructuring scenario (as a going concern) rather than a liquidation scenario. In deriving a distressed enterprise value, Fitch estimates a distressed EBITDA value of $150 million, representing a 13% discount to MoneyGram's estimated pro forma operating EBITDA of approximately $172 million, which is roughly equivalent to the level of EBITDA necessary for MoneyGram to satisfy its maximum senior secured leverage ratio covenant of 6.5x. Fitch then applies a 6x distressed EBITDA multiple, which considers comparable current and historical market multiples, as well as the assumption that a stress event would likely lead to multiple contraction relative to historical levels. As is standard with Fitch's recovery analysis, the revolver is fully drawn and cash balances fully depleted to reflect a stress event. Fitch also adjusts MoneyGram's distressed enterprise value for liquidity requirements to cover any estimated shortfall in restricted asset coverage for a stress scenario. The 'RR1' for MoneyGram's senior secured first lien bank facility reflects Fitch's belief that 91%-100% recovery is realistic. The 'RR4' for MoneyGram's senior secured second lien reflects Fitch's belief that 31%-50% recovery is realistic. MOUNT SINAI: Moody's Downgrades Long-Term Rating on Debt to 'Ba2' ----------------------------------------------------------------- Moody's Investors Service has downgraded to Ba2 from Ba1 the long- term ratings assigned to Mount Sinai Medical Center of Florida's outstanding debt issued through the City of Miami Beach Health Facilities Authority. The rating outlook remains negative at the lower rating level. The downgrade follows continually weak financial performance and a decline in unrestricted cash. The negative outlook reflects Moody's concerns that competitive and economic challenges will continue to affect volumes. Moody's believes these issues could make it difficult to achieve the operating targets necessary to support capital projects and maintain cash, despite management's initiatives. Approximately $267 million of debt is affected by this action, as listed at the conclusion of this report. Legal Security: All outstanding bonds are secured by: a gross revenue pledge of the obligated group; a full and irrevocable guaranty of the Mount Sinai Medical Center Foundation (the Foundation) for principal and interest payments; a mortgage on MSMC's south campus; MSMC's right, title and interest in the ground lease on the land that the north campus is situated on, and; a negative pledge from the Medical Center and the Foundation. Interest Rate Derivatives: None Challenges * Meaningful declines in surgical demand across inpatient and outpatient modalities, in spite of a flattening of absolute number of admissions, which poses a fundamental challenge to MSMC's ability to achieve enterprise growth needed to stabilize operations * Liquidity measures have deteriorated since FYE 2007 as cash on hand and cash-to-debt decreased to modest 71 days and a thin 35%, respectively, at December 31, 2008. * Debt levels remain very high relative to size of operations (debt to cash flow of over 28 times in 2008) and balance sheet liquidity (cash to debt 35%) * Growing losses related to physician practices (recruitment for specialists) of $9.6 million for the full fiscal year 2008 as compared with a budget of $8.7 million; Budget for FY 2009 includes an additional $4.7 million in physician and other support services around this strategy which may be difficult to off set as recessionary pressures flatten utilization * Multi faceted plans for enterprise growth may prove to be dilutive as the use of debt or cash would be required to execute these initiatives Strengths * Still solid absolute cash position ($93.2 million at December 31, 2008), held by MSMC and Foundation (Foundation provides irrevocable guaranty to bonds); investments are heavily weighted to fixed income securities * Recent recruitment of highly productive cardiac surgeon, who is established in market; though contracted salary will add to physician costs * Clearly articulated operational imperatives to achieve much needed top line growth; though fundamentals of market could hinder improvement; recent engagement of consultants to maximize efficiencies * Land associated with former campus at the Miami Heart Hospital is prime waterfront real estate on Miami Beach that can be monetized Recent Developments Moody's believes fundamental characteristics of the market suggest that current challenges may be pervasive. These fundamentals include heavy competition, especially for the more profitable services, and shifting demographic trends on Miami Beach toward a younger population. To that end, competition from cardiac programs established at two local competitors Aventura and Palmetto Hospitals, have contributed to an open heart case decline at MSMC of more then 50% from 912 in 2004 to 430 in 2008. Looking forward, management expects recent recruitment of a cardiac surgeon to reverse the marked diminution of cardiac services. FY 2008 proved to be another challenging year for MSMC; with management prepared financials showing a $19.1 million operating loss (excluding a $10 million contribution from the Foundation and reclassifying $3.7 million of investment gains to non-operating revenue) compared with a $14.7 million operating loss in FY 2007 (excluding a $10 million contribution from the Foundation and reclassifying $5.8 million of investment gains to non-operating revenue). Weak FY 2008 performance compares unfavorably against a budgeted loss of $7.7 million. Variances to budget are largely tied to higher than anticipated losses associated with a growing number of employed physicians and a lower intensity volume mix with a marked drop in surgical demand, particularly pronounced with increased competition for cardiac services as discussed above. Operating cashflow of $20.5 million is 25% lower then the comparable period in FY 2007. FY 2008 represented the eleventh consecutive year that MSMC incurred an operating loss and the fourth consecutive year that operating cash flow declined. Key financial ratios have deteriorated from already weak levels with over 28.0 times debt to cashflow and 1.1 times maximum annual debt service coverage (excluding Foundation transfer of $10 million). When including the Foundation transfer, MADS coverage is a healthier 1.6 times and debt to cashflow an improved, but still leveraged, 13.7 times. Management has indicated that a baseline budget for FY 2009 anticipates losses of $19.7 million (excluding a $10 million contribution from the Foundation); though the budget does not include the potential benefits of activity generated by the recently recruited cardiac surgeon or consulting engagement. Ability to grow top line revenue from the core clinical enterprise remains a crucial element to long-term future improvement and credit risk stability at the current rating. Resources remain modest and highly leveraged for an organization of this size. The combined unrestricted cash balances totaled $93.2 million at December 31, 2008, equating to an adequate 71 days. Leverage is evidenced by cash to debt coverage of just 35%. Moody's retains concerns that with another $10 million transfer from the Foundation cash will decline by a like amount as investment markets and philanthropy are more challenged in the current economic environment. Finally, strategic capital projects are being considered for the longer term, including the consideration of a new hospital to the north of the beach in Aventura, however, management reports that new money borrowings will not be considered until operations are at least stable. The MSMC Foundation which provides explicit and unconditional support to the clinical operations will likely provide for a portion of MSMC's larger strategic capital needs through its considerable fundraising strength. Outlook The negative rating outlook reflects Moody's concerns that competitive and economic challenges will continue to affect volumes. Moody's believes these issues could make it difficult to achieve the operating targets necessary to support capital projects and maintain cash, despite management's initiatives What could change the rating -- UP Ability to achieve and sustain enterprise growth as measured by revenue and volumes that translates into a consistent track record of strengthening operating cash flow and a reduction of debt outstanding or significant growth in liquidity What could change the rating -- DOWN Further deterioration of financial performance or liquidity levels; enterprise contraction that results in continuous trend of market share loss; a material increase in debt without commensurate growth in cash flow or liquidity Key Indicators Assumptions & Adjustments: -- Based on financial statements for Mount Sinai Medical Center of Florida, Inc. & Subsidiaries -- First number reflects audit year ended December 31, 2007 -- Second number reflects audit year ended December 31, 2008 -- Operating income in each FY 2007 and 2008 excludes a $10 million transfer from the Foundation -- Investment gains of $5.8 million and $3.7 million reclassified to non -- operating income in FY's 2007 and 2008, respectively -- Investment returns smoothed at 6% unless otherwise noted * Inpatient admissions: 22,240; 22,439 * Total operating revenues: $455.6 million; $486.1 million * Moody's-adjusted net revenue available for debt service: $32.5 million; $26.3 million * Total debt outstanding: $268 million; $267 million * Maximum annual debt service (MADS): $22.8 million; $22.8 million * MADS Coverage with reported investment income: 1.4 times; 1.1 times * Moody's-adjusted MADS Coverage with normalized investment income: 1.4 times; 1.1 times * Debt-to-cash flow: 17.5 times; 28.0 times * Days cash on hand: 97 days; 71 days * Cash-to-debt: 44%; 35% * Operating margin: -3.2%; -4.0% * Operating cash flow margin: 5.6%; 4.2% Rated Debt: * Series 1998, fixed rate * Series 2001A, fixed rate * Series 2004, fixed rate The last rating action was on January 30, 2008, when MSMC's Ba1 rating was affirmed and the rating outlook was revised to negative from stable. MUTUAL BANK: Weiss Ratings Assigns "Very Weak" E- Rating -------------------------------------------------------- Weiss Ratings has assigned its E- rating to Harvey, Illinois-based Mutual Bank. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." Mutual Bank is not a member of the Federal Reserve, and is primarily regulated by the Federal Deposit Insurance Corporation. The institution was established on Dec. 15, 1962, and deposits have been insured by the FDIC since that date. Mutual Bank maintains a Web site at http://www.mutualbanking.com/and has 13 branches, ten in Illinois, one in New Jersey, one in New York and one in Texas. At Dec. 31, 2008, Mutual Bank disclosed $1.7 billion in assets and $1.5 billion in liabilities in its regulatory filings. MW SEWALL: Files for Chapter 11 Bankruptcy Protection ----------------------------------------------------- The Associated Press reports that M.W. Sewall & Co. has filed for Chapter 11 bankruptcy protection. According to The AP, M.W. Sewall lists Citgo Petroleum as its largest unsecured creditor, with roughly $1.2 million. Court documents say that its assets and liabilities are listed between $10 million and $50 million. Pine State Trading Co., says The AP, is the Company's second-largest unsecured creditor, holding a $282,000 claim. The AP relates that George Marcus, the attorney for M.W. Sewall, blamed the Company's collapse on weak business at its modular housing division, Landmark Homes, and last summer's run up in oil prices. M.W. Sewall said in court documents that it won't close any stores. Maine-based M.W. Sewall & Co. distributes petroleum products. It operates 15 Clipper Mart convenience stores and car washes along southern Maine's Route 1 corridor. The Company filed for Chapter 11 bankruptcy protection on March 27, 2009 (Bankr. D. Maine Case No. 09-20400). George J. Marcus, Esq., at Marcus, Clegg & Mistretta, PA, assists the Company in its restructuring effort. The Company listed $10 million to $50 million in assets and $10 million to $50 million in debts. NATIONAL WHOLESALE: GE Capital Sues Former Chief Financial Officer ------------------------------------------------------------------ General Electric Capital Corp. filed a lawsuit accusing the former chief financial officer of NWL Holdings Inc. of overstating inventory in order to collect loans larger than the now-defunct retailer was entitled, Bloomberg's David Glovin writes. Bloomberg relates that GE Capital sued Michael Gold in Manhattan federal court on behalf of itself and other lenders including JPMorgan Chase & Co., for breach of duty. The unit of Fairfield, Connecticut-based General Electric Co. seeks damages of at least $24.7 million. Bloomberg states that, according to the complaint, "Gold misrepresented the value of NWL's inventory in many different ways. As a result of Gold's misrepresentations, GECC and the lenders loaned tens of millions of dollars to NWL in reliance on the levels of NWL'inventory as certified by Gold." About National Wholesale West Hempstead, New York-based NWL Holdings, Inc. -- http://www.nationalwholesaleliquidators.com/-- aka National Wholesale Liquidators, is a family-owned discount retailer. The company was founded in 1984. The company has 55 stores located in New York, New Jersey, Pennsylvania, Connecticut, Maryland, Washington D.C., Delaware, Massachusetts, Virginia, Rhode Island, Michigan and Illinois. The Company filed for Chapter 11 protection on Nov. 10, 2008 (Bankr. D. Delaware Case No. 08-12847). Dreier LLP assists the company in its restructuring effort. The company listed assets of $100 million to $500 million and debts of $100 million to $500 million. NATIONWIDE HEALTH: S&P Gives Positive Outlook; Keeps 'BB' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Nationwide Health Properties Inc. to positive from stable. At the same time, S&P affirmed the company's 'BBB-' corporate credit and senior unsecured note ratings, and 'BB' rating on the company's preferred stock. "The positive outlook acknowledges continued improvement in NHP's credit ratios, which are strong for the rating," said credit analyst George Skoufis. "Of note are its solid debt protection measures, which offset concerns regarding a more concentrated tenant base, some current tenant challenges, and difficult economic conditions that could affect demand for private pay facilities. NHP also faces minimal lease rollover, and has ample liquidity to meet its capital needs." S&P would raise the credit rating one notch if NHP can maintain its currently solid financial profile while its top tenants work through this difficult economic and capital market downturn. Although S&P believes the likelihood of a downgrade is limited, S&P would revise its outlook to negative or lower the rating if cash flow weakens more severely than S&P's stress scenario contemplates, causing fixed-charge coverage to fall near 2x and pushing total coverage below 1x. S&P would also view negatively a debt financed dividend shortfall. NORTH FOREST: Moody's Cuts Rating on $63.2 Million Debt to 'Ba3' ---------------------------------------------------------------- Moody's Investors Service has downgraded North Forest Independent School District from a Ba1 to a Ba3. The rating downgrade affects $63.2 million of outstanding general obligation debt. The rating action reflects a continued weakening of the district's financial position, challenges the district will face restoring a financial position consistent with investment grade credits, and the uncertainty stemming from the district's accreditation status. Of the $63.2 million of debt Moody's rated debt, $28.6 million is guaranteed by the Texas Permanent School Fund which carries a Aaa Moody's rating and $36.5 million has credit enhancement provided by Financial Security Assurance (Moody's rated Aa3). Limited Tax Base With Weak Socios North Forest I.S.D. is located in Harris County (general obligation rated Aa1). Approximately 63% of the district's students reside within the limits of the City of Houston (general obligation rating Aa3 with a positive outlook). The district's $1.7 billion taxbase has seen positive growth, averaging 13% annually over the last five years. Socioeconomic statistics indicate low wealth levels with a per capita income representing only 58% of the state's median and 52% of the U.S. Although property growth has been positive, the full value per capita of $31,886 (based on fiscal 2009 ad valorem values) is comparatively low. Significant Financial Stress: Accumulated Deficit, Lack Of Liquidity And Use Of Bond Proceeds For Operations The district has experienced steady declines in student enrollment over the last 9 years, declining by 37% from 2001 to the current estimate of 7,900. Despite revenue loss from state funds based on enrollment, the district repeatedly failed to appropriately adjust staffing and other expenditures in light of ongoing enrollment declines. On average, the district receives approximately 65% of general fund revenues from the state. In fiscal 2007, the audited financial statements indicated deficit spending of approximately $11 million, resulting in a negative unreserved fund balance of $6.7 million. Highlighting the lack of budgetary control and oversight is the fact that while year-over- year expenditures in fiscal 2007 increased by $10.9 million, revenues decreased by $4 million. Moreover, an over-reporting of enrollment resulted in $7.3 million overpayment of state funds to the district, which was booked as a liability in 2007, further driving down fund balance. The district will fully repay this liability prior to the end of fiscal 2009. The downgrade to Ba3 reflects Moody's review of fiscal 2008 audited financial statements that indicated a further weakening of the general fund balance sheet. Approximately $3.4 million in deficit spending resulted in an ending cash balance of an extremely narrow $76,000. The unreserved fund balance further decreased to a negative $10.1 million. Further highlighting the weakness of 2008 results is the district's use of approximately $13 million in bond funds for operational purposes, which indicates the extent of the imbalance and narrow cash position in 2008. The potential legal ramifications of the use of bond funds for operating expenses are unknown. The rating action also considers the independent auditor report whereby the external auditor has disclaimed an opinion as a result of the inability to "satisfy ourselves concerning the reliability of presented financial information." Additionally the independent auditor report notes an uncertainty as to the district's ability to continue as a going concern. District Moves To Restore Structural Balance; Voters Reject Tax Rate Increase Without voter approval, Texas statutes limits the ad valorem rate for maintenance and operations to a maximum of $10.40/$1,000 ad valorem value. Voter approval to increase the rate by a maximum of $1.30/$1,000 is allowed. In December 2008, the district sought, but failed to obtain, voter authorization to increase the tax rate to $11.70. Favorably, the district has taken measures to control costs by consolidating campuses and eliminating instructional and administrative positions. These cost control measures are expected to produce an operating surplus of approximately $1.5 million at the end of fiscal 2009. Although the district has made strides in reducing expenses, Moody's believes the restoration of adequate reserves characteristic of an investment grade rating is unlikely to occur in the near term. State Oversight And Accreditation Status As financial deterioration became evident, the Texas Education Agency became involved in the district's financial and educational operations. In early 2007 the TEA assigned two conservators to oversee financial and educational operations. State oversight was increased in October 2008 when the TEA suspended the activities and powers of the elected school board and transferred these duties to a TEA appointed Board of Managers who serves at the will of the TEA. The TEA also assigned a new superintendent who reports directly to the Board of Managers. Under Texas law, the Board of Manager's term is limited to two years, at the conclusion of which an election is called and a seven member board is elected by the voters in the district. Additionally, separate Texas legislation requires the TEA to annually assign accreditation statuses to each school district within the state. In June 2008, the TEA assigned a status of Accredited-Probation to the district. The TEA notes weaknesses that resulted in "serious and persistent deficiencies in both the academic and financial performance of the district." Under the legislation, if the district does not adequately address the TEA's findings, the district's accreditation could be revoked, essentially requiring the district to cease operations. The TEA is currently reviewing the district's performance and has not yet assigned an accreditation status for the 2008-2009 school year. The uncertainty surrounding the upcoming TEA action and the district's future accreditation status is a key factor in Moody's downgrade action. It is important to note that of the $63.2 million of debt rated by Moody's, $28.6 million is guaranteed by the Texas Permanent School Fund which carries a Aaa Moody's rating. Based upon Moody's discussions with TEA officials, Moody's believes the state is committed to ensuring the ongoing payment of district debt considering the state pays approximately 49% of debt service obligations. There is precedent for the dissolution of a district with outstanding debt, in which case the state transferred the responsibility for the tax levy and debt service payments to another educational authority. What Could Change The Rating - Up * Improvement of financial condition, including augmentation of liquidity and fund balance and restoration of structural balance. * Improved financial management and oversight as evident in audited financial statements. * Accreditation status improved. What Could Change The Rating - Down * Continued structural imbalance resulting in further financial Weakening. * Failure to improve accreditation status or accreditation Revocation. Key Statistics: * Student enrollment: 7,900 (2008-2009 school year) * Fiscal 2009 full value: $1.7 billion * Fiscal 2009 full value per capita: $31,886 * Fiscal 2008 fund balance: negative $10.1 million * Affected debt outstanding: $63.2 million The last rating action for North Forest ISD was on April 28, 2008 when Moody's downgraded the rating to Ba1 from Baa2. NORTH PORT: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: North Port Gateway, LLC 1549 Ringling Boulevard, Suite 101 Sarasota, FL 34236 dba Sumter Crossing Bankruptcy Case No.: 09- 06029 Chapter 11 Petition Date: March 30, 2009 Court: Middle District of Florida (Tampa) Judge: K. Rodney May Debtor's Counsel: Don M. Stichter, Esq. dstichter.ecf@srbp.com Stichter, Riedel, Blain & Prosser 110 East Madison Street, Suite 200 Tampa, FL 33602 Tel: (813) 229-0144 Fax: (813) 229-1811 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 ------ --------------- ------------ Wendemen Construction, Inc. Trade debt $249,408 1515 Ringling Blvd. Suite 890 Sarasota, FL 34236 Parker Walter Group, Inc. Trade debt $194,179 Two North Tamiami Trail Suite 604 Sarasota, FL 34236-5575 Latham, Shuker, Eden & Services $77,793 Beaudine 390 N. Orange Ave., Ste. 600 James F. Soller & Associates Trade debt $70,820 Inc. Wendemen Engineering, Inc. Trade debt $61,595 Roetzel & Andress Trade debt $41,545 Watermark Engineering Group Trade debt $36,085 Inc. Florida Commercial Source LLC Trade debt $21,675 North Port Utilities Utilities $18,767 Commercial Clearinghouse Trade debt $15,000 North Port Utilities Utilities $8,842 Lutz, Bobo & Telfair, P.A. Services $8,258 BES, Inc. Trade debt $5,120 Bingles Tree Care Trade debt $3,175 Manatee Tractor Services Inc. Trade debt $2,786 Grant Thorton LLP Services $2,782 Baytree Finance Company Insurance $2,333 Otis Elevator Company Trade debt $1,868 Royal Green Landscaping Inc. Trade debt $1,720 Total Air Solutions Trade debt $1,560 The petition was signed by Frank Menke, III, managing member. NOVA BIOSOURCE: Files for Bankruptcy; Brent King Named CRO ---------------------------------------------------------- Nova Biosource Fuels, Inc. and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The Companies are seeking first day motions requesting approval from the Bankruptcy Court to permit the Companies to continue to manage their properties and operate their businesses as "debtors-in-possession" under the jurisdiction of the Bankruptcy Court. Certain of the Company's subsidiaries were not included in the Chapter 11 filing. The Companies also have appointed Brent King of Prairie Financial Advisors, LLC, as Vice President/Chief Restructuring Officer of the Companies. In his new position, Mr. King will be responsible for the bankruptcy process and financial operations of the Companies. Blank Rome LLP serves as bankruptcy counsel to the Companies in connection with the Chapter 11 cases. About Nova Biosource Fuels Nova Biosource Fuels, Inc. -- http://www.novabiosource.com-- is an energy company that refines and markets ASTM D6751 quality biodiesel and related co-products through the deployment of its proprietary, patented process technology, which enables the use of a broader range of lower cost feedstocks. Nova owns two biodiesel refineries: one in Seneca, Illinois with a nameplate capacity of 60 million gallons per year and one in Clinton, Iowa with a nameplate capacity of 10 million gallons per year. OSHKOSH CORPORATION: Moody's Confirms Corp. Family Rating at 'B2' ----------------------------------------------------------------- Moody's Investors Service confirmed the ratings of Oshkosh Corporation -- Corporate Family and Probability of Default Ratings at B2. The confirmation of Oshkosh's ratings, which were placed under review for possible downgrade on January 29, 2009, is driven primarily by the company's successful negotiation of amendments to its revolving credit facility, removing the likelihood of a violation of its covenants at 2Q 03/09. The speculative grade liquidity rating is SGL-3 and the long-term outlook is negative. The B2 Corporate Family Rating incorporates the impact that the severe economic downturn is having on several of the company's business units, with the access equipment business being the most severely affected. The global construction industry, the main driver of Oshkosh's access equipment unit, is undergoing a severe contraction and Moody's believes that it will remain weak at least through 2009. Operating margins within that unit are under pressure due to reduced demand and adverse product mix. The company is experiencing lower margins on tactical vehicle contracts with the Department of Defense, Oshkosh's largest customer at about 29% of total revenues. For the last twelve months through 1Q 12/09 key credit metrics were: 7.2% EBITA margin, 2.3x EBIT/interest expense, and 4.7x debt/EBITDA (all ratios adjusted per Moody's methodology.) Moody's believes that the severe contraction in Oshkosh's end markets will continue at least through 2009, resulting in the worsening of the company's credit metrics and positioning the company less firmly within the B2 rating category. Oshkosh's SGL-3 speculative grade liquidity rating reflects Moody's belief that the company will maintain an adequate liquidity profile over the next twelve months. Operating cash flow generation combined with about $260 million of cash balances at December 31, 2008, should be adequate to fund the company's normal operating requirements, capital spending needs and debt service requirements. Headroom under the amended financial covenants ought to be adequate over the near term after receipt of the recent facility amendment. The negative outlook incorporates Moody's view that Oshkosh will continue to face a difficult economic environment through calendar-year 2009 resulting in the company's credit metrics continued to be stressed for the foreseeable future. These ratings/assessments were affected by this action: -- Corporate Family Rating confirmed at B2; -- Probability of Default Rating confirmed at B2; -- $3.25 billion (originally $3.65 billion) first lien senior secured bank credit facility confirmed at B2, but it loss given default assessment is changed (LGD3, 46%) from (LGD3, 45%). The Company's speculative grade liquidity rating remains SGL-3. The last rating action was on January 29, 2009, at which time Moody's lowered the corporate family rating to B2 and put the ratings on review for potential further downgrade. Oshkosh Corporation, headquartered in Oshkosh, WI, is a leading designer, manufacturer and marketer of access equipment including aerial work platforms and telehandlers and a broad range of specialty vehicles and vehicle bodies. Last twelve month revenues through December 31, 2008, approximated $7.0 billion. PACIFIC NATIONAL: Weiss Ratings Assigns "Very Weak" E- Rating ------------------------------------------------------------- Weiss Ratings has assigned its E- rating to San Francisco, California-based Pacific National Bank. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." Pacific National Bank is chartered as a National Bank, primarily regulated by the Office of the Comptroller of the Currency. The institution was established on Jan. 1, 1887, and deposits have been insured by the Federal Deposit Insurance Corporation since Dec. 12, 1940. Pacific National Bank maintains a Web site at http://www.pacificnational.com/and has 18 branches in California. PANTRY INC: S&P Changes Outlook to Positive, Affirms 'B+' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Sanford, North Carolina-based The Pantry Inc. to positive from stable. S&P affirmed all the ratings on the company, including the 'B+' corporate credit rating. "The outlook revision reflects Pantry's improved cash flow generation and stronger credit protection measures," said Standard & Poor's credit analyst Ana Lai. Total debt to EBITDA declined to 4.8x from 6.1x a year ago. Pantry, like other operators in the convenience store industry, has benefited from a steady decline in oil prices for the past few quarters. Higher gasoline margins and cost reductions have contributed to EBITDA growth in 2008. "While S&P expects fuel margins to reach more normalized levels in 2009 following a period of record volatility," added Ms. Lai, "we expect operating results to remain fairly healthy in 2009 and credit measures to remain at the upper end of the rating category given higher gas margin, partly offset by declines in gallons sold and weaker merchandise sales from a general decline in consumer spending." PECOS CAPITAL: Files List of Creditors Holding Unsecured Claims --------------------------------------------------------------- PECOS Capital Group, LLC, filed with the U.S. Bankruptcy Court for the District of Delaware its list of unsecured creditors, disclosing: Entity Claim Amount ------ ------------ Reliance Financial Inc. $77,000 P.O. Box 5061 Carefree, AZ 85377 Bonnett Fairbourn $4,312 Friedman & Balint PC 2901 N. Central Avenue, Suite 1000 Phoenix, AZ 85012-2730 Carefree, Arizona-based PECOS Capital Group, LLC, filed for Chapter 11 protection on March 25, 2009, (Bankr. D. Del. Case No.: 09-05531). Mark W. Roth, Esq. at Polsinelli Shughart P.C. represents the Debtor in its restructuring effort. The Debtor listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. PECOS CAPITAL: Section 341(a) Meeting Slated for April 28 --------------------------------------------------------- The U.S. Trustee for Region 14 will convene a meeting of creditors in PECOS Capital Group, LLC's Chapter 11 case on April 28, 2009, at 2:00 p.m., at the US Trustee Meeting Room, 230 N. First Avenue, Suite 102, Phoenix, Arizona. 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. Carefree, Arizona-based PECOS Capital Group, LLC filed for Chapter 11 protection on March 25, 2009, (Bankr. D. Del. Case No.: 09-05531). Mark W. Roth, Esq. at Polsinelli Shughart P.C. represents the Debtor in its restructuring effort. The Debtor listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. PEOPLES COMMUNITY: Weiss Ratings Assigns "Very Weak" E- Rating -------------------------------------------------------------- Weiss Ratings has assigned its E- rating to West Chester, Ohio- based Peoples Community Bank. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." Peoples Community Bank is chartered as a Savings Association, primarily regulated by the Office of Thrift Supervision. The institution was established on March 14, 1889; deposits have been insured by the Federal Deposit Insurance Corporation since March 25, 1985. Peoples Community Bank maintains a Web site at http://www.pcbionline.com/and has 15 offices in Ohio and four in Indiana. At June 30, 2008, Peoples Community Bank disclosed deposits totalling $633 million in its regulatory filings. PHILADELPHIA NEWSPAPERS: Top Executives Got Bonuses Before Filing ----------------------------------------------------------------- The Associated Press reports that Philadelphia Newspapers Chairman Bruce Toll has confirmed that top executives received December bonuses before the Company filed for bankruptcy. Mr. Toll, according to The AP, explained that Philadelphia Newspapers CEO Brian Tierney and two others were doing a "very good job" and had not gotten raises since the 2006 purchase. The AP relates that the three were also awarded raises that have since been cancelled amid an outcry from creditors and workers who gave up $25-a-week raises. The AP states that Mr. Tierney's salary had been set to increase $232,000, to $850,000. Mr. Toll said that Mr. Tierney received a $350,000 bonus and two others $150,000 each, according to the Philadephia Magazine blog. Mr. Toll told said that he doesn't remember the amounts, The AP reports. Philadelphia Newspapers, LLC -- http://www.philly.com/-- owns and operate numerous print and online publications in the Philadelphia market, including the Philadelphia Inquirer, the Philadelphia Daily News, several community newspapers, the region's number one local Web site, philly.com, and a number of related online products. The Company's flagship publications are the Inquirer, the third oldest newspaper in the country and the winner of numerous Pulitzer Prizes and other journalistic recognitions, and the Daily News. Philadelphia Newspapers and its debtor-affiliates filed for Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D. Pa., Lead Case No. 09-11204). Proskauer Rose LLP is the Debtors' bankruptcy counsel, while Lawrence G. McMichael, Esq., at Dilworth Paxson LLP is the local counsel. The Debtors' financial advisor is Jefferies & Company Inc. The Debtors listed assets and debts of $100 million to $500 million. PHILIP J MARTIN: Wants Schedules and Statements Filing Extended --------------------------------------------------------------- Philip J. Martin asks the U.S. Bankruptcy Court for the Southern District of Alabama to extend the time for filing its schedules and statement of financial affairs as required by the Bankruptcy Code. The Debtor needs additional time to gather the information necessary to complete the schedules and statement of financial affairs. Headquartered in Orange Beach, Alabama, Philip J. Martin filed for Chapter 11 protection on March 12, 2009, (Bankr. S. D. Ala. Case No. 09-11178). Irvin Grodsky, Esq. represents the Debtor in its restructuring efforts. The Debtor estimated assets of $10 million to $50 million and debts of $10 million to $50 million. PILGRIM'S PRIDE: Court Extends Plan Filing Deadline to Sept. 30 --------------------------------------------------------------- Judge D. Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas extends the period by which Pilgrim's Pride Corp. and its affiliates have exclusive right to file a plan of reorganization until September 30, 2009, and the period by which the Debtors have exclusive right to solicit acceptances of that plan until November 30, 2009. As reported by the Troubled Company Reporter on March 4, 2009, Pilgrim's Pride said that the extension will afford them a full and fair opportunity to propose a consensual plan and solicit acceptances of the plan without deterioration and disruption. Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, in Dallas, Texas, said the Debtors' cases are both large and complex, with liabilities of approximately $3,000,000,000. Even though these cases are only three months old, the Debtors have already made significant progress in these chapter 11 cases, Mr. Youngman said. The Debtors are formulating a business plan and are evaluating and implementing various operational restructuring alternatives. Nonetheless, significant unresolved contingencies still exist, like the determination of outstanding claims against the Debtors, resolution of several material non-bankruptcy lawsuits, and completion of the analysis of the Debtors' unexpired leases and executory contracts, Mr. Youngman explained. The Debtors are not seeking an extension of the Exclusive Periods to delay creditors or force them to accede to their demands. In fact, operational restructuring has already proceeded on a fast track, and the Debtors intend to formulate a plan as soon as practicable. In light of ongoing efforts to finalize which leases and contracts will be assumed or rejected, and to quantify the Debtors' potential exposure to the different types of claims that may be filed against the estates and the value of its remaining assets for distribution to creditors, additional time is needed for the Debtors to develop and negotiate a plan of reorganization and prepare a disclosure statement that contains adequate information under Section 1125 of the Bankruptcy Code, Mr. Youngman asserted. According to Mr. Youngman, the extension of the Exclusive Periods will increase the likelihood of a greater distribution to the Debtors' stakeholders by facilitating an orderly, efficient and cost-effective plan process for the benefit of all creditors. Termination of the Exclusive Periods, on the other hand, could significantly delay, if not completely undermine the Debtors' ability to confirm any plan in these cases. 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: Court Extends Lease Decision Deadline to June 29 ----------------------------------------------------------------- Judge D. Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas extends the time within which Pilgrim's Pride Corp. and its affiliates may assume or reject real property leases to the earlier of (i) June 29, 2009, or (ii) the effective date of a confirmed Chapter 11 plan. As reported by the Troubled Company Reporter on March 9, 2009, the Debtors sought an extension to afford them more time to analyze whether assumption or rejection of the real property leases is appropriate in their Chapter 11 cases. Section 365(d)(4) of the Bankruptcy Code provides that the Debtors must assume or reject their non-residential real property leases by the earlier of (a) 120 days after the Petition Date, or (b) the date of entry of an order confirming a Chapter 11 plan of reorganization. If the Debtors fail to make an election with regards to any specific Real Property Lease by the lease decision deadline, the leases will be "deemed rejected." The Debtors are party to about 76 real property leases. The Debtors, because of the complexity and size and their Chapter 11 cases, do not believe that it will be possible to make an informed decision as to whether to assume or reject all real property leases by March 31, 2009, as required by Section 364(d)(4). Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, in Dallas, Texas, said the Debtors have already begun the process of evaluating their executory contracts and real property leases to see which ones should be amended and which ones are rejected. Absent the extension of the lease decision period, the real property leases will be subject to premature forfeiture, Mr. Youngman said. Forfeiture of the Debtors' interest in the real property leases would cause significant disruption to the Debtors' core operations and harm all of the Debtors' stakeholders, he pointed out. By contrast, the extension requested will allow the Debtors to make prudent business decisions regarding their future needs for leased real property, he explained. Furthermore, Mr. Youngman argued that, because the Debtors are current, and intend to remain current, on their postpetition obligations under the Real Property Leases, the requested extension will not prejudice the lessors of the Real Property Leases. About Pilgrim's Pride Corp. Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (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: Seeks to Hire Colliers as Real Estate Consultant ----------------------------------------------------------------- Pilgrim's Pride Corp. and its affiliates ask Judge D. Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas for authority to employ CCBN Texas Limited Partnership, doing business as Colliers International, as their real estate disposition consultant, nunc pro tunc to the Petition Date. William Snyder, Pilgrim's Pride Corporation's chief restructuring officer, relates that the Debtors are in the process of evaluating which of their properties are no longer necessary and should be marketed and disposed of. The Debtors seek to employ Colliers to manage, market, and dispose of identified commercial real estate occupied by the Debtors, and potentially perform similar services in connection with the Debtors' other real property as the need may arise during the postpetition period. A consulting firm like Colliers, Mr. Snyder contends, fulfills a critical need of the Debtors to recognize value from their existing assets and complements the services offered by the Debtors' other restructuring professionals. For their services, the Debtors will pay Colliers according to a commission-based compensation structure. * Colliers will be entitled to a commission on the sale of any individual parcel of property that is a part of the Property based on: Purchase Price from $0 to $999,999: 6% Purchase Price from $1,000 to $39,999,999: 3% Purchase Price from $40,000,000 to $49,999,999: 2% Purchase Price exceeds $50,000,000: 1% * The commissions are intended to be cumulative based on the purchase price of any particular parcel of property that is a part of the Property. For example, if a particular parcel that is a part of the Property had a purchase price of $55,000,000, then the commission will be the sum of: 6% x $999,999 = $59,999.94 3% x $38,999,999 = $1,169,999.90 2% x $9,999,999 = $199,999.98 1% x $5,000,000 = $50,000.00 Total Commission = $1,479,999 * Colliers will be entitled to ten percent (10%) of remaining rental obligation savings upon lease terminations; * Colliers will be entitled to a one-time flat fee of $2,500 per leasehold location, plus 10% of savings under scheduled obligations upon lease renewals; * Colliers will be entitled to 20% of savings for any awarded real estate tax reductions upon resolution of final appeals. The Debtors are to receive all benefit of reductions in future years. Colliers will be responsible for all expenses regardless of appeals outcomes. * Colliers will provide central cataloging and reporting at no charge; * Colliers will be entitled to a one-time flat fee of $500 per written Broker Opinion of Value. Verbal values will be at no cost to Client; * Appraisals provided by PGP Appraisal at cost agreed following authorization in writing by the Debtors, with 20% reduced rate fee. * Colliers will remit to the Debtors a rebate of 20% of individual fees received by Colliers from parties other than the Debtors; The rebate will be in the form of a check or a wire transfer. In addition, Colliers will rebate to the Debtors 20% of the total fee due to Colliers from the Debtors. The rebate will be in the form of a waiver of fees by Colliers or a refund, at the Debtors' discretion. The Consulting Agreement entered into between the Debtors and Colliers provides that if Colliers uses or engages any agents, representatives, brokers or other contractors to provide or assist Colliers to provide the services contemplated by the Consulting Agreement, Colliers will be solely responsible for all fees, costs and expenses of such agents, representatives, brokers or other contractors. Cash McWorther, Colliers' vice president, assures the Court that his firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code, and does not hold or represent interest materially adverse to the Debtors or their estates. 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 Object to Equity Panel Appointment ------------------------------------------------------------- The Official Committee of Unsecured Creditors in the bankruptcy cases of Pilgrim's Pride Corp. and its affiliates asks Judge D. Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas to deny the request by an ad hoc group of shareholders for status conference and appointment of an official committee of equity security holders. The Creditors Committee points to the Ad Hoc Group's failure to comply with Rule 2019(a) of the Federal Rules of Bankruptcy Procedure. By its plain terms, Rule 2019 requires disclosure of, among other things, "the amounts of claims or interest owned by the members of the committee, the times when acquired, the amounts paid, and any sales or other disposition, the Creditors Committee says. According to the Troubled Company Reporter on March 24, 2009, the Shareholders Group, comprised of certain holders of common stock issued by Pilgrim's Pride Corporation, asked the Court 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, said on the group's behalf. The Debtors, Mr. McConnell said, 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 said the Creditors Committee 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. 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) PMC MARKETING: Wants Charles A. Cupril as Bankruptcy Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Puerto Rico authorized PMC Marketing Corp. to employ Charles A. Cupril, P.S.C. Law Offices as counsel. The firm is expected to represent the Debtor in the Chapter 11 proceeding. The firm's professionals working in this Chapter 11 case and their hourly rates are: Charles A. Cuprill-Hernandez, Esq. $350 Associate $200 Paralegals $75 The Debtor advanced the $45,000 retainer in payment for the services and expenses incurred in connection with this Chapter 11 case. The firm will be paid by the Debtor with interim compensation to be paid as allowed at six-day intervals. Mr. Cuprill-Hernandez assured the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About PMC Marketing Corp. Headquartered in San Juan, Puerto Rico, PMC Marketing Corp. aka Farmacias El Amal and COD Drugs and Ymas Inventory Management Corp. filed for Chapter 11 protection on March 18, 2009, (Bankr. Case Nos.: 09-02048 to 09-02049) Charles Alfred Cuprill, PSC Law Office represents the Debtors in their restructuring efforts. the Debtors listed total assets of $10,144,505 and total debts of $32,520,014. POLYMER GROUP: Moody's Gives Stable Outlook; Keeps 'B1' Rating -------------------------------------------------------------- Moody's Investors Service changed the ratings outlook of Polymer Group, Inc., to stable from negative and affirmed the B1 Corporate Family Rating and B2 Probability of Default Rating. At the same time, the rating on the senior secured credit facility was raised to Ba3 from B1. Stable earnings combined with lower growth capital spending and modest debt reduction have led to improvements in PGI's free cash flow and financial leverage metrics, which Moody's expects to be sustained over the intermediate term. In 2008, the Company achieved 8% revenue growth and flat year-over-year EBITDA, despite steep increases in raw material costs during the first three quarters of the year. Approximately two-thirds of PGI's consolidated revenue is generated from products sold to disposable end markets, such as diapers and medical apparel, which are somewhat more recession-resistant. Cyclical volume weakness in North America and Europe, particularly for industrial products, has been mostly offset by growth in disposable products sold to developing regions. Nonetheless, cushion on the financial leverage covenant contained in PGI's senior secured credit facility is expected to be tight over the next four quarters, effectively limiting full availability on the company's revolver. The maximum leverage ratio steps down to 3.5 times in the first quarter of 2009 and to 3.0 times in the first quarter of 2010. To comply with the more restrictive covenant levels, the company has expressed its intention to reduce debt using operating cash flow. Additionally, PGI announced on March 3, 2009 that it plans to repurchase up to $70 million of its senior secured term loan over the next two years. However, if global economic conditions worsen such that PGI's cash flow is not likely to be sufficient to meet its debt reduction goals, and thus covenant compliance becomes doubtful, the outlook or ratings could be lowered. The upgrade in the senior secured credit facility to Ba3 from B1, in accordance with the application of Moody's Loss Given Default methodology, reflects the modest reduction in outstanding debt in the overall capital structure. Moody's affirmed these ratings: -- Corporate Family Rating; B1 -- Probability of Default Rating; B2 These ratings were upgraded: -- $45 million senior secured revolver due November 2010, to Ba3 (LGD2, 27%) from B1 (LGD3, 33%) -- $366 million senior secured term loan due 2012, to Ba3 (LGD2, 27%) from B1 (LGD3, 33%) Headquartered in Charlotte, North Carolina, Polymer Group, Inc., is one of the world's leading producers of nonwoven materials. The Company generated revenues in FY08 of $1.15 billion. PRECISION PARTS: In Dispute With Cerion Over Purchase Price ----------------------------------------------------------- Precision Parts International Services Corp. is in a courtroom fight with the approved buyer, Cerion LLC, which is demanding an $8.5 million reduction in the $18.5 million purchase price, Bloomberg's Bill Rochelle reported. According to the report, Cerion contends it's entitled to the reduction under provisions in the contract calling for price adjustments based on the level of accounts receivable and inventory. Precision Parts said in filing with the U.S. Bankruptcy Court for the District of Delaware that the demand is a "transparently manufactured" attempt to lower the price that isn't grounded in the contract. The bankruptcy judge has asked the parties to mediate. Bankruptcy Law360 reports that the official unsecured creditors committee in Precision Parts' cases has filed a motion to intervene in the adversary proceedings opened by Cerion. As reported by the Troubled Company Reporter on March 20, Precision Parts won approval to sell six plants that produce auto- parts to Cerion LLC for $18.5 million. No competing bids were made against Cerion's. Headquartered in Rochester Hills, Michigan, Precision Parts International Services Corp. -- http://www.precisionparts.com/-- sells products to major north American automotive and non- automotive original equipment manufacturers and Tier 1 and 2 suppliers. The Debtors operate six manufacturing facilities throughout north America, including a facility in Mexico operated on the Debtors' behalf by Intermex Manufactura de Chihuahua under a shelter and logistics agreement. The Debtors' operations consist of two distinct lines of business: MPI, which performs fineblanking work and conventional metal stamping, as well as a range of value-added finishing operations, and Skill which performs conventional metal stamping, as well as a range of assembly and value-added finishing operations. Four of the Debtors are holding companies that have no employees and are not involved in the Debtors' day-to-day operations: PPI Holdings, Inc.; PPI Sub-Holdings, Inc.; MPI International Holdings, Inc.; and Skill Tool & Die Holdings Corp. The Company and eight of its affiliates filed for Chapter 11 protection on Dec. 12, 2008 (Bankr. D. Del. Lead Case No. 08-13289). David M. Fournier, Esq., at Pepper Hamilton LLP; and Robert S. Hertzberg, Esq., and Deborah Kovsky-Apap, Esq., at Pepper Hamilton LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Alvarez & Marsal North America LLC as financial advisor and Kurtzman Carson Consultants LLC as notice, claims and balloting agent. When the Debtors filed for protection from their creditors, they listed assets of between $100 million to $500 million each. PRICE TRUCKING: Section 341(a) Meeting Slated for April 29 ---------------------------------------------------------- The U.S. Trustee for Region 4 will convene a meeting of creditors in Price Trucking, Inc., and F.T. Silfies, Inc.'s Chapter 11 cases on April 29, 2009, at 11:00 a.m., at 101 W. Lombard Street, Garmatz Courthouse, 2nd Fl., No. 2650, Baltimore, Maryland. 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 Ogden, Utah, Price Trucking, Inc. -- http://www.pricetrucking.com/-- is a full service trucking company that serves 48 states. The Company holds permits for hazardous waste transportation in most of the eastern half of the United States. Price Trucking, Inc., and F.T. Silfies, Inc., filed for separate Chapter 11 protection on March 25, 2009, (Bankr. D. Md. Lead Case No. 09-15044) J. Daniel Vorsteg, Esq., at Whiteford Taylor & Preston represents the Debtors in their restructuring efforts. The Debtors listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. PRICE TRUCKING: Wants Schedules Deadline Moved to April 24 ---------------------------------------------------------- Price Trucking, Inc., and F.T. Silfies, Inc., ask the U.S. Bankruptcy Court for the District of Maryland to extend the deadline to file schedules of assets and liabilities and statement of financial affairs to 30 days after the petition date. The Debtors were unable to complete and file the schedules and statements due to limited staff available to perform the required internal review of the Debtors' business and affairs, and other matters incident to the commencement of these Chapter 11 cases. The Debtors relate that they will work with the U.S. Trustee and any appointed creditors committee to make available sufficient financial data and creditor information to permit at least an initial Section 341 meeting to be timely held. Headquartered in Ogden, Utah, Price Trucking, Inc. -- http://www.pricetrucking.com/-- is a full service trucking company that serves 48 states. The Company holds permits for hazardous waste transportation in most of the eastern half of the United States. Price Trucking, Inc. and F.T. Silfies, Inc. filed for separate Chapter 11 protection on March 25, 2009 (Bankr. D. Md. Lead Case No.: 09-15044). J. Daniel Vorsteg, Esq. at Whiteford Taylor & Preston represents the Debtors in their restructuring efforts. In its bankruptcy petition, Price Trucking estimated assets of $10 million to $50 million and debts of $10 million to $50 million. PRICE TRUCKING: Wants Whiteford Taylor as Bankruptcy Counsel ------------------------------------------------------------ Price Trucking, Inc., and F.T. Silfies, Inc., ask the U.S. Bankruptcy Court for the District of Maryland to employ Whiteford, Taylor & Preston, LLP, as counsel. WT&P will: a) provide the Debtors legal advice with respect to their powers and duties as debtor and debtors-in-possession and in the operation of their businesses and management of their property; b) represent the Debtors in defense of any proceedings instituted in reclaim property or to obtain relief from the automatic stay; c) represent the Debtors in any proceedings instituted with respect to the Debtors' use of cash collateral; d) prepare any necessary applications, answers, orders, reports and other legal papers, and appear on the Debtors' behalf in proceedings instituted by or against the Debtors; e) assist the Debtors in the preparation of schedules, statement of financial affairs, and any amendments thereto which the Debtors may be required to file in these cases; f) assist the Debtors in the preparation of a Plan of Reorganization and disclosure statement; g) assist the Debtors with all legal matters, including, among others, all securities, corporate, real estate, tax, employee relations, general litigation, and bankruptcy legal work; and h) perform all of the legal services for the Debtors which may be necessary or desirable herein. Brent C. Strickland, a partner at WT&P, tells the Court that the hourly rates of the firm's professionals are: Lawyers $280 - $530 Paralegals $210 No retainer was paid to WT&P, however, WT&P reserves the rights to request a retainer from the Debtors if the facts and circumstances so warrant. Mr. Strickland assures the Court that WT&P is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Strickland can be reached at: Whiteford, Taylor & Preston, LLP Seven Saint Paul Street Baltimore, MD 21202-1636 Tel: (410) 347-8700 Fax: (410) 752-709 About Price Trucking, Inc. Headquartered in Ogden, Utah, Price Trucking, Inc. -- http://www.pricetrucking.com/-- is a full service trucking company that serves 48 states. The Company holds permits for hazardous waste transportation in most of the eastern half of the United States. Price Trucking, Inc. and F.T. Silfies, Inc. filed for separate Chapter 11 protection on March 25, 2009 (Bankr. D. Md. Lead Case No.: 09-15044). J. Daniel Vorsteg, Esq. at Whiteford Taylor & Preston represents the Debtors in their restructuring efforts. In its bankruptcy petition, Price Trucking estimated assets of $10 million to $50 million and debts of $10 million to $50 million. PRIMUS TELECOM: Protocol Limiting Trading In Securities Okayed -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved on an interim basis on March 26, 2009, notice and hearing procedures for trading in equity securities of Primus Telecommunications Group, Incorporated and its affiliated debtors' estates, in order to preserve and protect the Debtors' valuable tax attributes. These tax attributes include current year net operating losses, NOL carryforwards, and built-in losses estimated to be in excess of $240 million. Under the Internal Revenue Code of 1986, as amended, the Debtors and their estates are permitted to carry forward their net operating losses to offset their future taxable income for up to 20 taxable years, thereby reducing their future aggregate tax obligations and freeing up funds to meet working capital requirements and service debt. Such net operating losses may also be utilized by the Debtors to offset any taxable income generated by transactions completed during the Chapter 11 cases. In its motion, the Debtors related that unrestricted trading of Primus equity securities could adversely affect the Debtors' tax attributes if too many 5% or greater blocks of equity securities are created or too many shares are added to or sold from such blocks, such that, together with previous trading by 5% shareholders during the preceding three-year period, an ownership change is triggered prior to consummation, and outside the context, of a confirmed Chapter 11 plan. Pursuant to the approved procedures, any person or entity who currently is or becomes a Substantial Shareholder, must file with the Court and serve on counsel to the Debtors, a notice of such status on or before the later of (a) 20 calendar days after the effective date of the notice of entry of this order or (b) 10 calendar days after becoming a Substantial Shareholder. As defined in the Court's interim order, a Substantial Shareholder is any person or entity which beneficially owns at least 6,775,046 shares (representing approximately 4.75% of all issued and outstanding shares) of Primus common stock. Except as otherwise provided in the order, any sale or other transfer of equity securities in the Debtors in violation of the procedures will be null and void ab initio as an act in violation of the automatic stay under Sections 362 and 105(a) of the Bankruptcy Code. For the complete details regarding the procedures, a copy of the Court's interim order is available for free at: http://bankrupt.com/misc/PrimusTradingProcedures.pdf About Primus Telecom PRIMUS Telecommunications Group, Incorporated (OTCBB: PRTL) -- http://www.primustel.com-- is an integrated communications services provider offering international and domestic voice, voice-over-Internet protocol (VOIP), Internet, wireless, data and hosting services to business and residential retail customers and other carriers located primarily in the United States, Canada, Australia, the United Kingdom and Western Europe. PRIMUS provides services over its global network of owned and leased transmission facilities, including approximately 500 points-of-presence (POPs) throughout the world, ownership interests in undersea fiber optic cable systems, 18 carrier-grade international gateway and domestic switches, and a variety of operating relationships that allow it to deliver traffic worldwide. Founded in 1994, PRIMUS is based in McLean, Virginia. The company and four its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. D. Del. Lead Case No. 09-10867). George N. Panagakis, Esq., and T Kellan Grant, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicado, are the Debtors' proposed counsel. Davis L. Wright, Esq., Eric M. Davis, Esq., and Anthony Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, are the Debtors' proposed local counsel. The Debtor proposed CRT Investment Banking LLC as financial adviser and investment banker. When the Debtors filed for protection from their creditors, they listed assets between $100 million and $500 million, and debts between $500 million and $1 billion. PROPEX INC: Emerges From Bankruptcy After 14 Months --------------------------------------------------- Propex Inc. will now operate outside of bankruptcy after spending 14 months under Chapter 11 protection. The Chattanooga-based premier global supplier of polypropylene fabrics and fibers for the geosynthetic, concrete, furnishings and industrial markets used its time in protection to right size its balance sheet, restructure its debt and create additional cash flow. Propex's assets were purchased by a fund managed by Wayzata Investment Partners, a Minneapolis based private equity firm. Under the new ownership, Propex emerges from bankruptcy with a strong foundation and sufficient liquidity to aggressively expand its market leadership. "We are excited about the opportunity to work with Wayzata going forward to grow the Propex business," Propex's Executive Vice President and Chief Operating Officer Stan Brant said. "We have made great strides in our restructuring to reposition this company as the premiere supplier of polypropylene fabrics and fibers. Even in the current economic climate, our new capital structure makes Propex a stronger company that is focused on growth in our current markets as well as expanding into new ones," Mr. Brant stated. Mr. Brant credits the loyalty of Propex's customers and business partners and the commitment of its employees for the rapid and successful restructuring. About Propex Inc. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It also produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. The company and its debtor-affiliates filed for Chapter 11 protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249). The Debtors have selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. The Official Committee of Unsecured Creditors have tapped Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel. Propex Inc., and its affiliates delivered to the Court a Joint Plan of Reorganization and Disclosure Statement on October 29, 2008. Propex's exclusive period to solicit acceptances of the Plan expires Dec. 29, 2008. As of June 29, 2008, the Debtors' balance sheet showed total assets of US$562,700,000, and total debts of US$551,700,000. The Debtors filed their Disclosure Statement and Plan of Reorganization on October 29, 2008. Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Propex Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PROPEX INC: Wayzata's $82 Million Offer Tops Bidding ---------------------------------------------------- Wayzata Investment Partners offered $82 million for the assets of Propex Inc. and won the bidding to acquire the company, according to the Chattanooga Times Free Press. The auction was held on March 24, 2009. The sale is subject to Court approval. "[Wayzata is] going to continue to operate the company as a going concern," the newspaper quoted the company's counsel, Henry Kaim, Esq., of King & Spalding LLP, as saying. Judge John C. Cook of the U.S. Bankruptcy Court for the Eastern District of Tennessee approved the proposed bidding procedures for the sale of substantially all of the assets of Propex Inc. and its debtor affiliates. Judge Cook also approved the proposed break-up fee for Xerxes Operating Company, LLC, and Xerxes Foreign Holdings Corp. as the stalking horse bidders. The Xerxes Entities are majority-owned by an affiliate of the DIP Agent, Wayzata Investment Partners LLC. The Break-Up Fee will constitute a superpriority administrative expense obligation of the Debtors under Section 364(c) of the Bankruptcy Code. Potential Bidders were required to deliver their bids March 18, 2009, along with certain requirements. The Debtors had the right to reject any Bid they deem does not comply with the Bid Procedures. An auction was to be held March 23 at the offices of King & Spalding if other bids are timely received. Only Xerxes is authorized to make one or more Overbids at the Auction, which will be deemed to include an amount equal to the Approved Breakup Fee. The Debtors caused a form of the Auction and Sale notice to be sent by first-class mail postage prepaid to all notice parties. The Debtors will also serve a notice of assumption, sale, and assignment of designated unexpired leases and executory contracts on each counterparty to a potential Designated Contract without delay. The Debtors will also attach to a Cure Amount Notice a calculation of the cure amounts they believe must be paid to cure all prepetition defaults with respect to each potential Designated Contract. In the event a Cure Amount Objection is timely filed, the Cure Amount Objection must set forth: -- the basis for the objection, -- the specific amount the non-debtor party asserts is the correct Prepetition Cure Amount, and -- appropriate documentation in support of the Prepetition Cure Amount. If the Debtors and the non-debtor party to a potential Designated Contract cannot consensually resolve the Cure Amount Objection, the Successful Bidder or any other assignee will segregate any disputed cure amounts pending the resolution of any disputes by the Court or mutual agreement of the parties. A full-text copy of the Approved Bid Procedures is available for free at http://bankrupt.com/misc/Propex_BidProcedures.pdf Right to Credit Bid Before the Court entered its ruling, BNP Paribas Securities Corp., as administrative agent for the Debtors' Prepetition Lenders, and Black Diamond Capital Management, LLC, asserted that the proposed Bid Procedures should be modified as it chills competitive bidding and tilt the playing field unfairly to the advantage of Xerxes, the stalking horse bidder. The Lenders opposed the Bidding Procedures to the extent that they (i) prohibit credit bidding; (ii) include an unnecessary break-up fee; (iii) prohibit bids for less than all of the Debtors' assets; (iv) provide a cross-default provisions with respect to the DIP Facility; and (v) rely on a stalking horse asset purchase agreement that does not provide potential bidders with certainty as to the purchase price they are bidding against or clarity as to which assets and liabilities are being taken so as to allow them to reasonably determine the price themselves. On BNP Paribas' behalf, Gene L. Humphreys, Esq., at Bass, Berry & Sims, PLC, in Nashville, Tennessee, contended that the Debtors should demonstrate "cause" to justify abrogating the right to credit bid. Moreover, in a supplemental statement, BNP Paribas asked the Court to approve its right to credit bid. Black Diamond told the Court it is interested in bidding for the Debtors' assets, but asserted that approval of the Break-Up Fee will be counterproductive. "[T]he suggestion that paying a break up fee to a party that has been at the table with the Debtors for years runs counter to the spirit and purpose of break up fees," William L. Norton III, Esq., at Bradley Arant Boult Cummings LLP, in Nashville, Tennessee, said, on Black Diamond's behalf. In response to the Lenders' argument, Henry J. Kaim, Esq., at King & Spalding LLP, in Houston, Texas, asserted on the Debtors' behalf, that credit bidding by the Prepetition Lenders is inappropriate as it will create a disincentive for other prospective purchasers to become involved in the auction process and actively bid. "This chilling effect is clear and inevitable given the dominant size of the entirety of the Prepetition Lenders' claim, tagged at $230 million, compared to the reasonable range of value for the Assets," he elaborated. He added that credit bidding would be highly impractical because of the large number of lenders and their varying debt amounts. The Court would have to approve a procedure to determine and verify how much of the debt each lender holds, he pointed out. Moreover, the Debtors maintained that the APA simply provides that each purchaser, including Xerxes, has the ability to decide which executory contract and unexpired lease it seeks to assume as part of the acquisition. For its part, Xerxes maintained that the APA resulted from intensive, arm's-length negotiations. Xerxes emphasized that credit bidding creates the prospect of intra-lender disputes that would only delay the auction process. Xerxes also argued that it is unfair for it -- having committed the time and resources to execute a viable and straight-forward all-cash bid -- to compete against a bid of perhaps unknowable value. It also asserted that the proposed Break-Up Fee is reasonable. Upon deliberation, Judge Cook overruled the objections lodged by BNP Paribas and Black Diamond. Black Diamond Sought Discovery In a Court filing dated March 17, 2009, Black Diamond asked the Court to direct the Debtors and their financial advisor, Houlihan Lokey Howard & Zukin, Inc., to provide discovery on, among other things: -- communications between the Debtors and Xerxes and Wayzata on the stalking horse bid, including negotiations on the Wayzata APA; -- analyses of the amount of distributions the Debtors' creditors will receive if the Xerxes bid is consummated; and -- analyses on the liquidation value and net asset value of the Debtors. In response, the Debtors sought a protective order to forbid and quash Black Diamond's discovery requests and deposition notices. The Debtors contend that Black Diamond has failed to demonstrate a manifest need for the discovery. To the contrary, the Debtors maintain that the Discovery Request is inappropriate as Black Diamond (i) did not provide proper notice, (ii) seek information about another bidder prior to the auction, (iii) seek to cause an undue burden on them, and (iv) appear to intend to disrupt the sale process. Black Diamond reacted that the Debtors' concern that Black Diamond would obtain an unfair advantage in the bidding process if it obtains the requested discovery is misplaced, because any depositions will take place after the auction has been completed. In a subsequent filing with the Court, Black Diamond withdrew its discovery request. Parties Oppose Sale These entities expressed their objection to the sale of the Debtors' assets. They are: * Carl E. Levi, as trustee for Hamilton County, Tennessee * Jeff Davis County, Georgia * Pension Benefit Guaranty Corporation * Black Diamond Capital Management * BNP Paribas * Ace American Insurance Company Carl E. Levi, in his capacity as trustee for Hamilton County, Tennessee, and Jeff Davis County, Georgia, seek personal property taxes owed by the Debtors to them and all accrued interest for tax years 2007 and 2008 should be paid in full at the closing of any sale, and that taxes for 2009 be adequately provided for. Pension Benefit Guaranty Corporation avers that it has claims, aggregating $20 million, against the Debtors with respect to two pension plans they sponsored that are covered under Employee Retirement Income Security Act. Upon review, PBGC does not believe the Sale Motion transfers or affects the assets or obligations of Propex's foreign, non-debtor subsidiaries. PBGC thus objects to the Sale Motion to the extent any party seeks to interpret it or the APA differently. Black Diamond asserts that the consideration being provided under the Wayzata/Xerxes APA is substantially less than the liquidation value of the Senior Lenders' collateral. Moreover, Black Diamond contends that consummation of the Stalking Horse APA would result in the payment of numerous administrative claims and prepetition general unsecured claims. Allowing the payment of junior administrative and prepetition general unsecured claims outside of a plan and without providing for the payment of superpriority adequate protection claims is impermissible, Black Diamond argues. BNP Paribas maintains that the Stalking Horse APA does not satisfy Section 363 of the Bankruptcy Code because the purchase price is less than both the fair market value of the face amount of the liens. ACE American Insurance Company asked the Court to rule that (i) the assets being sold do not include the ACE Program Agreements and the ACE Insurance Policies; and (ii) the winning bidder will maintain, and will provide ACE with reasonable access to any business records which relate in any way to any claim made against the ACE Insurance Policies. ACE also reserves its right to deny coverage for otherwise- covered claims under the ACE Insurance Policies to the extent a sale of the Debtors' assets limits its ability to investigate those claims. Wayzata & Debtors React to Sale Objections Wayzata believes that the stream of discovery and objections submitted by BNP Paribas and Black Diamond in relation to the proposed sale potentially evidences an intent to obstruct the auction process and push the Debtors' estates towards a liquidation. Wayzata asked the Court to determine whether the bids submitted by Black Diamond and The Renco Group, Inc., fulfill the requirements set forth in the Court-approved Bidding Procedures. Wayzata asserts that the lack of certainty around the ability of Black Diamond and Renco to close on their proposal could harm the Debtors' estates. Thus, Wayzata asks the Court to: -- overrule the objections of Black Diamond and BNP Paribas to the Sale Motion; -- deny BNP Paribas' motion to credit bid; -- declare Black Diamond's bid and Renco's bid non-qualifying bids; and -- require the Debtors to conform any competing bids. In a separate filing, the Debtors also asked the Court to deny Black Diamond's and BNP Paribas' objections. BlueTex Responds BlueTex LLC, a subsidiary of Thee Renco Group, Inc., asserts that it submitted a bid for substantially all of the Debtors' assets in full compliance with the Court-approved Bidding Procedures. BlueTex contends that the equity commitment provided by Renco is sufficient to allow BlueTex to consummate the purchase of the Debtors' assets, independent of the availability of debt financing from Wachovia Bank. BDCM's Bid The Debtors note that on March 18, 2009, Propex U.S. Acquisition, LLC c/o Fund II, L.P., or otherwise referred to as BDCM wired a $50,000 deposit as required by the Bidding Procedures. It did not, however, submit an asset purchase agreement or the other required documents. The Debtors asked the Court to rule that is not a Qualified Bid. BDCM's Bid fails to address the Debtors' contracts in a manner substantially the same or better than that of the other bidders, leaving the Debtors' estate with, potentially substantial unpaid administrative expense liabilities, Mr. Kaim argued. "The BDCM Bid appears to be essentially a liquidation proposal that is not consistent with the overall 'going concern' approach approved by the Court," he said. The Debtors also sought a determination of whether the BDCM Bid was submitted timely under the Bid Procedures Order. The Debtors said they do not object to allowing the BDCM Bid to be considered as a Qualified Bid based on timeliness. However, in fairness to all parties, the Debtors urged the Court to determine whether BDCM's Bid is a Qualified Bid based on the party's failure to submit all documentation within the deadline. BDCM said the Debtors' bid disqualification request is absurd and unfounded as it violates the Debtors' fiduciary duty to maximize value of their estates. BDCM therefore asked the Court to deny the Debtors' disqualification request. Upon review, Judge Cook held that BDCM submitted a Qualified Bid and may participate in the auction. Proposed Sale Order The Debtors' counsel filed with the Court a proposed order for the sale of the Debtors' assets, a full-text copy of which is available for free at: http://bankrupt.com/misc/Propex_ProposedSaleOrder.pdf About Propex Inc. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It also produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. The company and its debtor-affiliates filed for Chapter 11 protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249). The Debtors have selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. The Official Committee of Unsecured Creditors have tapped Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel. Propex Inc., and its affiliates delivered to the Court a Joint Plan of Reorganization and Disclosure Statement on October 29, 2008. Propex's exclusive period to solicit acceptances of the Plan expires Dec. 29, 2008. As of June 29, 2008, the Debtors' balance sheet showed total assets of US$562,700,000, and total debts of US$551,700,000. The Debtors have filed their Disclosure Statement and Plan of Reorganization on October 29, 2008. Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Propex Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PROPEX INC: Parties Balk at Assumption of Pacts as Part of Sale --------------------------------------------------------------- In connection with the intention to sell substantially all of their assets to the highest and best bidder, Propex Inc. and its affiliates seek to assume, assign, and sell certain of their unexpired leases, license agreements, and executory contracts, free and clear of all liens, claims, encumbrances, and interests. The Debtors delivered to Judge John C. Cook of the U.S. Bankruptcy Court for the Eastern District of Tennessee a list of the Contracts they want to assume, assign and sell and the corresponding cure costs, a copy of which is available for free at http://bankrupt.com/misc/Propex_ContractsLeases.pdf The list includes the Debtors' insurance policies, corporate policies and more than 170 contracts to be assumed. Responses A. Dell Financial Dell Financial Services LLP says it does not object to the assumption and assignment of its unexpired leases. It, however, objects to the $3,542 prepetition cure amount stated by the Debtors. It contends that the correct cure amount is $5,854. DFS is a lease/finance company for Dell branded products, which include computers, laptops, servers, and related peripheral equipment. In a separate Court filing, DFS also asserts that the Debtors owe a lease obligation of $15,209 on account of SI Acquisitions. The Debtors acquired all of the outstanding capital stock of SI Concrete Systems Corporation and SI Geosolutions Corporation in January 2006. B. SAP America SAP America Inc. says it is unable, at this time, to make an informed decision on whether to consent or not to the assumption and assignment of a Software License Agreement it is a party to with the Debtors, as the proposed assignee has not been identified. Nevertheless, SAP America maintains that the cure amount for the Software License Agreement is $45,270. C. AIU Companies AIG, American International Specialty Lines Insurance Company, National Union Fire Insurance Company, New Hampshire Insurance Company, American International South Insurance Company, Insurance Company of the State of Pennsylvania, AISLIC and Commerce and Industry Insurance Company, and their affiliates provide insurance coverage to the Debtors. They assert that the Debtors have the burden of proving any cure amount, and that the Debtors have not made a showing of "adequate assurance." The AIU Companies inform the Court that they have inadequate information at this time on which to decide whether to consent or to object to the assumption of their policies. The AIU Companies reserve their right to object to any claim asserted under the policies subsequent to any assignment of the policies without their prior written consent. About Propex Inc. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It also produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. The company and its debtor-affiliates filed for Chapter 11 protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249). The Debtors have selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. The Official Committee of Unsecured Creditors have tapped Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel. Propex Inc., and its affiliates delivered to the Court a Joint Plan of Reorganization and Disclosure Statement on October 29, 2008. Propex's exclusive period to solicit acceptances of the Plan expires Dec. 29, 2008. As of June 29, 2008, the Debtors' balance sheet showed total assets of US$562,700,000, and total debts of US$551,700,000. The Debtors have filed their Disclosure Statement and Plan of Reorganization on October 29, 2008. Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Propex Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) QIMONDA NA: To Seek Final Approval of $40-Mil DIP Loan on April 13 ------------------------------------------------------------------ Qimonda North America Corp and its affiliate, Qimonda Richmond LLC, will present on April 13, 2009, at 3:30 p.m., before the Hon. Mary F. Walrath of the United States Bankruptcy Court for the District of Delaware, their request to obtain $40 million in postpetition financing under the senior secured superpriority debtor-in-possession loan security agreement dated March 26, 2009, with a syndicate of financial institutions that include 1903 Onshore Funding LLC as initial lender and GB Merchant Partners LLC as agent and arranger. Objections to final approval of the DIP Facility, if any, are due April 7, 2009, by 2:00 p.m. The hearing will take place at the Bankruptcy Court, 824 Market Street, 5th Floor, Courtroom 4 in Wilmington, Delaware. Judge Walrath on March 27 entered an order allowing the Debtors to access $20 million in financing on an interim basis. According to the Troubled Company Reporter on March 19, 2009, in papers filed with the Court, the Debtors related that the DIP Facility is absolutely essential to maintaining the Debtors' liquidity so they can continue to operate, wind-down and eventually sell assets with minimal disruption. The principal terms and conditions of the $40 million DIP Facility are: Borrower : Qimonda North American Corp. and Qimonda Richmond, LLC Lenders : GB Merchant Partners, LLC or any of its affiliates and possibly, other banks to which Agent may syndicate Amount : $40,000,000 Maturity Date: The date which is the earliest to occur of: -- the one year anniversary of the entry of the Interim Order; -- 25 days after the entry of the Interim Order if the Final Order has not been entered prior to the expiration of such 25-day period; -- the effective date of a plan of reorganization or liquidation that is confirmed pursuant to an order entered by the Bankruptcy Court in the cases; and -- the acceleration of the DIP Loans in accordance with the DIP Credit Agreements. Purpose : The Senior Credit Facility may be used for working capital and general corporate purposes consistent with the Budget, to pay transaction costs, fees and expenses and to pay the costs and expenses related to the administration of the cases. Interest and Certain Fees : The DIP Loans will bear interest at a rate equal to LIBOR plus the Applicable Margin. Interest rate shall be paid on the last day of each month during the term of the Senior DIP Credit Facility and on the Termination Date. Collateral : First priority lien on all tangible and intangible property of the Debtors' respective estates in the cases. In addition, the Debtors are required to file a request seeking to retain a joint venture of Advanced Technology Resource Group of CMN Inc., dba Colliers International, Gordon Brothers Commercial & Industrial Group LLC, and Emerald Technology Valuations LLC as sale consultants to sell the Debtors' assets as a turn-key operation in segments or individual equipment sale. The request was filed on March 18, 2009. Gordon Brothers Commercial is an affiliate of GB Merchant Partners. Borrowers agree to pay, for GBMP's benefit and the ratable benefit of any other Lenders, the fees set forth in the Rate and Fee Letter. This includes a non-refundable commitment fee in the amount set forth in the Rate & Fee Letter, to be filed under seal pursuant to the seal motion and the proposed seal order. A full-text copy of the Debtors' Senior Secured Superpriority Debtor-In-Possession Loan Security Agreement dated March 26, 2009, is available for free at http://ResearchArchives.com/t/s?3aed About Qimonda NA Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- is a leading global memory supplier with a diversified DRAM product portfolio. The company generated net sales of EUR1.79 billion in financial year 2008 and had -- prior to its announcement of a repositioning of its business -- approximately 12,200 employees worldwide, of which 1,400 were in Munich, 3,200 in Dresden and 2,800 in Richmond (Virginia, USA). The company provides DRAM products with a focus on infrastructure and graphics applications, using its power saving technologies and designs. Qimonda is an active innovator and brings high performance, low power consumption and small chip sizes to the market based on its breakthrough Buried Wordline technology. Qimonda AG, filed an application with the local court in Munich, Germany, on January 23, 2009, to open insolvency proceedings. QAG's U.S. units, Qimonda North America Corp. and Qimonda Richmond LLC, filed for Chapter 11 before the Delaware bankruptcy court on February 20 (Bankr. D. Del., Lead Case No. 09-10589). Mark D. Collins, Esq., at Richards Layton & Finger PA, has been tapped as counsel. Roberta A. DeAngelis, the United States Trustee for Region 3, appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Jones Day and Ashby & Geddes represent the Committee. In its bankruptcy petition, Qimonda estimated assets and debts of more than $1 billion. QUEBECOR WORLD: Posts $654.0 Million Fourth Quarter Loss -------------------------------------------------------- Quebecor World Inc.'s results in the fourth quarter and for the year ended December 31, 2008, are based on continuing operations following the sale of its European business in June, 2008. In the fourth quarter, Quebecor World reported a net loss from continuing operations of $654.0 million or ($3.26) per share compared to $1,802.6 million or ($13.69) per share in the fourth quarter of last year. Fourth quarter results included IAROC net of income taxes of $118.1 million or $0.59 per share, compared to $91.1 million or $0.69 per share in the same period in 2007 as well as a goodwill impairment charge of $324.1 million in 2008 compared to $1,743.4 million net of income taxes in the same period the previous year. For the full year 2008, Quebecor World reported a net loss from continuing operations of $943.9 million or ($5.26) per share, compared to a net loss from continuing operations of $1,837.4 million or ($14.10) per share for the same period in 2007. The full year results incorporate IAROC net of taxes of $165.9 million or $0.91 per share compared to $157.2 million or $1.19 per share in 2007. Excluding IAROC, goodwill impairment charge and reorganization items, adjusted diluted loss per share from continuing operations was ($2.06) in 2008 compared to adjusted diluted earnings per share from continuing operations of $0.31 in 2007. On the same basis, adjusted operating income in 2008 was $121.0 million compared to $169.3 million in 2007. Consolidated revenues were $4.0 billion compared to $4.7 billion in 2007. In the fourth quarter, the Company generated consolidated revenues from continuing operations of $1.0 billion compared to $1.2 billion in 2007. Operating income in the fourth quarter of 2008 before impairment of assets, restructuring and other charges (IAROC) and goodwill impairment charge was $50.3 million compared to $24.9 million in the fourth quarter of 2007. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was $118.3 million in the fourth quarter of 2008 compared to $137.9 million in the fourth quarter of 2007. The lower adjusted EBITDA in 2008 is principally due to decreased volumes, plant closures and particularly in the fourth quarter, to the economic slowdown affecting all sectors. Despite a lower level of activity than planned, the Company's adjusted EBITDA continued to be in line with management's expectations and with the projections prepared for the DIP financing when Quebecor World filed for creditor protection on January 21, 2008. In 2008, the Company aggressively implemented cost reductions to offset lower volumes due to the challenging economic environment. Quebecor World reduced its workforce by 12% during 2008. Major overhead cost reduction programs have also been launched. As a result, in the fourth quarter, selling, general and administrative expenses decreased by 10.8% excluding the favorable impact of foreign exchange and depreciation and amortization, compared to the same period in 2007. The Company has been operating under creditor protection since its initial filing in the U.S. and Canadian courts. As stated in the twenty-second Monitor's report, the Company had an unrestricted cash balance of $200 million as of February 15, 2009. In addition, Quebecor World continues to have access to the Revolving Loan Facility of up to $400 million. On March 26, 2009, the Company's exclusivity period under Chapter 11 in the U.S. to file a Plan or Plans of Reorganization was extended to April 27, 2009. As to the stay period in Canada, it has been extended again under the CCAA process to May 31, 2009. "Despite the difficult economic situation, we succeeded in achieving our financial and operational goals in 2008. We reached our financial targets and delivered on all our commitments to our customers," commented Jacques Mallette President and CEO of Quebecor World Inc. "We managed to achieve these objectives while dealing with the added complexity and challenges of operating under court supervised creditor protection in both the United States and Canada. This is a tribute to our employees, our customers, and our suppliers who have demonstrated their confidence in us throughout this period. Our industry, as evidenced by the latest results and comments from our competitors, is facing significant challenges in the current economic environment. However, we believe the actions we implement to streamline and rightsize our cost structure should make us a strong participant in our industry." In the fourth quarter, the Company continued to focus on renewing major customers, gaining new ones and improving efficiency across all its business groups by reducing costs, improving processes and maximizing the performance of its manufacturing platform. In the fourth quarter, the Company further demonstrated its commitment to its customer base by the significant investment in new equipment to help its customers achieve their business goals. Quebecor World announced the purchase of three new state-of-the- art short cutoff retail offset presses to further enhance its industry leading U.S. and Canadian retail insert platforms. This investment will provide customers with a new format capability to reduce paper consumption, shorten cycle time and reduce delivery costs. The first of these new presses is scheduled to be operational early in the third quarter of 2009. Also in the fourth quarter 2008, the Company continued to expand its Integrated Multichannel Solutions offering to help retailers achieve maximum return on their marketing investment through integrated solutions that target an ever-changing consumer across multiple channels. Quebecor World publishing and catalog customers are also able to realize greater postal savings with the addition of two new 30-pocket machines in the recently opened Somerset, New Jersey consolidation facility. This additional co- mail capacity gives more customers an opportunity to mitigate the impact of the additional postage costs during these challenging economic times. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina, and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The Chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the Chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. ROBBINS BROS: Gets Final OK to Use Sec. Lenders Cash Collateral --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of District of Delaware has granted Robbins Bros. Corporation final authority to use Secured Lenders' cash collateral, in accordance with a budget. Secured lenders are Well Fargo Bank, National Association, Paradox Syndication LLC, Weston Presidio Capital IV, L.P., and WPC Entrepreneur Fund II, L.P. The Debtors require the use of cash collateral to pay the reasonable and necessary expenses and to pay ongoing administrative expenses. Except with the prior written consent of Secured Lenders, Debtor are not allowed to make expenditures of cash collateral that would exceed any line item of the budget by more than 15%. As adequate protection for any diminution in the value of the collateral, each of the secured lenders are granted replacement liens in all of the Debtor's post-petition assets, except for avoidance actions, subordinate only to the Carve Outs for the payment of U.S. Trustee Fees, Court fees, professional fees, and all tax obligations owed to governmental taxing authorities. The replacement liens in favor of Weston Presidio and WPC will be junior to the replacement liens in favor of Wells Fargo and Paradox. As further adequate protection, to the extent of any diminution of the collateral, secured lenders are granted a superpriority claim pursuant to Sec. 507(b) of the Bankruptcy Code. The Debtor shall also make adequate protection payments to Wells Fargo in the amount set forth in the budget. The authority to use cash collateral will automatically terminate upon: a) the appointment of a Chapter 11 trustee or examiner; b) the conversion to Chapter 7 or dismissal of the Debtor's case; c) the termination of the Asset Purchase Agreement of the stalking horse bidder or the successful bidder for the sale of the Debtor's assets, or the termination of the Sec. 363 sale process; d) the commencement by the Debtor of any adversary proceeding or contested matter against any of the Secured Lenders with respect to the secured lenders' claims or security interests. As reported in the Troubled Company Reporter on March 9, 2009, the Court authorized Robbins Bros. Corporation to access, on an interim basis, cash collateral securing repayment of secured loans to its prepetition lenders until May 3, 2009. A full-text copy of the Debtor's cash collateral budget is available for free at: http://bankrupt.com/misc/Robbins.CashCollateralBudget.pdf About Robbins Bros. Corporation Headquartered in Azusa, California, Robbins Bros. Corporation -- http://www.robbinsbros.com/-- aka William Pitt, Inc. sells jewelries. The Debtors filed for Chapter 11 protection on March 3, 2009 (Bankr. D. Del. Case No. 09-10708). Bruce Grohsgal, Esq., and Michael Seidl, Esq., at Pachulski, Stang, Ziehl Young & Jones represent the Debtor as counsel. Omni Management Group LLC is the Debtor's Claims, Noticing and Balloting Agent. Deloitte Financial Advisory Services LLP serves as Bankruptcy Reporting Advisor. Deloitte Tax LLP is the Debtor's Tax Advisor. William Blair & Company, L.L.C. serves as Investment Banker. The Debtor listed assets of $50 million to $100 million and debts of $50 million to $100 million. ROBBINS BROS: Sec. 341(a) Meeting of Creditors Set for April 15 --------------------------------------------------------------- Roberta A. DeAngelis, the Acting United States Trustee for Region 3, will convene a meeting of Robbins Bros. Corporation's creditors on April 15, 2009, at 2:00 p.m., at the J. Caleb Boggs Federal Building, 844 King Street, 2nd Floor, Room 2112, in Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtor under oath about the Debtor's financial affairs and operations that would be of interest to the general body of creditors. About Robbins Bros. Corporation Headquartered in Azusa, California, Robbins Bros. Corporation -- http://www.robbinsbros.com/-- aka William Pitt, Inc. sells jewelries. The Debtors filed for Chapter 11 protection on March 3, 2009 (Bankr. D. Del. Case No. 09-10708). Bruce Grohsgal, Esq., and Michael Seidl, Esq., at Pachulski, Stang, Ziehl Young & Jones represent the Debtor as counsel. Omni Management Group LLC is the Debtor's Claims, Noticing and Balloting Agent. Deloitte Financial Advisory Services LLP serves as Bankruptcy Reporting Advisor. Deloitte Tax LLP is the Debtor's Tax Advisor. William Blair & Company, L.L.C. serves as Investment Banker. The Debtor listed assets of $50 million to $100 million and debts of $50 million to $100 million. ROBBINS BROS: U.S. Trustee Appoints 7-Member Creditors Panel ------------------------------------------------------------ Roberta A. DeAngelis, Acting United States Trustee for Region 3, appointed 7 creditors to serve on the official committee of unsecured creditors in Robbins Bros. Corporation's Chapter 11 case. The Creditors Committee members are: a) Leo Schachter Diamonds, LLC Attn: Jay I. Weinblatt 579 Fifth Avenue New York, NY 10017 Tel: (212) 981-1887 Fax: (212) 668-3174 b) Moshe Namdar & Co. (USA) Inc. Attn: Laurence Liebman 579 Fifth Ave., Suite 602 New York, NY 10017 Tel: (212) 759-0500 Fax: (212) 759-0100 c) R&R Grosbard Inc. Attn: Richard Grosbard 1185 Avenue of the Americas 20th Floor, New York, NY 10036 Tel: (212) 575-0077 Fax: (212) 704-0738 d) Nelson Jewellery Arts Co., Ltd. Attn: Kenneth R. Wilson 631 S. Olive St., Suite 900 Los Angeles, CA 90014 Tel: (213) 489-3323 Fax: (213) 489-1832 e) Scott Kay Inc. Attn: Jeffrey Simon 780 Palisade Avenue Teaneck, NJ 07666 Tel: (201) 287-0100 Fax: (201) 287-1617 f) Twinklediam, Inc. Attn: Mr. Parag Vora 529 Fifth Avenue New York, NY 10017 Tel: (212) 599-4240 Fax: (212) 490-4141 g) Frederick Goldman, Inc. Attn: Richard Goldman 154 West 14 th St. New York, NY 10011 Tel: (212) 807-2007 Fax: (212) 807-2239 About Robbins Bros. Corporation Headquartered in Azusa, California, Robbins Bros. Corporation -- http://www.robbinsbros.com/-- also known as William Pitt, Inc., sells jewelry. The Debtors filed for Chapter 11 protection on March 3, 2009 (Bankr. D. Del. Case No. 09-10708). Bruce Grohsgal, Esq., and Michael Seidl, Esq., at Pachulski, Stang, Ziehl Young & Jones represent the Debtor as counsel. Omni Management Group LLC is the Debtor's Claims, Noticing and Balloting Agent. Deloitte Financial Advisory Services LLP serves as Bankruptcy Reporting Advisor. Deloitte Tax LLP is the Debtor's Tax Advisor. William Blair & Company, L.L.C., serves as Investment Banker. The Debtor listed assets of $50 million to $100 million and debts of $ 50 million to $100 million. S&K FAMOUS: Pays Off Secured Debt & Sells Headquarters ------------------------------------------------------ S&K Famous Brands Inc. has fully paid off its secured debt this week, achieving a key milestone in the Company's Chapter 11 restructuring efforts. The sale of the S&K headquarters building and retail store in Glen Allen, Virginia, was also completed and closed this week. S&K will lease back office, warehouse, and retail space from the new owner on favorable terms. S&K has also successfully introduced several new contemporary clothing brands to better serve customers who are looking for unique, affordable options for casual and weekend wear. Joseph A. Oliver III, President and Chief Executive Officer, commented, "We have paid off over $24 million in bank loans since last June and are very pleased to be free of bank debt and Wells Fargo Retail Finance at this critical time. Successfully reorganizing our company and exiting from bankruptcy will depend on our ability to raise new equity or debt financing, or sell the business, in the near term. We are looking for a lender or an investor group who values our extremely loyal customer base and understands the growth potential in this company. All our efforts are dedicated towards securing financing during the coming weeks." "In addition, we are pleased by the positive response from customers to our new casual, non-tailored clothing and accessories lines. Since last fall, we have introduced contemporary collections of jeans, casual shirts, jackets and suit separates (suits that can be purchased off the rack and do not require tailoring) under popular designer labels at great values. We heard from our customers that they were looking for more unique, affordable clothing ideas that stood apart from the typical department store or big box retailer assortment. These casual designer lines fit our positioning as a specialty retailer for the customer who wants to express his own individual style and still achieve great value on his clothing purchases," Mr. Oliver said. Several new lines that S&K Menswear has introduced include: * Michael Brandon -- a new collection of denim, shirts, jackets and suit separates that reflect a youthful, fresh twist on classic styles. * Pop-Icon -- includes premium denim and shirts that mix 1960's idealism and today's modern edge to create a blend of artistic and innovative styling. * 191 Unlimited -- clothing that reflects unique, embroidery, and screen printing with contrasting fabrics, offering a flattering fit, cutting edge details, and unparalleled comfort. * Michael Kors -- a recognized leader in producing polished, sleek tailored clothing that conveys a luxury, jet-set lifestyle. * Reaction by Kenneth Cole -- a great American brand with an urban, modern edge with tailored fits and neutral color palettes. * Sean John -- includes sophisticated fashion-forward dress clothing that reflects a unique urban sensibility and style. About S&K Famous Brands Headquartered in Glen Allen, Virginia, S & K Famous Brands, Inc. - - http://www.skmenswear.com/-- sells men's swimwear. The Debtor filed for Chapter 11 protection on Feb. 9, 2009, (Bank. E.D. Va. Case No.: 09-30805) Lynn L. Tavenner, Esq., Paula S. Beran, Esq., at Tavenner & Beran, PLC and McGuireWoods LLP represent the Debtor in its restructuring efforts. Its financial advisor is Alvarez & Marsal North America LLC. The Debtor's DIP Lender is Wells Fargo Retail Finance LLC as administrative and collateral agent. The Debtor listed total assets of $41,440,100 and total debts of $35,499,00. SABRE HOLDINGS: S&P Downgrades Corporate Credit Rating to 'B' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on travel distribution company Sabre Holdings Corp., including the long-term corporate credit rating to 'B' from 'B+'. All ratings were removed from CreditWatch, where they were placed with negative implications on Nov. 10, 2008. The outlook is negative. "The rating actions are based on a weaker-than-expected financial profile primarily because of a significant decline in travel bookings that began in the fourth quarter of 2008, with further weakness anticipated well into 2009, caused by the global economic recession; and incremental debt," said Standard & Poor's credit analyst Betsy Snyder. As a result, Sabre's financial profile, which had improved somewhat due to debt reductions and strong earnings after its leveraged buyout in March 2007, weakened in 2008. "We expect continued weakness in the company's financial profile in 2009, with only modest improvement for 2010," the analyst continued. Indeed, if the recovery in travel is weaker than anticipated or takes longer to occur, resulting in continued pressure on the company's financial profile, S&P could lower ratings further. The ratings on Southlake, Texas-based Sabre Holdings Corp., and its major operating subsidiary, Sabre Inc., reflect a highly leveraged financial profile and limited access to capital after its 2007 acquisition by private equity firms; and the cyclical nature of the travel industry, in which the company participates as a distributor and marketer. Ratings also incorporate the company's leading position in this segment of the travel market, and the free cash flow this business typically generates. Sabre's businesses include GDS (global distribution systems used by travel agents), on-line travel distribution (Travelocity), and solutions and consulting for travel providers. Silver Lake Partners and Texas Pacific Group acquired Sabre in March 2007 for approximately $5.4 billion, including the assumption of approximately $900 million of debt. The acquisition was financed through $3 billion of incremental debt and $1.5 billion of sponsor equity. This resulted in a significant weakening in the company's previously strong financial profile. S&P expects the ongoing significant decline in travel demand to hurt Sabre's revenues, earnings, and cash flow through at least 2009, with only modest improvement in 2010. As a result, S&P doesn't foresee any material debt reduction or improvement in the company's financial profile until 2011. If the decline in travel is longer and deeper than expected, resulting in debt to EBITDA of more than 9x on a sustained basis, S&P could lower the ratings. Conversely, if travel demand recovers more rapidly or if the company realizes better-than-expected cost reductions, resulting in improved free cash flow and greater-than-required debt amortization, S&P could revise the outlook to stable. For example, S&P could revise the outlook to stable if debt to EBITDA declines to below 8x. However, even with a greater-than-expected decline in EBITDA and a tightening leverage covenant in its credit facility, S&P believes the company will continue to have adequate cushion through 2009. SPANSION INC: Bankruptcy No Reason for Drastic Redesign ------------------------------------------------------- The bankruptcy of Flash Memory manufacturer Spansion Inc. is leaving OEMs wondering how they can continue production of designs that rely on the Company's components. The specialized Memory Distributor, Memphis Electronic is ready to recommend drop in replacements to facilitate seamless continuation of production. "In most cases we can offer drop in solutions from Amic, EON and other manufacturers already on our linecard. We are also urging these Flash Manufacturers to bring more Spansion alternatives to the market. Additionally, we are helping our customers with the procurement of remaining stock, by offering advice on design changes which will require the least effort," said Thorsten Wronksi, President, Memphis Electronic AG. Currently, some manufacturers are issuing production guarantees to assuage customer concerns. "For example, Amic guarantees the production of 5V Flashes for the next five years, and is entertaining the idea of developing new 16Mbit and 32Mbit 5V Flashes -- assuming enough of our customers express interest," added Mr. Wronski. "Shortly we will be able to offer the first samples from EON of their Spansion S29GL compatible Uniform-Sector Flashes." About Memphis Electronic AG Memphis Electronic AG -- http://www.memphis.ag/english-- was founded in 1991 as a distributor of memory modules. Because of the rising demand for memory ICs Memphis began developing and producing its own memory modules. Later, the company expanded its operations to include distribution of products purchased directly from IC manufacturers. Memphis Electronic AG has branches and logistics centres in Bad Homburg, Germany; London, UK; Barcelona, Spain; Hong Kong, China; and Houston, USA. As a special distributor of memory products Memphis Electronic can offer its customers products that are best suited to the current market situation. About Spansion Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc. and four affiliates filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. As of Sept. 30, 2008, Spansion disclosed total assets of $3,840,000,000, and total debts of $2,398,000,000. SPANSION INC: Sec. 341 Meeting of Creditors Set for April 14 ------------------------------------------------------------ Roberta A. DeAngelis, the acting United States Trustee for Region 3, will convene a meeting of the creditors of Spansion Inc., and its debtor affiliates on April 14, 2009, at 9:00 a.m., in Room 2112 at J. Caleb Boggs Federal Building, located at 844 King Street, in Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases. Attendance by the Debtors' creditors at the meeting is welcome, but not required. The Sec. 341(a) meeting offers the creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. About Spansion Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc. and four affiliates filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of Sept. 30, 2008, Spansion disclosed total assets of $3,840,000,000, and total debts of $2,398,000,000. SPANSION INC: Can Use Lenders' Cash Collateral Until May 19 ----------------------------------------------------------- Judge Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware issued a second interim order authorizing Spansion Inc., and its debtor affiliates to use cash collateral for not more than $200,000,000 in accordance with the budget, a full-text copy of which is available for free at: http://bankrupt.com/misc/Spansion_Budget.pdf Judge Carey held that the Second Interim Order will immediately terminate on that date on which the first of these dates occurs: (i) May 19, 2009; (ii) the date on which the Court terminates the authorization; (iii) in the event the Debtors breach any of their obligations under the Second Interim Order, the date that is five business days after the Debtors and the Official Committee of Unsecured Creditors receive written notice from the Prepetition Agent, the Ad Hoc Consortium and the Floating Rate Notes Trustee that it has terminated its consent to use Cash Collateral; (iv) the date that is five business days after counsel to the Debtors and counsel to the Committee receive written notice from the Prepetition Agent that it is withdrawing its consent to use Cash Collateral; and (v) the date on which the Debtors breach their obligations. As adequate protection, the Debtors will grant replacement liens to the Prepetition Lenders on all property and assets of the Revolving Obligors -- assets under the Prepetition Credit Agreement, and all proceeds, rents, or profits that were subject to the Prepetition Lender Liens and additional liens to the Prepetition Lenders on all of the Revolving Obligors' unencumbered assets. As adequate protection, the Debtors that have granted liens to the FRN Trustee or the FRN Noteholders on account of FRNs will grant replacement liens to the FRN Trustee and the FRN Noteholders on all property and assets of the FRN Obligors, and all proceeds, rents and profits that were subject to the FRN Noteholders' liens on the Noteholder collateral and additional liens to the FRN Noteholders on all of the FRN Obligors' unencumbered assets. If the Debtors reject any of the equipment leases pursuant to Section 365 of the Bankruptcy Code before the Termination Date or a final order is entered recharacterizing any Equipment Leases, avoiding any lien on the Prepetition Lender Collateral securing any obligations under the Equipment Leases or determining that the obligations of any of the Revolver Obligors under the Equipment Leases does not constitute Prepetition Revolver Indebtedness: (i) the Debtors will no longer be required to make monthly rental payments required under the Equipment Leases that were rejected; and (ii) the Prepetition Agent will not have right to withdraw its consent to use cash collateral by giving written notice to the Debtors and the Committee. A full-text copy of the Second Cash Collateral Order available for free at: http://bankrupt.com/misc/Spansionh_2ndCashCollateralOrd.pdf Prior to the Court's entry of the Interim Order, the Official Committee of Unsecured Creditors and Bank of America, N.A. filed objections with the Court. In its objection, the Committee said it has been working closely with the Debtors to obtain requisite information to be able to evaluate the proposed use of cash collateral. Blake M. Cleary, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, proposed attorney for Committee, told the Court that the Debtors have agreed to certain requests by the Committee and the Committee is hopeful that additional issues will be resolved. Mr. Cleary asserted that the relief sought by the Debtors goes beyond the scope of the relevant Bankruptcy Code provisions; unnecessarily impairs the ability of the Committee to safeguard the interests of the creditors generally; would unduly tie the hands of the Committee in its later pursuit of certain rights and remedies should circumstances so dictate; and in the case of certain new collateral being granted as adequate protection, may trigger unintended adverse tax consequences for the Debtors. Accordingly, the Committee noted, a further interim order and any final order should be entered with these modifications, clarifications and protections: (a) Budget must be subject to its review and input; (b) Payment to foreign subsidiaries must be separately disclosed and capped for each individual entity; (c) Professional Fee Requests must be submitted in advance; (d) The Interim Order did not provide for any Carve-Out from the prepetition secured parties' liens and claims. The Committee reserves its rights to challenge the amount of the proposed Carve-Out, formulation of any Carve-Out and any caps on the Committee's ability to investigate the Prepetition Secured Parties; (e) The grant of an additional 35% equity interest to the Prepetition Lenders and FRN Noteholders should not be authorized; (f) Until a determination is made that each of the Debtors are obligors or otherwise have pledged their asserts to the FRN or the Prepetition Lenders, the replacement liens and adequate protection liens should be limited and should not be a blanket grant on behalf of all the Debtors; Bank of America, for its part, as prepetition agent under the Prepetition Credit Agreement, objected on procedural, substantive, and due process grounds to the extensive difference between the relief requested in the motion and the contents of the draft orders. Judge Carey held that all objections to the entry of the Second Interim Order that have not been withdrawn are overruled, provided that all parties-in-interest reserve their right to object on any grounds to any further interim or final authorization to use Cash Collateral. Michael R. Lastowski, Esq., at Duane Morris, LLP, in Wilmington, Delaware, had submitted with the Court a certification of counsel regarding the second interim order authorizing the Debtors to use cash collateral. A final hearing on the request has been scheduled for April 23, 2009, at 4:00 p.m. About Spansion Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc. and four affiliates filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of Sept. 30, 2008, Spansion disclosed total assets of $3,840,000,000, and total debts of $2,398,000,000. SPANSION INC: Commences Review on Leases; Rejects Equipment Pacts ----------------------------------------------------------------- Spansion Inc. and its affiliates have begun a comprehensive review of their executory contracts and leases to determine which to assume and which to reject. As a result of their preliminary review, the Debtors have decided to reject leases that are of no benefit to their estates. Pursuant to Section 365 of the Bankruptcy Code, the Debtors seek authority from the U.S. Bankruptcy Court for the District of Delaware to reject 19 leases, nunc pro tunc to the Petition Date. A full-text copy of the Leases and its corresponding monthly rentals are available for free at: http://bankrupt.com/misc/Spansion_1stEquipmetnLeases.pdf http://bankrupt.com/misc/Spansion_MonthlyRentals.pdf Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc. and four affiliates filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of Sept. 30, 2008, Spansion disclosed total assets of $3,840,000,000, and total debts of $2,398,000,000. SPANSION INC: Seeks to Employ Duane Morris as Delaware Counsel -------------------------------------------------------------- Spansion Inc. and its affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to employ Duane Morris LLP as their attorneys, nunc pro tunc to the Petition Date, pursuant to Sections 327(a) and 328(a) of the Bankruptcy Code. The Debtors selected Duane Morris because: (i) they have consulted the firm prior to the Petition Date with respect to, among other things, advise regarding a host of issues related to restructuring efforts and the preparation for the petition and prosecution of the Chapter 11 cases; (ii) the firm and its attorneys that have been assigned to the Chapter 11 cases have considerable experience in the Chapter 11 reorganization cases and the fields of debtors' and creditors' rights generally; (iii) the firm does not hold or represent any adverse interest; and (iv) the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. As attorneys, Duane Morris will: (a) advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their business and properties; (b) attend meetings and negotiate with representatives of creditors and other parties-in-interest; (c) take all necessary action to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors, and representing the Debtors' estates in negotiations concerning all litigation in which the Debtors are involved, including objections to claims filed against the estates; (d) prepare and review all motions, applications, answers, orders, reports, and papers necessary to the administration of the Debtors' estates; (e) take any necessary action on behalf of the Debtors to obtain approval of a disclosure statement and confirmation of the Debtors' estates; (f) advise the Debtors in connection with any potential sale of assets; (g) appear before the Court, any appellate courts, and the United States Trustee, and protect the interest of the Debtors' estates before those Courts and the United States Trustee; and (h) perform all other necessary legal services for the Debtors in connection with the Chapter 11 cases, including analyzing the Debtors' leases and executory contracts and the assumption or assignment, analyzing the validity of liens against the Debtors, and advising on corporate, litigation, environmental, and other legal matters. The Debtors propose to pay Duane Morris based on the firm's current hourly rates: Professional Rate/Hour ------------ --------- Partners $340-$830 Of Counsel $300-$775 Special Counsel $295-$640 Associates $220-$510 Paralegals $135-$290 Legal Assistants $125-$225 The Debtors will also reimburse Duane Morris for actual, necessary expenses and other charges incurred. The principal attorneys presently designated to represent the Debtors and their current hourly rates are: Attorney Rate/Hour -------- --------- Michael R. Lastowski $675 Richard W. Riley $540 Sommer L. Ross $340 Adrian C. Maholchic $305 The Debtors relate they have paid Duane Morris $150,000 on February 26, 2009, to be applied to fee charges, and disbursements incurred for the period prior to the Petition Date and to pay the Chapter 11 filing fees incurred upon the commencement of the Chapter 11 cases. Michael R. Lastowski, Esq., at Duane Morris LLP, in Wilmington, Delaware, assures the Court that his firm is a " disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Spansion Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc. and four affiliates filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of Sept. 30, 2008, Spansion disclosed total assets of $3,840,000,000, and total debts of $2,398,000,000. SPORTSMAN'S WAREHOUSE: Section 341(a) Meeting Slated for April 16 ----------------------------------------------------------------- Roberta DeAngelis, the acting U.S. Trustee for Region 3, will convene a meeting of creditors in Sportsman's Warehouse, Inc.'s Chapter 11 case on April 16, 2009, at 9:00 a.m. at J. Caleb Boggs Federal Building, 2nd Floor, Room 2112, Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Midvale, Utah, 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. The company listed assets of $436 million against debt totaling $452 million as of Dec. 31., 2008. STANDARD PACIFIC: S&P Cuts Ratings on Senior Notes to 'CCC-' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its issue-level rating on Standard Pacific Corp.'s senior unsecured notes to 'CCC-' from 'CCC' and removed the rating from CreditWatch, where it was placed with negative implications on March 4, 2009. At the same time, S&P lowered its recovery rating on the debt to '5' from '4', indicating that senior noteholders can expect modest (10%-30%) recovery in the event of a payment default. S&P lowered these ratings on Standard Pacific's senior unsecured debt after the Irvine, California-based homebuilder released financial for its fiscal year ended Dec. 31, 2008, and after S&P analyzed the recovery prospects for senior unsecured creditors. Standard Pacific is a moderately sized homebuilder that delivered 4,607 homes during 2008 at an estimated average sales price of $330,000. S&P's 'CCC' corporate credit rating on Standard Pacific reflects deteriorating conditions in many of the company's key housing markets, diminished prospects for positive cash flow in the near term, and a highly leveraged balance sheet. Rating Lowered And Removed From Creditwatch Standard Pacific Corp. Rating ------ To From -- ---- Sr. unsecured CCC- CCC/Watch Neg (Recov rtg: 5) (Recov rtg: 4) STARWOOD HOTELS: Moody's Downgrades Senior Ratings to 'Ba1' ----------------------------------------------------------- Moody's Investors Service downgraded Starwood Hotels & Resorts Worldwide, Inc.'s senior unsecured ratings to Ba1, and assigned a Ba1 Corporate Family rating and Ba1 Probability of Default rating. "The downgrade reflects Moody's expectation of a deeper and more prolonged downturn in travel demand that will cause Starwood's credit metrics to remain outside levels appropriate for the former rating category" stated Peggy Holloway, Senior Credit Officer at Moody's. Moody's anticipates revenue per available room in 2009 could drop approximately 17% before stabilizing later in 2010. As a result, Starwood's debt/EBITDA could rise slightly above 4.5 times (incorporating Moody's standard analytic adjustments). Given Moody's view that industry conditions will remain challenged into 2010, the company's debt/EBITDA could remain above 4.0 times into 2011 (incorporating Moody's standard analytic adjustments). Starwood has a reasonable chance of reducing absolute debt levels by securitizing timeshare receivables, selling assets, and reducing capital spending. However, given the challenged credit and economic environment there is a material level of execution risk related to the timing and likely proceeds from such activity. In light of these challenges, Starwood is more appropriately positioned in the Ba1 rating category. Moody's assigned a Speculative Grade Liquidity rating of SGL-3 which reflects adequate liquidity. Starwood is expected to fund all of its capital spending and dividend from cash on hand and cash from operations. However, the company will be reliant upon its revolving credit facility to fund its term loan maturity in the second quarter of 2009. The company is in the process of amending its financial covenants which, if passed, will improve the cushion under the debt/EBITDA covenant. The rating outlook is stable reflecting Moody's expectation that Starwood will be able to reduce debt levels modestly to offset some of the anticipated deterioration in earnings and amend its leverage covenant. If industry conditions worsen beyond Moody's expectations, Starwood's rating would face downward rating pressure. Starwood Hotels & Resorts Worldwide, Inc. Ratings assigned: -- Corporate Family rating at Ba1 -- Probability of Default rating at Ba1 -- Speculative Grade Liquidity rating at SGL-3 Ratings downgraded, assessments assigned: -- Senior unsecured bonds and debentures to Ba1, (LGD 4, 56%) from Baa3 -- Senior unsecured shelf to (P) Ba1, (LGD 4, 56%) from (P) Baa3 -- Senior subordinate shelf to (P) Ba2, (LGD 6, 97%) from (P) Ba1 Ratings confirmed, assessments assigned: -- Preferred debt shelf at (P) Ba2, (LGD 6, 97%) Moody's last rating action on Starwood took place on February 2, 2009 when the company's ratings were placed on review for possible downgrade. Starwood Hotels & Resorts Worldwide, Inc., headquartered in White Plains, New York, is a leading hotel company with approximately 900 properties in more than 100 countries. STRATEGIC CAPITAL: Weiss Ratings Assigns "Very Weak" E- Rating -------------------------------------------------------------- Weiss Ratings has assigned its E- rating to Champaign, Ill.-based Strategic Capital Bank. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." Strategic Capital Bank is not a member of the Federal Reserve, and is primarily regulated by the Federal Deposit Insurance Corporation. The institution was established on Nov. 1, 1999, and deposits have been insured by the FDIC since that date. Strategic Capital Bank maintains a Web site at http://www.strategiccap.com/ and has one office located in Illinois. At Dec. 31, 2008, Strategic Capital Bank disclosed $598 million in assets and $581 million in liabilities in its regulatory filings. SUN-TIMES MEDIA: Files for Chapter 11; to Divest Assets ------------------------------------------------------- Sun-Times Media Group, Inc. and certain affiliates filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code. The filing was made in the U.S. Bankruptcy Court for the District of Delaware. The Company and its principal operating subsidiary, the Sun-Times News Group, will continue to operate its newspapers and online sites as usual while it focuses on further improving its cost structure and stabilizing operations. The Company has retained Rothschild Inc. to commence a process for the sale of assets pursuant to Section 363 of the U.S. Bankruptcy Code. The Company believes it has sufficient financial resources to continue customary day-to-day operations during this process. The Company operates 59 newspapers and their corresponding online sites. Those titles include: the Chicago Sun-Times, the SouthtownStar, Beacon News (Aurora), Courier-News (Elgin), Herald News (Joliet), Lake County News-Sun (Waukegan), Naperville Sun, Post-Tribune(Merrillville, Ind.), and weeklies published by Pioneer Press and Fox Valley Publications. The Company also publishes free shoppers and content on all of its corresponding online news sites and other sites such as YourSeason.com. As reported by the Troubled Company Reporter on December 23, 2008, Davidson Kempner Capital Management LLC sent to shareholders of Sun-Times Media a letter regarding its consent solicitation to reconstitute the Sun-Times' board of directors. The firm said its consent solicitation provides shareholders with the opportunity to reconstitute the Board of Directors and quickly put in place the necessary combination of publishing, financial and restructuring expertise that is essential to guide Sun-Times Group through its financial crisis. According to Davidson Kempner, the future of Sun-Times is at stake and time is short. A potential bankruptcy may occur within the next 12 months, the firm said, noting: -- Sun-Times' revenues have been declining at a 10% CAGR since January 2005; -- 2008 will be the third year in a row of negative EBITDA; -- Sun-Times' cost structure is out of control: -- gross margins have dropped 10 points since 2005; -- overhead costs have increased 12% since 2005, despite a 27% drop in revenues; -- current cost structure is now 112% of revenues; -- Sun-Times has been burning $20 million of cash per quarter on average since 2006. -- Sun-Times, at the current cash burn rate, may have less than 12 months of liquidity remaining, in our view. -- The diminution in Sun-Times' liquidity is remarkable for a media business with virtually no outstanding debt. "Over the past several months, the Company has taken several steps to reduce costs and strengthen our organization. However, the significant downturn in the print advertising environment that has affected newspapers across the country has continued to severely impact us," said Jeremy L. Halbreich, Chairman and Interim Chief Executive Officer of Sun-Times Media Group. "Unfortunately, this deteriorating economic climate, coupled with a significant, pending IRS tax liability dating back to previous management, has led us to today's difficult action. Importantly, we firmly believe that filing for Chapter 11 protection and exploring the potential sale of assets or new investment in the Company offers us the best opportunity to protect our respected media properties for the long-term." Mr. Halbreich added, "With [the] filing, it will be business as usual as we continue to operate our newspapers and online sites. We provide the area's best source of local news and information and remain committed to continuing to serve our readers, advertisers, and communities. We have enjoyed a long, rich history in the Chicago area and our goal is to preserve and sustain these strong print and online news and information assets that are such an integral part of the fabric of Chicago and its neighboring communities." The Company intends to move through the Chapter 11 process as quickly as possible and expects the process to be completed in 2009. The Sun-Times Media Group's legal advisor is Kirkland & Ellis and its financial advisor is Rothschild Inc. Huron Consulting Group is acting as restructuring advisor to the Company. The newspaper industry has been in turmoil. Newspaper advertising revenues plunged 25% in 2008, according to Barclays Capital, MarketWatch relates. In December, Tribune Co., filed for Chapter 11 bankruptcy protection in Wilmington, Delaware. Star Tribune followed in January. In February, Philadelphia Newspapers LLC and Journal Register Co. commenced bankruptcy proceedings. Other newspaper organizations have shut down certain operations. On March 16, Hearst Corp. said the Seattle Post-Intelligencer will shift to an entirely digital news product. The final print issue of the newspaper appeared the next day. In February, Hearst said it might close the San Francisco Chronicle unless it could find a way to cut operating costs. In February, E.W. Scripps & Co. closed Denver's Rocky Mountain News. In January, Gannett Co. said it would shut down the Tucson Citizen if it could not find a buyer for the Arizona publication. U.S. Sen. Benjamin Cardin (D-Md.) last week introduced legislation to the U.S. Congress Tuesday that would allow newspapers to operate as nonprofit organizations. According to David B. Wilkerson at MarketWatch, Sen. Cardin proposed that newspapers could operate as nonprofits, if they chose to do so, claiming 501(c)(3) status for educational purposes, similar to public broadcasting. Mr. Wilkerson said that under the proposal, advertising and subscription revenue would be tax-exempt, and contributions to support coverage or operations could be tax- deductible. Nonprofit-status newspapers would not be allowed to make political endorsements but would be allowed to freely report on all issues, including political campaigns, according to Mr. Wilkerson. Operating Losses for Past 6 Years The Wall Street Journal states that Chicago Sun-Times isn't burdened with debt. The Company's problem, according to the report, is operating losses for each of the past six years, including a $344 million loss in 2008. WSJ relates that Chicago Sun-Times admitted that it is "at risk of running out of cash quickly" unless it receives relief from its obligations. Chicago Sun-Times said in regulatory filings that it had less than $100 million in cash and cash equivalents as of September 30, 2008. According to WSJ, Chicago Sun-Times said that it may seek to sell "substantially all" of its assets. Chicago Sun-Times hired investment bank Rothschild Inc. to help it sell assets, WSJ says. WSJ notes that Chicago Sun-Times canceled an auction of the Company in 2008 when it received few offers. Suitors in that were wary of investing in Chicago Sun-Times while the Internal Revenue Service claim hung over its head, WSJ states, citing Mr. Halbreich. Citing Chicago Sun-Times chairman and interim chief executive Jeremy L. Halbreich, WSJ relates that the primary motivation for the Company's bankruptcy filing is that the tax claim won't carry over to potential new owners. The Company, says WSJ, faces a crushing tax claim stemming from the former ownership of press baron Conrad Black. Court documents say that Chicago Sun-Times values its assets at less than the $510 million claim, which won't be wiped out in the proceedings. According to court documents, Chicago Sun-Times listed $479 million in assets as of November 7, 2008, and about $801 million in debts. WSJ reports that Chicago Sun-Times also blamed its weakened financial condition in part on legacy issues related to Mr. Black who, along with other executives, were convicted in 2007 for their role in swindling the Company out of millions of dollars. WSJ notes that Mr. Black is listed as a creditor in Chicago Sun-Times Chapter 11 case, as the company has advanced legal fees and expenses to Mr. Black related to pending civil lawsuits. According to the report, Chicago Sun-Times has paid out some $118 million in connection with legal fees and costs for Mr. Black and other former company officers and directors. Sun-Times said it expects its advertising revenue to decline roughly 30% throughout 2009. That follows an 18% drop in print ad revenue during last year's fourth quarter. About Chicago Sun-Times The Chicago Sun-Times is the oldest continuously published daily newspaper in the city. It began in 1844 as the Chicago Evening Journal (which was the first newspaper to publish the rumor, now believed false, that a cow owned by Catherine O'Leary was responsible for the Chicago fire). The Evening Journal, whose West Side building at 17-19 S. Canal was undamaged, gave the Chicago Tribune a temporary home until it could rebuild. In 1929, the newspaper was relaunched as the Chicago Daily Illustrated Times. The modern paper grew out of the 1948 merger of the Chicago Sun, founded in 1941 by Marshall Field III, and the Chicago Daily Times. Before Rupert Murdoch, the newspaper was for a time owned by Field Enterprises, controlled by the Marshall Field family, who also owned WFLD channel 32 since its inception in 1966, and the afternoon paper Chicago Daily News. When the Daily News ended its run in 1978, much of its staff, including Pulitzer Prize-winning columnist Mike Royko, were moved to the Sun-Times. During the Field period, the newspaper had a populist, progressive character that leaned Democratic but was independent of the city's Democratic establishment. Although the graphic style was urban tabloid, the paper was well-regarded for journalistic quality and did not rely on sensational front-page stories. It typically ran articles from the Washington Post/Los Angeles Times wire service. About Sun-Times Media Group Sun-Times Media Group, Inc. (Pink Sheets:SUTM) -- http://www.thesuntimesgroup.com/-- owns media properties including the Chicago Sun-Times and Suntimes.com as well as newspapers and Web sites serving more than 200 communities across Chicago. Sun-Times Media Group, Inc.'s balance sheet at Sept. 30, 2008, showed total assets of $479.9 million, total liabilities of $801.7 million, resulting in a stockholders' deficit of roughly $321.8 million. SUN-TIMES MEDIA: Case Summary & 30 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Sun Times Media Group, Inc. Bankruptcy Case No.: 09-11092 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- American Publishing (1991) LLC 09-11093 American Publishing Company LLC 09-11094 American Publishing Management Services, Inc. 09-11095 APAC-95 Oklahoma Holdings, Inc. 09-11096 Centerstage Media, LLC 09-11097 Chicago Group Acquisition LLC 09-11098 Chicago Sun-Times Features, Inc. 09-11099 Chicago Sun-Times LLC 09-11100 Digital Chicago Inc. 09-11101 Fox Valley Publications LLC 09-11102 HGP, Partnership 09-11103 HIPI (2002) Inc. 09-11104 Hollinger Australian Holdings Limited 09-11105 Hollinger International Publishing Inc. 09-11106 HTH Benholdco LLC 09-11107 HTH Holdings Inc. 09-11108 HTNM LLC 09-11109 HTPC Corporation 09-11110 LHAT Corporation 09-11112 Meridian Star, Inc. 09-11113 Midwest Suburban Publishing, Inc. 09-11114 Northern Miner U.S.A., Inc. 09-11115 Oklahoma Airplane LLC 09-11116 Pioneer Newspapers Inc. 09-11117 Reach Chicago LLC 09-11118 Sun Telemarketing LLC 09-11119 Sun-Times Distribution Systems, Inc. 09-11120 Sun-Times PRD Inc. 09-11121 TAHL (2002) Inc. 09-11122 The Johnstown Tribune Publishing Company 09-11123 The Post-Tribune Company LLC 09-11124 The Red Streak Holdings Company 09-11125 The Sun-Times Company 09-11126 XSTMHoldings LLC 09-11127 Type of Business: The Debtors (Pink Sheets: SUTM.PK) conduct business as a single operating segment which is concentrated in the publishing, printing, and distribution of newspapers in greater Chicago, Illinois, metropolitan area and the operation of various related Web sites. The Debtors also have non-debtor affiliates in Canada, the United Kingdom and Burma. Sun-Times Media Group is the ultimate company of each of the Debtors in these Chapter 11 cases. Chapter 11 Petition Date: March 31, 2009 Court: District of Delaware Judge: Christopher S. Sontchi Debtors' Counsel: James H.M. Sprayregan, P.C. James A. Stempel, Esq. David A. Agay, Esq. Sarah H. Seewer, Esq. Kirkland & Ellis LLP Aon Center 200 East Randolph Drive Chicago, IL 60601-6636 Tel: (312) 861-2000 Fax: (312) 861-2200 http://www.kirkland.com/ Debtors' Co-counsel: Pauline K. Morgan, Esq. Edmon L. Morton, Esq. Sean T. Greecher, Esq. Young Conaway Stargatt & Taylor LLP 100 West Street, 17th Floor Wilmington, DE 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 http://www.ycst.com/ Financial Advisor: Huron Consulting Group Inc. 550 West Van Buren Street Chicago, IL 60607 Tel: (312) 583-8700 Fax: (312) 583-8701 http://www.huronconsultinggroup.com/ --- and --- Rothschild Inc. 1251 Avenue of the Americas, 51st floor New York, NY 10020 Tel: (212) 403 3500 Fax: (212) 403 3501 http://www.rothschild.com/ Claims Agent: Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245 Tel: (866) 381-9100 The Debtors' financial condition as of November 7, 2008: Total Assets: $479,000,000 Total Debts: $801,000,000 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Catalyst Paper (USA) Inc. Trade Vendor $1,470,983 2101 4th Avenue, Sute 1950 Seattle, WA 98121 P: 206-838-2070 F: 206-838-2071 Alberta Newsprint Sales Trade Vendor $1,108,440 916 Savannah Circle Naperville, IL 60540 P: 630-369-1899 F: 604-681-8861 Tembec Enterprises, Inc. Trade Vendor $1,027,088 10, Chemin Gatineau, C.P. 5000 Temiscaming, QC JOZ3RO Canada P: 819-627-4387 F: 819-627-1178 Chicago Tribune Trade Vendor $614,618 Distribution 435 North Michigan Avenue, Suite 300 Chicago, IL 60611 P: 800-874-2863 F: 312-222-3093 Joyce B. Santiago Contest Winner $480,000 Pat Deleo Contest Winner $440,000 United Temps $370,463 Skybridge Trade Vendor $328,352 Mirkaei Tikshoret, Ltd. Litigation $275,000 Web Printing Controls Trade Vendor $259,785 Classified Plus, Inc. Trade Vendor $210,875 Security Professionals, Inc. Trade Vendor $173,734 Central Ink Com Trade Vendor $162,000 Western Colorprint Trade Vendor $140,000 Graphic Promotions, Inc. Trade Vendor $137,580 Atex, Inc. Trade Vendor $134,309 Newsboy Delivery System Inc. Trade Vendor $124,303 Carmichael Leasing Trade Vendor $112,652 Open Foundation $107,850 SCA Promotions Trade Vendor $98,123 Integrators Ltd. Trade Vendor $97,500 Vanguard Energy Services LLC Trade Vendor $87,449 Innerworkings LLC Trade Vendor $76,938 RKON Incorporated Trade Vendor $71,171 Pension Benefit Guarantee Unfunded Pension unstated Corporation Liability Mark Kipnis Indemnification unstated Claim Lax O'Sullivan Scott LLP Litigation unstated John Boultbee Indemnification unstated Claim Internal Revenue Service Tax unstated Conrad Black Indemnification unstated Claim and Monies to exercise stock option The petition was signed by James D. McDonough, senior vice president, chief administrative officer, general counsel and secretary. SUSSER HOLDINGS: S&P Gives Stable Outlook; Affirms 'B+' Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Corpus Christi, Texas-based Susser Holdings LLC to stable from negative. S&P affirmed all ratings on the company, including its 'B+' corporate credit rating. "The outlook revision is based on Susser's improved cash flow generation in the past several quarters as well as its success in integrating the Town & Country acquisition," said Standard & Poor's credit analyst Ana Lai. "Credit measures have strengthened to levels more in line with the rating category," she added. Total debt to EBITDA was 5.3x in fiscal 2008 down from pro forma debt leverage of about 6.0x in fiscal 2007. TEREX CORPORATION: Moody's Cuts Corporate Family Rating to 'Ba3' ---------------------------------------------------------------- Moody's Investors Service lowered the ratings of Terex Corporation -- Corporate Family and Probability of Default Ratings to Ba3 from Ba2. The rating outlook is negative. In a related rating action, Moody's raised Terex's Speculative Grade Liquidity rating to SGL-2 from SGL-3. This concludes the review for downgrade initiated on February 13, 2009. The downgrade and change in outlook reflects the significant contraction in several of Terex's end markets that is expected to negatively impact the company's earnings and cash flow metrics at least through 2009. The global construction and mining industries, primary drivers of Terex's revenues, are undergoing a severe downturn. In the fourth quarter of FY08 the company took a goodwill impairment charge of about $460 million related to its Construction, Road Building, and Utility businesses, which is indicative of a lower level of earnings and cash flow expected from these businesses over the coming quarters. Operating margins are likely to remain under pressure as the rapid erosion of demand for construction equipment results in under-absorption of fixed costs. In response, the company has sought to reduce capacity and may take additional charges to right size its businesses. The EBITA margin for FY08 declined to 9.5% from 11.5% in FY07 and interest coverage fell to 5.6x from 9.5x over the same time period (all ratios adjusted per Moody's methodology). Terex's backlog declined by almost 30% on a year-over-year basis. Terex is pursuing restructuring initiatives and working capital improvements, attempting to minimize the negative impact of this downturn on its operating margins and cash generation. The company has reduced staffing in most of its businesses in excess of 18% since June 2008, and is rationalizing underutilized facilities. Notwithstanding these efforts, Terex's operating performance is likely to trend towards credit metrics that were previously identified by the rating agency as being potentially in-line with a lower rating. These metrics include debt/EBITDA above 3.0x or EBIT/interest expense below 2.0x (all ratios adjusted per Moody's methodology). As a result, Moody's view is that Terex's operating performance will be below prior's year performance and future credit metrics will be more reflective of the Ba3 Corporate Family Rating. In spite of the downgrade, Moody's improved Terex's speculative grade liquidity rating to SGL-2 from SGL-3 due to the improved liquidity profile subsequent to the company's receiving needed covenant waivers under its bank credit facility. Terex was able to amend its fixed charge covenant ratio under the agreement, removing the likely violation of this covenant at 1Q09. Headroom under this covenant should be sufficient over the next twelve months. As of December 31, 2008, the company had approximately $484.4 million of cash balances. The negative outlook incorporates Moody's view that Terex will continue to face a difficult economic environment through 2009 resulting in the company's credit metrics continued to be stressed for the foreseeable future. These ratings/assessments were affected by this action: -- Corporate Family Rating lowered to Ba3 from Ba2; -- Probability of Default Rating lowered to Ba3 from Ba2; -- $895 million senior secured bank credit facility (benefiting from subsidiary guarantees) lowered to Baa3 (LGD1, 9%) from Baa2 (LGD1, 9%); -- $300 million senior subordinated notes due 2014 (benefiting from upstream guarantees) lowered to Ba2 (LGD3, 37%) from Ba1 (LGD3, 35%); and, -- $800 million senior subordinated notes due 2017 (unguaranteed) lowered to B1 (LGD5, 77%) from Ba3 (LGD5, 76%). The company's speculative grade liquidity rating was raised to SGL-2 from SGL-3. The last rating action was on February 13, 2009, at which time Moody's put Terex's ratings under review for potential downgrade. Terex Corporation, headquartered in Westport, Connecticut, is a diversified global manufacturer supporting the construction, mining, utility and other end markets. Revenues for FY08 were approximately $9.9 billion. TOWER HILL: Moody's Downgrades Ratings on Five Classes of Notes --------------------------------------------------------------- Moody's Investors Service announced that it has downgraded its ratings of five Classes of Notes issued by Tower Hill CDO, Ltd., a synthetic collateralized debt obligation transaction. Tower Hill CDO, Ltd., synthetically references seven bespoke corporate synthetic CDOs, each of which references a portfolio of corporate entities. Class Description: $100,000,000 Class A-1 Senior Secured Floating Rate Notes Due 2016 -- Current Rating: C -- Prior Rating: B1 -- Prior Rating Date: March 4, 2009 Class Description: U.S. $112,000,000 Class A-2 Senior Secured Floating Rate Notes Due 2016 -- Current Rating: C -- Prior Rating: Caa1 -- Prior Rating Date: March 4, 2009 Class Description: $72,000,000 Class B Senior Secured Deferrable Interest Floating Rate Notes Due 2016 -- Current Rating: C -- Prior Rating: Caa3 -- Prior Rating Date: March 4, 2009 Class Description: $24,000,000 Class C Senior Secured Deferrable Interest Floating Rate Notes Due 2016 -- Current Rating: C -- Prior Rating: Ca -- Prior Rating Date: March 4, 2009 Class Description: $60,000,000 Class D Senior Secured Deferrable Interest Floating Rate Notes Due 2016 -- Current Rating: C -- Prior Rating: Ca -- Prior Rating Date: March 4, 2009 The rating actions reflect the deterioration in the credit quality of the reference portfolio of Corporate Synthetic CDOs, as well as the occurrence on March 19, 2009, as reported by the Trustee, of an Additional Termination Event under Part 1(15)(e) of the ISDA Schedule to the Master Agreement dated August 16, 2006. The Additional Termination Event resulted in a Termination Event under Section 5(b)(v) of the Master Agreement and an Event of Default under Section 5.01(g) the Indenture dated August 16, 2006. In addition, pursuant to section 5.02(ii) of the Indenture, the Trustee has declared the principal of and accrued interest on all the Notes to be immediately due and payable. The Additional Termination Event occurred when the Class A Overcollateralization Ratio (expressed as a percentage) calculated by dividing (i) the Collateral Principal Amount by (ii) the Aggregate Principal Amount of the Class A Notes, fell below 100%. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses will depend on the liquidation proceeds of the disposition of the collateral and amount of the Defaulted Counterparty Termination Payment. TPG-AUSTIN PORTFOLIO: Moody's Downgrades Senior Ratings to 'C' -------------------------------------------------------------- Moody's Investors Service downgraded the ratings of TPG-Austin Portfolio Holdings LLC's senior secured credit facility to C, from Caa2. Moody's also downgraded TPG-Austin's corporate family rating to Caa3 from Caa2. Concurrently, Moody's has withdrawn these ratings for business reasons. TPG-Austin is a wholly-owned subsidiary of a joint venture between Thomas Properties Group, Inc. (6% stake), California State Teachers Retirement System (19%), Lehman Brothers Holdings (50%), and certain co-investors (25%). Moody's rating actions reflect Thomas Properties' announcement that TPG-Austin has reached an agreement that restructures and recapitalizes the financing on the partnership's 10-property portfolio of office assets in Austin, Texas. Moody's rates the senior secured credit facility, which consisted of a $193 million term loan (due 2013) and a $100 million revolving credit facility (due 2012) prior to the restructuring agreement. The term loan was fully drawn upon transaction closing in June 2007, but the $100 million revolver remains undrawn and has not been available since Lehman Brothers Commercial Paper, the sole lender, declared bankruptcy in September 2008. The Court-approved agreement restructures the credit facility by replacing the unfunded $100 million revolver with $60 million of new senior secured priority financing contributed by the partners. A portion of proceeds from this new financing was used to repurchase and retire an $80 million portion of the existing term loan from a third-party for $14 million. Additionally, a portion of the proceeds was used to pay accrued term loan interest due. Since early January, TPG- Austin has withheld the interest payments due on its term loan as a partial offset for damages caused by Lehman's failure to fund the credit facility. Moody's downgrade of the senior secured credit facility reflects 1) the default on term loan interest due since early January, even though this default was resolved as part of the new financing agreement and 2) the repurchase and retirement of $80 million of debt for a deep discount, which Moody's views as tantamount to a distressed exchange offer. Moody's downgrade also reflects the substantial change in terms of the credit facility, including a suspension of covenants until 2012, stricter conditions on advances, and accrual and capitalization of interest due. The downgrade of TPG-Austin's corporate family rating to Caa3 from Caa2 reflects the very weak, though modestly improved, financial position of the portfolio. Moody's notes that this transaction was underwritten with only about 25% equity in June 2007, near the peak of the current real estate cycle. Although leverage and interest coverage improve modestly as a result of the restructuring agreement, credit metrics remain very weak. As such, even though TPG-Austin's debt doesn't begin maturing until 2012, Moody's expects the partnership to have difficulty meeting its obligations at this time. Moody's also expects that TPG- Austin's portfolio, which was 89% leased as of 4Q08, will face operating challenges in the upcoming year. Given that five of the ten assets are located in the northwestern suburbs, which are experiencing an influx of new supply amidst deteriorating economic conditions, maintaining portfolio net operating income will be challenging. These ratings were downgraded and withdrawn: -- TPG-Austin Portfolio Holdings LLC - secured term loan to C, from Caa2; secured revolving credit facility to C, from Caa2; corporate family rating to Caa3, from Caa2 Moody's last rating action with respect to TPG-Austin Portfolio Holdings LLC was on December 19, 2008, when Moody's downgraded the senior secured ratings and corporate family rating to Caa2 from B1. The ratings remained on review for possible downgrade. TRIBUNE CO: Files Schedules of Assets and Liabilities ----------------------------------------------------- Tribune Co. filed with the U.S. Bankruptcy Court for the District of Delaware its schedules of assets and liabilities last week, disclosing: A. Real Property $27,663,535 B. Personal Property B.1 Cash on hand 0 B.2 Bank Accounts JPMorgan Chase Bank 7,749 JPMorgan Chase Bank 13,550 Bank of America (2,275) Northern Trust Bank 439,639 See http://bankrupt.com/misc/tribunecob2.pdf B.9 Interests in Insurance Policies Federal Insurance Company 109,112 St. Paul Fire & Marine Insurance Company 155,540 Zurich American Insurance Company 285,549 FM Global 1,381,520 Indian Harbor Insurance 184,623 Others 720,473 See http://bankrupt.com/misc/tribunecob9.pdf B.13 Business Interests and stocks 0 Invest in Los Angeles Times 2,132,681,566 Invest in Newsday 1,036,609,657 Invest in Baltimore Sun Co. 1,081,603,483 Invest in Tribune Broadcasting Company 1,479,039,615 Invest in Tribune Finance LLC 2,800,000,000 Invest in Eagle New Media 1,370,336,794 Invest in LA International 4,731,518,144 Others 2,726,114,271 See http://bankrupt.com/misc/tribunecob13.pdf B.14 Interests in partnerships Investment in Metromix LLC JV 2,239,012 Chicago Equity Fund 898,426 Legacy.com 3,703,255 Merrill Lynch (stocks) 3,069 Asia Media Fund 333,514 AdStar, Inc. 34,434 Classified Ventures Undetermined B.15 Government and Corporate Bonds 1,240,545 B.16 Accounts Receivable Intercompany Receivable from Tribune Finance Service Center, Inc. 16,733,732,227 Intercompany Receivable from Tribune Publishing Company 3,732,351,160 Others 1,867,483,057 See http://bankrupt.com/misc/tribunecob16.pdf B.21 Other Contingent & Unliquidated claims Undetermined B.22 Patents and other intellectual property Undetermined See http://bankrupt.com/misc/tribunecob22.pdf B.23 Licenses, franchises, and other intangibles Software 388,161 Accumulated Depreciation - Software (375,162) B.25 Vehicles Autos 60,947 Accumulated Depreciation - Autos (54,326) B.28 Office equipment, furnishings and supplies Office equipment 159,504 Computer Equipment 935,331 Furniture & Fixtures 5,685,043 Accum. Depr. Furniture & Fixture (5,241,767) Accum. Depr. Office Equipment (143,401) Accum. Depr. Computer Equipment (890,932) B.29 Machinery 969,726 B.35 Other Personal Property Prepaid Expenses 1,217,434 Prepaid Insurance 3,076,834 Prepaid Postage 94,228 Prepaid-direct mail postage clearing 971 Other current assets 179,120,827 Interest Rate Swap & Other Long-term assets 37,820,093 Interest Rate Cap 6,617,137 Deferred Income Taxes 6,579,477 Deferred Charges 4,518,663 TOTAL SCHEDULED ASSETS $39,964,208,320 ======================================================== C. Property Claimed as Exempt $0 D. Secured Claim Barclays Bank PLC Undetermined Citicapital Technology Finance, Inc. Undetermined Forsythe/McCarthur Associates, Inc. Undetermined JP Morgan Chase Bank, N.A. Undetermined Xerox Corporation Undetermined E. Unsecured Non-priority Claims Undetermined See http://bankrupt.com/misc/tribunecoE.pdf F. Unsecured Non-priority Claims JP Morgan Chase Bank, NA 8,543,530,470 Merrill Lynch Capital Corp. 1,619,506,849 Deferred Compensation 19,894,000 Excess Pension 10,060,803 Intercompany Claims 31,319,078,972 Letter Agreements 6,667,622 Non-qualified Pension 44,135,999 Salary Continuation 24,856 Unsecured Notes and Debentures 2,041,927,047 Supplemental 401(k) 93,869 Trade Payable 2,548,950 See http://bankrupt.com/misc/tribunecoF.pdf TOTAL SCHEDULED LIABILITIES $43,607,469,438 ======================================================== A schedule of the Debtor's executory contracts and unexpired leases is available for free at: http://bankrupt.com/misc/tribunecoG.pdf Tribune also filed its statement of financial affairs. Chandler Bigelow, III, senior vice president and chief financial officer of Tribune Company, said the company has earned income from employment, trade, or from operation of its business within two years before the Petition Date: Source Amount ------ ------ 2008 Net Income ($3,014,231,000) 2007 Net Income 86,945,000 2006 Net Income 593,995,000 According to Mr. Bigelow, non-operating income for the fiscal year 2008 through the Petition Date includes: Source Amount ------ ------ After-tax gain on change in fair value of derivatives and related investments $108,598,000 After-tax gain on sales of investments, net 42,377,000 After-tax loss on sale of Time Warner securities 60,800,000 After-tax loss on other, net 1,734,000 Income tax adjustments 1,859,358,000 The Debtor made payments or other transfers to creditors within 90 days before the Petition Date aggregating $948,207,354. Among the largest payments are: Name of Creditor Amount ---------------- --------- Barclays Bank PLC $15,917,037 Barclays Bank PLC 1,500,000 Bowater America Inc 6,272,396 Bowater America Inc 5,900,871 Bowater America Inc 6,830,790 Bowater America Inc 5,037,237 Catalyst Paper USA Inc 3,910,931 Catalyst Paper USA Inc 1,997,469 Catalyst Paper USA Inc 1,127,119 Catalyst Paper USA Inc 1,082,620 CCI Europe 2,500,000 Fox Broadcasting Company 1,160,326 Fox Broadcasting Company 1,874,644 Goldman Sachs Group Inc 1,248,444 Howe Sounds Pulp and Paper LP 2,335,435 Howe Sounds Pulp and Paper LP 3,272,025 Howe Sounds Pulp and Paper LP 2,360,113 Howe Sounds Pulp and Paper LP 1,994,734 JP Morgan Chase 2,000,000 JP Morgan Chase 2,000,000 JP Morgan Chase Bank, NA 20,948,229 JP Morgan Chase Bank, NA 20,948,939 JP Morgan Chase Bank, NA 6,856,454 JP Morgan Chase Bank, NA 8,260,416 JP Morgan Chase Bank, NA 3,950,407 JP Morgan Chase Bank, NA 3,977,943 JP Morgan Chase Bank, NA 3,811,635 JP Morgan Chase Bank, NA 7,225,897 JP Morgan Chase Bank, NA 1,108,090 JP Morgan Chase Bank, NA 1,952,805 JP Morgan Chase Bank, NA 111,670,760 Nielsen Media Research Inc 1,507,271 Nielsen Media Research Inc 1,536,172 Platformic Inc 1,269,509 Sidley Austin LLP 3,500,000 Sidley Austin LLP 1,000,000 SP Newsprint Sales Co 1,284,902 SP Newsprint Sales Co 1,060,865 SP Newsprint Sales Co 2,650,213 SP Newsprint Sales Co 1,382,292 SP Newsprint Sales Co 2,673,755 SP Newsprint Sales Co 4,684,425 Warner Bros 1,212,917 Warner Bros 1,190,717 Warner Bros 1,211,705 Warner Bros 1,055,102 White Birch Paper Company 1,004,280 White Birch Paper Company 2,848,535 White Birch Paper Company 1,983,335 A list of the 90-Day Payments is available for free at: http://bankrupt.com/misc/TribuneCompany_Payment2Creditors.pdf The Debtor also made payments to current and former directors and officers on these dates: A. Current Directors and Officers Date Range Salary Equity Grants Severance ---------- ------ ------------- --------- 12/8/2007-12/8/2008 $10,523,606 $6,134,395 $0 B. Former Directors and Officers Date Range Salary Equity Grants Severance ---------- ------ ------------- --------- 12/8/2008-12/8/2008 $13,572,609 $17,776,152 $38,970,475 The company also discloses that it was party to several lawsuits and administrative proceedings pending in non-bankruptcy courts. A list of the lawsuits is available for free at: http://bankrupt.com/misc/Tribune_LawSuits.pdf Tribune also gave gifts or charitable contributions within one year before the Petition Date. Among the recipients of the gifts are: Name Amount ---- ------ American Ireland Fund $10,000 Commercial Club Foundation 100,000 Junior Achievement of Chicago 15,000 So Other Might Eat 10,000 The Company also incurred losses from theft, fire other casualty within one year preceding the Petition Date: Description Value ----------- ----- Workers' Compensation $116,224 Workers' Compensation 102,798 Workers' Compensation 82,872 Workers' Compensation 105,858 Auto Liability 112,500 Within one year before the Petition Date, the Company made payments or transfers to persons, including attorneys, for consultation concerning debt consolidation, bankruptcy law or preparation of a petition: Name Amount ---- ------ Alvarez & Marsal North America LLC $350,000 Alvarez & Marsal North America LLC 359,090 Alvarez & Marsal North America LLC 708,451 Cole, Schotz, Meisel, Forman & Leonard P.A. 200,000 Cole, Schotz, Meisel, Forman & Leonard P.A. 214,290 Daniel J. Edelman Inc. 50,000 Daniel J. Edelman Inc. 60,000 Epiq Bankruptcy Solutions 20,000 Epiq Bankruptcy Solutions 25,000 Lazard Freres and Co. LLC 200,000 McDermott Will & Emery 28 McDermott Will & Emery 26,411 Sidley Austin LLP 78,212 Sidley Austin LLP 41,348 Sidley Austin LLP 4,150 Sidley Austin LLP 10,960 Sidley Austin LLP 105,535 Sidley Austin LLP 70,987 Sidley Austin LLP 256,072 Sidley Austin LLP 2,297,080 Sidley Austin LLP 2,330 Sidley Austin LLP 358,290 Sidley Austin LLP 176,638 Tribune Company holds properties owned by another person, including: Description of Property Owner ----------------------- ----- 3 HP Proliant DL360 G5 servers LocalTV IBM eServer xSeries 232 server CNN 2 IBM eServer xSeries 232 servers CNN Orion 4000/5 Verizon Cisco 2600 Telerep 4 Dell servers and 1 HP server Metromix Cisco 2600 Bank of America 3 IBM Netfinity 3500 servers Associated Press Newswire modems Associated Press Cisco 2600 Northern Trust Cisco 2600 Nielsen Media Research AT&T Optical Fiber AT&T Tribune Company also transferred assets on these dates: Date of Sale Name of Transferee Value Received ------------ ------------------ -------------- 10/17/2007 Wilshire Classifieds, LLC $1,040,000 9/28/2007 Chandler Trust No.1 22,310,916 9/28/2007 Chandler Trust No.1 24,633,255 12/11/2007 Matthew Bender & Company 104,027,619 12/11/2007 Mosby, Inc. 50,220,668 10/31/2008 Reed Elsevier, Inc 5,000,000 12/28/2007 Doublemousse B.V. 3,111,480 Dec 5-8,2008 Sold via broker 148,790,369 Headquartered in Chicago, Illinois, Tribune Company -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: LA Times Files Schedules of Assets and Liabilities -------------------------------------------------------------- Los Angeles Times Communications, LLC, filed with the U.S. Bankruptcy Court for the District of Delaware its schedules of assets and liabilities last week, disclosing: A. Real Property $229,994,705 B. Personal Property B.1 Cash on hand 0 Petty Cash 4,770 B.2 Bank Accounts (259,374) B.3 Security Deposits Distributor Rental Security Deposits 604,808 B.4 Artwork 466,908 B.13 Business Interests and stocks Investment in Sub-TM Lic Inc 898,992,252 LA Investments 3,585,737 B.16 Accounts Receivable Receivable from Tribune Company 4,979,008,544 Others 499,217,249 B.18 Other Liquidated Debts 3,610,355 B.21 Other Contingent & Unliquidated claims Undetermined B.22 Patents and other intellectual property Undetermined B.23 Licenses, franchises, and other intangibles 24,017,398 B.25 Vehicles 113,155 B.28 Office equipment, furnishings and supplies Office Equipment 5,599,338 Computer Equipment 52,942,858 Furniture & Fixtures 19,074,464 Accum Depr-Furniture & Fixture (13,375,722) Accum Depr-Office Equipment (5,268,197) Accum Depr-Comp Equipment (46,459,686) B.29 Machinery Bottom Wrap 43,683 Gal/Oil 2,181 Other Supplies Inventory 1,033,890 Plates Inventory 203,091 Machinery and Equipment 11,833,739 Production Equipment 2,639,870 Prepress 15,065,128 Pressroom 206,582,235 Other Equipment 5,166,686 CIP 2,126,744 Accum Depr-Machinery & Equipment (9,072,267) Accum Depr-Production Equip (2,129,348) Accum Depr-Other Equip (5,038,671) Accum Depr-Prepress (10,602,917) Accum Depr-Pressroom (83,240,142) B.30 Inventory General Newsprint Inventory 20,318,061 Special Paper Newsprint 2,953,132 Reserve LIFO (3,333,856) Newsprint in Transit 9,323,421 Black Ink Inventory 265,840 Color Ink Inventory 206,312 Other Inventories 1,061,717 B.35 Other Personal Property Prepaid Expenses 1,543,760 Prepaid Postage 164,101 Prepaid Postage-Mail Subscription 47,658 Prepaid Rent/Leases 818,673 Prepaid Service Contracts 504,588 Prepaid Expenses-Other 500,899 Prepaid Marketing Expenses 352,818 Other Current Assets 1,488,376 Building/Leaseholds 6,196,724 Building Improvements 39,680,383 Capitalized Interest 8,693 Accum Depr-Land Improvements (604,437) Accum Depr-Bldg/Improvements (5,549,921) Accum Depr-Bldg Improvements (6,980,964) Other Long Term Assets 604,487 TOTAL SCHEDULED ASSETS $6,817,278,095 ======================================================== C. Property Claimed as Exempt $0 D. Secured Claim Undetermined E. Unsecured Non-priority Claims Undetermined F. Unsecured Non-priority Claims Certain Customer Liabilities 266,536 Intercompany Claims 4,554,394,047 Tribune Finance, LLC 2,786,325,440 Tribune Finance Service Center, Inc 1,008,164,383 Tribune License, Inc. 126,926,818 Tribune Media Services, Inc. 100,228,382 Others 532,749,023 Letter Agreements 971,640 Salary Continuation 20,215 Accrued Acquisition 2,884,834 Trade Payable 8,947,685 TOTAL SCHEDULED LIABILITIES $8,589,129,980 ======================================================== LA Times Communications also filed its statement of financial affairs. It did not disclose any income from employment or from the operation of business during the two years immediately preceding the Petition Date. The Debtor said it paid a total of $2,438,346 to creditors within 90 days before the Petition Date. A list of the 90-Day Transfers is available for free at: http://bankrupt.com/misc/latimesc3b.pdf The Debtor is a party to more than 90 lawsuits and administrative proceedings filed within one year before the Petition Date. A list of the Lawsuits is available for free at: http://bankrupt.com/misc/latimesc4a.pdf The Debtor also disclosed that it have gifts and charitable contributions to various entities totaling more than $450,000 within one year before the Petition Date. A list of the Gifts is available for free at http://bankrupt.com/misc/latimesc7.pdf The Debtor incurred more than $700,000 of losses from fire, theft and other casualty within one year before the Petition Date. A list of the Losses is available for free at: http://bankrupt.com/misc/latimesc8.pdf The Debtor disclosed that it has received notice in writing by a governmental unit that it may be liable under or in violation of an environmental law: Site Name Governmental Unit Environmental Law --------- ----------------- ----------------- BKK Corporation California Dept. Section 107(a), Landfill of Toxic Substances Title 42 Section Control 9607(a), the California Health and Safety Code Section 25323.5 Los Angeles Times Orange County California Health Health Care Agency and Safety Code Section 25298(c)(4); California Code of Regulations, Title 23, Subchapter 16, Section 2652 Los Angeles Times Orange County California Heath Health Care Agency and Safety Code Section 25299.37(a); California Code of Regulations, Title 23, Subchapter 16, Section 2652 The Debtor disclosed the inventory and the amount of the inventory it holds in the past year before the Petition Date. A list of the Inventory is available for free at: http://bankrupt.com/misc/latimesc20a.pdf Headquartered in Chicago, Illinois, Tribune Company -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Amends $225M Barclays Asset-Backed Securitization Loan ------------------------------------------------------------------ The initial amended securitization facilities entered into among Tribune Company, non-debtor Tribune Receivables LLC, and Barclays Bank PLC will expire on April 10, 2009. The purpose of the limited period was to provide the Debtors a reasonable time to evaluate the impact of their Chapter 11 proceedings on their businesses, determine their long-term financing needs, and explore alternatives for the financing. Since the entry of the Final Financing Order approving the Existing Debt Facilities, the Debtors and Barclays continued to negotiate an (i) extended securitization facility to be syndicated by Barclays to other lenders, and (ii) amended letter of credit facility. As a result of the negotiations, the Debtors entered into Amended and Restated Securitization Agreements to assure available sources of working capital and financing to carry on the operation of their business, Bryan Krakauer, Esq., at Sidley Austin, LLP, in Chicago Illinois, tells the U.S. Bankruptcy Court for the District of Delaware. The Amended and Restated Securitization Agreements include these salient terms: (a) The Facility limit under the ARRLA is reduced from $300,000,000 to up to $225,000,000, consisting of an Aggregate Revolving Loan Commitment in the amount of [up to $75,000,000] and an Aggregate Term Commitment of [up to $150,000,000]. (b) The Maturity Date for the loans under the ARRLA is changed to the earliest of: -- 45th day after the commencement of scheduled amortization, which scheduled amortization will commence on April 10, 2010; -- the effective date of a Chapter 11 plan of reorganization for the parent company; -- the date on which a sale of all or substantially all of the assets of the guarantors is consummated under Section 363 of the Bankruptcy Code; and -- the date on which maturity of the Loans is accelerated pursuant to the loan agreement as a result of a Facility Termination Event. (c) The various representations, covenants, defaults and amortization triggers in the Existing Facilities are revised and incorporated into the Amended and Restated Securitization Agreements. (d) The Facility Termination Events relating to the bankruptcy proceedings are retained in the ARRLA. (e) The Amended and Restated Securitization Agreements are revised to accommodate syndication by Barclays to other Lenders, including provisions for defaulting lenders, replacement of lenders, additional administration agent provisions and revised fee letters. The Debtors also entered into an Amended and Restated Guaranty Security Agreement, which material terms are: (a) Tribune Co. and the other Debtors grant to the Administrative Agent, for the benefit of the Secured Parties, a first priority, perfected security interest in all of their personal assets and property of any kind or description. (b) The Collateral pledged under the ARGSA secured the obligations of Tribune Co. and the other Debtors under the ARRPA, the ARG, the ARSA, and any other document or instrument executed in connection therewith. (c) The security interest granted under the ARGSA is a first priority, perfected security interest in all Collateral that is not otherwise encumbered by a perfected security interest as of the Petition Date. It is a junior, perfected security interest in all Collateral that is subject to a permitted lien. (d) If a Facility Termination Event occurs, the RLA Agent may immediately enforce its security interest and exercise all remedies available under the ARGSA, the Transaction Documents, or the financing orders, including foreclosing on the Collateral. The Debtors also entered into an Amended Letter of Credit Facility to permit Tribune Co. to obtain standby letters of credit necessary in the ordinary course of its and its subsidiaries' business. The Amended Letter of Credit Facility provides these terms: Type of Facility: An Amended Letter of Credit Facility in the amount of up to $50,000,000 L/C Agent: Barclays Bank PLC Lenders: Barclays and the other lenders from time to time party to the L/C Agreement Account Parties: Tribune Co. and the other Debtors that are signatories to the L/C Agreement Guarantors: Debtor subsidiaries that are signatories to the L/C Agreement Commitment Amount: $50,000,000 Interest Rate: L/C Agent's base rate plus a 5% per annum Collateral: The amounts deposited into the collateral account from time to time pursuant to the L/C Agreement. The applicable account party is obligated to cash collateralize each outstanding obligation in an amount at least equal to 105% of that obligation. Termination Date: The earlier of (a) April 10, 2010, or (b) other date on which commitments terminate pursuant to the L/C Agreement. Tenor of L/C: Each L/C will expire on a date no later than the first anniversary of the issuance date of the L/C. Security: The facility will be secured by a first priority, perfected, security interest in, and lien on, the LC Cash Collateral pursuant to Section 364(d) of the Bankruptcy Code, with priority over (i) any other lien or security interest under Section 364(d), (ii) all other liens and claims against the property of Tribune Co. or of the Debtor subsidiaries of the Collateral existing on the Petition Date, and (iii) priority claims alleging priority pursuant to Sections 503, 506(c) or 507. A full-text copy of the Amended Securitization Agreement is available for free at http://researcharchives.com/t/s?3a9a The Debtors, Mr. Krakauer asserts, have a vital business purpose for continuing the Amended Facilities. It is essential that the Debtors' employees, vendors, service providers, and customers remain confident in the Debtors' ability to transition their businesses smoothly through the Chapter 11 process, operate normally in that environment, and implement their reorganization plan in an expeditious manner. In the absence of the proposed financing, serious and irreparable harm to the Debtors and their estates could occur, which may include third parties declining to conduct business dealings with the Debtors, Mr. Krakauer tells the Court. The preservation, maintenance and enhancement of the going concern value of the Debtors are of the utmost significance and importance to the Debtors' successful reorganization, he adds. For these reasons, the Debtors ask Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to approve the Amended and Restated Securitization Agreements and authorize them to perform all actions required under the documents. In a separate filing, the Debtors and Barclays Bank PLC, jointly ask the Court to file under seal certain Fee Letters associated with the Second DIP Financing Motion. The Court will convene a hearing on April 9, 2009, at 10:00 a.m., to consider approval of the request. Objections are due April 2. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Company -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Seeks Stay of Suit by Former LA Times Workers --------------------------------------------------------- Tribune Company and its debtor affiliates seek (i) declaratory judgment staying a lawsuit pending in the United States District Court for the Northern District of Illinois, and (ii) injunctive relief under Section 105(a) enjoining further prosecution of that lawsuit. The Illinois Action was filed by Dan Neil and former Los Angeles Times employees Corie Brown, Henry Weinstein, Walter Roche, Jr., Myron Levin and Julie Makinen, against the owner of the Debtors, Samuel Zell, and GreatBanc Trust Company. On September 16, 2008, the former employees filed the complaint asserting six claims of alleged violations of the Employee Retirement and Income Security Act and two claims for common law breach of fiduciary duty and aiding and abetting breaches of fiduciary duty. The complaint arises out of the transaction in 2007 in which Tribune went from a publicly traded company to a privately held company. In 2006 and 2007, Tribune's board considered several possible transactions with respect to the company. After considering various alternatives, engaging in extensive negotiations, and conducting significant due diligence, in April 2007, Tribune Company accepted a proposal from Equity Group Investments, LLC. In the first stage of the Leveraged ESOP Transaction, the ESOP borrowed $25,000,000 from Tribune to purchase about 9,000,000 shares of Tribune common stock for $28 a share. At that time, Tribune's stock was trading publicly at $32.81 per share. The ESOP Note was to be repaid in initial annual installments of $15,342,301, commencing April 1, 2008, over 30 years, from annual contributions Tribune agreed to make to the ESOP or distributions paid on the shares of the Company's common stock. In the second stage of the Leveraged ESOP Transaction, in December 2007, Tribune canceled the remaining outstanding Tribune shares and automatically converted them into the right to receive $34 per share. According to the Debtors' counsel, Kate J. Stickles, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, Tribune's Amended and Restated Certificate of Incorporation required indemnification to its directors and officers to the "fullest extent permitted by applicable law." However, she says that although the company has purchased certain insurance policies that it contends would cover the claims asserted in the Neil Action, those policies are not sufficient to cover claims for the damages the Neil Plaintiffs purport to have incurred. She adds that the insurance policies at issue have self-insured retentions that have not been met and Tribune may have obligations to indemnify for these amounts too. Ms. Stickles asserts that the Neil Plaintiffs' continued assertion of claims for amounts far in excess of the Debtors' insurance policies and their insistence that any recovery is not limited to insurance proceeds only, makes Tribune the real party- in-interest in the Neil Action because Tribune may ultimately be responsible for a significant portion of that claims asserted by the Neil Plaintiffs. Moreover, Tribune believes it is likely that the Neil Plaintiffs will press their claims against it in the bankruptcy cases, just as they originally had named Tribune as a defendant in the Neil Action and that the defendants in the Neil Action who are directors and officers of Tribune will likely assert indemnity claims for attorneys' fees and any damages awarded in the Neil Action. The Debtors believe that an actual controversy exists between them and the Neil Plaintiffs because the Neil Plaintiffs have violated the automatic stay by: (i) continuing an action against non-debtors that they know or should know would have an adverse impact on Tribune's ability to reorganize; (ii) continuing to pursue an action which will deplete Tribune's estate assets. Thus, the Debtors ask the U.S. Bankruptcy Court for the District of Delaware to issue a preliminary injunction, among other things, staying, restraining, and enjoining the Defendants from continuing the prosecution of the civil action before the United States District Court for the Northern District of Illinois. The Debtors assert that: (a) the continued prosecution of the Neil Action is an ongoing violation of the automatic stay pursuant to Section 362(a) of the Bankruptcy Code; and (b) the Neil Action violates the automatic stay because it exposes Tribune to potentially substantial indemnification, creating an identity of interests between Tribune and the defendants in the Neil Action. As widely reported, Debtor Tribune Media Services, Inc., filed an adversary suit against actor Warren Beatty related to the Dick Tracy rights. On August 28, 1985, Tribune Media and Mr. Beatty entered into a written agreement pursuant to which TMS granted, among other things, motion picture, television, and customary related rights in the Dick Tracy Property to Mr. Beatty in accordance with and subject to the terms of the Agreement. Under the Dick Tracy Agreement, Mr. Beatty was to "attempt to enter into an agreement for the financing and distribution of a feature picture based on the Dick Tracy Property." The Dick Tracy Agreement included a provision by which TMS could effect a reversion of all rights granted to Mr. Beatty under the Agreement. Specifically, the Dick Tracy Agreement provided in relevant part that "within five years after the initial domestic release of the picture, or any subsequent theatrical picture or television series or special, photography has not commenced on either another theatrical motion picture or television series or special, TMS may give Mr. Beatty notice of its intention to effect reversion of all rights granted under the Agreement." If within two years after receipt of that notice, principal photography has not commenced, then TMS, by a further written notice to Mr. Beatty, may effect a reversion. In 1990, a theatrical motion picture entitled "Dick Tracy" was successfully completed by Mr. Beatty, and TMS received substantial monies under the Dick Tracy Agreement arising from the production and distribution of the motion picture. Other than certain initial payments related to the Dick Tracy motion picture, ongoing payments to TMS under the Dick Tracy Agreement are dependent on motion picture and television programs made by Mr. Beatty within the meaning of the Agreement. Since the 1990 Dick Tracy motion picture, Mr. Beatty has not completed a single theatrical motion picture, television series, or television special under the Dick Tracy Agreement, and TMS has not received any payments under the Dick Tracy Agreement other than those arising from the 1990 Dick Tracy motion picture. In November 2006, in light of Mr. Beatty's failure to make any productive use of the Dick Tracy Property, TMS served written notice of its intent to effect a reversion of all rights granted to Mr. Beatty. The Notice provides that, unless Mr. Beatty commenced principal photography on another theatrical motion picture or television series or special within two years, all rights granted to him would revert back to TMS. In April 2008, Mr. Beatty, according to TMS, asked that rather than commencing a project, TMS extend his rights to the Dick Tracy Property so that he would maintain control over certain Dick Tracy motion picture and television rights without needing to commence principal photography on a motion picture or television project under the Agreement until November 19, 2013. TMS rejected Mr. Beatty's proposal. In a letter dated November 18, 2008, TMS notified Mr. Beatty that all rights previously granted to Mr. Beatty to the Dick Tracy Property had automatically reverted to TMS by operation of the Dick Tracy Agreement and TMS' 2006 Reversion Notice. TMS received a $15,000 check from Mr. Beatty for an alleged half- hour Dick Tracy television special; however, TMS returned the check because principal photography on a television special had in fact not commenced. Instead, TMS asked for a tangible and legitimate proof that Mr. Beatty has commenced principal photography on a bona fide project. Mr. Beatty did not provide any tangible and legitimate proof that he has started on a Dick Tracy project, instead, he filed a lawsuit against TMS in the U.S. District Court for the Central District of California seeking for a declaration that he continued to enjoy all rights under the Agreement as a result of his alleged commencement of principal photography in November 2008 on a purported television special. By this adversary proceeding, TMS seeks the U.S. Bankruptcy Court for the District of Delaware to resolve, settle and gain unfettered use of certain Dick Tracy motion picture and television rights wrongly claimed by Mr. Beatty. Bryan Krakauer, Esq., at Sidley Austin, LLP, in Chicago Illinois, TMS' counsel, asserts that Mr. Beatty's ongoing assertion of alleged rights to the Dick Tracy Property interferes with TMS' ability to exploit the full value of this extremely lucrative property for the benefit of the Debtors' estate and creditors. TMS thus requires a judicial determination of the estate's rights in the Dick Tracy Property to remove Mr. Beatty's interference therewith and thereby give the Debtors' estate the ability to monetize the substantial asset. TMS, through this adversary proceeding, asks the Bankruptcy Court to declare that the Dick Tracy Property is, without restriction, the sole and exclusive property of the Debtors' estate under Section 541 of the Bankruptcy Code. Moreover, TMS asks the Bankruptcy Court to enter a permanent and mandatory injunction against Mr. Beatty from interfering with its rights to exercise complete and unfettered dominion and control over the Dick Tracy Property, including enjoining Mr. Beatty from: (i) causing the unauthorized publication of any Dick Tracy motion picture, television series, or television special; and (ii) engaging in any action that would otherwise interfere with TMS' rights to enter into business transactions regarding the motion picture and television rights to the Dick Tracy Property previously granted under the Dick Tracy Agreement. Mr. Beatty's lawyer, Bert Fields, called the adversary complaint "utter hogwash" and "just a Hail Mary pass", the Chicago Tribune reported. "Obviously, Warren would have preferred to go ahead with the picture, so he produced the special to extend the rights, and the contract very clearly says you can do that," Chicago Tribune quoted Mr. Fields as saying. "Warren has been trying to get cooperation from the Tribune corporation for years and getting nothing but the back of their hand," Mr. Field told the newspaper. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Company -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: To Sell Westline Asset to Summit Westline for $7MM -------------------------------------------------------------- Tribune Company and its affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to enter into a direct lease with its current sub-lessee, Mosby, Inc., for a parcel of real property commonly known as 11830 Westline Industrial Drive, in Maryland Heights, Missouri, and as part of that transaction, sell the Westline Property to Summit Westline Investors, LLC, on the terms and conditions set forth in the Purchase and Sale Agreement dated as of March 11, 2009. The Westline Property is an office complex with three one-story buildings and one two-story building on a parcel of real estate covering approximately 10.29 acres. The Westline Property was leased by The Times Mirror Company from its affiliate, TMCT, LLC, and then subleased to a third-party tenant. The current tenant, Mosby, Inc., has subleased the Westline Property since 1997 pursuant to a sublease agreement that expires in August 2009. In June 2000, Tribune Company completed the acquisition of the Times Mirror Company and its seven daily newspapers, including the Los Angeles Times, the Baltimore Sun, and the Hartford Courant. As part of the transaction, Tribune obtained a purchase option on a portfolio of eight properties that were owned by TMCT, including the Westline Property, the headquarters for the Los Angeles Times, and the headquarters and printing facilities for the Baltimore Sun and the Hartford Courant. Neither Tribune nor any of the other Debtors have conducted any of their own business operations on the Westline Property, nor do any of the Debtors anticipate having any need to use the Westline Property directly in the future. In light of this, Tribune began marketing the Westline Property in February 2008 in anticipation of a sale as soon as practicable after exercising its purchase option. Tribune and Summit Westline Investors, LLC, have negotiated and executed a sale agreement for the sale of the Westline Property. The Sale Agreement provides that Summit Westline will purchase the Westline Property for $7,000,000 paid in full in cash at the closing, subject to prorations and adjustments. The Sale Agreement contemplates that closing will occur on or before 15 days after: (i) the expiration of the Purchaser's study period; or (ii) the Purchaser's written waiver of its rights to terminate the Sale Agreement. In accordance with the Sale Agreement, the Purchaser has deposited the sum of $250,000 in earnest money into an escrow account to be applied to the purchase price on the Closing Date, the Debtors tell the Court. The Debtors seek to sell the Westline Property to the Purchaser subject to the Direct Lease with Mosby and free and clear of all other existing liens, claims and encumbrances. Upon closing, existing liens, claims and encumbrances will attach to the net proceeds of the sale in order of their priority, with the same validity, force or effect which they now have against the Westline Property. A full-text copy of the Summit Sale Agreement is available for free at http://bankrupt.com/misc/Tribune_SaleAgreement.pdf About Tribune Co. Headquartered in Chicago, Illinois, Tribune Company -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) UCI HOLDCO: Moody's Junks Corporate Family Rating from 'B3' ----------------------------------------------------------- Moody's Investors Service lowered the Corporate Family and Probability of Default ratings of UCI Holdco, Inc., to Caa1 from B3. Holdco is the ultimate parent of United Components, Inc. In a related action, the ratings of Holdco's unguaranteed senior unsecured notes were lowered to Caa3 from Caa2; the ratings of UCI's senior secured credit facilities were lowered to B1 from Ba3; and the ratings of UCI's senior subordinated notes were lower to Caa2 from Caa1. The ratings remain under review for possible downgrade. The lowering of Holdco's Corporate Family and Probability of Default ratings to Caa1 reflects Moody's belief that demand for automotive aftermarket parts will continue to be lackluster as consumers reduce miles driven and adopt more conservative spending patterns as a result of weakened general economic conditions. The rating also considers Moody's view that UCI will continue to be one of North America's largest automotive aftermarket suppliers. The general fundamentals of the automotive aftermarket, such as a large vehicle base and higher average vehicle age, should continue to benefit the company over the long-term. The company's filtration products (about 40% of 2008 revenues) are largely consumables that have relatively short and predictable replacement cycles and are somewhat resistant to economic downturns. The company's fuel, cooling, and engine management products (about 60% of 2008 revenues combined), which are non-discretionary products that are required for proper vehicle performance, have more stable demand patterns which offer important revenue visibility. The review will consider the company's ability to replace its $75 million revolving credit facility which matures in June 2009. The company has borrowed $20 million under the revolving credit facility, which remains outstanding. Approximately $36 million of unused capacity was available under the revolving credit facility at December 31, 2008, net of letters of credit outstanding and exposure to Lehman. One of the options the company is considering, among other financing alternatives, is operating without a revolver and using only internally generated funds for working capital needs. The review will also consider industry pressures on the company's operating performance, which include increased competitor sourcing from lower cost countries and weakened economic conditions in North American and international markets. Moody's believes the company will be challenged to find a long-term solution to refinancing the existing revolving credit facility under similar terms, given current credit tightness in the financial markets. These ratings were lowered and remain under review: UCI Holdco, Inc.: -- Corporate Family Rating, to Caa1 from B3; -- Probability of Default Rating, to Caa1 from B3; -- Unguaranteed senior unsecured notes, to Caa3 (LGD5, 88%) from Caa2 (LGD5, 87%); United Components, Inc. -- Senior secured bank credit facilities, to B1 (LGD2, 12%) from Ba3 (LGD2, 14%), consisting of: -- $75 million guaranteed senior secured bank revolving credit facility maturing June 2009; -- $189 million (remaining amount) guaranteed senior secured bank term loan due 2012; -- $230 million of guaranteed senior subordinated unsecured notes maturing 2013, to Caa2 (LGD4, 61%) from Caa1 (LGD4, 58%) The last rating action on Holdco was to change the outlook to negative and affirm the B3 Corporate Family Rating on January 9, 2009. UCI, headquartered in Evansville, Indiana, is one of the larger and more diversified companies primarily servicing the vehicle aftermarket. The company supplies a broad range of filtration products, fuel products cooling systems, and engine management systems. While approximately 90% of revenues are currently automotive related, UCI also services customers within the trucking, marine, mining, construction, agricultural, and industrial vehicle markets. Annual revenues in 2008 were approximately $880 million. UCI is an indirect wholly owned subsidiary of UCI Holdco, Inc., which is a portfolio company of the Carlyle Group. UNITED COMMERCIAL: Moody's Cuts Bank Strength Rating to 'D-' ------------------------------------------------------------ Moody's Investors Service downgraded the ratings of United Commercial Bank (bank financial strength rating to D- from C-; deposits to Ba3 from Baa2). The short term ratings of the bank were also downgraded to Not Prime from Prime-2. The rating outlook is negative. This concludes the review for possible downgrade initiated on March 12, 2009. United Commercial Bank is a subsidiary of UCBH Holdings, Inc., which is unrated. The bank and holding company are referred to as UCB below. The downgrade reflects Moody's view that UCB's tangible common equity position could come under significant pressure in the short-term because of its particularly large commercial real estate exposure, which equals over 6 times its TCE. Moody's expects UCB's portfolio to weaken in response to deteriorating market conditions. The company's disclosure of a material weakness in its internal controls related to credit risk also contributed to the rating agency's conclusion. Although Moody's had previously incorporated UCB's CRE concentration into its ratings, the recent sharp decline in real estate prices and anticipated deterioration in CRE loan performance, especially residential construction and development loans, has led Moody's to considerably increase its loss expectations. The rating action is consistent with Moody's recent announcement that it is recalibrating some of the weights and relative importance attached to certain rating factors within its current bank rating methodologies. Capital adequacy, in particular, takes on increasing importance in determining the bank financial strength rating in the current environment. In explaining the multi-notch downgrade, the rating agency said that UCB's TCE (including equity credit for hybrids) as a percentage of risk-weighted assets could come under substantial pressure based on Moody's expected loss assumptions for commercial real estate. It added that UCB's regulatory capital ratios are likely to remain above well-capitalized minimums because of the significant amount of preferred securities in the capital base. The TCE and Tier 1 ratios were 7.7% and 13%, respectively, as of December 31, 2008. Also of concern is the bank's core deposit to loan ratio of 64% which is low compared to regional bank peers because of UCB's higher reliance on wholesale sources and time deposits. Even if Moody's gave partial credit for UCB's $1 billion of foreign deposits, which are excluded, this ratio would still be low. Moody's noted that among the U.S. banks which it rates, UCB has one of the highest commercial real estate concentrations with true CRE (excluding owner occupied) equal to 66% of loans and 6.6 times TCE, including common equity credit for hybrids. Construction is also significant at $2 billion, or 2.5 times TCE, and has grown approximately 20% over the last year. UCB has its headquarters in California, and the majority of the company's CRE portfolio is in its home state -- which is one of the more distressed real estate markets in the U.S. The rating agency added that UCB's weakness in internal controls may add to the challenges it faces in managing credit losses in increasingly difficult credit and real estate markets. Moody's last rating action was on March 12, 2009, when UCB's ratings were placed on review for possible downgrade. UCBH Holding, Inc., which is headquartered in San Francisco, California, reported total assets of $13.5 billion as of December 31, 2008. Downgrades: Issuer: United Commercial Bank -- Bank Financial Strength Rating, Downgraded to D- from C- -- Issuer Rating, Downgraded to B1 from Baa2 -- OSO Rating, Downgraded to NP from P-2 -- Deposit Rating, Downgraded to NP from P-2 -- OSO Senior Unsecured OSO Rating, Downgraded to B1 from Baa2 -- Senior Unsecured Deposit Rating, Downgraded to Ba3 from Baa2 Outlook Actions: Issuer: United Commercial Bank -- Outlook, Changed To Negative From Rating Under Review UNITED SUBCONTRACTORS: Case Summary & 30 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: United Subcontractors Inc. 5201 Eden Avenue, Suite 220 Edina, MN 55436 Bankruptcy Case No.: 09-11152 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- USI Senior Holdings, Inc 09-11150 USI Intermediate Holdings, Inc. 09-11153 San Gabriel Insulation, Inc. 09-11154 Construction Services & Consultants, Inc. 09-11156 Tabor Insulation, Inc. 09-11159 Type of Business: The Debtor installs an array of residential and commercial products. See http://www.unitedsub.com/ Chapter 11 Petition Date: March 31, 2009 Court: District of Delaware (Delaware) Debtors' Counsel: Mark K. Thomas, Esq. Paul V. Possinger, Esq. Peter J. Young, Esq. Proskauer Rose LLP Three First National Plaza 70 West Madison, Suite 3800 Chicago, IL 60602-4342 Tel: (312) 962-3550 Fax: (312) 962-3351 http://www.proskauer.com/ Counsel to the Independent Directors: Gerber & Eisenberg LLP Debtors' Co-counsel: Steven M. Yoder, Esq. Gabriel R. MacConaill, Esq. Potter Anderson & Corroon LLP Hercules Plaza, Sixth Floor 1313 North Market Street Wilmington, DE 19899-0951 Tel: (302) 984-6000 Fax: (302) 658-1192 http://www.potteranderson.com/ Claims Agent: Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245 Tel: (866) 381-9100 http://www.kccllc.net/ Financial Advisor: Alvarez & Marsal Securities LLC Estimated Assets: $50 million to to $100 million Estimated Debts: $100 million to $500 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Stock Building trade debt $102,236 Supply, Inc. 1001 West Mowery Dr. Homestead, FL 33030 Tel: (919) 431-1000 Fax: (919) 431-1700 Amsco Windows trade debt $73,482 1880 South 1045 West Salt Lake City, UT 84104 Tel: (801) 972-6441 Fax: (801) 978-5059 Naples Lumber & Supply Co. trade debt $59,389 Inc. 3828 Radio Road Naples, FL 34104 Tel: (239) 643-7000 Fax: (239) 643-5987 Preferred Materials Inc. trade debt $52,175 Amerrock Products LP trade debt $48,188 Armstrong World Inds. Inc. trade debt $47,178 United Fibers, Inc. trade debt $46,152 Kawneer trade debt $39,486 Sy's Supplies South Inc. trade debt $36,866 Avalarainc trade debt $36,600 Rfactor trade debt $36,178 Superior Radiant Insulation trade debt $35,157 The Dow Chemical Co. trade debt $34,203 Service Partners trade debt $32,965 CMI trade debt $30,491 Jones Lumber trade debt $27,433 T.G.P. trade debt $26,027 FPI-Regency Products US Inc. trade debt $22,007 Western Fibers Inc. trade debt $20,582 Cast Crete trade debt $20,491 Oldcastle Glass-Vancouver trade debt $19,228 Regence Bluecross Blueshield trade debt $19,127 Oxford Health Plans United trade debt $18,275 Healthcare Mountain Construction trade debt $16,867 Probuild East LLC trade debt $16,771 Lamtec Corporation trade debt $16,123 Linear trade debt $15,174 Art Craft Metals Inc. trade debt $14,965 Basffoam Enterprises trade debt $14,751 Rubbermaid Home Products trade debt $14,142 The petition was signed by Timothy J. Gallagher, chief financial officer. US TELEPACIFIC: Moody's Gives Negative Outlook; Keeps 'B3' Rating ----------------------------------------------------------------- Moody's Investors Service has changed the outlook for all ratings of US TelePacific Corporation to negative from stable, reflecting the challenges the company will face in staying compliant with debt covenants in its bank credit facility over the next twelve months. Moody's affirmed the Company's B3 corporate family rating and the B1 ratings for the Company's senior secured (first lien) bank credit facilities. Moody's does not rate TelePacific's senior secured (second lien) term loan. Issuer: U.S. TelePacific Corporation * Corporate Family Rating -- Affirmed, B3 * Probability of Default Rating -- Affirmed, B3 * Senior Secured Revolving Credit Facility -- Affirmed, B1, LGD2 - 29% * 1st Lien Term Loan -- Affirmed, B1, LGD2 -29% Outlook Actions: * Outlook, Changed To Negative From Stable The B3 corporate family rating reflects TelePacific's ongoing turnaround, as the Company's service territories in California and Nevada were among the first hit by the collapse of the real estate market in 2007. The slower than anticipated sales and heightened churn caused by the poor economic conditions in its markets have contributed to the Company's revenue run rate falling about $50 million short of Moody's previous projections for 2009. On the other hand, TelePacific has exceeded expected cost synergies from the integration of MPower and Arrival Communications, and may have additional flexibility in slowing its capital spending to preserve liquidity and generate positive free cash flow in 2009. However, the negative outlook is based on Moody's expectations that TelePacific will have a difficult time in meeting the scheduled stepped down leverage covenants in its bank facility throughout 2009. Although the Company expects to manage its operations to avoid covenant violations, the continuing pressures in TelePacific's operating territories may limit the company's maneuverability and force the Company to seek covenant relief. Moody's notes that the company's covenant levels (3.0x) for total reported leverage is low relative to its CLEC peers, and that the lenders may be amenable to reset the covenants. However, given the current conditions in the credit markets, a waiver or an amendment would be expensive, further straining TelePacific's free cash flow generating capacity. Moody's also acknowledges the support that TelePacific's sponsors have provided to the company by extending a $20 million letter of credit facility to backstop a run up of accounts payable. Moody's last rating action was on January 23, 2008, when Moody's affirmed TelePacific's B3 corporate family rating and the B1 ratings for the Company's first lien credit facilities. TelePacific Communications, headquartered in Los Angeles, California, is a competitive local exchange carrier serving over 1 million access line equivalents. VARIG LOGSTICA: Voluntary Chapter 15 Case Summary ------------------------------------------------- Chapter 15 Petitioner: Alexandre Savio Abs da Cruz manager of flight operations of Varig Logstica S.A. Chapter 15 Debtor: Varig Logstica S.A. Rua Gomes de Carvalho, no. 1609 Vila Olimpia Brazil So Paulo, FL 33130 Chapter 15 Case No.: 09-15717 Type of Business: The Debtor provides cargo air transport services in Brazil to major cargo companies including, among others, Federal Express, DHL and UPS. Chapter 15 Petition Date: March 31, 2009 Court: Southern District of Florida (Miami) Judge: A. Jay Cristol Chapter 15 Petitioner's Counsel: Stephen P. Drobny, Esq. sdrobny@shutts.com 1500 Miami Center 201 S Biscayne Blvd. Miami, FL 33131 Tel: (305) 347-7362 Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million VINEYARD BANK: Weiss Ratings Assigns "Very Weak" E- Rating ---------------------------------------------------------- Weiss Ratings has assigned its E- rating to Rancho Cacamonga, Calif.-based Vineyard Bank, National Association. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." Vineyard Bank is chartered as a National Bank, primarily regulated by the Office of the Comptroller of the Currency. The institution was established on Sept. 11, 1981, and deposits have been insured by the Federal Deposit Insurance Corporation since that date. Vineyard Bank maintains a Web site at http://www.vineyardbank.com/ and has 17 branches in California. At Dec. 31, 2008, Vineyard Bank disclosed $2.0 billion in assets and $1.8 billion in liabilities in its regulatory filings. VISTEON CORP: Files Annual Report; PwC Issues Going Concern Doubt ----------------------------------------------------------------- Visteon Corporation delivered on March 31, 2009, to the Securities and Exchange Commission its Annual Report on Form 10-K for the year ended December 31, 2008. Visteon posted a net loss of $681 million for year 2008 on net sales of $9.07 billion, compared to $372 million in 2007 on net sales of $10.7 billion. As of Dec. 31, 2008, Visteon had $5.24 billion in total assets; $4.27 billion in total current liabilities, $65 million in long- term debt, and $1.31 billion employee, pension and other postretirement benefit obligations. Visteon had $887 billion in shareholders' deficit as of December 31. Pursuant to affirmative covenants contained in the agreements associated with the Company's senior secured facilities and European Securitization, Visteon is required to provide audited annual financial statements within a prescribed period of time after the end of each fiscal year without a "going concern" audit report or like qualification or exception. On March 31, 2009, PricewaterhouseCoopers LLP, the Company's independent registered public accounting firm included an explanatory paragraph in its audit report on the Company's 2008 consolidated financial statements indicating substantial doubt about the Company's ability to continue as a going concern. The receipt of such an explanatory statement constitutes a default under the Facilities. Visteon is exploring various strategic and financing alternatives and has retained legal and financial advisors to assist in this regard. The Company has commenced discussions with lenders under the Facilities, including an Ad Hoc Committee of lenders regarding the restructuring of the Company's capital structure. Additionally, the Company has commenced discussions with certain of its major customers to address its liquidity and capital requirements. Visteon says any restructuring may affect the terms of the Facilities, other debt and common stock and may be affected through negotiated modifications to the related agreements or through other forms of restructurings, including under court supervision pursuant to a voluntary bankruptcy filing under Chapter 11 of the U.S. Bankruptcy Code. There can be no assurance that an agreement regarding any such restructuring will be obtained on acceptable terms with the necessary parties or at all. If an acceptable agreement is not obtained, an event of default under the Facilities would occur as of the expiration of the Waivers, excluding any extensions thereof, and the lenders would have the right to accelerate the obligations thereunder. Acceleration of the Company's obligations under the Facilities would constitute an event of default under the senior unsecured notes and would likely result in the acceleration of these obligations as well. In any such event, the Company may be required to seek protection under Chapter 11 of the U.S. Bankruptcy Code. As reported in today's Troubled Company Reporter, the Company entered into amendments and waivers with the lenders under its Facilities, which provide for waivers of the defaults for limited periods of time. A full-text copy of Visteon's 2008 Annual Report is available at no charge at http://ResearchArchives.com/t/s?3aee About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Mich. (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. * * * As reported by the Troubled Company Reporter on March 31, 2009, Moody's Investors Service lowered Visteon's Probability of Default and Corporate Family Ratings to Caa3 and Ca, respectively. In a related action, Moody's also lowered the ratings of Visteon's senior secured term loan to Caa2 from B3, unguaranteed senior unsecured notes to C from Caa3, and guaranteed senior unsecured notes to Ca from Caa2. Visteon's Speculative Grade Liquidity Rating was also lowered to SGL-4 from SGL-3. The outlook remains negative. On March 11, Fitch Ratings downgraded the Issuer Default Rating of Visteon Corporation to 'C' from 'CC', indicating that a default was imminent or inevitable. The ratings were removed from Rating Watch Negative, where they were placed on Dec. 11, 2008. The TCR said on Jan. 14, 2009, that Standard & Poor's Ratings Services lowered its corporate credit rating on Visteon Corp. to 'CCC' from 'B-' and removed all the ratings from CreditWatch, where they had been placed on Nov. 13, 2008, with negative implications. The outlook is negative. At the same time, S&P also lowered its issue-level ratings on the company's debt. VISTEON CORP: UK Affiliate Commences Insolvency Proceedings ----------------------------------------------------------- Visteon Corporation says Visteon UK Limited, a company organized under the laws of England and Wales and an indirect, wholly-owned subsidiary of the Company, filed on March 31, 2009, for administration under the United Kingdom Insolvency Act of 1986 with the High Court of Justice, Chancery division in London, England. The UK Administration does not include the Company or any of the Company's other subsidiaries. The UK Administration was initiated in response to continuing operating losses of the UK Debtor and mounting labor costs and their related demand on the Company's cash flows. Under the UK Administration, the UK Debtor will likely be run down. The UK Debtor has operations in Enfield, UK, Basildon, UK, and Belfast, UK and recorded sales of $250 million for the year ended December 31, 2008. The UK Debtor had total assets of $153 million as of December 31, 2008. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Mich. (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. * * * As reported by the Troubled Company Reporter on February 27, 2009, Visteon, for fourth quarter 2008, posted a net loss of $328 million on sales from continuing operations of $1.7 billion. For fourth quarter 2007, Visteon reported a net loss of $43 million on sales of $2.9 billion. For the full year 2008, Visteon reported a net loss of $663 million on sales of $9.5 billion compared with a net loss of $372 million on sales of $11.3 billion for full year 2007. As of Dec. 31, 2008, Visteon had $5.26 billion in total assets, $1.71 billion in current liabilities, $2.61 billion in long-term debt. Visteon also had $627 million in employee benefit obligations, including pension obligations; $404 million in postretirement benefits other than pensions; $139 million in deferred income tax obligations; $365 million in other non-current liabilities; and $264 million in minority interests in consolidated subsidiaries. Visteon has an $869 million shareholders' deficit. As reported by the Troubled Company Reporter on March 31, 2009, Moody's Investors Service lowered Visteon's Probability of Default and Corporate Family Ratings to Caa3 and Ca, respectively. In a related action, Moody's also lowered the ratings of Visteon's senior secured term loan to Caa2 from B3, unguaranteed senior unsecured notes to C from Caa3, and guaranteed senior unsecured notes to Ca from Caa2. Visteon's Speculative Grade Liquidity Rating was also lowered to SGL-4 from SGL-3. The outlook remains negative. On March 11, Fitch Ratings downgraded the Issuer Default Rating of Visteon Corporation to 'C' from 'CC', indicating that a default was imminent or inevitable. The ratings were removed from Rating Watch Negative, where they were placed on Dec. 11, 2008. The TCR said on Jan. 14, 2009, that Standard & Poor's Ratings Services lowered its corporate credit rating on Visteon Corp. to 'CCC' from 'B-' and removed all the ratings from CreditWatch, where they had been placed on Nov. 13, 2008, with negative implications. The outlook is negative. At the same time, S&P also lowered its issue-level ratings on the company's debt. VISTEON CORP: Gets Waiver Until May 30 Under Credit Facilities -------------------------------------------------------------- Visteon Corporation has reached agreements with its lenders for temporary waivers and amendments to its primary secured credit facilities while continuing to address its capital structure. The company also said it is engaged in discussions with customers to address its liquidity and capital requirements. Specifically, effective March 31, 2009, the Company entered into limited waivers and amendments to these agreements: -- The Amended and Restated Credit Agreement, dated as of April 10, 2007 -- Term Credit Agreement -- among the Company, certain of its subsidiaries, the lenders, Credit Suisse Securities (USA) LLC and Sumitomo Mitsui Banking Corporation, as co-documentation agents, Citicorp USA, Inc., as syndication agent, JPMorgan Chase Bank, N.A., as administrative agent, and J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. as joint lead arrangers and joint bookrunners; -- The Credit Agreement, dated as of August 14, 2006 -- ABL Credit Agreement -- among the Company, certain of its subsidiaries, the lenders, and JPMorgan Chase Bank, N.A., as Administrative Agent; and -- The Master Receivables Purchase & Servicing Agreement, dated as of August 14, 2006 and as amended and restated as of October 29, 2008 -- Securitization Agreement - among Visteon UK Limited, Visteon Deutschland GmbH, Visteon Sistemas Interiores Espana S.L.U., Cadiz Electronica S.A.U., Visteon Portuguesa Limited, VC Receivables Financing Corporation Limited, Visteon Electronics Corporation, Visteon Financial Centre P.L.C., The Law Debenture Trust Corporation P.L.C., Citibank, N.A., Citibank International Plc, Citicorp USA, Inc., and the Company and the related securitization agreements. Pursuant to the Limited Waiver to the Term Credit Agreement, the potential default relating to the inclusion of an explanatory paragraph in the report of the Company's independent registered public accounting firm indicating substantial doubt about the Company's ability to continue as a going concern is waived until May 30, 2009, and the Company is required to complete certain collateral disclosure and perfection matters within certain periods following effectiveness or the Term Waiver may be terminated prior to May 30, 2009 and certain other Events of Default may occur. The Company also entered into a letter agreement, effective as of March 31, 2009, with an ad hoc committee of lenders under its senior secured term loan. The Letter Agreement requires, among other things, that the Company and it subsidiaries to provide access to management, as well as certain analysis and reports to the Ad Hoc Committee. The agreement also requires the Company and its subsidiaries in North America and Europe to maintain a balance of cash and cash equivalents of at least $335.1 million on a consolidated basis, and requires the Company and its subsidiaries in North America to maintain a balance of cash and cash equivalents of at least $193.5 million on a consolidated basis. The Letter Agreement provides that the failure to comply with any of its terms will cause termination of the Term Waiver prior to May 30, 2009 and certain other Defaults or Events of Default may occur. Pursuant to the Fourth Amendment and Limited Waiver to the Credit Agreement and Amendment to Security Agreement, the Going-Concern Default is waived until May 30, 2009, and the Company is required to complete certain collateral disclosure and perfection matters within certain periods following effectiveness or the ABL Waiver may be terminated at the discretion of the Administrative Agent. The ABL Waiver also makes several amendments to the ABL Credit Agreement, including: * Increasing the interest rate applicable to borrowing and commitment fees payable thereunder; * Eliminating the availability of swingline loans and overadvances; * Restricting future borrowings or the issuance of any new letters of credit if such borrowing or letter of credit would cause the amount of the Company's cash and cash equivalents in the U.S. to exceed $100 million, excluding amounts held in certain designated collateral accounts; * Requiring the Company to maintain cash and cash equivalents in a certain designated deposit or securities account in amount that at least equals the amount borrowed plus letters of credit issued under the ABL Credit Agreement; and * Ensuring that only a certain amount of cash and cash equivalents are held in accounts that are not subject to control agreements securing outstanding amounts under the ABL Credit Agreement. Pursuant to the Conditional Waiver to the Securitization Agreement, the Going-Concern Default is waived until June 29, 2009. The Securitization Waiver also makes several amendments to the Securitization Agreement, including: * Decreasing the variable funding facility limit to $200 million; * Increasing the borrowing rates and commitment fees payable thereunder; * Increasing certain reserves; * Requiring notification to customers by Visteon of the sales of certain receivables and re-direction of customer payments to special purpose segregated accounts; * Increasing the frequency of borrowing base and other reporting and settlement periods; * Giving the agent discretion to access receivables collections; and * Requiring further amendments from May 31, 2009, that would require customers whose receivable have been sold under the program to make payment thereon directly to the lenders. Visteon remains in active discussions with its lenders regarding the restructuring of the company's capital structure. Additionally, Visteon is continuing discussions with its customers including Chrysler, Ford, GM, Honda, Hyundai, Nissan, PSA and Renault, regarding support and cooperation to assist the company in managing through the current environment. However, there can be no assurance that agreements regarding any such restructuring will be obtained. "Visteon remains focused on driving improvement throughout our operations despite the turbulent production environment," said Chairman and CEO Donald J. Stebbins. "We appreciate the involvement and support of our lenders and customers in that effort, along with the ongoing commitment of our global suppliers and employees." About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Mich. (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. * * * As reported by the Troubled Company Reporter on February 27, 2009, Visteon, for fourth quarter 2008, posted a net loss of $328 million on sales from continuing operations of $1.7 billion. For fourth quarter 2007, Visteon reported a net loss of $43 million on sales of $2.9 billion. For the full year 2008, Visteon reported a net loss of $663 million on sales of $9.5 billion compared with a net loss of $372 million on sales of $11.3 billion for full year 2007. As of Dec. 31, 2008, Visteon had $5.26 billion in total assets, $1.71 billion in current liabilities, $2.61 billion in long-term debt. Visteon also had $627 million in employee benefit obligations, including pension obligations; $404 million in postretirement benefits other than pensions; $139 million in deferred income tax obligations; $365 million in other non-current liabilities; and $264 million in minority interests in consolidated subsidiaries. Visteon has an $869 million shareholders' deficit. As reported by the Troubled Company Reporter on March 31, 2009, Moody's Investors Service lowered Visteon's Probability of Default and Corporate Family Ratings to Caa3 and Ca, respectively. In a related action, Moody's also lowered the ratings of Visteon's senior secured term loan to Caa2 from B3, unguaranteed senior unsecured notes to C from Caa3, and guaranteed senior unsecured notes to Ca from Caa2. Visteon's Speculative Grade Liquidity Rating was also lowered to SGL-4 from SGL-3. The outlook remains negative. On March 11, Fitch Ratings downgraded the Issuer Default Rating of Visteon Corporation to 'C' from 'CC', indicating that a default was imminent or inevitable. The ratings were removed from Rating Watch Negative, where they were placed on Dec. 11, 2008. The TCR said on Jan. 14, 2009, that Standard & Poor's Ratings Services lowered its corporate credit rating on Visteon Corp. to 'CCC' from 'B-' and removed all the ratings from CreditWatch, where they had been placed on Nov. 13, 2008, with negative implications. The outlook is negative. At the same time, S&P also lowered its issue-level ratings on the company's debt. W.R. GRACE: Seeks to Keep CEO Alfred Festa for Another 4 Years -------------------------------------------------------------- W.R. Grace & Co. and its debtor-affiliates seek authority from Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware to enter into an employment agreement with Alfred E. Festa to extend his term as chief executive officer. Mr. Festa has been CEO of the Debtors since June 1, 2005. He assumed the position of CEO pursuant to a written agreement with the Debtors, dated January 19, 2005, which agreement expires on May 31, 2009. The Debtors' Board of Directors, according to Theodore L. Freedman, Esq., at Kirkland & Ellis LLP, in New York, has determined that Mr. Festa should continue to be retained in the CEO position. Mr. Freedman relates that since Mr. Festa became CEO, each of the Debtors' businesses have performed well. In 2008, Grace's core EBIT is $300 million compared to 2004's $179 million. In 2008, despite difficult economic conditions, at the end of the year total revenues increased to $3.317 million. Moreover, Mr. Freedman notes that during Mr. Festa's tenure as CEO, the Debtors have resolved a substantial portion of their liabilities subject to compromise and moved closer to resolution of their Chapter 11 cases. Specifically, in April 2008, the Debtors entered into an agreement-in-principle to settle all present and future asbestos-related personal injury claims against the Debtors. On March 9, 2009, the Court approved the Disclosure Statement explaining the Debtors' Joint Plan of Reorganization. Thus, the Debtors' Board believes Mr. Festa continues to make significant contributions to the Debtors' business performance as CEO, and therefore continuity of his leadership of the Debtors' will benefit their estates. 2009 CEO Agreement The CEO Agreement, valid for four years beginning June 1, 2009, entitles Mr. Festa to: (a) an initial annual salary of $936,000; (c) a 100% targeted award under the Debtors' annual incentive compensation program; and (d) participation in each of the Debtors' annual long-term incentive compensation program having a targeted value of $3.2 million under the 2009-2010 Long-term Incentive Plan for Key Employees. In all other respects, the 2009 CEO Agreement is essentially the same as the 2005 CEO Agreement, Mr. Freedman says. Mr. Freedman tells the Court that Mr. Festa has accepted the terms of the 2009 CEO Agreement. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. The Debtors filed their Chapter 11 Plan and Disclosure Statement on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Debtors' Disclosure Statement began on Jan. 21, 2005. The Debtors' exclusive period to file a chapter 11 plan expired on July 23, 2007. Estimation of W.R. Grace's asbestos personal injury liabilities commenced on Jan. 14, 2008. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: To Implement 2009-2011 Key Employee Incentive Plan -------------------------------------------------------------- W.R. Grace & Co. and its affiliates ask Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware for permission to implement the W.R. Grace & Co. 2009-2011 Long Term Incentive Plan, the Debtors' continuing long-term incentive compensation program for certain of their key employees. Kathleen P. Makowski, Esq., at Pachulski Stang Ziehl & Jones LLP, in New York, relates that the Debtors' long-term incentive program requires that a renewed LTIP be implemented each calendar year, with no more than three LTIPs in effect in any year. The Court has previously entered seven orders authorizing the Debtors to implement their long-term incentive plans: Date of Order Period of LTIP ------------- -------------- August 26, 2002 2002-2004 LTIP March 26, 2006 2003-2005 LTIP June 9, 2004 2004-2006 LTIP July 13, 2005 2005-2007 LTIP July 24, 2006 2006-2008 LTIP August 29, 2007 2007-2009 LTIP August 26, 2008 2008-2010 LTIP The provisions of the 2009-2011 LTIP are essentially the same as the provisions under the 2008-2010 LTIP, except that the aggregate targeted award will be decreased based on the recommendation of Watson Wyatt Worldwide, the compensation consultant of the Debtors' Board of Directors. The 2009-2011 LTIP provides for a cash payout award component equal to 50% of the total targeted award of $12.5 million for key employees, and a grant of stock options for shares of the W.R. Grace & Co. stock for the remaining 50% of the total targeted award. If earned, total aggregate cash awards under the 2009-2011 LTIP would be: Targeted Maximum Year Cash Payout Cash Payout ------- ------------ ------------ 2011 $2.08 million $2.08 million 2012 $4.17 million $10.42 million Total $6.25 million $12.50 million Cash awards to key employees, if earned, will be made in one- third installment in 2011 and two-thirds installment in 2012. Performance criteria for the cash awards are: (a) Business performance for cash awards is measured on a three-year performance period, commencing with 2009. (b) The applicable compounded annual 3-year growth rate in core earnings before interest and taxes (EBIT) to achieve a cash payment of 100% of the 2009-2011 LTIP target award will be 6% per annum. Core EBIT for the 3-year period is adjusted for changes in pension expense and LTIP expense (Core EBIT). (c) Partial payouts for EBIT growth rates between 0% and 6% will be implemented on a straight-line basis. (d) Cash payments under the 2009-2011 LTIP will be increased at EBIT compounded annual growth rates in excess of the 6%, up to a maximum of 200% of the Base Target Cash Award at an annual compounded EBIT growth rate of 25%. (e) Cash payouts, if earned, will occur in one-third installment in 2011 and two-third installment in 2012. The one-third installment after 2011 is limited to one- third of the Base Targeted Cash Award. (f) Cash payout adjustments for a "significant acquisition" and a "significant divestiture" applicable to the calculation of cash awards under the 2008-2010 LTIP and the 2007-2009 LTIP will also apply to cash awards under the 2008-2010 LTIP. The 2009-2011 LTIP targets an award value of $12.5 million in the aggregate, excluding that for the Debtors' chief executive officer, which award value has decreased from the $15.8 million target value in 2008-2010 LTIP. Ms. Makowski says the company's compensation committee has decided to reset its long term incentive award strategy to reflect the 50th percentile of the Debtors' industry peer group, instead of the 60th percentile that has been in place before these Chapter 11 cases up to the implementation of the 2008-2010 LTIP. Moreover, under the 2009-2011 LTIP, the Debtors anticipate granting options covering about 2 million shares of Grace Stock, including those for the CEO. The stock options granted under the 2009-2011 LTIP will be deemed to have the same value as the options granted under the 2008-2010 LTIP, based on the recommendation of Watson Wyatt. Ms. Makowski notes that the number of shares of Grace Stock covered by grants under the 2009- 2011 LTIP will be about the same number as covered by grants last year under the 2008-2010 LTIP. The "strike price" of the stock options awarded under the 2009- 2011 LTIP will be the market price of Grace Stock as of the award date. One third of the awarded stock options would vest each year in 2010, 2011, and 2012. The stock options would generally be exercisable for five years after grant. The Debtors must provide sufficient incentives to motivate and retain their high-performing employees during the pendency of their Chapter 11 cases. This would maximize the likelihood of a successful restructuring for the Debtors, Ms. Makowski tells the Court. Meanwhile, the Court granted the Debtors' request to contribute $8,533,803 to their retirement plans for April 2009, as required by federal law. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in New York, said she did not receive any timely objection relating to the request. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. The Debtors filed their Chapter 11 Plan and Disclosure Statement on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Debtors' Disclosure Statement began on Jan. 21, 2005. The Debtors' exclusive period to file a chapter 11 plan expired on July 23, 2007. Estimation of W.R. Grace's asbestos personal injury liabilities commenced on Jan. 14, 2008. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Hires Seale to Advise on Sale of Gas Equipment Unit --------------------------------------------------------------- W.R. Grace & Co. and its affiliates ask Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware for authority to employ Seale & Associates, Inc., as their financial advisor in connection with the sale of all or substantially all of the assets in their gas equipment business. The Debtors conduct a specialty chemical business that operates through two operating units, Grace Davison and Grace Construction products. The Debtors manufacture and sell certain equipment for natural gas processing applications as part of their Grace Davison business unit operations. In order to sell the assets of the business in the most efficient and effective manner, the Debtors require the services of Seale. As sale financial advisor, Seale is expected to: (a) identify potential acquiring companies; (b) assist the Debtors in approaching those companies and any other companies, which come to the Debtors' attention; (c) coordinate the execution of confidentiality agreements with prospective acquiring companies; (d) complete necessary selling materials; (e) coordinate the divestiture process with potential acquiring companies; (f) assist in the preparation of management presentations; (g) coordinate management presentation visits and data room inspections with acquiring companies; and (h) assist in the closing process as requested by the Debtors. Laura Davis Jones, Esq., at Pachulski Stang, Ziehl & Jones, LLP, in Wilmington, Delaware, emphasizes that Seale will carry out functions distinct only to the Transaction so that there will be no duplication of efforts by Seale and the Debtors' financial advisor, Blackstone Group L.P. For the contemplated services, the Debtors will pay Seale: * a $25,000 monthly non-refundable retainer, not exceeding $100,000, payable after the execution of their Retainer Agreement, plus * a success fee calculated as 2% on any proceeds that when calculated as a multiple of 2008 EBITDA is equal to 6.5 times or less; plus 2.50% of any portion of the proceeds that when calculated as a multiple of 2008 EBITDA is greater than 6.5 times and up to and including 7.5 times; plus 3% of any portion of proceeds that when calculated as a multiple of 2008 EBITDA is in excess of 7.5 times. The success fee, Ms. Jones says, is contingent upon closing of the Transaction. The Debtors will also reimburse Seale for all expenses incurred in connection with Transaction. Moreover, the Debtors will indemnify Seale for any claims arising from or related to the Transaction, except for claims resulting from the firm's bad faith, gross negligence or willful misconduct. Jeremy F. Rohen, a managing director at Seale & Associates, Inc., assures the Court that Seale is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107 (b) of the Bankruptcy Code. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. The Debtors filed their Chapter 11 Plan and Disclosure Statement on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Debtors' Disclosure Statement began on Jan. 21, 2005. The Debtors' exclusive period to file a chapter 11 plan expired on July 23, 2007. Estimation of W.R. Grace's asbestos personal injury liabilities commenced on Jan. 14, 2008. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Former Employees Testify on Asbestos in Libby Mine -------------------------------------------------------------- Several witnesses have been presented before the U.S. District Court for the District of Montana in the trial of the criminal case filed by the U.S. Government against W.R. Grace & Co. and its former executives relating to the company's vermiculite mine in Libby, Montana. Robert Locke, a former global vice president of Grace's construction products division, related on March 23, 2009, as a government witness, that he has warned his former boss of the dangers of the vermiculite mined in Libby after company tests in 1977 showed the vermiculite ore is tainted with asbestos, Amy Linn and Bob Van Norris of Bloomberg News reported. The Government, according to the report, showed the jury a memo circulating to several top Grace officials in January 1977 outlining possible repercussions the company faced from Libby vermiculite. Mr. Locke resigned from Grace on bad terms and has subsequently filed civil lawsuits against Grace and Robert Bettachi, the company's former senior vice president, the report related. Grace Yang, a chemist and former research manager of Grace, told jurors on March 19 that Grace commissioned a study in 1976 that showed hamsters exposed to vermiculite mined in Libby developed mesothelioma, a rare and deadly cancer, Bloomberg reported. Specifically, the study showed that 10 of the 60 hamsters suffered from lung tumors and "extensive" thickening of the lungs. Grace never published the study, Ms. Yang told the Court, Bloomberg said. Hayman Duecker, a former chemist for Grace, testified that he oversaw the 1976 study on the hamsters, Montana's News Station said in a report dated March 18, 2009. Aubrey Miller, a toxicologist for the U.S. Environmental Protection Agency, said in a testimony before the Court, that EPA workers involved in the agency's cleanup operations in Libby, Montana, were exposed to asbestos fibers, Montana's News Station said in a March 16, 2009 report. Dr. Miller testified that EPA cleanup operation samples showed hundreds of thousands of asbestos fibers floating around workers, and that one EPA worker, while driving a truck at the site, was exposed to 500,000 asbestos fibers, the report said. Defense lawyers argued that the State of Montana and EPA found no apparent Clean Air Act violations by Grace, the report disclosed. James Becker, who used to work as senior financial analyst for Grace testified that Grace tried to use discretion in labeling its Zonolite products to make sure the company didn't lose money. Mr. Becker said, according to Montana's News, that he participated in a series of strategic task force committee meetings where the company planned to limit consumers from buying large amounts of Vermiculite by putting the fertilizer product in larger bags so no one would want to purchase them. Defense attorney, David Bernick, Esq., at Kirkland & Ellis, LLP, in Chicago, Illinois, argued by saying Grace spent $6 million to replace its wet mill to meet environmental operating standards, Montana's News said. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. The Debtors filed their Chapter 11 Plan and Disclosure Statement on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Debtors' Disclosure Statement began on Jan. 21, 2005. The Debtors' exclusive period to file a chapter 11 plan expired on July 23, 2007. Estimation of W.R. Grace's asbestos personal injury liabilities commenced on Jan. 14, 2008. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WARREN BANK: Weiss Ratings Assigns "Very Weak" E- Rating -------------------------------------------------------- Weiss Ratings has assigned its E- rating to Warren, Mich.-based Warren Bank. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." Warren Bank is a member of the Federal Reserve, and is primarily regulated by the Federal Reserve Board. The institution was established on Oct. 7, 1998, and deposits have been insured by the Federal Deposit Insurance Corporation since that date. Warren Bank maintains a Web site at http://www.warrenbank.com/and has six branches in Michigan. At Dec. 31, 2008, Warren Bank disclosed $604 million in assets and $572 million in liabilities in its regulatory filings. WILBRAHAM CBO: Fitch Junks Ratings on Two Classes of Notes ---------------------------------------------------------- Fitch Ratings has downgraded one and revised the Recovery Rating on two classes of notes issued by Wilbraham CBO, Ltd. These rating actions are effective immediately: -- $17,497,076 class A-2 notes downgrade to 'B' from 'BBB-' and Outlook Stable; -- $10,048,198 class B-1 notes remain at 'C' and revise 'DR4' to 'RR5'; -- $ 31,776,988 class B-2 notes remain at 'C' and revise 'DR4' to 'RR5'. Additionally, the class A-1 notes have been paid in full. Wilbraham is a collateralized debt obligation managed by Babson Capital Management LLC which closed July 13, 2000. Wilbraham is primarily composed of corporate high yield bonds. The final maturity for this transaction is July 13, 2012. Payments are made semi-annually in January and July and the reinvestment period ended in July 2005. The downgrade to the class A-2 notes reflects the poor credit quality of the current performing portfolio. The weighted average rating of the portfolio is 'B-/CCC+' of which 16.6% is rated in the 'CCC' or lower category. Approximately 10.7% of the portfolio is currently on Outlook Negative and 9.3% is on Rating Watch Negative. As of the March 2, 2009 trustee report, $6.4 million was reported in the principal collections account and a portfolio collateral balance of $31.2 million, of which $10.1 million is defaulted. The class A overcollateralization test passed at 156.3% with a trigger of 120%; however, the B and C OC tests failed their respective triggers of 113% and 106.5%. Additionally, all interest coverage tests are failing. The downward revision to the RR on the class B-1 and B-2 notes is the result of a lower recovery expectation for the remaining securities in the portfolio and the significant undercollateralization of the classes. Additionally, the classes continue to PIK interest and further undercollateralization is expected as this continued diversion of principal to pay down the most senior notes progresses over time. The ratings address the likelihood that investors will receive full and timely payments of interest on scheduled interest payment dates, as well as the stated balance of principal on the final payment date. The Distressed Recovery Rating on the classes of notes has been revised to RR to reflect Fitch's updated Rating Definitions Criteria released March 3, 2009. Fitch's current and revised criteria for rating corporate CDOs was released on April 30, 2008. However, due to the high obligor concentration within the portfolio, Fitch used a more deterministic approach in analyzing the portfolio rather than utilizing the Corporate Portfolio Credit Model. Fitch's probability of default was based upon issuer default ratings and term to maturity. The recovery rates were based either upon specified underlying securities' RR, comparable recovery ratings, or the PCM assumed recovery rate depending upon the seniority of each of the underlying bonds. WILLOUGHBY'S APPLIANCE: In the Process of Filing for Bankruptcy --------------------------------------------------------------- Willoughby's Appliance Center is in the process of filing for bankruptcy, Kristv.com reports, citing an attorney for the Company's owner. According to Kristv.com, dozens of clients have complained to the Better Business Bureau when they weren't able to get the appliances they bought from Willoughby's. The BBB, Kristv.com relates, said that Willoughby's has promised to give those clients their appliances. Kristv.com states that several called the police department, seeking to file criminal charges against Willoughby's. The report says that the police determined that it's a "civil matter" after some discussion with the district attorney's office. Willoughby's Appliance Center -- http://willoughbys.homeappliances.com/hadealer/StoreDisplay.do?STO RE=SStaples -- is based in Corpus Christi, Texas. WOODLANDS COMMERICAL: Weiss Ratings Assigns "Very Weak" E- Rating ----------------------------------------------------------------- Weiss Ratings has assigned its E- rating to Salt Lake City-based Woodlands Commercial Bank fka Lehman Brothers Commercial Bank. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." Woodlands is not a member of Federal Reserve, and is primarily regulated by the Federal Deposit Insurance Corporation. The institution was established on August 24, 2005, and deposits have been insured by the FDIC since that date. Woodland tells the FDIC it maintains a Web site at http://www.lehman.com/and has one office located in Salt Lake City. At Dec. 31, 2008, Woodlands disclosed $5.4 billion in assets and $4.9 billion in liabilities in its regulatory filings. ZOUNDS INC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Zounds, Inc. 4404 E. Baseline Rd., Ste. 114 Phoenix, AZ 85042 Bankruptcy Case No.: 09-bk-06053 Type of Business: The Debtor offer a portfolio of hearing aids and wireless devices. See http://www.zoundshearing.com/ Chapter 11 Petition Date: March 30, 2009 Court: District of Arizona (Phoenix) Judge: George B. Nielsen Jr. Debtor's Counsel: Jordan A. Kroop, Esq. jkroop@ssd.com Squire Sanders & Dempsey LLP Two Renaissance Square 40 N. Central Avenue, Ste. 2700 Phoenix, AZ 85004-4498 Tel: (602) 528-4000 Fax: (602) 253-8129 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 ------ --------------- ------------ JWT Specialized Trade $4,267,329 Communications File 56434 Los Angeles, CA 90074-6434 A. Eicoff & Company Trade $911,871 P.O. Box 8500-4250 Philadelphia, PA 19178 Signature Capital Investment Banking $747,190 100 Commercial St., Suite 100 Services Portland ME 04101 Chongqinn Sichuan Trade $428,858 Microcircuit Company Ketchum-Chicago Trade $286,741 Group 7 Design Trade $284,778 Low Mountain Construction Trade $213,631 RCC Associates, Inc. Trade $191,521 Leiden Cabinet Company Trade $187,542 Murata Power Solutions Trade $175,063 DAZ3-Stapley Office Bldg #1 Rent $174,596 Fedcor Design, LLC Trade $150,885 Marco Contractors Trade $123,233 ETS-Lindgren, L.P. Trade $123,208 Staubach Retail Trade $112,716 R.C. Legnini Company, Inc. Trade $108,709 In'Tech Industries, Inc. Trade $105,748 Nationwide Yellow Pages Trade $96,558 Services Robert Half Technology Trade $93,480 Knowles Electronics, Inc. Trade $91,112 The petition was signed by Samuel Thomasson, chief executive officer. * Fitch Comments on Restaurant Industry's Performance in Crisis --------------------------------------------------------------- The restaurant industry continues to endure the negative effects of the U.S. recession and the credit crisis in 2009, according to a new report released by Fitch Ratings. Most companies in the industry are facing rising borrowing costs caused by the combination of a challenging operating environment and difficult credit conditions. The quick-service restaurant segment, however, is better positioned to withstand the current economic stress and market downturn. "Given that efforts to stimulate the economy will take time to materialize, a sustainable turnaround is still not anticipated in 2009," said Carla Norfleet Taylor, Director at Fitch Ratings. According to the report, Fitch expects these themes to continue to permeate the industry in 2009: -- Sluggish same-store sales growth, which will continue due to rising unemployment, low consumer sentiment and reduced discretionary spending. -- Moderating food cost inflation; however, the benefits realized depend on the timing of contract expirations and exposure across various commodities. -- Reductions in capital expenditures and new unit development, primarily in full-service dining, as firms focus on maintaining adequate liquidity. Since many firms in the restaurant industry are displaying weaker credit profiles, those having to renegotiate bank credit agreements are facing more stringent borrowing terms, at a time when access to the bond market is challenging at best. "Preserving liquidity and maintaining strong bank relationships is paramount in this environment and will be the focus of most management teams," said Wesley E. Moultrie, II Senior Director at Fitch Ratings. "While credit profiles are weakening across the industry, most of the large investment grade chain restaurants have limited near- term maturities and are currently generating free cash flow. They therefore have ample liquidity to weather the downturn," added Taylor. Default risk has increased for highly leveraged chains, franchisees and independents, as seen by the number of bankruptcy filings in the family dining and bar and grill segments during 2008. "While the restaurant industry is extremely fragmented, in aggregate outstanding debt and loan obligations for those entering bankruptcy could be considerable," said Taylor. This is a list of publicly rated Restaurant or Foodservice companies and their current Fitch Issuer Default Ratings and Outlooks: -- McDonald's Corporation: 'A', Stable Outlook -- Burger King Corporation: 'BB', Positive Outlook -- YUM! Brands, Inc.: 'BBB-', Stable Outlook -- Darden Restaurants, Inc.: 'BBB', Negative Outlook -- ARAMARK Corporation, 'B', Stable Outlook * BaddebtBankruptcy.com Offers Bankruptcy Consultation ------------------------------------------------------ Bankruptcy Las Vegas, a bankruptcy consultancy company, has launched a new Web site, baddebtbankruptcy.com, for free consultation regarding bankruptcy protection. Any person, who is hit by bankruptcy can opt for this free consultancy. Due to recent recession, many companies and people fail to clear their debts. Hence, they have to face court rooms or petitions are filed against them. At baddebtbankruptcy.com, lawyers meet personally with each client. The company offers a free initial consultation with one of their Las Vegas Bankruptcy Attorneys. They are traditionally the most affordable of any dedicated personal bankruptcy firm in Nevada. They offer night and weekend appointments at various locations throughout the state. They make dealing with debt through an experienced Las Vegas Bankruptcy Attorney, which is easy and affordable. * Equity Risk Partners Launches Executive Advisory Series --------------------------------------------------------- Equity Risk Partners (ERP), the only full service insurance brokerage and consulting firm focused exclusively on the needs of the private equity industry, has launch of the Equity Risk Partners' Executive Advisory Series to provide companies with critical tools and information about insurance and private equity issues. To help companies navigate through turbulent markets, the regular conference call series features ERP's most experienced strategists providing vital information about key insurance and private equity topics to help companies adapt to and overcome today's economic challenges. "With the current economic uncertainty, it has never been more important to provide companies with the proper tools and resources for making critical decisions," said Michael Marcon, founder and CEO, Equity Risk Partners. "As ERP is dedicated to insurance- related issues and due diligence for the private equity market, we are committed to helping companies understand the broader context of these issues, as well as the specific costs, benefits, and opportunities. Through our Executive Advisory Series, we will be able to answer companies' pressing questions, empower executives with knowledge and assist them in making profitable business decisions." Equity Risk Partners' Executive Advisory Series will kick off at 1:30 p.m. EST, on April 2, with a strategic conference call covering critical issues relating to bankruptcy. Topics covered will include what to consider about bankruptcy as it relates to directors' and officers' liability insurance, property and casualty, and employee benefits, as well as what to look for when purchasing a company in bankruptcy. Leading experts will address what companies need to know about these topics, how to address them, what pitfalls to be aware of and how to capitalize on opportunities. Each Equity Risk Partners' Executive Advisory Series call is completely free for interested parties, will last approximately 30-45 minutes, and will include a question and answer session. Transcripts will be made available after each call. Additional details will be announced shortly. About Equity Risk Partners Equity Risk Partners -- http://www.equityriskpartners.com/-- is the only insurance brokerage, employee benefits and risk management consulting firm focused exclusively on the needs of the private equity industry and its portfolio companies. Founded in 2001, the company is dedicated to improving the efficiency, structure and return of private equity transactions through consistent and timely due diligence. Combining extensive industry experience with a dedication to excellence, they deliver creative, cost effective insurance solutions, as well as innovative product and financing alternatives. Headquartered in San Francisco, Equity Risk Partners has a nationwide presence with additional offices in New York and Chicago. * NewOak Names Sam Warren as RMBS Structured Solutions Director --------------------------------------------------------------- NewOak Capital reports that Samuel Warren has been appointed as director of RMBS Structured Solutions to direct the firm's RMBS structuring solutions team and complement our already deep RMBS and residential loans credit management capabilities. "Non-agency mortgages continue to be a source of concern for many financial institutions because of continued credit deterioration and lack of clarity as to the impact of the new government programs. Sam brings a great deal of structuring and loan experience in the residential mortgage space and complements our deep bench," said Ron D'Vari, CEO and co-founder of NewOak Capital. "Depending on the specific circumstances, restructuring can be a viable risk management solution but needs to be done with care and full understanding of underlying credit, valuation, accounting and documentation ramifications. NewOak Capital's experienced team of credit, structuring, legal, valuation, and trading are optimally positioned to work with clients to achieve the best outcome," Mr. D'Vari stated. "Sam brings a wealth of experience and a successful track record in the restructuring of clients' structured credit portfolios to NewOak Capital. Sam is joining a group that already has a great deal of depth in the RMBS, CMBS and CDO/CLO space and we're excited to be adding such a strong leader for a strategy that we believe is a timely solution for a number of our clients," said James Frischling, President and co-founder of NewOak Capital. Sam Warren brings extensive experience structuring and trading reREMIC securities. His previous experience includes positions at Deutsche Bank and Lehman Brothers. He was a MBS Trader at Deutsche Bank, most recently responsible for the issuance of over $8 billion in reREMIC securitizations. Earlier at Deutsche Bank, Mr. Warren led the Alt-A New Issue team of the MBS trading desk, which issued over $20 billion of securities. While at Lehman Brothers, he was a member of the banking and structuring team, which completed $9 billion of RMBS/HEQ issuance and created multiple ABCP conduits for third parties. Mr. Warren has a BA from Columbia University. About NewOak Capital NewOak Capital -- http://www.newoakcapital.com/-- is an advisory, asset management and capital markets firm organized to serve as an ally to institutions in addressing the challenges of the global credit markets. Using an integrated analytics platform, we provide analysis, valuation, restructuring, risk transfer and investment management solutions and services to financial institutions and other investors. The NewOak Capital team consists of more than 30 professionals with an average of more than 20 years of experience across multiple asset classes and credit cycles. The firm's experts incorporate the interaction of residential/commercial, consumer, and corporate credits via capital markets, financial institutions, corporate spending/capital needs, and consumer behavior. * Stroock Adds Daniel Ginsberg to Financial Restructuring Group --------------------------------------------------------------- Stroock & Stroock & Lavan LLP said Daniel P. Ginsberg has joined the firm's Financial Restructuring Practice Group as Special Counsel. Mr. Ginsberg was most recently a Counsel for White & Case LLP, where he practiced in the firm's financial restructuring and insolvency group. Mr. Ginsberg has extensive experience representing both debtors and secured and unsecured creditors in Chapter 11 cases. His representative matters include Environmental Systems Products Holdings, Inc., an emissions testing company, in the out-of-court restructuring of more than $600 million of debt; various aircraft finance parties in the Northwest Airlines Corporation and Delta Air Lines, Inc. Chapter 11 cases; the pre-petition lenders in the Trenwick Americas Corporation Chapter 11 case; the unsecured bank committee in the Reliance Financial Services Corporation Chapter 11 cases; United Pan-Europe Communications, N.V., a leading European cable and telecommunications company, in connection with its successful multinational restructuring; various creditors in the Lehman Brothers Chapter 11 and SIPA proceedings; and the pre- and post- petition secured lenders in the Fleming Companies, Inc. Chapter 11 cases. Lewis Kruger and Kris Hansen, Co-Chairs of Stroock's Financial Restructuring Group, noted that Mr. Ginsberg will be an excellent addition to their large team of experts and that his broad domestic and international restructuring experience will be a valuable asset to their clients. Stroock recently added Andrew DeNatale as Partner and Head of the Special Situations Lending Group on March 19, 2007. Mr. Ginsberg previously practiced with Mr. DeNatale. Stroock's Financial Restructuring attorneys represent individual and groups of creditors, investors, purchasers and debtors in bankruptcy proceedings and out-of-court restructurings. Stroock has extensive experience representing strategic and control investors, and regularly act for several hedge fund and private equity investors in that capacity. Stroock & Stroock & Lavan LLP -- http://www.stroock.com/-- is a law firm providing transactional and litigation guidance to leading multinational corporations, investment banks and private equity firms in the U.S. and abroad. Stroock's practice areas include capital markets/securities, commercial finance, mergers and acquisitions and joint ventures, private equity, private funds, derivatives and commodities, employment law and benefits, energy and project finance, entertainment, environmental law, financial restructuring, financial services litigation, insurance, intellectual property, investment management, litigation, personal client services, real estate, structured finance and tax. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Apr. 1-4, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 16-19, 2009 COMMERICAL LAW LEAGUE OF AMERICA 2009 Chicago/Spring Meeting Westin Hotel on Michigan Ave., Chicago, Ill. Contact: (312) 781-2000; http://www.clla.org/ Apr. 17-18, 2009 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES NABT Spring Seminar The Peabody, Orlando, Florida Contact: http://www.nabt.com/ Apr. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE Consumer Bankruptcy Conference John Adams Courthouse, Boston, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 27-28, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org Apr. 28-30, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org May 1, 2009 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners Alexander Hamilton Custom House, New York City Contact: 1-703-739-0800; http://www.abiworld.org/ May 4, 2009 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference New York Marriott Marquis, New York City Contact: 1-703-739-0800; http://www.abiworld.org/ May 7-8, 2009 RENASSANCE AMERICAN MANAGEMENT, INC. 6th Annual Conference on Distressted Investing - Europe The Le Meridien Piccadilly Hotel, London, U.K. Contact: 1-903-595-3800 or http://www.renaissanceamerican.com/ May 7-10, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center National Harbor, Maryland Contact: http://www.abiworld.org/ May 12-15, 2009 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Tulane University, New Orleans, La. Contact: http://www.abiworld.org/ May 14-16, 2009 ALI-ABA Chapter 11 Business Reorganizations Langham Hotel, Boston, Massachusetts Contact: http://www.ali-aba.org June 10-13, 2009 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 25th Annual Bankruptcy & Restructuring Conference The Ritz-Carlton Orlando Grande Lakes Orlando, Florida Contact: http://www.aria.org/ June 11-14, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ July 29-Aug. 1, 2009 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Westin Hilton Head Island Resort & Spa, Hilton Head Island, S.C. Contact: http://www.abiworld.org/ Aug. 6-8, 2009 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Conference Hotel Hershey, Hershey, Pa. Contact: http://www.abiworld.org/ Sept. 10-11, 2009 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 2, 2009 AMERICAN BANKRUPTCY INSTITUTE ABI/GULC "Views from the Bench" Georgetown University Law Center, Washington, D.C. Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Oct. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Paris Las Vegas, Las Vegas, Nev. Contact: http://www.abiworld.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 29-May 2, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2010 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Ritz-Carlton Amelia Island, Amelia, Fla. Contact: http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Last Updated: March 16, 2009 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Ma. Theresa Amor J. Tan Singco, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***