/raid1/www/Hosts/bankrupt/TCR_Public/090420.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, April 20, 2009, Vol. 13, No. 108
Headlines
ABACUS 2006-9: S&P Downgrades Ratings on All Classes to 'D'
ABITIBIBOWATER INC: Bankruptcy Filing Cues S&P's Rating Cut to 'D'
ABITIBIBOWATER INC: DBRS Downgrades Bowater and Subsidiary to "D"
ABITIBIBOWATER INC: Court Approves "First Day" Motions
ABITIBIBOWATER INC: Canadian Units File Chapter 15 Petitions
ABITIBI-CONSOLIDATED: Voluntary Chapter 15 Case Summary
AMERIGROUP CORP: S&P Cuts Ratings on Two Bank Loans to 'BB'
ABITIBI-CONSOLIDATED INC: Moody's Cuts Default Rating to 'D'
AEROGROW INT'L: Nonpayment of Fees Prompts Nasdaq Delisting Notice
AMERICAN INDEPENDENT: A.M. Best Affirms "D" Fin'l Strength Rating
AMERICAN INT'L: A.M. Best Comments on Sale to Farmers Group
AMERICAN PHYSICIANS: A.M. Best Affirms "bb-" ICR on APSpecialty
AMERICAN STERLING: Closed Friday; Metcalf Bank Assumes Deposits
AMH HOLDINGS: S&P Junks Corporate Credit Rating From 'B-'
AUTOBACS STRAUSS: Court Sets May 22 as General Claims Bar Date
AVETA INC: S&P Puts 'B' Ratings on $20MM & $485MM Bank Loans
AVIS BUDGET: S&P Affirms 'CCC+' Long-Term Corporate Credit Rating
AZER PROPERTY: Case Summary & Five Largest Unsecured Creditors
BANK OF AMERICA: 2 Advisory Firms Oppose Chairman's Re-election
BEARINGPOINT INC: Deltek Discloses Impact of Bankruptcy
BEARINGPOINT INC: Signs Definitive Pact with PwC on $25MM Sale
BEARINGPOINT INC: Court Approves $350MM Asset Sale to Deloitte
BETHANY ROLLING: Wants to Access LaSalle's Cash Collateral
BIG 10 STORES: Can Access $1 Million Sun Finance DIP Facility
BIG 10 STORES: Epiq Bankruptcy Approved as Claims Agent
BI-LO LLC: Dilworth Store to Be Replaced with Bloom Supermarket
BLOCK 34: U.S. Trustee Schedules Meeting of Creditors for May 18
BOWATER CANADA: S&P Cuts Senior Unsecured Debt Rating to 'D'
BOWATER CANADIAN: S&P's Long-Term Corp. Credit Rating Tumble to D
BOWATER INC: S&P's Long-Term Corporate Credit Rating Tumble to 'D'
BRAVO HEALTH: S&P Puts 'B' Rating on $25 Mil. & $90 Mil. Loans
BRODER BROS: S&P Downgrades Corporate Credit Rating to 'SD'
BRUNO'S SUPERMARKETS: Court Okays Management Incentive Plan
BRUNO'S SUPERMARKETS: Final Sale Hearing to be Held on April 30
BUILDING MATERIALS: Moody's Cuts Corp. Family Rating to 'Caa3'
CANWEST MEDIA: DBRS Cuts Sub Debt to D, Keeps Issuer Rating at C
CARMORE HOLDINGS: S&P Puts 'B' Rating on $25MM & $100MM Loans
CHRYSLER LLC: U.S. Gov't & Fiat May Name New CEO And Directors
CIB MARINE: TruPS Debt, Rising Losses Prompt Going Concern Doubt
CIB MARINE: TruPS Restructuring Opposed; Voting Extended to May 11
CIMAREX ENERGY: S&P Changes Outlook to Stable; Affirms 'BB' Rating
CITIGROUP INC: Reports $1.6 Billion Net Income for Q1 2009
CITIGROUP INC: Provides Update on Timing of Exchange Offers
CMP SUSQUEHANNA: S&P Raises Corporate Credit Rating to 'CCC+'
COOPERATIVE BANK: To File Annual Report by Month's End
COOPERATIVE BANK: Warns of Bankruptcy Absent Capital Infusion
CRESCENT BANKING: Dixon Hughes Raises Going Concern Doubt
DAYTON SUPERIOR: Files for Bankruptcy, Arranges $165MM GECC Loan
DAYTON SUPERIOR: Case Summary & 28 Largest Unsecured Creditors
DILLARD'S INC: S&P Cuts Rating to 'B-' From 'B+'; Outlook Stable
DRUG FAIR GROUP: Court Approves $40 Million Bankruptcy Loan
ENERGY PARTNERS: Moody's Cuts Corporate Family Rating to 'Ca'
FIRST METALS: Files Restructuring Proposal Under the BIA
FOOTHILLS RESOURCES: Court Sets May 11 As General Bar Date
GENERAL GROWTH: W. Ackman Protects Bet with Bankruptcy Financing
GENERAL GROWTH: Allowed to Use Cash, Won't Promptly Draw Loan
GENERAL GROWTH: Simon Property Says GGP Would Be Good Fit
GENERAL GROWTH: Wilmington Trust Says It's Not A Creditor
GENERAL GROWTH: Fitch Downgrades Issuer Default Rating to 'D'
GENERAL MOTORS: Finalizing Plan for Bankruptcy Filing, Says Report
GENERAL MOTORS: Judge & Lawyer Say Ch. 11 Could Be Done in 60 Days
GENERAL MOTORS: Plunkett Cautions on 'Quick Rinse' Bankruptcy
GENERAL MOTORS: Mulls Dropping Pontiac, GMC Brands in Savings Bid
GERDAU AMERISTEEL: S&P Puts Rating on 4 Cos. on Watch Negative
GERDAU AMERISTEEL: S&P Puts 'BB+' Rating on Negative CreditWatch
GOLDEN CROSSING: Moody's Reviews 'Ba1' Rating on Bank Facilities
GREAT BASIN BANK: Nevada State Bank Assumes All Deposits
MERITAGE HOMES: Moody's Affirms 'B1' Corporate Family Rating
HAMPSHIRE GROUP: President and CEO Michael Culang Steps Down
HEALTH NET: S&P Puts 'BB' Rating on $400MM 6.375% Notes Due 2017
HEALTHSPRING INC: S&P Cuts Ratings on $100MM & $300MM Loans to B+
HORIZON LINES: S&P Affirms 'B+' Long-Term Corporate Credit Rating
HUMAN TOUCH: Redemption Date Extension Cues S&P's 'D' Rating
HUNTSMAN CORP: Deutsche Bank Relaxes Unit's Loan Covenants
INNOVATIVE COMPANIES: Case Summary & 69 Largest Unsec. Creditors
INTERACTIVE HEALTH: S&P's Corporate Credit Rating Tumble to 'D'
INTERNATIONAL KIRKLAND: Seek Debt Settlement, May File Under BIA
JAMES A RHODE: Section 341(a) Meeting Scheduled For May 12
LEE MEMORIAL: Wants Court to Approve Sale Bid Procedures
LEE MEMORIAL: Proposes Bid Protocol for Phoenix Property
LEHMAN BROTHERS: Merchant Banking Acquired by Reinet & Mgt. Team
LIGHTHOUSE LODGE: Section 341(a) Meeting Scheduled for May 13
LINCOLN NATIONAL: Fitch Downgrades Junior Debt Rating to 'BB+'
LYONDELL CHEMICAL: Wins Protection from California Counties' Suits
MACY'S INC: S&P Cuts Rating to 'BB' From 'BBB-'; Outlook Stable
MADOFF SECURITIES: Liquidators Can Start Proceedings to Seize Car
MARINA BAY: U.S. Trustee Schedules Meeting of Creditors for May 6
MCCLATCHY CO: Receives Non-Compliance Notice From NYSE
METOKOTE CORP: Declining Sales Prompt S&P to Junk Rating
MGM MIRAGE: Provides $70MM to Ensure CityCenter Project Continues
MICHAEL FOODS: S&P Affirms Corporate Credit Rating at 'B+'
MOOG INC: Moody's Changes Outlook to Negative; Keeps 'Ba2' Rating
MISCOR GROUP: Obtains Covenant Waiver From Wells Fargo
NEWS-JOURNAL: Hires Bruce Hanna as Counsel for Possible Bankruptcy
NEIMAN MARCUS: S&P Cuts Rating to 'B' From 'B+'; Outlook Negative
NORTH AMERICAN ENERGY: S&P Cuts Rating on $545 Mil. Loan to 'BB'
NORTH COAST LIFE: A.M. Best Affirms & Removes C++ FS Rating
NOVA BIOSOURCE: To Trade Over the Counter Under Symbol 'NBFA'
NOVA CHEMICALS: DBRS Says Merger Approval Won't Cue Rating Action
PACIFIC LIFE: A.M. Best Upgrades FS Rating to "A" From "B-"
PENN TREATY: A.M. Best Affirms "D" Issuer Credit Rating
PENNEY (J.C.): S&P Cuts Rating to 'BB' From 'BBB-'; Outlook Stable
PETROZONE INC: Involuntary Chapter 11 Case Summary
PILGRIM'S PRIDE: Sets June 1 as Deadline for Proofs of Claim
POLAROID CORP: Hilco & Gordon Bros. Win "Polaroid" Marks
PRESIDENTIAL LIFE: A.M. Best Affirms "bb-" Issuer Credit Rating
RH DONNELLEY: Nonpayment of Interest Cues S&P's Rating Cut to 'D'
ROY DAVIS: Files for Chapter 11 Bankruptcy Protection
SALANDER-O'REILLY: Kips Bay Take Over $75MM Manhattan Mansion
SEARS HOLDINGS: S&P Affirms 'BB-' Rating; Removed From Neg. Watch
SILVERHAWK COMMONS: Case Summary & 11 Largest Unsecured Creditors
SIX FLAGS: Starts Debt for Equity Swap Offer for Debt Securities
SIX FLAGS: S&P Downgrades Corporate Credit Rating to 'D'
SPECTRUM BRANDS: Equity Panel to Prove $2.3BB Equity Value Is Low
SPECTRUM BRANDS: Stockholders Want More Info on Co.'s Valuation
SPANSION INC: Non-Payment of Fees Prompt NASDAQ Delisting Notice
SUNESIS PHARMA: Receives NASDAQ Non-Compliance Notification
SUNSTONE HOTEL: Makes $600 Tender Offer for Every $1,000 of Notes
STARWOOD HOTELS: S&P Downgrades Corporate Credit Rating to 'BB'
STRATOS GLOBAL: Stratos Acquisition Cues Moody's Positive Outlook
TRAILER BRIDGE: S&P Affirms 'B-' Corporate Credit Rating
TRUMP ENTERTAINMENT: Lease Pact With Helicopter Co. Gets Court OK
U.S. STEEL: S&P Puts Rating on Co., 3 Others on Watch Negative
U.S. STEEL: S&P Puts 'BB+' Rating on Negative Watch
USA SPRINGS: To Put $10,000 in Escrow for Administrative Expense
UTAH 7000: Auction Ends Without Sale; Shareholders & Bank at Odds
WHE HOLDINGS: U.S. Trustee Sets Meeting of Creditors for May 13
WILLIAM LYON: Moody's Downgrades Default Rating to 'Ca'
ZENITH NATIONAL: A.M. Best Affirms "bb+" on $58.36MM Securities
* A.M. Best Comments on Treatment of TALF Loans
* A.M. Best Says U.S. Property/Casualty Industry's Profit Squeezed
* Focus Management Group Adds John Bambach as Managing Director
* Kirkland & Ellis LLP Relocates Chicago Office
* Mortgage Cram-Down Bill Stalls in Senate
* Failed Banks Now Total 25 as 2 Banks from Nevada & Missouri Shut
* BOND PRICING -- Week From April 13 to April 17, 2009
*********
ABACUS 2006-9: S&P Downgrades Ratings on All Classes to 'D'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on all
classes issued by ABACUS 2006-9 Ltd. to 'D'.
The lowered ratings follow a number of recent write-downs of
underlying reference entities, which have caused the class A-2, B,
and C notes to incur complete principal losses and the class A-1
notes to incur a partial principal loss.
Ratings Lowered
ABACUS 2006-9 Ltd.
Rating
------
Class To From
----- -- ----
A-1 D CCC-
A-2 D CC
B D CC
C D CC
ABITIBIBOWATER INC: Bankruptcy Filing Cues S&P's Rating Cut to 'D'
------------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long-term
corporate credit rating on newsprint producer AbitibiBowater Inc.
and its subsidiaries Bowater Inc. and Bowater Canadian Forest
Products Inc. to 'D' from 'CC'.
"We downgraded the company after AbitibiBowater and its
subsidiaries filed for bankruptcy protection in the U.S.," said
Standard & Poor's credit analyst Jatinder Mall.
At the same time, S&P lowered the senior unsecured debt ratings on
AbitibiBowater, Bowater, Bowater Canada Finance Corp., and Bowater
Canadian Forest Products to 'D' from 'C'.
S&P removed these ratings from CreditWatch negative where they
were placed Feb. 10, 2009.
S&P had lowered the ratings on Abitibi-Consolidated Inc. and
Abitibi-Consolidated Co. of Canada to 'D' on March 31, 2009, and
removed them from CreditWatch, because Abitibi-Consolidated had
missed payment on its secured loan.
ABITIBIBOWATER INC: DBRS Downgrades Bowater and Subsidiary to "D"
-----------------------------------------------------------------
Dominion Bond Rating Service has downgraded the Issuer Rating of
Bowater Inc. to D and the Senior Debentures rating of Bowater
Canadian Forest Products Inc. to D following the announcement that
AbitibiBowater Inc. and certain of its U.S. and Canadian
subsidiaries have filed voluntary petitions in the United States
under Chapter 11 of the United States Bankruptcy Code.
As well, AbitibiBowater and certain of its Canadian subsidiaries
will seek creditor protection under the Companies Creditors
Arrangement Act (CCAA) in Canada. The Company filed in Canada on
April 17, 2009. AbitibiBowater's subsidiaries located outside the
United States and Canada have not commenced Chapter 11, CCAA or
similar proceedings. DBRS has also removed the Bowater ratings
from Under Review with Negative Implications, where they were
originally placed on October 30, 2008. In keeping with DBRS
policy, all recovery ratings assigned to the above mentioned
companies are being discontinued given the rating action to D.
DBRS had previously downgraded the ratings on ABH and its
subsidiaries, Abitibi-Consolidated Inc. and Abitibi-Consolidated
Company of Canada to D on March 16, 2009, following an
announcement that the Company had decided not to pay certain
amounts of principal and interest on affected unsecured notes,
secured notes and term loan that would be due before the meetings
of noteholders and lenders scheduled for April 30, 2009. The
rating action followed the Commercial Division of the Superior
Court of Quebec in Montreal granting an interim court order under
the Canada Business Corporations Act in connection with the
Recapitalization by the Company announced on March 13, 2009. The
downgrade to D was consistent with DBRS methodology.
ABITIBIBOWATER INC: Court Approves "First Day" Motions
------------------------------------------------------
AbitibiBowater Inc., said the U.S. Bankruptcy Court for the
District of Delaware has granted the relief the Company requested
in its "First Day Motions" filed in conjunction with its voluntary
petitions under Chapter 11 of the U.S. Bankruptcy Code. As well,
AbitibiBowater and its Canadian subsidiaries have obtained an
Order from the Quebec Superior Court in Canada for creditor
protection pursuant to the Companies' Creditors Arrangement Act.
The Delaware and Quebec Courts issued a variety of orders on
either a final or interim basis that will support business
continuity for AbitibiBowater throughout the restructuring
process.
The U.S. and Canadian orders include, among other things,
authorization to (1) continue making payments relating to
employees' current wages, salaries and benefit programs in the
ordinary course; (2) ensure the continuation of the current cash
management systems; (3) honor ongoing customer obligations; (4)
enter into financing commitments for debtor-in-possession
financing totaling approximately $200 million for certain of its
Bowater subsidiaries; and (5) enter into an amendment providing
for the continuation of an existing Abitibi-Consolidated
subsidiary securitization program for its accounts receivable, in
the approximate amount of $210 million. Under the terms of the
Canadian Order, Ernst & Young Inc. will serve as the Court-
appointed Monitor under the CCAA process and will assist the
Company in formulating its restructuring plan.
Luann Lasalle at The Canadian Press noted last week that thousands
of AbitibiBowater employees face months of uncertainty about their
jobs and pensions while the Company operates under bankruptcy
protection. According to Canadian Press, Dave Coles, president of
the Communications, Energy and Paperworkers Union, said his top
priority is to ensure that the pensions and benefits of the
company's retirees and its current unionized workers are protected
in any court-sponsored restructuring.
"Then the next issue is to ensure that we save and maintain as
many jobs and communities that is at all possible across Canada,"
Canadian Press quoted Mr. Coles as saying.
Mr. Coles told Canadian Press he suspects that workers will be
asked for concessions to help the company through its
restructuring.
"We're prepared to work on many cost issues, but this isn't about
the wages and benefits of our members," he said, according to
Canadian Press. "It's not labour costs that have put the company
in jeopardy. It's their mismanagement and their debt load."
To aid in its liquidity, AbitibiBowater has entered into a debtor-
in-possession financing facility with Fairfax Financial Holdings
Ltd., which provides for a fully committed $206 million term loan
on an interim basis, and can be upsized to $600 million as an
incremental term loan and an asset-backed revolving credit
facility. In addition, the Company's Abitibi-Consolidated
subsidiary has entered into arrangement that provides for the
continuation of its existing securitization program for its
accounts receivable in the approximate amount of $210 million.
The proposed DIP Facility and Securitization Programs are pending
approval of the Bankruptcy Court and the Canadian Court.
AbitibiBowater's common shares have been removed from listing by
the New York Stock Exchange. In addition, the Company has
received a letter from the Toronto Stock Exchange to the effect
that trading on its common shares and exchangeable shares had been
suspended and would be delisted effective at the close of market
on May 15, 2009. The Company is now trading on the Pink Sheets
under symbol "ABWTQ". Shareholders may contact their financial
institutions, brokers or financial advisors to obtain more details
on trading alternatives including the Pink Sheets.
About AbitibiBowater Inc.
Headquartered in Montreal, Canada, AbitibiBowater Inc. --
http://www.abitibibowater.com/-- produces a wide range of
newsprint, commercial printing papers, market pulp and wood
products. It is the eighth largest publicly traded pulp and paper
manufacturer in the world. AbitibiBowater owns or operates 27
pulp and paper facilities and 34 wood products facilities located
in the United States, Canada, the United Kingdom and South Korea.
Marketing its products in more than 90 countries, the company is
also among the world's largest recyclers of old newspapers and
magazines, and has more third-party certified sustainable forest
land than any other company in the world.
Out-of-Court Restructuring Effort
AbitibiBowater tried to renegotiate about $2.9 billion in the
debts of its Canadian unit, Abitibi-Consolidated, and
$1.8 billion of its U.S. unit, Bowater Inc. On March 13,
AbitibiBowater and Abitibi-Consolidated commenced a
recapitalization proposal which was intended to reduce the
Company's net debt by roughly $2.4 billion, lower its annual
interest expense by roughly $162 million and raise roughly
$350 million through the issuance of new notes of ACI and common
stock and warrants of the Company.
On February 9, Bowater Finance II LLC, an indirect wholly owned
subsidiary of AbitibiBowater, commenced private offers with
respect to six series of outstanding debt securities issued by
either Bowater Incorporated or Bowater Canada Finance Corporation,
a wholly owned subsidiary of Bowater, to exchange the old notes
for new notes. BowFin also intended for a concurrent private
offering of new 15.5% First Lien Notes due November 15, 2011, to
holders of Bowater Notes who tender notes in the exchange offers.
The Company moved the exchange offer deadlines several times after
failing to garner enough support from bondholders. It ultimately
abandoned the exchange offer on March 31.
Bankruptcy Filing
The Company and several affiliates filed for Chapter 11 bankruptcy
protection before the U.S. Bankruptcy Court for the District of
Delaware on April 16, 2009. Judge Kevin J. Carey presides over
the case. The Company and its Canadian affiliates commenced
parallel restructuring proceedings under the Companies' Creditors
Arrangement Act before the Quebec Superior Court Commercial
Division the next day. Alex F. Morrison at Ernst & Young, Inc.,
was appointed CCAA monitor.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the
Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as
the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in
Wilmington, Delaware, serves as the Debtors' co-counsel, while:
Troutman Sanders LLP in New York, serves as the Debtors' conflicts
counsel. The Debtors' financial advisor is Advisory Services LP,
and their noticing and claims agent is Epiq Bankruptcy Solutions
LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan
LLP, in Toronto, Ontario.
As of September 30, 2008, the Company had $9,937,000,000 in total
assets and $8,783,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes Abitibibowater
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the chapter 11 proceedings and parallel proceedings under the
Companies' Creditors Arrangement Act in Canada undertaken by
Abitibibowater Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
ABITIBIBOWATER INC: Canadian Units File Chapter 15 Petitions
------------------------------------------------------------
Abitibi Consolidated Inc. and Abitibi-Consolidated Company of
Canada announced their intent to file petitions for recognition
under Chapter 15 of the Bankruptcy Code in support of their
restructuring proceedings in Canada.
The two units filed their Chapter 15 petitions on April 17.
Headquartered in Montreal, Canada, AbitibiBowater Inc. --
http://www.abitibibowater.com/-- produces a wide range of
newsprint, commercial printing papers, market pulp and wood
products. It is the eighth largest publicly traded pulp and paper
manufacturer in the world. AbitibiBowater owns or operates 27
pulp and paper facilities and 34 wood products facilities located
in the United States, Canada, the United Kingdom and South Korea.
Marketing its products in more than 90 countries, the company is
also among the world's largest recyclers of old newspapers and
magazines, and has more third-party certified sustainable forest
land than any other company in the world.
Out-of-Court Restructuring Effort
AbitibiBowater tried to renegotiate about $2.9 billion in the
debts of its Canadian unit, Abitibi-Consolidated, and
$1.8 billion of its U.S. unit, Bowater Inc. On March 13,
AbitibiBowater and Abitibi-Consolidated commenced a
recapitalization proposal which was intended to reduce the
Company's net debt by roughly $2.4 billion, lower its annual
interest expense by roughly $162 million and raise roughly
$350 million through the issuance of new notes of ACI and common
stock and warrants of the Company.
On February 9, Bowater Finance II LLC, an indirect wholly owned
subsidiary of AbitibiBowater, commenced private offers with
respect to six series of outstanding debt securities issued by
either Bowater Incorporated or Bowater Canada Finance Corporation,
a wholly owned subsidiary of Bowater, to exchange the old notes
for new notes. BowFin also intended for a concurrent private
offering of new 15.5% First Lien Notes due November 15, 2011, to
holders of Bowater Notes who tender notes in the exchange offers.
The Company moved the exchange offer deadlines several times after
failing to garner enough support from bondholders. It ultimately
abandoned the exchange offer on March 31.
Bankruptcy Filing
The Company and several affiliates filed for Chapter 11 bankruptcy
protection before the U.S. Bankruptcy Court for the District of
Delaware on April 16, 2009. Judge Kevin J. Carey presides over
the case. The Company and its Canadian affiliates commenced
parallel restructuring proceedings under the Companies' Creditors
Arrangement Act before the Quebec Superior Court Commercial
Division the next day. Alex F. Morrison at Ernst & Young, Inc.,
was appointed CCAA monitor.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the
Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as
the Debtors' CCAA counsel.
Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves
as the Debtors' co-counsel, while: Troutman Sanders LLP in New
York, serves as the Debtors' conflicts counsel. The Debtors'
financial advisor is Advisory Services LP, and their noticing and
claims agent is Epiq Bankruptcy Solutions LLC.
As of September 30, 2008, the Company had $9,937,000,000 in total
assets and $8,783,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes Abitibibowater
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the chapter 11 proceedings and parallel proceedings under the
Companies' Creditors Arrangement Act in Canada undertaken by
Abitibibowater Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
ABITIBI-CONSOLIDATED: Voluntary Chapter 15 Case Summary
-------------------------------------------------------
Chapter 15 Debtor: Abitibi-Consolidated Inc.
aka Boise Cascade Canada Ltd.
aka The Ontario and Minnesota Power Company
Limited
aka The Keewatin Power Company, Limited
aka Keewatin Lumber Co. Ltd.
aka Compagnie de Papier Abitibi Ltee
aka Kenora Paper Mills, Limited
aka Stone-Consolidated Corporation
aka 2931664 Canada Inc.
aka Corporation Stone-Consolidated
aka The Keewatin Lumber Company Limited
aka Retallack Insurance Brokers Ltd.
aka Abitibi-Price Inc.
aka The Keewatin Lumber Company Limited
aka Ediwise Societe Abitibi-Consolidated
aka Retallack Insurance Agency Ltd.
aka Abitibi Power & Paper Company Limited
aka The Ontario and Minnesota Power Co. Ltd.
aka Abitibi Paper Company Ltd.
aka Kenora Paper Mills, Ltd.
aka Keewatin Power Co. Ltd.
aka Ontario Minnesota Power Co. Ltd.
aka Keewatin Power Co. Ltd.
aka The Fort Frances Pulp & Paper Co. Ltd.
aka The Fort Frances Pulp and Paper Company,
Limited
aka Rainy River Forest Products Inc.
aka Holdco Abitibi Inc.
1155 Metcalfe St., Suite 800
Montreal, Quebec
Canada
Chapter 15 Case No.: 09-11348
Debtor-affiliate filing subject to Chapter 15 petition:
Entity Case No.
------ --------
Abitibi-Consolidated Company of Canada 09-11349
Type of Business: The Debtors directly or indirectly owns most of
the Canadian operating assets of the Abitibi
Group, including 16 pulp and paper mills.
Abitibi-Consolidated Company of Canada is the
result of the 1997 merger of Donohue Forest
Product Inc. and Donohue Quno Inc.
See http://www.bowater.com/
Chapter 15 Petition Date: April 17, 2009
Court: District of Delaware (Delaware)
Judge: Kevin J. Carey
Chapter 15 Petitioner's Counsel: Pauline K. Morgan, Esq.
bankfilings@ycst.com
Sean T. Greecher, Esq.
bankfilings@ycst.com
Young, Conaway, Stargatt & Taylor
The Brandywine Building
1000 West Street, 17th Floor
Wilmington, DE 19801
Tel: (302) 571-6600
Estimated Assets: More than $1 billion
Estimated Debts: More than $1 billion
AMERIGROUP CORP: S&P Cuts Ratings on Two Bank Loans to 'BB'
-----------------------------------------------------------
Standard & Poor's Ratings Services said it withdrew its recovery
ratings on all rated health insurance companies' debt issues.
Consequently, S&P is changing some of S&P's issue-level ratings on
these debt issues. These actions are the result of a change in
S&P's application of criteria for rating debt issued by health
insurers. The issuer credit ratings remain unchanged.
In May 2007, Standard & Poor's adopted its recovery rating
criteria. According to this criteria, S&P determines an issue-
level rating based on the issuer credit rating as adjusted, if
appropriate, per the recovery rating (i.e., by notching up or down
from the issuer credit rating).
However, S&P now believe that there are growing uncertainties in
the industry about how to appropriately factor in the impact of
regulatory intervention on enterprise valuation. Therefore, S&P
will no longer use the recovery analysis methodology to determine
the issue-level ratings on health insurers' debt issues. S&P is
now reverting to S&P's original methodology for notching, which is
based on structural subordination.
Ratings List
Downgraded; Recovery Ratings Withdrawn
Amerigroup Corp.
To From
-- ----
Secured
$50 mil. bank loan due 2012 BB BB+
Recovery Rating NR 2
$351.3 mil. bank loan due 2012 BB BB+
Recovery Rating NR 2
HealthSpring Inc.
To From
-- ----
Secured
$100 mil. revolver due 2012 B+ BB-
Recovery Rating NR 2
$300 mil. term loan A due 2012 B+ BB-
Recovery Rating NR 2
Upgraded; Recovery Ratings Withdrawn
Amerigroup Corp.
To From
-- ----
Unsecured
$260 mil. notes due 2012 BB B+
Recovery Rating NR 6
Issue-Level Ratings Remain Unchanged; Recovery Ratings Withdrawn
Health Net Inc.
To From
-- ----
Unsecured
$400 mil. 6.375% notes due 2017 BB
Recovery Rating NR 3
Aveta Inc.
To From
-- ----
Secured
$20 mil. bank loan due 2010 B
Recovery Rating NR 4
$485 mil. bank loan due 2011 B
Recovery Rating NR 4
CareMore Holdings Inc.
To From
-- ----
Secured
$25 mil. revolver due 2012 B
Recovery Rating NR 4
$100 mil. term loan due 2013 B
Recovery Rating NR 4
Bravo Health Inc.
To From
-- ----
Secured
$25 mil. revolver due 2012 B
Recovery Rating NR 4
$90 mil. term loan B due 2013 B
Recovery Rating NR 4
ABITIBI-CONSOLIDATED INC: Moody's Cuts Default Rating to 'D'
------------------------------------------------------------
Moody's Investors Service has downgraded the probability of
default ratings of Abitibi-Consolidated Inc. and Bowater
Incorporated to D from Ca. All other ratings were affirmed.
Subsequent to the actions, all ratings of Abitibi and Bowater will
be withdrawn because both companies have entered bankruptcy
proceedings.
The downgrade follows the announcement that AbitibiBowater Inc.
and its U.S. and Canadian subsidiaries have filed voluntary
petitions for reorganization under Chapter 11 in the U.S.
Bankruptcy Code. As well, AbitibiBowater and certain of its
Canadian subsidiaries will seek creditor protection under the
Companies' Creditors Arrangement Act in Canada. The Company's
normal day-to-day operations will continue during the
restructuring process. The Company also announced that, pending
Court approval, it has received commitments for up to $200 million
in debtor-in-possession financing to fund continuing operations
for certain of its Bowater subsidiaries and has entered into an
amendment providing for the continuation of its existing
securitization program at Abitibi for approximately $210 million.
Downgrades:
Issuer: Abitibi-Consolidated Inc.
-- Probability of Default Rating, Downgraded to D from Ca
Issuer: Bowater Incorporated
-- Probability of Default Rating, Downgraded to D from Ca
Moody's last rating action was on April 2, 2009 when Abitibi's and
Bowater's corporate family rating was downgraded to Ca from Caa3.
Headquartered in Montreal, Quebec, with a regional office in
Greenville, South Carolina, AbitibiBowater is North America's
leader in newsprint and commercial printing papers. Abitibi and
Bowater are separate legal entities and are the key operating
subsidiaries of AbitibiBowater, the publicly traded holding
company.
AEROGROW INT'L: Nonpayment of Fees Prompts Nasdaq Delisting Notice
------------------------------------------------------------------
AeroGrow International, Inc., was notified on April 16, 2009, by
Nasdaq that it has not paid certain fees required by Listing Rule
5210(d). Accordingly, Nasdaq informed AeroGrow that it will be
delisted unless AeroGrow appeals the determination by April 23,
2009.
AeroGrow plans to appeal the determination.
Founded in 2002 in Boulder, Colorado, AeroGrow International, Inc.
-- http://www.aerogrow.com/-- is dedicated to the research,
development and marketing of the AeroGarden(R) line of foolproof,
dirt-free indoor gardens. AeroGardens allow anyone to grow
farmer's market fresh herbs, salad greens, tomatoes, chili
peppers, flowers and more, indoors, year-round, so simply and
easily that no green thumb is required.
AMERICAN INDEPENDENT: A.M. Best Affirms "D" Fin'l Strength Rating
-----------------------------------------------------------------
A.M. Best Co. has affirmed the financial strength rating of D
(Poor) and issuer credit rating (ICR) of "c" of American
Independent Network Insurance Company of New York (New York, NY).
The outlook for these ratings is negative. A.M. Best also has
affirmed the ICR of "d" on the holding company, Penn Treaty
American Corporation (Penn Treaty) [NASDAQ: PTYA].
Subsequently, A.M. Best has assigned a category NR-4 (Company
Request) to American Independent Network's FSR and an "nr" to the
ICR in response to a request from company management to be removed
from A.M. Best's interactive rating process. A.M. Best also has
assigned an "nr" to Penn Treaty's ICR.
American Independent Network is a subsidiary of Penn Treaty
Network America Insurance Company and American Network Insurance
Company, both of which entered into voluntary rehabilitation in
their domiciliary jurisdiction of the Commonwealth of Pennsylvania
on January 6, 2009. The rating affirmations reflect the extremely
weak balance sheet, concentrated business profile and the
continued weak statutory operating performance of the organization
as a whole.
AMERICAN INT'L: A.M. Best Comments on Sale to Farmers Group
-----------------------------------------------------------
A.M. Best Co. commented that the financial strength rating of A
(Excellent), issuer credit ratings of "a" and negative outlook of
the personal lines companies owned by American International
Group, Inc. (New York, NY) are unchanged following the
announcement of the sale of AIG companies to Farmers Group, Inc.
(Los Angeles, CA), a subsidiary of Zurich Financial Services
(Zurich, Switzerland).
AIG and Farmers have announced that the sale price is
$1.9 billion; $1.5 billion will be paid in cash and the balance
will be paid via issuance to AIG of $400 million in euro-
denominated subordinated capital notes backed by Zurich's
principal operating unit, Zurich Insurance Company (Zurich,
Switzerland). These AIG companies are direct subsidiaries of
AIG's commercial insurance entities, and it is A.M. Best's
expectation that the capital position of these commercial
operating companies will be maintained post transaction.
While no revision is expected to the ratings of the AIG personal
lines companies as a result of this transaction, it is likely that
the outlook on the ratings will be revised to "stable" from
"negative," reflecting the current outlook of the ratings of
Farmers.
A.M. Best believes the transaction will have a positive impact on
the remaining AIG commercial property/casualty entities, but notes
that the failure of the sale could result in a re-evaluation on
the ratings of the personal lines companies of AIG due to the
deterioration in their perceived franchise value.
These personal lines companies of American International Group,
Inc. are being sold to Farmers Group, Inc.:
-- 21st Century Insurance Group
-- 21st Century Casualty Company
-- 21st Century Insurance Company
-- 21st Century Insurance Company of the Southwest
-- New Hampshire Indemnity Company, Inc.
-- American International Pacific Insurance Company
-- AIG Hawaii Insurance Company, Inc.
-- AIG National Insurance Company, Inc.
-- American Pacific Insurance Company, Inc.
-- American International Insurance Company
-- American International Insurance Company of California
-- American International Insurance Company of New Jersey
-- AIG Advantage Insurance Company
-- American International Insurance Company of Delaware
-- AIG Centennial Insurance Company
-- AIG Auto Insurance Company of New Jersey
-- AIG Preferred Insurance Company
-- AIG Premier Insurance Company
-- AIG Indemnity Insurance Company
AMERICAN PHYSICIANS: A.M. Best Affirms "bb-" ICR on APSpecialty
---------------------------------------------------------------
A.M. Best Co. has affirmed the financial strength rating of A-
(Excellent) and issuer credit ratings (ICR) of "a-" of American
Physicians Assurance Corporation, the primary member of American
Physicians Group. American Physicians is the lead subsidiary of
American Physicians Capital, Inc. (APCapital) [NASDAQ: ACAP].
A.M. Best also has affirmed the ICR of "bbb-" of APCapital. The
outlook for these ratings is stable.
Concurrently, A.M. Best has affirmed the FSRs of B+ (Good) and B-
(Fair) and the ICRs of "bbb-" and "bb-" of APSpecialty Insurance
Corporation (APSpecialty) and Insurance Corporation of America
(ICA), respectively. The outlook for the ratings of APSpecialty
is stable, and the outlook for the ratings of ICA has been revised
to stable from negative. All companies are domiciled in East
Lansing, MI.
The ratings reflect the group's conservative balance sheet,
favorable operating performance since 2004 and its improved
business position as a leading specialty provider of medical
liability coverage within its five core states. The group also
has maintained good risk-adjusted capital levels despite funding
APCapital's capital management initiatives via substantial
dividend activity. Additionally, the ratings take into account
APCapital's guidance for 2009 and favorable earnings prospects
over the near term.
The ratings further consider the financial flexibility afforded by
APCapital, its ready access to the capital markets, strong
interest coverage and modest financial leverage (total debt/total
capital), which is 9.3% as of year-end 2008. The dividend stream
from American Physicians has been utilized to repurchase stock,
redeem $5 million of trust preferred debt and fund stock
dividends. Going forward, A.M. Best expects that APCapital's
future demands on subsidiary capital will be neutralized by
earnings.
Partially offsetting these positive rating factors are the group's
poor historical operating performance prior to 2004 and the
inherent market risks associated with the medical professional
liability sector with regard to price competition, legislative
(tort) reform, loss cost trends and regulatory challenges.
ICA's ratings recognize its run-off status, continued adverse loss
reserve development and the negative operating cash flows
generated by the company. The revised outlook reflects the
implementation of an adverse development cover between ICA and its
sister company, American Physicians. The agreement, effective
January 1, 2009, calls for American Physicians to indemnify ICA
for the ultimate net loss in excess of ICA's recorded reserves as
of December 31, 2008.
APSpecialty's rating affirmations acknowledge its run-off status,
more than adequate capitalization and uncertainty as it pertains
to its ultimate business prospects going forward.
AMERICAN STERLING: Closed Friday; Metcalf Bank Assumes Deposits
---------------------------------------------------------------
American Sterling Bank, Sugar Creek, Missouri, was closed April 17
by the Office of Thrift Supervision, which appointed the Federal
Deposit Insurance Corporation as receiver. To protect the
depositors, the FDIC entered into a purchase and assumption
agreement with Metcalf Bank, Lee's Summit, Missouri, to assume all
of the deposits of American Sterling Bank.
The Missouri offices of American Sterling will reopen on Saturday,
and the offices in California and Arizona will reopen on Monday as
branches of Metcalf Bank. Depositors of American Sterling Bank
will automatically become depositors of Metcalf Bank. Deposits
will continue to be insured by the FDIC, so there is no need for
customers to change their banking relationship to retain their
deposit insurance coverage. Customers of both banks should
continue to use their existing branches until Metcalf Bank can
fully integrate the deposit records of American Sterling Bank.
Over the weekend, depositors of American Sterling Bank can access
their money by writing checks or using ATM or debit cards. Checks
drawn on the bank will continue to be processed. Loan customers
should continue to make their payments as usual.
As of March 20, 2009, American Sterling Bank had total assets of
approximately $181 million and total deposits of $171.9 million.
In addition to assuming the failed bank's deposits, Metcalf also
agreed to purchase approximately $173.6 million in assets. The
FDIC will retain the remaining assets for later disposition.
The FDIC and Metcalf Bank entered into a loss-share transaction on
approximately $100 million of American Sterling's assets. Metcalf
Bank will share with the FDIC in the losses on the assets covered
under the agreement. The loss-sharing arrangement is projected to
maximize returns on the assets covered by keeping them in the
private sector. The agreement also is expected to minimize
disruptions for loan customers.
Customers who have questions about Friday's transaction can call
the FDIC toll-free at 1-866-954-9528. Interested parties can also
visit the FDIC's Web site at
http://www.fdic.gov/bank/individual/failed/amsterling.html
The FDIC estimates that the cost to the Deposit Insurance Fund
will be $42 million. Metcalf Bank's acquisition of all the
deposits was the "least costly" resolution for the FDIC's Deposit
Insurance Fund compared to alternatives. American Sterling Bank is
the twenty-fourth FDIC-insured institution to fail in the nation
this year. The last FDIC-insured institution to be closed in
Missouri was Hume Bank, Hume, on March 7, 2008.
Congress created the Federal Deposit Insurance Corporation --
http://www.fdic.gov/-- in 1933 to restore public confidence in
the nation's banking system. The FDIC insures deposits at the
nation's 8,305 banks and savings associations and it promotes the
safety and soundness of these institutions by identifying,
monitoring and addressing risks to which they are exposed. The
FDIC receives no federal tax dollars - insured financial
institutions fund its operations.
AMH HOLDINGS: S&P Junks Corporate Credit Rating From 'B-'
---------------------------------------------------------
Standard & Poor's Ratings Service said that it lowered its
corporate credit ratings on AMH Holdings Inc. and its operating
subsidiary, Cuyahoga Falls, Ohio-based Associated Materials Inc.
to 'CCC+' from 'B-'. The outlook is negative.
At the same time, Standard & Poor's lowered the issue-level rating
on the company's $165 million senior subordinated notes to 'CCC'
(one notch below the corporate credit rating) from 'CCC+', with a
recovery rating of '5', indicating S&P's expectation for modest
(10%-30%) recovery in the event of a default. Standard & Poor's
also lowered the issue-level rating on the $446 million senior
discount notes issued by AMH Holdings, the holding company parent
of AMI, to 'CCC-' (two notches lower than the corporate credit
rating), with a recovery rating of '6', indicating S&P's
expectation of negligible (0% to 10%) recovery in the event of a
payment default.
"The downgrades reflect S&P's assessment that AMH's ability to
service its current capital structure over the intermediate term
will be challenged given our expectation for difficult operating
conditions to continue due to the depressed new construction end
markets and expected decline in repair and remodeling activity,"
said Standard & Poor's credit analyst Tobias Crabtree. As a
result, Standard & Poor's estimates that it is likely reported
EBITDA will remain less than $90 million, thus resulting in a cash
flow shortfall after accounting for cash interest payments of
about $50 million for 2009, which step up to $90 million for 2010.
As a result, AMH is expected to materially borrow on its
$225 million asset-based revolver over the intermediate term, thus
constraining the company's liquidity. Furthermore, S&P is
concerned the company could seek a restructuring of its debt
obligations in order to reduce its high debt leverage and interest
burden over the near term.
The ratings on AMH and AMI reflect a highly leveraged financial
profile, participation in the highly fragmented and competitive
window industry, volatile raw material costs, cyclical end-
markets, and relatively high fixed overhead.
AMH is a holding company with no direct operations and depends on
cash flow from AMI to meet its debt obligations. Standard &
Poor's views AMH and AMI as a consolidated enterprise.
The vinyl siding industry is relatively mature and consolidated,
while the vinyl window market is more fragmented and faster
growing. Although company-owned distribution insulates AMH
somewhat from competition with larger, more diversified rivals, it
also requires greater overhead expenses. Costs for raw materials,
primarily vinyl resin and aluminum, account for about 50% of total
costs and also affect AMH's profitability. Historically, the
company has implemented price increases to mitigate raw material
cost inflation.
The negative outlook reflects S&P's concerns about the weak
operating environment and the impact this will have on AMH's
operating performance throughout the next 12 to 18 months. In
addition, the Company's cash interest expense will increase
significantly beginning in September 2009 as its holding company
notes turn cash pay. As a result, liquidity will be a key factor
during this period. A downgrade could occur if AMH's near-term
operating performance is weaker than expected, resulting in excess
availability under its asset-based credit facility falling to less
than $30 million and EBITDA interest coverage remaining less than
1x for a sustained time period. Specifically, based upon S&P's
estimates, if revenue were to decline by about 6% and margins
contract by 100 basis points during 2009, the company's EBITDA
interest coverage would deteriorate to less than 1x.
AUTOBACS STRAUSS: Court Sets May 22 as General Claims Bar Date
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has set
May 22, 2009, at 5:00 p.m. Eastern time, as the deadline for
filing of proofs of claim in the Chapter 11 case of Autobacs
Strauss Inc.
Governmental units have until August 3, 2009, at 5:00 p.m. Eastern
time to file proofs of claim against the Debtor.
Proofs of claim must be filed so as to be actually received by
Epiq Bankruptcy Solutions, LLC, on or before the applicable bar
dates at these addresses:
if by mail:
Autobacs Strauss Inc. Claims Processing Center
c/o Epiq Bankruptcy Solutions, LLC
FDR Station
P.O. Box 5286
New York, NY 10150-5286
if by hand delivery or overnight carrier:
Autobacs Strauss Inc. Claims Processing Center
c/o Epiq Bankruptcy Solutions, LLC
757 Third Avenue, 3rd Floor
New York, NY 10017
For additional information regarding the filing of a proof of
claim, please contact the Debtor in writing, through its counsel,
at this address:
Young Conaway Stargatt & Taylor, LLP
The Brandywine Building
1000 West Street, 17th Floor
Wilmington, Delaware 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
Parties may also contact Epiq Bankruptcy Solutions, LLC at
(646) 282-2500 between 9:00 a.m. and 5:00 p.m. Eastern time.
Headquartered in South River, New Jersey, Autobacs Strauss Inc. --
http://www.straussauto.com/-- sells after-market automotive parts
and accessories, and operate automotive service centers located in
New York, New Jersey, Philadelphia, Bethlehem and Pennsylvania.
The Company operates 86 retail store locations and has about 1,450
employees. The company filed for Chapter 11 protection on
February 4, 2009 (Bankr. D. Del. Case No. 09-10358). Edward J.
Kosmowski, Esq., at Young Conaway Stargatt & Taylor, LLP,
represents the Debtor in its restructuring efforts. As of
January 3, 2009, the Debtor had total assets of $75,000,000 and
total debts of $72,000,000.
AVETA INC: S&P Puts 'B' Ratings on $20MM & $485MM Bank Loans
------------------------------------------------------------
Standard & Poor's Ratings Services said it withdrew its recovery
ratings on all rated health insurance companies' debt issues.
Consequently, S&P is changing some of S&P's issue-level ratings on
these debt issues. These actions are the result of a change in
S&P's application of criteria for rating debt issued by health
insurers. The issuer credit ratings remain unchanged.
In May 2007, Standard & Poor's adopted its recovery rating
criteria. According to this criteria, S&P determines an issue-
level rating based on the issuer credit rating as adjusted, if
appropriate, per the recovery rating (i.e., by notching up or down
from the issuer credit rating).
However, S&P now believe that there are growing uncertainties in
the industry about how to appropriately factor in the impact of
regulatory intervention on enterprise valuation. Therefore, S&P
will no longer use the recovery analysis methodology to determine
the issue-level ratings on health insurers' debt issues. S&P is
now reverting to S&P's original methodology for notching, which is
based on structural subordination.
Ratings List
Downgraded; Recovery Ratings Withdrawn
Amerigroup Corp.
To From
-- ----
Secured
$50 mil. bank loan due 2012 BB BB+
Recovery Rating NR 2
$351.3 mil. bank loan due 2012 BB BB+
Recovery Rating NR 2
HealthSpring Inc.
To From
-- ----
Secured
$100 mil. revolver due 2012 B+ BB-
Recovery Rating NR 2
$300 mil. term loan A due 2012 B+ BB-
Recovery Rating NR 2
Upgraded; Recovery Ratings Withdrawn
Amerigroup Corp.
To From
-- ----
Unsecured
$260 mil. notes due 2012 BB B+
Recovery Rating NR 6
Issue-Level Ratings Remain Unchanged; Recovery Ratings Withdrawn
Health Net Inc.
To From
-- ----
Unsecured
$400 mil. 6.375% notes due 2017 BB
Recovery Rating NR 3
Aveta Inc.
To From
-- ----
Secured
$20 mil. bank loan due 2010 B
Recovery Rating NR 4
$485 mil. bank loan due 2011 B
Recovery Rating NR 4
CareMore Holdings Inc.
To From
-- ----
Secured
$25 mil. revolver due 2012 B
Recovery Rating NR 4
$100 mil. term loan due 2013 B
Recovery Rating NR 4
Bravo Health Inc.
To From
-- ----
Secured
$25 mil. revolver due 2012 B
Recovery Rating NR 4
$90 mil. term loan B due 2013 B
Recovery Rating NR 4
AVIS BUDGET: S&P Affirms 'CCC+' Long-Term Corporate Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on car and
consumer truck renter Avis Budget Group Inc., including affirming
the 'CCC+' long-term corporate credit rating. At the same time,
S&P lowered its ratings on the company's credit facility to 'CCC+'
from 'B', one notch lower than the corporate credit rating on the
company. S&P revised the recovery rating on this debt to a '4'
from a '1', indicating average (30%-50%) recovery of principal in
the event of a payment default, based upon S&P's expectation that
the credit markets will continue to require higher
collateralization for secured vehicle facilities, leaving less
available for the corporate secured lenders.
All ratings were removed from CreditWatch, where they were
initially placed with negative implications on Jan. 25, 2008, and
subsequently lowered three times, and maintained on CreditWatch.
S&P revised the CreditWatch implications to positive from
developing on Jan. 6. 2009. The outlook is now developing.
"The rating actions differ from our previous expectation of a
potential modest upgrade, reflecting further deterioration in
travel demand, uncertainty regarding the fate of the distressed
U.S. auto manufacturers and its effect on the car rental industry,
and continuing constrained capital markets," said Standard &
Poor's credit analyst Betsy Snyder. "Given the continuing
constrained capital markets, S&P is concerned about the company's
ability to refinance a significant portion of its close to
$4 billion of debt that matures through 2010 and would likely
lower ratings if it appears that the company cannot achieve this.
However, if the company is successful, S&P could raise ratings
modestly," the analyst continued.
The ratings on Parsippany, New Jersey-based Avis Budget Group
reflect a highly leveraged financial profile; the price-
competitive and cyclical nature of on-airport car rentals; its
exposure to the troubled automobile manufacturing industry; and
significant refinancing risk-with close to $4 billion of debt
maturities through 2010. Ratings also incorporate the company's
position as a major U.S. on-airport car renter and the strong cash
flow this business generates.
Avis Budget (parent of the Avis and Budget car rental brands and
the Budget consumer truck rental brand) experienced a weakening in
its credit ratios in 2008 due to several reasons. Similar to
other car and consumer truck renters, it experienced a combination
of lower demand and pricing in both those operations;
restructuring charges; and an increase in operating expenses and
vehicle costs, caused by the weak used car prices, which resulted
in losses on certain vehicle types and higher depreciation
expense. In addition, the company's financial profile was
negatively affected by $430 million of incremental debt.
The rating incorporates S&P's expectation that Avis Budget's
financial profile will remain under pressure through 2009 due to
anticipated weaker earnings and cash flow. The developing outlook
reflects uncertainty regarding travel demand, the effect of the
distressed U.S. auto manufacturers on the car rental industry, and
continuing constrained capital markets that hinder the company's
refinancing efforts, although rental cars have received
eligibility under the TALF program. If these trends were to
persist, S&P would likely lower ratings. However, if the company
makes significant progress on refinancing its 2009 and 2010 debt
maturities, due to improving capital market conditions, S&P could
raise ratings modestly. While a bankruptcy of one or more of the
auto manufacturers could cause some cash flow delays or further
declines in used car values, S&P does not believe the direct
effect would be enough to cause sufficient damage to result in a
downgrade.
AZER PROPERTY: Case Summary & Five Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Azer Property Partnership
1281 Westwood Blvd., Suite 200
Los Angeles, CA 90024
Tel: (310) 312-0202
Bankruptcy Case No.: 09-18845
Chapter 11 Petition Date: April 15, 2009
Court: Central District of California (Los Angeles)
Judge: Barry Russell
Debtor's Counsel: William H. Brownstein, Esq.
Brownsteinlaw.bill@gmail.com
William H. Brownstein & Associates, P.C.
1250 Sixth St., Ste. 205
Santa Monica, CA 90401
Tel: (310) 458-0048
Fax: (310) 576-3581
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
------ --------------- ------------
Mission Oaks National Bank secured: $3,693,149
Ontario Branch $2,000,000
800 N. Ferrari Lane
Ontario, CA 91764
Mission Oaks National Bank secured: $1,698,106
Ontario Branch $4,000,000
800 N. Ferrari Lane
Ontario, CA 91764
Banda Engineering $3,500
1930 W Glenoaks Blvd
Glendale, CA 91201
DeArtola Construction $2,600
GeoSystems, Inc. $260
The petition was signed by Magdi Azer.
BANK OF AMERICA: 2 Advisory Firms Oppose Chairman's Re-election
---------------------------------------------------------------
Dan Fitzpatrick at The Wall Street Journal reports that proxy
advisory firms RiskMetrics Group and Glass Lewis & Co. have asked
shareholders to oppose Bank of America Corp. CEO Kenneth Lewis'
re-election as chairperson.
According to WSJ, RiskMetrics and Glass Lewis also joined Proxy
Governance, another investor advisor, in asking shareholders to
approve a permanent separation in the chairman and CEO roles. The
shareholders, says the report, will vote on the proposal during an
April 29 annual meeting in Charlotte, North Carolina. Dan
Fitzpatrick and Joann S. Lublin at WSJ relates that Service
Employees International Union supports the proposal.
WSJ states that Jerry Finger, who controls about 1.5 million BofA
shares and filed a lawsuit against the bank earlier this year,
said that he expects lead director Temple Sloan to take Mr. Lewis'
place. According to WSJ, Mr. Finger said that Mr. Sloan informed
him of those plans during a meeting in March.
Mr. Sloan didn't tell Mr. Finger that he was in line to become the
next chairperson or that such a move was under consideration, WSJ
reports, citing a person familiar with the matter. The source
said that Mr. Sloan gave out reasons on the chairperson-CEO split
being a bad idea, WSJ relates. WSJ, citing the source, states
that internal conflicts can develop if a non-executive chairman is
given an office alongside other executives at headquarters.
WSJ relates that Mr. Lewis told board members that he wants to
remain as CEO until the crisis is over at the earliest and three
years at the latest. WSJ quoted Mr. Lewis as saying, "I don't
think the breakup of the chairman and the CEO is necessarily a bad
thing, but I don't think it's a good thing necessarily, either."
The three advisory firms, according to WSJ, want lead director
Temple Sloan to be removed from the BofA board. Glass Lewis, WSJ
states, is opposing the election of three former Merrill Lynch
directors.
WSJ quoted RiskMetrics as saying, "The entire board will need to
be reconstituted in the coming years" and nonexecutive directors
Jackie Ward, Frank Bramble, Monica Lozano and Robert Tillman must
not be voted, due to an "absence" of leadership and an
unwillingness "to curb Mr. Lewis's penchant for empire building."
WSJ notes that the advisory firms complained on BofA's quick
decision last year to purchase Merrill Lynch & Co. and not
disclose more about its fourth-quarter losses before a
December 5, 2008 shareholder vote.
BofA is disappointed in Glass Lewis' conclusions and disagrees
with the "substance and viewpoint" of the RiskMetrics report,
saying that it "acted legally and appropriately in our
disclosures," WSJ states, citing BofA spokesperson Scott
Silvestri.
Abbey Spanier Commences Class Suit
Abbey Spanier Rodd & Abrams, LLP, disclosed the commencement of a
class action lawsuit in the United States District Court for the
Southern District of New York (09-cv-3748) on behalf of a class of
all holders of Merrill Lynch & Co., Inc., common stock as of
October 10, 2008, the record date for the acquisition of Merrill
Lynch by BofA on January 1, 2009 and who acquired BofA common
stock pursuant to the consummation of the Acquisition.
The complainant alleged that defendants made material
misstatements and omitted information regarding Merrill Lynch's
deteriorating financial condition and ultimately the combined
companies in public statements and regulatory filings, including,
but not limited to, the Joint Proxy Statement and the Registration
Statement on Form S-4 issued in connection with the Acquisition.
More specifically, the complainant alleged violations of Section
14(a) of the Securities Exchange Act of 1934, and Rule 14a-9
promulgated thereunder and Sections 11 and 12(a)(2) of the
Securities Act of 1933. The complainant alleged that defendants
violated Section 14(a) by their: (a) dissemination of the false
and misleading Proxy Statement; and (b) failure to update the
Proxy Statement prior to the December 5, 2008 vote on the
Acquisition. In addition, more than 1.7 billion shares of BofA
common stock were issued to Merrill Lynch shareholders pursuant to
the Acquisition. The complainant alleged that defendants violated
Section 11 by their: (a) dissemination of the false and misleading
Registration Statement; and (b) failure to update the Registration
Statement prior to the January 1, 2009 consummation of the
Acquisition. The complainant also alleged violations Sections of
10(b) and 20(a) of the 1934 Act, and Rule 10b-5 promulgated
thereunder. Defendants include Merrill Lynch, BofA, John A.
Thain, Kenneth D. Lewis, Merrill Lynch Pierce Fenner & Smith,
Nelson Chai, Gary Carlin, Joe L. Price, and Neil A. Cotty.
The truth regarding Merrill Lynch's financial condition and the
condition of the combined companies remained concealed until six
weeks after shareholders voted for the Acquisition. After the
financial markets closed on January 14, 2009, investors learned
that BofA was likely to receive a significant cash infusion from
the federal government and that the government had further pledged
to backstop billions of dollars of losses on toxic assets -- all
necessitated by the Acquisition and the deteriorated state of
Merrill. On January 2, 2009, the first trading day following
BofA's announcement of the completion of the Acquisition, BofA
common stock closed at $14.33 per share. In the immediate wake of
The Wall Street Journal article on January 14, 2009, concerning
Kenneth D. Lewis's (BofA's CEO) secret mission to Washington and
the promises he extracted from federal officials, BofA common
stock closed at $10.20 per share. When BofA and Merrill Lynch
filed their financial statements for the fourth quarter of fiscal
year 2008 on January 16, 2009, BofA common stock closed at $7.18
per share.
Plaintiff seeks to recover damages on behalf of all Merrill Lynch
shareholders who held Merrill Lynch common stock on October 10,
2008, and acquired BofA securities on January 1, 2009.
The Securities Law Firm of Tramont Guerra & Nunez, PA (TGN)
informed investors in the Deutsche Bank 7.60% Contingent Capital
Trust III (NYSE: DTK) concerning class action lawsuit (Case No. 09
CV 03075) filed on March 30, 2009, in the U.S. District Court for
the Southern District of New York. The Non-Cumulative Trust
Preferred Securities issued by Deutsche Bank AG (NYSE: DB), was
underwritten through a syndication of major Wall Street firms
which included: UBS Securities LLC (NYSE: UBS), Citigroup Global
Markets, Inc. (NYSE: C), Morgan Stanley & Co. (NYSE: MS) and Banc
of America Securities (NYSE: BAC). The class action lawsuit
alleges that registration statements and prospectus contained
"materially false and misleading statements" failed to properly
reflect the true nature of the losses sustained by the Company in
the credit markets. Prospective class members need to determine
which legal process is more suitable for them to recover
investment losses, a class action lawsuit or an individual
securities arbitration claim filed with the Financial Industry
Regulatory Authority (FINRA).
The underwriters are obligated to conduct due diligence of facts
concerning the risks associated with the investment. Many
investors were advised by their financial advisors that these
securities were suitable for current income investment objectives.
Brokerage firms are obligated to give and investors are entitled
to rely upon suitable investment advice in accordance with FINRA
sales practice rules and regulations.
Recommendations of unsuitable investments and concentrated
investments in the financial sector are both sales practice
violations which form the basis of a securities arbitration claim
filed with FINRA should an investor sustain damages (losses) as a
result. In some cases, shareholders must "opt-out" as a class
member in order to pursue a securities arbitration claim,
otherwise this legal option is not available.
Bank of America
Based in Charlotte, North Carolina, Bank of America --
http://www.bankofamerica.com/-- 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 serves more
than 59 million consumer and small business relationships with
more than 6,100 retail banking offices, nearly 18,700 ATMs and
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 support to more than 4 million small business
owners. The company serves clients in more than 150 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.
BEARINGPOINT INC: Deltek Discloses Impact of Bankruptcy
-------------------------------------------------------
Deltek, Inc., expects to report consulting services revenue of
roughly $20 million for the first quarter ended March 31, 2009.
Deltek cited the impact of BearingPoint Inc.'s bankruptcy and
lower training and implementation services and reimbursable
expenses. Deltek expects total revenue for the first quarter to
be approximately $62 million, compared to guidance of $67 million
to $68 million.
Deltek will host a conference call to discuss final first quarter
2009 results on April 30, 2009 at 5:00 p.m. Eastern Time.
Deltek -- http://deltek.com/-- provides enterprise applications
software for project-focused businesses.
BearingPoint, Inc. -- http://www.BearingPoint.com-- is currently
one of the world's largest providers of management and technology
consulting services to Global 2000 companies and government
organizations in more than 60 countries worldwide. Based in
McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP
-- has approximately 15,000 employees focusing on the Public
Services, Commercial Services and Financial Services industries.
BearingPoint professionals have built a reputation for knowing
what it takes to help clients achieve their goals, and working
closely with them to get the job done. The Company's service
offerings are designed to help clients generate revenue, increase
cost-effectiveness, manage regulatory compliance, integrate
information and transition to "next-generation" technology.
BearingPoint, Inc., fka KPMG Consulting, Inc., together with its
units, filed for Chapter 11 on February 18, 2009 (Bankr. S.D.
N.Y., Case No. 09-10691). Alfredo R. Perez, Esq., at Weil Gotshal
& Manges LLP, has been tapped as counsel. Greenhill & Co., LLC,
and AP Services LLC, have also been tapped as advisors. Davis
Polk & Wardell is special corporate counsel. BearingPoint
disclosed total assets of $1,762,689,000, and debts of
$2,231,839,000 as of September 30, 2008.
Contemporaneous with their bankruptcy petitions, the Debtors filed
a pre-packaged Joint Plan of Reorganization under Chapter to
implement the terms of their agreement with the secured lenders.
Under the Plan, the Debtors propose to exchange general unsecured
claims for equity in the reorganized company. Existing
shareholders are out of the money. The Plan and the explanatory
disclosure statement remain subject to approval by the Bankruptcy
Court.
BEARINGPOINT INC: Signs Definitive Pact with PwC on $25MM Sale
--------------------------------------------------------------
BearingPoint, Inc., has entered into definitive agreements with
PricewaterhouseCoopers LLP, under which PwC will acquire a
significant portion of BearingPoint's North American Commercial
Services business and associated Global Delivery Centers for
$25 million.
This sale is expected to be completed on or before June 30, 2009,
and is subject to the satisfaction of customary closing conditions
and the rules of the bankruptcy court, which, among other things,
require that BearingPoint must consider all "higher or better"
offers from other potential buyers and obtain court approval.
There can be no assurance that the proposed sale will be approved
by the court or that the transaction will be completed.
As reported by the Troubled Company Reporter, BearingPoint
International Bermuda Holdings Limited, an indirect subsidiary of
BearingPoint Inc., on April 2, entered into a Share Sale Agreement
with PwC Advisory Co., Ltd., the Japanese affiliate of PwC, for
the sale of the Company's consulting business in Japan to PwC
Japan. Pursuant to the Share Sale Agreement, PwC Japan agreed to
purchase BearingPoint Co., Ltd. (Chiyoda-ku), an indirect, wholly
owned subsidiary of the Company, through the purchase of all
issued and outstanding shares of BearingPoint Japan. The Company
expects to generate cash of roughly $45 million in connection with
the Transaction, including approximately $38.4 million in cash for
the Shares and $6.6 million in cash from the repayment of
intercompany charges owed by BearingPoint Japan to the Company,
subject to adjustment. In addition, in connection with the
Transaction, PwC Japan will assume certain intercompany debt owed
by certain non-Debtor subsidiaries of the Company to BearingPoint
Japan.
The consummation of the Japan Unit Transaction is expected to
occur on or prior to April 28, 2009, and is subject to customary
closing conditions, including the delivery of a transition
services agreement and various other transaction documents on or
prior to Closing. The Company believes that the Transaction does
not require Bankruptcy Court approval because the Transaction was
approved by subsidiaries of the Company that are not Debtors, and,
therefore, are not under the jurisdiction of the Bankruptcy Court.
About BearingPoint
BearingPoint, Inc. -- http://www.BearingPoint.com-- is currently
one of the world's largest providers of management and technology
consulting services to Global 2000 companies and government
organizations in more than 60 countries worldwide. Based in
McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP
-- has approximately 15,000 employees focusing on the Public
Services, Commercial Services and Financial Services industries.
BearingPoint professionals have built a reputation for knowing
what it takes to help clients achieve their goals, and working
closely with them to get the job done. The Company's service
offerings are designed to help clients generate revenue, increase
cost-effectiveness, manage regulatory compliance, integrate
information and transition to "next-generation" technology.
BearingPoint, Inc., fka KPMG Consulting, Inc., together with its
units, filed for Chapter 11 on February 18, 2009 (Bankr. S.D.
N.Y., Case No. 09-10691). Alfredo R. Perez, Esq., at Weil Gotshal
& Manges LLP, has been tapped as counsel. Greenhill & Co., LLC,
and AP Services LLC, have also been tapped as advisors. Davis
Polk & Wardell is special corporate counsel. BearingPoint
disclosed total assets of $1,762,689,000, and debts of
$2,231,839,000 as of September 30, 2008.
Contemporaneous with their bankruptcy petitions, the Debtors filed
a pre-packaged Joint Plan of Reorganization under Chapter to
implement the terms of their agreement with the secured lenders.
Under the Plan, the Debtors propose to exchange general unsecured
claims for equity in the reorganized company. Existing
shareholders are out of the money. The Plan and the explanatory
disclosure statement remain subject to approval by the Bankruptcy
Court.
BEARINGPOINT INC: Court Approves $350MM Asset Sale to Deloitte
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved on April 17, 2009, BearingPoint, Inc.'s sale of a
significant portion of its North American Public Services business
to Deloitte LLP for $350 million, subject to adjustment.
The deal remains subject to the satisfaction of closing
conditions. There can be no assurance that the transaction will
be completed, BearingPoint said.
On April 6, BearingPoint and Deloitte entered into Amendment
No. 1 to the parties' Asset Purchase Agreement dated as of
April 3. The Amendment, among other things, modifies the Asset
Purchase Agreement to provide that the termination fee will not be
payable in certain specific circumstances where the event that
would have triggered its payment was wholly beyond the control of
BearingPoint and instead provides for an increased expense
reimbursement in such circumstances.
As reported by the Troubled Company Reporter, in papers filed with
the Court on April 15, 2009, the Official Committee of Unsecured
Creditors of Bearingpoint, Inc., et al., held that, while it does
not oppose the sale of the Debtors' public services business unit
to Deloitte LLP, at the minimum, parties-in-interest should be
informed what assets are being sold, the amount that the estates
will receive as sale proceeds, and how these sale proceeds will be
allocated. The Committee also said that at the very least
Deloitte should fix the schedule of assets to be acquired as of
the date of the approval of the sale, or be made to pay for the
contracts not included in the original schedule, after the sale is
approved. Under the APA, the addition of contracts to the initial
schedules does not affect the purchase price of $350 million to be
paid by Deloitte.
The Committee also said Deloitte should not also be able to
designate subcontracts for rejection where it is otherwise
purchasing (either directly or through novation) the related
general contract.
The Committee further said the APA must be modified to permit the
Debtors to share the intellectual property associated with the
acquired assets to the extent necessary to fully operate their
businesses and to service or sell the assets that are not to be
acquired. The Committee also said absent a showing by the Debtors
that they are receiving adequate value in exchange for acquired
avoidance actions, they should not be included in the PS sale.
The Committee also argued that the senior lenders should receive
only the proceeds of their collateral. Based upon the Committee's
initial review, the Senior Lenders appear not to have a security
interest in these assets:
a) real property leases of the Debtors;
b) security deposits of the Debtors;
c) commercial tort claims arising subsequent to the closing of
the prepetition loan transaction;
d) registered copyrights and certain IP;
e) assets of non-debtors Dallas Project Holdings Limited and
BearingPoint LP proposed to be sold (e.g., license for use
of the "BearingPoint" name/trademark); and
f) avoidance actions (including any Acquired Avoidance
Actions).
A full-text copy of the Asset Purchase Agreement with Deloitte is
available at no charge at http://ResearchArchives.com/t/s?3b98
A full-text copy of the Amendment to the Asset Purchase Agreement
is available at no charge at http://ResearchArchives.com/t/s?3b99
About BearingPoint
BearingPoint, Inc. -- http://www.BearingPoint.com-- is currently
one of the world's largest providers of management and technology
consulting services to Global 2000 companies and government
organizations in more than 60 countries worldwide. Based in
McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP
-- has approximately 15,000 employees focusing on the Public
Services, Commercial Services and Financial Services industries.
BearingPoint professionals have built a reputation for knowing
what it takes to help clients achieve their goals, and working
closely with them to get the job done. The Company's service
offerings are designed to help clients generate revenue, increase
cost-effectiveness, manage regulatory compliance, integrate
information and transition to "next-generation" technology.
BearingPoint, Inc., fka KPMG Consulting, Inc., together with its
units, filed for Chapter 11 on February 18, 2009 (Bankr. S.D.
N.Y., Case No. 09-10691). Alfredo R. Perez, Esq., at Weil Gotshal
& Manges LLP, has been tapped as counsel. Greenhill & Co., LLC,
and AP Services LLC, have also been tapped as advisors. Davis
Polk & Wardell is special corporate counsel. BearingPoint
disclosed total assets of $1,762,689,000, and debts of
$2,231,839,000 as of September 30, 2008.
Contemporaneous with their bankruptcy petitions, the Debtors filed
a pre-packaged Joint Plan of Reorganization under Chapter to
implement the terms of their agreement with the secured lenders.
Under the Plan, the Debtors propose to exchange general unsecured
claims for equity in the reorganized company. Existing
shareholders are out of the money. The Plan and the explanatory
disclosure statement remain subject to approval by the Bankruptcy
Court.
BETHANY ROLLING: Wants to Access LaSalle's Cash Collateral
----------------------------------------------------------
Bethany Rolling Hills LLC and its debtor-affiliates ask the Hon.
Robert N. Kwan of the U.S. Bankruptcy Court for the District of
Central District of California for permission to use cash
collateral of LaSalle Bank National Association.
The Debtors intend to use the cash collateral to make the minimum
expenditures required to maintain, and prevent a decline of, the
value of their properties.
The Debtor wants to use the cash collateral for a period of 30
days, with expenditures during the period not to exceed 110% of
the aggregate expenditures as set forth in a budget.
As adequate protection, LaSalle Bank will receive perfected
replacement liens in the Debtors' postpetition assets and
proceeds.
Before they filed for bankruptcy, LaSalle Bank filed a compliant
against the Debtors seeking the appointment of a receive and a
temporary restraining order, which cases pending in the 4th
Judicial District Court in County of El Paso, Colorado, at
present. Bill Hoffman of Trigild Inc. was appointed receiver for
the Debtors' properties by the Colorado State Courts. The Debtors
and LaSalle Bank agreed to allow Mr. Hoffman to remain in
possession of the Debtors' properties as the Debtors restructure
their secured debt, pay unpaid unsecured debt, and confirm a plan
of reorganization.
A full-text copy of the Debtors' cash collateral budget is
available for free at http://ResearchArchives.com/t/s?3b90
Headquartered in Lodi, California, Bethany Rolling Hills LLC filed
for Chapter 11 protection on March 27, 2009 (Bankr. C.D. Calif.
Lead Case No. 09-12937). Four affiliates more also sought
protection on April 1, 2009. Evan D. Smiley, Esq., Weiland,
Golden, Smiley, et al., represents the Debtors. When the Debtors
filed for bankruptcy, they listed assets between $10 million and
$50 million, and debts between $100 million and $500 million.
BIG 10 STORES: Can Access $1 Million Sun Finance DIP Facility
-------------------------------------------------------------
The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for
the District of Delaware authorized Big 10 Tire Stores Inc. and
its debtor-affiliates to access, on an interim basis, $1 million
of postpetition financing under a certain credit agreement with
Sun BT Finance Holdings LLC, as administrative and collateral
agent.
Proceeds of the loan will be used to fund the Debtors' business
operations and preserve the value of the Debtors' assets,
including the payment of amounts owed to employees, vendors,
suppliers and customers.
The DIP facility provided under the Credit Agreement consists of
(i) a $3 million senior revolving credit facility with $1 million
available immediately upon closing and up to an additional
$2 million available; (ii) tranche A term loan in an amount equal
to the obligations outstanding under the prepetition senior credit
agreement; and (iii) a tranche B term loan in an amount equal to
the obligations outstanding under the prepetition junior credit
agreement. The loans are expected to terminate 120 days after the
Debtors' bankruptcy filing.
Pre-bankruptcy, Sun Finance provided a $5.4 million senior
revolving line of credit and a $17.5 million term loan to the
Debtors under a the credit agreement dated Dec. 18, 2006. As of
their bankruptcy filing, the Debtors owe $12.8 million under the
agreement. On the one hand, Cratos Capital Management LLC also
provided $12 million under the second lien credit agreement dated
Dec. 18, 2006, to the Debtors. The Debtors owe $12 million under
the second lien agreement as of their bankruptcy filing.
The revolving loans will incur interest at 15% per annum while the
tranche A and B term loans incur 7.75% and 11.25% per annum,
respectively.
The Debtors will pay a host of fees including an $80,000 closing
fee as part of the DIP agreement.
Bridgestone Americas Tire Operations LLC, which claims to be owed
$1.9 million, protested to proposed DIP financing. Bridgestone
asserts that it should be provided adequate protection for any
diminution in value of its interest in the Debtor's assets.
Theresa V. Brown-Edwards, Esq., at Potter Anderson & Corroon LLP,
represents Bidgestone Americas.
Headquartered in Mobile, Alabama, Big 10 Tires Stores Inc. --
http://www.big10tires.com/-- offers an array of tire products
consists of performance, light truck and sport utility and all-
season touring tires in Alabama, Georgia and Florida. The Company
and three of its affiliates filed for protection on April 2, 2009
(Bankr. D. Del. Lead Case No. 09-11173). Chad A. Fights, Esq.,
and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell,
represent the Debtors. When the Debtors filed for protection from
their creditors, they listed assets and debts between $10 million
and $50 million in their filing.
BIG 10 STORES: Epiq Bankruptcy Approved as Claims Agent
-------------------------------------------------------
The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for
the District of Delaware authorized Big 10 Tire Stores Inc. and
its debtor-affiliates to employ Epiq Bankruptcy Solutions LLC as
their claims, noticing, and balloting agent.
The firm will:
a) prepare and serve required notices in these chapter 11
cases, including, without limitation: (i) 341 Notice (Notice
of Commencement of Case); (ii) Notice of Claims Bar Date in
chapter 11 cases; (iii) Objections to Claims and Transfers
of Claims; (iv) Notice of Hearing on confirmation of
Plan and Disclosure Statement; (v) Notice of Hearing on
motions filed by United States Trustee; and (vi) Notice
of Transfer of Claim;
b) within 7 days of mailing, file with the Court, a copy of the
notice served with a Certificate of Service attached,
indicating the name and complete address of each party
served;
c) maintain copies of all proofs of claims and proofs of
interest filed in the case;
d) maintain the official claims register and record all
Transfers of Claims and make changes to the creditor matrix
after the objection period has expired. The claims clerk
will also record any order entered by the Court which may
affect the claim by making a notation on the claims register
and monitor the Court's docket for any claims related
pleading filed and make necessary notations on the claims
register. No claim or claim information should be
deleted for any reason;
e) maintain a separate claims register for each debtor in
jointly administered cases;
f) file a quarterly updated claims register with the Court in
alphabetical and numerical order. If there has been no
claims activity, the claims clerk may file a Certification
of No Claim Activity;
g) maintain an up-to-date mailing list of all creditors and all
entities who have filed proofs of claim or interest and/or
request for notices in the case and provide such list to the
Court or any interested party upon request;
h) allow public access to claims and the claims register at no
charge;
i) within 10 days of entry of an Order converting a case or
within 30 days or entry of a Final Decree, forward all
claims and updated claims register to the Court, along with
an updated mailing list. The claims register and mailing
list should be provided in both paper and on disc and in
alphabetical and numerical order. The mailing list disc
should be in txt format;
j) comply with applicable federal, state, municipal and local
statutes, ordinances, rules, regulations, orders and other
requirements; and
k) promptly comply with such further conditions and
requirements as the Clerk's Office or Court may at any time
prescribe;
l) provide balloting and solicitation services, including
preparing ballots, producing personalized ballots and
tabulating creditor ballots on a daily basis;
m) provide other noticing, disbursing and related
administrative services as may be required from time to time
by the Debtors; and
n) provide assistance with, among other things, certain data
processing and ministerial administrative functions,
including, but not limited to, such functions related to:
(i) the Debtors' schedules, statements of financial affairs
and master creditor lists, and any amendments thereto; and
(ii) the processing and reconciliation of claims.
The firm's compensation rates are:
Designation Hourly Rate
----------- -----------
Senior Consultant $295
Senior Case Manager $225-$275
Case Manager (Level 2) $185-$220
IT Programming Consultant $140-$190
Case Manager (Level 1) $125-$145
Clerk $40-$50
Daniel C. McElhinney, executive director of the firm, assures the
Court that the firm is a "disinterested person" as defined in
Section 101(14) of the Bankruptcy Code.
Headquartered in Mobile, Alabama, Big 10 Tires Stores Inc. --
http://www.big10tires.com/-- offers an array of tire products
consists of performance, light truck and sport utility and all-
season touring tires in Alabama, Georgia and Florida. The Company
and three of its affiliates filed for protection on April 2, 2009
(Bankr. D. Del. Lead Case No. 09-11173). Chad A. Fights, Esq.,
and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell,
represent the Debtors. When the Debtors filed for protection from
their creditors, they listed assets and debts between $10 million
and $50 million in their filing.
BI-LO LLC: Dilworth Store to Be Replaced with Bloom Supermarket
---------------------------------------------------------------
Charlotte Business Journal reports that Bi-Lo LLC will close its
store at 2226 Park Road in Dilworth on April 25. The store will
be replaced with a Bloom supermarket.
Bi-Lo, according to Business Journal, denied that the store's
closure is related to the Company's bankruptcy filing. Bi-Lo said
that its lease expired in 2008 and the store has been operating on
a month-to-month basis, Business Journal states. The building
will be gutted, Business Journal says, citing Mike Lucier, a CB
Richard Ellis broker who represents the property owner. Work will
start in May or June and the Bloom store will open by year-end,
according to the report.
The store, says Business Journal, will offer severance packages to
eligible employees. The report states that the Company has 40
workers.
About Bi-Lo LLC
Greenville, South Carolina-based BI-LO LLC -- http://my.bi-lo.com/
-- is a chain of 215 supermarkets based in Greenville, South
Carolina. Founded in 1964 by Frank Outlaw, the Company and its
affiliates operate supermarkets around South Carolina, North
Carolina, Georgia, and Tennessee and have about 17,000 employees.
Dallas-based Lone Star Funds bought the business in 2005 from
Koninklijke Ahold NV, the Dutch supermarket operator. Lone Star
also owns Bruno's Supermarkets LLC, a chain of 66 stores
that filed under Chapter 11 in February in Birmingham, Alabama.
BI-LO and its affiliates filed for Chapter 11 bankruptcy
protection on March 23, 2009 (Bankr. D. S.C. Case No. 09-02140).
Betsy Johnson Burn, Esq., Frank B.B. Knowlton, Esq., George Barry
Cauthen, Esq., and Jody A. Bedenbaugh, Esq., at Nelson, Mullins,
Riley and Scarborough assist the Companies in their restructuring
efforts. The Companies listed $100 million to $500 million in
assets and $100 million to $500 million in debts.
BLOCK 34: U.S. Trustee Schedules Meeting of Creditors for May 18
---------------------------------------------------------------
Roberta A. DeAngelis, acting U.S. Trustee, for Region 3 will
convene a meeting of creditors in Block 34 U.S., Inc.'s Chapter 11
case on May 18, 2009, at 2:00 p.m., at J. Caleb Boggs Federal
Building, 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 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.
El Segundo, California-based Block 34 U.S., Inc. filed for
Chapter 11 protection on April 10, 2009 (Bankr. D. Del. Case No.
09-11255). Robert S. Brady, Esq., at Young, Conaway, Stargatt &
Taylor, represents the Debtor in its restructuring efforts. In
its bankruptcy petition, the Debtor listed assets of $10 million
to $50 million and debts of $100,000 to $500,000.
BOWATER CANADA: S&P Cuts Senior Unsecured Debt Rating to 'D'
------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long-term
corporate credit rating on newsprint producer AbitibiBowater Inc.
and its subsidiaries Bowater Inc. and Bowater Canadian Forest
Products Inc. to 'D' from 'CC'.
"We downgraded the company after AbitibiBowater and its
subsidiaries filed for bankruptcy protection in the U.S.," said
Standard & Poor's credit analyst Jatinder Mall.
At the same time, S&P lowered the senior unsecured debt ratings on
AbitibiBowater, Bowater, Bowater Canada Finance Corp., and Bowater
Canadian Forest Products to 'D' from 'C'.
S&P removed these ratings from CreditWatch negative where they
were placed Feb. 10, 2009.
S&P had lowered the ratings on Abitibi-Consolidated Inc. and
Abitibi-Consolidated Co. of Canada to 'D' on March 31, 2009, and
removed them from CreditWatch, because Abitibi-Consolidated had
missed payment on its secured loan.
BOWATER CANADIAN: S&P's Long-Term Corp. Credit Rating Tumble to D
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long-term
corporate credit rating on newsprint producer AbitibiBowater Inc.
and its subsidiaries Bowater Inc. and Bowater Canadian Forest
Products Inc. to 'D' from 'CC'.
"We downgraded the company after AbitibiBowater and its
subsidiaries filed for bankruptcy protection in the U.S.," said
Standard & Poor's credit analyst Jatinder Mall.
At the same time, S&P lowered the senior unsecured debt ratings on
AbitibiBowater, Bowater, Bowater Canada Finance Corp., and Bowater
Canadian Forest Products to 'D' from 'C'.
S&P removed these ratings from CreditWatch negative where they
were placed Feb. 10, 2009.
S&P had lowered the ratings on Abitibi-Consolidated Inc. and
Abitibi-Consolidated Co. of Canada to 'D' on March 31, 2009, and
removed them from CreditWatch, because Abitibi-Consolidated had
missed payment on its secured loan.
BOWATER INC: S&P's Long-Term Corporate Credit Rating Tumble to 'D'
------------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long-term
corporate credit rating on newsprint producer AbitibiBowater Inc.
and its subsidiaries Bowater Inc. and Bowater Canadian Forest
Products Inc. to 'D' from 'CC'.
"We downgraded the company after AbitibiBowater and its
subsidiaries filed for bankruptcy protection in the U.S.," said
Standard & Poor's credit analyst Jatinder Mall.
At the same time, S&P lowered the senior unsecured debt ratings on
AbitibiBowater, Bowater, Bowater Canada Finance Corp., and Bowater
Canadian Forest Products to 'D' from 'C'.
S&P removed these ratings from CreditWatch negative where they
were placed Feb. 10, 2009.
S&P had lowered the ratings on Abitibi-Consolidated Inc. and
Abitibi-Consolidated Co. of Canada to 'D' on March 31, 2009, and
removed them from CreditWatch, because Abitibi-Consolidated had
missed payment on its secured loan.
BRAVO HEALTH: S&P Puts 'B' Rating on $25 Mil. & $90 Mil. Loans
--------------------------------------------------------------
Standard & Poor's Ratings Services said it withdrew its recovery
ratings on all rated health insurance companies' debt issues.
Consequently, S&P is changing some of S&P's issue-level ratings on
these debt issues. These actions are the result of a change in
S&P's application of criteria for rating debt issued by health
insurers. The issuer credit ratings remain unchanged.
In May 2007, Standard & Poor's adopted its recovery rating
criteria. According to this criteria, S&P determines an issue-
level rating based on the issuer credit rating as adjusted, if
appropriate, per the recovery rating (i.e., by notching up or down
from the issuer credit rating).
However, S&P now believe that there are growing uncertainties in
the industry about how to appropriately factor in the impact of
regulatory intervention on enterprise valuation. Therefore, S&P
will no longer use the recovery analysis methodology to determine
the issue-level ratings on health insurers' debt issues. S&P is
now reverting to S&P's original methodology for notching, which is
based on structural subordination.
Ratings List
Downgraded; Recovery Ratings Withdrawn
Amerigroup Corp.
To From
-- ----
Secured
$50 mil. bank loan due 2012 BB BB+
Recovery Rating NR 2
$351.3 mil. bank loan due 2012 BB BB+
Recovery Rating NR 2
HealthSpring Inc.
To From
-- ----
Secured
$100 mil. revolver due 2012 B+ BB-
Recovery Rating NR 2
$300 mil. term loan A due 2012 B+ BB-
Recovery Rating NR 2
Upgraded; Recovery Ratings Withdrawn
Amerigroup Corp.
To From
-- ----
Unsecured
$260 mil. notes due 2012 BB B+
Recovery Rating NR 6
Issue-Level Ratings Remain Unchanged; Recovery Ratings Withdrawn
Health Net Inc.
To From
-- ----
Unsecured
$400 mil. 6.375% notes due 2017 BB
Recovery Rating NR 3
Aveta Inc.
To From
-- ----
Secured
$20 mil. bank loan due 2010 B
Recovery Rating NR 4
$485 mil. bank loan due 2011 B
Recovery Rating NR 4
CareMore Holdings Inc.
To From
-- ----
Secured
$25 mil. revolver due 2012 B
Recovery Rating NR 4
$100 mil. term loan due 2013 B
Recovery Rating NR 4
Bravo Health Inc.
To From
-- ----
Secured
$25 mil. revolver due 2012 B
Recovery Rating NR 4
$90 mil. term loan B due 2013 B
Recovery Rating NR 4
BRODER BROS: S&P Downgrades Corporate Credit Rating to 'SD'
-----------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on Trevose, Pennsylvania-based Broder Bros. Co. to
'SD' from 'CC'. S&P also lowered the ratings on the company's
$225 million 11.25% senior notes due 2010 to 'D' from 'C'. The
recovery rating on these notes remains at '6', indicating
expectations for negligible (0%-10%) recovery in the event of
payment default. As of Dec. 31, 2008, S&P estimates Broder had
about $375 million in reported debt outstanding.
The downgrades follow Broder's announcement that it elected not to
make its April 15th $12.7 million interest payment on the senior
notes. On April 9, 2009, the company announced that it was
pursuing an exchange offer for its 11.25% senior notes. In
addition, it also received an amendment and waiver on its
$225 million asset-based revolver, waiving any default arising
from the delay in delivering the company's 2008 audited financial
statements and delaying the interest payment until May 15, 2009.
The amendment also allows for a change of control from the
issuance of stock in connection with the exchange offer.
"In addition to the company's default on its scheduled interest
payment on the senior notes, the 'SD' rating also reflects S&P's
belief that the purchase may be at a substantial discount to the
par amount of the outstanding issue," explained Standard & Poor's
credit analyst Bea Chiem. As a result, S&P views the purchase as
being tantamount to default given the company's weak financial
performance, highly leveraged capital structure, and 2010 maturity
on its notes.
"As soon as practical thereafter, S&P would assess Broder's
capital structure and review the ratings and assess recovery based
on the amount of notes the company successfully tendered," said
Ms. Chiem. Based on S&P's preliminary assessment, S&P believes
there is a possibility that the corporate credit rating may remain
in the 'CCC' category because a significant proportion of the
company's customers participate in the highly cyclical and mature
promotional products industry, which is highly vulnerable to the
currently weak economy and Broder's overall operating
difficulties. However, Broder's ability to meaningfully improve
its capital structure and restore sufficient covenant cushion and
liquidity would be key factors in S&P's assessment of the rating
following the exchange offer.
BRUNO'S SUPERMARKETS: Court Okays Management Incentive Plan
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Alabama
approved on April 17, 2009, approved, in part, the management
incentive plan submitted by Bruno's Supermarkets, LLC, on
March 13, 2009.
As reported in the Troubled Company Reporter on March 18, 2009,
Bruno's Supermarkets, LLC, the Sale and Retention Incentive Plan
groups employees eligible for payments into two groups:
a) five senior management executives directly responsible for
assisting in selling the assets (Tier I); and
b) sixteen department head, regional and divisional management
employees whose loss would impair the Debtor's ability to
function in the bankruptcy estate and to maximize value to
the estate (Tier II).
As modified, a total sum of $180,000 may be paid to the Tier One
Employees, in the Debtor's discretion as to the Tier One Employees
and as to the dollar amount of the payment to each of the Tier One
Employees, only if the gross proceeds from the auction are equal
to or exceed $40 million. Gross proceeds will, at a minimum,
exclude the proceeds from (i) the sale of cash on hand, (ii) the
return of any deposits or cash from ACE American Insurance
Company, or iii) deposits or refunds from any source not
associated with the auction.
With the written consent of its official committee of unsecured
creditors, the Debtor may increase the sum to be paid to the Tier
One Employees to $200,000. In the event that the gross proceeds
are equal to or exceed $42.5 million, then the Debtor may
automatically increase the aggregate sum to be paid to the Tier
One Employees up to $200,000 and the consent of the Committee will
not be required.
A total amount of $150,000 may be paid to the Tier Two Employees.
With the written consent of the Committee, the Debtor may increase
the aggregate sum to $180,000.
Bruno's Supermarkets, LLC, is a privately held company
headquartered in Birmingham, Alabama. Bruno's is the parent
company of the Bruno's, Food World, and FoodMax grocery store
chains, which includes 23 Bruno's, 41 Food World, and 2 FoodMax
locations in Alabama and the Florida panhandle. Founded in
1933, Bruno's has operated as an independent company since 2007
after undergoing several transitions and changes in ownership
starting in 1995.
Bruno's filed for Chapter 11 relief on Feb. 5, 2009 (Bankr. N.D.
Ala. Case No. 09-00634). Burr & Forman LLP is the Debtor's lead
counsel. Najjar Denaburg, P.C., is the Debtor's interim conflicts
counsel. Greenberg Traurig, LLP is the official committee of
unsecured creditors' counsel. Alvarez & Marsal is the Debtor's
restructuring advisor. When Bruno's filed for protection from its
creditors, it listed assets and debts of between $100 million and
$500 million each.
BRUNO'S SUPERMARKETS: Final Sale Hearing to be Held on April 30
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Alabama has
scheduled a final hearing on April 30, 2009, at 8:00 a.m., to
consider the approval of the sale of substantially all of the
assets of Bruno's Supermarkets, LLC, either as a going concern or
to a buyer who will conduct a liquidation sale of the assets.
As reported in the Troubled Company Reporter on April 17, 2009,
the Court approved the amended bidding procedures for sale of the
Debtor's assets. As approved, the Debtor will conduct an auction
in accordance with the amended bidding procedures on April 22,
2009, or if the extension conditions are satisfied, on April 29,
2009.
As reported in the Troubled Company Reporter on April 15, 2009,
The assets to be offered for sale includes, without limitation,
all inventory, certain equipment, interests in contracts or
leases, accounts receivable, payment intangibles, and goodwill
associated with any of the assets, but excluding all Excluded
Assets.
In the auction, the Debtor will first offer the assets for sale as
a going concern. If an acceptable offer is not received for all
of the assets as a going concern, Debtor will offer the remaining
assets for sale through a liquidation or going-out-of business
sale.
Proposed Bid Protections
Under the amended bidding procedures, Debtor can conduct the
auction with or without a stalking horse. In the event the Debtor
selects a stalking horse for all or part of the assets, the
amended bidding procedures permit Debtor to pay a termination fee
of up to 2.5% of the cash purchase of the purchase price.
In the event of multiple bids on the same asset, the Debtor at its
own discretion may reduce the purchase price set forth in the
stalking horse's Asset Purchase Agreement by up to 115% of the
allocated purchase price for a particular asset, to the extent
said asset is sold to another entity and the stalking horse is
still the successful bidder with respect to the remaining assets
on which it bid as a group.
A copy of the Debtor's motion, including the proposed bidding
procedures, is available at:
http://bankrupt.com/misc/Bruno's.BidProcedures.pdf
Bruno's Supermarkets, LLC, is a privately held company
headquartered in Birmingham, Alabama. Bruno's is the parent
company of the Bruno's, Food World, and FoodMax grocery store
chains, which includes 23 Bruno's, 41 Food World, and 2 FoodMax
locations in Alabama and the Florida panhandle. Founded in
1933, Bruno's has operated as an independent company since 2007
after undergoing several transitions and changes in ownership
starting in 1995.
Bruno's filed for Chapter 11 relief on Feb. 5, 2009 (Bankr. N.D.
Ala. Case No. 09-00634). Burr & Forman LLP is the Debtor's lead
counsel. Najjar Denaburg, P.C., is the Debtor's interim conflicts
counsel. Greenberg Traurig, LLP, is the Official Committee of
Unsecured Creditors' counsel. Alvarez & Marsal is the Debtor's
restructuring advisor. When Bruno's filed for protection from its
creditors, it listed assets and debts of between $100 million and
$500 million each.
BUILDING MATERIALS: Moody's Cuts Corp. Family Rating to 'Caa3'
--------------------------------------------------------------
Moody's Investors Service has lowered Building Materials Holding
Corporation's corporate family rating to Caa3 from Caa1,
probability of default rating to Caa3 from Caa2 and the ratings on
the senior secured credit facility to Caa3 from Caa1. The ratings
outlook remains negative.
The ratings downgrade reflects the increased probability of
default resulting from the ongoing deterioration of the
residential construction and building products industry in the
U.S., BMHC's inability to maintain covenant compliance and its
weak liquidity profile. Moody's anticipates that the rapid
deterioration of demand for BMHC's products and services will
persist over the near term causing continued operating losses and
an unsustainable capital structure, given the company's high debt
burden. While BMHC currently has access to $20 million under its
credit facility, the company could lose access to the facility and
the term loan could be called if the company is unable to
satisfactorily amend the facility prior to the expiration of a
limited waiver on June 1, 2009.
The negative outlook reflects Moody's view that the muted
prospects for the business coupled with tight credit markets will
make it increasingly difficult for the company to obtain an
amendment that will alleviate the current liquidity concerns while
providing full recovery for lenders.
These ratings for BMHC were downgraded:
-- Corporate Family Rating, downgraded to Caa3 from Caa1;
-- Probability of default, downgraded to Caa3 from Caa2; and
-- Senior Secured Bank Credit Facility, downgraded to Caa3,
LGD3, 49% from Caa1, LGD3, 37%.
The previous rating action on BMHC was the August 7, 2008
downgrade of the corporate family rating to Caa1 from B3.
BMHC, headquartered in Boise, Idaho, is one of the largest
providers of residential building products and construction
services in the United States, with a focus in the western and
southern states. Sales in 2008 were $1.3 billion.
CANWEST MEDIA: DBRS Cuts Sub Debt to D, Keeps Issuer Rating at C
----------------------------------------------------------------
Dominion Bond Rating Service downgraded Canwest Media Inc.'s
Senior Subordinated Notes rating to D from C (low). In addition,
DBRS has discontinued its recovery rating on Canwest Media's
Senior Subordinated Notes as per DBRS's methodology. Previously,
the recovery rating on these notes was RR5 (indicating anticipated
recovery prospects of between 10% and 30%).
DBRS has confirmed Canwest Media's Issuer Rating at C and the
recovery rating on its Secured Bank Debt at RR1 (indicating
anticipated recovery prospects of 90% to 100%), which continues to
result in an instrument rating of CC, three notches above Canwest
Media's C Issuer Rating. These ratings remain Under Review with
Negative Implications, where they were placed on March 12, 2009.
The downgrade of Canwest Media's Senior Subordinated Notes rating
to D follows the Company's failure to make a US$30.4 million
interest payment on these notes on April 14, 2009. Canwest
Media's interest payment was originally due on March 15, 2009.
When this payment date was not met, a 30-day cure period was
triggered, giving the Company additional time to make this payment
before a default occurred. As the original cure period (as per
the indenture that governs these notes) has expired and the
interest payment has not been made, DBRS considers this a default
under its rating methodology.
DBRS notes that on April 14, 2009, Canwest Media announced that it
had received an extension agreement from an ad hoc committee of
its noteholders (representing 70% of the notes). As part of this
agreement, noteholders will not demand immediate payment of the
US$761 million of principal and any unpaid interest on these notes
from Canwest Media until April 21, 2009.
This extension to April 21, 2009, now coincides with the expiry of
its current waiver from the senior lenders (as obtained on
April 7, 2009) on its secured credit facility. Canwest Media was
not in compliance with its current financial covenants under its
secured credit facility as per its recent quarter-end
(February 28, 2009).
With these extensions, Canwest Media plans to continue to discuss
a recapitalization agreement with its senior lenders and
noteholders over the next week and seeks to gain the necessary
extensions to allow a recapitalization plan to proceed. However,
DBRS notes that should additional extensions and a
recapitalization plan not be successful, the Company may be left
with no alternative but to seek creditor protection.
As such, DBRS has maintained Canwest Media's C Issuer Rating and
the CC/RR1 ratings on its Secured Bank Debt Under Review with
Negative Implications. DBRS will continue to monitor Canwest
Media's recapitalization initiatives, along with the waivers from
its senior lenders which to date have precluded the banks from
issuing a notice of default.
In addition, Canwest Limited Partnership's (Canwest LP) Issuer
Rating has been maintained at C (high), along with the CC
(low)/RR3 ratings on its Secured Bank Debt and the C (low)/RR6
ratings on its Senior Subordinated Notes. These ratings also
remain Under Review with Negative Implications, where they were
placed on March 12, 2009, following DBRS's previous downgrade of
Canwest LP's ratings.
DBRS does note that Canwest LP has initiated discussions with its
senior lenders to seek to amend its financial covenants through
the remainder of F2009 (ends August 31, 2009). Canwest LP could
breach the covenants under its Secured Bank Debt during the
current quarter (Q3 F2009, which ends on May 31, 2009).
Should Canwest LP not be successful in attaining an amendment or
waiver, it too would need to either execute a recapitalization
plan or, failing that, possibly seek creditor protection. DBRS
notes that if Canwest LP were to seek creditor protection, this
would trigger a cross-default provision under the obligations at
Canwest Media.
As part of its review of Canwest LP, DBRS will assess: (a) the
outcome of Canwest Media's possible recapitalization; (b) Canwest
LP's negotiations with its senior lenders on amending the
financial covenant tests under its secured credit facility; and
(c) the appropriateness of its C (high) Issuer Rating on Canwest
LP, given Canwest LP's current liquidity and the tremendous
pressure on its newspaper operations (for which EBITDA declined by
37% for the first six months of F2009).
DBRS notes that a successful recapitalization at Canwest Media
could indirectly benefit Canwest LP, as lower distributions would
be required to be sent to the parent to service its debt, which
currently totals $1.3 billion. This was roughly 30% of Canwest
Media's consolidated debt ($4.3 billion) at February 28, 2009.
CARMORE HOLDINGS: S&P Puts 'B' Rating on $25MM & $100MM Loans
-------------------------------------------------------------
Standard & Poor's Ratings Services said it withdrew its recovery
ratings on all rated health insurance companies' debt issues.
Consequently, S&P is changing some of S&P's issue-level ratings on
these debt issues. These actions are the result of a change in
S&P's application of criteria for rating debt issued by health
insurers. The issuer credit ratings remain unchanged.
In May 2007, Standard & Poor's adopted its recovery rating
criteria. According to this criteria, S&P determines an issue-
level rating based on the issuer credit rating as adjusted, if
appropriate, per the recovery rating (i.e., by notching up or down
from the issuer credit rating).
However, S&P now believe that there are growing uncertainties in
the industry about how to appropriately factor in the impact of
regulatory intervention on enterprise valuation. Therefore, S&P
will no longer use the recovery analysis methodology to determine
the issue-level ratings on health insurers' debt issues. S&P is
now reverting to S&P's original methodology for notching, which is
based on structural subordination.
Ratings List
Downgraded; Recovery Ratings Withdrawn
Amerigroup Corp.
To From
-- ----
Secured
$50 mil. bank loan due 2012 BB BB+
Recovery Rating NR 2
$351.3 mil. bank loan due 2012 BB BB+
Recovery Rating NR 2
HealthSpring Inc.
To From
-- ----
Secured
$100 mil. revolver due 2012 B+ BB-
Recovery Rating NR 2
$300 mil. term loan A due 2012 B+ BB-
Recovery Rating NR 2
Upgraded; Recovery Ratings Withdrawn
Amerigroup Corp.
To From
-- ----
Unsecured
$260 mil. notes due 2012 BB B+
Recovery Rating NR 6
Issue-Level Ratings Remain Unchanged; Recovery Ratings Withdrawn
Health Net Inc.
To From
-- ----
Unsecured
$400 mil. 6.375% notes due 2017 BB
Recovery Rating NR 3
Aveta Inc.
To From
-- ----
Secured
$20 mil. bank loan due 2010 B
Recovery Rating NR 4
$485 mil. bank loan due 2011 B
Recovery Rating NR 4
CareMore Holdings Inc.
To From
-- ----
Secured
$25 mil. revolver due 2012 B
Recovery Rating NR 4
$100 mil. term loan due 2013 B
Recovery Rating NR 4
Bravo Health Inc.
To From
-- ----
Secured
$25 mil. revolver due 2012 B
Recovery Rating NR 4
$90 mil. term loan B due 2013 B
Recovery Rating NR 4
CHRYSLER LLC: U.S. Gov't & Fiat May Name New CEO And Directors
--------------------------------------------------------------
Chrysler CEO Bob Nardelli told workers that the U.S. government
and Fiat SpA will appoint a new chief executive officer and board
of directors once the merger agreement is completed, Jeff Bennett
at The Wall Street Journal reports.
WSJ quoted Mr. Nardelli as saying, "The majority of the directors
will be independent (not employees of Chrysler or Fiat)," and the
board "will have the responsibility to appoint a chairman and
select a CEO with Fiat's concurrence."
According to WSJ, Cerberus Capital Management LP would have to
give up all or most of its equity in Chrysler under its
reorganization, which allows Fiat to appoint new management.
WSJ reports that Republican Sen. Bob Corker of Tennessee said that
he would support a revamped Chrysler controlled by European
executives, as such arrangement might be the only way to guarantee
the Company's survival. "I've always assumed that Fiat would
totally control this deal," the report quoted Sen. Corker as
saying.
WSJ relates that Sen. Debbie Stabenow said that she wouldn't
object Fiat CEO Sergio Marchionne's becoming Chrysler's chief
executive officer. WSJ previously reported that a person familiar
with the matter said that it was possible Mr. Marchionne could
serve as Chrysler's CEO.
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- a unit of Cerberus Capital Management
LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles
and products. The company has dealers worldwide, including
Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil,
Venezuela, China, Japan, and Australia.
Liquidity Crunch
Chrysler has been trying to keep itself afloat. As reported by
the Troubled Company Reporter on March 20, 2009, its Chief
Financial Officer Ron Kolka, has said even if Chrysler gets
additional government loans, it could face another cash shortage
in July when revenue dries up as the company shuts down its
factories for two weeks to change from one model year to the next.
The Company's CFO has said Chrysler planned for the
$4 billion federal government bailout it received January 2 to
last through March 31. The Company is talking with the Obama
administration's autos task force about getting another
$5 billion, and faces a March 31 deadline to complete its plan to
show how it can become viable and repay the loans.
General Motors Corp. and Chrysler admitted in their viability
plans submitted to the U.S. Treasury on February 17 that they
considered bankruptcy scenarios, but ruled out the idea, citing
that a Chapter 11 filing would result to plummeting sales, more
loans required from the U.S. government, and the collapse of
dealers and suppliers.
A copy of the Chrysler viability plan is available at:
http://ResearchArchives.com/t/s?39a3
A copy of GM's viability plan is available at:
http://researcharchives.com/t/s?39a4
* * *
As reported in the Troubled Company Reporter on December 3, 2008,
Dominion Bond Rating Service downgraded the ratings of Chrysler
LLC, including Chrysler's Issuer Rating to CC from CCC (high).
Chrysler's First Lien Secured Credit Facility and Second Lien
Secured Credit Facility have also been downgraded to CCC and CC
(low) respectively. All trends are Negative. The ratings action
reflects Chrysler's challenge to maintain sufficient liquidity
balances amid severe industry conditions that have deteriorated
alarmingly over the past few months and are not expected to
improve in the near term. With this ratings action, Chrysler is
removed from Under Review with Negative Implications, where it was
placed on November 7, 2008.
As reported in the Troubled Company Reporter on August 11, 2008,
Standard & Poor's Ratings Services lowered its ratings on Chrysler
LLC, including the corporate credit rating, to 'CCC+' from 'B-'.
On July 31, 2008, TCR said that Fitch Ratings downgraded the
Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The
Rating Outlook is Negative. The downgrade reflects Chrysler's
restricted access to economic retail financing for its vehicles,
which is expected to result in a further step-down in retail
volumes. Lack of competitive financing is also expected to result
in more costly subvention payments and other forms of sales
incentives. Fitch is also concerned with the state of the
securitization market and the ability of the automakers to access
this market on an economic basis over the near term, given the
steep drop in residual values, higher default rates, higher loss
severity being experienced and jittery capital market.
As reported in the TCR on December 3, 2008, Dominion Bond Rating
Service downgraded on November 20, 2008, the ratings of Chrysler
LLC, including Chrysler's Issuer Rating to CC from CCC (high).
Chrysler's First Lien Secured Credit Facility and Second Lien
Secured Credit Facility have also been downgraded to CCC and CC
(low) respectively. All trends are Negative. The ratings action
reflects Chrysler's challenge to maintain sufficient liquidity
balances amid severe industry conditions that have deteriorated
alarmingly over the past few months and are not expected to
improve in the near term. With this ratings action, Chrysler is
removed from Under Review with Negative Implications, where it was
placed on November 7, 2008.
CIB MARINE: TruPS Debt, Rising Losses Prompt Going Concern Doubt
----------------------------------------------------------------
CIB Marine Bancshares, Inc., said in a regulatory filing with the
Securities and Exchange Commission that there is substantial doubt
concerning its ability to continue as a going concern for a
reasonable period of time. KPMG LLP, in Milwaukee, Wisconsin,
audits the Company's financial report.
Default on TruPS Payment
CIB Marine noted that its trust preferred securities holders are
owed in excess of $100 million, all of which is currently due and
payable. At December 31, 2008, total assets at the CIB Marine
parent company were $117.1 million, which included $13.2 million
of liquid assets; and total liabilities were $102.3 million. CIB
Marine said there is no other source of repayment of the TruPS,
other than these assets. CIB Marine defaulted on one series of
the TruPS on March 25, 2009 and, absent additional capital, cash
or a successful restructuring of the TruPS, will default on the
other three series of TruPS during the second quarter of 2009.
$34.4 Mil. Net Loss in 2008
CIB Marine also related that it continued to sustain significant
operating losses in 2008. Net loss after factoring in income from
discontinued operations was $34.4 million, compared to
$13.8 million in 2007. Net loss from continuing operations was
$36.2 million, compared to $15.2 million in 2007. CIB Marine said
total assets decreased to $906 million at December 31, 2008, from
$1.01 billion at December 31, 2007, largely reflecting the impact
of the sale of the deposits, branches, and most of the loans of
Citrus Bank, NA, during 2008. Loans decreased by $40 million and
deposits decreased by $50 million, also largely reflecting the
impact of the sale of the Citrus Bank business, partially offset
by some growth in loans and deposits in the Company's other
markets.
In an April 16 letter to shareholders, CIB Marine explained that
the key contributors to the large continuing operating loss were:
* Net interest income declined from $22.6 million in 2007 to
$21.6 million in 2008, reflecting the reduced balance
sheet and continued pressure on margins from the
competitive deposit market and the Company's efforts to
maintain strong liquidity. Its net interest income
continues to be depressed by the effect of the high cost
of the TruPS. The interest expense on these TruPS
increased from $8.5 million in 2007 to $8.9 million in
2008, representing over 25% of its total interest expense;
* Certain aspects of credit quality experienced continued
pressure during 2008, reflecting general economic
conditions as well as specific market conditions in
Florida and Arizona. The loan loss provision expense in
2008 was $22.1 million compared to $6.4 million in 2007.
The 2008 provision expense primarily comprised
$11.3 million in provision expense allocated to the home
equity pools (compared to $6.2 million in 2007) and
$10.8 million in provision expense allocated to
construction and development loans (largely related to
residential construction and development loans in the
Florida and Arizona markets). As of December 31, 2008,
the home equity loan pools had a balance of $52.2 million
and loan loss reserves allocated to these two pools
totaled $4.5 million, compared to a balance of
$73.0 million and a loan loss reserve of $5.3 million at
December 31, 2007;
* Noninterest income increased from $3.1 million in 2007 to
$6.2 million in 2008, reflecting the gain on the sale of
Citrus Bank in 2008;
* While CIB Marine continued to implement efficiency plans
to reduce operating expenses, significant one-time
expenses caused total noninterest expense to increase from
$34.5 million in 2007 to $41.6 million in 2008.
Reflecting the sale of Citrus Bank and other staff
reductions, compensation and employee benefits decreased
from $18.2 million in 2007 to $16.4 million in 2008. On
the other hand:
-- professional services increased from $3.3 million in
2007 to $4.8 million in 2008, representing the cost of
advisory and other support services in the execution of
the company's capital plan as well as fees related to
loan collection and workout-related services;
-- impairment losses on investment securities of
$1.8 million were recorded in 2008 compared to zero in
2007;
-- write downs and losses on assets were $3.5 million in
2008 compared to $0.7 million in 2007, reflecting the
write-down in the fourth quarter of 2008 of CIB
Marine's investment in the four statutory trusts
(related to the TruPS); and
-- other expense increased from $5.9 million in 2007 to
$10.5 million in 2008, including a $3.4 million
settlement expense recognized in 2008 related to the
Lewis litigation.
FDIC Action
At December 31, 2008, pursuant to Federal Deposit Insurance Corp.
regulations, both of CIB Marine's subsidiary banks were classified
as well capitalized. However, in March 2009 Marine Bank
stipulated to a cease and desist order which was signed by the
FDIC and the Wisconsin Department of Financial Institutions,
Division of Banking in early April 2009, and is expected to become
effective in the near future.
The C&D primarily resulted from the high level of nonperforming
assets of Marine Bank and the resulting impact on its financial
condition. The C&D requires Marine Bank to take certain
corrective actions focusing on reducing exposure to non-performing
loans, charging off all loans classified as loss, imposes
restrictions on lending to credits with existing non-performing
loans, and accruing interest on certain delinquent loans in
addition to charging off previously accrued interest on those
loans.
Key provisions also include a restriction on paying dividends
without regulatory approval, a requirement to maintain a minimum
tier 1 leverage ratio of 10% at Marine Bank, retaining qualified
management, revising lending policies and procedures focused on
documentation, maintaining an appropriate loan review and grading
system, and adopting a comprehensive budget. Failure to adhere to
the requirements of the actions mandated by the C&D, once it
becomes effective, can result in more severe restrictions and
civil monetary penalties.
The C&D added no additional requirements to the asset quality and
loan review program previously implemented and currently
maintained by Marine Bank. CIB Marine and Marine Bank also remain
committed to maintaining adequate capital levels. Generally,
enforcement actions such as the C&D can be lifted only after
subsequent examinations substantiate complete correction of the
underlying issues.
President and CEO John P. Hickey, Jr., told shareholders in his
letter that, to further support the efforts to restructure the
Company, CIB Marine has applied to the appropriate regulators to
merge Marine Bank into Central Illinois Bank. The merger combined
with other operating efficiencies being implemented would further
reduce the operating costs of the company.
On April 14, 2009, the Company accepted the resignation of Steven
C. Hillard from its Board of Directors; the Audit and Compensation
and Stock Option Committees of the Board; and the Boards of the
Company's wholly owned subsidiaries Central Illinois Bank and
Marine Bank.
A full-text copy of CIB Marine's 2008 Annual Report on Form 10-K
is available at no charge at http://ResearchArchives.com/t/s?3b97
About CIB Marine Bancshares
CIB Marine Bancshares, Inc., is a multi-bank holding company with
its principal executive offices in Pewaukee, Wisconsin, a suburb
of Milwaukee. CIB Marine owned and operated two separately
chartered commercial banking organizations at December 31, 2008:
Central Illinois Bank, with its main office in Champaign,
Illinois, and Marine Bank, with its main office in Wauwatosa,
Wisconsin, a suburb of Milwaukee. CIB Marine offers a full array
of traditional banking services through its bank subsidiaries.
These services include a broad range of loan products, such as
commercial loans, commercial real estate loans, commercial and
residential construction loans, one-to-four family residential
real estate loans, consumer loans, and commercial and standby
letters of credit; accepting demand, savings and time deposits,
providing commercial paper and repurchase agreements; and
providing other banking services. At December 31, 2008, CIB
Marine and all of its bank and nonbank subsidiaries had a combined
total of 197 full-time equivalent employees.
CIB MARINE: TruPS Restructuring Opposed; Voting Extended to May 11
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CIB Marine Bancshares, Inc., has moved to May 11, 2009, the
deadline for bondholders to vote in the Company's proposal to
restructure obligations related to its trust preferred securities.
As of April 10, 2009, the initial voting deadline established in
the Consent Solicitation, CIB Marine was notified that a
sufficient number of negative votes were cast by the applicable
holders of two series of TruPS to prevent approval of the Plan of
Restructuring. Based upon conversations that CIB Marine and its
investment banking firm have had with certain of the TruPS
holders, including certain holders who have initially voted
against the Consent Solicitation, CIB Marine elected to extend the
voting deadline to give it more time to consider amending the
terms of the Consent Solicitation and Plan of Restructuring to
address the holders' concerns, as well as to consider other
available options.
The company is in the process of gathering votes from all trust
preferred securities holders, including:
-- the holders of securities that represent a part of the
collateral pool for these CDOs in which senior bondholders
are eligible to vote:
(1) Regional Diversified Funding (CUSIPs: 75902AAA6 and
75902AAB4),
(2) Senior Tranche of PreTSL I (Preferred Term Securities,
Ltd. (CUSIPs: 740408AA7 and G7219MAA4)), and
(3) Senior Tranche of PreTSL II (Preferred Term Securities
II, Ltd. (CUSIPs: 74040KAB8, 74040KAF9, G7220EAB7));
and
-- the holders of securities issued by CIB Statutory Trust V.
CIB Marine submitted on March 16, 2009, a Consent Solicitation to
holders of its existing TruPS to restructure its obligations under
those instruments. Pursuant to its Plan of Restructuring, the
roughly $100.9 million of current indebtedness (including accrued
interest of $39.1 million) under the debentures held by the Trusts
would be replaced with roughly $94.9 million aggregate liquidation
preference of newly-issued CIB Marine 7% Fixed Rate Perpetual
Noncumulative Preferred Stock.
CIB Marine proposed the Plan of Restructuring for these reasons:
* To prevent the default of CIB Marine's outstanding
debentures scheduled to occur between March 25, 2009, and
April 30, 2009 and to help provide it with a more stable
capital structure;
* To eliminate $100.9 million of indebtedness from CIB
Marine's balance sheet and significantly improve its
regulatory capital position;
* To substitute noncumulative 7% dividends (on the Company
Preferred) for the higher-rate interest on the debentures
in order to help improve CIB Marine's future operating
results.
By preventing or curing the default of the debentures and TruPS,
reducing debt, and improving its equity, regulatory capital
position and future operating results, CIB Marine hoped the
approval of the Plan would position the Company itself to seek a
business combination transaction on terms that could be more
advantageous to CIB Marine and result in greater value for both
the holders of the existing TruPS, as well as CIB Marine's common
shareholders.
If the Plan of Restructuring is ultimately not approved, CIB
Marine will not be able to cure its default on the TruPS.
At December 31, 2008, total assets at the CIB Marine parent
company were $117.1 million, which included $13.2 million of
liquid assets; and total liabilities were $102.3 million. CIB
Marine has said there is no other source of repayment of the
TruPS, other than these assets. CIB Marine defaulted on one
series of the TruPS on March 25, 2009 and, absent additional
capital, cash or a successful restructuring of the TruPS, will
default on the other three series of TruPS during the second
quarter of 2009.
About CIB Marine Bancshares
CIB Marine Bancshares, Inc., is a multi-bank holding company with
its principal executive offices in Pewaukee, Wisconsin, a suburb
of Milwaukee. CIB Marine owned and operated two separately
chartered commercial banking organizations at December 31, 2008:
Central Illinois Bank, with its main office in Champaign,
Illinois, and Marine Bank, with its main office in Wauwatosa,
Wisconsin, a suburb of Milwaukee. CIB Marine offers a full array
of traditional banking services through its bank subsidiaries.
These services include a broad range of loan products, such as
commercial loans, commercial real estate loans, commercial and
residential construction loans, one-to-four family residential
real estate loans, consumer loans, and commercial and standby
letters of credit; accepting demand, savings and time deposits,
providing commercial paper and repurchase agreements; and
providing other banking services. At December 31, 2008, CIB
Marine and all of its bank and nonbank subsidiaries had a combined
total of 197 full-time equivalent employees.
CIMAREX ENERGY: S&P Changes Outlook to Stable; Affirms 'BB' Rating
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Standard & Poor's Ratings Services said that it revised its
outlook on exploration and production company Cimarex Energy Co.
to stable from negative. At the same time, S&P affirmed the
ratings on this company, including the 'BB' corporate credit
rating.
"The outlook revision reflects our increased confidence that
Cimarex's liquidity will be satisfactory in light of the recent
announcement that it has increased the commitments under its
credit facility to $800 million from $500 million, while
maintaining a $1 billion borrowing base," said Standard & Poor's
Credit analyst Paul B. Harvey. Additional hedge positions entered
into at the end of March with Mid-continent hub floor prices of $3
per MMBtu, provide protection from further deterioration in
realized natural gas prices, particularly over the summer. S&P
expects Cimarex to manage capital spending to remain within
operating cash flows, and that significant borrowing under the
credit facility will not be necessary. Finally, S&P expects
financial measures to remain strong for the rating, despite the
poor natural gas prices Cimarex is facing.
The ratings on Cimarex Energy Co. reflect its position as a
midsize exploration and production company in the volatile oil and
natural gas industry, and the risks associated with its aggressive
growth strategy, moderate reserve life, and relatively high-cost
operations. However, the company's moderate financial policies
currently mitigate these factors. Cimarex's business risk profile
is weak, reflecting its midsized proved reserve base of 1.3
trillion cubic feet equivalent (about 80% natural gas; 80%
developed) as of Dec. 31, 2008.
The stable outlook assumes Cimarex will maintain adequate
liquidity and above-average financial measures despite very weak
near term natural gas prices. In addition, the stable outlook
reflects expectations that available borrowing capacity will
continue to support compliance with the working capital covenant
in the credit facility. Negative rating actions could occur if
covenant compliance becomes tight and/or debt leverage exceeds
2.5x with no near-term remedy. Although unlikely in the near-
term, S&P could consider a positive rating action if Cimarex
improves its operating performance, namely lower finding and
development costs, while maintaining its conservative financial
policy.
CITIGROUP INC: Reports $1.6 Billion Net Income for Q1 2009
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Citigroup Inc. reported net income for the first quarter of 2009
of $1.6 billion and a loss per share of $0.18, based on 5,385
million shares outstanding. Citi said revenues of $24.8 billion
were driven by strong results in the Institutional Clients Group,
partially offset by net write-downs. Results also include $7.3
billion in net credit losses and a $2.7 billion net loan loss
reserve build.
Citi said the $0.18 loss per share reflected the reset in January
2009 of the conversion price of the $12.5 billion convertible
preferred stock issued in a private offering in January 2008.
This did not have an impact on net income but resulted in a
reduction to income available to common shareholders of $1.3
billion or $0.24 per share. Without this reduction, earnings per
share were positive. The loss per share also reflected preferred
stock dividends, which did not impact net income but reduced
income available to common shareholders by $1.3 billion.
Citi said total revenues of $24.8 billion were up 99% compared to
the first quarter of 2008, with sequential improvement across all
regions. Net interest margin of 3.30% increased 50 and 8 basis
points versus the first and fourth quarter 2008, respectively .
Operating expenses were down $3.7 billion, or 23%, since the first
quarter 2008.
As of March 31, 2009, Citi had $2.19 trillion in total assets,
including $30.8 billion in cash and cash equivalents; and $2.06
trillion in total liabilities.
Citi said headcount has been reduced by roughly 13,000 since the
fourth quarter 2008 to 309,000 and roughly 65,000 since peak
levels.
Citi also noted that Tier 1 capital ratio was roughly 11.8% versus
7.7% in the first quarter 2008. Deposit base remained relatively
stable at $763 billion compared to the fourth quarter 2008,
despite the challenging environment. Deposits declined 8% since
the first quarter 2008, due to the sale of the German retail
banking operations and the impact of foreign exchange. U.S.
deposits increased $8 billion sequentially and $28 billion year-
over-year. Closed sale of remaining Redecard position for an
after-tax gain of $704 million.
"Our results this quarter reflect the strength of Citi's franchise
and we are pleased with our performance. With revenues of nearly
$25 billion and net income of $1.6 billion, we had our best
overall quarter since the second quarter of 2007," said Vikram
Pandit, Chief Executive Officer of Citi.
"The clear message from this quarter is that our clients remain
engaged. Citi is a unique franchise in global financial services.
We offer more services in more places around the globe than
anyone, which our clients have long recognized. Despite the
challenges we have faced this past year, they remain closely
engaged with us.
"As strong as our franchise is, we have been taking steps to
strengthen it further. We have lowered risk and dramatically
reduced the problem legacy assets that have caused many of our
losses. We have meaningfully lowered expenses and headcount and
improved efficiency. We have also increased our capital base.
"Additionally, we continued to extend significant amounts of
credit to U.S. consumers and continued to focus on supporting the
U.S. housing market. Since October 2008, we successfully worked
with borrowers, with combined mortgages totaling approximately
$13.5 billion, to avoid potential foreclosure and were able to
keep more than 9 out of 10 distressed borrowers with Citi
mortgages we own in their homes. Also since October 2008, our
U.S. Cards business has worked with over 820,000 consumers to help
them manage their credit card debt through a variety of
forbearance programs.
"While we and the industry face challenges in the coming quarters
as we work through the weak economy, we will remain focused on
strengthening the Citi franchise. We will continue to reduce our
legacy risk, aggressively manage expenses and improve efficiency.
Most importantly, we will continue to engage our clients with what
I believe to be the most talented team of people in financial
services today.
"As a final note, I want to personally thank all Citi employees
around the world who are the foundation of Citi's success. Their
continued tireless efforts on behalf of our clients underscore
their dedication. Despite the challenges of the past year, I
remain confident that Citi will emerge from the financial crisis
as one of the strongest franchises in financial services," said
Mr. Pandit.
A full-text copy of Citi's Quarterly Financial Data Supplement is
available at no charge at http://ResearchArchives.com/t/s?3b9b
A full-text copy of Citi's First Quarter Earnings Release is
available at no charge at http://ResearchArchives.com/t/s?3b9e
About Citigroup
Based in New York, Citigroup Inc. (NYSE: C) --
http://www.citigroup.com-- is organized into four major segments
-- Consumer Banking, Global Cards, Institutional Clients Group,
and Global Wealth Management. Citi had $2.0 trillion in total
assets on $1.9 trillion in total liabilities as of Sept. 30, 2008.
As reported in the Troubled Company Reporter on Nov. 25, 2008, the
U.S. government entered into an agreement with Citigroup to
provide a package of guarantees, liquidity access, and capital.
As part of the agreement, the U.S. Treasury and the Federal
Deposit Insurance Corporation will provide protection against the
possibility of unusually large losses on an asset pool of
approximately $306 billion of loans and securities backed by
residential and commercial real estate and other such assets,
which will remain on Citigroup's balance sheet. As a fee for this
arrangement, Citigroup will issue preferred shares to the Treasury
and FDIC. In addition and if necessary, the Federal Reserve will
backstop residual risk in the asset pool through a non-recourse
loan.
CITIGROUP INC: Provides Update on Timing of Exchange Offers
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Citigroup Inc. said it continues to finalize definitive
documentation with the U.S. government regarding the government's
commitment to exchange a portion of its preferred shares with an
aggregate liquidation value of up to $25 billion for interim
securities and warrants. Citi is also working to complete the
customary SEC review process with respect to the public exchange
offers announced on February 27, 2009. Although significant
progress has been made on these matters, the process is not yet
complete.
Additionally, the U.S. government is finalizing its previously
announced industry stress tests, the results of which are
anticipated to be available in the near term.
Given the now anticipated proximity of the announcement of stress
test results by the U.S. government, Citi said the proposed
exchange offer will not be launched until the conclusion of the
industry stress tests.
Citi also confirmed its intention to continue to pay full
dividends on the preferred shares through and until the closing of
the public exchange at which point these dividends will be
suspended. It is Citi's intention not to pay common stock
dividends during this period. Citi also reconfirms that it has no
plans to suspend distributions at current rates on its Trust
Preferred Securities and Enhanced Trust Preferred Securities.
About Citigroup
Based in New York, Citigroup Inc. (NYSE: C) --
http://www.citigroup.com-- is organized into four major segments
-- Consumer Banking, Global Cards, Institutional Clients Group,
and Global Wealth Management. Citi had $2.0 trillion in total
assets on $1.9 trillion in total liabilities as of Sept. 30, 2008.
As reported in the Troubled Company Reporter on Nov. 25, 2008, the
U.S. government entered into an agreement with Citigroup to
provide a package of guarantees, liquidity access, and capital.
As part of the agreement, the U.S. Treasury and the Federal
Deposit Insurance Corporation will provide protection against the
possibility of unusually large losses on an asset pool of
approximately $306 billion of loans and securities backed by
residential and commercial real estate and other such assets,
which will remain on Citigroup's balance sheet. As a fee for this
arrangement, Citigroup will issue preferred shares to the Treasury
and FDIC. In addition and if necessary, the Federal Reserve will
backstop residual risk in the asset pool through a non-recourse
loan.
CMP SUSQUEHANNA: S&P Raises Corporate Credit Rating to 'CCC+'
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Standard & Poor's Ratings Services raised its corporate credit
rating on Atlanta, Georgia-based CMP Susquehanna Radio Holdings
Corp. to 'CCC+' from 'SD'. The rating outlook is stable.
Also, S&P raised its issue-level rating on the company's
subordinated debt to 'CCC-' from 'D'.
In addition, S&P affirmed its 'CCC+' rating on the company's
secured credit facilities and removed them from CreditWatch, where
they were placed with negative implications Jan. 30, 2009.
"The ratings upgrade reflects our reassessment of CMP's
creditworthiness following the company's completion of what S&P
considered to be a distressed debt exchange," explained Standard &
Poor's credit analyst Jeanne Mathewson.
S&P lowered its corporate credit rating on CMP to 'SD' on April 8,
reflecting the completion of an exchange of series A preferred
stock, warrants, and new variable-rate senior subordinated secured
second-lien notes due 2014 for CMP's 9.875% senior subordinated
notes. The transaction improved the company's capital structure,
reducing debt by roughly $161.5 million, or 19%, and interest
expense by roughly 25%. CMP reduced pro forma leverage by roughly
two turns; however, S&P expects the company's leverage to increase
to the low- to mid-teens range by the end of 2009 due to continued
weak advertising demand and EBITDA declines. Based on S&P's
outlook for 2009, S&P believes that CMP may need to amend
financial covenants in the second half of the year to avoid a
violation of its leverage covenant.
Revenue and EBITDA in the quarter ended Dec. 31, 2008 were down
15% and 27%, respectively, from the prior year due to weak
advertising demand. As a result of the decline in EBITDA and the
company drawing down the entire revolving credit facility, lease-
adjusted debt to EBITDA rose to 12.3x for the 12 months ended
Dec. 31, 2008, from 9.9x a year earlier. EBITDA margins declined
400 basis points over the same period, to 37.5%. Unadjusted
EBITDA coverage of interest was thin, at 1.2x. Pro forma for the
completion of the company's debt exchange, lease-adjusted leverage
and EBITDA coverage of interest were somewhat better, at 10.2x and
1.6x, respectively, for the same period.
S&P expects continuing declines in EBITDA from weak advertising
demand to cause leverage to increase to the low- to mid-teens area
by the end of 2009. S&P believes that EBITDA coverage of interest
will be somewhat more stable, benefiting from lower interest
expense as a result of reduced debt following the completion of
the company's exchange offer.
CMP Susquehanna owns approximately 32 radio stations in nine
markets, including four of the top 10 markets, such as San
Francisco, California; Houston and Dallas-Fort Worth, Texas; and
Atlanta, Georgia.
COOPERATIVE BANK: To File Annual Report by Month's End
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Cooperative Bankshares, Inc., says it currently requires an
additional period of time to complete its consolidated financial
statements for the year ended December 31, 2008. The Company
currently anticipates that it will file its Form 10-K for the year
ended December 31, 2008, with the Securities and Exchange
Commission by April 30, 2009.
Cooperative Bankshares, the parent company of Cooperative Bank,
filed a Form 12b-25 on April 1, indicating that additional time to
file its Annual Report on Form 10-K was required to complete the
Company's consolidated financial statements for the fiscal year
ended December 31, 2008.
Cooperative Bankshares says it require additional time to file its
Form 10-K because it has not completed its consolidated financial
statements and related disclosures for the year ended December 31,
2008. Cooperative Bankshares says the deterioration of the
economy in general, and the securities markets and the real estate
markets in which the Company conducts its business specifically,
have resulted in additional accounting complexities and
disclosures and has caused the Company to:
(1) have a third-party perform an independent assessment of
its loan portfolio and the level of its allowance for loan
losses;
(2) have a third-party perform an independent impairment
analysis of its goodwill asset;
(3) undertake actions designed to improve its capital position
and engage an investment banker and financial advisors to
assist with this effort and to evaluate the Company's
strategic options, including a possible sale or merger of
the Company; and
(4) further evaluate its $13.5 million deferred tax asset for
a potential valuation allowance.
The Company and its banking unit have entered into a Stipulation
and Consent to the Issuance of an Order to Cease and Desist with
the FDIC and the North Carolina Commissioner of Banks. The Bank
unit consented to the issuance of an Order to Cease and Desist
promulgated by the FDIC and the Commissioner. Under the terms of
the Order, the Bank is required to prepare and submit written
plans or reports to the FDIC and the Commissioner and undertake a
number of other corrective actions.
Cooperative Bankshares says these events have required additional
time for the Company to complete its financial statements and for
its independent auditors to complete their external audit of the
Company's financial statements.
In response to the Order, the Bank and the Company have, among
other things, formed a Board committee to oversee the Bank's
compliance with the Order, restricted growth (with the exception
of increasing liquid assets), halted the origination of reduced
documentation loans, enhanced the Bank's monitoring and internal
reporting regarding liquidity and commenced preparing a capital
plan.
$30.6 Million Net Loss for 2008 Expected
The Company expects that its results of operations for the year
ended December 31, 2008, will be significantly different from the
results of operations for the year ended December 31, 2007. The
Company expects to report a loss of $30.6 million for 2008
compared to net income of $8.1 million for 2007. This loss for
2008 is primarily a result of an estimated provision for loan
losses of $35.7 million, an estimated loss on investments of
$9.6 million (which includes an other-than-temporary impairment
charge on available for sale securities of $9.1 million),
estimated goodwill impairment charges of $5.5 million, and
estimated lower interest income on loans as a result of rate
changes implemented by the Federal Reserve Board and an increase
in nonperforming loans.
If the Company does not enter into a binding agreement providing
for an infusion of additional capital or the sale of the Company
by April 30, 2009, then the Company expects to record an estimated
valuation allowance of $13.5 million on its $13.5 million deferred
tax asset. Actual results for December 31, 2008, may reflect a
larger loss than is estimated.
In particular, the Company may record a larger provision for loan
losses than as estimated above or the valuation allowance on its
$13.5 million deferred tax asset.
Efforts to Increase Capital
Management is taking various steps designed to improve the Bank's
capital position. The Bank has developed a written alternative
capital plan designed to solicit capital investments and, if
necessary, reduce the Bank's asset size and expenses. However,
such plan is still dependent upon a capital infusion to meet the
capital requirements of the Order. As a result, the Company
continues to work with its advisors in an attempt to raise capital
ratios through sale of assets or a capital raise.
To date, the Bank has sold $17.0 million of loans classified as
held for sale at December 31, 2008 and surrendered select bank-
owned life insurance policies totaling $10.1 million. In
addition, the Bank has experienced a reduction of loans held for
investment of approximately $15.1 million during the first quarter
of 2009 primarily as a result of payoffs. The Company is
currently engaged in preliminary negotiations with various third
parties regarding the raising of additional capital.
At December 31, 2008, the Bank had Tier 1 Core Capital of 5.64%
and Total Risk-Based Capital of 6.93%, which rendered the Bank
"undercapitalized" pursuant to Part 325 of the FDIC Rules and
Regulations. As a result of its capital classification, the Bank
is now subject to restrictions on asset growth, dividends, other
capital distributions and management fees. These restrictions
will generally prevent the Bank, as an undercapitalized
institution, from allowing its average total assets during any
calendar quarter to exceed its average total assets during the
preceding calendar quarter except in limited circumstances.
Additionally, the restrictions will generally prohibit the Bank
from making any capital distribution or dividend or paying any
management fee to any individual having control of the Bank so
long as it remains "undercapitalized" under applicable FDIC
regulations. In the event that the Company is required to record
the estimated $13.5 million valuation allowance on its deferred
tax asset, the Bank's Tier 1 Core Capital and Total Risk-Based
Capital ratios would decrease to 4.46% and 5.76%, respectively.
If the Bank's Tier 1 Core Capital falls below 3% of adjusted
total assets, the Bank would be considered "significantly
undercapitalized" under applicable FDIC regulations.
The Company believes that it needs to raise a minimum of
$25.0 million of additional capital, assuming no change in the
expected loss for 2008, risk-weighted assets, or its capital
position, to be capitalized at the levels required by the Order.
This amount would be increased to approximately $33.0 million if
the $13.5 million valuation allowance were required to be
recorded. The Company is currently engaged in preliminary
negotiations with various third parties regarding the raising of
additional capital or a potential sale of the Company. However,
the Company has yet to enter into a definitive agreement regarding
the raising of additional capital or a potential sale of the
Company and no assurances can be made that the Company will
ultimately enter into such an agreement.
About Cooperative Bank
Chartered in 1898, Cooperative Bank in Wilmington, North Carolina,
provides a full range of financial services through 21 offices and
one loan origination office in North Carolina and three offices in
South Carolina. The Bank's subsidiary, Lumina Mortgage, Inc., is
a mortgage-banking firm, originating and selling residential
mortgage loans through four offices in North Carolina.
COOPERATIVE BANK: Warns of Bankruptcy Absent Capital Infusion
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Cooperative Bankshares, Inc., said that absent a definitive
agreement providing for an infusion of additional capital or the
sale of the Company, in connection with the issuance of its
audited consolidated financial statements for the year ended
December 31, 2008, it expects to receive from its independent
auditor an opinion expressing substantial doubt about its ability
to continue as a going concern and, as a result, the Company
expects to record an estimated $13.5 million valuation allowance
on its deferred tax asset.
If the Company were to enter into a definitive agreement with
respect to the raising of additional capital or a potential sale
of the Company subsequent to the date it records the estimated
$13.5 million valuation allowance, the Company may be able to
recover all or a portion of the valuation allowance. The Order
requires the Company to increase its capital ratios so that the
Bank has a minimum Tier 1 Core Capital ratio of 6% and a minimum
Total Risk-Based Capital ratio of 10% within 120 days of the date
of the Order.
"If we do not obtain additional capital, we do not expect to meet
the ratios set forth in the Order," the Company said. "Failure to
meet the minimum ratios set forth in the Order could result in our
regulators taking additional enforcement actions regarding the
Bank. In addition, even if we are successful in meeting the
capital ratios mandated in the Order, we cannot assure you that we
will not need to raise additional capital in the future.
Additionally, because of the Company's cumulative losses and its
liquidity and capital positions, the FDIC and the Commissioner may
take additional significant regulatory action against the Bank
that could, among other things, materially adversely impact the
Company's stockholders."
Liquidity
At December 31, 2008, the Company had liquid assets (comprised of
cash, cash equivalents, marketable securities, and loans held for
sale) with an estimated market value of approximately
$58.6 million. As a result of the Bank's capital levels at
December 31, 2008, the Company can no longer accept, renew or
rollover brokered deposits unless and until such time as it
receives a waiver from the FDIC. In addition, the Bank may not
solicit deposits by offering an effective yield that exceeds by
more than 75 basis points the prevailing effective yields on
insured deposits of comparable maturity in the Bank's normal
market area or in the market area in which such deposits are being
solicited.
Subsequent to December 31, 2008, the Bank, in an effort to
increase liquidity, sold $17.0 million of loans classified as held
for sale at December 31, 2008 and surrendered select bank-owned
life insurance policies totaling $10.1 million.
During the first quarter of 2009, deposits increased
$72.2 million primarily as a result of the Bank's solicitation of
Internet deposits and loans held for investment have decreased
$15.1 million primarily as a result of payoffs. The additional
liquidity was used, in part, to reduce the Bank's short-term
borrowings by $58.0 million. The Order prohibits the Bank from
making dividend payments to the Company and the Company has no
other material source of income aside from such dividends. The
Company is also prohibited from making dividend payments to
stockholders and distribution payments on the Company's trust
preferred securities without the prior approval of the Federal
Reserve Bank of Richmond, which approval has been denied to date.
Bankruptcy Warning
Accordingly, if the Bank is placed into FDIC receivership, it is
highly likely that the Company would be required to cease
operations and liquidate or seek bankruptcy protection. If the
Company were able to liquidate or seek bankruptcy protection, it
does not believe that there would be any assets available to the
holders of capital stock of the Company.
About Cooperative Bank
Chartered in 1898, Cooperative Bank in Wilmington, North Carolina,
provides a full range of financial services through 21 offices and
one loan origination office in North Carolina and three offices in
South Carolina. The Bank's subsidiary, Lumina Mortgage, Inc., is
a mortgage-banking firm, originating and selling residential
mortgage loans through four offices in North Carolina.
CRESCENT BANKING: Dixon Hughes Raises Going Concern Doubt
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Crescent Banking Company said that, in compliance with NASDAQ
Marketplace Rule 4350(b)(1)(B), it received an audit opinion
containing a "going concern" modification for its Annual Report on
Form 10-K for the year ended December 31, 2008.
Don Boggus, the Company's President and Chief Executive Officer,
stated, "The prevailing economic environment continues to have a
significant impact on our asset quality and earnings. While this
time is challenging, especially for banks, we intend to continue
to take steps that will preserve the long-term safety and
soundness of our institution. It remains difficult to determine
when and to what extent the financial industry and the market
generally will recover. Until that recovery occurs, we expect to
continue to face serious challenges going forward."
"[T]he Company is no longer considered 'well-capitalized' as of
December 31, 2008 based on regulatory standards. In addition to
its deteriorating capital position, the Company has suffered
significant losses from operations as well as heightened levels of
nonperforming assets. These matters raise substantial doubt about
the ability of Crescent Banking Company to continue as a going
concern," Dixon Hughes PLLC, the Company's independent auditors,
said in an April 13 report.
Last week, Crescent Banking reported a net loss of $31.7 million
for the year ended December 31, 2008. In comparison, the Company
had net income for the year ended December 31, 2007, of
$6.4 million. The Company's net loss for 2008 is largely
attributable to the provision for loan losses during such period
of approximately $25.8 million, a $9.9 million valuation allowance
against its deferred tax asset and a $3.4 million goodwill
impairment charge.
At December 31, 2008, the Company and Bank were considered
"Adequately Capitalized" by regulatory definition. While the
Company has withdrawn its application to receive government
assistance, the Company continues to actively seek to increase its
capital levels to return to the "Well Capitalized" category. The
Company has engaged an investment banking firm to assist in its
efforts to raise additional capital.
Mr. Boggus added, "A sound capital level is critical in this
market as we experience earnings pressure as a result of a
compressed net interest margin, provisions to the allowance for
loan losses and high liquidity levels."
In addition to efforts to raise additional capital, the Company's
Board of Directors adopted an "Action Plan" in October 2008. Under
this plan the Bank has:
* Improved its liquidity position to $153 million of cash
and cash equivalents;
* Aggressively recognized and reserved for troubled assets;
* Reduced its concentrations in development and construction
loans;
* Reduced overhead, including senior management taking a 10%
cut in salary, board members cutting their fees 33%, the
elimination of any bonus payments and overall staff
reduction;
* Grown non-interest bearing deposit accounts;
* Reduced wholesale and broker deposits; and
* Conducted an outside assessment of management and staffing
levels.
The ratio of the Company's non-performing assets to total loans
and other real estate was 7.72% at December 31, 2008, as compared
to 4.20% at June 30, 2008, and 1.34% at December 31, 2007. The
Company had $62.6 million of non-performing assets at
December 31, 2008, comprised of $36.8 million of non-accrual and
restructured loans and $25.8 million of foreclosed properties held
in other real estate owned. The ratio of net charge-offs to
average commercial banking loans outstanding was 1.64% for the
year ended December 31, 2008, compared to 0.11% for the year ended
December 31, 2007. The Company's loan portfolio decreased by
$29.8 million to total $785.4 million at December 31, 2008. The
Company experienced a $70.7 million decrease in construction,
acquisition and development loans during 2008.
Mr. Boggus stated, "We remain focused on aggressively identifying
problem loans and pursuing favorable resolutions of any issues
associated with those problem loans. Additionally, we have
aggressively pursued growth of our core deposits while reducing
the Company's overhead. As part of the overhead reduction, our
management has voluntarily taken a ten percent pay reduction, and
the banking subsidiary's board members have voluntarily reduced
their board fees by 33%. We will continue to consider additional
cost reduction measures."
A full-text copy of Crescent Banking's Annual Report on Form 10-K
is available at no charge at http://ResearchArchives.com/t/s?3b95
A full-text copy of Crescent Banking's report to shareholders is
available at no charge at http://ResearchArchives.com/t/s?3b96
About Crescent Banking Company
Crescent Banking Company is a bank holding company headquartered
in Jasper, Georgia with total consolidated assets of approximately
$1.0 billion and consolidated shareholders' equity of
approximately $36.8 million, representing a book value of $6.87
per share, as of December 31, 2008. The Company has 11 full
service offices, a loan production office and a corporate office,
located in five counties in North Georgia. The Company had
approximately 5.4 million shares of common stock outstanding at
December 31, 2008. The Company's common stock is listed on the
Nasdaq Capital Market under the symbol "CSNT".
DAYTON SUPERIOR: Files for Bankruptcy, Arranges $165MM GECC Loan
----------------------------------------------------------------
Dayton Superior Corporation has decided to pursue its debt
restructuring efforts under court protection by filing a voluntary
petition for reorganization under Chapter 11 of the Bankruptcy
Code in the U.S. Bankruptcy Court for the District of Delaware, in
Wilmington.
"We had sincerely hoped to restructure our debt outside of the
court," said Eric R. Zimmerman, Dayton Superior's President and
Chief Executive Officer. "However, in light of the unprecedented
tight credit markets, we determined that this filing is the best
possible course of action to achieve a sustainable long-term
financial structure and secure the Company's future growth and
profitability. We will pursue a consensual plan of reorganization
and debt restructuring under court protection while maintaining
normal business operations."
The Company has arranged for a 12-month debtor-in-possession
credit facility from GE Capital of up to $165 million. The DIP
facility will replace the Company's existing $150 million
revolving credit facility. The DIP facility will provide
immediate liquidity to the Company to help fund operations during
the reorganization, subject only to court approval and other
customary conditions. The Company will seek prompt court approval
of the DIP facility and authority to continue operating its
business and serving its customers in the ordinary course,
including the authority to make wage and salary payments to
employees and to continue to make payments to suppliers.
As reported by the Troubled Company Reporter on April 13, 2009,
Dayton Superior entered into a third amendment to its revolving
credit agreement with the lender under its $150.0 million
revolving credit facility; and a fourth amendment to the term loan
credit agreement with the lenders under its $100.0 million term
loan credit facility.
Pursuant to the Amendments, (i) the scheduled maturities under the
Credit Agreements and (ii) the date by which the Company must
provide to the Agent a letter of intent or definitive term sheet
for the acquisition of the Company by a person acceptable to the
Lenders on terms and conditions satisfactory to the Lenders, have
been extended to April 20, 2009.
The company had retained Harris Williams & Co. to assist in its
evaluation process. Dayton Superior also had retained Moelis &
Company LLC to advise on options to refinance or otherwise
restructure the company's outstanding indebtedness.
The company's private exchange offer with respect to its 13%
Senior Subordinated Notes due 2009 and concurrent consent
solicitation expired April 9. The company did not extend
expiration date.
"We intend to fulfill our commitments to our employees, customers
and suppliers without interruption while we restructure our debt.
It is our goal to emerge from reorganization expeditiously as a
stronger company with greater flexibility, lower debt and a
sustainable long-term capital structure," Mr. Zimmerman continued.
Mr. Zimmerman emphasized that the current situation is a result of
the tight credit markets and the timing of the Company's debt
maturities and is not related to operations. "Dayton Superior is
the leading company in our industry. Although we are certainly
feeling the effects of the recession, in 2008 we reported all-
time-high operating income of $45 million on net sales of
$476 million. The 9.5% operating margin was also a record. Our
current level of bid activity for quoting infrastructure projects
is up 20-30% over a year ago due in large part to the federal
stimulus plan. We are optimistic about the future as we enter the
reorganization process."
In the court filing, the Company listed assets of $286 million
against liabilities of $413 million. Liabilities include
approximately $161 million in principal and accrued interest on
the Company's 13% Senior Subordinated Notes due 2009 and
$222 million in outstanding borrowings under the Company's senior
secured credit facilities.
While the Company is in chapter 11, investments in its securities
will be highly speculative. Investors should assume that shares
of the Company's common stock have little or no value and will
likely be cancelled upon consummation of the Company's
reorganization. The Company anticipates that its common stock
will be delisted from trading on the NASDAQ National Market. The
Company expects to cease filing periodic and other reports with
the Securities and Exchange Commission, effective immediately.
Certain information concerning the Company will be available in
the bankruptcy.
The outcome of the chapter 11 restructuring case is uncertain and
subject to substantial risk. There can be no assurance that the
Company will be successful in achieving its financial
reorganization.
About Dayton Superior
Headquartered in Dayton, Ohio, Dayton Superior Corporation
(NASDAQ:DSUP) -- http://www.daytonsuperior.com/-- is a North
American provider of specialized products consumed in non-
residential, concrete construction, and a concrete forming and
shoring rental company serving the domestic, non-residential
construction market. The company's products are used in non-
residential construction projects, including infrastructure
projects, such as highways, bridges, airports, power plants and
water management projects; institutional projects, such as
schools, stadiums, hospitals and government buildings, and
commercial projects, such as retail stores, offices and
recreational, distribution and manufacturing facilities. Dayton
Superior offers more than 20,000 catalogued products.
* * *
As reported by the Troubled Company Reporter on January 28, 2009,
Standard & Poor's Rating Services said it lowered its ratings on
Dayton Superior Corp. S&P lowered the corporate credit rating to
'CCC' from 'CCC+' and removed all ratings from CreditWatch, where
they were placed with negative implications on August 14, 2008.
The outlook is negative.
DAYTON SUPERIOR: Case Summary & 28 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Dayton Superior Corporation
aka Aztec Concrete Accessories, Inc
aka Dayton Superior Specialty Chemical Corporation
aka Symons Corporation
aka Dur-O-Wal, Inc.
aka Trevecca Holdings, Inc.
aka Southern Construction Products, Inc.
7777 Washington Village Drive, Suite 130
Dayton, OH 45459
Bankruptcy Case No.: 09-11351
Type of Business: The Debtor makes and distributes construction
products.
Aztec Concrete Accessories Inc., Dayton Superior
Specialty Chemical Corporation, Dur-O-Wa Inc.,
Southern Construction Products Inc., Symons
Corporation and Trevecca Holdings Inc. were
merged with the Debtor on December 31, 2004.
See http://www.daytonsuperior.com/
Chapter 11 Petition Date: April 19, 2009
Court: District of Delaware (Delaware)
Debtor's Counsel: Andrew C. Irgens, Esq.
irgens@rlf.com
John H. Knight, Esq.
knight@rlf.com
Paul N. Heath, Esq.
heath@rlf.com
Paul Noble Heath, Esq.
heath@rlf.com
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, DE 19899
Tel: (302) 651-7700
Fax: (302) 651-7701
-- and --
Latham & Watkins LLP
885 Third Avenue
New York, NY 10022-4834
Tel: (212) 906-1200
http://www.lw.com/
The Debtor's financial condition as of February 27, 2009:
Total Assets: $288,709,000
Total Debts: $405,867,000
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
The Bank of New York Note Debt $161,470,450
Mellon Trust Company,
N.A.
Global Corporate Trust
2 N. LaSalle Street, Ste 1020
Chicago, IL 60602
Attn: Roxane L. Ellwanger
Tel: (312) 827-8574
Fax: (312) 827-8542
US Bank Corporate Trust Note Debt $1,028,104
Services, Mail Code: EP-
MN-WS3T, 60 Livingston
Avenue, St. Paul, MN 55107
Attn: Matthew Mankowski
Tel: (651) 495-3805
Fax: (651) 495-8141
Keystone Steel and Wire Trade Debt $770,219
7000 S.W. Adams Street
Peoria, IL 61641
Brett Grieder
Tel: (309) 697-7755
Fax: (309) 697-7422
Morgan Stanley & Professional $619,199
Company, Incorporated Services
One New York Plaza, 7th Floor
New York, NY 10004
Attn: Richard Hanson
Fax: (212) 507-4824
Gerdau Ameristeel Trade Debt $514,117
4221 W. Boy Scout Blvd.
Suite 600
Tampa FL 33607
Harold Fernandez
Tel: (813) 207-2249
Equipment Depot of Illinois Trade Debt $390,214
Valley Machining Trade Debt $305,238
Ulma Form Works, Inc. Trade Debt $263,170
De Acero S.A de C.V. Trade Debt $262,739
Olympic Panel Products Trade Debt $202,657
Imperial Capital Professional $200,000
Services
Kemeos Inc. Trade Debt $169,073
Thompson Hine LLP Professional $156,097
Services
Monarch Cement Co. Trade Debt $142,728
Deloitte & Touche LLP Professional $138,208
Alsina Forms Co., Inc. Trade Debt $133,141
Shanghai VEl Electric Trade Debt $132,600
Namasco, a Division of Trade Debt $125,748
Klockner
W.R. Grace Co. Trade Debt $118,250
Barton Solvents Trade Debt $108,233
Unitex Trade Debt $99,341
Microsoft Licensing, GP Trade Debt $89,508
Mostardi Platt Environmental Professional $86,746
Services
Ixmation, Inc. Trade Debt $77,889
Marchem Corporation Trade Debt $76,132
Group 365 Chicago, LLC Marketing $75,683
Primex Plastic Corporation Trade Debt $75,540
Lucent Polymers LLC Trade Debt $70,466
The petition was signed by Edward J. Puisis, chief financial
officer.
DILLARD'S INC: S&P Cuts Rating to 'B-' From 'B+'; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services said it took various actions on
six department store operators. S&P downgraded most-but not all-of
these companies. S&P removed all six companies from CreditWatch
with negative implications, where they had been placed on Feb. 5,
2009.
"The rating actions reflect Standard & Poor's deepening concern
about the impact of the U.S. recession on the increasingly
troubled department store sector," said Standard & Poor's credit
analyst Diane Shand, "which felt the full brunt of the declining
U.S. economy and weakening consumer confidence in 2008." The
recession is likely to last through at least the third quarter of
2009 given weakening employment, the still-poor housing market,
and continuing turmoil in financial markets. "We believe lower
consumer spending and declining mall traffic will affect the sales
and profits of the department store operators this year," added
Ms. Shand, "and that recovery will be slow and dependent on an
improvement in the macroenvironment."
Standard & Poor's expects moderate-priced department store
operators like Dillard's, Macy's, and J.C. Penney to suffer high-
single-digit declines in comparable-store sales in 2009 and that
the more upscale competitors like Neiman Marcus and Nordstrom will
incur low-double-digit declines in same-store sales. S&P believes
department store operators will generally plan inventories,
expenses, and store growth conservatively in 2009 in an effort to
protect margins and cash flow. Nevertheless, most companies'
margins are likely to erode as a result of weak consumer demand,
lack of sales leverage, and promotional activity. S&P expects
declining profitability to hurt their credit profiles. Credit
metrics for all of the rated department stores also weakened in
2008 as a result of poor industry fundamentals and companies'
needs to align inventories with significantly weaker demand.
Currently, liquidity is not a concern. Macy's and Penney recently
amended their credit facilities. Dillard's, Neiman Marcus, and
Sears have covenant-lite credit facilities and S&P believes that
Nordstrom has ample cushion within its covenants.
The rating affirmation on Sears Holdings Corp. (BB-/Negative) is
based on S&P's expectation that credit measures should remain
adequate for the rating, even with expected sales pressure from a
difficult retailing environment. This would reflect Sears' recent
cost-reduction measures and that Sears' cash flow generation
should remain satisfactory due to reduced working capital needs
from planned inventory reduction and lower capital spending.
Ratings List
Ratings Lowered
To From
-- ----
Dillard's Inc. B-/Stable/-- B+/Watch Neg/--
Macy's Inc. BB/Stable/-- BBB-/Watch Neg/--
Neiman Marcus
Group Inc. (The) B/Negative/-- B+/Watch Neg/--
Nordstrom Inc. BBB+/Stable/A-2 A-/Watch Neg/A-2
Penney (J.C.) Co. Inc. BB/Stable/-- BBB-/Watch Neg/--
Ratings Affirmed And Off CreditWatch
To From
-- ----
Sears Holdings Corp. BB-/Negative/-- BB-/Watch Neg/--
DRUG FAIR GROUP: Court Approves $40 Million Bankruptcy Loan
-----------------------------------------------------------
Drug Fair Group Inc. won final approval from the U.S. Bankruptcy
Court for the District of Delaware of a loan to help finance
operations as it sells stores.
According to Carla Main at Bloomberg News, Judge Brendan Linehan
Shannon gave Drug Fair permission to borrow as much as $40 million
from Bank of America Corp. as the agent for a group of lenders.
Drug Fair, founded in 1954, agreed last month to sell 32 stores in
central and northern New Jersey to a unit of Deerfield, Illinois-
based Walgreen Co. for about $54 million. Walgreen's offer may
rise to as much as $65.1 million, depending on a valuation of the
stores' inventory.
Judge Shannon scheduled an April 24 auction for other bidders to
try and top Walgreen's offer.
About Drug Fair Group, Inc.
Headquartered in Somerset, New Jersey, Drug Fair Group, Inc. --
http://www.drugfair.com/or http://www.costcuttersonline.com/--
fka Community Distributors, Inc. operates pharmacies and general
merchandise stores in northern and central New Jersey. Founded in
1954, the Company has two divisions: Drug Fair and Cost Cutters.
The Drug Fair division includes stores which sell both
pharmaceuticals and general merchandise and the Cost Cutters
division which are larger format stores that offer value-oriented,
general merchandise.
The Debtor and CDI Group, Inc., filed for Chapter 11 protection on
March 18, 2009, (Bankr. D. Del. Case No.: 09-10897 to 09-10898)
Domenic E. Pacitti, Esq., and Michael W. Yurkewicz, Esq., at Klehr
Harrison Harvey Branzburg & Ellers represent the Debtors in their
restructuring efforts. The Debtors propose to employ Epiq
Bankruptcy Solutions, LLC, as claims agent. The Debtors listed
estimated assets of $50 million to $100 million and estimated
debts of $100 million to $500 million.
ENERGY PARTNERS: Moody's Cuts Corporate Family Rating to 'Ca'
-------------------------------------------------------------
Moody's Investors Service downgraded Energy Partners, Ltd's
Corporate Family Rating and Probability of Default Rating to Ca
from Caa3 following the company's announcement that it has not
made a $17 million interest payment on its senior notes which was
due on April 15, 2009. Moody's also downgraded the company's
senior unsecured notes rating to C (LGD5, 76%) from Ca (LGD4,
64%). The outlook is negative.
The notes indentures provide for a thirty-day cure period for this
interest payment; however, Energy Partners is also negotiating
with its bank lenders regarding its $38 million borrowing base
deficiency. The company has until April 22, 2009 to present to
its bank group a draft of a proposed plan to convert the senior
unsecured notes to equity and to meet a $16.7 million cash or
security pledge to the Mineral Management Services. The ratings
downgrade and negative outlook reflect the increased likelihood of
default given the company's lack of liquidity and very high
leverage relative to its proved reserves and production base.
The last rating action affecting Energy Partners was on March 11,
2009, when Moody's downgraded the company's CFR to Caa3 and the
senior unsecured notes to Ca, following its receipt of a
noncompliance notice from the MMS. The ratings were left on
review for further possible downgrade and this action concludes
Moody's ratings review.
Energy Partners, Ltd. is an independent E&P company headquartered
in New Orleans, Louisiana.
FIRST METALS: Files Restructuring Proposal Under the BIA
--------------------------------------------------------
First Metals Inc. filed with the Official Receiver a proposal to
its creditors pursuant to Part III of the Bankruptcy and
Insolvency Act.
The proposal has been made to facilitate First Metals' ability to
implement a restructuring plan. A meeting of creditors to vote on
the proposal must be called by the proposal trustee within 21
days. To be accepted the proposal must be approved by a majority
in number, and at least two thirds in value, of the voting in each
class of creditors.
First Metals has approximately 42.8 million shares issued and
outstanding.
First Metals announced on January 7, that it had filed a Notice of
Intention to Make a Proposal under the Bankruptcy and Insolvency
Act. The filing was made to facilitate First Metal's ability to
implement a restructuring plan. On February 6, 2009, First Metals
obtained a Court Order for an original extension, until March 23,
2009, to file a proposal with the Official Receiver. The deadline
was later moved to April 17.
Based in Toronto, Ontario, First Metals Inc. (CA:FMA) --
http://www.firstmetalsinc.com-- produces Copper from its Fabie
Mine, near Rouyn-Noranda and has the advanced Magusi Copper, Zinc,
Gold and Silver deposit , located approximately 1.2 km from the
Fabie Mine The Company has approximately 42.8 million shares
issued and outstanding.
FOOTHILLS RESOURCES: Court Sets May 11 As General Bar Date
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware set
May 11, 2009, at 4:00 p.m. prevailing Eastern time as the bar date
for filing of proofs of claim in Foothills Resources, Inc., and
its affiliates' bankruptcy cases.
Governmental entitles have until August 10, 2009, at 4:00 p.m.
prevailing Eastern time to file proofs of claim.
Proofs of claim must be filed by U.S. mail or other hand delivery
system, so as to be actually received by the Debtors notice and
claims agent on or before the applicable bar dates at this
address:
(i) if by regular mail:
The Garden City Group, Inc.
Attn: Foothills Texas, Inc.
P.O. Box 9000
No. 6521
Merrick, NY 11566-9000
or
(ii) if by overnight mail or hand delivery:
The Garden City Group, Inc.
Attn: Foothills Texas, Inc.
105 Maxess Road, Melville, NY 11747
About Foothills Resources
Foothills Resources, Inc., is an oil and gas exploration company
engaged in the acquisition, exploration and development of oil and
natural gas properties. The company's operations are primarily
through its wholly owned subsidiaries, Foothills California, Inc.,
Foothills Texas, Inc., and Foothills Oklahoma, Inc.
On February 11, 2009, Foothills Resources, Inc., and its wholly
owned subsidiaries, Foothills California, Inc., Foothills
Oklahoma, Inc., and Foothills Texas, Inc., filed voluntary
petitions for reorganization relief under Chapter 11 (Bankr. D.
Del. Lead Case No. 09-10453). Judge Christopher S. Sontchi
handles the Chapter 11 cases. The Debtors tapped Akin Gump
Strauss Hauer & Feld LLP as lead bankruptcy counsel. The Garden
City Group Inc. is the company's claims agent. In its bankruptcy
petition, Foothills estimated assets and debts of between
$50 million and $100 million each.
GENERAL GROWTH: W. Ackman Protects Bet with Bankruptcy Financing
----------------------------------------------------------------
William Ackman's hedge-fund firm agreed to provide $375 million in
bankruptcy financing to General Growth Properties Inc., as part of
his wager that the mall owner can restructure without wiping out
shareholders, Carla Main at Bloomberg News said.
According to the Bloomberg report, Mr. Ackman's Pershing Square
Capital Management LP began accumulating a stake in General Growth
in November and now controls 25% of its equity through stock and
derivatives known as swaps.
Although equity holders take a total loss in about 90% of U.S.
bankruptcies, Mr. Ackman said last month he would push for a debt
restructuring that preserves value for General Growth's
shareholders.
According to GENERAL GROWTH BANKRUTPCY NEWS, General Growth
Properties, Inc., GGP Limited Partnership and certain of their
U.S. subsidiaries, on April 15, 2009, obtained a commitment,
subject to satisfaction of certain conditions, from Pershing
Square Capital Management, L.P., as agent, to provide the Company
and its debtor affiliates $375 million of debtor-in-possession
financing.
GGP said in a regulatory filing that the DIP Credit Agreement will
be used to refinance certain prepetition secured indebtedness and
will be available to fund the Debtors' working capital
requirements. The DIP Credit Agreement provides that principal
outstanding on the DIP Term Loan will bear interest at an annual
rate equal to LIBOR, subject to a minimum LIBOR floor of 3%, plus
12%.
The interest rate on General Growth's DIP, according to Kate
Haywood at Dow Jones Newswires, is higher than that paid by
LyondellBasell Industries on its $8 billion DIP. Lyondell's DIP
Facility included $3.25 billion term loans priced at 10% over
LIBOR and a $1.515 billion asset-based revolving credit facility
at 7% over LIBOR. General Growth's DIP interest rate, she adds,
is also higher than the 8% General Motors Corp. could end up
paying in the event of a default on up to $13.4 billion of loans
put in place by the U.S. government.
The DIP Credit Agreement provides that upon the effective date of
a plan of reorganization for the Company in the Chapter 11 Cases,
the Company will issue warrants to Pershing and its designees to
acquire for a nominal exercise price:
(i) with respect to the Company, 4.9%, on a fully-diluted
basis, of each class or series of equity securities of the
Company; and
(ii) with respect to certain subsidiaries, 4.9%, on a fully-
diluted basis, of any class of equity securities of the
subsidiary issued in respect of certain claims in
connection with the Chapter 11 Cases.
Thomas H. Nolan, Jr., president and chief operating officer of
GGP, said that in the event that, in connection with a plan of
reorganization for the Company, the Company, GGPLP or The Rouse
Company LP offers to sell any newly issued equity securities,
that seller will be obligated to offer to sell to Pershing and
its designees up to an aggregate of 4.9% of those equity
securities on a fully-diluted basis on the same terms.
Mr. Nolan added that in the event that the Company consummates a
rights offering for securities in connection with the plan of
reorganization, it will be obligated to convert a portion of the
DIP Term Loan obligation into those securities. Further, if,
prior to the DIP Term Loan maturity date, the Company has repaid
any of the DIP Term Loan principal and interest, the Company will
have the right to cause the Lenders to purchase the offered
securities in an amount equal to the lesser of:
-- $375.0 million, and
-- the retired amount of the DIP Term Loan on the same terms
and conditions of the rights offering, provided that
certain conditions precedent have been satisfied.
Mr. Nolan, however, disclosed that the conversion rights cannot
result in Pershing and its designees receiving stock equaling
more than 5.0% of the Company common stock on a fully-diluted
basis.
Subject to certain conditions precedent, the Company will also
have the right to elect to repay all or a portion of the
outstanding principal amount of the DIP Term Loan, plus accrued
and unpaid interest thereon, at maturity by issuing common stock
of the Company to the Lenders. However, the stock-settled
repayment right will be limited to the Lenders' receipt of
Company common stock equaling no more than 5.0% of that common
stock on a fully-diluted basis.
The DIP Credit Agreement contains certain customary covenants,
various representations and warranties, and events of default,
Mr. Nolan said.
The Company disclosed it paid Pershing a commitment fee of
$15 million.
About General Growth
Based in Chicago, Illinois, General Growth Properties, Inc.
(NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S.
mall owner, having ownership interest in, or management
responsibility for, more than 200 regional shopping malls in 44
states, as well as ownership in master planned community
developments and commercial office buildings. The Company's
portfolio totals roughly 200 million square feet of retail space
and includes more than 24,000 retail stores nationwide. General
Growth is a self-administered and self-managed real estate
investment trust.
General Growth Properties Inc. and other affiliates filed for
Chapter 11 on April 16, 2009 (Bankr. S.D. N.Y., Case No. 09-
11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P.
Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal &
Manges LLP, have been tapped as bankruptcy counsel. Kirkland &
Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been
engaged as claims agent. The Company also hired AlixPartners LLP
as financial advisor and Miller Buckfire Co. LLC, as investment
bankers. The Debtors disclosed $29,557,330,000 in assets and
$27,293,734,000 in debts as of Dec. 31, 2008.
Bankruptcy Creditors' Service, Inc., publishes General Growth
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by General Growth Properties Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL GROWTH: Allowed to Use Cash, Won't Promptly Draw Loan
-------------------------------------------------------------
General Growth Properties Inc. won approval from Judge Allan
Gropper of the U.S. Bankruptcy Court for the Southern District of
New York to use cash on hand to continue running its operations
and won't immediately seek to use a bankruptcy loan.
Judge Gropper approved the Chicago-based company's request to use
"cash Collateral" owed to lenders at a hearing on April 16.
Bloomberg said, citing court papers, the Company will have about
$122.4 million in cash on hand at the end of the week and expects
that amount to rise to $238.7 million by July. As reported by the
TCR on April 17, 2009, General Growth Properties said that as
demonstrated by its 13-week budget, the GGP Group has sufficient
cash on hand and projected cash flow to continue all business
operations without an immediate need for additional financing
beyond use of cash collateral.
Nonetheless, according to GENERAL GROWTH BANKRUPTCY NEWS, aside
from seeking approval to access cash collateral, the Company will
also seek permission from the Bankruptcy Court to obtain debtor-
in-possession financing from PS Green Holdings, LLC and PS Green
Inc., and Pershing Square Capital Management, L.P., as agent, in
the amount of $375 million.
The DIP Financing Facility does not prime the security interests
of any other secured creditor, and the Debtors do not require or
seek an interim order permitting any borrowing under the DIP
Financing Facility prior to entry of a final order. In a typical
case, a debtor-in-possession would request the court to allow it
access part of the DIP loan package upon interim approval of the
loan, and the remaining amount after final approval.
James A. Mesterharm, managing director of AlixPartners, LLP,
restructuring advisor to GGP, said in a court filing that although
the Debtors' projected cash flow from operations is sufficient,
over the long term, to pay all operating expenses of their
properties and to pay post-petition, contract-rate interest on its
mortgage debt, the Debtors require additional financing to assure
adequate levels of working capital for the duration of the Chapter
11 cases and provide additional liquidity to appropriately operate
their business in a manner that maintains and enhances value for
the benefit of all constituencies. He related that the DIP
Financing Facility provides the Debtors with the necessary
flexibility to make appropriate expenditures and investments in
their business to maintain the competitiveness of their facilities
across the country. It also will protect the estates against
unforeseen events and circumstances, such as interest rate
increases, worse-than-anticipated economic conditions, and
unanticipated capital expenditure requirements like major repairs
to a property.
Mr. Mesterharm provided a "summary" of terms of the proposed DIP
Facility:
-- The proposed DIP Financing Facility was negotiated between
PS Green Holdings, LLC and PS Green Inc. as the initial
lenders, GGP and GGP LP as Borrowers, Pershing Square
Capital Management, L.P. as the Agent, and each of the
Guarantors identified on Schedule 1.1B to the DIP Credit
Agreement.
-- Under the DIP Credit Agreement, the DIP Lender agrees to
make a $375 million credit facility available to the GGP
Group for general working capital purposes, to fund the
costs of administration of the chapter 11 cases, to satisfy
in full the prepetition Goldman Loan, to pay all fees and
expenses and any other purposes permitted under the DIP
Credit Agreement.
-- The proposed DIP Loan bears interest on the unpaid principal
at the lesser of the maximum rate as defined in the
Agreement or LIBOR plus 12%, and will mature on the date
that is the earliest of the Business Day on or immediately
before 18 months after the Funding Date, the effective date
of a chapter 11 plan of reorganization, or the date the Term
Loan is accelerated pursuant to the terms of the DIP Credit
Agreement, whether at stated maturity, upon an Event of
Default or otherwise.
-- Subject to certain exceptions specified in the DIP Credit
Agreement, the collateral offered under the DIP Credit
Agreement includes all real and personal property of the
Debtors and their estates of any kind, whether existing
before or arising after the Petition Date. The DIP Lenders
will receive a first priority lien on unencumbered property
and a junior lien on any encumbered property.
-- Subject to a Carve-Out for certain expenses of
administration, the Agent will receive a superpriority
administrative expense against the Debtors' estates. Under
the Carve-Out, the Agent's liens and the superpriority
administrative claim are subject to any unpaid fees due to
the United States Trustee or the Court, all reasonable fees
and expenses incurred by a trustee under Sec. 726(b) of the
Bankruptcy Code up to $500,000, reasonable expenses of
members of any statutory committee, and all unpaid fees and
expenses allowed by the Court of professionals retained by
the GGP Group through the acceleration of the Maturity Date
and a cap on certain expenses incurred after the
acceleration of the Maturity Date.
-- The DIP Lender will receive warrants to acquire 4.9% of each
class of equity securities of the Debtors upon consummation
of a chapter 11 plan of reorganization. The aggregate
exercise price of all of the warrants is $100.
-- Events of Default include breach of certain covenants,
payment defaults, and the occurrence of certain events in
the chapter 11 cases.
-- Subject to certain conditions, upon the consummation of a
plan of reorganization, the Debtors have the right to elect
to pay all or a portion of the outstanding principal of the
DIP Loan and accrued and unpaid interest due by issuing
common stock of GGP to the DIP Lender.
-- GGP and GGP LP, as borrowers, and the guarantors, agree to
defend, indemnify and hold the agent and the DIP Lenders
harmless from and against certain indemnified liabilities.
-- The Debtors paid a 4% commitment fee to the DIP Lenders
prior to commencement of the Chapter 11 cases. The DIP
Financing Facility contains a three percent 3% exit fee, a
requirement for payment of the DIP Lender's financial
advisory fees, and certain other administrative fees typical
of debtor in possession financing facilities.
About General Growth
Based in Chicago, Illinois, General Growth Properties, Inc.
(NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S.
mall owner, having ownership interest in, or management
responsibility for, more than 200 regional shopping malls in 44
states, as well as ownership in master planned community
developments and commercial office buildings. The Company's
portfolio totals roughly 200 million square feet of retail space
and includes more than 24,000 retail stores nationwide. General
Growth is a self-administered and self-managed real estate
investment trust.
General Growth Properties Inc. and other affiliates filed for
Chapter 11 on April 16, 2009 (Bankr. S.D. N.Y., Case No. 09-
11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P.
Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal &
Manges LLP, have been tapped as bankruptcy counsel. Kirkland &
Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been
engaged as claims agent. The Company also hired AlixPartners LLP
as financial advisor and Miller Buckfire Co. LLC, as investment
bankers. The Debtors disclosed $29,557,330,000 in assets and
$27,293,734,000 in debts as of Dec. 31, 2008.
Bankruptcy Creditors' Service, Inc., publishes General Growth
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by General Growth Properties Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL GROWTH: Simon Property Says GGP Would Be Good Fit
---------------------------------------------------------
General Growth Properties Inc.'s malls would be a good fit for
Simon Property Group Inc., Simon's Chief Financial Officer
Stephen E. Sterrett said, according to Bloomberg's Carla Main.
Bloomberg relates that General Growth, the owner of more than 200
regional shopping malls in 44 states, has been trying to sell
properties including Boston's Faneuil Hall and New York's South
Street Seaport. Before its bankruptcy filing, General Growth had
been marketing the Fashion Show Mall, the Grand Canal Shoppes and
the Shoppes at the Palazzo. The three Las Vegas properties were
put up for sale in October.
"There's a strategic reason for, say, a Simon to buy those
assets and combine them with the Forum Shops," Rich Moore, a
managing director at RBC Capital Markets in Solon, Ohio, said
yesterday in an interview. Simon's Forum Shops at Caesars is
adjacent to the Caesars Palace hotel and casino on the Las Vegas
Strip.
Mr. Sterrett declined to comment on whether Simon Property, the
largest U.S. mall owner, has tried to buy General Growth's Las
Vegas malls or is interested in doing so now. Indianapolis-based
Simon has stakes in 386 properties. He noted that those assets
"have been on the market for some time."
About General Growth
Based in Chicago, Illinois, General Growth Properties, Inc.
(NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S.
mall owner, having ownership interest in, or management
responsibility for, more than 200 regional shopping malls in 44
states, as well as ownership in master planned community
developments and commercial office buildings. The Company's
portfolio totals roughly 200 million square feet of retail space
and includes more than 24,000 retail stores nationwide. General
Growth is a self-administered and self-managed real estate
investment trust.
General Growth Properties Inc. and other affiliates filed for
Chapter 11 on April 16, 2009 (Bankr. S.D. N.Y., Case No. 09-
11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P.
Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal &
Manges LLP, have been tapped as bankruptcy counsel. Kirkland &
Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been
engaged as claims agent. The Company also hired AlixPartners LLP
as financial advisor and Miller Buckfire Co. LLC, as investment
bankers. The Debtors disclosed $29,557,330,000 in assets and
$27,293,734,000 in debts as of Dec. 31, 2008.
Bankruptcy Creditors' Service, Inc., publishes General Growth
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by General Growth Properties Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL GROWTH: Wilmington Trust Says It's Not A Creditor
---------------------------------------------------------
Wilmington Trust (NYSE:WL) said April 16 that it is serving as
successor indenture trustee for certain holders of debt issued by
General Growth Properties (GGP), which filed for Chapter 11
protection April 16 in the United States Bankruptcy Court,
Southern District of New York.
General Growth in its list of 100 largest unsecured creditors
listed Wilmington Trust FSB as having the third and fourth largest
unsecured claims on account of (i) GGPLP Notes 3.98% due April 15,
2012 in the amount of $1,550,000,000 and (ii) Rouse Bonds 6.75%
due May 12, 2013 in the amount of $798,454,857.
Wilmington Trust is not a direct holder of debt issued by any GGP
entity, despite the bankruptcy filing's listing of Wilmington
Trust among GGP's largest unsecured creditors. Wilmington Trust is
serving as successor indenture trustee and has no credit exposure,
unsecured or otherwise, to GGP.
In its role as successor indenture trustee, Wilmington Trust acts
on behalf of creditors who hold $1.55 billion of GGP 3.98% notes
due in 2027 and approximately $800 million of bonds of The Rouse
Company L.P. with a 6.75% coupon due in 2013 (GGP acquired Rouse
in 2004). In addition, Wilmington Trust serves as Delaware
trustee for $200 million of trust preferred securities.
Wilmington Trust represents these creditors by administering
certain provisions of the trust indenture, which is a formal
agreement between debt issuers and bondholders. Through its CCS
business, Wilmington Trust is paid a fee for providing these
trustee services. GGP's bankruptcy filing has no effect on
Wilmington Trust's balance sheet, credit quality, or financial
condition.
"I want to be clear that this bankruptcy filing does not affect
our balance sheet and it poses absolutely no credit risk to us,"
said Ted T. Cecala, Wilmington Trust's chairman and chief
executive officer. "This is simply another assignment that speaks
to CCS' position as a leading global provider of independent
trustee and administrative services for corporate clients."
Wilmington Trust's CCS business offers institutional trustee,
agency, asset management, retirement plan, and administrative
services for clients worldwide who use capital market financing
structures, as well as those who seek to establish or maintain
nexus, or legal residency, for special purpose entities. Because
Wilmington Trust does not underwrite securities offerings or
provide investment banking services, it is able to deliver
corporate trust services that are conflict-free.
About Wilmington Trust
Wilmington Trust Corporation (NYSE:WL) is a financial services
holding company that provides Regional Banking services throughout
the mid-Atlantic region, Wealth Advisory Services for high-net-
worth clients in 36 countries, and Corporate Client Services for
institutional clients in 88 countries. Its wholly owned bank
subsidiary, Wilmington Trust Company, which was founded in 1903,
is one of the largest personal trust providers in the United
States and the leading retail and commercial bank in Delaware.
Wilmington Trust Corporation and its affiliates have offices in
Arizona, California, Connecticut, Delaware, Florida, Georgia,
Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York,
Pennsylvania, South Carolina, Vermont, the Cayman Islands, the
Channel Islands, London, Dublin, Frankfurt, Luxembourg, and
Amsterdam.
About General Growth
Based in Chicago, Illinois, General Growth Properties, Inc.
(NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S.
mall owner, having ownership interest in, or management
responsibility for, more than 200 regional shopping malls in 44
states, as well as ownership in master planned community
developments and commercial office buildings. The Company's
portfolio totals roughly 200 million square feet of retail space
and includes more than 24,000 retail stores nationwide. General
Growth is a self-administered and self-managed real estate
investment trust.
General Growth Properties Inc. and other affiliates filed for
Chapter 11 on April 16, 2009 (Bankr. S.D. N.Y., Case No. 09-
11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P.
Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal &
Manges LLP, have been tapped as bankruptcy counsel. Kirkland &
Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been
engaged as claims agent. The Company also hired AlixPartners LLP
as financial advisor and Miller Buckfire Co. LLC, as investment
bankers. The Debtors disclosed $29,557,330,000 in assets and
$27,293,734,000 in debts as of Dec. 31, 2008.
Bankruptcy Creditors' Service, Inc., publishes General Growth
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by General Growth Properties Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL GROWTH: Fitch Downgrades Issuer Default Rating to 'D'
-------------------------------------------------------------
Fitch Ratings has downgraded the Issuer Default Ratings assigned
to General Growth Properties, Inc. and its subsidiaries GGP
Limited Partnership and The Rouse Company LP to 'D' following the
announcement that these entities have filed for chapter 11
bankruptcy protection. Fitch has affirmed the issue ratings as
outlined below.
Fitch has taken these rating actions:
General Growth Properties, Inc.
-- IDR downgraded to 'D' from 'RD'.
GGP Limited Partnership
-- IDR downgraded to 'D' from 'RD';
-- Revolving credit facility affirmed at 'C/RR5';
-- Term loan affirmed at 'C/RR5';
-- Exchangeable senior notes affirmed at 'C/RR5';
-- Perpetual preferred stock (indicative) affirmed at 'C/RR6'.
The Rouse Company LP
-- IDR downgraded to 'D' from 'C';
-- Senior unsecured notes affirmed at 'C/RR5'.
GENERAL MOTORS: Finalizing Plan for Bankruptcy Filing, Says Report
------------------------------------------------------------------
Telegraph.co.uk reports that General Motors Corp. is finalizing a
plan on a Chapter 11 bankruptcy filing in case it fails to reduce
its $62 billion debt ahead of a June 1 deadline imposed by the
government.
Telegraph.co.uk, citing GM CEO Fritz Henderson, relates that the
government wasn't pressuring the Company into making a decision
before the cut-off date. "Given what we need to accomplish, I
certainly felt a couple weeks ago that it was more probable that
we would need to go through a bankruptcy process," Telegraph.co.uk
quoted Mr. Henderson as saying.
According to Telegraph.co.uk, Mr. Henderson said that it was still
"feasible" that a bankruptcy might be avoided, but he admitted
that any decision on a bankruptcy filing would be made by the
Company in conjunction with the Treasury. Sharon Terlep at The
Wall Street Journal reports that GM, as part of a plan being
worked out for the Company to survive within Chapter 11, is
considering splitting the Company in two parts -- one consisting
of desirable assets like Chevrolet and Cadillac, and the other of
liabilities like health-care obligations to retirees and the
money-losing Saturn brand. "We're working to make sure Treasury
is comfortable and confident we will accomplish our goals," WSJ
quoted Mr. Henderson as saying.
Talks with the United Auto Workers have been slow going, as the
union is more focused on negotiations with Chrysler LLC, which
faces a tighter government-imposed deadline than GM, WSJ states,
citing Mr. Henderson. WSJ relates that a committee representing
bondholders is awaiting a GM deal with the UAW to decide how to
proceed.
WSJ, citing Mr. Henderson, reports that GM will make more cuts in
its hourly and salaried work force in the coming weeks. WSJ
states that GM said earlier this year that it would let go of
about 3,400 white-collar workers, most of them by May 1, 2009.
About 250 workers were dismissed in March and more cuts are
expected this month, WSJ says, citing a GM spokesperson.
WSJ states that GM is trying to offload several assets -- from
money-losing brands to a factory in France. Mr. Henderson, WSJ
reports, said that the Company has potential bidders for its
Hummer truck brand, its European Opel unit and a transmission
plant in Strasbourg, France.
According to WSJ, Mr. Henderson said that GM has taken its AC
Delco off the market after the Company failed to get enough cash
for the parts business. The report says that the unit was put up
for sale in October 2008. GM received much interest but it wasn't
"going to get the value for the business," the report states,
citing Mr. Henderson.
GM said in February that it would need $4.6 billion in additional
U.S. government loans in the second quarter, but Mr. Henderson
said that the U.S. Treasury hasn't yet approved additional
financing, WSJ relates.
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 November 10,
2008, General Motors Corporation's balance sheet at
September 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 November 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 October 9, 2008. S&P said
that the outlook is negative.
Fitch Ratings, as reported in the Troubled Company Reporter on
November 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: Judge & Lawyer Say Ch. 11 Could Be Done in 60 Days
------------------------------------------------------------------
Mark D. Collins, a bankruptcy attorney and the director of
Richards, Layton & Finger, said that a bankrupt General Motors
Corp. could be reorganized in as little as a month, Tom Hals at
Reuters reports.
Citing the Hon. Kevin Gross of the U.S. Bankruptcy Court for the
District of Delaware, Reuters relates that should GM file for
bankruptcy, the judge who handles the case would be under pressure
to accelerate the proceedings. Judge Gross said that if the case
lingered then it could open a "tremendous sinkhole" in the U.S.
economy, Reuters states. "It has to be out in 30 to 60 days," the
report quoted him as saying.
According to Reuters, Judge Gross said that a court could take
steps to speed up the process like eliminating some issues
relating to federal law regarding mass layoffs. Mr. Collins,
Reuters states, said that he expected GM to file in New York due
to the court's experience and speed.
Reuters relates that Mr. Collins said that GM would have to reach
agreement with most parties before filing for bankruptcy and then
move its healthy operations quickly to a new entity that is free
of pre-bankruptcy liabilities. Kimberly S. Johnson at The
Associated Press reports that even without an agreement from a
committee representing large institutional bondholders, GM is
preparing to launch a public bond-exchange offer so the Company
can begin reducing its debt. The AP quoted GM spokesperson Julie
Gibson as saying, "We have a large pool of people we need to
reach, and the only way to do that is through a public offering."
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: Plunkett Cautions on 'Quick Rinse' Bankruptcy
-------------------------------------------------------------
"Conventional wisdom has General Motors Corp. filing for Chapter
11 bankruptcy in late spring or early summer, emerging from court
supervision as a smaller but viable company in as little as two
weeks, or two to four months at the outside. Both of these
scenarios are exceedingly optimistic," according to bankruptcy
experts at the law firm of Plunkett Cooney.
"Bankruptcy may indeed be the last, best option to restructure
General Motors because of the multitude of challenges the company
faces and its deeply entrenched stakeholders," said Doug
Bernstein, head of Plunkett Cooney's Banking, Bankruptcy and
Creditors' Rights practice group. "But it's unrealistic to expect
that the process will go smoothly and quickly. The company is
massive, its operations are complex, and it has thousands of
potential claimants and interested parties. The bankruptcy court
will require time to make sure everyone's due process rights are
respected, even if they have to make painful sacrifices."
"Time is not GM's friend in or out of court," he added. "But the
rights and potentially the livelihoods of employees, dealers,
pensioners, suppliers and investors are at stake. It will take
time for stakeholder groups to form, lawyers to prepare pleadings,
a judge to review them and then make decisions. Rushing the
process raises the risks that corners will be cut, due process
brushed aside and mistakes made. You don't want to get
sidetracked by litigation or see GM's 'quick rinse' become a
'rinse and repeat' bankruptcy."
Mr. Bernstein noted that in the first two weeks of the Delphi
Corp. bankruptcy, nearly 300 individual pleadings were filed with
the court. Each one had to be prepared, filed and settled, or
argued and adjudicated.
Sample of possible issues:
-- Under the bankruptcy code, a judge may set aside collective
Bargaining agreements. However, there must first be good
faith negotiations on a modified contract that have stalled
before a company can petition a judge to reject the
original agreement.
-- Similarly, GM can move to void dealer franchise agreements
with court approval. However, it has more than 6,000
dealers who operate under 50 different sets of state
franchise laws. Further complicating the matter, many of
the dealers' stores carry multiple GM brands, some of which
may end up in the rumored "good" GM and others in the "bad"
GM whose assets will be liquidated through Section 363
sales.
-- Any person with standing has a right to be heard on any
issue before the court. That would include GM's 377,000
hourly retirees who would almost certainly object to any
effort to curtail their contractual benefits.
-- Investment funds that hold GM bonds have a fiduciary
responsibility to put the interests of their shareholders
first. They won't easily accept terms they believe
undervalue their claims.
-- GM's foreign subsidiaries will act to protect their own
interests, especially in the anticipated division of GM
assets.
-- Critical vendor motions will follow the court-granted
automatic stay, which prevents suppliers from trying to
collect receivables. In addition, GM almost certainly will
file preference claims to recover certain payments made to
suppliers and vendors during the 90 days prior to the
bankruptcy filing. All of these will take time to sort.
-- Stakeholders must be given notice when decisions are before
the court so they have time to respond. It's not uncommon
for overnight express letters to be sent regarding urgent
matters. In GM's case, thousands of FedEx and UPS letters
might be required.
-- A Chrysler bankruptcy filing and liquidation, which is a
Distinct possibility, could further complicate GM's ability
to restructure because of the stress it would place on the
supplier base, consumer confidence and the overall economy.
"In many districts, bankruptcy courts are at or near their
physical capacity to handle their existing case load and all of
the associated filings and claims," Mr. Bernstein notes. "A
bankruptcy courthouse may be a huge building, but a bankruptcy
court -- even in Manhattan -- typically includes only a judge,
secretary, law clerk and possibly a docket clerk. There is no
army of judges and clerks that can be mobilized, unless the code
is changed and the courts reorganized."
Those who hope for a short stay in bankruptcy for General Motors
are assuming that many of the major issues can be pre-negotiated,
Bernstein said.
"Even if substantial progress is made between now and the
government's June 1 deadline, enough of the pieces probably won't
be in place to allow a judge to approve a plan in two weeks,"
Bernstein said. "If everything goes perfectly, and it rarely
does, two to four months is doable. But GM's stay in bankruptcy
probably will be longer and more costly than many expect. That's
okay if you end up with a better plan and a truly viable company."
About Plunkett Cooney
Established in 1913, Plunkett Cooney is one of Michigan's largest
full-service law firms with more than 150 attorneys in nine
Michigan cities and Columbus, Ohio. The firm has achieved the
highest rating (AV) awarded by Martindale-Hubbell, a leading,
international directory of law firms.
GENERAL MOTORS: Mulls Dropping Pontiac, GMC Brands in Savings Bid
-----------------------------------------------------------------
General Motors Corp., facing a June 1 U.S.-backed bankruptcy, may
drop its Pontiac and GMC brands as part of broader cost-cutting
moves, Bloomberg's Carla Main said, citing people familiar with
the discussions.
GM's Chevrolet, Cadillac and Buick brands are likely safe, said
the people, who asked not to be named because decisions aren't
final. According to the report, citing the people, GMC and
Pontiac are being studied as part of talks with an Obama
administration task force assessing whether GM can be restructured
without bankruptcy.
According to Ms. Main, shedding Pontiac or GMC would mean a deeper
bite into GM's portfolio of eight U.S. brands than in its Feb. 17
blueprint for keeping $13.4 billion in federal loans. GM said
then it would keep Chevrolet, Cadillac, Buick and GMC and retain
Pontiac as a niche line while selling or closing Hummer, Saab and
Saturn. GMC has a better chance of surviving than Pontiac, one of
the people said, according to the report. GMC, Bloomberg notes,
sells only light trucks such as the Sierra pickup, while Pontiac's
offerings include the descendants of the brand's high-performance
models from the 1960s and 1970s. Among the decisions yet to be
reached is what would happen to Pontiac or GMC should Detroit-
based GM opt not to keep them, the people said.
Structured Bankruptcy
In accordance with the March 31, 2009 deadline in the U.S.
Treasury's loan agreements with General Motors and Chrysler, the
Obama Administration announced its determination of the viability
of the companies, pursuant to their February 17, 2009 submissions,
and is laying out a new finite path forward for both companies to
restructure and succeed. These findings and new framework for
success are consistent with the President's commitment to support
an American auto industry that can help revive modern
manufacturing and support our nation's effort to move toward
energy independence, but only in the context of a fundamental
restructuring that will allow these companies to prosper without
taxpayer support.
-- Viability of Existing Plans: The plans submitted by GM and
Chrysler on February 17, 2009 did not establish a credible path to
viability. In their current form, they are not sufficient to
justify a substantial new investment of taxpayer resources. Each
will have a set period of time and an adequate amount of working
capital to establish a new strategy for long-term economic
viability.
-- General Motors: While GM's current plan is not viable, the
Administration is confident that with a more fundamental
restructuring, GM will emerge from this process as a stronger more
competitive business. This process will include leadership changes
at GM and an increased effort by the U.S. Treasury and outside
advisors to assist with the company's restructuring effort. Rick
Wagoner is stepping aside as Chairman and CEO. In this context,
the Administration will provide GM with working capital for 60
days to develop a more aggressive restructuring plan and a
credible strategy to implement such a plan. The Administration
will stand behind GM's restructuring effort.
-- Chrysler: After extensive consultation with financial and
industry experts, the Administration has reluctantly concluded
that Chrysler is not viable as a stand-alone company. However,
Chrysler has reached an understanding with Fiat that could be the
basis of a path to viability. Fiat is prepared to transfer
valuable technology to Chrysler and, after extensive consultation
with the Administration, has committed to building new fuel
efficient cars and engines in U.S. factories. At the same time,
however, there are substantial hurdles to overcome before this
deal can become a reality. Therefore, the Administration will
provide Chrysler with working capital for 30 days to conclude a
definitive agreement with Fiat and secure the support of necessary
stakeholders. If successful, the government will consider
investing up to the additional $6 billion requested by Chrysler to
help this partnership succeed. If an agreement is not reached, the
government will not invest any additional taxpayer funds in
Chrysler.
-- A Fresh Start to Implement Aggressive Restructurings:
While Chrysler and GM are different companies with different paths
forward, both have unsustainable liabilities and both need a fresh
start. Their best chance at success may well require utilizing the
bankruptcy code in a quick and surgical way. Unlike a
liquidation, where a company is broken up and sold off, or a
conventional bankruptcy, where a company can get mired in
litigation for several years, a structured bankruptcy process - if
needed here - would be a tool to make it easier for General Motors
and Chrysler to clear away old liabilities so they can get on a
path to success while they keep making cars and providing jobs in
our economy.
-- A Commitment to Consumer Warrantees: The Administration
will stand behind new cars purchased from GM or Chrysler during
this period through an innovative warrantee commitment program.
-- Appointment of a Director of Auto Recovery: The
Administration also announced that Edward Montgomery, a top labor
economist and former Deputy Secretary of Labor, will serve as
Director of Recovery for Auto Workers and Communities. Dr.
Montgomery will work to leverage all resources of government to
support the workers, communities and regions that rely on the
American auto industry.
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.
General Motors Corp. admitted in its viability plan submitted to
the U.S. Treasury on February 17 that it considered bankruptcy
scenarios, but ruled out the idea, citing that a Chapter 11 filing
would result to plummeting sales, more loans required from the
U.S. government, and the collapse of dealers and suppliers.
A copy of GM's viability plan is available at:
http://researcharchives.com/t/s?39a4
The U.S. Treasury and U.S. President Barack Obama's automotive
task force are currently reviewing the Plan, which requires an
additional $16.6 billion on top of $13.4 billion already loaned by
the government to GM.
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,
Dominion Bond Rating Service 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.
GERDAU AMERISTEEL: S&P Puts Rating on 4 Cos. on Watch Negative
--------------------------------------------------------------
Standard & Poor' Ratings Services said that it took rating actions
on four U.S. steel producers and fabricators. Specifically, S&P
placed the ratings on United States Steel Corp., Gerdau Ameristeel
Corp., and Worthington Industries Inc. on CreditWatch with
negative implications and revised the outlook on Commercial Metals
Co. to negative.
As reported by the Troubled Company Reporter on July 7, 2008,
Standard & Poor's Ratings Services affirmed Gerdau Ameristeel
Corp.'s ratings, including the 'BB+' corporate credit rating.
These actions are part of S&P's ongoing review of the metals
industry in light of the precipitous drop in steel pricing and
demand at the end of 2008. S&P placed the ratings on Nucor Corp.
on CreditWatch with negative implications on March 18, 2009. S&P
may take further rating actions as S&P continues its review.
Producers have shown discipline in cutting output and import
competition is relatively light, but the speed and depth of the
current economic downturn has been striking and is threatening the
credit quality of many steel producers. Mills in North America
are operating between 40% and 50% of capacity, and there have been
few indications that demand will improve in any meaningful way
during 2009.
Although most participants have adequate liquidity for the time
being, operating at utilization rates below 50% for a prolonged
period of time, even for the minimills with their more flexible
cost structures, will likely lead to much weaker credit measures.
In some cases, these conditions could lead to potential covenant
compliance issues and will eat away at liquidity reserves.
S&P will continue to evaluate industry conditions, its affects on
credit quality and liquidity, and the steps companies are taking
in response to a very tough market.
GERDAU AMERISTEEL: S&P Puts 'BB+' Rating on Negative CreditWatch
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it placed its
ratings, including its 'BB+' corporate credit rating, on Tampa,
Florida-based Gerdau Ameristeel Corp. on CreditWatch with negative
implications.
"The CreditWatch listing reflects our concern that financial
metrics will be inconsistent with the current rating, given the
very weak operating environment, with U.S. steel mills operating
at less than 50% capacity, and the lack of signs of meaningful
recovery in steel end-markets in 2009," said Standard & Poor's
credit analyst Marie Shmaruk. Although the company, as a minimill
producer, has a relatively flexible cost structure, operating at
very low utilization rates for prolonged periods of time will
likely lead to a sustained period of very weak credit metrics.
For the rating, S&P would expect the company's adjusted debt to
EBITDA to be below 4x and funds from operations to adjusted debt
above 25%.
In resolving the CreditWatch listing, S&P will evaluate the
company's plans for dealing with the extremely difficult market
conditions and review steps the company is taking to preserve and
enhance liquidity.
GOLDEN CROSSING: Moody's Reviews 'Ba1' Rating on Bank Facilities
----------------------------------------------------------------
Moody's Investors Service placed Golden Crossing Finance Inc.
underlying Ba1 rating for the backed senior secured bank
facilities under review for downgrade.
"The project is on target for substantial completion in the near
future and Moody's expects that the operating performance will be
satisfactory says Catherine Deluz, Moody's analyst for GCFI.
However overlaying the fundamental operational strength of the
project is the project's exposure to weakening counterparties.
The key risk at this stage is a provision in the loan agreement
for the project credit facilities whereby a financial guarantor's
event of default would trigger a GCFI's event of default. One of
the financial guarantors is XL Capital Assurance (UK) Ltd (a.k.a
Syncora). Syncora's insurance strength rating has been downgraded
now to Ca and while the sponsor has been working diligently on
dealing with that cross default provision, there is no final
resolution as yet, and a resolution could be a few days or weeks
away. In the meantime the deadline for Syncora to complete its
restructuring is fast approaching, and Syncora has announced that
it would suspend the payment of claims as of April 26, 2009 under
certain circumstances. As a result, the risk that a financial
guarantor's event of default and a cross default could be
triggered before any resolution is reached is increasing."
The last rating action was on February 19, 2009 when GCFI was
downgraded to Ba1 with a negative outlook.
Debt list:
-- Insured Senior Secured Bank Credit Facilities:
C$963.4 million.
Golden Crossing Finance and Golden Crossing General Partnership
are special purpose vehicles indirectly owned by Bilfinger Berger
AG (not rated). Both GCFI and GCGP are headquartered in
Vancouver, British Columbia. GCFI is the financial conduit
created to provide funding to GCGP for the development of the
Golden Ears Bridge project, which consists of a new six-lane
bridge across the Fraser River east of Vancouver, British
Columbia, and approximately 13 kilometres of new and existing
roads. The project is a Public Private Partnership with the South
Coast British Columbia Transportation Authority.
GREAT BASIN BANK: Nevada State Bank Assumes All Deposits
--------------------------------------------------------
Great Basin Bank of Nevada, Elko, Nevada, was closed April 17 by
the Nevada Financial Institutions Division, which appointed the
Federal Deposit Insurance Corporation (FDIC) as receiver. To
protect the depositors, the FDIC entered into a purchase and
assumption agreement with Nevada State Bank, Las Vegas, Nevada, to
assume all of the deposits of Great Basin Bank of Nevada.
The five offices of Great Basin Bank of Nevada will reopen on
Monday as branches of Nevada State Bank. Depositors of Great
Basin Bank of Nevada will automatically become depositors of
Nevada State Bank. Deposits will continue to be insured by the
FDIC, so there is no need for customers to change their banking
relationship to retain their deposit insurance coverage. Customers
of both banks should continue to use their existing branches until
Nevada State Bank can fully integrate the deposit records of Great
Basin Bank of Nevada.
Over the weekend, depositors of Great Basin Bank of Nevada can
access their money by writing checks or using ATM or debit cards.
Checks drawn on the bank will continue to be processed. Loan
customers should continue to make their payments as usual.
As of December 31, 2008, Great Basin Bank of Nevada had total
assets of $270.9 million and total deposits of $221.4 million. In
addition to assuming all of the deposits of the failed bank,
Nevada State Bank agreed to purchase approximately $252.3 million
of assets. The FDIC will retain the remaining assets for later
disposition.
The FDIC and Nevada State Bank entered into a loss-share
transaction on approximately $143.4 million of Great Basin Bank's
assets. Nevada State Bank will share in the losses on the asset
pools covered under the loss-share agreement. The loss-sharing
arrangement is projected to maximize returns on the assets covered
by keeping them in the private sector. The agreement also is
expected to minimize disruptions for loan customers.
Customers who have questions about Friday's transaction can call
the FDIC toll-free at 1-866-782-1969. Interested parties can also
visit the FDIC's Web site at
http://www.fdic.gov/bank/individual/failed/greatbasin.html
The FDIC estimates that the cost to the Deposit Insurance Fund
will be $42 million. Nevada State Bank's acquisition of all the
deposits was the "least costly" resolution for the FDIC's Deposit
Insurance Fund compared to alternatives. Great Basin Bank of
Nevada is the twenty-fifth FDIC-insured institution to fail in the
nation this year, and the second in Nevada. The last FDIC-insured
institution to be closed in the state was Security Savings Bank,
Henderson, on February 27, 2009.
Congress created the Federal Deposit Insurance Corporation --
http://www.fdic.gov/-- in 1933 to restore public confidence in
the nation's banking system. The FDIC insures deposits at the
nation's 8,305 banks and savings associations and it promotes the
safety and soundness of these institutions by identifying,
monitoring and addressing risks to which they are exposed. The
FDIC receives no federal tax dollars - insured financial
institutions fund its operations.
MERITAGE HOMES: Moody's Affirms 'B1' Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service affirmed all of the ratings of Meritage
Homes Corporation, including its corporate family rating of B1,
senior unsecured debt rating of B1, and speculative grade
liquidity rating of SGL-2. The ratings outlook remains negative.
The ratings' affirmation reflects the total absence of any debt
maturities before 2014, the company's positive, albeit weakened,
cash flow generation, and $314 million unrestricted cash balance
as of December 31, 2008 (pro forma for $108 million in tax refunds
collected in March 2009). In addition, Meritage operates under a
business model that heavily favors optioned over owned land,
leaving it somewhat less exposed to the large impairment charges
being booked by its peer group. At the same time, however, the
company may face covenant compliance challenges later this year,
particularly in its tangible net worth test, although Moody's
notes that the company currently has nothing drawn or needed under
its revolver, which was paid off early in 2008, save for some
modest letter of credit exposure; derives over 50% of revenues
from one state - Texas, although that is currently to the
company's benefit; and has a large proportion of its total lot
supply in Arizona, an especially weak homebuilding market
currently.
The negative outlook reflects the expectation of Moody's Corporate
Finance Group that housing market conditions will worsen in 2009,
the bottom is not yet visible, government actions will be helpful
largely at the margin, liquidity will remain tight and lender
behavior uncertain, and 2009 will be a year of greatly reduced
deliveries.
Going forward, the ratings outlook could stabilize if the company
were to begin to generate substantial cash flow and use the cash
to continue to augment liquidity and/or were to turn profitable on
a pre-impairment basis. The company's ratings could come under
pressure if the company were to have difficulty receiving further
covenant relief, if needed; if Moody's were to project the company
to turn cash flow negative on a trailing twelve month basis in
2009 and 2010; or if debt leverage were to exceed 65% on a
sustained basis (as of December 31, 2008, Meritage Homes' lease
adjusted debt leverage was approximately 57%).
These ratings were affirmed:
-- B1 corporate family rating;
-- B1 probability of default rating;
-- B1 senior unsecured debt rating (LGD3, 49%) [vs. B1 (LGD4,
53%)];
-- SGL-2 speculative grade liquidity rating.
Moody's last rating action for Meritage occurred on January 17,
2008, at which time Moody's lowered the company's corporate family
rating to B1 from Ba3.
Meritage Homes Corporation is the 10th largest homebuilder in the
U.S., primarily building attached and detached single-family homes
in 12 metropolitan areas in Arizona, Texas, California, Nevada,
Colorado, and Florida. Formerly known as Meritage Corporation,
the company was founded in 1985 and is headquartered in
Scottsdale, Arizona. Total revenues and consolidated net income
for the year ended December 31, 2008 were approximately $1.5
billion and ($292) million, respectively.
HAMPSHIRE GROUP: President and CEO Michael Culang Steps Down
------------------------------------------------------------
Hampshire Group, Limited, said Michael S. Culang had resigned as
President and Chief Executive Officer and as a Director of the
company.
The Company also said Richard Mandell has been appointed as
President and Chief Executive Officer. Mr. Mandell has served as
a Director of the company since April 2008. Mr. Mandell also
serves as a director of Encore Capital Group, for which he served
as the Chairman of the Board of Directors from October 2004 until
May 2007. In addition, Mr. Mandell serves on the Board of
Directors of Trian Acquisition I Corp., a $920 million SPAC. From
January 1986 to February 1998, Mr. Mandell was a Vice President --
Private Investments of Clariden Asset Management (NY) Inc., a
subsidiary of Clariden Bank, a private Swiss bank. Prior to that,
Mr. Mandell served as a Managing Director of Banking of Prudential
Securities Incorporated, from 1982 to June 1995, where he was head
of the Retail Trade Group.
Heath L. Golden has been appointed Executive Vice President and
Chief Operating Officer. Mr. Golden was previously Vice President
of Administration and General Counsel.
The Company is currently party to a merger agreement with NAF
Holdings II, LLC and NAF Acquisition Corp. Subject to the terms
and conditions of the merger agreement, NAF Acquisition Corp. has
commenced a cash tender offer to purchase all of the outstanding
shares of common stock of the Company at $5.55 per share, net to
the holders thereof and without interest, in cash. The tender
offer was scheduled to expire at 5:00 P.M., New York City time, on
April 17, 2009, unless extended.
Following the consummation of the tender offer and subject to the
satisfaction or waiver of the conditions set forth in the merger
agreement, NAF Acquisition Corp. would merge with and into the
Company, with the Company continuing as the surviving corporation.
About Hampshire Group
Based in New York, Hampshire Group, Limited (Pink Sheets: HAMP) is
a leading U.S. provider of women's and men's sweaters, wovens and
knits, and a designer and marketer of branded apparel. Its
customers include leading retailers such as Macy's, Kohl's, JC
Penney, Dillard's, Bloomingdale's and Nordstrom, for whom it
provides trend-right,
branded apparel. Hampshire's owned brands include
Spring+Mercer(R), its newly-launched "better" apparel line,
Designers Originals(R), Hampshire's first brand and still a top-
seller in department stores, as well as Mercer Street Studio(R),
Requirements(R), and RQT(R). Hampshire also licenses the Geoffrey
Beene(R) and Dockers(R) labels for men's sweaters, both of which
are market leaders in their categories, and recently acquired
licenses for classification labels of the Joseph Abboud(R) and
Alexander Julian(R) brands for men's tops and bottoms.
* * *
As reported by the Troubled Company Reporter on April 14, 2009,
Hampshire Group notified the six participating commercial banks
who are parties to its revolving credit facility that the Company
was not in compliance with the credit facility's consolidated
fixed charge coverage ratio covenant for the quarterly period
ended December 31, 2008. The Company has entered into a letter
agreement dated April 2, 2009, with HSBC Bank USA National
Association -- as agent and letter of credit issuing bank under
the credit facility -- pursuant to which the lenders may, but are
not obligated to, issue letters of credit to the Company's
suppliers on a cash collateralized basis.
The Company is in discussions with its lenders regarding a waiver
of the fixed charge coverage ratio covenant for the fourth quarter
of 2008 and an amendment to the credit facility to waive or
otherwise replace the fixed charge covenant requirement for 2009.
Absent a waiver or amendment waiving the non-compliance, or
alternate financing, the Company may not be able to collateralize
its obligations under existing or future production orders, as
required, and would not be permitted to borrow under the credit
facility, which would prevent the Company from operating its
business.
The Company's independent public accounting firm Deloitte & Touche
LLP has said the Company's non-compliance with the fixed charge
ratio covenant under the credit facility raises uncertainty
regarding the Company's ability to fulfill its financial
commitments as they become due during 2009, which raises
substantial doubt about its ability to continue as a going
concern.
The Company had $98.7 million in total assets and $33.9 million in
total liabilities at December 31, 2008.
HEALTH NET: S&P Puts 'BB' Rating on $400MM 6.375% Notes Due 2017
----------------------------------------------------------------
Standard & Poor's Ratings Services said it withdrew its recovery
ratings on all rated health insurance companies' debt issues.
Consequently, S&P is changing some of S&P's issue-level ratings on
these debt issues. These actions are the result of a change in
S&P's application of criteria for rating debt issued by health
insurers. The issuer credit ratings remain unchanged.
In May 2007, Standard & Poor's adopted its recovery rating
criteria. According to this criteria, S&P determines an issue-
level rating based on the issuer credit rating as adjusted, if
appropriate, per the recovery rating (i.e., by notching up or down
from the issuer credit rating).
However, S&P now believe that there are growing uncertainties in
the industry about how to appropriately factor in the impact of
regulatory intervention on enterprise valuation. Therefore, S&P
will no longer use the recovery analysis methodology to determine
the issue-level ratings on health insurers' debt issues. S&P is
now reverting to S&P's original methodology for notching, which is
based on structural subordination.
Ratings List
Downgraded; Recovery Ratings Withdrawn
Amerigroup Corp.
To From
-- ----
Secured
$50 mil. bank loan due 2012 BB BB+
Recovery Rating NR 2
$351.3 mil. bank loan due 2012 BB BB+
Recovery Rating NR 2
HealthSpring Inc.
To From
-- ----
Secured
$100 mil. revolver due 2012 B+ BB-
Recovery Rating NR 2
$300 mil. term loan A due 2012 B+ BB-
Recovery Rating NR 2
Upgraded; Recovery Ratings Withdrawn
Amerigroup Corp.
To From
-- ----
Unsecured
$260 mil. notes due 2012 BB B+
Recovery Rating NR 6
Issue-Level Ratings Remain Unchanged; Recovery Ratings Withdrawn
Health Net Inc.
To From
-- ----
Unsecured
$400 mil. 6.375% notes due 2017 BB
Recovery Rating NR 3
Aveta Inc.
To From
-- ----
Secured
$20 mil. bank loan due 2010 B
Recovery Rating NR 4
$485 mil. bank loan due 2011 B
Recovery Rating NR 4
CareMore Holdings Inc.
To From
-- ----
Secured
$25 mil. revolver due 2012 B
Recovery Rating NR 4
$100 mil. term loan due 2013 B
Recovery Rating NR 4
Bravo Health Inc.
To From
-- ----
Secured
$25 mil. revolver due 2012 B
Recovery Rating NR 4
$90 mil. term loan B due 2013 B
Recovery Rating NR 4
HEALTHSPRING INC: S&P Cuts Ratings on $100MM & $300MM Loans to B+
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it withdrew its recovery
ratings on all rated health insurance companies' debt issues.
Consequently, S&P is changing some of S&P's issue-level ratings on
these debt issues. These actions are the result of a change in
S&P's application of criteria for rating debt issued by health
insurers. The issuer credit ratings remain unchanged.
In May 2007, Standard & Poor's adopted its recovery rating
criteria. According to this criteria, S&P determines an issue-
level rating based on the issuer credit rating as adjusted, if
appropriate, per the recovery rating (i.e., by notching up or down
from the issuer credit rating).
However, S&P now believe that there are growing uncertainties in
the industry about how to appropriately factor in the impact of
regulatory intervention on enterprise valuation. Therefore, S&P
will no longer use the recovery analysis methodology to determine
the issue-level ratings on health insurers' debt issues. S&P is
now reverting to S&P's original methodology for notching, which is
based on structural subordination.
Ratings List
Downgraded; Recovery Ratings Withdrawn
Amerigroup Corp.
To From
-- ----
Secured
$50 mil. bank loan due 2012 BB BB+
Recovery Rating NR 2
$351.3 mil. bank loan due 2012 BB BB+
Recovery Rating NR 2
HealthSpring Inc.
To From
-- ----
Secured
$100 mil. revolver due 2012 B+ BB-
Recovery Rating NR 2
$300 mil. term loan A due 2012 B+ BB-
Recovery Rating NR 2
Upgraded; Recovery Ratings Withdrawn
Amerigroup Corp.
To From
-- ----
Unsecured
$260 mil. notes due 2012 BB B+
Recovery Rating NR 6
Issue-Level Ratings Remain Unchanged; Recovery Ratings Withdrawn
Health Net Inc.
To From
-- ----
Unsecured
$400 mil. 6.375% notes due 2017 BB
Recovery Rating NR 3
Aveta Inc.
To From
-- ----
Secured
$20 mil. bank loan due 2010 B
Recovery Rating NR 4
$485 mil. bank loan due 2011 B
Recovery Rating NR 4
CareMore Holdings Inc.
To From
-- ----
Secured
$25 mil. revolver due 2012 B
Recovery Rating NR 4
$100 mil. term loan due 2013 B
Recovery Rating NR 4
Bravo Health Inc.
To From
-- ----
Secured
$25 mil. revolver due 2012 B
Recovery Rating NR 4
$90 mil. term loan B due 2013 B
Recovery Rating NR 4
HORIZON LINES: S&P Affirms 'B+' Long-Term Corporate Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on
shipping company Horizon Lines, Inc., including its 'B+' long-term
corporate credit rating. At the same time, S&P affirmed the 'BB'
rating on the senior secured debt, two notches above the corporate
credit rating, while leaving the recovery rating on this debt
unchanged at '1' indicating expectations of very high (90%-100%)
recovery in the event of a payment default. In addition, S&P
affirmed the 'B-' rating on the senior unsecured notes, two
notches below the corporate credit rating, while leaving the
recovery rating on this debt unchanged at '6', indicating
expectations of a negligible (0%-10%) recovery in the event of a
payment default. The outlook is negative.
"Ratings on Horizon Lines reflect the company's highly leveraged
financial profile, shareholder-friendly financial policies, and
participation in the capital-intensive and competitive shipping
industry," said Standard & Poor's credit analyst Funmi Afonja.
Positive credit factors include barriers to entry afforded by the
Jones Act (which applies to intra-U.S. shipping) and the less
cyclical demand for ocean cargo shipments of consumer staples,
relative to other commodities.
Charlotte, North Carolina-based Horizon Lines' operating outlook
and financial profile have been negatively affected by the U.S.
recession and prolonged softness in the Puerto Rico market. The
weak macroeconomic conditions resulted in pricing pressures and
low-single-digit volume reductions, during 2008, in all markets
served except Alaska, which had a modest volume increase.
Alaskans are supported by distributions from The Alaska Permanent
Fund which sets aside a certain share of oil revenues to benefit
Alaskans. S&P expects that over the next year, this oil-driven
economy will be increasingly affected by greatly reduced crude oil
prices and a prolonged U.S. recession. The current ratings and
outlook take into consideration cost-cutting initiatives, reduced
capital spending plans, and modest debt maturities over the next
few years. Even so, S&P believes that earnings and cash
generation potential will continue to remain vulnerable to
macroeconomic pressures through at least the end of the year.
Given current uncertainty over the depth and duration of the U.S.
recession, S&P is maintaining a negative outlook on the company.
At Dec. 21, 2008, debt to EBITDA (adjusted for operating leases)
was 6.6x, compared with 5.6x in the prior period. Over the past
year, credit measures have weakened due largely to margin pressure
from elevated fuel prices and weaker volumes and due to debt-
financed share buybacks. S&P expects that credit measures will
remain vulnerable to weakening macroeconomic conditions and be
less affected by fuel prices that have moderated in recent months.
The negative outlook reflects the potential for a further material
weakening in financial profile, due to the effects of the U.S.
recession. If that were to occur, causing debt to EBITDA to
approach 8x, S&P would likely lower ratings. S&P's ratings and
outlook do not incorporate any potential liquidity events or
negative outcome that could result from the Department of Justice
investigation. If the investigation were to result in a material
fine or negative outcome, S&P would likely lower the rating. S&P
could revise the outlook to stable if earnings and credit metrics
strengthen as a result of improved market conditions, although S&P
does not anticipate such an improvement over the near term.
HUMAN TOUCH: Redemption Date Extension Cues S&P's 'D' Rating
------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on Long Beach, California-based robotic massage
chair producer and marketer Human Touch LLC and its wholly owned
subsidiary Interactive Health Finance Corp. to 'D' from 'CC'. S&P
also lowered the ratings on the company's $100 million 7.25%
senior notes due April 1, 2011, to 'D' from 'C'. The recovery
rating for these notes remains at '6', indicating expectations of
negligible (0%-10%) recovery in the event of a payment default.
These rating actions reflect Standard & Poor's view that the
extension of the mandatory redemption date constitutes a default
under S&P's criteria, given that the payment date has been
extended beyond the original payment date. S&P notes that it is
S&P's understanding that such extension was made pursuant to an
amendment agreed to by a majority of bondholders, and therefore
S&P believes there is no contractual default. As of Dec. 31,
2008, S&P estimates Human Touch had about $83 million in reported
debt outstanding.
The downgrades follow Human Touch's extension of its first
mandatory redemption date on these notes from April 1, 2009 to
April 21, 2009.
"We expect that the company may restructure its debt given its
highly leveraged capital structure and weak operating
performance," said Standard & Poor's credit analyst Bea Chiem.
"If Human Touch is able to make this deferred principal payment,
or upon completion of a debt restructuring, S&P would review and
raise the ratings."
HUNTSMAN CORP: Deutsche Bank Relaxes Unit's Loan Covenants
----------------------------------------------------------
Huntsman International LLC, a wholly owned subsidiary of Huntsman
Corporation, entered into a waiver to its $650 million revolving
credit facility dated August 16, 2005, with Deutsche Bank AG New
York Branch, as administrative agent, and the financial
institutions party thereto as lenders.
The waiver relaxes the senior secured leverage ratio covenant from
3.75 to 1.00 to 5.00 to 1.00 for the period measured June 30, 2009
through June 30, 2010.
The waiver, among other things, also modifies the definition of
Consolidated EBITDA and permits Huntsman International LLC to add
back any lost profits attributable to Hurricanes Gustav and Ike
that occurred in 2008. Additionally, the amount of Permitted Non-
Cash Impairment and Restructuring Charges was increased from $100
million to $200 million.
As an incentive to the lenders to agree to these changes, Huntsman
offered a payment of 50 basis points to consenting lenders. In
addition the LIBOR spread on borrowed funds under the revolving
credit facility increased to 400 basis points. There are
currently no borrowings under this facility. Among other things,
Huntsman also agreed not to make aggregate restricted payments
greater than $100 million plus Available Equity Proceeds.
Kimo Esplin, its CFO, stated: "We were fully compliant with our
financial covenants, but as we looked forward and considered the
possibility of a longer than anticipated global recession, we felt
it prudent to take action now to obtain greater flexibility under
our covenants."
He added, "By obtaining this waiver, we preserve our ability to
freely access the $650 million revolver in addition to available
cash to meet the needs of our business, even if the economy's
recovery from the present downturn takes longer than expected. We
finished our first quarter with liquidity in excess of $1 billion.
We are pleased to have taken this step and others that put us in a
position of financial strength as the world's economies begin to
recover."
A full-text copy of the Waiver is available at no charge at
http://ResearchArchives.com/t/s?3b9a
About Huntsman
Huntsman Corp. -- http://www.huntsman.com/-- is a global
manufacturer and marketer of differentiated chemicals. Its
operating companies manufacture products for a variety of global
industries, including chemicals, plastics, automotive, aviation,
textiles, footwear, paints and coatings, construction, technology,
agriculture, health care, detergent, personal care, furniture,
appliances and packaging. Originally known for pioneering
innovations in packaging and, later, for rapid and integrated
growth in petrochemicals, Huntsman has more than 12,000 employees
and operates from multiple locations worldwide. The Company had
2008 revenues exceeding $10 billion.
* * *
As reported by the Troubled Company Reporter on March 19, 2009,
Standard & Poor's Ratings Services said it lowered its ratings on
Salt Lake City, Utah-based Huntsman Corp., including its corporate
credit rating to 'B' from 'BB-'. The ratings remain on
CreditWatch with negative implications. At the same time, S&P
assigned its '5' recovery rating, indicating the expectation of
modest recovery (10%-30%) in the event of a default, to Huntsman
International LLC's existing $300 million senior unsecured notes.
S&P also assigned a '6' recovery rating, indicating the
expectation of negligible recovery (0%-10%) in the event of a
default, to Huntsman International LLC's existing subordinated
notes aggregating $1.285 billion.
INNOVATIVE COMPANIES: Case Summary & 69 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: The Innovative Companies LLC, Debtor
150 Motor Parkway, Suite 210
Hauppauge, NY 11788
Bankruptcy Case No.: 09-72669
Debtor-affiliates filing subject to Chapter 11 petitions:
Entity Case No.
------ --------
Innovative Stone LLC 09-72673
Innovative Stone Distribution LLC 09-72676
Innovative Marble & Tile LLC 09-72681
Innovative Stone Surfaces, LLC 09-72682
Innovative New Jersey LLC 09-72683
Chapter 11 Petition Date: April 17, 2009
Court: Eastern District of New York (Central Islip)
Judge: Dorothy Eisenberg
Debtor's Counsel: Leslie A. Berkoff, Esq.
lberkoff@moritthock.com
Moritt Hock Hamroff Horowitz LLP
400 Garden City Plaza, Suite 202
Garden City, NY 11530
Tel: (516) 873-2000
Fax: (516) 873-2010
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
Innovative Companies LLC's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Maran Corp Risk Associates $43,772
300 Hampton Road
Southampton, NY 11968
BDO Seidman, LLP $40,000
401 Broadhollow Rd, 2nd Floor
Melville, NY 11747
Foster & Foley $24,667
255 Executive Drive, Suite 307
Plainview, NY 11803
Epstein Becker & Green PC $23,633
Tashlik, Kreutzer, Goldwyn & Crandell $21,673
Sitrick and Company $9,432
Carr Business Systems $5,637
The United States Life Insurance Co. $2,089
Ecinternet $1,335
Monster, Inc. $1,000
CDW Direct, LLC $990
ADP, Inc. $163
AT&T Mobility $541
B. Innovative Marble & Tile's Largest Unsecured Creditors is
available for free at http://ResearchArchives.com/t/s?3b9c
C. Innovative New Jersey's Largest Unsecured Creditors is
available for free at http://ResearchArchives.com/t/s?3b9d
D. Innovative Stone Distribution's Largest Unsecured Creditors is
available for free at http://ResearchArchives.com/t/s?3b9f
E. Innovative Stone LLC's Largest Unsecured Creditors is
available for free at http://ResearchArchives.com/t/s?3ba0
F. Innovative Stone Surfaces's Largest Unsecured Creditors is
available for free at http://ResearchArchives.com/t/s?3ba1
The petition was signed by Karen Pearse, president and chief
financial officer.
INTERACTIVE HEALTH: S&P's Corporate Credit Rating Tumble to 'D'
---------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on Long Beach, California-based robotic massage
chair producer and marketer Human Touch LLC and its wholly owned
subsidiary Interactive Health Finance Corp. to 'D' from 'CC'. S&P
also lowered the ratings on the company's $100 million 7.25%
senior notes due April 1, 2011, to 'D' from 'C'. The recovery
rating for these notes remains at '6', indicating expectations of
negligible (0%-10%) recovery in the event of a payment default.
These rating actions reflect Standard & Poor's view that the
extension of the mandatory redemption date constitutes a default
under S&P's criteria, given that the payment date has been
extended beyond the original payment date. S&P notes that it is
S&P's understanding that such extension was made pursuant to an
amendment agreed to by a majority of bondholders, and therefore
S&P believes there is no contractual default. As of Dec. 31,
2008, S&P estimates Human Touch had about $83 million in reported
debt outstanding.
The downgrades follow Human Touch's extension of its first
mandatory redemption date on these notes from April 1, 2009 to
April 21, 2009.
"We expect that the company may restructure its debt given its
highly leveraged capital structure and weak operating
performance," said Standard & Poor's credit analyst Bea Chiem.
"If Human Touch is able to make this deferred principal payment,
or upon completion of a debt restructuring, S&P would review and
raise the ratings."
INTERNATIONAL KIRKLAND: Seek Debt Settlement, May File Under BIA
----------------------------------------------------------------
International Kirkland Minerals Inc. has settled the principal
terms of nine debt settlement agreements for an aggregate of
$526,277.75 of debt owed by the Company to arm's-length
consultants and service providers.
The debt settlement agreements are based at $0.04 per share which
is the closing price of IKI as at April 15, 2009, and the
agreements, if necessary, are also subject to Insolvency and
Bankruptcy proceedings at the option of the Company to
simultaneously eliminate all debts of the Company on the same
terms and conditions as with all creditors of the Company.
The debt settlements represent over 66.66% of the aggregate debt
owed by the Company to arm's-length creditors and represent all
creditors of the Company except for one arm's-length creditor that
may be owed a net of approximately $245,000 by the Company, which
represents less than 33.33% of all outstanding debt owed by the
Company to arm's-length creditors.
In addition, the Company announces a non-brokered private
placement unit offering of up to 10,000,000 units of the Company
at a price of $0.03 per unit for gross proceeds of $300,000. Each
unit consists of one common share and one share purchase warrant
exercisable into one further common share of the Company at a
price of $0.05 per share over a one year term. The closing of the
private placement is subject to the settlement of all debts of the
Company, at the option of the subscriber. Insiders will subscribe
for 25% (2,500,000 units) of the above noted private placement.
The debt settlements and private placement is subject to the
approval of the TSX Venture Exchange and all other regulatory
authorities having jurisdiction.
Finally, the Company has initiated a property search for North
American-based gold prospects.
Vancouver, British Columbia-based International Kirkland Minerals
Inc. (TSX VENTURE: IKI) engages in the acquisition, exploration,
and evaluation of mineral properties in Canada. It primarily
explores for uranium and Gold properties.
JAMES A RHODE: Section 341(a) Meeting Scheduled For May 12
----------------------------------------------------------
The U.S. Trustee for Region 14 will convene a meeting of creditors
in James A. Rhode's Chapter 11 case on May 12, 2009, at 3:00 p.m.,
at 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.
Phoenix, Arizona-based James A. Rhode and Naomi R. Rhode filed for
Chapter 11 protection on April 10, 2009 (Bankr.D. Ariz. Case No.
09-07133). James E. Cross, Esq., at Osborn Maledon P.A.
represents the Debtor in its restructuring efforts. Each of the
Debtor's estimated assets and debts range from $10 million to
$50 million.
LEE MEMORIAL: Wants Court to Approve Sale Bid Procedures
--------------------------------------------------------
The Hon. Margaret Cangilos-Ruiz of the United States Bankruptcy
Court for the Northern District of New York authorized the Albert
Lindley Lee Memorial Hospital aka A.L. Lee Memorial Hospital to
access, on an interim basis, cash collateral of Fulton Savings
Bank until April 24, 2009.
Proceeds of the cash collateral will be used to fund the Debtor's
day-to-day operations. The Debtor said that they don have
sufficient available resources of working capital to carry on the
operations of its business.
The Debtor agreed to make $4,000 adequate protection payment to
Fulton Savings Bank each month.
The Debtor and Fulton Savings entered into loan agreement dated
Dec. 12, 2002, of which Fulton Savings claims first priority liens
on, and security interests in the Debtor's present and future
accounts receivables and certain assets.
A hearing is set for April 30, 2009, at 11:30 a.m., to consider
final approval of the request. Objections, if any, are due
April 27, 2009.
A full-text copy of the Debtor's cash collateral budget is
available for free at http://ResearchArchives.com/t/s?3b8d
Fulton, New York-based The Albert Lindley Lee Memorial Hospital,
also known as A.L. Lee Memorial Hospital, filed for Chapter 11
protection on April 3, 2009 (Bankr. N. D. N.Y. Case No. 09-30845).
Stephen A. Donato, Esq., at Bond, Schoeneck & King, PLLC,
represents the Debtor in its restructuring efforts. The Debtor
listed total assets of $17,167,501 and total debts of $12,281,735.
LEE MEMORIAL: Proposes Bid Protocol for Phoenix Property
--------------------------------------------------------
The Albert Lindley Lee Memorial Hospital, also known as A.L. Lee
Memorial Hospital, asks the U.S. Bankruptcy Court for the Northern
District of New York to approve bidding procedures to govern the
sale of its real property and building comprising the Phoenix
Primary Care Center including medical facilities.
In addition, the Debtor is asking the Court to approve the asset
purchase agreement with Oswego Hospital, subsidiary of Oswego
Hospital Inc., who agreed to acquire the Debtor's assets for
$1.5 million. The Debtor wants to assume certain unexpired
personal property leases and assign them to Oswego.
The purchase agreement is expected to terminate on April 30, 2009,
if the closing of the sale is not completed by that date.
The Debtor proposes May 11, 2009, as deadline for interested
purchasers to submit their offers for the Debtor's assets. If the
motion is approved, an auction will be held on May 13, 2009, at
1:00 p.m., at the Offices of Bond, Schoeneck & King PLLC at One
Lincoln Center in Syracuse, New York.
Furthermore, the Debtor asks that the Court schedule the sale
hearing on May 14, 2009, at 11:30 a.m.
Fulton, New York-based The Albert Lindley Lee Memorial Hospital,
also known as A.L. Lee Memorial Hospital, filed for Chapter 11
protection on April 3, 2009 (Bankr. N. D. N.Y. Case No. 09-30845).
Stephen A. Donato, Esq., at Bond, Schoeneck & King, PLLC,
represents the Debtor in its restructuring efforts. The Debtor
listed total assets of $17,167,501 and total debts of $12,281,735.
LEHMAN BROTHERS: Merchant Banking Acquired by Reinet & Mgt. Team
----------------------------------------------------------------
Reinet Investments S.C.A., through its wholly-owned subsidiary
Reinet Fund S.C.A. F.I.S., and the current management team of
Lehman Brothers Holdings Inc.'s Merchant Banking business have
completed the acquisition of the assets of Lehman Brothers'
Merchant Banking business. Reinet and the management team have
created a new entity, which has been named Trilantic Capital
Partners. Trilantic will manage approximately $3.3 billion in
portfolio assets through the two former Lehman Brothers funds -
Fund III and Fund IV.
Through the transaction, which has been approved by the Funds'
limited partners, Reinet has purchased a 49% stake in Trilantic
for $10 million and will take over Lehman Brothers' $230 million
of un-invested limited partner commitments to Fund IV. The
management team will own the remaining 51% of the partnership.
Charles Ayres, former managing director and head of global
merchant banking for Lehman Brothers, will manage the new
entity along with his four other partners: E. Daniel James, Joseph
Cohen, Vittorio Pignatti-Morano and Javier Banon.
Johann Rupert, Executive Chairman of Reinet, said:
"Alan Quasha, principal of Quadrant Management and Vanterra
Capital, played the key role in leading the transaction.
Without his experience and diligence the deal would not have
closed. Alan will serve on Trilantic's Investment Committee. The
former Lehman Brothers franchise and closely knit team provide a
strong platform with significant uncommitted capital at a time of
great investment opportunities in the private equity middle
market."
About Trilantic
Trilantic Capital Partners manages funds that seek significant
long-term capital appreciation through direct investments in
established operating companies in partnership with management.
The funds invest in companies with sound business fundamentals,
proven operating teams and a compelling business strategy. Since
1986, the Trilantic management team has raised and managed four
institutional funds and several employee investment vehicles, with
total committed capital in excess of $8.0 billion. To date, the
Global and Europe Funds IV have made investments of some $800
million in aggregate. Further commitments by limited partners to
invest in the funds currently amount to some $1.7 billion.
About Reinet
Reinet Investments S.C.A. is a partnership limited by shares
incorporated in the Grand Duchy of Luxembourg. Reinet Investments
holds the entire ordinary share capital of Reinet Fund S.C.A.
F.I.S., a specialised investment fund holding assets with a
current aggregate value of some EUR2 billion. The investment will
be made through Reinet Fund S.C.A. F.I.S. Reinet shares are
listed on the Luxembourg
Lehman Brothers' Collapse
Founded in 1850, Lehman Brothers Holdings Inc. --
http://www.lehman.com-- was the fourth largest investment bank
in the United States, offering a full array of financial services
in equity and fixed income sales, trading and research, investment
banking, asset management, private investment management and
private equity. Its worldwide headquarters in New York and
regional headquarters in London and Tokyo are complemented by a
network of offices in North America, Europe, the Middle East,
Latin America and the Asia Pacific region.
Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y.
Case No. 08-13555) after Barclays PLC and Bank of America Corp.
backed out of a deal to acquire the company, and the U.S. Treasury
refused to provide financial support that would have eased out a
sale. Lehman's bankruptcy petition listed $639 billion in assets
and $613 billion in debts, effectively making the firm's
bankruptcy filing the largest in U.S. history. Several affiliates
filed bankruptcy petitions thereafter.
On Sept. 19, 2008, Lehman Brothers, Inc., was placed in
liquidation pursuant to the provisions of the Securities Investor
Protection Act (Case No. 08-CIV-8119). James W. Giddens was
appointed trustee for the SIPA liquidation of the business of LBI.
Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed
a petition under Chapter 15 of the U.S. Bankruptcy Code on
February 10, 2009. Lehman Brothers Finance, a subsidiary of
Lehman Brothers Inc., estimated both its assets and liabilities at
more than $1 billion.
LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, has been placed into administration,
together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to wind down the business of LBI
(Europe) on Sept. 15, 2008.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on Sept. 16. The
two units have combined liabilities of JPY4 trillion -- US$38
billion. Akio Katsuragi, a former Morgan Stanley executive, runs
Lehman's Japan units.
Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited suspended
operations upon the bankruptcy filing of their U.S. counterparts.
Asset Sales
Barclays Bank Plc has acquired Lehman's North American
investment banking and capital markets operations and supporting
infrastructure for US$1.75 billion. Nomura Holdings Inc., the
largest brokerage house in Japan, on Sept. 22 reached an agreement
to purchased Lehman Brothers Holdings, Inc.'s operations in Europe
and the Middle East less than 24 hours after it reached a deal to
buy Lehman's operations in the Asia Pacific for US$225 million.
Nomura paid only US$2 dollars for Lehman's investment banking and
equities businesses in Europe, but agreed to retain most of
Lehman's employees.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
LIGHTHOUSE LODGE: Section 341(a) Meeting Scheduled for May 13
-------------------------------------------------------------
The U.S. Trustee, for Region 17 will convene a meeting of
creditors in Lighthouse Lodge, LLC's Chapter 11 case on May 13,
2009, at 10:30 a.m., at U.S. Federal Bldg., 280 S 1st St. No. 130,
San Jose, California.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Pacific Grove, California, Lighthouse Lodge, LLC
-- http://www.lhls.com/-- dba Lighthouse Lodge & Suites, offers
cabin and motel accommodation. The Debtor filed for Chapter 11
protection on April 9, 2009 (Bankr. N. D. Calif. Case No. 09-
52610). Hagop T. Bedoyan, Esq., at Klein, DeNatale, Goldner, et
al. represents the Debtor in its restructuring efforts. The
Debtor's assets and debts both range from $10 million to
$50 million.
LINCOLN NATIONAL: Fitch Downgrades Junior Debt Rating to 'BB+'
--------------------------------------------------------------
Fitch Ratings has downgraded the ratings of Lincoln National
Corporation and its insurance operating subsidiaries. The Rating
Outlook is Negative.
Key downgrades include these:
-- LNC Issuer Default Rating to 'BBB+' from 'A';
-- LNC senior debt to 'BBB' from 'A-';
-- LNC junior subordinated debt to 'BB+' from 'BBB+';
-- LNC Commercial Paper to 'F2' from 'F1';
-- Lincoln National Life Ins. Co Insurer Financial Strength
rating to 'A+' from 'AA-'.
The one notch downgrade of the IFS ratings primarily reflects
Fitch's view of LNC's weaker statutory capital quality after
upstreaming cash (both dividends and borrowings) to the parent
holding company during 2009 to support a $500 million debt
maturity payment, as well as further deterioration in the
company's risk-based capital position under Fitch's updated asset
stress scenarios.
The two notch downgrade of LNC's senior debt rating and IDR
additionally reflects what Fitch views as reduced financial
flexibility at the holding company given cash recently paid out to
fund debt maturities, relatively large commercial paper balances,
and historic reliance on inter-company borrowings, which Fitch
views as offering only limited flexibility in a stressful
environment.
The company's capital securities are being downgraded one
additional notch to a non-investment grade level due to an
increasing likelihood that LNC will trigger the alternative coupon
satisfaction mechanism associated with these securities due in
part to a possible goodwill write-down.
All rating actions also reflect the company's exposure to ongoing
global capital market turmoil, which Fitch believes will likely
result in additional investment losses and further downward
pressure on the company's operating earnings as 2009 unfolds.
LNC's earnings declined significantly in 2008 relative to previous
years, and Fitch expects continued deterioration in the first
quarter of 2009, driven primarily by realized losses and
impairments of structured securities, corporate bonds and
preferred stocks held in the general accounts of the company's
insurance operating companies.
In addition to investment losses, the company's weak earnings
could result in goodwill impairments and accelerated amortization
of other intangible assets. Also, Fitch expects LNC to report
lower revenue generation from its fee-based businesses, primarily
its variable annuity lines, driven by the severe decline in equity
markets.
The Negative Outlook reflects Fitch's view that near-term adverse
financial market and recessionary economic conditions will likely
continue for an extended period. As a result, Fitch believes LNC
could experience higher-than-expected volatility in financial
results and capital, and in more extreme scenarios, could
potentially become liquidity constrained.
Fitch's ratings of LNC are supported by the company's longstanding
strong competitive position in the life insurance and annuity
market, strong and diverse distribution network, strong management
team and historically solid operating performance. These
positives are tempered somewhat by the current weak economic and
capital market conditions, as well as challenges LNC faces with
respect to strong competition in the life insurance and asset
accumulation sectors, particularly in the affluent market segment
that LNC has targeted, and the degree to which the company's
earnings continue to be leveraged to the equity markets.
Lincoln National Corporation, headquartered in Radnor,
Pennsylvania, markets a broad range of insurance and asset
accumulation products and financial advisory services primarily to
the affluent market segment. On Dec. 31, 2008, the company
reported consolidated assets of $163.1 billion and common equity
of $8 billion.
Fitch downgrades the ratings of LNC and its insurance operating
subsidiaries:
Lincoln National Corporation
-- Long-term IDR to 'BBB+' from 'A';
-- Short-term IDR to 'F2' from 'F1';
-- CP to 'F2' from 'F1';
-- Floating rate senior notes due April 20, 2010 to 'BBB' from
'A-';
-- 6.2% senior notes due Dec. 15, 2011 to 'BBB' from 'A-';
-- 5.65% senior notes due Aug. 27, 2012 to 'BBB' from 'A-';
-- 4.75% senior notes due Jan. 27, 2014, to 'BBB' from 'A-';
-- 4.75% senior notes due Feb. 15, 2014 to 'BBB' from 'A-';
-- 7% senior notes due March 15, 2018 to 'BBB' from 'A-';
-- 6.15% senior notes due April 7, 2036 to 'BBB' to 'A-';
-- 6.3% senior notes due Oct. 9, 2037 to 'BBB' from 'A-';
-- 6.75% junior subordinated debentures due April 20, 2066 to
'BB+' from 'BBB+';
-- 7% junior subordinated debentures due May 17, 2066 to 'BB+'
from 'BBB+';
-- 6.05% junior subordinated debentures due April 20, 2067 to
'BB+' from 'BBB+'.
Lincoln National Capital VI
-- Trust preferred securities to 'BB+' from 'BBB+'.
Lincoln National Life Insurance Company
-- IFS to 'A+' from 'AA-'.
Lincoln Life & Annuity Company of New York
-- IFS to 'A+' from 'AA-'.
First Penn-Pacific Life Insurance Company
-- IFS to 'A+' from 'AA-'.
The Rating Outlook remains Negative.
LYONDELL CHEMICAL: Wins Protection from California Counties' Suits
------------------------------------------------------------------
Carla Main of Bloomberg Reports that Lyondell Chemical Co. won
from the U.S. Bankruptcy Court for the Southern District of New
York protection from lawsuits from the city of Los Angeles and
several California counties that want to sue it for billions of
dollars to clean up lead paint.
U.S. Bankruptcy Judge Robert Gerber in Manhattan said April 16
that the usual ban on lawsuits against bankrupt companies applies
to protect Lyondell's Millennium Holdings LLC unit from lead paint
claims.
Judge Gerber stated the suits couldn't be brought under the
Bankruptcy Code and also noted that they couldn't be brought under
an exception for police and government entities.
As reported by the TCR on March 24, 2009, pursuant to Sections
362(a) and 105(a) of the Bankruptcy Code, Lyondell Chemical
Company and its 78 debtor-affiliates filed a motion before the
U.S. Bankruptcy Court for the Southern District of New York (i) to
enforce the automatic stay and the Court's Stay Order and (ii)
enjoin the County of Santa Clara, the County of Solano, the County
of Alameda, the County of Monterey, the County of San Mateo, the
City and County of San Francisco, the City of Oakland, the City of
San Diego, and the City of Los Angeles from prosecuting a lawsuit
against Debtor Millennium Holdings LLC pending in the Superior
Court of California.
In March 2000, the California Parties joined a syndicate of
private plaintiffs' law firms including Motley Rice LLP that
initiated a public nuisance lawsuit against former lead pigment
manufacturers including The Glidden Company, Millennium's
predecessor-in-interest in California state court. The trial
court initially dismissed the action, but the appellate court
reversed and reinstated the public nuisance claim. The
California Supreme Court declined further review and remanded the
case to the trial court. In 2007, the California Parties sought
and received leave to file a Fourth Amended Complaint against
Millennium, which replaced as defendant Millennium Inorganics
Chemicals Inc., a former and non-debtor affiliate of Millennium,
Atlantic Richfield Company, American Cyanamid Company, Conagra
Grocery Products Company, E.I. Du Pont De Nemours and Company, NL
Industries, Inc., The Sherwin-Williams Company, Armstrong
Containers, and Cytec Industries, Inc.
Andrew M. Troop, Esq., at Cadwalader, Wickersham & Taft LLP, in
New York, related that Section 362(b)(4) provides that the filing
of a bankruptcy petition does not operate as a stay against
commencement or continuation of an action by a governmental unit
to enforce its regulatory power, except for a complaint that is
not brought pursuant to the governmental unit's regulatory
powers. In this case, the Santa Clara Lawsuit asserts a public
nuisance claim which sounds common law tort and does not allege
that Millennium is violating any applicable law governing the
behavior of debtors. Having failed to allege that Millennium has
violated any regulatory scheme, the California Parties cannot
argue that public nuisance actions are exercises of regulatory
powers, he cites. Moreover, the Santa Clara Lawsuit's seeking to
enforce private rights cannot be reconciled with the notion that
the governmental entities are exercising their police and
regulatory power. He notes that the California Parties intend to
abate a nuisance on behalf of citizens of their jurisdictions but
it is evident that lead paint is not present in every residence
of those counties.
Mr. Troop cited that the Santa Clara Lawsuit would also not be
exempted by Section 362(b)(4) because the California Parties are
seeking to protect their pecuniary interest. He asserts that the
Santa Clara Lawsuit is primarily about obtaining money from a
debtor as a remedy for past conduct and has nothing to do with
deterring any future conduct of a debtor. He explains that the
California Parties seek to have the alleged public nuisance
abated from all public and private homes and property affected
throughout the State of California, however, none of the
defendants, including Millennium, has the ability to abate lead
from properties that they do not own, control, or have a legal
right to enter. The Santa Clara Lawsuit thus suggested the
defendants pay money into a large common fund from which the
costs of abatement and inspection efforts would be paid. Given
that suggestion, it is evident that the California Parties' sole
purpose in the Santa Clara Lawsuit is to extract a large monetary
judgment from the defendants under the guise of an injunctive
abatement plan, he argued.
Mr. Troop stressed that if the California Parties were to
prevail, the Santa Clara Lawsuit would require Millennium to pay
potentially billions of dollars. More importantly, the Santa
Clara Lawsuit would consume the Debtors' management's time and
divert resources to the detriment of their estates. The
existence of the Santa Clara Lawsuit outside the bankruptcy
process, with its attendant delay, and uncertainty poses a burden
on the Debtors' estates that issuance of a Section 105(a)
injunction would redress, he maintained.
About Lyondell Chemical
Basell AF and Lyondell Chemical Company merged operations
in 2007 to form LyondellBasell Industries --
http://www.lyondellbasell.com/-- the world's third largest
independent chemical company. Lyondellbasell produces
polypropylene and advanced polyolefins products, is a leading
supplier of polyethylene, and a global leader in the development
and licensing of polypropylene and polyethylene processes and
related catalyst sales.
LyondellBasell became saddled with debt as part of the
US$12.7 billion merger. About a year after completing the merger,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code on January 6, 2009, to facilitate a restructuring
of the company's debts. The case is In re Lyondell Chemical
Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023).
Seventy-nine Lyondell entities, including Equistar Chemicals, LP,
Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt
Industries, Inc., filed for Chapter 11. LyondellBasell is not
part of the bankruptcy filing. LyondellBasell's non-U.S.
operating entities are also not included in the Chapter 11 filing.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities.
Lyondell Chemical estimated that consolidated assets total
US$27.12 billion and debts total US$19.34 billion as of the
bankruptcy filing date.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MACY'S INC: S&P Cuts Rating to 'BB' From 'BBB-'; Outlook Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services said it took various actions on
six department store operators. S&P downgraded most-but not all-of
these companies. S&P removed all six companies from CreditWatch
with negative implications, where they had been placed on Feb. 5,
2009.
"The rating actions reflect Standard & Poor's deepening concern
about the impact of the U.S. recession on the increasingly
troubled department store sector," said Standard & Poor's credit
analyst Diane Shand, "which felt the full brunt of the declining
U.S. economy and weakening consumer confidence in 2008." The
recession is likely to last through at least the third quarter of
2009 given weakening employment, the still-poor housing market,
and continuing turmoil in financial markets. "We believe lower
consumer spending and declining mall traffic will affect the sales
and profits of the department store operators this year," added
Ms. Shand, "and that recovery will be slow and dependent on an
improvement in the macroenvironment."
Standard & Poor's expects moderate-priced department store
operators like Dillard's, Macy's, and J.C. Penney to suffer high-
single-digit declines in comparable-store sales in 2009 and that
the more upscale competitors like Neiman Marcus and Nordstrom will
incur low-double-digit declines in same-store sales. S&P believes
department store operators will generally plan inventories,
expenses, and store growth conservatively in 2009 in an effort to
protect margins and cash flow. Nevertheless, most companies'
margins are likely to erode as a result of weak consumer demand,
lack of sales leverage, and promotional activity. S&P expects
declining profitability to hurt their credit profiles. Credit
metrics for all of the rated department stores also weakened in
2008 as a result of poor industry fundamentals and companies'
needs to align inventories with significantly weaker demand.
Currently, liquidity is not a concern. Macy's and Penney recently
amended their credit facilities. Dillard's, Neiman Marcus, and
Sears have covenant-lite credit facilities and S&P believes that
Nordstrom has ample cushion within its covenants.
The rating affirmation on Sears Holdings Corp. (BB-/Negative) is
based on S&P's expectation that credit measures should remain
adequate for the rating, even with expected sales pressure from a
difficult retailing environment. This would reflect Sears' recent
cost-reduction measures and that Sears' cash flow generation
should remain satisfactory due to reduced working capital needs
from planned inventory reduction and lower capital spending.
Ratings List
Ratings Lowered
To From
-- ----
Dillard's Inc. B-/Stable/-- B+/Watch Neg/--
Macy's Inc. BB/Stable/-- BBB-/Watch Neg/--
Neiman Marcus
Group Inc. (The) B/Negative/-- B+/Watch Neg/--
Nordstrom Inc. BBB+/Stable/A-2 A-/Watch Neg/A-2
Penney (J.C.) Co. Inc. BB/Stable/-- BBB-/Watch Neg/--
Ratings Affirmed And Off CreditWatch
To From
-- ----
Sears Holdings Corp. BB-/Negative/-- BB-/Watch Neg/--
MADOFF SECURITIES: Liquidators Can Start Proceedings to Seize Car
-----------------------------------------------------------------
Susan Salisbury at Palmbeachpost.com reports that a West Palm
Beach-based federal bankruptcy judge Paul G. Hyman has allowed
liquidators of Bernard Madoff's U.K. trading business, Madoff
Securities International Limited, to start proceedings aimed at
seizing a vintage Aston Martin car allegedly at Peter Madoff's
Palm Beach residence.
As reported by the Troubled Company Reporter on April 16, 2009,
the trustees liquidating Madoff Securities went to the U.S.
Bankruptcy Court for the Southern District of Florida to try to
confiscate the car.
According to Palmbeachpost.com, Judge Hyman cleared the way for
the representatives to follow up on a British High Court of
Justice order directing them to "locate, protect, secure, take
possession of, collect and get in all property or assets" of
Madoff Securities. Palmbeachpost.com relates that the West Palm
Beach court instructed liquidators to launch a probe on Madoff
Securities' affairs and to take whatever legal action is
necessary.
Palmbeachpost.com states that Peter Madoff will be required to
produce unspecified documents. Liquidators said in court
documents that Mr. Madoff controls assets that may have been
fraudulently transferred to him by Madoff Securities.
London-based Madoff Securities International Limited is a money
management business of Bernard L. Madoff in the United Kingdom.
Mark Richard Byers, Andrew Laurence Hosking, and Stephen John
Akers at Grant Thornton UK LLP filed a Chapter 15 petition against
the Company on April 14, 2009 (Bankr. S.D. Fla. Case No. 09-
16751). The Company has $100 million to $500 million in assets
and more than $1 billion in debts.
MARINA BAY: U.S. Trustee Schedules Meeting of Creditors for May 6
-----------------------------------------------------------------
The U.S. Trustee for Region 3 will convene a meeting of creditors
in Marina Bay at Rio Grande, LLC's Chapter 11 case on May 6, 2009,
at 12:00 p.m., at Bridge View Building, Suite 102, 800 Cooper
Street, Camden, New Jersey.
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.
Chester Heights, Pennsylvania-based, Marina Bay at Rio Grande, LLC
filed for Chapter 11 protection on April 8, 2009 (Bankr. D. N.J.
Case No. 09-18825). Scott M. Zauber, Esq., at Subranni, Ostrove &
Zauber represents the Debtor in its restructuring efforts. Each
of the Debtor's estimated assets and debts range from $10 million
to $50 million.
MCCLATCHY CO: Receives Non-Compliance Notice From NYSE
------------------------------------------------------
The McClatchy Company reported that on April 14, 2009, it was
notified by the New York Stock Exchange that it is not in
compliance with the exchange's continued listing standard for
total market capitalization and shareholders' equity. NYSE
continued listing standards applicable to the company include
average market capitalization of no less than $75 million over a
30-trading-day period and stockholders' equity of no less than
$75 million.
The company is now considered below the criteria for the continued
listing standards because as of April 8, 2009, McClatchy's total
market capitalization was less than the minimum of $75 million
over a consecutive 30-trading-day period and its last reported
stockholders' equity on its most recent Annual Report on Form 10-K
filed with the Securities and Exchange Commission was
$52.4 million, also less than $75 million.
In accordance with NYSE procedures, McClatchy has 45 days from the
receipt of the notice to submit a plan to the NYSE demonstrating
how it intends to comply with the NYSE's continued listing
standards within 18 months from the receipt of the notice.
McClatchy intends to develop a plan to bring the company in
compliance with the listing standards within the required
timeframe.
McClatchy said in February 2009 that it had been notified by the
NYSE that it is not in compliance with the NYSE's continued
listing standard for the average price per share of the company's
Class A publicly traded common shares of less than $1.00 over a
consecutive 30-trading-day period. Subsequently, the NYSE
announced that this standard was temporarily suspended through
June 30, 2009, and McClatchy has until at least December 7, 2009,
to bring the company in compliance with this listing standard.
About The McClatchy Company
Headquartered in Sacramento, California, The McClatchy Company
(NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest
newspaper company in the United States, with 30 daily newspapers,
approximately 50 non-dailies, and direct marketing and direct mail
operations. McClatchy also operates leading local websites in
each of its markets. McClatchy-owned newspapers include The Miami
Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The
Kansas City Star, the Charlotte Observer, and The (Raleigh) News &
Observer. McClatchy also owns a portfolio of premium digital
assets, including 14.4% of CareerBuilder, an online job site, and
25.6% of Classified Ventures, a newspaper industry partnership
that offers the auto website, cars.com, and the rental site,
apartments.com.
On September 17, 2008, Moody's Investor Services downgraded the
Company's corporate credit rating to 'B2' from 'Ba2'. On
February 6, 2009, Standard & Poor's lowered its corporate credit
rating on the Company to 'CCC+' from `B', with a negative rating
outlook. The ratings on the Company's bonds were lowered from
'CCC+' to 'CCC-'.
The Troubled Company Reporter said Feb. 10, 2009, that Fitch
Ratings downgraded the Issuer Default Rating and outstanding debt
ratings of McClatchy:
-- Issuer Default Rating to 'CCC' from 'B-';
-- Senior secured credit facility to 'CCC/RR4' from 'B+/RR2';
-- Senior secured term loan to 'CCC/RR4' from 'B+/RR2';
-- Senior unsecured notes/debentures to 'C/RR6' from 'CCC/RR6'.
METOKOTE CORP: Declining Sales Prompt S&P to Junk Rating
--------------------------------------------------------
Standard & Poor's Ratings Services said it has lowered its
corporate credit rating on Lima, Ohio-based MetoKote Corp. to
'CCC+' from 'B'. The outlook is developing. At the same time,
S&P also lowered its issue-level rating on the company's senior
secured debt to 'CCC+' from 'B+' and revised the recovery rating
to '3' from '2', indicating S&P's expectation of meaningful (50%
to 70%) recovery for lenders in the event of a payment default.
The ratings were removed from CreditWatch, where they had been
placed with negative implications on Nov. 13, 2008.
"The downgrade reflects our view that declining light-vehicle
sales and production in North America and Europe during 2009 will
continue to lower the company's profitability and cash flow
generation," said Standard & Poor's credit analyst Lawrence
Orlowski. "Consequently, S&P believes EBITDA could fall
substantially in 2009 and trigger a covenant violation later in
the year as well as lead to challenges in extending the maturity
of the bank revolving credit facility due in May 2010," he
continued.
Based on fiscal 2008 sales (October year-end), the auto original
equipment manufacturer market accounted for almost half of
MetoKote's revenues, and S&P expects sales volumes in this market
to remain weak in the year ahead. U.S. light-vehicle sales in 2008
were 13.2 million units, and S&P expects sales to fall to
9.7 million units this year. S&P expects MetoKote's 2009 revenue
to fall significantly. As a result, S&P believes MetoKote's
leverage will increase substantially to at least 5.7x by the end
of fiscal 2009 from about 3.4x as of fiscal 2008. S&P's estimate
incorporates an expectation that sales will decline by more than
40% in 2009 and margins will deteriorate by more than 300 basis
points.
The ratings on MetoKote reflect the company's highly everaged
financial position and vulnerable business risk profile as a
participant in the highly competitive, fragmented, and cyclical
coating business serving the automotive, agricultural, and
construction markets. MetoKote applies industrial coatings
designed to inhibit the corrosion of automotive and industrial
products. The privately held company is controlled by its equity
sponsor, unrated CCMP Capital Advisors LLC, and does not file with
the SEC. MetoKote had total balance sheet debt of $101.9 million
as of Jan. 31, 2009.
MetoKote's sales are vulnerable to swings in demand and pricing
for coating activity because its operations are concentrated in
this niche segment. In addition, the company lacks significant
scope and scale in this fragmented sector, even though it is the
largest independent operator. Still, S&P believes the company has
a highly variable cost structure and a generally favorable
contract structure with its long-term customers.
MetoKote competes with the large, captive coating operations of a
number of OEMs and with many small, single-plant companies. It
has limited geographic diversity; an estimated 77% of its fiscal
2008 revenue was generated in North America, and its concentrated
customer base adds further business risk. MetoKote's geographic
diversity has been increasing, but very slowly, through a steady
global expansion to serve customers outside North America.
The outlook is developing. S&P could lower the rating if the
company is unable to maintain adequate liquidity. This could
occur if the company's revenue fell more than 40% in 2009, the
decline caused a covenant to be breached, and the company could
not negotiate covenant relief. S&P could also lower the rating if
the company cannot refinance or extend the maturity on its
revolving credit facility that expires in May 2010, or if the
company seeks to undertake a distressed exchange of debt at a
substantial discount from par, which S&P consider to be tantamount
to a default.
S&P could raise the ratings if the company amended its financial
covenants, refinanced or extended the maturity on its revolving
credit facility, and maintained sustainable positive free
operating cash flow. This would likely require that market
conditions improve and the economic recovery is sustained. S&P
does not expect this scenario to occur until later in 2009, at
best.
MGM MIRAGE: Provides $70MM to Ensure CityCenter Project Continues
-----------------------------------------------------------------
MGM MIRAGE said Friday that, as permitted under the terms of the
Company's amendment of its senior credit facility, it has provided
$70 million to cover the current construction costs for
CityCenter. The payment by MGM MIRAGE includes $35 million that
should have been funded by Infinity World, a subsidiary of Dubai
World.
"MGM MIRAGE remains dedicated to supporting the completion of
CityCenter, recognizing the significant long-term value this
development will provide to Las Vegas and the state of Nevada,"
said Jim Murren, Chairman and CEO of MGM MIRAGE. "MGM is
determined to make CityCenter a success and we continue to review
with our partners all options to keep CityCenter fully funded. We
are continuing to engage in constructive discussions with our
senior lenders and the CityCenter lending group and we appreciate
the support of the involved parties."
As reported by the Troubled Company Reporter, MGM MIRAGE said
there can be no assurance that any waiver, amendment or long-term
solution will be available or that CityCenter will not determine
to seek relief through a filing under the U.S. Bankruptcy Code.
The CityCenter lenders have temporarily waived through April 29,
2009, certain defaults and potential defaults under City Center's
senior secured credit facility relating to required sponsor equity
capital contributions to CityCenter.
MGM MIRAGE entered into Amendment No. 4 dated April 9, 2009, to
its Fifth Amended and Restated Loan Agreement with MGM Grand
Detroit, LLC, as initial co-borrower, and a consortium of lenders
led by Bank of America, N.A., as administrative agent. Amendment
No. 4 revised the dates upon which interest accrued on LIBOR loans
is payable. Pursuant to Amendment No. 4, interest accrued on
LIBOR loans will be payable monthly and on the last day of the
related interest period.
Amendment No. 4 also modified the Company's ability to make
additional investments in CityCenter. The Company is permitted to
make investments in CityCenter, within seven business days after
April 8, 2009 and subject to certain conditions:
(A) in an amount not to exceed the lesser of:
(i) the aggregate amount requested by CityCenter from
the Company and Dubai World, including from their
affiliates, and
(ii) $35 million, so long as Dubai World shall have made
a corresponding investment in an equal amount; and
(B) in an amount not to exceed the lesser of:
(i) the aggregate amount requested by CityCenter from
the Company and Dubai World, including from their
affiliates, and
(ii) $70 million, so long as Dubai World will not have
made a corresponding investment in an equal
amount.
No other future investments by the Company in CityCenter are
permitted by the Loan Agreement, except up to $20 million to
ensure public health, safety and welfare or regulatory compliance.
The Company paid a customary amendment fee to the lenders party to
the Loan Agreement in connection with the execution of Amendment
No. 4.
Certain of the lenders party to the Loan Agreement and their
affiliates have in the past engaged in financial advisory,
investment banking, commercial banking or other transactions of a
financial nature with the Company and its subsidiaries, including
the provision of advisory services for which they received
customary fees, expense reimbursement or other payments.
The members of the lending syndicate are:
* Banc of America Securities LLC and The Royal Bank of
Scotland PLC, as Joint Lead Arrangers,
* Banc of America Securities LLC, The Royal Bank of Scotland
PLC, J.P. Morgan Securities Inc., Citibank North America,
Inc. and Deutsche Bank Securities, Inc., as Joint Book
Managers,
* The Royal Bank of Scotland PLC, as Syndication Agent,
* Barclays Bank PLC, BNP Paribas, Citigroup USA Inc.,
Commerzbank AG, Deutsche Bank Trust Company Americas,
JPMorgan Chase Bank, N.A., Sumitomo Mitsui Banking
Corporation, UBS Securities LLC and Wachovia Bank, National
Association, as Co-Documentation Agents,
* Bank of Scotland, Merrill Lynch Bank USA and Morgan Stanley
Bank, as Senior Managing Agents, Societe Generale and U.S.
Bank National Association, as Managing Agents
About MGM Mirage
Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM) --
http://www.mgmmirage.com/-- is a hotel and gaming company. It
owns and operates 17 properties located in Nevada, Mississippi
and Michigan, and has investments in three other properties in
Nevada, New Jersey and Illinois.
MGM MIRAGE reported a net loss of $1.14 billion on revenues of
$1.62 billion for the three months ended December 31, 2008. MGM
MIRAGE reported a net loss of $855.2 million on revenues of
$7.20 billion for year 2008. MGM MIRAGE had $23.2 billion in
total assets, including $1.53 billion in total current assets;
$3.0 billion in total current liabilities; and $12.4 billion in
long-term debt. A full-text copy of the Annual Report on Form
10-K is available at no charge at:
http://researcharchives.com/t/s?3ae0
The Company does not expect to be in compliance with the financial
covenants under its senior credit facility at March 31, 2009. On
March 17, Company obtained an amendment to the senior credit
facility, which included a waiver of the requirement to comply
with the financial covenants through May 15, 2009. Following
expiration of the waiver on May 15, 2009, the Company will be
subject to an event of default related to the expected
noncompliance with financial covenants under the senior credit
facility at March 31, 2009.
The report of Deloitte & Touche, LLP, MGM MIRAGE's independent
registered public accounting firm on the Company's consolidated
financial statements for the year ended December 31, 2008,
contains an explanatory paragraph with respect to the Company's
ability to continue as a going concern.
* * *
As reported by the Troubled Company Reporter on March 23, 2009,
Moody's Investors Service downgraded MGM MIRAGE's Probability of
Default Rating to Caa3 from Caa2 and its Corporate Family Rating
to Caa2 from Caa1.
According to the TCR on March 23, 2009, Standard & Poor's Ratings
Services lowered its corporate credit and issue-level ratings on
Las Vegas-based MGM MIRAGE and its subsidiaries by two notches;
the corporate credit rating was lowered to 'CCC' from 'B-'. These
ratings were removed from CreditWatch, where they were initially
placed with negative implications on Jan. 30, 2009. S&P said that
the rating outlook is negative.
The TCR reported on March 25, 2009, that Fitch Ratings took these
rating actions for MGM MIRAGE following the lawsuit filed against
MGM by City Center JV partner Dubai World, and the two-month
covenant waiver obtained from its bank lenders:
-- Issuer Default Rating downgraded to 'C' from 'CCC';
-- Senior secured notes downgraded to 'CCC/RR2' from 'B/RR2';
-- Senior unsecured credit facility downgraded to 'CC/RR3' from
'B-/RR3';
-- Senior unsecured notes downgraded to 'CC/RR3' from 'B-/RR3';
-- Senior subordinated notes affirmed at 'C/RR6'.
MICHAEL FOODS: S&P Affirms Corporate Credit Rating at 'B+'
----------------------------------------------------------
Standard & Poor's Ratings Services affirmed all ratings, including
the 'B+' corporate credit ratings, on Minnetonka, Minnesota-based
Michael Foods Inc. At the same time, Standard & Poor's assigned
its 'BB' issue-level rating with a recovery rating of '1'
(indicating the likelihood of very high [90-100%] recovery in the
event of a payment default) to Michael Foods' proposed
$525 million senior secured credit facilities. The facilities
consist of a 3.5-year $75 million revolving credit facility, a
3.5-year $200 million term loan A, and a five-year $250 million
term loan B. The debt proceeds will be used to refinance existing
debt and pay fees and expenses. The ratings on the company's
existing bank facilities will be withdrawn at the close of the
transaction. Pro forma for the transaction, the company is
expected to have about $771 million in debt outstanding, including
about $151 million in 9.75% senior discount notes due 2013 at
parent M-Foods Holdings Inc.
"The ratings on Michael Foods Inc. reflect the company's
relatively high, albeit improving, debt leverage, commodity
exposure, and competition from a number of larger companies in its
operating sectors," Standard & Poor's credit analyst Christopher
Johnson said.
The outlook is stable. Despite substantial commodity cost
inflation in 2008, Michael Foods has improved credit protection
measures and reduced debt. S&P could revise the outlook to
positive over the near term if the company can reduce and sustain
leverage below 4x and maintain adequate liquidity. Given S&P's
expectation for an improved input cost environment over the next
year, S&P believes that if EBITDA margins improve by 150 basis
points in fiscal 2009, and even if the company incurred a 10%
annual decline in revenues, total adjusted debt to EBITDA would
still remain below 4x. S&P would consider revising the outlook to
negative if leverage were to exceed 5x.
MOOG INC: Moody's Changes Outlook to Negative; Keeps 'Ba2' Rating
-----------------------------------------------------------------
Moody's Investors Service has changed the rating outlook of Moog,
Inc. to negative from stable.
The negative outlook reflects Moody's view that credit metrics
will likely approach maximum tolerance level for the Ba2 corporate
family rating. The impact of economic weakness on Moog's
industrial and commercial aircraft controls product sales, coupled
with recent acquisition spending could increase debt to EBITDA
over 4.0 times (Moody's adjusted basis) as well as pressure
headroom under existing financial covenants. While acknowledging
the benefits of Moog's ongoing diversification strategy, the
negative outlook expresses Moody's concerns that acquisitions have
not materially enhanced pre-financing returns and free cash flow
has been pressured. The ratings would be sensitive to ongoing
acquisitions through this cyclical downturn and changes to the
adequacy of Moog's liquidity profile.
The ratings for Moog remain:
-- Corporate Family Rating, Ba2
-- Probability of Default Rating, Ba2
-- $200 million 6.25% senior subordinated notes, due 2015, Ba3
LGD 5, to 81% from 79%
-- $200 million 7.25% senior subordinated notes, due 2018, Ba3
LGD 5, to 81% from 79%
Moody's last rating action on Moog occurred May 27, 2008 when the
Ba2 corporate family rating was affirmed.
Moog, Inc., headquartered in East Aurora, NY, is a leading
designer and manufacturer of high performance precision motion
control products and systems for aerospace and industrial markets.
The company operates within five segments: Aircraft Controls
(36.6% of Q1-FY2009 revenues), Space and Defense Controls (16.0%),
Industrial Systems (24.7%), Components (18.3%), and Medical
Devices (4.5%). Moog had last twelve months ended December 2008
revenues of about $1.9 billion.
MISCOR GROUP: Obtains Covenant Waiver From Wells Fargo
------------------------------------------------------
MISCOR Group, Ltd., and its affiliates executed on April 14, 2009,
a fourth amendment to their Credit and Security Agreement dated
January 14, 2008, as amended, limited waiver of defaults with
senior secured lender, Wells Fargo Business Credit, a division of
Wells Fargo Bank, National Association.
The Fourth Amendment waived the Default, and also waived an
undeclared event of default -- noncompliance with the debt service
coverage ratio covenant for the year ending December 31, 2008,
contained in Section 6.2(d) of the Credit Agreement -- subject to
the limitation that the waiver is effective only in this specific
instance and for the specific purpose for which it is given, and
will not entitle the Borrowers to any other or further waiver in
any similar or other circumstances.
The Fourth Amendment also amended the Credit Agreement in these
respects:
-- eliminated the minimum net income and debt service coverage
ratio covenants for the year ending December 31, 2009;
-- adjusted the minimum book net worth covenant to $38,750,000
as of December 31, 2009;
-- incorporated a monthly minimum EBITDA covenant commencing in
April, 2009;
-- reduced the revolving credit line limit to $11,000,000 (from
$13,750,000);
-- reset the interest rate on the revolving credit line and
term notes to the Daily Three Month LIBOR plus 5.25%
effective April 14, 2009; and
-- suspended interest payments on the Company's subordinated
debt to the Company's President and Chief Executive Officer,
John A. Martell.
In connection with the Fourth Amendment, the Company agreed to pay
Lender a waiver fee equal to $100,000, payable in two installments
of $50,000 each, on the date of execution of the Fourth Amendment
and on the date 60 days following the execution date.
On March 5, 2009, MISCOR Group, received a letter from Wells Fargo
stating that, based upon Lender's review of the Borrowers'
internal unaudited financial statements for the 12-month period
ending December 31, 2008 (which statements had not been audited),
the Borrowers were in default of the financial covenant contained
in Section 6.2(b) of the Credit Agreement, which required the
Company to achieve, during the fiscal year ending December 31,
2008, Net Income of not less than $1,000,000.
Affiliates Magnetech Industrial Services, Inc.; Martell Electric,
LLC; HK Engine Components, LLC; Magnetech Power Services, LLC;
Ideal Consolidated, Inc.; 3-D Service, Ltd.; and American Motive
Power, Inc. are co-borrowers under the Credit Agreement.
Also on April 14, the Company and Mr. Martell executed an
Amendment to the Promissory Note Dated January 1, 2004, which
modified the terms of the $3,000,000 promissory note originally
executed by the Company in favor of Martell on January 1, 2004.
Under the terms of the Amendment, monthly principal and interest
payments due to Mr. Martell are suspended until February 1, 2010.
Interest will continue to accrue but at a new rate of the greater
of 5% or the prime rate plus 1%. All accrued interest on the Note
will be due and payable on February 1, 2010, and interest will be
due and payable monthly thereafter. Monthly principal payments in
the amount of $50,000 will be due and payable beginning on
February 1, 2010 and continuing until December 31, 2014, when all
remaining principal and accrued interest on the Note will become
due and payable in one lump sum amount.
On April 15, MISCOR reported that total revenues increased by
$49.9 million, or 68 percent, to $123.2 million in 2008, up from
$73.3 million in 2007. However, difficult market conditions in
the fourth quarter led to a net loss of $1.5 million, or $0.12 per
diluted share, for the full year 2008, compared to a net loss of
$2.0 million, or $0.26 per diluted share, for the year ended 2007.
MISCOR reported a net loss of $3.0 million, or $0.25 per diluted
share, on net sales of $31.5 million for the fourth quarter 2008.
For the same period of 2007, the Company reported net income of
$289,000, or $0.03 per diluted share, on net sales of $22.7
million. MISCOR reported profitability in the first three
quarters of 2008 was more than offset by a softening of business
in the fourth quarter, including a severe decline in industrial
and rail activity and the resulting challenges confronted by the
Company with the integration of the American Motor Power (AMP)
acquisition.
The Company had $78.7 million in total assets and $36.0 million in
total liabilities for the period ended December 31, 2008.
A full-text copy of the Fourth Amendment is available at no charge
at http://ResearchArchives.com/t/s?3ba3
A full-text copy of the Note Amendment is available at no charge
at http://ResearchArchives.com/t/s?3ba4
A full-text copy of MISCOR's Annual Report is available at no
charge at http://ResearchArchives.com/t/s?3ba2
About MISCOR
South Bend, Indiana-based MISCOR Group, Ltd. (OTC BB: MIGL)
provides electrical and mechanical solutions to industrial,
commercial and institutional customers through three segments:
Industrial Services, consisting of the Company's maintenance and
repair services to several industries including electric motor and
wind power and repairing, manufacturing, and remanufacturing
industrial lifting magnets for the steel and scrap industries,
Construction and Engineering Services, consisting of MISCOR's
electrical and mechanical contracting services, mainly to
industrial, commercial, and institutional customers, and Rail
services, consisting of the Company's manufacturing and rebuilding
of power assemblies, engine parts, and other components related to
large diesel engines and its locomotive maintenance,
remanufacturing, and repair services for the rail industry. In
2007, MISCOR entered the wind power industry through its
acquisition of 3-D Service, Ltd., providing both onsite and in-
shop maintenance and repair services for wind farms. MISCOR was
ranked on the Inc. 500 in 2004 and 2005 and operates in 15
locations in the U.S. and Canada.
NEWS-JOURNAL: Hires Bruce Hanna as Counsel for Possible Bankruptcy
------------------------------------------------------------------
Jay Stapleton at News-journalonline.com reports that The News-
Journal Corp. has hired Bruce A. Hanna as bankruptcy counsel to
explore reorganizing the Company's debt as a way to sever ties
with Cox Enterprises and keep the newspaper operating.
The Davidson family, which owns a majority share in The News-
Journal, said bankruptcy might be an option, News-journal.com
relates.
News-journalonline.com quoted Mr. Hanna as saying, "A Chapter 11
reorganization could potentially allow The News-Journal to
continue operating, thereby saving several hundred jobs." Citing
an attorney familiar with the matter, the report states that the
process could lead to a lower payment for Cox's shares.
Cox owns 47.5% of News-Journal, according to News-
journalonline.com. The report says that Cox sued The News-Journal
in 2004, claiming that its executives weren't informed of the
decision to pay $13 million for naming rights of the News-Journal
Center on Beach Street. U.S. District Court Judge John A. Antoon
II, after a trial in 2006, found that the amount the News-Journal
should pay Cox to buy out its shares was $129 million, the report
states.
News-journalonline.com relates that Cox attorneys have said that
after the sale agreement is severed, The News-Journal can pay Cox
an installment of $29 million or file articles of dissolution,
which could lead to a court-supervised sale. News-
journalonline.com reports that officials with Cox, who have
controlled the sales process, sought for a court order in March to
begin the 10-day time frame that would trigger payment or
dissolution.
News-journalonline.com quoted Mike Chapman, an attorney for the
Davidson family, as saying, "The company is now of very small
value. There hardly seems to be a worse time to sell a newspaper
than now." Owen Van Essen, a broker handling the sale, said in
court documents that The News-Journal has a current value of $25
to $30 million. Newsjournalonline.com states that back in 2004,
Mr. Essen estimated the value of The News-Journal at $306 million.
The Davidson family is interested in mediation with Cox, News-
journalonline.com says, citing Mr. Chapman.
Bankruptcy would hurt a sale, News-journalonline.com relates,
citing John A. DeVault, the lead attorney for Cox. "The sooner we
sell it now, the better the price," the report quoted Mr. DeVault
as saying.
According to News-journalonline.com, Judge Antoon said that he
would sign an order to sever the joint sale agreement, starting
the 10-day time period in which The News-Journal must make its
intentions known. Judge Antoon also granted Cox's request to name
The News-Journal Chief Executive Manager Jim Hopson as "receiver"
to protect its interests in the Company, News-journalonline.com
says. Judge Antoon, News-journalonline.com states, granted The
News-Journal's request that there be no layoffs or sales of assets
during the 10-day period without court approval. According to the
report, the News-Journal has cut its workforce by 186 to 555 and
has taken other cost-saving measures, including closing three
bureaus.
The Daytona Beach News-Journal is a Florida daily newspaper
serving Volusia and Flagler counties. It grew from the Halifax
Journal which was started in 1883. The Davidson family purchased
the newspaper in 1928 and retain control to the present. In 1986,
The Morning Journal and Evening News merged into one morning
newspaper. The newspaper began its on-line services in 1994. In
circulation, the newspaper is currently among the Top 100
Newspapers in the United States.
NEIMAN MARCUS: S&P Cuts Rating to 'B' From 'B+'; Outlook Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it took various actions on
six department store operators. S&P downgraded most-but not all-of
these companies. S&P removed all six companies from CreditWatch
with negative implications, where they had been placed on Feb. 5,
2009.
"The rating actions reflect Standard & Poor's deepening concern
about the impact of the U.S. recession on the increasingly
troubled department store sector," said Standard & Poor's credit
analyst Diane Shand, "which felt the full brunt of the declining
U.S. economy and weakening consumer confidence in 2008." The
recession is likely to last through at least the third quarter of
2009 given weakening employment, the still-poor housing market,
and continuing turmoil in financial markets. "We believe lower
consumer spending and declining mall traffic will affect the sales
and profits of the department store operators this year," added
Ms. Shand, "and that recovery will be slow and dependent on an
improvement in the macroenvironment."
Standard & Poor's expects moderate-priced department store
operators like Dillard's, Macy's, and J.C. Penney to suffer high-
single-digit declines in comparable-store sales in 2009 and that
the more upscale competitors like Neiman Marcus and Nordstrom will
incur low-double-digit declines in same-store sales. S&P believes
department store operators will generally plan inventories,
expenses, and store growth conservatively in 2009 in an effort to
protect margins and cash flow. Nevertheless, most companies'
margins are likely to erode as a result of weak consumer demand,
lack of sales leverage, and promotional activity. S&P expects
declining profitability to hurt their credit profiles. Credit
metrics for all of the rated department stores also weakened in
2008 as a result of poor industry fundamentals and companies'
needs to align inventories with significantly weaker demand.
Currently, liquidity is not a concern. Macy's and Penney recently
amended their credit facilities. Dillard's, Neiman Marcus, and
Sears have covenant-lite credit facilities and S&P believes that
Nordstrom has ample cushion within its covenants.
The rating affirmation on Sears Holdings Corp. (BB-/Negative) is
based on S&P's expectation that credit measures should remain
adequate for the rating, even with expected sales pressure from a
difficult retailing environment. This would reflect Sears' recent
cost-reduction measures and that Sears' cash flow generation
should remain satisfactory due to reduced working capital needs
from planned inventory reduction and lower capital spending.
Ratings List
Ratings Lowered
To From
-- ----
Dillard's Inc. B-/Stable/-- B+/Watch Neg/--
Macy's Inc. BB/Stable/-- BBB-/Watch Neg/--
Neiman Marcus
Group Inc. (The) B/Negative/-- B+/Watch Neg/--
Nordstrom Inc. BBB+/Stable/A-2 A-/Watch Neg/A-2
Penney (J.C.) Co. Inc. BB/Stable/-- BBB-/Watch Neg/--
Ratings Affirmed And Off CreditWatch
To From
-- ----
Sears Holdings Corp. BB-/Negative/-- BB-/Watch Neg/--
NORTH AMERICAN ENERGY: S&P Cuts Rating on $545 Mil. Loan to 'BB'
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
ratings on all loans of North American Energy Alliance LLC.
S&P lowered the rating on the company's $545 million first-lien
facilities to 'BB' from 'BB+'. The facilities consist of $425
million in first-lien term loans, an $80 million letter of credit
(LOC) facility, and a $40 million revolving facility. The term
loans consist of $85 million funded at close and a delayed draw of
$340 million (drawn), and they mature in 2015. The LOC and
revolving credit facilities mature in 2013.
S&P also lowered the rating on NAEA's $325 million bridge loan to
'B+' from 'BB-'. The recovery ratings on secured and unsecured
tranches remain '1' and '4', respectively.
The outlook on all facilities is negative.
"The downgrade results in part from our current view that first-
lien debt amortization is sufficiently behind its expected levels
that, when combined with the continued weakening of market
conditions, financial covenant violations may be possible prior to
the first lien's 2015 maturity, said Standard & Poor's credit
analyst Justin Martin.
Although financial reports for 2008 have yet to be released,
management notified lenders of this concern on April 14 and is
currently exploring options to mitigate the risk.
Independent of management's notification to lenders, S&P remains
concerned about the credit impact of deteriorating energy and
capacity markets, which contributed to S&P's revision of the
outlook to negative in January 2009, and on the financial metrics
of the company's portfolio under a combination of Standard &
Poor's stress scenarios.
NORTH COAST LIFE: A.M. Best Affirms & Removes C++ FS Rating
-----------------------------------------------------------
A.M. Best Co. has removed from under review with negative
implications and affirmed the financial strength rating of C++
(Marginal) and issuer credit rating of "b" of North Coast Life
Insurance Company (Spokane, WA) [OTCBB: NCLI]. Both ratings have
been assigned a negative outlook.
The ratings of North Coast Life were placed under review with
negative implications on November 21, 2008, following a
significant decline in its total capital through third quarter
2008, due to investment related realized and unrealized losses.
The impact on North Coast Life's already low capital base brought
it close to a regulatory minimum for a key state of operation.
The affirmation of the ratings and the removal from under review
reflects North Coast Life's growth in its capital position through
year-end 2008 and into first quarter 2009. North Coast Life's
improvement in capital is attributed to a new reinsurance
transaction involving the cession of a block of inforce life
insurance business. The reinsurance agreement resulted in
improvement in North Coast Life's reported year-end operating
results. In addition, the company has not recognized additional
investment losses and shareholder dividends have been suspended.
The negative outlook recognizes the potential for additional
realized investment losses, given the company's significant level
of unrealized losses relative to capital, which could negatively
impact North Coast Life's balance sheet strength, as well as the
continuing financial volatility in the U.S. economy. North Coast
Life has historically maintained a low level of risk-adjusted
capitalization and a high level of below investment grade bonds
relative to capital.
The ratings also acknowledge North Coast Life's profitable
operations, the company's recent restructuring of its home office
expenses to reduce operating costs and the ongoing evolution of
North Coast Life's technology platform to further develop its
business profile.
NOVA BIOSOURCE: To Trade Over the Counter Under Symbol 'NBFA'
-------------------------------------------------------------
Nova Biosource Fuels, Inc. (Pink Sheets: NBFA), a refiner and
marketer of ASTM quality biodiesel, said that as of April 15,
2009, the Company's securities are eligible for quotation under
the symbol "NBFA" in the over-the-counter market maintained by
Pink OTC Markets Inc.
Pink OTC Markets Inc. is a centralized quotation service that
collects and publishes quotes for over-the-counter traded
securities in real-time. The move to Pink OTC Markets is the
result of the Company no longer meeting the continued listing
standards of NYSE Amex, LLC due to its filing for Chapter 11 under
the U.S. Bankruptcy Code.
On April 1, 2009, Nova Biosource received notice from NYSE Amex
LLC, formerly known as the American Stock Exchange, indicating
that the Exchange had suspended trading of the Company's
securities and had determined to seek to remove the Company's
securities from listing on the Exchange as a result of the
Company's bankruptcy filing and the Company's failure to comply
with certain other provisions of the Exchange's Company Guide.
The last day that the Company's common stock traded on the
Exchange was March 30, 2009. The Company did not take any further
action to appeal the Exchange's decision.
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.
On March 23, 2009, Nova issued preliminary financial information
for the quarter ended January 31, 2009. Total assets of the
Company as of January 31, 2009, were roughly $109,657,000, while
total liabilities were roughly $110,542,000, resulting in
stockholders' deficit of $885,000. The Company's net loss for the
quarter ended January 31, 2009, was roughly $11,149,000.
The Company has not been able to file its Form 10-Q for the period
ended January 31, 2009, due to the Company's staffing and
financial limitations. However, the Company intends to attempt to
file the Form 10-Q on or before April 15, 2009.
NOVA CHEMICALS: DBRS Says Merger Approval Won't Cue Rating Action
-----------------------------------------------------------------
Dominion Bond Rating Service notes that the shareholders of NOVA
Chemicals Corporation have approved the acquisition of all of the
issued and outstanding common shares of NOVA by International
Petroleum Investment Company for $6.00 per common share. The
approval was reached following a special resolution at the
Company's annual and special meeting of shareholders that was
passed by roughly 98% of the votes cast.
The approval of the transaction is a positive step toward the
completion of the IPIC transaction, which is expected in late May
or early June. However, a rating action is currently not
warranted as the closing of the deal is contingent upon necessary
court and regulatory approvals. In addition, further details
regarding NOVA's ultimate capital and legal structure, among
several other factors, are required to make a rating
determination.
DBRS notes that the Company previously announced that it had
retired the $250 million in notes that were due to mature
April 1, 2009, using available liquidity. Upon completion of the
transaction, NOVA would operate as an independent chemicals and
plastics company, benefiting from being part of a much larger,
financially stronger entity able to support continued investments
in the business and longer-term growth opportunities. IPIC is an
Abu Dhabi state-owned investment firm and leading investor in the
field of petroleum and energy, primarily in Europe, the Middle
East and Asia.
PACIFIC LIFE: A.M. Best Upgrades FS Rating to "A" From "B-"
-----------------------------------------------------------
A.M. Best Co. has upgraded the financial strength rating (FSR) to
A (Excellent) from B- (Fair) and the issuer credit rating to "a"
from "bb-" of Pacific Life Re Limited (United Kingdom), formerly
known as Scottish Re Limited. The ratings have been removed from
under review and assigned a negative outlook.
Subsequently, A.M. Best has withdrawn the ratings at the company's
request and assigned a category NR-4 to the FSR and an "nr" to the
ICR.
These rating actions reflect the support afforded to PLR by its
new parent, Pacific LifeCorp (Newport Beach, CA).
PENN TREATY: A.M. Best Affirms "D" Issuer Credit Rating
-------------------------------------------------------
A.M. Best Co. has affirmed the financial strength rating of D
(Poor) and issuer credit rating (ICR) of "c" of American
Independent Network Insurance Company of New York (New York, NY).
The outlook for these ratings is negative. A.M. Best also has
affirmed the ICR of "d" on the holding company, Penn Treaty
American Corporation (Penn Treaty) [NASDAQ: PTYA].
Subsequently, A.M. Best has assigned a category NR-4 (Company
Request) to American Independent Network's FSR and an "nr" to the
ICR in response to a request from company management to be removed
from A.M. Best's interactive rating process. A.M. Best also has
assigned an "nr" to Penn Treaty's ICR.
American Independent Network is a subsidiary of Penn Treaty
Network America Insurance Company and American Network Insurance
Company, both of which entered into voluntary rehabilitation in
their domiciliary jurisdiction of the Commonwealth of Pennsylvania
on January 6, 2009. The rating affirmations reflect the extremely
weak balance sheet, concentrated business profile and the
continued weak statutory operating performance of the organization
as a whole.
PENNEY (J.C.): S&P Cuts Rating to 'BB' From 'BBB-'; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services said it took various actions on
six department store operators. S&P downgraded most-but not all-
of these companies. S&P removed all six companies from
CreditWatch with negative implications, where they had been placed
on Feb. 5, 2009.
"The rating actions reflect Standard & Poor's deepening concern
about the impact of the U.S. recession on the increasingly
troubled department store sector," said Standard & Poor's credit
analyst Diane Shand, "which felt the full brunt of the declining
U.S. economy and weakening consumer confidence in 2008." The
recession is likely to last through at least the third quarter of
2009 given weakening employment, the still-poor housing market,
and continuing turmoil in financial markets. "We believe lower
consumer spending and declining mall traffic will affect the sales
and profits of the department store operators this year," added
Ms. Shand, "and that recovery will be slow and dependent on an
improvement in the macroenvironment."
Standard & Poor's expects moderate-priced department store
operators like Dillard's, Macy's, and J.C. Penney to suffer high-
single-digit declines in comparable-store sales in 2009 and that
the more upscale competitors like Neiman Marcus and Nordstrom will
incur low-double-digit declines in same-store sales. S&P believes
department store operators will generally plan inventories,
expenses, and store growth conservatively in 2009 in an effort to
protect margins and cash flow. Nevertheless, most companies'
margins are likely to erode as a result of weak consumer demand,
lack of sales leverage, and promotional activity. S&P expects
declining profitability to hurt their credit profiles. Credit
metrics for all of the rated department stores also weakened in
2008 as a result of poor industry fundamentals and companies'
needs to align inventories with significantly weaker demand.
Currently, liquidity is not a concern. Macy's and Penney recently
amended their credit facilities. Dillard's, Neiman Marcus, and
Sears have covenant-lite credit facilities and S&P believes that
Nordstrom has ample cushion within its covenants.
The rating affirmation on Sears Holdings Corp. (BB-/Negative) is
based on S&P's expectation that credit measures should remain
adequate for the rating, even with expected sales pressure from a
difficult retailing environment. This would reflect Sears' recent
cost-reduction measures and that Sears' cash flow generation
should remain satisfactory due to reduced working capital needs
from planned inventory reduction and lower capital spending.
Ratings List
Ratings Lowered
To From
-- ----
Dillard's Inc. B-/Stable/-- B+/Watch Neg/--
Macy's Inc. BB/Stable/-- BBB-/Watch Neg/--
Neiman Marcus
Group Inc. (The) B/Negative/-- B+/Watch Neg/--
Nordstrom Inc. BBB+/Stable/A-2 A-/Watch Neg/A-2
Penney (J.C.) Co. Inc. BB/Stable/-- BBB-/Watch Neg/--
Ratings Affirmed And Off CreditWatch
To From
-- ----
Sears Holdings Corp. BB-/Negative/-- BB-/Watch Neg/--
PETROZONE INC: Involuntary Chapter 11 Case Summary
--------------------------------------------------
Alleged Debtor: Petrozone, Inc.
10099 S. Broadway
Crown Point, IN 46307
Case Number: 09-21449
Involuntary Petition Date: April 16, 2009
Court: Northern District of Indiana (Hammond Division)
Judge: J. Philip Klingeberger
Petitioner's Counsel: Catherine Molnar-Boncela, Esq.
geg_law@ameritech.net
Gordon E. Gouveia & Associates
433 West 84th Drive
Merrillville, IN 46410
Tel: (219) 736-6020
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Bank of Indiana, N.A. money loaned $1,017,931
Richard Morris
Sr. VP for Comm. Lending
5 Executive Dr., Ste., A.
Lafayette, IN 47905
Gerald B. Coleman fees and expenses $36,620
9101 N. Wesleyan Road
Suite 100
Indianapolis, IN 46268
S-Mart Petroleum, Inc. products and money $210,381
5824 Plum Creek Blvd. loaned
Carmel, IN 46033
PILGRIM'S PRIDE: Sets June 1 as Deadline for Proofs of Claim
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas has
set June 1, 2009, at 5:00 p.m. prevailing Pacific Time, as the
last date and time for each person or entity, including
governmental units, to file proofs of claim in Pilgrim's Pride
Corporation, et al.'s Chapter 11 cases.
For questions with respect to this bar date notice, please contact
the Debtors' court-approved claims agent Kurtzman Carson
Consultants at (888) 830-4659.
Proofs of claim must be filed so as to be actually received on or
before June 1, 2009, at 5:00 p.m. prevailing Pacific Time, at this
address:
(i) if by first class mail or overnight mail:
Pilgrim's Pride Claims Processing Center
c/o Kurtzman Carson Consultants LLC
2335 Alaska Avenue, El Segundo
CA 90245
(ii) if by hand delivery:
Pilgrim's Pride Claims Processing Center
c/o Kurtzman Carson Consultants LLC
2335 Alaska Avenue, El Segundo
CA 90245
or
Clerk of the United States Bankruptcy Court
Attn: Pilgim's Pride Claims Processing Center
United States Bankruptcy Court
Northern District of Texas
Fort Worth Division
501 West Tenth Street
Fort Worth, TX 76102-3643
For those asserting a claim against more than one Debtor, separate
proofs of claim must be filed against each such Debtor.
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)
POLAROID CORP: Hilco & Gordon Bros. Win "Polaroid" Marks
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota approved
the acquisition by a joint venture led by Gordon Brothers Brands,
LLC and Hilco Consumer Capital, L.P., which includes private
equity fund Knight's Bridge Capital Partners and other
institutional investors, of substantially all the assets of
Polaroid Corp., including the Polaroid brand, intellectual
property, inventory and other assets.
Janet Whitman at Canwest News Service reports that the investor
group won the bidding with an $87.6 million offer, capping a
tumultuous three-week bankruptcy auction that was reopened twice.
The joint venture partners, who recently acquired The Sharper
Image(R), Linens 'N Things(R) and Bombay(R) brands, plan to
develop a full-scale global licensing and marketing strategy for
wholesale, direct-to-retail and e-commerce businesses to leverage
Polaroid's innovative and pioneering heritage.
Stephen Miller, Co-President, Gordon Brothers Retail Group stated,
"Polaroid is an iconic brand known globally for their technical
innovation and high-quality products that deliver on its
reputation of ease-of-use. As a Boston-based company, it's a
privilege to keep Polaroid's roots in America while expanding the
brand internationally."
"The Polaroid brand has immense global appeal that translates into
almost all categories," commented Jamie Salter, CEO of Hilco
Consumer Capital. "This is a terrific opportunity to unlock
Polaroid's brand value and transform its multi-channel platform of
diverse and unique consumer products using leading technologies
and trend-setting innovations."
As reported by the Troubled Company Reporter on April 13, 2009,
Polaroid conducted another auction of its assets after U.S.
Bankruptcy Judge Gregory Kishel junked its bid to sell itself to a
joint-venture of two liquidation firms, Hilco Consumer Capital LP
of Toronto and Gordon Brothers Brands LLC of Boston for
$56.3 million.
Private-equity firm Patriarch Partners LLC, the losing bidder at
an extended auction this week, filed papers April 9 saying the
auction should be reopened so it could increase its bid again to
$55.7 million in cash and 15% equity in the new company valued at
$9.75 million, Bloomberg said according to Patriarch spokesman
Taylor Griffin.
Patriarch argued its offer was better for Polaroid because the
liquidators planned to fire employees and halt innovation at the
company. Bloomberg noted that Judge Kishel said he would
supervise another auction in his courtroom on April 16.
Peter Lattman and Jeffrey McCracken at The Wall Street Journal
state that after 28 bids and counterbids in the third round of
bidding in the last three weeks, Lynn Tilton of Patriarch Partners
then emerged as the victor, agreeing to pay $88.1 million for
Polaroid. The New York Times relates that Patriarch Partners won
with a $59.1 million bid. According to The NY Times, Judge Kishel
reopened the auction last week, citing complaints over the
procedures. Patriarch Partners, The NY Times states, lost that
auction and Polaroid sought court approval to sell itself to Hilco
and Gordon Brothers. A Patriarch Partners spokesperson said that
the firm told the Court that the auction was flawed and should be
reopened so it could increase its bid to about $55.7 million in
cash and 15% equity in the new company valued at $9.75 million, NY
Times reports. The Court, according to The NY Times, said that he
would supervise another auction in his courtroom on Thursday.
But Judge Kishel, after hearing from Polaroid's creditors, ruled
that Hilco and Gordon Brothers won the bidding with an
$87.6 million offer, WSJ reports.
According to WSJ, the creditors preferred the liquidators' bid
party due to their track record operating other brands like
Polaroid. The report says that the creditors will keep 25% of the
Polaroid.
According to the joint venture, During its 72-year history,
Polaroid has developed one of the world's most widely recognized
consumer brands. The joint venture recognizes that Polaroid's
unique "innovation-made-simple" brand platform has global appeal
across a wide demographic and can be expanded to numerous product
categories. The Polaroid brand began with polarized sunglasses,
evolved into instant film, camera and camera accessories, and
expanded well beyond into flat panel televisions, portable DVD
players, digital photo frames, digital HD camcorders, waterproof
digital cameras and more.
Always on the cutting edge of the latest "instant" technologies,
Polaroid is also responsible for the world's very first ZINK(TM)
(Zero Ink(TM) Printing Technology) enabled printing device. The
Polaroid PoGo(TM) Instant Mobile Printer offers the capability to
print and share 2"x3" borderless, color images from a camera cell
phone or digital camera in under a minute. In 2009, Polaroid
unveiled a digital camera with the same printing capabilities, the
palm-sized PoGo Instant Digital Camera.
The flexibility of the Polaroid brand offers limitless potential
to embark on additional product opportunities, ranging from
consumer electronics to commercial imaging. The joint venture
intends to partner with a number of global institutions in the
ongoing development of the Polaroid brand.
Hilco Consumer Capital, L.P. - http://www.hilcocc.com/--
specializes in private equity investments in branded companies
with high target market awareness. HCC looks to acquire
retailers, wholesalers and intellectual property in this space and
seeks to build significant, additional value through innovative
product development, marketing, merchandising and licensing
strategies. Current portfolio brands and companies include House
of Marley, Caribbean Joe(R), Ellen Tracy(R), Halston(R), Tommy
Armour Golf(R), RAM Golf(R), The Sharper Image(R), Linens 'N
Things(R) and Bombay(R). HCC is a unit of The Hilco Organization
-- http://www.hilcotrading.com/-- a Chicago-based, international
provider of diversified financial and operational services,
including business asset valuations, asset acquisition and
disposition services, M&A services and retail consulting.
Gordon Brothers Brands, LLC is a member of the Gordon Brothers
Group family of companies. Gordon Brothers Brands purchases,
sells, and licenses brands and other intellectual property.
Current portfolio brands and companies include Rugged Shark(R),
The Sharper Image(R), Linens 'N Things(R) and Bombay(R), among
others. Founded in 1903, Gordon Brothers Group --
http://www.GordonBrothers.com/-- is a global advisory,
restructuring and investment firm specializing in retail and
consumer products, industrial and real estate sectors. Gordon
Brothers Group maximizes value for both healthy and distressed
companies by purchasing or selling all categories of assets,
appraising assets, providing debt financing, making private equity
investments and operating businesses for extended periods. Gordon
Brothers Group conducts over $50 billion in annual transactions
and appraisals.
Tom Petters Bought Polaroid with Ponzi Money, Receiver Says
Court-appointed receiver, Doug Kelly, said in court documents that
Tom Petters purchased Polaroid in 2005 with money from his Ponzi
scheme.
The government officials said that Mr. Petters bought Polaroid
with $426 million he stole from investors through Petters Cos.
Inc., Jennifer Niemela at Minneapolis/St. Paul Business Journal
reports, citing Mr. Kelly.
About Polaroid Corporation
Polaroid Corporation -- http://www.polaroid.com-- makes and
sells films, cameras, and other imaging products. The company and
20 of its affiliates first filed for bankruptcy protection on
October 12, 2001 (Bankr. D. Del. Lead Case No. 01-10864).
Skadden, Arps, Slate, Meagher & Flom LLP represented the Debtors
in their previous restructuring efforts. At that time, the
company blamed steep decline in its revenue and the resulting
impact on its liquidity.
On June 28, 2002, the U.S. Bankruptcy Court for the District of
Dealware approved the purchase of substantially all of Polaroid's
business by One Equity Partners. The bid provides for cash
consideration of $255 million plus a 35% interest in the new
company for unsecured creditors.
Polaroid Corp., together with 11 affiliates, filed its second
voluntary petition for Chapter 11 on Dec. 18, 2008 (Bankr. D.
Minn., Lead Case No. 08-46617). Judge Gregory F. Kishel handles
the Chapter 22 case. James A. Lodoen, Esq., at Lindquist & Vennum
P.L.L.P, is the Debtors' counsel.
According to the company, the financial structuring process and
the second bankruptcy filing are the result of events at Petters
Group Worldwide, which has owned Polaroid since 2005. The founder
of Petters Group and certain associates are currently under
investigation for alleged acts of fraud that have compromised the
financial condition of Polaroid and other entities owned by
Petters Group. The company and its leadership team are not
subjects of the ongoing investigation involving Petters Group.
About Petters Group Worldwide
Based in Minnetonka, Minn., Petters Group Worldwide LLC is named
for founder and chairman Tom Petters. The group is a collection
of some 20 companies, most of which make and market consumer
products. It also works with existing brands through licensing
agreements to further extend those brands into new product lines
and markets. Holdings include Fingerhut (consumer products via
its catalog and Web site), SoniqCast (maker of portable, WiFi MP3
devices), leading instant film and camera company Polaroid
(purchased for $426 million in 2005), Sun Country Airlines
(acquired in 2006), and Enable Holdings (online marketplace and
auction for consumers and manufacturers' overstock inventory).
Petters formed the company in 1988.
Petters Company, Inc., is the financing and capital-raising unit
of Petters Group Worldwide, LLC. Petters Company, Inc., and
Petters Group Worldwide, LLC, filed separate petitions for Chapter
11 relief on Oct. 11, 2008 (Bankr. D. Minn. Case No. 08-45257 and
08-45258, respectively). James A. Lodoen, Esq., at Lindquist &
Vennum P.L.L.P., represents the Debtors as counsel. In its
petition, Petters Company, Inc., listed debts of between
$500 million and $1 billion, while its parent, Petters Group
Worldwide, LLC, listed debts of not more than $50,000.
As reported in the Troubled Company Reporter on Oct. 7, 2008,
Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing
business as Sun Country Airlines, Inc., and MN Airline Holdings,
Inc., filed for Chapter 11 bankruptcy protection with the U.S.
Bankruptcy Court for the District of Minnesota on Oct. 6, 2008
(Lead Case No. 08-45136). Petters Aviation, LLC, is a wholly
owned unit of Thomas Petters Inc. and owner of MN Airline
Holdings, Inc., Sun Country's parent company.
PRESIDENTIAL LIFE: A.M. Best Affirms "bb-" Issuer Credit Rating
---------------------------------------------------------------
A.M. Best Co. has affirmed the financial strength rating of B+
(Good) and issuer credit rating of "bbb-" of Presidential Life
Insurance Company and the ICR of "bb-" of Presidential Life
Corporation (both of Nyack, NY) [NASDAQ: PLFE]. The outlook for
all ratings is stable.
The ratings reflect Presidential Life's strengthened
capitalization, consistent operating earnings over a five-year
rating period and the elimination of leverage at Presidential Life
Corp, reflecting the pay off of its $100 million senior notes due
February 2009. The ratings also recognize Presidential Life's
risk and capital management strategies and the company's attempt
to further diversify its geographic and product portfolio.
Although Presidential Life has reduced its exposure to higher risk
assets as a percentage of capital in recent years, exposures to
riskier assets such as limited partnerships and illiquid private
placements remain. Moreover, the company is concentrated in the
interest sensitive individual annuity business; and thus, highly
sensitive to the performance of the underlying asset portfolio.
Accordingly, A.M. Best remains cautious given current economic
market conditions and the impact that further deterioration in
certain asset classes could have on Presidential Life's operating
performance.
Over the past several years, Presidential Life has stabilized new
business growth and operating performance after a period of rapid
growth, which had previously strained capital. In addition, the
company is better positioned from Presidential Life Corp's
retirement of debt and is expected to further strengthen its own
capitalization as dividend payments have been reduced.
RH DONNELLEY: Nonpayment of Interest Cues S&P's Rating Cut to 'D'
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it has lowered its
corporate credit rating for R.H. Donnelley Corp. to 'D' from
'CCC+'. In addition, the issue-level rating on RHD's
$1.23 billion 8.875% series A-4 senior notes was lowered to 'D'
from 'CCC-'. All other issue-level ratings at RHD were lowered to
'C' from 'CCC-'.
"The rating actions stem from the company's announcement that it
did not make the $55 million interest payment on the notes due
April 15, 2009," said Standard & Poor's credit analyst Emile
Courtney. A payment default has not occurred relative to the
legal provisions of the notes, because there is a 30-day grace
period in which to make the interest payment. However, S&P
considers a default to have occurred, even if a grace period
exists, when the nonpayment is a function of the borrower being
under financial distress -- unless S&P is confident that the
payment will be made in full during the grace period.
In February 2009, S&P lowered its corporate credit rating on the
company to 'CCC+', reflecting S&P's belief that the company would
undergo a debt recapitalization of some form over the subsequent
two years. This is because S&P believes the company will
experience a worsening pace of EBITDA decline during the period,
and expect the pace of decline in yellow pages advertising sales
at RHD has meaningfully worsened because of the deepening U.S.
economic recession, which has exacerbated the secular shift away
from print ads. Additionally, and as a result, RHD is likely to
violate covenants in credit facilities in 2010 at its R.H.
Donnelley Inc. and Dex Media West LLC operating subsidiaries. S&P
believes the company will face challenges in refinancing
maturities of more than $1.2 billion in 2010.
RHD's announcement reflects the company's efforts to recapitalize,
and as a result, S&P believes the risk of a near-term bankruptcy
or restructuring are now meaningfully increased. As a result, S&P
lowered the corporate credit ratings to 'CC' from 'CCC+' on the
company's operating subsidiaries Dex Media West LLC, Dex Media
East LLC, Dex Media Inc. and R.H. Donnelley Inc. The ratings
outlooks are negative.
S&P also lowered all issue-level ratings for unsecured and
subordinated debt at each operating company (where it exists) to
'C', except for the senior unsecured rating at Dex Media West LLC.
S&P lowered this rating to 'CC', the same as the 'CC' corporate
credit rating, reflecting a recovery rating of '4' on the notes
and S&P's expectation for average (30% to 50%) recovery for
lenders in the event of a payment default. Additionally, S&P
lowered the issue-level ratings for senior secured debt at Dex
Media East LLC and R.H. Donnelley Inc. to 'CCC-', one notch above
the 'CC' corporate credit rating, reflecting a recovery rating of
'2' on the facilities and S&P's expectation for substantial (70%
to 90%) recovery for lenders in the event of a payment default.
S&P also lowered the issue-level ratings for senior secured debt
at Dex Media West LLC to 'CCC', two notches above the corporate
credit rating, reflecting a recovery rating of '1' on the
facilities and S&P's expectation for meaningful (90% to 100%)
recovery for lenders in the event of a payment default.
The outlook on the 'CC' corporate credit ratings for RHD's
operating subsidiaries Dex Media West LLC, Dex Media East LLC, Dex
Media Inc. and R.H. Donnelley Inc. is negative. The negative
outlook reflects S&P's expectation that the risk of a near-term
bankruptcy or restructuring are meaningfully increased following
RHD's announcement yesterday regarding the company's efforts to
recapitalize.
ROY DAVIS: Files for Chapter 11 Bankruptcy Protection
-----------------------------------------------------
Ben Semmes at Pittsburgh Business Times reports that Roy D. Davis,
who owns Tusca Mediterranean Tapas at the SouthSide Works, has
voluntarily filed for Chapter 11 bankruptcy protection.
Business Times relates that Mr. Davis filed the bankruptcy
petition through his company, Spurs Enterprises LP, listing
$100,001 to $500,000 in assets and $1,000,001 million to
$10 million in liabilities. Court documents say that the Debtor's
largest creditors include West Banco Inc., an affiliate of The
Soffer Organization, R.E. Crawford Construction Co., and Mr. Davis
himself, who loaned $1.3 million to the corporation.
According to Business Times, an affiliate of The Soffer
Organization, owner of the SouthSide Works, filed in November 2008
a $163,000 lawsuit against Tusca Mediterranean. The report says
that Mr. Davis bought out the stakes of R.E. Crawford Construction
Co. and the Mowod family.
Business Times states that R.E. Crawford sued Tusca Mediterranean,
claiming that the Company failed to pay $220,000. R.E. Crawford,
says the report, sold its stake in the Company for $350,000 in
August 2007.
Roy D. Davis is a racehorse owner and entrepreneur.
SALANDER-O'REILLY: Kips Bay Take Over $75MM Manhattan Mansion
-------------------------------------------------------------
Katya Kazakina at Bloomberg News reports that Kips Bay Decorator
Show House has taken over Salander-O'Reilly Galleries LLC's $75
million 1922 neo-Italian Renaissance townhouse in Manhattan.
Bloomberg relates that the Salander-O'Reilly Galleries was
padlocked by a court order a year and a half ago. Lawrence B.
Salander, who rented the mansion, is accused of stealing
$88 million from investors, clients, and Bank of America,
Bloomberg states. According to Bloomberg, more than 30 high-end
decorators participated the five-story building's makeover.
The building, says Bloomberg, is listed at $75 million with
Sotheby's International Realty. The owner, Aby Rosen, lent the
townhouse to Kips Bay for more than two months free of charge,
states the report.
Established in 1976, New York-based Salander-O'Reilly Galleries
LLC -- http://www.salander.com/-- exhibits and manages fine art
from renaissance to contemporary. On Nov. 1, 2007, three
creditors filed an involuntary chapter 7 petition against the
gallery (Bankr. S.D.N.Y. Case Number 07-13476). The petitioners,
Carol F. Cohen of Two Swans Farm, Cavallon Family LP, and Richard
Ellenberg, disclosed total claims of more than $5 million. Amos
Alter, Esq., at Troutman Sanders LLP and John Koegel, Esq., at The
Koegel Group LLP represent the petitioners.
On Nov. 9, 2007, the Debtor's case was converted to a chapter 11
proceeding (Bankr. S.D.N.Y. Case No. 07-30005). Alan D. Halperin,
Esq., at Halperin Battaglia Raicht, LLP, represents the gallery.
Salander-O'Reilly Galleries is owned by Lawrence B. Salander and
his wife, Julie D. Salander, of Millbrook, New York. The couple
also has membership interests in galleries including non-debtor
entities, Renaissance Art Investors and Salander Decorative Arts
LLC. The couple filed for chapter 11 protection on Nov. 2, 2007
(Bankr. S.D.N.Y. Case No. 07-36735). Douglas E. Spelfogel, Esq.,
and Richard J. Bernard, Esq. at Baker & Hostetler LLP and Susan P.
Persichilli, Esq., at Buchanan Ingersoll PC represent the Debtors
in their restructuring efforts. When they filed for bankruptcy,
Mr. and Mrs. Salander listed assets and debts between $50 million
and $100 million.
Prior to bankruptcy, Mr. Salander resigned as Salander-O'Reilly
Galleries' manager and turned over the control to Triax Capital
Advisors LLC, an independent turnaround firm.
SEARS HOLDINGS: S&P Affirms 'BB-' Rating; Removed From Neg. Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it took various actions on
six department store operators. S&P downgraded most-but not all-of
these companies. S&P removed all six companies from CreditWatch
with negative implications, where they had been placed on Feb. 5,
2009.
"The rating actions reflect Standard & Poor's deepening concern
about the impact of the U.S. recession on the increasingly
troubled department store sector," said Standard & Poor's credit
analyst Diane Shand, "which felt the full brunt of the declining
U.S. economy and weakening consumer confidence in 2008." The
recession is likely to last through at least the third quarter of
2009 given weakening employment, the still-poor housing market,
and continuing turmoil in financial markets. "We believe lower
consumer spending and declining mall traffic will affect the sales
and profits of the department store operators this year," added
Ms. Shand, "and that recovery will be slow and dependent on an
improvement in the macroenvironment."
Standard & Poor's expects moderate-priced department store
operators like Dillard's, Macy's, and J.C. Penney to suffer high-
single-digit declines in comparable-store sales in 2009 and that
the more upscale competitors like Neiman Marcus and Nordstrom will
incur low-double-digit declines in same-store sales. S&P believes
department store operators will generally plan inventories,
expenses, and store growth conservatively in 2009 in an effort to
protect margins and cash flow. Nevertheless, most companies'
margins are likely to erode as a result of weak consumer demand,
lack of sales leverage, and promotional activity. S&P expects
declining profitability to hurt their credit profiles. Credit
metrics for all of the rated department stores also weakened in
2008 as a result of poor industry fundamentals and companies'
needs to align inventories with significantly weaker demand.
Currently, liquidity is not a concern. Macy's and Penney recently
amended their credit facilities. Dillard's, Neiman Marcus, and
Sears have covenant-lite credit facilities and S&P believes that
Nordstrom has ample cushion within its covenants.
The rating affirmation on Sears Holdings Corp. (BB-/Negative) is
based on S&P's expectation that credit measures should remain
adequate for the rating, even with expected sales pressure from a
difficult retailing environment. This would reflect Sears' recent
cost-reduction measures and that Sears' cash flow generation
should remain satisfactory due to reduced working capital needs
from planned inventory reduction and lower capital spending.
Ratings List
Ratings Lowered
To From
-- ----
Dillard's Inc. B-/Stable/-- B+/Watch Neg/--
Macy's Inc. BB/Stable/-- BBB-/Watch Neg/--
Neiman Marcus
Group Inc. (The) B/Negative/-- B+/Watch Neg/--
Nordstrom Inc. BBB+/Stable/A-2 A-/Watch Neg/A-2
Penney (J.C.) Co. Inc. BB/Stable/-- BBB-/Watch Neg/--
Ratings Affirmed And Off CreditWatch
To From
-- ----
Sears Holdings Corp. BB-/Negative/-- BB-/Watch Neg/--
SILVERHAWK COMMONS: Case Summary & 11 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Silverhawk Commons, LLC
30040 - 30400 Commerce Court
Murrieta, CA 92563
Bankruptcy Case No.: 09-17562
Chapter 11 Petition Date: April 16, 2009
Court: Central District of California (Riverside)
Judge: Thomas B. Donovan
Debtor's Counsel: Thomas J. Polis, Esq.
tom@polis-law.com
Polis & Associates, APLC
19800 MacArthur Blvd., Ste. 1000
Irvine, CA 92612-2433
Tel: (949) 862-0040
Fax: (949) 862-0041
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
------ --------------- ------------
Fort McDowell Enterprises, $15,900,000
LLC
PO Box 18359
Fountain Hills, AZ 85269-8359
Silverhawk Land & $10,540,000
Acquisitions, LLC
3151 Airway Ave, Ste T-1
Costa Mesa, CA 92626
BankFirst $10,050,000
800 Marquette Ave, Ste 200
Minneapolis, MN 55402
Paul McDonnell, Treasurer property; $490,162
secured and
senior:
9,750,000
Rob Jacobson REIT Appraiser 2,500
Rhoades Capital Fund I, LLC Unknown
Tucalota Creek Partners, LLC Unknown
Employment Development Unknown
Dept.
Franchise Tax Board Unknown
Internal Revenue Service Unknown
Martin Howard Managing Member Unknown
The petition was signed by Martin Howard.
SIX FLAGS: Starts Debt for Equity Swap Offer for Debt Securities
----------------------------------------------------------------
Six Flags, Inc., has started an offer to exchange any and all of
the following notes (collectively, the "SFI Notes") for shares of
common stock of Six Flags (the "Common Stock"). The SFI Notes
available for exchange in this offer include:
-- 8-7/8% Senior Notes due 2010 of Six Flags, Inc.;
-- 9-3/4% Senior Notes due 2013 of Six Flags, Inc.; and
-- 9-5/8% Senior Notes due 2014 of Six Flags, Inc.
For
each
$1,000
Principal
Amount,
For each
Exchanged,
$1,000
Total
Claims(1)
Consider-
Exchanged,
ation
Total (#
of
Outstanding Consideration
Shares
Principal (# of shares of
Six Flags, Inc. Amount of Common
Common
Notes to be Exchanged CUSIP No. (in millions) Stock(2))
Stock)
8-7/8% Senior
Notes due
2010 83001P AD1 $131.1 18.5857
19.2455
(the "SFI 2010
Notes")
9-3/4% Senior
Notes due 2013 83001P AF6 $142.4 18.5857
18.9380
(the "SFI 2013
Notes")
83001P AH2
9-5?? , 8% Senior
Notes due 2014 83001P AK5 $314.8 18.5857
19.6057
(the "SFI 2014 Notes")
(1) Claims consists of principal amount, and accrued and
unpaid interest thereon through, and including, June 25,
2009.
(2) All Common Stock share numbers in this communication
reflect the consummation of the 1-for-100 reverse stock
split that is a condition to the Restructuring Plan.
Six Flags is offering to exchange all properly tendered and
accepted SFI Notes for shares of Common Stock. Subject to the
terms and conditions of the Exchange Offer, each holder of SFI
Notes (each, a "Holder" and collectively, the "Holders") who
validly tenders prior to the Expiration Date (as defined below)
and does not revoke all SFI Notes held by such Holder prior to the
Withdrawal Deadline (as defined below) will receive the Total
Consideration in the table above. Holders who tender, and do not
revoke, their SFI Notes in the Exchange Offer will not be entitled
to any interest on such SFI Notes from June 25, 2009, regardless
of when the Exchange Offer closes, and any subsequent interest
that would otherwise have been accrued on such SFI Notes will be
deemed paid in full upon receipt of the Total Consideration in the
Exchange Offer. Six Flags currently intends to take advantage of
the applicable 30-day grace period for making the semi-annual cash
interest payment due on June 1, 2009, on the SFI 2014 Notes. The
cash interest that Holders of the SFI 2014 Notes would otherwise
be entitled has been included in the calculation of the number of
shares of Common Stock such Holders are being offered in the
Exchange Offer and will receive in lieu of such cash interest
payment.
Concurrently with the Exchange Offer, Six Flags is also soliciting
consents from the Holders (the "Consent Solicitation") for certain
amendments to the indentures pursuant to which the SFI Notes were
issued (as each may have been amended and supplemented from time
to time, collectively, the "Indentures"), to eliminate or amend
substantially all of the restrictive covenants and modify certain
of the events of default and various other provisions contained in
the Indentures (collectively, the "Proposed Amendments"). A
tender by any Holder in the Exchange Offer will also constitute an
approval by such Holder of the Proposed Amendments. The Proposed
Amendments will not become operative unless and until the Exchange
Offer is consummated.
The Exchange Offer and Consent Solicitation will expire at 11:59
p.m., New York City time, on June 25, 2009, unless extended or
earlier terminated (the "Expiration Date"). Tenders of SFI Notes
pursuant to the Exchange Offer may be withdrawn and consents
delivered pursuant to the Consent Solicitation may be revoked at
any time until May 29, 2009 (the "Withdrawal Deadline").
Thereafter, such tenders may be withdrawn and consents may be
revoked only if the Exchange Offer and the Consent Solicitation
are terminated without any SFI Notes being accepted for exchange
pursuant to the Exchange Offer.
The Exchange Offer and the Consent Solicitation are part of a
restructuring plan (the "Restructuring Plan") with respect to the
SFI Notes, the 4.50% Convertible Senior Notes due 2015 (the "SFI
Convertible Notes") and the Preferred Income Equity Redeemable
Shares (the "PIERS"). As part of the Restructuring Plan, SFI also
plans to conduct (i) a separate exchange offer for $280 million
aggregate principal amount, plus accrued and unpaid interest
thereon through June 25, 2009, of the SFI Convertible Notes to
exchange 18.5857 shares of Common Stock for each $1,000 of Claims
of SFI Convertible Notes validly tendered and not revoked (the
"Convertible Note Exchange Offer"), and (ii) a consent
solicitation from the holders of 11.5 million currently
outstanding PIERS to amend the terms of the PIERS to provide,
among other things, that each initial $25.00 of liquidation
preference, plus accrued and unpaid dividends thereon through
June 25, 2009, shall automatically convert into 0.17 shares of
Common Stock upon consummation of the Restructuring Plan (the
"PIERS Amendment"). If the Restructuring Plan is successful and
all of the Holders of SFI Notes and holders of SFI Convertible
Notes participate therein, the PIERS would be converted to
approximately 10% of the outstanding Common Stock, the SFI
Convertible Notes would be exchanged for approximately 26.7% of
the outstanding Common Stock and the SFI Notes would be exchanged
for approximately 58.3% of the outstanding Common Stock, with the
existing holders of Common Stock holding approximately 5.0% of the
outstanding Common Stock, in each case prior to taking into
account the issuance of any equity under an equity incentive plan
to be adopted in connection with the Restructuring Plan.
The consummation of the Exchange Offer is conditioned upon the
satisfaction or waiver of the other conditions set forth in the
Offering Memorandum, dated April 17, 2009 (the "Offering
Memorandum"), including, among other things: (i) at least 95% of
the aggregate principal amount of each of the SFI Notes are
validly tendered for exchange and not revoked by the Withdrawal
Deadline, such tenders of SFI Notes being irrevocable thereafter,
and Holders representing such SFI Notes deliver their consents to
the Proposed Amendments; (ii) at least 95% of the outstanding
aggregate principal amount of the SFI Convertible Notes are
validly tendered for exchange and not revoked by May 29, 2009,
that holders of such SFI Convertible Notes do not withdraw their
SFI Convertible Notes on or prior to the Expiration Date, and
holders representing such SFI Convertible Notes deliver their
consents to proposed amendments to the SFI Convertible Notes
similar to the Proposed Amendments in the Convertible Note
Exchange Offer; (iii) holders of a majority of the outstanding
liquidation preference of the PIERS consent to the PIERS
Amendment; and (v) holders of a majority of the outstanding shares
of Common Stock consent to the adoption of a new equity incentive
plan, the PIERS Amendment, a 1-for-100 reverse stock split and an
increase in Six Flags' authorized shares of common stock and
certain other amendments to Six Flags' certificate of
incorporation.
In the event that the Restructuring Plan does not occur, Six Flags
intends to explore all other restructuring alternatives available
to it at that time, which may include an alternative out-of-court
restructuring or the commencement of a chapter 11 plan of
reorganization, with or without a pre-arranged plan of
reorganization. There can be no assurance that any alternative
restructuring arrangement or plan could be accomplished.
Six Flags' obligations to accept any SFI Notes tendered and to pay
the applicable consideration for them are set forth solely in the
Offering Memorandum relating to the Exchange Offer and Consent
Solicitation to be filed with the Securities and Exchange
Commission on Form 8-K and the accompanying Letter of Transmittal.
Persons with questions regarding the Exchange Offer and Consent
solicitation should review the Offering Memorandum or contact
Globic Advisors, Inc., the information agent for the Exchange
Offer and Consent Solicitation, at (800) 974-5771. This news
release is neither an offer to purchase nor a solicitation of an
offer to sell the SFI Notes. The Exchange Offer and Consent
Solicitation is made only by, and pursuant to the terms set forth
in the Offering Memorandum, and the information in this news
release is qualified by reference to the Offering Memorandum and
the accompanying Letter of Transmittal. Subject to applicable
law, Six Flags may amend, extend or terminate the Exchange Offer
and Consent Solicitation.
The Common Stock will be issued pursuant to the exemption from the
registration requirements of the Securities Act of 1933, as
amended (the "Securities Act"), provided by Section 3(a)(9) of the
Securities Act and the exemption from state securities law
requirements provided by Section 18(b)(4)(C) of the Securities
Act. We have made no arrangements for and have no understanding
with any dealer, salesman or other person regarding the
solicitation or recommendation of tenders hereunder. Any such
solicitation or recommendation of tenders by persons other than
Six Flags must not be relied upon by you as having been authorized
by Six Flags.
About Six Flags
Headquartered in New York City, Six Flags Inc. (NYSE: SIX) --
http://www.sixflags.com/-- is the world's largest regional
theme park company with 21 parks across the United States, Mexico
and Canada. Founded in 1961, Six Flags has provided world class
entertainment for millions of families with cutting edge, record-
shattering roller coasters and appointment programming with events
like the popular Thursday and Sunday Night Concert Series. Now 47
years strong, Six Flags is recognized as the preeminent thrill
innovator while reaching to all demographics -- families, teens,
tweens and thrill seekers alike -- with themed attractions based
on the Looney Tunes characters, the Justice League of America,
skateboarding legend Tony Hawk, The Wiggles and Thomas the Tank
Engine.
* * *
According to the Troubled Company Reporter on March 13, 2009,
Six Flags said it does not have sufficient cash to redeem
$287.5 million in Preferred Income Equity Redeemable Shares on
August 15, 2009.
As of December 31, 2008, Six Flags had $3.03 billion in total
assets, including $210.3 million in cash and cash equivalents;
$2.11 billion in total long-term debt, and $2.36 billion in total
debt, excluding $123.1 million in debt at December 31, 2004,
which had been called for prepayment; and $443.8 million in
stockholders' deficit.
Given the current negative conditions in the economy generally and
the credit markets in particular, Six Flags said there is
substantial uncertainty that it will be able to effect a
refinancing of its debt on or prior to maturity or the PIERS prior
to their mandatory redemption date on August 15, 2009.
"As a result of these factors, there is substantial doubt about
our ability to continue as a going concern unless a successful
restructuring occurs," Six Flags said.
Six Flags Inc., has reportedly hired Paul Hastings Janofsky &
Walker as bankruptcy counsel and investment bank Houlihan Lokey
Howard & Zukin to negotiate with creditors, including its banks,
bondholders, and preferred shareholders.
As reported by the Troubled Company Reporter on March 3, 2009,
Fitch Ratings has downgraded Six Flags, Inc. and its subsidiaries
-- Six Flags (Issuer Default Rating to 'CC' from 'CCC'; and Senior
unsecured notes, including the 4.5% convertible notes, to 'C/RR6'
from 'CC/RR6'); Six Flags Operations Inc. (IDR to 'CC' from 'CCC';
and Senior unsecured notes to 'C/RR6' from 'CCC-/RR5'); and Six
Flags Theme Park Inc. (IDR to 'CC' from 'CCC'; and Secured bank
credit facility to 'B-/RR2' from 'B/RR1'). In addition, Fitch
affirms Six Flags' preferred stock at 'C/RR6'.
As reported by the TCR on April 6, Standard & Poor's Ratings
Services withdrew its ratings on New York, New York-based Six
Flags Inc. and its subsidiaries, including the 'CCC' corporate
credit rating, at the Company's request.
SIX FLAGS: S&P Downgrades Corporate Credit Rating to 'D'
--------------------------------------------------------
Standard & Poor's Ratings Services said it has lowered its
corporate credit rating on New York, New York-based Six Flags Inc.
and Six Flags Theme Parks Inc. to 'D' from 'CCC'. In addition,
the issue-level rating on the company's 9 3/4% senior notes was
lowered to 'D' from 'CC'.
The rating actions stem from the company's announcement that it
did not make the April 15, 2009, $7 million interest payment on
the 9 3/4% senior notes. Under the applicable indenture relating
to the senior notes, this does not constitute a default because
the company has a 30-day grace period to make the payment before
any acceleration of the senior notes or any other debt repayment.
However, Standard & Poor's considers a default to have occurred,
even if a grace period exists, when the nonpayment is a function
of the borrower's being under financial stress -- unless S&P is
confident that the payment will be made in full during the grace
period.
Six Flags could seek a prepackaged or prearranged Chapter 11
reorganization to reduce its high debt and significant near-term
maturities. An out-of-court restructuring is also a possibility,
based on management's public comments.
As of Dec. 31, 2008, Six Flags had cash and cash equivalents of
$210 million, which is its primary source of liquidity. The
company's $275 million revolving credit facility is substantially
drawn and has minimal availability. Although the company likely
could have met the April 15, 2009, interest payment with cash on
hand, S&P has substantial doubt about whether Six Flags will be
able to redeem its preferred income equity redeemable shares for
cash totaling $318.8 million, including accrued and unpaid
dividends of $31.3 million, by Aug. 15, 2009. If Six Flags is
unable to refinance or restructure its PIERS on or before the
redemption date, it will constitute an event of default under the
credit facility, permitting lenders to accelerate the obligations.
Acceleration by bank lenders would cause other debt maturities to
accelerate as well.
The outstanding balance on the credit facility totaled about
$1.1 billion as of Dec. 31, 2008, and non-bank debt totaled
$1.3 billion. Based on the current state of the economy and the
credit markets, S&P believes it is unlikely that Six Flags will be
able to refinance the PIERS or the 2010 notes prior to their
respective maturities. The company is exploring various
alternatives.
This unsolicited rating(s) was initiated by Standard & Poor's. It
may be based solely on publicly available information and may or
may not involve the participation of the issuer's management.
Standard & Poor's has used information from sources believed to be
reliable, but does not guarantee the accuracy, adequacy, or
completeness of any information used.
SPECTRUM BRANDS: Equity Panel to Prove $2.3BB Equity Value Is Low
-----------------------------------------------------------------
The Official Committee of Equity Security Holders of Spectrum
Brands, Inc., said it is pleased that the revised disclosure
statement which gained Bankruptcy Court approval on April 15
incorporated most of the additional language proposed by the
Committee.
While Spectrum Brands acquiesced to the majority of the objections
of the Committee to the initially proposed disclosure statement,
the Committee believes that the final disclosure statement still
lacks any specific details as to how Spectrum Brands' financial
advisor, Perella Weinberg, calculated their estimate of Spectrum
Brands' firm value at only $2.3 billion.
While Perella Weinberg revised their estimate of firm value
$100 million higher than their previous estimate in the initial
version of the disclosure statement, the Committee finds this
revised valuation to be inexplicably low, at only 6.9x the
$332 million in EBITDA that Spectrum Brands projects for 2010,
with a resulting equity value of only $610 million ($2.3 billion
firm value minus $1.69 billion in net debt projected as of
07/15/09 = $610 million in equity value) that's only 5.6x FCF
(Free Cash Flow of $109 million that Spectrum Brands projects for
2010).
All that is required for existing shareholders' equity to be in
the money is an enterprise value north of $2.562 billion (7.7x
EBITDA) and a resulting equity value north of $872 million (8x
FCF), "hardly difficult multiples to imagine given most comparable
companies trade at higher multiples on both measures today," the
Equity Committee said. The difference between the $2.562 billion
valuation above which existing equity retains value and the
$2.3 billion valuation proposed by Spectrum Brands is only
$262 million, or less than 0.8x EBITDA.
Spectrum Brands has said, if the Company's Plan is confirmed as
proposed, existing common stock will be extinguished under the
plan, and no distributions will be made to holders of the
Company's existing equity.
The Official Equity Committee remains optimistic that its
presentation, with the assistance of its financial advisor Allen &
Company, to the Bankruptcy Court during the confirmation hearings
beginning June 15, will show that the current Plan must be found
to be unconfirmable because, among other reasons, it proposes to
give noteholders new notes and new common stock with a value
greater than the amount of their claims under their existing
notes, and is thus not fair and equitable to existing
shareholders.
Highlighting the Plan's lack of fairness, the final disclosure
statement quantifies for the first time that Spectrum's management
and board of directors, who own roughly only 3% of the stock, may
be awarded up to 10% of the reorganized company's stock under the
proposed equity incentive plan which seems like a perverse reward
for their decision to put the company through this highly
questionable chapter 11 filing, and to support a reorganization
Plan which seeks to wipe out existing shareholders.
If the bankruptcy court rules in favor of the Official Equity
Committee, the Company's Plan will not be confirmed and a new or
modified plan will be required which would call for adequate
compensation for existing shareholders that should allow existing
shareholders to maintain an ongoing equity participation in the
visibly robust collection of businesses that comprise Spectrum
Brands.
About Spectrum Brands
Based in Cibolo, Texas, Spectrum Brands, Inc. --
http://www.spectrumbrands.com/-- supplies consumer batteries,
lawn and garden care products, specialty pet supplies, shaving and
grooming products, household insect control products, personal
care products, and portable lighting. Spectrum Brands' business
is operated in three reportable segments: (a) Global Batteries and
Personal Car; (b) Global Pet Supplies; and (c) Home and Garden.
Spectrum Brands has roughly 5,960 employees worldwide, with about
2,700 of those employees working within the United States. In
addition, Spectrum Brands holds a 50% interest in a domestic
entity; minority interests (less than 25% each) in a domestic
entity and a foreign entity; a limited partnership interest in a
foreign entity; and a 100% interest in a foreign trust.
Spectrum Brands, Inc., and 13 subsidiaries filed separate Chapter
11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No.
09-50455). The Hon. Ronald B. King presides over the cases. D.
J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in
New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq.,
at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman,
Esq., in San Antonio, serve as the Debtors' counsel. Sutherland
Asbill & Brennan LLP acts as special counsel; Perella Weinberg
Partners LP, as financial advisor; Deloitte Tax LLP as tax
consultant; and Logan & Company Inc. as claims and noticing agent.
As of September 30, 2008, Spectrum Brands had $2,247,479,000 in
total assets and $3,274,717,000 in total liabilities.
An official committee of equity security holders -- composed of
Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and
the Peter and Karen Locke Living Trust -- was appointed by the
U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009.
The Equity Committee has tapped Alston & Bird LLP as its
bankruptcy counsel.
Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by Spectrum Brands Inc. and its various subsidiaries.
(http://bankrupt.com/newsstand/or 215/945-7000)
SPECTRUM BRANDS: Stockholders Want More Info on Co.'s Valuation
---------------------------------------------------------------
Reuters reports that the official committee of equity security
holders of Spectrum Brands, Inc., said that they wanted more
information about how the Company's value was calculated at
$2.3 billion.
Spectrum Brands, according to Reuters, received court approval
earlier last week to solicit votes from creditors for its
reorganization plan. Reuters relates that the equity committee
said it wanted to know how Spectrum Brands' financial adviser came
up with a $2.3 billion value for the Company in that
reorganization plan. Citing the committee, Reuters says that
Spectrum Brands would have to be valued above
$2.562 billion for equity holders to get some money back.
According to Reuters, the equity committee said that existing
shareholders will be wiped out if the current reorganization plan
is approved with the present value of the Company. The equity
committee said in a statement, "If the bankruptcy court rules in
favor of the official equity committee, the Company's plan of
reorganization will not be confirmed and a new or modified plan
will be required."
Based in Cibolo, Texas, Spectrum Brands, Inc. --
http://www.spectrumbrands.com/-- supplies consumer batteries,
lawn and garden care products, specialty pet supplies, shaving and
grooming products, household insect control products, personal
care products, and portable lighting. Spectrum Brands' business
is operated in three reportable segments: (a) Global Batteries and
Personal Car; (b) Global Pet Supplies; and (c) Home and Garden.
Spectrum Brands has roughly 5,960 employees worldwide, with about
2,700 of those employees working within the United States. In
addition, Spectrum Brands holds a 50% interest in a domestic
entity; minority interests (less than 25% each) in a domestic
entity and a foreign entity; a limited partnership interest in a
foreign entity; and a 100% interest in a foreign trust.
Spectrum Brands, Inc. and 13 subsidiaries filed separate Chapter
11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No.
09-50455). The Hon. Ronald B. King presides over the cases. D.
J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in
New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq.,
at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman,
Esq., in San Antonio, serve as the Debtors' counsel. Sutherland
Asbill & Brennan LLP acts as special counsel; Perella Weinberg
Partners LP, as financial advisor; Deloitte Tax LLP as tax
consultant; and Logan & Company Inc. as claims and noticing agent.
As of September 30, 2008, Spectrum Brands had $2,247,479,000 in
total assets and $3,274,717,000 in total liabilities.
An official committee of equity security holders -- composed of
Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and
the Peter and Karen Locke Living Trust -- was appointed by the
U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009.
The Equity Committee has tapped Alston & Bird LLP as its
bankruptcy counsel.
Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by Spectrum Brands Inc. and its various subsidiaries.
(http://bankrupt.com/newsstand/or 215/945-7000)
SPANSION INC: Non-Payment of Fees Prompt NASDAQ Delisting Notice
----------------------------------------------------------------
Spansion Inc. has received an additional staff determination
notice from the NASDAQ Stock Market stating that the company's
failure to pay certain fees in accordance with NASDAQ Marketplace
Rule 5210(d), is an additional basis for delisting the company's
securities from the NASDAQ Global Select Market.
The company intends to appeal the delisting determination before
the NASDAQ Listing Qualifications Panel. There can be no assurance
that the hearing panel will grant the company's request for
continued listing.
About Spansion
Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com-- is a
Flash memory solutions provider, dedicated to enabling, storing
and protecting digital content in wireless, automotive, networking
and consumer electronics applications. Spansion, previously a
joint venture of AMD and Fujitsu, is the largest company in the
world dedicated exclusively to designing, developing,
manufacturing, marketing, selling and licensing Flash memory
solutions.
Spansion Inc. and four affiliates filed voluntary petitions
for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No.
09-10690). Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and
Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped
as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane
Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions
LLC, is the claims agent. 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.
SUNESIS PHARMA: Receives NASDAQ Non-Compliance Notification
-----------------------------------------------------------
Sunesis Pharmaceuticals, Inc., received a letter, dated April 14,
2009, from the Listing Qualifications Department of The NASDAQ
Stock Market notifying the Company that it does not comply with
the $10.0 million minimum stockholders' equity requirement for
continued listing on The NASDAQ Global Market set forth in NASDAQ
Marketplace Rule 5450(b)(1)(A). NASDAQ's determination was based
on a review of the Company's Annual Report on Form 10-K for the
period ended December 31, 2008.
At that time, the Company's stockholders' equity was reported at
$6.5 million. Since that time, the Company announced an up to
$43.5 million financing, of which the first $10.0 million was
received on April 3, 2009 upon the issuance of shares of the
Company's Series A preferred stock and warrants and the remainder
of which may be issued by the Company, subject to approval by the
Company's stockholders, upon the satisfaction of a certain
clinical milestone and the Company's common stock trading above a
specified floor price or upon approval by a majority of the
investors in the private placement, among other conditions.
While the Company does not anticipate that it will meet the $10.0
million of stockholders' equity continued listing requirement as
of March 31, 2009 on a GAAP or pro-forma basis after giving effect
to the $10.0 million private placement, the amount of the
shortfall depends on the net proceeds from the initial closing of
the private placement, the amount of the restructuring charge from
the Company's reduction in force on March 31, 2009 and the
application of GAAP to the terms of the newly issued securities,
which the Company is in the process of analyzing.
As provided in the NASDAQ rules, the Company has the opportunity
to submit to NASDAQ a specific plan and timeline to achieve and
sustain compliance. The Company intends to submit in a timely
manner to the NASDAQ Staff a plan to continue listing on The
NASDAQ Global Market. There is no assurance that NASDAQ will
accept the Company's plan to satisfy the stockholders' equity
requirement.
If, after the completion of its review, NASDAQ determines that the
Company has not presented a plan that adequately addresses the
stockholders' equity issue, NASDAQ will provide written notice
that the Company's securities will be subject to delisting from
The NASDAQ Global Market. In that event, the Company may either
apply for listing on The NASDAQ Capital Market, provided it meets
the continued listing requirements of that market, or appeal the
decision to a NASDAQ Listing Qualifications Panel. In the event
of an appeal, the Company's securities would remain listed on The
NASDAQ Global Market pending a decision by the Panel following the
hearing.
About Sunesis Pharmaceuticals
Based in South San Francisco, California, Sunesis Pharmaceuticals,
Inc., -- http://www.sunesis.com/-- is a biopharmaceutical company
focused on the development and commercialization of new oncology
therapeutics for the treatment of solid and hematologic cancers.
Sunesis has built a highly experienced cancer drug development
organization committed to advancing its lead product candidate,
voreloxin, in multiple indications to improve the lives of people
with cancer.
SUNSTONE HOTEL: Makes $600 Tender Offer for Every $1,000 of Notes
-----------------------------------------------------------------
Sunstone hotel Partnership, LLC, commenced on April 17, 2009, a
tender offer to purchase any and all of its outstanding 4.60%
Exchangeable Senior Notes due 2027 for a cash purchase price equal
to $600 for every $1,000 principal amount of the Notes (which
includes a consent fee of $5 per $1,000 principal amount of the
Notes). Holders whose Notes are purchased will also receive
accrued and unpaid interest on said Notes to, but excluding, the
date on which payment for purchased Notes is made.
As of April 16, 2009, there was $186,012,000 aggregate principal
amount of Notes outstanding. The Notes are exchangeable, under
certain circumstances, into shares of Sunstone's common stock at
an exchange rate of 32.9179 share of the Sunstone Hotel Investors'
common stock for each $1,000 principal amount of Notes, subject to
adjustment as set forth in the Indenture. Sunstone's common stock
is traded in the New York Stock Exchange under the symbol "SHO".
As of April 17, 2009, the last reported sale price of a share of
Sunstone common stock was $3.90.
The tender offer and consent solicitation (the "Offer") will
expire at 12:00 midnight, New York City time on May 14, 2009,
unless extended.
The Operating Partnership is also soliciting Consents from the
registered holders of Notes (1) to adopt a proposed amendment to
the Indenture, dated as of June 18, 2007, as amended and
supplemented, among the Operating Partnership, its parent Sunstone
Hotel Investors, Inc. and the Trustee under which the Notes were
issued and (2) to the execution by said entities of a supplemental
indenture effecting the proposed amendment. Holders of Notes may
validly deliver their Consents without tendering the related
Notes. However, holders that validly tender their Notes pursuant
to the Tender Offer will be required to and will be deemed to have
validly delivered their Consents.
Holders validly delivering and not validly revoking consents
without tendering Notes will receive a consent fee in cash equal
to $5 per $1,000 principal amount of the Notes as to which holders
so deliver the Consents.
The proposed amendment will amend the Events of Defaults section
of the Indenture so that an acceleration of indebtedness of any
subsidiary of Sunstone Hotel Investors or the Operating
Partnership other than a Subsidiary Guarantor will not constitute
an event of default with respect to the Notes.
None of the Operating Partnership, Sunstone Hotel Investors, their
respective Board of Directors, the dealer manager and solicitation
agent, the information agent or depositary is making any
recommendation to holders as to whether a holder of Notes should
tender or refrain from tendering such holder's Notes or refrain
from consenting to the proposed amendment.
For queries regarding the Offer, please contact the information
agent or the dealer manager and solicitation agent for the Offer.
The information agent and depository for the Offer is:
Global Bondholder Services Corporation
Attn: Corporate Actions
65 Broadway, Suite 704
New York, NY 10006
Tel: (866) 857-2200 or (212) 430-3774
Fax: (212) 430-3775
The dealer manager and solicitation agent for the Offer is:
Citl
Attn: Liability Management Group
390 Greenwich Street
New York, NY 10013
Tel: (800) 558-3745 (toll-free)
Sunstone Hotel Investors, Inc. -- http://www.sunstonehotels.com/-
- is a lodging real estate investment trust that has interests in
44 hotels comprised of 15,029 rooms primarily in the upper-upscale
segment operated under nationally recognized brands, such as
Marriott, Hilton, Hyatt, Fairmont and Starwood.
As of December 31, 2008, Sunstone Hotel Investors had total
assets of $2.80 billion in assets, $1.71 billion in debt, and
$898.3 million in equity. For 2008, the company reported net
income of $74.7 million on total revenues of $969.2 million.
At December 31, 2008, Sunstone Hotel Investors reported total
assets of $3.05 billion, total liabilities of $1.86 billion, and
stockholders' equity of $1.09 billion. Net income was
$125.7 million on $961.7 million in total revenues.
STARWOOD HOTELS: S&P Downgrades Corporate Credit Rating to 'BB'
---------------------------------------------------------------
Standard & Poor's Ratings Services it lowered its corporate credit
and issue-level ratings on Marriott International Inc. and
Starwood Hotels & Resorts Worldwide Inc., and removed them from
CreditWatch, where they were placed with negative implications on
March 27, 2009. S&P lowered the corporate credit ratings:
-- Marriott: to 'BBB-' from 'BBB'; and
-- Starwood: to 'BB' from 'BB+'.
The rating outlook for both companies is stable.
S&P's 'BBB' corporate credit rating on Global Hyatt Corp. remains
on CreditWatch with negative implications, pending the completion
of S&P's review of the company's near- to intermediate-term
financial policy.
"The rating downgrades on Marriott and Starwood reflect a downward
revision in S&P's expectation for 2009 revenue per available room
in the U.S. lodging industry, to a decline between 14% and 16%,
from about 10% earlier this year," said Standard & Poor's credit
analyst Emile Courtney.
S&P believes that lodging demand could begin to improve at the
beginning of 2010, fairly shortly after the U.S. economy
potentially begins to show signs of recovery, which, in S&P's
view, will be in the fourth quarter of 2009. As a result, S&P's
current ratings anticipate that U.S. RevPAR will be flat in 2010
versus 2009.
S&P now expects the recession in the U.S. and in major global
hotel markets outside the U.S. to negatively affect the global
lodging industry in 2009 to a greater extent than S&P had
previously anticipated. Standard & Poor's base case macroeconomic
assumption is for U.S. GDP to decline 3% in 2009, to begin to grow
again in the fourth quarter of 2009, and to grow by 1.4% in 2010.
In addition, hotel markets outside North America have experienced
a steep drop in RevPAR so far in 2009 -- in many locations steeper
than in the U.S.
STRATOS GLOBAL: Stratos Acquisition Cues Moody's Positive Outlook
-----------------------------------------------------------------
Moody's Investors Service changed the outlook of Stratos Global
Corporation to positive from stable following the announcement
that Inmarsat plc (Ba2 -- Stable) has acquired Stratos. The
positive outlook favorably considers the strategic benefits of new
ownership and the better than expected operating performance over
the past year. However, the ratings anticipate that profit
margins could decline due to the less advantageous terms of a new
distribution agreement with Inmarsat (which impacts all Inmarsat
resellers) and a continued shift in business mix.
Moody's also upgraded the speculative grade liquidity rating to
SGL-2 from SGL-3. Expectations for Stratos to maintain a healthy
cash balance (approximately $105 million at year end 2008) and
generate about breakeven free cash flow, as well as its unused $25
million revolver, support good liquidity over the next year.
All ratings, including the SGL-2, incorporate the potential that
Stratos could pay a moderate special dividend to Inmarsat over the
near-term.
A summary of the actions follows.
Stratos Global Corporation
-- Affirmed B1 Corporate Family Rating
-- Affirmed B1 Probability of Default Rating
-- Speculative Grade Liquidity Rating, Upgraded to SGL-2 from
SGL-3
-- Senior Secured Bank Debt, Affirmed Ba2, LGD2, 23%
-- Senior Unsecured Bonds, Affirmed B3 rating, adjusted to LGD5,
80% from LGD5, 77%
-- Outlook, Changed To Positive From Stable
Moody's last rating action for Stratos occurred on January 31,
2008, at which time Moody's affirmed the B1 corporate family
rating.
Stratos Global Corporation is a global provider of mobile and
fixed satellite-based communications services. The mobile
satellite services segment (80% of revenues) provides mobile
telecommunications services primarily over the Inmarsat satellite
system. The broadband segment provides integrated high-speed data
and voice telecommunications services through VSATs and its own
digital microwave network in the Gulf of Mexico. The company
serves government and military, oil and gas, and maritime end
markets. Its revenue for 2008 was $639 million.
TRAILER BRIDGE: S&P Affirms 'B-' Corporate Credit Rating
--------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' long-term
corporate credit rating on shipping company Trailer Bridge Inc.
At the same time, S&P affirmed the 'B-' rating on the senior
secured debt, the same as the corporate credit rating, while
leaving the recovery rating on this debt unchanged at '3'
indicating expectations of a meaningful (50%-70%) recovery in the
event of a payment default. The outlook is negative.
"Ratings on Trailer Bridge reflect the company's highly leveraged
financial profile, concentrated end-market demand, and
participation in the capital-intensive and competitive shipping
industry," said Standard & Poor's credit analyst Funmi Afonja.
Positive credit factors include less cyclical demand for ocean
cargo shipments of consumer staples, by residents of Puerto Rico,
relative to other commodities, and barriers to entry provided by
the Jones Act (which regulates intra-U.S. shipping).
Jacksonville, Florida-based Trailer Bridge's operating outlook and
financial profile have been adversely affected by the continued
softness in the Puerto Rico market and the Dominican Republic
trade, and by the prolonged U.S. recession. Despite capacity cuts
and fleet rationalizations freight volumes and shipping rates have
come under increasing pressure, particularly in the Puerto Rico
market that accounts for the bulk of the company's earnings.
Southbound vessel utilization improved to 86.3% during 2008,
compared to 80.0% during 2007 due to capacity cuts in the
Dominican Republic trade. Excluding the impact of capacity cuts,
vessel utilization levels deteriorated year-over-year. S&P
believes that the company will remain vulnerable to these
macroeconomic pressures, through at least the end of the year.
The current ratings and outlook take into consideration cost-
cutting initiatives, reduced capital spending plans, and modest
debt maturities over the next few years.
In April 2008, Trailer Bridge announced that it is under review by
the Department of Justice as part of an antitrust investigation
into pricing practices among carriers serving the Puerto Rico
market. As a result of the DOJ investigation, the committee
Trailer Bridge formed to explore strategic alternatives, including
the potential sale of the McLean family's 47.8% ownership stake,
has suspended its active review. S&P will continue to monitor
developments on both fronts.
At Dec. 31, 2008, debt to EBITDA (adjusted for operating leases)
was 8.3x, compared with 5.6x in the prior period. Credit measures
will likely remain weak, and could deteriorate further if the
slowing U.S. economy exacerbates already sluggish Puerto Rican
economic conditions or if volumes in the new Dominican Republic
trade remain weak.
The negative outlook reflects S&P's expectation that the company's
financial profile will remain vulnerable to the continued softness
in the Puerto Rico market and to the effects of the U.S.
recession. If the company were to experience liquidity
constraints as a result of increased earnings pressures from the
weak economic environment, S&P would likely lower the ratings.
For example, S&P could lower the ratings if revolver usage
increased beyond $5 million and there was limited room under the
springing financial covenants. S&P could revise the outlook to
stable if earnings and credit metrics strengthen as a result of
improved market conditions, although S&P does not anticipate such
an improvement over the near term.
TRUMP ENTERTAINMENT: Lease Pact With Helicopter Co. Gets Court OK
-----------------------------------------------------------------
Suzette Parmley at Philadelphia Inquirer reports that the Hon.
Judith Wizmur of the U.S. Bankruptcy Court for the District of New
Jersey has allowed Trump Entertainment Resorts Inc. to enter into
a new lease agreement with a helicopter company to shuttle high-
end players, primarily from New York and Philadelphia, at the
behest of the Debtor.
According to Philadelphia Inquirer, Judge Wizmur also approved
Trump Entertainment's request to pay commissions to travel agents
who book people into its three casino hotels and to consummate
litigation claims under $5,000 that were settled before the
Company's bankruptcy.
Philadelphia Inquirer quoted Charles A. Stanziale Jr., the
attorney for Trump Entertainment, as saying, "The granting of the
motions permits the continued, efficient, and normal operations of
the casinos. It's all about maintaining a customer, player, and
vendor base, which will allow the company to really compete in the
market that it operates in."
New York development company Coastal Marina LLC said last year
that it will purchase Trump Marina casino and turn it into a
Margaritaville-themed casino, Philadelphia Inquirer states.
Coastal Marina, according to Philadelphia Inquirer offered
$316 million for Trump Marina, but the amount was reduced to
$270 million as market conditions changed.
Coastal Marina spokesperson Charlie Leonard said that the Company
was "continuing to work toward its goal of completing the
acquisition of Trump Marina Hotel and Casino," Philadelphia
Inquirer reports.
Based in Atlantic City, New Jersey, Trump Entertainment Resorts
Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and
operates three casino hotel properties in Atlantic City, New
Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza
Hotel and Casino, and Trump Marina Hotel Casino. The Company
conducts gaming activities and provides customers with casino
resort and entertainment.
Donald Trump is a shareholder of the Company and, as its non-
executive Chairman, is not involved in the daily operations of the
company. The Company is separate and distinct from Mr. Trump's
privately held real estate and other holdings.
Trump Entertainment Resorts, TCI 2 Holdings, LLC and other
affiliates filed for Chapter 11 on Feb. 17, 2009 (Bankr. D. N.J.,
Lead Case No. 09-13654). The company has tapped Charles A.
Stanziale, Jr., Esq., at McCarter & English, LLP, as lead counsel,
and Weil Gotshal & Manges as co-counsel. Ernst & Young LLP is the
Company's auditor and accountant and Lazard Freres & Co. LLC is
the financial advisor. The company disclosed assets of
$2,055,555,000 and debts of $1,737,726,000 as of Dec. 31, 2008.
U.S. STEEL: S&P Puts Rating on Co., 3 Others on Watch Negative
--------------------------------------------------------------
Standard & Poor' Ratings Services said that it took rating actions
on four U.S. steel producers and fabricators. Specifically, S&P
placed the ratings on United States Steel Corp., Gerdau Ameristeel
Corp., and Worthington Industries Inc. on CreditWatch with
negative implications and revised the outlook on Commercial Metals
Co. to negative.
These actions are part of S&P's ongoing review of the metals
industry in light of the precipitous drop in steel pricing and
demand at the end of 2008. S&P placed the ratings on Nucor Corp.
on CreditWatch with negative implications on March 18, 2009. S&P
may take further rating actions as S&P continues its review.
Producers have shown discipline in cutting output and import
competition is relatively light, but the speed and depth of the
current economic downturn has been striking and is threatening the
credit quality of many steel producers. Mills in North America
are operating between 40% and 50% of capacity, and there have been
few indications that demand will improve in any meaningful way
during 2009.
Although most participants have adequate liquidity for the time
being, operating at utilization rates below 50% for a prolonged
period of time, even for the minimills with their more flexible
cost structures, will likely lead to much weaker credit measures.
In some cases, these conditions could lead to potential covenant
compliance issues and will eat away at liquidity reserves.
S&P will continue to evaluate industry conditions, its affects on
credit quality and liquidity, and the steps companies are taking
in response to a very tough market.
In December 2007, Standard & Poor's Ratings Services assigned
its 'BB+' senior unsecured rating to the proposed offering of up
to US$400 million in senior unsecured notes due Feb. 1, 2018, of
United States Steel Corp. (BB+/Negative/--).
U.S. STEEL: S&P Puts 'BB+' Rating on Negative Watch
---------------------------------------------------
Standard & Poor's Ratings Services said that it placed its
ratings, including its 'BB+' corporate credit rating, on
Pittsburgh-based United States Steel Corp. on CreditWatch with
negative implications.
"The CreditWatch listing reflects S&P's concern that financial
metrics will be inconsistent with the current rating, given the
very weak operating environment, with U.S. steel mills operating
at less than 50% capacity, and the lack of signs of meaningful
recovery in steel end-markets in 2009," said Standard & Poor's
credit analyst Marie Shmaruk. Although the company has taken
significant actions to restructure its operations, as an
integrated steel producer it has a relatively high fixed-cost
structure compared to its minimill competitors, which S&P would
expect to lead to significantly weaker financial metrics during
the current downturn.
For the rating, S&P would expect the company's adjusted debt to
EBITDA to be below 4x and funds from operations to adjusted debt
above 25%. S&P believes that with its significant financial
leverage and uncertain end-market demand, the company could have
difficulty reaching those levels in the next couple of years,
which, based on S&P's current expectations, could result in a one-
notch downgrade. Total debt, adjusted for significant underfunded
postretirement obligations, was $6.7 billion at year-end 2008.
In resolving the CreditWatch listing, S&P will evaluate the
company's plans for dealing with the extremely difficult operating
conditions, the likelihood of significant improvements in the next
year, and review the company's liquidity position.
USA SPRINGS: To Put $10,000 in Escrow for Administrative Expense
----------------------------------------------------------------
Bob Sanders at New Hampshire Business Review reports that USA
Springs has reached a tentative deal with some of its
shareholders, who would advance some $10,000 to put in escrow to
pay administrative expense.
Citing USA Sports counsel Alan Braunstein, New Hampshire Business
relates that a minority shareholder in USA Springs also agreed to
offer an unrelated parcel of land in Raymond -- valued at $200,000
-- in a possible bankruptcy sale. According to the report, the
Hon. Michael Deasy of the U.S. Bankruptcy Court for the District
of New Hampshire expressed skepticism about the "throw-in", saying
that there was some kind of enforceable provisions to make sure
that the third parties couldn't back out of any deal. Judge
Deasy, says the report, insisted that there be specific deadlines.
The report states that Judge Deasy gave the parties until April 27
to put the agreement in writing, another three days for parties to
raise any objections.
According to New Hampshire Business, Judge Deasy scheduled the
next hearing on May 4.
New Hampshire Business says that Judge Deasy had ruled on April 1
that USA Sports' Chapter 11 reorganization be converted to a
Chapter 7 liquidation. Mr. Braunstein asked the Court to
reconsider its decision and convert the case back to Chapter 11,
New Hampshire Business reports. Mr. Braunstein New Hampshire
Business relates, blamed the lack of progress and communication on
Earl D. Munroe, the former counsel of Francisco Rotundo -- the
principal and driving force behind USA Springs -- who apparently
had business in Costa Rico and often couldn't be reached.
According to the report, Mr. Braunstein said that he can now
report that progress has been made, a agreement that "could be a
viable basis for a reasonable plan to present to the court."
Mr. Rotundo, New Hampshire Business reports, won a large
groundwater withdrawal permit over the opposition of opponents in
the community and elsewhere, New Hampshire Business relates. New
Hampshire Business says that the trust that holds the groundwater
permit agreed to hand over the "water rights" as part of any
reorganization, including the sale of the company as a going
concern. Mr. Rotundo, according to New Hampshire Business, ran
out of money halfway through construction of the plant and Roswell
Commercial Mortgage, LLC -- owed about $10 million -- started
foreclosure proceedings. New Hampshire Business states that Mr.
Rotundo then filed for Chapter 11 protection in to give him time
to find additional financing. In the 10 months following the
Chapter 11 filing, no payments were made to Roswell, disclosure
reports were filed late or not at all, and no plan had been filed,
the report says, citing Judge Deasy.
Based in Nottingham, New Hampshire, USA Springs Inc. filed for
Chapter 11 bankruptcy protection on June 27, 2008 (D. N.H. Case
No. 08-11816). Armand M. Hyatt, Esq., at Hyatt & Flynn, PLLC, and
Earl D. Munroe, Esq., at Muroe & Chew, represent the Debtor in its
restructuring efforts. An Official Committee of Unsecured
Creditors has been appointed in the case. The Committee's
counsel is Terrie Harman, Esq., at Harman Law Offices. In its
schedules, the Debtor disclosed $127,000,335 in assets and
$13,913,901 in liabilities.
UTAH 7000: Auction Ends Without Sale; Shareholders & Bank at Odds
-----------------------------------------------------------------
Paul Foy at The Associated Press reports that Utah 7000 LLC's
auction for luxury golf community Promontory ended without a sale
on Wednesday.
According to The AP, Credit Suisse and shareholders for Pivotal
Group accused each other of acting in bad faith, submitting the
only bids. The AP says that lawyers for both parties spent the
day objecting that the other's bid wasn't enough or failed to
satisfy terms of a court-approved reorganization. The report
states that the offers weren't revealed even to auctioneer Richard
Aaron.
Credit Suisse said in court documents that Pivotal Group
subsidiaries defaulted on $275 million in loans in December 2007.
The AP relates the loans which were sold to hedge funds and other
investors. The AP states that Credit Suisse doesn't hold the
loans but it acts as agent for the loan holders.
Based in Park City, Utah, Utah 7000 LLC fka Pivotal Promontory LLC
operates and develops resort community near Park City and Deer
Valley ski resorts. Utah 7000 owns a 7,224-acre master-planned
development near Park City, Utah, known as Promontory,
On March 28, certain holders of junior and second priority liens
filed for involuntary Chapter 11 petitions against the Company
(Bankr. D. Utah Lead Case No.08-21869). Kenneth L. Cannon, II,
Esq., at Durham Jones & Pinegar, represents the petitioners.
On April 3, 2008, the Debtors gave their consent to the entry of
an order for Chapter 11 bankruptcy relief. Danny C. Kelly, Esq.,
at Stoel Rives LLP and Eve H. Karasik, Esq., at Stutman Treister &
Glatt Professional Co., represent the Debtors in their
restructuring efforts.
The U.S. Trustee for Region 19 appointed an Official Committee of
Unsecured Creditors in the cases. J. Thomas Beckett, Esq., at
Parsons Behle & Latimer, represents the Committee.
According to Bloomberg, Judge Judith A. Boulden estimated the
value of Utah 7000's property at $560.1 million. The Debtor owes
about $431.5 million to several secured creditors.
WHE HOLDINGS: U.S. Trustee Sets Meeting of Creditors for May 13
---------------------------------------------------------------
The U.S. Trustee for Region 19 will convene a meeting of creditors
in WHE Holdings, LLC's Chapter 11 case on May 13, 2009, at 1:30
p.m., at U.S. Custom House, 721 19th St., Room 106, Denver,
Colorado.
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 Englewood, Colorado, WHE Holdings, LLC
-- http://www.westhawkdevelopment.com/-- aka West Hawk Energy
(USA) LLC provides oil well drilling services. The Debtor filed
for Chapter 11 protection on April 7, 2009 (Bankr. D. Colo. Case
No. 09-16019). Daniel J. Garfield, Esq., and Michael J. Pankow,
Esq., at Brownstein Hyatt Farber Schreck LLP represent the Debtor
in its restructuring efforts. Each of the Debtor's estimated
assets and debts range from $10 million to $50 million.
WILLIAM LYON: Moody's Downgrades Default Rating to 'Ca'
-------------------------------------------------------
Moody's Investors Service lowered the probability of default
rating of William Lyon Homes to Ca from Caa2 following the
company's announcement on April 13, 2009 that it had commenced a
cash tender whereby it would spend up to a maximum of $40 million
to purchase a portion of its outstanding senior notes by May 8,
2009. The cash tender amounts will be determined in accordance
with a modified Dutch Auction procedure. If the auction is
successful and the cash tender amounts fall within the range of
Moody's expectations, the transaction will constitute a distressed
exchange and a limited default by Moody's definition. Following
completion of the distressed exchange, Moody's will likely restore
the company's probability of default rating to Caa2.
At the same time, the ratings on the three issues of securities
that Moody's expect will be impacted by the tender offer were
lowered to reflect the estimated losses to be incurred by
participating bondholders.
As a result of the announcement of the cash tender offer, these
ratings were lowered:
-- Probability of default rating lowered to Ca from Caa2;
-- Senior Unsecured Notes, lowered to C (LGD5, 84%) from Caa3
(LGD5, 72%).
Moody's most recent announcement concerning the ratings for
William Lyon Homes was on December 30, 2008, at which time Moody's
lowered the company's corporate family rating to Caa2 from Caa1
and the ratings on the senior unsecured notes to Caa3 from Caa2.
Begun in 1956 and headquartered in Newport Beach, California,
William Lyon Homes designs, builds, and sells single family
detached and attached homes in California, Arizona and Nevada.
Consolidated homebuilding revenues and net income including
charges for the fiscal year ended December 31, 2008 were
approximately $526 million and $(112) million, respectively.
ZENITH NATIONAL: A.M. Best Affirms "bb+" on $58.36MM Securities
---------------------------------------------------------------
A.M. Best Co. has affirmed the financial strength rating of A
(Excellent) and issuer credit ratings (ICR) of "a" of Zenith
National Insurance Group and its members, Zenith Insurance Company
and ZNAT Insurance Company (ZNAT), a wholly owned subsidiary of
Zenith. Concurrently, A.M. Best has affirmed the ICR of "bbb" of
the group's parent, Zenith National Insurance Corp. (Wilmington,
DE) [NYSE: ZNT].
A.M. Best also has affirmed the debt rating of "bb+" on
$58.36 million 8.55% capital securities, due 2028 of Zenith
National Insurance Capital Trust I. All companies are domiciled
in Woodland Hills, CA, except where specified. The outlook for
all ratings is stable.
The ratings reflect Zenith's superior capitalization, strong
operating performance despite competitive market conditions and
commitment to maintain underwriting discipline through market
cycles. Zenith has demonstrated a significant loss ratio
advantage within the workers' compensation line over the long
term, reflective of management's established commitment to
adequate risk pricing across market cycles. The group also
benefits from the financial flexibility of Zenith National, which
provides the group access to capital as needed.
Partially offsetting these positive rating factors is the
reduction in operating profitability, reflective of the
competitive market conditions existing in California, as well as
the state mandated rate reductions occurring in Florida in recent
years. Additionally, the concentration of written premiums within
these two states potentially exposes Zenith to changes within both
the regulatory and competitive market environment. Despite these
concerns, the outlook reflects the historically strong
underwriting performance and demonstrated experience in
underwriting the workers' compensation line over the long term.
* A.M. Best Comments on Treatment of TALF Loans
-----------------------------------------------
A.M. Best Co. has reviewed the terms and conditions of the Federal
Reserve Bank of New York's Term Asset-Backed Securities Loan
Facility and will treat the loans as operating leverage, and not
financial leverage, subject to certain limitations. The TALF
loans will be over-collateralized with investments in asset-backed
securities, with the intention of producing a relatively close
asset/liability match that generates a positive spread. In
contrast, debt treated as financial leverage generally lacks this
matching and is instead used for general corporate purposes, to
fund an acquisition or for business expansion.
Through the TALF, the Federal Reserve has made available three-
year term loans to qualifying U.S. borrowers. To qualify, an
entity must pledge eligible collateral to the Federal Reserve in
the form of AAA-rated, U.S. dollar-denominated ABS. These
securities must be newly issued in 2009 and rated at the highest
possible long-term credit rating from at least two nationally
recognized statistical rating organizations (NRSRO), and not have
a credit rating below the highest investment grade rating by any
major NRSRO.
The types of eligible collateral include ABS backed by student
loans, auto loans, credit card loans, small business loans,
mortgage servicing advances, loans or leases relating to business
equipment, leases of vehicle fleets and floorplan loans. The
Federal Reserve has indicated that the TALF may be expanded in the
future to include additional categories of ABS such as commercial
mortgage-backed securities and non-agency residential mortgage-
backed securities. Eligible collateral for a particular borrower
must not be backed by loans originated by the borrower or by an
affiliate of the borrower.
Loans issued under the TALF are non-recourse to the borrower and
have a three-year maturity. The borrower is responsible for all
principal and interest payments on a TALF loan. The loan would be
equal to the amount of eligible collateral pledged less a
collateral haircut that varies by ABS category and is established
by the Federal Reserve. The non-recourse feature of the TALF loan
is viewed favorably in A.M. Best's rating analysis, as the
borrower's credit risk on the ABS is limited to the haircut
applied to the TALF loan through the ability to surrender
collateral in full payment of the loan.
Founded in 1899, A.M. Best Company is a global full-service credit
rating organization dedicated to serving the financial and health
care service industries, including insurance companies, banks,
hospitals and health care system providers.
* A.M. Best Says U.S. Property/Casualty Industry's Profit Squeezed
------------------------------------------------------------------
The U.S. property/casualty industry was impacted by a series of
unprecedented events in 2008, including exceptionally challenging
market conditions, the worst financial crisis in recent history,
the fourth-highest year on record for U.S. catastrophe-related
losses, and turmoil in the mortgage and financial guaranty
segments. Nevertheless, the industry weathered the storm and
generated a net profit of approximately $6.1 billion for the year,
albeit down significantly from $65.5 billion recorded in 2007.
-- Net premiums written fell 1.8% to $439.9 billion in 2008,
the first time NPW has declined in consecutive years since
1932 and 1933.
-- Driven by challenging market conditions, including continued
rate pressure, large and frequent weather-related losses,
and significant losses posted by mortgage and financial
guaranty insurers, the industry recorded an underwriting
loss of $20.0 billion in 2008, down from an underwriting
gain of $21.6 billion in 2007.
-- The industry's combined ratio deteriorated almost
10.0 percentage points to 104.7 from 95.1 in 2007,
representing the industry's highest combined ratio since it
posted a 107.2 in 2002.
-- The mortgage and financial guaranty segments significantly
influenced the overall industry's underwriting performance
in 2008; as the two segments collectively reported an
underwriting loss of $15.1 billion and a combined ratio of
305.0.
-- Volatile financial markets pulled the industry's net
investment gains down 47% to $34.1 billion in 2008 from
$64.6 billion in 2007.
-- The U.S. P/C industry's policyholders' surplus declined
$59.4 billion, or 11.3%, to $465.4 billion in 2008 from
$524.8 billion in 2007.
-- The personal lines segment's underwriting results
deteriorated significantly in 2008, with a reported
calendar-year combined ratio of 103.9, compared with 96.2 in
2007.
-- The commercial lines segment's combined ratio deteriorated
12.1 percentage points to 106.1 in 2008, driven in part by
extensive underwriting losses for mortgage and financial
guaranty insurers.
-- The U.S reinsurance segment's combined ratio increased to
99.9 in 2008, up 6.3 points from 93.6 in 2007.
-- While the road ahead is full of uncertainty, and 2009 is
expected to be another challenging year for the U.S.
property/casualty industry, A.M. Best believes the overall
industry is sufficiently capitalized to absorb the
challenges posed by the cyclical nature of underwriting and
the volatility in the financial markets.
Founded in 1899, A.M. Best Company is a global full-service credit
rating organization dedicated to serving the financial and health
care service industries, including insurance companies, banks,
hospitals and health care system providers.
In a separate report, A.M. Best said the U.S. property/casualty
industry suffered record insured losses in 2008 from tornadoes and
severe thunderstorms. As the frequency and severity of these
events have risen in recent years, P/C insurers face the prospect
of another tornado season in which single devastating
thunderstorms and tornado outbreaks result in losses of $1 billion
or more.
-- Annual tornado activity in 2008 was among the worst on
record, and significant tropical storm activity added to
insured losses.
-- Losses in recent years from frequent tornado and
thunderstorm activity has pressured financial results of
regional insurers and some single-state writers.
-- Of the 29 severe thunderstorm catastrophes in 2008, two
events each resulted in insured losses of $1 billion or
more; another four severe weather events generated losses of
$725 million or more, according to ISO/PCS.
-- Four tornado and severe thunderstorm events in the 2006-2008
period represent the industry's highest in terms of insured
losses.
-- While hurricanes and earthquakes tend to generate higher
losses per event, tornadoes and related weather events have
caused nearly 57%, on average, of all U.S. insured
catastrophe losses in any given year since 1953.
-- With the downtown Atlanta tornado of March 2008, insurers
may have to further consider tornado outbreaks that hit
urban centers.
* Focus Management Group Adds John Bambach as Managing Director
---------------------------------------------------------------
Focus Management Group has bolstered its turnaround and business
restructuring team with the addition of John Bambach, Jr., CTP.
Mr. Bambach will serve as a Managing Director to compliment the
Firm's growing demand for its business restructuring and case
management services and to provide additional support to the
Firm's nationwide clientele.
"John's broad experience within the turnaround industry has given
him a keen understanding of the challenges that face our
customers," said J. Tim Pruban, President of Focus Management
Group. "His hands-on experience leading large, complex
operational and financial restructurings will play a significant
role in enabling Focus to expand its delivery of turnaround
services and experience to our clients."
With over 20 years of in-depth experience in leading
organizational change as CEO, COO and CFO, Mr. Bambach has
engineered the successful turnaround of multiple companies,
averting them from bankruptcy and returning operations back to
profitability. He is well versed in all aspects of turnaround
management, mergers and acquisitions, operational improvement,
business development and strategic planning.
Mr. Bambach joins Focus Management Group from a leading turnaround
consulting firm, where he served as a Principal. Prior to his
work in the business restructuring field, he was the Founder of
several successful start-up companies, the last of which he grew
to be the most dominant provider of cable interactive software.
Mr. Bambach is a Certified Turnaround Professional. He received
his Master's Degree in Business Administration from the New York
Institute of Technology and his Bachelor's Degree in Psychology
from La Salle University. He is based out of Focus Management
Group's Tampa office and can be reached at (813) 281-0062 or via
e-mail at:
j.bambach@focusmg.com
About Focus Management Group
Focus Management Group provides nationwide professional services
in turnaround management, insolvency proceedings, business
restructuring and operational improvement with a senior-level team
of 120 professionals. Headquartered in Tampa, FL, with offices in
Atlanta, Chicago, Cleveland, Greenwich, Los Angeles and Nashville,
the Firm provides a full portfolio of services to distressed
companies and their stakeholders, including secured lenders and
equity sponsors.
* Kirkland & Ellis LLP Relocates Chicago Office
-----------------------------------------------
Kirkland & Ellis LLP has moved its Chicago office from the Aon
Center to a newly constructed building located at 300 North
LaSalle.
James H.M. Sprayregen, Esq., Anup Sathay, Esq., Marc J. Carmel,
Esq., David M. Bernick, Esq., David L. Eaton, Esq., Andrew M.
Kaufman, Esq., Marc Kieselstein, Esq., James A. Stempel, Esq., and
other K&E professionals located in Chicago can be reached at:
KIRKLAND & ELLIS LLP
300 North LaSalle
Chicago, IL 60654
Telephone (312) 862-2000
Fax (312) 862-2200
Kirkland will occupy 26 floors of the 60-story high-rise. The
building office space measures more than 1,267,331 square feet,
with Kirkland occupying roughly 650,000 square feet.
The building's environmentally sustainable design includes an
array of features to help the Firm enhance its service to clients,
including an exclusive conference center, expanded WiFi and
Blackberry service, video conferencing and environmentally-
friendly lighting and energy systems.
"As a result of a detailed planning process that began in 2001, we
were able design a next generation home for Kirkland's Chicago
office, which meets not only our space needs, but also provides us
with all the tools necessary to practice law at the highest
levels. Our technology infrastructure, office layout and
operational systems were all redesigned with the goal of serving
our clients more efficiently. We believe we met that goal," said
Kevin Evanich, a partner in Kirkland's Chicago office.
Representatives from Kirkland worked closely with developer Hines
Real Estate Interests LP, architect SOM and project manager The
Rise Group to influence key design decisions regarding the
building, including lobby design, parking and elevator capacity,
and reliability and redundancy of major building and Kirkland
systems including power, cooling and technology. General
contractor Clune Construction joined the team to assist in the
design and build out of the Firm's space. The Staubach Group
served as the Firm's leasing agent.
"We could not be more pleased with our experience during the
development and construction of our new office," said Douglas
McLemore, the Firm's executive director. "We worked with a
wonderful team who helped us create a functional, beautiful and
environmentally friendly space for our business. The building is
truly a showcase for their exceptional work."
Kirkland has been headquartered in the Aon Center since 1972,
where it was the second-largest tenant in the building. The Firm
also occupied two floors of the Prudential Building.
Kirkland & Ellis LLP is a 1,500-attorney law firm representing
global clients in complex litigation and dispute
resolution/arbitration, corporate and tax, restructuring, real
estate and intellectual property and technology matters. The Firm
has offices in Chicago, Hong Kong, London, Los Angeles, Munich,
New York, Palo Alto, San Francisco and Washington, D.C.
* Mortgage Cram-Down Bill Stalls in Senate
------------------------------------------
Senate Democrats are scaling back legislation that would let
bankruptcy judges alter mortgage terms because lawmakers don't
have enough votes for passage, a spokesman for Senate Majority
Whip Richard Durbin said, according to a report by Bloomberg's
Carla Main.
According to Ms. Main's report, Max Gleischman, a spokesman for
Durbin, an Illinois Democrat, said the main "sticking point" is
whether the measure, which passed the House of Representatives in
March, should be limited to certain loans or a specific time
period,
Bloomberg relates that the "cram-down" bill would allow bankruptcy
judges to modify distressed borrowers' mortgages closer to the
lower market value of their homes, even over the objections of
creditors. Judges would be able to reduce principal, lower the
interest rate, change the maturity or convert the loan to a fixed
rate. The House legislation would apply to all loans, while
bankers and credit union executives lobbied to limit it solely to
subprime mortgages.
Negotiations with banks over provisions in the legislation
are still taking place, Mr. Gleischman said, according to the
report. He confirmed that the bill as passed by the House
"doesn't have the votes to pass the Senate."
* Failed Banks Now Total 25 as 2 Banks from Nevada & Missouri Shut
------------------------------------------------------------------
Two more banks were seized by regulators on April 17, bringing
this year's tally of failed banks to 25. The numbers could rise
further this year as there were 252 financial institutions in the
Federal Deposit Insurance Company's "Problem List" as of the end
of 2008, compared with only 76 in the prior year.
According to Bloomberg News, tumbling home prices and surging
unemployment caused more borrowers to fall behind on loan payments
to banks.
The banks closed this year by regulators are:
Bank Closing Date
---- ------------
Great Basin Bank of Nevada, Elko, NV 04/17/09
American Sterling Bank, Sugar Creek, MO 04/17/09
New Frontier Bank, Greeley, CO 04/10/09
Cape Fear Bank, Wilmington, NC 04/10/09
Omni National Bank, Atlanta, GA 03/27/09
TeamBank, National Association, Paola, KS 03/20/09
Colorado National Bank, Colorado Springs, CO 03/20/09
FirstCity Bank, Stockbridge, Georgia 03/20/09
Freedom Bank of Georgia, Commerce, GA 03/06/09
Security Savings Bank, based in Henderson, Nevada 02/27/09
Heritage Community Bank, Glenwood, Ill. 02/27/09
Silver Falls Bank, Silverton, OR 02/20/09
Pinnacle Bank of Oregon, Beaverton, OR 02/13/09
Corn Belt Bank and Trust Company, Pittsfield, IL 02/13/09
Riverside Bank of the Gulf Coast, Cape Coral, FL 02/13/09
Sherman County Bank, Loup City, NE 02/13/09
County Bank, Merced, CA 02/06/09
Alliance Bank, Culver City, CA 02/06/09
FirstBank Financial Services, McDonough, GA 02/06/09
Ocala National Bank, Ocala, FL 01/30/09
Suburban Federal Savings Bank, Crofton, MD 01/30/09
MagnetBank, Salt Lake City, UT 01/30/09
1st Centennial Bank, Redlands, CA 01/23/09
Bank of Clark County, Vancouver, WA 01/16/09
National Bank of Commerce, Berkeley, IL 01/16/09
The FDIC was appointed as receiver for the closed banks. To
protect the depositors, the FDIC entered into a purchase and
assumption agreement with various banks that agreed to assume the
deposits of the closed banks:
Buyer's FDIC Cost
Assumed to Insurance
Deposits Fund
Closed Bank Buyer (millions) (millions)
----------- ---- -------- -----
Great Basin Bank Nevada State Bank $221.4 $42.0
American Sterling Metcalf Bank, Lee Summit $171.9 $42.0
New Frontier Bank -- No Buyer -- - $670.0
Cape Fear Bank First Federal, Charleston $403.0 $131.0
Omni National -- No Buyer -- - $290.0
TeamBank, N.A. Great Southern Bank $474.0 $98.0
Colorado National Herring Bank, Amarillo, TX $82.7 $9.0
FirstCity Bank -- No Buyer -- - $100.0
Freedom Bank Nat'l Georgia Bank, Lavonia $161.0 $36.2
Security Savings Bank of Nevada, L.V. $175.2 $59.1
Heritage Community MB Financial Bank, N.A. $218.6 $41.6
Silver Falls Citizens Bank $116.3 $50.0
Pinnacle Bank Washington Trust Bank $64.0 $12.1
Corn Belt Bank Carlinville Nat'l Bank $142.4 $100.0
Riverside Bank TIB Bank $281.4 $201.5
Sherman County Heritage Bank $85.1 $28.0
County Bank Westamerica Bank $1,300.0 $135.0
Alliance Bank California Bank & Trust $951.0 $206.0
FirstBank Regions Bank $279.0 $111.0
Ocala National CenterState Bank $205.2 $99.6
Suburban Federal Bank of Essex $302.0 $126.0
MagnetBank -- No Buyer -- - $119.4
1st Centennial First California Bank $302.1 $227.0
Bank of Clark Umpqua Bank $523.6 $120-145
Nat'l Commerce Republic Bank of Chicago $402.1 $97.1
The FDIC entered into an agreement with SunTrust Bank, Atlanta,
Georgia to act as paying agent for the insured deposits of Omni
National Bank. As of March 9, 2009, Omni had total deposits of
$796.8 million, of which $2.0 million were uninsured.
To protect the depositors of New Frontier Bank, the FDIC created
the Deposit Insurance National Bank of Greeley (DINB), which will
remain open for approximately 30 days to allow depositors time to
open accounts at other insured institutions. Bank of the West,
San Francisco, California, was contracted by the FDIC to provide
operational management of the DINB. As of March 24, 2009, New
Frontier had total assets of $2.0 billion and total deposits of
about $1.5 billion.
A complete list of banks that failed since 2000 is available at:
http://www.fdic.gov/bank/individual/failed/banklist.html
252 Banks in Problem List
No advance notice is given to the public when a financial
institution is closed. The FDIC has a "problem list" of banks,
although the list is not divulged to the public.
As previously reported by the TCR, the number of FDIC-insured
commercial banks and savings institutions reporting financial
results fell to 8,305 at the end of 2008, down from 8,384 at the
end of the third quarter. The net decline of 79 institutions was
the largest since the first quarter of 2002. Fifteen new
institutions were chartered in the fourth quarter, the smallest
number in any quarter since the third quarter of 1994. Seventy-
eight insured institutions were absorbed into other institutions
through mergers, and 12 institutions failed during the quarter
(five other institutions received FDIC assistance in the quarter).
For all of 2008, there were 98 new charters, 292 mergers, 25
failures and 5 assistance transactions. Five institutions with
total assets of $1.3 trillion were assisted by the FDIC in 2008.
This is the largest number of failed and assisted institutions in
a year since 1993, when there were 50.
At year-end, 252 insured institutions with combined assets of
$159 billion were on the FDIC's "Problem List." These totals are
up from 171 institutions with $116 billion in assets at the end of
the third quarter, and 76 institutions with $22 billion in assets
at the end of 2007. The Problem List's 252 institutions at the
end of the fourth quarter of 2008 is the largest number since the
middle of 1995.
"Problem" institutions are those institutions with financial,
operational, or managerial weaknesses that threaten their
continued financial viability. They are rated by the FDIC or
Office of the Thrift Supervision as either a "4" or "5", based on
a scale of 1 to 5 in ascending order of supervisory concern.
A copy of FDIC's Quarterly Banking Profile is available at:
http://researcharchives.com/t/s?3aa5
* BOND PRICING -- Week From April 13 to April 17, 2009
------------------------------------------------------
Company Coupon Maturity Bid Price
------- ------ -------- ---------
155 E TROPICANA 8.75% 4/1/2012 41.83
ACCO Brands Corp 7.63% 8/15/2015 22.50
ACCURIDE CORP 8.50% 2/1/2015 21.75
ACE CASH EXPRESS 10.25% 10/1/2014 26.75
ADVANTA CAP TR 8.99% 12/17/2026 9.50
AHERN RENTALS 9.25% 8/15/2013 36.00
ALABAMA POWER 5.50% 10/1/2042 70.00
ALERIS INTL INC 10.00% 12/15/2016 2.50
ALION SCIENCE 10.25% 2/1/2015 23.50
ALLBRITTON COMM 7.75% 12/15/2012 33.50
ALLIED CAP CORP 6.00% 4/1/2012 33.75
ALLIED CAP CORP 6.63% 7/15/2011 34.50
AMBASSADORS INTL 3.75% 4/15/2027 31.63
AMER AXLE & MFG 5.25% 2/11/2014 18.75
AMER AXLE & MFG 7.88% 3/1/2017 20.06
AMER CAP STRATEG 8.60% 8/1/2012 44.50
AMER GENL FIN 3.00% 7/15/2009 79.00
AMER GENL FIN 3.05% 6/15/2010 35.00
AMER GENL FIN 3.10% 6/15/2009 73.60
AMER GENL FIN 3.10% 7/15/2009 76.80
AMER GENL FIN 3.30% 7/15/2009 87.23
AMER GENL FIN 3.30% 11/15/2009 75.50
AMER GENL FIN 3.30% 6/15/2010 39.00
AMER GENL FIN 3.35% 5/15/2009 82.00
AMER GENL FIN 3.40% 10/15/2009 79.33
AMER GENL FIN 3.45% 4/15/2010 40.00
AMER GENL FIN 3.85% 9/15/2009 79.00
AMER GENL FIN 3.88% 10/1/2009 93.28
AMER GENL FIN 3.88% 10/15/2009 66.49
AMER GENL FIN 3.88% 11/15/2009 81.60
AMER GENL FIN 3.90% 9/15/2009 85.14
AMER GENL FIN 3.90% 4/15/2010 67.64
AMER GENL FIN 3.90% 4/15/2011 24.00
AMER GENL FIN 4.00% 6/15/2009 94.18
AMER GENL FIN 4.00% 8/15/2009 88.05
AMER GENL FIN 4.00% 9/15/2009 60.00
AMER GENL FIN 4.00% 11/15/2009 30.00
AMER GENL FIN 4.00% 11/15/2009 64.00
AMER GENL FIN 4.00% 11/15/2009 79.52
AMER GENL FIN 4.00% 12/15/2009 50.00
AMER GENL FIN 4.00% 12/15/2009 65.33
AMER GENL FIN 4.00% 12/15/2009 77.07
AMER GENL FIN 4.00% 3/15/2011 36.00
AMER GENL FIN 4.05% 5/15/2010 35.00
AMER GENL FIN 4.10% 1/15/2010 51.78
AMER GENL FIN 4.10% 5/15/2010 23.00
AMER GENL FIN 4.10% 1/15/2011 35.05
AMER GENL FIN 4.13% 1/15/2010 74.41
AMER GENL FIN 4.15% 11/15/2010 39.25
AMER GENL FIN 4.15% 12/15/2010 38.40
AMER GENL FIN 4.15% 1/15/2011 53.57
AMER GENL FIN 4.20% 8/15/2009 53.00
AMER GENL FIN 4.20% 10/15/2009 80.00
AMER GENL FIN 4.20% 11/15/2009 62.52
AMER GENL FIN 4.20% 10/15/2010 47.25
AMER GENL FIN 4.25% 11/15/2009 62.52
AMER GENL FIN 4.25% 10/15/2010 33.00
AMER GENL FIN 4.30% 5/15/2009 93.75
AMER GENL FIN 4.30% 6/15/2009 85.70
AMER GENL FIN 4.30% 9/15/2009 80.00
AMER GENL FIN 4.30% 6/15/2010 18.50
AMER GENL FIN 4.30% 7/15/2010 61.70
AMER GENL FIN 4.30% 9/15/2010 58.39
AMER GENL FIN 4.35% 6/15/2009 80.17
AMER GENL FIN 4.35% 6/15/2009 90.00
AMER GENL FIN 4.35% 9/15/2009 85.19
AMER GENL FIN 4.35% 3/15/2010 45.00
AMER GENL FIN 4.40% 5/15/2009 97.49
AMER GENL FIN 4.40% 7/15/2009 60.00
AMER GENL FIN 4.40% 12/15/2010 35.50
AMER GENL FIN 4.50% 7/15/2009 60.00
AMER GENL FIN 4.50% 9/15/2009 85.24
AMER GENL FIN 4.50% 3/15/2010 70.05
AMER GENL FIN 4.50% 8/15/2010 24.25
AMER GENL FIN 4.50% 11/15/2010 30.00
AMER GENL FIN 4.50% 11/15/2011 45.87
AMER GENL FIN 4.55% 10/15/2009 79.00
AMER GENL FIN 4.60% 11/15/2009 74.00
AMER GENL FIN 4.60% 8/15/2010 32.00
AMER GENL FIN 4.60% 9/15/2010 27.06
AMER GENL FIN 4.60% 10/15/2010 57.43
AMER GENL FIN 4.63% 5/15/2009 98.73
AMER GENL FIN 4.63% 9/1/2010 63.25
AMER GENL FIN 4.65% 8/15/2010 39.00
AMER GENL FIN 4.70% 12/15/2009 77.27
AMER GENL FIN 4.70% 10/15/2010 57.33
AMER GENL FIN 4.75% 6/15/2010 30.00
AMER GENL FIN 4.75% 8/15/2010 35.00
AMER GENL FIN 4.75% 5/15/2011 50.65
AMER GENL FIN 4.80% 8/15/2009 88.25
AMER GENL FIN 4.80% 9/15/2011 35.90
AMER GENL FIN 4.85% 10/15/2009 82.75
AMER GENL FIN 4.85% 12/15/2009 77.99
AMER GENL FIN 4.88% 5/15/2010 61.00
AMER GENL FIN 4.88% 6/15/2010 63.85
AMER GENL FIN 4.88% 7/15/2012 44.00
AMER GENL FIN 4.90% 12/15/2009 80.00
AMER GENL FIN 4.90% 3/15/2011 52.12
AMER GENL FIN 4.95% 11/15/2010 25.75
AMER GENL FIN 5.00% 9/15/2009 86.25
AMER GENL FIN 5.00% 1/15/2010 34.00
AMER GENL FIN 5.00% 6/15/2010 64.40
AMER GENL FIN 5.00% 9/15/2010 35.00
AMER GENL FIN 5.00% 10/15/2010 35.00
AMER GENL FIN 5.00% 11/15/2010 46.50
AMER GENL FIN 5.00% 12/15/2010 37.00
AMER GENL FIN 5.00% 12/15/2010 38.00
AMER GENL FIN 5.00% 12/15/2010 36.00
AMER GENL FIN 5.00% 1/15/2011 36.00
AMER GENL FIN 5.00% 1/15/2011 33.00
AMER GENL FIN 5.00% 3/15/2011 46.68
AMER GENL FIN 5.00% 6/15/2011 39.35
AMER GENL FIN 5.00% 10/15/2011 24.26
AMER GENL FIN 5.00% 12/15/2011 45.50
AMER GENL FIN 5.10% 6/15/2009 94.31
AMER GENL FIN 5.10% 9/15/2009 57.03
AMER GENL FIN 5.10% 9/15/2010 59.33
AMER GENL FIN 5.10% 3/15/2011 37.74
AMER GENL FIN 5.10% 1/15/2012 39.98
AMER GENL FIN 5.15% 6/15/2009 97.50
AMER GENL FIN 5.15% 9/15/2009 85.66
AMER GENL FIN 5.20% 6/15/2010 40.10
AMER GENL FIN 5.20% 5/15/2011 29.39
AMER GENL FIN 5.20% 12/15/2011 43.50
AMER GENL FIN 5.25% 6/15/2009 95.00
AMER GENL FIN 5.25% 6/15/2009 94.32
AMER GENL FIN 5.25% 7/15/2010 50.00
AMER GENL FIN 5.25% 4/15/2011 39.00
AMER GENL FIN 5.25% 6/15/2011 50.44
AMER GENL FIN 5.30% 6/15/2009 94.41
AMER GENL FIN 5.35% 6/15/2010 42.20
AMER GENL FIN 5.35% 7/15/2010 50.00
AMER GENL FIN 5.35% 9/15/2011 33.25
AMER GENL FIN 5.38% 9/1/2009 85.50
AMER GENL FIN 5.38% 10/1/2012 39.33
AMER GENL FIN 5.40% 6/15/2011 50.36
AMER GENL FIN 5.40% 6/15/2011 50.36
AMER GENL FIN 5.45% 9/15/2009 50.05
AMER GENL FIN 5.45% 6/15/2011 49.84
AMER GENL FIN 5.45% 10/15/2011 30.00
AMER GENL FIN 5.50% 6/15/2009 94.35
AMER GENL FIN 5.50% 12/15/2010 43.50
AMER GENL FIN 5.50% 4/15/2011 27.00
AMER GENL FIN 5.60% 6/15/2011 50.60
AMER GENL FIN 5.63% 8/17/2011 44.50
AMER GENL FIN 6.00% 7/15/2011 30.16
AMER GENL FIN 6.25% 7/15/2010 63.67
AMER GENL FIN 6.25% 7/15/2011 32.34
AMER GENL FIN 6.25% 7/15/2011 18.90
AMER GENL FIN 6.75% 7/15/2011 51.58
AMER GENL FIN 7.75% 9/15/2010 45.00
AMER GENL FIN 7.85% 8/15/2010 62.60
AMER GENL FIN 7.90% 9/15/2010 61.37
AMER GENL FIN 8.00% 8/15/2010 66.80
AMER GENL FIN 8.10% 9/15/2011 51.33
AMER GENL FIN 8.13% 8/15/2009 93.52
AMER GENL FIN 8.15% 8/15/2011 51.77
AMER GENL FIN 8.20% 9/15/2011 51.45
AMER GENL FIN 8.38% 8/15/2011 52.03
AMER INTL GROUP 4.70% 10/1/2010 64.00
AMER INTL GROUP 4.88% 3/15/2067 7.99
AMER INTL GROUP 5.38% 10/18/2011 58.48
AMER INTL GROUP 6.25% 3/15/2037 13.50
AMER MEDIA OPER 8.88% 1/15/2011 36.00
AMR CORP 9.20% 1/30/2012 42.00
AMR CORP 10.40% 3/15/2011 52.00
AMR CORP 10.42% 3/15/2011 46.00
AMR CORP 10.45% 3/10/2011 52.00
ANTHRACITE CAP 11.75% 9/1/2027 4.25
APPLETON PAPERS 9.75% 6/15/2014 23.00
ARCO CHEMICAL CO 9.80% 2/1/2020 15.00
ARCO CHEMICAL CO 10.25% 11/1/2010 15.25
ARVINMERITOR 8.13% 9/15/2015 25.00
ARVINMERITOR 8.75% 3/1/2012 32.00
ASARCO INC 7.88% 4/15/2013 23.50
AT HOME CORP 0.52% 12/28/2018 0.06
ATHEROGENICS INC 1.50% 2/1/2012 11.00
AVENTINE RENEW 10.00% 4/1/2017 12.00
AVIS BUDGET CAR 7.63% 5/15/2014 26.62
AVIS BUDGET CAR 7.75% 5/15/2016 27.50
BALLY TOTAL FITN 14.00% 10/1/2013 1.00
BANK NEW ENGLAND 8.75% 4/1/1999 7.12
BANK NEW ENGLAND 9.88% 9/15/1999 4.50
BANKUNITED CAP 3.13% 3/1/2034 7.00
BARRINGTON BROAD 10.50% 8/15/2014 20.00
BEAZER HOMES USA 4.63% 6/15/2024 33.00
BEAZER HOMES USA 6.50% 11/15/2013 25.13
BEAZER HOMES USA 6.88% 7/15/2015 27.06
BEAZER HOMES USA 8.13% 6/15/2016 26.00
BEAZER HOMES USA 8.38% 4/15/2012 27.00
BEAZER HOMES USA 8.63% 5/15/2011 39.00
BELL MICROPRODUC 3.75% 3/5/2024 15.63
BLOCKBUSTER INC 9.00% 9/1/2012 46.00
BON-TON DEPT STR 10.25% 3/15/2014 23.50
BORDEN INC 7.88% 2/15/2023 17.50
BORDEN INC 8.38% 4/15/2016 17.25
BORDEN INC 9.20% 3/15/2021 12.00
BOWATER INC 6.50% 6/15/2013 8.00
BOWATER INC 9.38% 12/15/2021 9.69
BOWATER INC 9.50% 10/15/2012 9.50
BRIGHAM EXPLORE 9.63% 5/1/2014 28.00
BRODER BROS CO 11.25% 10/15/2010 18.00
BROOKSTONE CO 12.00% 10/15/2012 45.00
BURLINGTON COAT 11.13% 4/15/2014 61.00
C&D TECHNOLOGIES 5.50% 11/15/2026 46.00
CALLON PETROLEUM 9.75% 12/8/2010 38.00
CAPMARK FINL GRP 7.88% 5/10/2012 21.50
CAPMARK FINL GRP 8.30% 5/10/2017 21.50
CARAUSTAR INDS 7.25% 5/1/2010 50.38
CARAUSTAR INDS 7.38% 6/1/2009 53.00
CARDINAL HEALTH 9.50% 4/15/2015 26.75
CCH I LLC 9.92% 4/1/2014 0.50
CCH I LLC 10.00% 5/15/2014 1.00
CCH I LLC 11.13% 1/15/2014 3.00
CCH I LLC 11.75% 5/15/2014 4.99
CCH I LLC 12.13% 1/15/2015 1.50
CCH I LLC 13.50% 1/15/2014 1.30
CCH I/CCH I CP 11.00% 10/1/2015 9.50
CCH I/CCH I CP 11.00% 10/1/2015 8.75
CELL GENESYS INC 3.13% 11/1/2011 43.13
CELL THERAPEUTIC 5.75% 12/15/2011 14.50
CHAMPION ENTERPR 2.75% 11/1/2037 15.75
CHAMPION ENTERPR 7.63% 5/15/2009 91.00
CHARTER COMM HLD 9.92% 4/1/2011 1.00
CHARTER COMM HLD 10.00% 5/15/2011 1.52
CHARTER COMM HLD 11.75% 5/15/2011 2.00
CHARTER COMM INC 6.50% 10/1/2027 10.88
CIRCUS CIRCUS 7.63% 7/15/2013 18.00
CITADEL BROADCAS 4.00% 2/15/2011 30.00
CLAIRE'S STORES 10.50% 6/1/2017 27.94
CLEAR CHANNEL 4.25% 5/15/2009 91.00
CLEAR CHANNEL 4.40% 5/15/2011 22.26
CLEAR CHANNEL 4.50% 1/15/2010 52.10
CLEAR CHANNEL 4.90% 5/15/2015 17.25
CLEAR CHANNEL 5.00% 3/15/2012 19.00
CLEAR CHANNEL 5.50% 9/15/2014 14.50
CLEAR CHANNEL 5.50% 12/15/2016 17.25
CLEAR CHANNEL 5.75% 1/15/2013 18.00
CLEAR CHANNEL 6.25% 3/15/2011 21.00
CLEAR CHANNEL 6.88% 6/15/2018 16.00
CLEAR CHANNEL 7.25% 10/15/2027 10.22
CLEAR CHANNEL 7.65% 9/15/2010 35.00
CLEAR CHANNEL 10.75% 8/1/2016 22.08
CMP SUSQUEHANNA 9.88% 5/15/2014 4.50
COMMERCIAL VEHIC 8.00% 7/1/2013 29.50
COMPUCREDIT 3.63% 5/30/2025 34.88
CONEXANT SYSTEMS 4.00% 3/1/2026 20.00
CONSTAR INTL 11.00% 12/1/2012 3.00
COOPER-STANDARD 7.00% 12/15/2012 14.00
COOPER-STANDARD 8.38% 12/15/2014 10.00
CREDENCE SYSTEM 3.50% 5/15/2010 30.00
DAE AVIATION 11.25% 8/1/2015 30.75
DAYTON SUPERIOR 13.00% 6/15/2009 64.50
DECODE GENETICS 3.50% 4/15/2011 10.00
DELPHI CORP 8.25% 10/15/2033 0.01
DELTA PETROLEUM 3.75% 5/1/2037 17.50
DEX MEDIA INC 8.00% 11/15/2013 13.00
DEX MEDIA WEST 8.50% 8/15/2010 61.75
DEX MEDIA WEST 9.88% 8/15/2013 27.50
DOLE FOODS CO 8.63% 5/1/2009 100.00
DOWNEY FINANCIAL 6.50% 7/1/2014 0.50
DOWNSTREAM DEVEL 12.00% 10/15/2015 28.25
DUANE READE INC 9.75% 8/1/2011 64.70
DUNE ENERGY INC 10.50% 6/1/2012 35.00
E*TRADE FINL 8.00% 6/15/2011 59.00
ENERGY PARTNERS 8.75% 8/1/2010 30.10
ENERGY PARTNERS 9.75% 4/15/2014 26.50
EPIX MEDICAL INC 3.00% 6/15/2024 9.00
EQUISTAR CHEMICA 7.55% 2/15/2026 15.50
EVERGREEN SOLAR 4.00% 7/15/2013 30.75
FAIRPOINT COMMUN 13.13% 4/1/2018 25.75
FGIC CORP 6.00% 1/15/2034 5.99
FIBERTOWER CORP 9.00% 11/15/2012 35.50
FINISAR CORP 2.50% 10/15/2010 55.00
FINLAY FINE JWLY 8.38% 6/1/2012 3.53
FIRST DATA CORP 5.63% 11/1/2011 37.52
FLOTEK INDS 5.25% 2/15/2028 29.70
FONTAINEBLEAU LA 11.00% 6/15/2015 3.25
FORD MOTOR CO 9.95% 2/15/2032 18.63
FORD MOTOR CRED 4.45% 4/20/2009 98.00
FORD MOTOR CRED 4.70% 4/20/2009 94.00
FORD MOTOR CRED 4.80% 7/20/2009 91.09
FORD MOTOR CRED 4.90% 9/21/2009 85.18
FORD MOTOR CRED 5.00% 8/20/2009 87.25
FORD MOTOR CRED 5.00% 9/21/2009 82.75
FORD MOTOR CRED 5.00% 10/20/2009 81.10
FORD MOTOR CRED 5.00% 1/20/2011 53.15
FORD MOTOR CRED 5.10% 8/20/2009 83.45
FORD MOTOR CRED 5.10% 2/22/2011 40.00
FORD MOTOR CRED 5.15% 1/20/2011 53.55
FORD MOTOR CRED 5.20% 3/21/2011 50.00
FORD MOTOR CRED 5.25% 2/22/2011 59.00
FORD MOTOR CRED 5.25% 3/21/2011 51.98
FORD MOTOR CRED 5.25% 3/21/2011 40.83
FORD MOTOR CRED 5.25% 9/20/2011 59.43
FORD MOTOR CRED 5.30% 3/21/2011 34.00
FORD MOTOR CRED 5.30% 4/20/2011 50.00
FORD MOTOR CRED 5.35% 5/20/2009 86.00
FORD MOTOR CRED 5.40% 6/22/2009 94.40
FORD MOTOR CRED 5.40% 12/21/2009 80.00
FORD MOTOR CRED 5.40% 1/20/2011 54.15
FORD MOTOR CRED 5.40% 10/20/2011 50.00
FORD MOTOR CRED 5.40% 10/20/2011 50.00
FORD MOTOR CRED 5.45% 4/20/2011 42.50
FORD MOTOR CRED 5.50% 6/22/2009 92.62
FORD MOTOR CRED 5.50% 2/22/2010 77.32
FORD MOTOR CRED 5.50% 2/22/2010 77.07
FORD MOTOR CRED 5.50% 10/20/2011 38.75
FORD MOTOR CRED 5.55% 6/21/2010 68.00
FORD MOTOR CRED 5.55% 8/22/2011 49.68
FORD MOTOR CRED 5.55% 9/20/2011 44.79
FORD MOTOR CRED 5.60% 4/20/2011 48.00
FORD MOTOR CRED 5.60% 8/22/2011 48.25
FORD MOTOR CRED 5.60% 9/20/2011 47.99
FORD MOTOR CRED 5.60% 11/21/2011 47.85
FORD MOTOR CRED 5.65% 12/20/2010 50.50
FORD MOTOR CRED 5.65% 5/20/2011 51.11
FORD MOTOR CRED 5.65% 7/20/2011 49.28
FORD MOTOR CRED 5.65% 12/20/2011 44.45
FORD MOTOR CRED 5.65% 1/21/2014 36.87
FORD MOTOR CRED 5.70% 3/22/2010 63.70
FORD MOTOR CRED 5.70% 5/20/2011 47.78
FORD MOTOR CRED 5.70% 1/20/2012 34.50
FORD MOTOR CRED 5.75% 8/22/2011 48.96
FORD MOTOR CRED 5.75% 12/20/2011 37.70
FORD MOTOR CRED 5.75% 2/21/2012 44.50
FORD MOTOR CRED 5.75% 2/20/2014 28.00
FORD MOTOR CRED 5.85% 6/21/2010 70.79
FORD MOTOR CRED 5.85% 7/20/2011 50.06
FORD MOTOR CRED 5.85% 1/20/2012 43.81
FORD MOTOR CRED 5.90% 7/20/2011 48.00
FORD MOTOR CRED 6.00% 6/21/2010 68.00
FORD MOTOR CRED 6.00% 10/20/2010 50.95
FORD MOTOR CRED 6.00% 1/20/2015 41.46
FORD MOTOR CRED 6.00% 2/20/2015 47.26
FORD MOTOR CRED 6.05% 6/20/2011 49.00
FORD MOTOR CRED 6.05% 3/20/2012 24.35
FORD MOTOR CRED 6.05% 3/20/2014 44.20
FORD MOTOR CRED 6.10% 6/20/2011 49.51
FORD MOTOR CRED 6.15% 7/20/2010 49.91
FORD MOTOR CRED 6.15% 9/20/2010 67.00
FORD MOTOR CRED 6.15% 12/22/2014 33.82
FORD MOTOR CRED 6.20% 5/20/2011 49.00
FORD MOTOR CRED 6.20% 6/20/2011 53.50
FORD MOTOR CRED 6.25% 6/20/2011 52.50
FORD MOTOR CRED 6.25% 2/21/2012 25.55
FORD MOTOR CRED 6.25% 3/20/2012 43.78
FORD MOTOR CRED 6.25% 12/20/2013 47.23
FORD MOTOR CRED 6.25% 4/21/2014 27.10
FORD MOTOR CRED 6.25% 1/20/2015 25.00
FORD MOTOR CRED 6.25% 3/20/2015 36.00
FORD MOTOR CRED 6.30% 3/22/2010 75.93
FORD MOTOR CRED 6.30% 5/20/2014 23.00
FORD MOTOR CRED 6.30% 5/20/2014 20.33
FORD MOTOR CRED 6.35% 9/20/2010 60.50
FORD MOTOR CRED 6.40% 8/20/2010 59.02
FORD MOTOR CRED 6.50% 3/20/2015 20.75
FORD MOTOR CRED 6.52% 3/10/2013 43.50
FORD MOTOR CRED 6.55% 8/20/2010 63.28
FORD MOTOR CRED 6.55% 12/20/2013 49.23
FORD MOTOR CRED 6.60% 10/21/2013 33.00
FORD MOTOR CRED 6.95% 4/20/2010 70.97
FORD MOTOR CRED 7.15% 8/20/2010 57.52
FORD MOTOR CRED 7.25% 7/20/2017 42.00
FORD MOTOR CRED 7.30% 4/20/2015 53.25
FORD MOTOR CRED 7.35% 11/7/2011 62.83
FORD MOTOR CRED 7.35% 3/20/2015 28.65
FORD MOTOR CRED 7.35% 9/15/2015 26.48
FORD MOTOR CRED 7.50% 8/20/2010 67.00
FORD MOTOR CRED 7.50% 9/20/2010 52.00
FORD MOTOR CRED 7.55% 9/30/2015 41.25
FORD MOTOR CRED 7.90% 5/18/2015 47.50
FORD MOTOR CRED 8.00% 12/20/2010 62.00
FOREST CITY ENT 7.63% 6/1/2015 35.00
FRANKLIN BANK 4.00% 5/1/2027 0.01
FREESCALE SEMICO 8.88% 12/15/2014 28.00
FREESCALE SEMICO 10.13% 12/15/2016 23.13
FRONTIER AIRLINE 5.00% 12/15/2025 15.00
GENCORP INC 2.25% 11/15/2024 38.25
GENCORP INC 4.00% 1/16/2024 71.25
GENERAL MOTORS 6.75% 5/1/2028 8.46
GENERAL MOTORS 7.13% 7/15/2013 8.21
GENERAL MOTORS 7.20% 1/15/2011 11.75
GENERAL MOTORS 7.38% 5/23/2048 7.70
GENERAL MOTORS 7.40% 9/1/2025 7.88
GENERAL MOTORS 7.70% 4/15/2016 10.11
GENERAL MOTORS 8.10% 6/15/2024 6.00
GENERAL MOTORS 8.25% 7/15/2023 7.38
GENERAL MOTORS 8.38% 7/15/2033 9.00
GENERAL MOTORS 8.80% 3/1/2021 6.88
GENERAL MOTORS 9.40% 7/15/2021 7.18
GENERAL MOTORS 9.45% 11/1/2011 3.50
GENWORTH FINL 6.15% 11/15/2066 13.00
GENWORTH GLOBAL 6.10% 4/15/2033 15.25
GENWORTH GLOBAL 6.30% 5/15/2033 15.25
GEON COMPANY 7.50% 12/15/2015 25.00
GEORGIA GULF CRP 7.13% 12/15/2013 18.00
GEORGIA GULF CRP 9.50% 10/15/2014 18.25
GEORGIA GULF CRP 10.75% 10/15/2016 8.00
GGP LP 3.98% 4/15/2027 9.08
GMAC LLC 4.90% 10/15/2009 70.50
GMAC LLC 4.90% 10/15/2009 71.00
GMAC LLC 4.95% 10/15/2009 75.00
GMAC LLC 5.00% 8/15/2009 75.00
GMAC LLC 5.00% 8/15/2009 74.50
GMAC LLC 5.00% 9/15/2009 72.35
GMAC LLC 5.00% 9/15/2009 74.00
GMAC LLC 5.00% 9/15/2009 75.00
GMAC LLC 5.00% 10/15/2009 71.00
GMAC LLC 5.05% 7/15/2009 84.00
GMAC LLC 5.10% 7/15/2009 83.70
GMAC LLC 5.10% 8/15/2009 74.00
GMAC LLC 5.10% 9/15/2009 72.00
GMAC LLC 5.20% 11/15/2009 67.00
GMAC LLC 5.20% 11/15/2009 72.25
GMAC LLC 5.25% 7/15/2009 78.00
GMAC LLC 5.25% 7/15/2009 74.26
GMAC LLC 5.25% 8/15/2009 71.50
GMAC LLC 5.25% 8/15/2009 75.00
GMAC LLC 5.25% 11/15/2009 66.50
GMAC LLC 5.25% 11/15/2009 67.00
GMAC LLC 5.25% 1/15/2014 29.99
GMAC LLC 5.30% 1/15/2010 58.57
GMAC LLC 5.35% 11/15/2009 68.50
GMAC LLC 5.35% 12/15/2009 69.00
GMAC LLC 5.35% 12/15/2009 69.00
GMAC LLC 5.35% 1/15/2014 29.80
GMAC LLC 5.40% 12/15/2009 64.50
GMAC LLC 5.40% 12/15/2009 65.00
GMAC LLC 5.50% 1/15/2010 61.00
GMAC LLC 5.63% 5/15/2009 96.00
GMAC LLC 5.70% 6/15/2013 30.00
GMAC LLC 5.70% 10/15/2013 28.71
GMAC LLC 5.70% 12/15/2013 29.75
GMAC LLC 5.75% 1/15/2010 59.40
GMAC LLC 5.75% 1/15/2014 28.75
GMAC LLC 5.85% 2/15/2010 58.37
GMAC LLC 5.85% 5/15/2013 29.30
GMAC LLC 5.85% 6/15/2013 31.25
GMAC LLC 5.85% 6/15/2013 27.18
GMAC LLC 5.85% 6/15/2013 31.00
GMAC LLC 5.90% 12/15/2013 28.00
GMAC LLC 5.90% 12/15/2013 24.50
GMAC LLC 6.00% 1/15/2010 60.29
GMAC LLC 6.00% 2/15/2010 62.32
GMAC LLC 6.00% 2/15/2010 58.49
GMAC LLC 6.00% 4/1/2011 56.99
GMAC LLC 6.00% 7/15/2013 28.30
GMAC LLC 6.00% 11/15/2013 28.25
GMAC LLC 6.00% 12/15/2013 22.80
GMAC LLC 6.00% 9/15/2019 26.52
GMAC LLC 6.00% 9/15/2019 26.00
GMAC LLC 6.05% 3/15/2010 59.27
GMAC LLC 6.05% 8/15/2019 24.02
GMAC LLC 6.05% 10/15/2019 25.38
GMAC LLC 6.10% 11/15/2013 25.84
GMAC LLC 6.13% 10/15/2019 24.79
GMAC LLC 6.15% 3/15/2010 64.25
GMAC LLC 6.15% 9/15/2013 28.69
GMAC LLC 6.15% 11/15/2013 27.00
GMAC LLC 6.15% 12/15/2013 29.00
GMAC LLC 6.15% 8/15/2019 28.75
GMAC LLC 6.15% 10/15/2019 28.25
GMAC LLC 6.20% 11/15/2013 32.50
GMAC LLC 6.25% 3/15/2013 29.00
GMAC LLC 6.25% 7/15/2013 28.75
GMAC LLC 6.25% 10/15/2013 29.25
GMAC LLC 6.25% 11/15/2013 29.50
GMAC LLC 6.25% 7/15/2019 28.25
GMAC LLC 6.30% 3/15/2013 28.00
GMAC LLC 6.30% 10/15/2013 28.67
GMAC LLC 6.30% 11/15/2013 32.18
GMAC LLC 6.30% 8/15/2019 28.25
GMAC LLC 6.30% 8/15/2019 28.25
GMAC LLC 6.35% 5/15/2013 30.00
GMAC LLC 6.38% 6/15/2010 51.51
GMAC LLC 6.38% 1/15/2014 25.00
GMAC LLC 6.40% 3/15/2013 30.00
GMAC LLC 6.40% 11/15/2019 24.75
GMAC LLC 6.45% 2/15/2013 30.01
GMAC LLC 6.50% 6/15/2009 88.81
GMAC LLC 6.50% 10/15/2009 74.80
GMAC LLC 6.50% 3/15/2010 60.00
GMAC LLC 6.50% 5/15/2012 43.91
GMAC LLC 6.50% 7/15/2012 38.11
GMAC LLC 6.50% 2/15/2013 29.70
GMAC LLC 6.50% 3/15/2013 30.50
GMAC LLC 6.50% 4/15/2013 31.00
GMAC LLC 6.50% 5/15/2013 30.75
GMAC LLC 6.50% 6/15/2013 34.99
GMAC LLC 6.50% 8/15/2013 18.89
GMAC LLC 6.50% 11/15/2013 31.10
GMAC LLC 6.50% 1/15/2020 28.50
GMAC LLC 6.55% 12/15/2019 26.00
GMAC LLC 6.55% 12/15/2019 28.50
GMAC LLC 6.63% 10/15/2011 38.98
GMAC LLC 6.65% 2/15/2013 27.00
GMAC LLC 6.70% 6/15/2009 90.05
GMAC LLC 6.70% 7/15/2009 84.01
GMAC LLC 6.70% 5/15/2014 27.80
GMAC LLC 6.70% 5/15/2014 23.39
GMAC LLC 6.70% 6/15/2014 24.75
GMAC LLC 6.70% 6/15/2019 28.75
GMAC LLC 6.70% 12/15/2019 27.00
GMAC LLC 6.75% 11/15/2009 66.42
GMAC LLC 6.75% 9/15/2011 37.00
GMAC LLC 6.75% 10/15/2011 39.00
GMAC LLC 6.75% 10/15/2011 38.13
GMAC LLC 6.75% 7/15/2012 36.00
GMAC LLC 6.75% 9/15/2012 33.83
GMAC LLC 6.75% 9/15/2012 30.00
GMAC LLC 6.75% 10/15/2012 34.50
GMAC LLC 6.75% 4/15/2013 29.00
GMAC LLC 6.75% 4/15/2013 27.04
GMAC LLC 6.75% 6/15/2014 25.50
GMAC LLC 6.75% 6/15/2019 28.75
GMAC LLC 6.80% 7/15/2009 75.25
GMAC LLC 6.80% 11/15/2009 68.02
GMAC LLC 6.80% 12/15/2009 65.50
GMAC LLC 6.80% 2/15/2013 33.25
GMAC LLC 6.80% 4/15/2013 28.55
GMAC LLC 6.85% 7/15/2009 75.96
GMAC LLC 6.85% 10/15/2009 69.95
GMAC LLC 6.88% 10/15/2012 34.60
GMAC LLC 6.88% 4/15/2013 27.60
GMAC LLC 6.90% 6/15/2009 86.36
GMAC LLC 6.90% 12/15/2009 64.50
GMAC LLC 6.90% 6/15/2017 25.00
GMAC LLC 6.95% 8/15/2009 78.00
GMAC LLC 6.95% 6/15/2017 27.00
GMAC LLC 7.00% 7/15/2009 84.66
GMAC LLC 7.00% 8/15/2009 78.00
GMAC LLC 7.00% 9/15/2009 72.00
GMAC LLC 7.00% 9/15/2009 71.00
GMAC LLC 7.00% 10/15/2009 69.40
GMAC LLC 7.00% 10/15/2009 69.65
GMAC LLC 7.00% 11/15/2009 72.50
GMAC LLC 7.00% 11/15/2009 68.00
GMAC LLC 7.00% 12/15/2009 64.00
GMAC LLC 7.00% 12/15/2009 72.50
GMAC LLC 7.00% 1/15/2010 61.07
GMAC LLC 7.00% 3/15/2010 61.15
GMAC LLC 7.00% 10/15/2011 39.36
GMAC LLC 7.00% 9/15/2012 40.00
GMAC LLC 7.00% 10/15/2012 28.55
GMAC LLC 7.00% 11/15/2012 35.00
GMAC LLC 7.00% 12/15/2012 31.58
GMAC LLC 7.00% 1/15/2013 26.25
GMAC LLC 7.05% 10/15/2009 65.13
GMAC LLC 7.10% 9/15/2012 37.50
GMAC LLC 7.10% 1/15/2013 31.76
GMAC LLC 7.10% 1/15/2013 34.25
GMAC LLC 7.13% 8/15/2009 75.00
GMAC LLC 7.13% 8/15/2012 35.46
GMAC LLC 7.13% 12/15/2012 31.77
GMAC LLC 7.15% 8/15/2009 79.00
GMAC LLC 7.15% 8/15/2010 58.13
GMAC LLC 7.15% 11/15/2012 31.50
GMAC LLC 7.20% 8/15/2009 76.00
GMAC LLC 7.25% 11/15/2009 66.88
GMAC LLC 7.25% 1/15/2010 60.92
GMAC LLC 7.25% 8/15/2012 36.20
GMAC LLC 7.25% 12/15/2012 31.50
GMAC LLC 7.25% 12/15/2012 35.00
GMAC LLC 7.50% 9/15/2010 57.00
GMAC LLC 7.50% 10/15/2012 33.00
GMAC LLC 7.50% 11/15/2017 22.47
GMAC LLC 7.55% 8/15/2010 53.00
GMAC LLC 7.63% 11/15/2012 35.50
GMAC LLC 7.70% 8/15/2010 58.00
GMAC LLC 7.70% 8/15/2010 58.00
GMAC LLC 7.75% 10/15/2012 38.50
GMAC LLC 7.85% 8/15/2010 59.14
GMAC LLC 7.88% 11/15/2012 35.00
GMAC LLC 8.00% 6/15/2010 59.81
GMAC LLC 8.00% 6/15/2010 60.00
GMAC LLC 8.00% 6/15/2010 63.25
GMAC LLC 8.00% 7/15/2010 63.25
GMAC LLC 8.00% 9/15/2010 50.00
GMAC LLC 8.00% 9/15/2010 53.00
GMAC LLC 8.05% 4/15/2010 57.00
GMAC LLC 8.13% 9/15/2009 89.31
GMAC LLC 8.20% 7/15/2010 58.60
GMAC LLC 8.25% 9/15/2012 34.00
GMAC LLC 8.40% 4/15/2010 57.88
GMAC LLC 8.40% 8/15/2015 24.57
GMAC LLC 8.50% 5/15/2010 60.31
GMAC LLC 8.50% 5/15/2010 56.30
GMAC LLC 8.50% 10/15/2010 64.02
GMAC LLC 8.50% 10/15/2010 63.50
GMAC LLC 8.50% 8/15/2015 28.00
GMAC LLC 8.65% 8/15/2015 30.09
GMAC LLC 8.88% 6/1/2010 62.50
HAIGHTS CROSS OP 11.75% 8/15/2011 38.63
HANNA (MA) CO 6.52% 2/23/2010 70.06
HARRAHS OPER CO 5.38% 12/15/2013 20.00
HARRAHS OPER CO 5.50% 7/1/2010 55.56
HARRAHS OPER CO 5.63% 6/1/2015 19.53
HARRAHS OPER CO 6.50% 6/1/2016 18.50
HARRAHS OPER CO 8.00% 2/1/2011 23.83
HARRAHS OPER CO 10.75% 2/1/2016 24.25
HARRAHS OPER CO 10.75% 2/1/2016 25.50
HARRY & DAVID OP 9.00% 3/1/2013 27.25
HAWAIIAN TELCOM 9.75% 5/1/2013 6.00
HAWKER BEECHCRAF 8.50% 4/1/2015 31.50
HAWKER BEECHCRAF 9.75% 4/1/2017 23.00
HEADWATERS INC 2.50% 2/1/2014 23.50
HEADWATERS INC 2.88% 6/1/2016 29.75
HERTZ CORP 6.35% 6/15/2010 62.00
HEXION US/NOVA 9.75% 11/15/2014 26.50
HILTON HOTELS 7.20% 12/15/2009 86.00
HINES NURSERIES 10.25% 10/1/2011 14.50
HUMAN GENOME 2.25% 10/15/2011 44.50
HUTCHINSON TECH 3.25% 1/15/2026 21.00
IDEARC INC 8.00% 11/15/2016 2.50
INCYTE CORP 3.50% 2/15/2011 51.67
INCYTE CORP LTD 3.50% 2/15/2011 51.06
INN OF THE MOUNT 12.00% 11/15/2010 12.50
INTCOMEX INC 11.75% 1/15/2011 35.25
INTERTAPE POLYM 8.50% 8/1/2014 42.00
ISTAR FINANCIAL 5.13% 4/1/2011 44.50
ISTAR FINANCIAL 5.13% 4/1/2011 44.25
ISTAR FINANCIAL 5.15% 3/1/2012 41.00
ISTAR FINANCIAL 5.38% 4/15/2010 67.85
ISTAR FINANCIAL 5.50% 6/15/2012 42.75
ISTAR FINANCIAL 5.65% 9/15/2011 43.00
ISTAR FINANCIAL 5.80% 3/15/2011 44.00
ISTAR FINANCIAL 6.00% 12/15/2010 65.00
ISTAR FINANCIAL 8.63% 6/1/2013 39.50
JAZZ TECHNOLOGIE 8.00% 12/31/2011 20.50
JEFFERSON SMURFI 7.50% 6/1/2013 12.50
JEFFERSON SMURFI 8.25% 10/1/2012 11.50
K HOVNANIAN ENTR 6.50% 1/15/2014 30.00
K HOVNANIAN ENTR 7.75% 5/15/2013 25.00
K HOVNANIAN ENTR 8.00% 4/1/2012 43.00
K HOVNANIAN ENTR 8.88% 4/1/2012 40.00
KAISER ALUMINUM 12.75% 2/1/2003 6.25
KELLWOOD CO 7.63% 10/15/2017 4.50
KEMET CORP 2.25% 11/15/2026 16.50
KEMET CORP 2.25% 11/15/2026 17.25
KEYSTONE AUTO OP 9.75% 11/1/2013 20.75
KKR FINANCIAL 7.00% 7/15/2012 34.50
KNIGHT RIDDER 4.63% 11/1/2014 17.00
KNIGHT RIDDER 5.75% 9/1/2017 17.95
KNIGHT RIDDER 6.88% 3/15/2029 13.80
KNIGHT RIDDER 7.13% 6/1/2011 20.13
KNIGHT RIDDER 7.15% 11/1/2027 14.25
LANDAMERICA 3.13% 11/15/2033 11.52
LANDAMERICA 3.25% 5/15/2034 12.25
LANDRY'S RESTAUR 9.50% 12/15/2014 98.10
LAZYDAYS RV 11.75% 5/15/2012 4.90
LEAR CORP 5.75% 8/1/2014 21.25
LEAR CORP 8.50% 12/1/2013 18.63
LEAR CORP 8.75% 12/1/2016 16.50
LECROY CORP 4.00% 10/15/2026 44.21
LECROY CORP 4.00% 10/15/2026 38.75
LEHMAN BROS HLDG 1.50% 3/23/2012 9.50
LEHMAN BROS HLDG 4.25% 1/27/2010 10.50
LEHMAN BROS HLDG 4.38% 11/30/2010 12.00
LEHMAN BROS HLDG 4.50% 7/26/2010 12.00
LEHMAN BROS HLDG 4.70% 3/6/2013 8.80
LEHMAN BROS HLDG 4.80% 3/13/2014 11.30
LEHMAN BROS HLDG 4.80% 6/24/2023 7.00
LEHMAN BROS HLDG 5.00% 1/14/2011 10.00
LEHMAN BROS HLDG 5.00% 1/22/2013 6.25
LEHMAN BROS HLDG 5.00% 2/11/2013 8.32
LEHMAN BROS HLDG 5.00% 3/27/2013 9.00
LEHMAN BROS HLDG 5.00% 8/5/2015 6.00
LEHMAN BROS HLDG 5.00% 12/18/2015 4.10
LEHMAN BROS HLDG 5.00% 5/28/2023 8.25
LEHMAN BROS HLDG 5.00% 5/30/2023 7.00
LEHMAN BROS HLDG 5.00% 6/10/2023 9.00
LEHMAN BROS HLDG 5.00% 6/17/2023 7.00
LEHMAN BROS HLDG 5.10% 1/28/2013 8.50
LEHMAN BROS HLDG 5.10% 2/15/2020 7.00
LEHMAN BROS HLDG 5.15% 2/4/2015 5.00
LEHMAN BROS HLDG 5.20% 5/13/2020 7.18
LEHMAN BROS HLDG 5.25% 2/6/2012 11.50
LEHMAN BROS HLDG 5.25% 2/11/2015 4.00
LEHMAN BROS HLDG 5.25% 3/8/2020 7.25
LEHMAN BROS HLDG 5.25% 5/20/2023 6.06
LEHMAN BROS HLDG 5.35% 2/25/2018 7.00
LEHMAN BROS HLDG 5.35% 3/13/2020 7.00
LEHMAN BROS HLDG 5.35% 6/14/2030 4.10
LEHMAN BROS HLDG 5.38% 5/6/2023 7.06
LEHMAN BROS HLDG 5.40% 3/6/2020 6.06
LEHMAN BROS HLDG 5.40% 3/20/2020 7.00
LEHMAN BROS HLDG 5.40% 3/30/2029 9.25
LEHMAN BROS HLDG 5.40% 6/21/2030 7.63
LEHMAN BROS HLDG 5.45% 3/15/2025 7.00
LEHMAN BROS HLDG 5.45% 4/6/2029 7.00
LEHMAN BROS HLDG 5.45% 2/22/2030 7.63
LEHMAN BROS HLDG 5.45% 7/19/2030 7.13
LEHMAN BROS HLDG 5.45% 9/20/2030 7.30
LEHMAN BROS HLDG 5.50% 4/4/2016 12.50
LEHMAN BROS HLDG 5.50% 2/4/2018 8.50
LEHMAN BROS HLDG 5.50% 2/19/2018 7.31
LEHMAN BROS HLDG 5.50% 11/4/2018 7.06
LEHMAN BROS HLDG 5.50% 2/27/2020 7.50
LEHMAN BROS HLDG 5.50% 3/14/2023 7.00
LEHMAN BROS HLDG 5.50% 4/8/2023 6.06
LEHMAN BROS HLDG 5.50% 4/15/2023 7.50
LEHMAN BROS HLDG 5.50% 4/23/2023 7.00
LEHMAN BROS HLDG 5.50% 8/5/2023 4.95
LEHMAN BROS HLDG 5.50% 10/7/2023 7.25
LEHMAN BROS HLDG 5.50% 1/27/2029 7.26
LEHMAN BROS HLDG 5.50% 2/3/2029 8.75
LEHMAN BROS HLDG 5.50% 8/2/2030 7.50
LEHMAN BROS HLDG 5.55% 2/11/2018 7.00
LEHMAN BROS HLDG 5.55% 3/9/2029 7.25
LEHMAN BROS HLDG 5.55% 1/25/2030 7.25
LEHMAN BROS HLDG 5.55% 9/27/2030 6.97
LEHMAN BROS HLDG 5.55% 12/31/2034 7.25
LEHMAN BROS HLDG 5.60% 1/22/2018 6.00
LEHMAN BROS HLDG 5.60% 2/17/2029 7.00
LEHMAN BROS HLDG 5.60% 2/24/2029 6.73
LEHMAN BROS HLDG 5.60% 3/2/2029 7.00
LEHMAN BROS HLDG 5.60% 2/25/2030 7.33
LEHMAN BROS HLDG 5.60% 5/3/2030 7.76
LEHMAN BROS HLDG 5.63% 1/24/2013 13.00
LEHMAN BROS HLDG 5.63% 3/15/2030 11.90
LEHMAN BROS HLDG 5.65% 11/23/2029 7.00
LEHMAN BROS HLDG 5.65% 8/16/2030 4.00
LEHMAN BROS HLDG 5.65% 12/31/2034 7.50
LEHMAN BROS HLDG 5.70% 1/28/2018 7.41
LEHMAN BROS HLDG 5.70% 2/10/2029 7.25
LEHMAN BROS HLDG 5.70% 4/13/2029 7.13
LEHMAN BROS HLDG 5.70% 9/7/2029 7.50
LEHMAN BROS HLDG 5.70% 12/14/2029 4.10
LEHMAN BROS HLDG 5.75% 4/25/2011 13.25
LEHMAN BROS HLDG 5.75% 7/18/2011 11.50
LEHMAN BROS HLDG 5.75% 5/17/2013 11.25
LEHMAN BROS HLDG 5.75% 3/27/2023 6.00
LEHMAN BROS HLDG 5.75% 9/16/2023 9.00
LEHMAN BROS HLDG 5.75% 10/15/2023 7.46
LEHMAN BROS HLDG 5.75% 10/21/2023 7.00
LEHMAN BROS HLDG 5.75% 11/12/2023 6.00
LEHMAN BROS HLDG 5.75% 11/25/2023 7.00
LEHMAN BROS HLDG 5.75% 12/16/2028 8.51
LEHMAN BROS HLDG 5.75% 12/23/2028 7.25
LEHMAN BROS HLDG 5.75% 8/24/2029 7.00
LEHMAN BROS HLDG 5.75% 9/14/2029 6.06
LEHMAN BROS HLDG 5.75% 10/12/2029 6.30
LEHMAN BROS HLDG 5.75% 3/29/2030 6.50
LEHMAN BROS HLDG 5.80% 9/3/2020 4.33
LEHMAN BROS HLDG 5.80% 10/25/2030 7.25
LEHMAN BROS HLDG 5.85% 11/8/2030 3.96
LEHMAN BROS HLDG 5.88% 11/15/2017 10.00
LEHMAN BROS HLDG 5.90% 5/4/2029 7.00
LEHMAN BROS HLDG 5.90% 2/7/2031 7.00
LEHMAN BROS HLDG 5.95% 12/20/2030 5.00
LEHMAN BROS HLDG 6.00% 7/19/2012 12.00
LEHMAN BROS HLDG 6.00% 1/22/2020 7.10
LEHMAN BROS HLDG 6.00% 2/12/2020 7.25
LEHMAN BROS HLDG 6.00% 1/29/2021 3.00
LEHMAN BROS HLDG 6.00% 10/23/2028 7.00
LEHMAN BROS HLDG 6.00% 11/18/2028 7.06
LEHMAN BROS HLDG 6.00% 5/11/2029 5.00
LEHMAN BROS HLDG 6.00% 7/20/2029 7.00
LEHMAN BROS HLDG 6.00% 4/30/2034 7.08
LEHMAN BROS HLDG 6.00% 7/30/2034 7.50
LEHMAN BROS HLDG 6.00% 2/21/2036 7.25
LEHMAN BROS HLDG 6.00% 2/24/2036 6.43
LEHMAN BROS HLDG 6.00% 2/12/2037 5.55
LEHMAN BROS HLDG 6.05% 6/29/2029 1.12
LEHMAN BROS HLDG 6.10% 8/12/2023 7.00
LEHMAN BROS HLDG 6.15% 4/11/2031 7.00
LEHMAN BROS HLDG 6.20% 9/26/2014 13.25
LEHMAN BROS HLDG 6.20% 6/15/2027 7.25
LEHMAN BROS HLDG 6.20% 5/25/2029 4.94
LEHMAN BROS HLDG 6.25% 2/5/2021 4.02
LEHMAN BROS HLDG 6.25% 2/22/2023 4.50
LEHMAN BROS HLDG 6.30% 3/27/2037 8.25
LEHMAN BROS HLDG 6.40% 10/11/2022 7.10
LEHMAN BROS HLDG 6.50% 2/28/2023 7.61
LEHMAN BROS HLDG 6.50% 3/6/2023 3.10
LEHMAN BROS HLDG 6.50% 10/18/2027 8.58
LEHMAN BROS HLDG 6.50% 10/25/2027 5.80
LEHMAN BROS HLDG 6.50% 1/17/2033 3.09
LEHMAN BROS HLDG 6.50% 12/22/2036 8.50
LEHMAN BROS HLDG 6.50% 2/13/2037 8.50
LEHMAN BROS HLDG 6.50% 6/21/2037 6.50
LEHMAN BROS HLDG 6.50% 7/13/2037 8.06
LEHMAN BROS HLDG 6.60% 10/3/2022 7.75
LEHMAN BROS HLDG 6.63% 1/18/2012 12.50
LEHMAN BROS HLDG 6.75% 12/28/2017 0.01
LEHMAN BROS HLDG 6.75% 7/1/2022 9.00
LEHMAN BROS HLDG 6.75% 11/22/2027 9.00
LEHMAN BROS HLDG 6.75% 3/11/2033 7.63
LEHMAN BROS HLDG 6.75% 10/26/2037 8.00
LEHMAN BROS HLDG 6.80% 9/7/2032 7.00
LEHMAN BROS HLDG 6.85% 8/16/2032 7.63
LEHMAN BROS HLDG 6.88% 5/2/2018 14.00
LEHMAN BROS HLDG 6.88% 7/17/2037 0.01
LEHMAN BROS HLDG 6.90% 9/1/2032 8.75
LEHMAN BROS HLDG 7.00% 4/16/2019 7.10
LEHMAN BROS HLDG 7.00% 5/12/2023 7.50
LEHMAN BROS HLDG 7.00% 9/27/2027 13.25
LEHMAN BROS HLDG 7.00% 10/4/2032 8.50
LEHMAN BROS HLDG 7.00% 7/27/2037 9.25
LEHMAN BROS HLDG 7.00% 9/28/2037 6.69
LEHMAN BROS HLDG 7.00% 11/16/2037 8.25
LEHMAN BROS HLDG 7.00% 12/28/2037 8.00
LEHMAN BROS HLDG 7.00% 1/31/2038 9.00
LEHMAN BROS HLDG 7.00% 2/1/2038 7.75
LEHMAN BROS HLDG 7.00% 2/7/2038 10.13
LEHMAN BROS HLDG 7.00% 2/8/2038 9.00
LEHMAN BROS HLDG 7.00% 4/22/2038 7.00
LEHMAN BROS HLDG 7.10% 3/25/2038 7.25
LEHMAN BROS HLDG 7.25% 2/27/2038 6.00
LEHMAN BROS HLDG 7.25% 4/29/2038 8.75
LEHMAN BROS HLDG 7.35% 5/6/2038 9.00
LEHMAN BROS HLDG 7.73% 10/15/2023 5.83
LEHMAN BROS HLDG 7.88% 8/15/2010 14.00
LEHMAN BROS HLDG 8.05% 1/15/2019 5.06
LEHMAN BROS HLDG 8.50% 8/1/2015 12.00
LEHMAN BROS HLDG 8.50% 6/15/2022 8.09
LEHMAN BROS HLDG 8.80% 3/1/2015 9.50
LEHMAN BROS HLDG 8.92% 2/16/2017 10.00
LEHMAN BROS HLDG 9.50% 12/28/2022 6.20
LEHMAN BROS HLDG 9.50% 1/30/2023 4.13
LEHMAN BROS HLDG 9.50% 2/27/2023 9.00
LEHMAN BROS HLDG 10.00% 3/13/2023 6.00
LEHMAN BROS HLDG 10.38% 5/24/2024 6.16
LEHMAN BROS HLDG 11.00% 10/25/2017 4.32
LEHMAN BROS HLDG 11.00% 6/22/2022 7.75
LIFETIME BRANDS 4.75% 7/15/2011 43.50
LOCAL INSIGHT 11.00% 12/1/2017 20.25
MAGMA DESIGN 2.00% 5/15/2010 62.50
MAGNA ENTERTAINM 8.55% 6/15/2010 14.05
MAJESTIC STAR 9.50% 10/15/2010 31.25
MAJESTIC STAR 9.75% 1/15/2011 3.00
MANDALAY RESORT 6.38% 12/15/2011 36.50
MANDALAY RESORT 6.50% 7/31/2009 77.44
MANDALAY RESORTS 9.38% 2/15/2010 41.00
MASHANTUCKET PEQ 8.50% 11/15/2015 17.38
MASONITE CORP 11.00% 4/6/2015 2.50
MATTEL INC 7.48% 4/22/2009 100.00
MEDIANEWS GROUP 6.38% 4/1/2014 99.98
MERCER INTL INC 9.25% 2/15/2013 31.25
MERISANT CO 9.50% 7/15/2013 2.06
MERIX CORP 4.00% 5/15/2013 25.56
METALDYNE CORP 11.00% 6/15/2012 10.00
MFCCN-CALL05/09 5.00% 5/15/2015 75.91
MFCCN-CALL05/09 5.00% 5/15/2015 75.91
MFCCN-CALL05/09 5.00% 5/15/2015 75.91
MFCCN-CALL05/09 5.05% 5/15/2015 76.15
MFCCN-CALL05/09 5.15% 5/15/2017 96.50
MFCCN-CALL05/09 5.15% 5/15/2017 68.73
MFCCN-CALL05/09 5.20% 5/15/2017 69.02
MFCCN-CALL05/09 5.20% 5/15/2017 100.04
MGM MIRAGE 6.00% 10/1/2009 67.00
MGM MIRAGE 6.75% 9/1/2012 46.00
MGM MIRAGE 8.38% 2/1/2011 30.00
MGM MIRAGE 8.50% 9/15/2010 57.00
MILACRON ESCROW 11.50% 5/15/2011 20.50
MILLENNIUM AMER 7.63% 11/15/2026 1.50
MOHEGAN TRIBAL 8.00% 4/1/2012 48.75
MOHEGAN TRIBAL 8.38% 7/1/2011 40.50
MOMENTIVE PERFOR 9.75% 12/1/2014 31.75
MOMENTIVE PERFOR 11.50% 12/1/2016 21.00
MORRIS PUBLISH 7.00% 8/1/2013 5.00
MTR GAMING GROUP 9.75% 4/1/2010 75.50
NATL FINANCIAL 0.75% 2/1/2012 34.44
NCI BLDG SYSTEMS 2.13% 11/15/2024 60.00
NEENAH FOUNDRY 9.50% 1/1/2017 26.00
NEFF CORP 10.00% 6/1/2015 33.63
NEIMAN MARCUS 10.38% 10/15/2015 43.13
NELNET INC 5.13% 6/1/2010 64.50
NETWORK COMMUNIC 10.75% 12/1/2013 15.00
NEW PLAN EXCEL 4.50% 2/1/2011 55.25
NEW PLAN EXCEL 7.50% 7/30/2029 14.00
NEW PLAN REALTY 6.90% 2/15/2028 9.02
NEW PLAN REALTY 7.65% 11/2/2026 19.50
NEW PLAN REALTY 7.97% 8/14/2026 14.00
NEWPAGE CORP 10.00% 5/1/2012 40.50
NEWPAGE CORP 12.00% 5/1/2013 22.25
NIPSCO CAP MRKTS 7.72% 4/17/2009 99.20
NORTEK INC 8.50% 9/1/2014 18.00
NORTH ATL TRADNG 9.25% 3/1/2012 19.50
NORTHSTAR REAL 7.25% 6/15/2027 40.71
NTK HOLDINGS INC 0.00% 3/1/2014 10.00
NUVEEN INVEST 5.00% 9/15/2010 59.00
OSI RESTAURANT 10.00% 6/15/2015 46.75
PACKAGING DYNAMI 10.00% 5/1/2016 29.82
PALM HARBOR 3.25% 5/15/2024 29.50
PANOLAM INDUSTRI 10.75% 10/1/2013 5.00
PARK PLACE ENT 7.50% 9/1/2009 71.31
PARK PLACE ENT 7.88% 3/15/2010 56.63
PARK PLACE ENT 8.13% 5/15/2011 46.00
PENHALL INTL 12.00% 8/1/2014 35.88
PERKINS & MARIE 14.00% 5/31/2013 48.63
PHH CORP 6.45% 4/15/2010 70.00
PILGRIMS PRIDE 9.25% 11/15/2013 30.50
PINNACLE AIRLINE 3.25% 2/15/2025 76.75
PLY GEM INDS 9.00% 2/15/2012 23.00
POLYONE CORP 8.88% 5/1/2012 50.00
POTLATCH CORP 12.50% 12/1/2009 104.50
POWERWAVE TECH 1.88% 11/15/2024 20.60
POWERWAVE TECH 3.88% 10/1/2027 22.50
POWERWAVE TECH 3.88% 10/1/2027 22.44
PREIT ASSOCIATES 4.00% 6/1/2012 26.47
PRIMUS TELECOM 3.75% 9/15/2010 2.63
PRIMUS TELECOM 8.00% 1/15/2014 4.88
PRIMUS TELECOMM 14.25% 5/20/2011 37.00
QUALITY DISTRIBU 9.00% 11/15/2010 30.00
QUANTUM CORP 4.38% 8/1/2010 65.45
RADIAN GROUP 7.75% 6/1/2011 43.65
RADIO ONE INC 6.38% 2/15/2013 18.00
RADIO ONE INC 8.88% 7/1/2011 25.00
RAFAELLA APPAREL 11.25% 6/15/2011 16.75
RAIT FINANCIAL 6.88% 4/15/2027 27.22
RATHGIBSON INC 11.25% 2/15/2014 23.25
RAYOVAC CORP 8.50% 10/1/2013 11.11
READER'S DIGEST 9.00% 2/15/2017 10.13
REALOGY CORP 10.50% 4/15/2014 36.00
REALOGY CORP 12.38% 4/15/2015 21.50
REALOGY CORP 12.38% 4/15/2015 21.00
RENTECH INC 4.00% 4/15/2013 23.87
RESIDENTIAL CAP 8.00% 2/22/2011 42.00
RESIDENTIAL CAP 8.38% 6/30/2010 51.50
RESIDENTIAL CAP 8.50% 6/1/2012 16.93
RESIDENTIAL CAP 8.50% 4/17/2013 14.10
RESIDENTIAL CAP 8.50% 5/15/2010 73.25
RESTAURANT CO 10.00% 10/1/2013 45.00
RH DONNELLEY 6.88% 1/15/2013 5.25
RH DONNELLEY 6.88% 1/15/2013 5.00
RH DONNELLEY 6.88% 1/15/2013 5.25
RH DONNELLEY 8.88% 1/15/2016 5.38
RH DONNELLEY 8.88% 10/15/2017 5.50
RH DONNELLEY INC 11.75% 5/15/2015 15.00
RICHARDSON ELEC 7.75% 12/15/2011 39.00
RITE AID CORP 6.88% 8/15/2013 32.38
RITE AID CORP 7.70% 2/15/2027 16.50
RITE AID CORP 8.13% 5/1/2010 20.00
RITE AID CORP 8.50% 5/15/2015 36.35
RITE AID CORP 9.38% 12/15/2015 38.63
RIVER ROCK ENT 9.75% 11/1/2011 55.25
RJ TOWER CORP 12.00% 6/1/2013 1.00
ROUSE CO LP/TRC 6.75% 5/1/2013 30.00
ROUSE COMPANY 7.20% 9/15/2012 29.25
SABRE HOLDINGS 7.35% 8/1/2011 54.00
SALEM COMM HLDG 7.75% 12/15/2010 30.50
SECURUS TECH 11.00% 9/1/2011 66.00
SEQUA CORP 11.75% 12/1/2015 16.75
SIMMONS CO 7.88% 1/15/2014 15.75
SINCLAIR BROAD 3.00% 5/15/2027 56.50
SINCLAIR BROAD 6.00% 9/15/2012 32.00
SIRIUS SATELLITE 3.25% 10/15/2011 44.00
SIX FLAGS INC 4.50% 5/15/2015 10.50
SIX FLAGS INC 8.88% 2/1/2010 20.00
SIX FLAGS INC 9.63% 6/1/2014 11.00
SIX FLAGS INC 9.75% 4/15/2013 19.45
SIX FLAGS OPER 12.25% 7/15/2016 32.38
SMURFIT-STONE 8.00% 3/15/2017 13.00
SNOQUALMIE 9.13% 2/1/2015 26.75
SONIC AUTOMOTIVE 8.63% 8/15/2013 33.00
SPACEHAB INC 5.50% 10/15/2010 58.10
SPECTRUM BRANDS 7.38% 2/1/2015 28.00
SPECTRUM BRANDS 12.50% 10/2/2013 26.50
SPHERIS INC 11.00% 12/15/2012 37.50
STALLION OILFIEL 9.75% 2/1/2015 14.63
STANDARD MTR 6.75% 7/15/2009 89.00
STANDRD PAC CORP 6.00% 10/1/2012 40.38
STANLEY-MARTIN 9.75% 8/15/2015 31.13
STATION CASINOS 6.00% 4/1/2012 36.00
STATION CASINOS 6.50% 2/1/2014 4.00
STATION CASINOS 6.63% 3/15/2018 0.50
STATION CASINOS 6.88% 3/1/2016 0.50
STONE CONTAINER 8.38% 7/1/2012 11.25
STONE ENERGY 8.25% 12/15/2011 55.50
SWIFT TRANS CO 12.50% 5/15/2017 25.38
TENNECO AUTOMOT 8.63% 11/15/2014 27.25
THORNBURG MTG 8.00% 5/15/2013 3.95
TIMES MIRROR CO 6.61% 9/15/2027 2.60
TIMES MIRROR CO 7.25% 3/1/2013 5.50
TIMES MIRROR CO 7.25% 11/15/2096 3.50
TIMES MIRROR CO 7.50% 7/1/2023 3.05
TOUSA INC 9.00% 7/1/2010 2.00
TOYS R US 7.63% 8/1/2011 61.99
TOYS R US DEL 8.75% 9/1/2021 15.00
TRANS-LUX CORP 8.25% 3/1/2012 25.10
TRANSMERIDIAN EX 12.00% 12/15/2010 6.50
TRAVELPORT LLC 11.88% 9/1/2016 33.50
TRIBUNE CO 4.88% 8/15/2010 5.13
TRIBUNE CO 5.25% 8/15/2015 3.00
TRIBUNE CO 5.67% 12/8/2008 2.50
TRICO MARINE 3.00% 1/15/2027 14.00
TRICO MARINE SER 6.50% 5/15/2028 30.75
TRONOX WORLDWIDE 9.50% 12/1/2012 15.00
TRUE TEMPER 8.38% 9/15/2011 33.00
TRUMP ENTERTNMNT 8.50% 6/1/2015 10.50
TUBE CITY IMS 9.75% 2/1/2015 21.50
UAL CORP 4.50% 6/30/2021 41.00
UAL CORP 5.00% 2/1/2021 45.00
UNISYS CORP 6.88% 3/15/2010 53.71
UNISYS CORP 8.00% 10/15/2012 37.00
UNISYS CORP 8.50% 10/15/2015 35.75
UNISYS CORP 12.50% 1/15/2016 38.50
UNITED COMPONENT 9.38% 6/15/2013 41.50
UNIV CITY FL HLD 8.38% 5/1/2010 50.00
US LEASING INTL 6.00% 9/6/2011 46.00
USFREIGHTWAYS 8.50% 4/15/2010 41.00
VERASUN ENERGY 9.38% 6/1/2017 5.00
VERENIUM CORP 5.50% 4/1/2027 15.00
VERSO PAPER 11.38% 8/1/2016 21.00
VIASYSTEMS INC 10.50% 1/15/2011 65.00
VICORP RESTAURNT 10.50% 4/15/2011 3.00
VISTEON CORP 7.00% 3/10/2014 5.00
VISTEON CORP 12.25% 12/31/2016 5.38
VOUGHT AIRCRAFT 8.00% 7/15/2011 39.75
WASH MUT BANK FA 6.88% 6/15/2011 0.00
WASH MUT BANK NV 5.55% 6/16/2010 26.00
WASH MUTUAL INC 4.20% 1/15/2010 82.25
WASH MUTUAL INC 8.25% 4/1/2010 51.00
WCI COMMUNITIES 4.00% 8/5/2023 0.50
WCI COMMUNITIES 6.63% 3/15/2015 2.00
WCI COMMUNITIES 7.88% 10/1/2013 1.00
WELLS FARGO CO 3.55% 5/1/2009 97.55
WII COMPONENTS 10.00% 2/15/2012 45.00
WILLIAM LYONS 7.50% 2/15/2014 13.00
WILLIAM LYONS 7.63% 12/15/2012 13.25
WILLIAM LYONS 10.75% 4/1/2013 18.00
WITCO CORP 6.88% 2/1/2026 15.00
XM SATELLITE 9.75% 5/1/2014 31.00
XM SATELLITE 13.00% 8/1/2013 46.63
*********
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 ***