/raid1/www/Hosts/bankrupt/TCR_Public/090520.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, May 20, 2009, Vol. 13, No. 138
Headlines
750 JEFFERSON: Files Schedules of Assets and Liabilities
750 JEFFERSON: Creditor Asks Court to Declare Debtor a SARE
ABET TECHNOLOGIES: Case Summary & 20 Largest Unsecured Creditors
ACCURIDE CORPORATION: Moody's Cuts Corp. Family Rating to 'Caa3'
AFFILIATED FOODS: Court Extends Schedules Filing for 30 More Days
AFFILIATED FOODS: Gets Interim OK to Hire Heller Draper as Counsel
AFFILIATED FOODS: Has Interim OK for Dover Dixon as Local Counsel
AFFILIATED FOODS: U.S. Trustee Appoints 5-Member Creditors Panel
AGT CRUNCH: Can File Schedules and Statements Until June 20
AGT CRUNCH: U.S. Trustee Appoints 7-Member Creditors Committee
AMERICAN INT'L: Names Six Nominees to Board of Directors
AMERICAN INT'L: SEC to Distribute $843-Mil. to Harmed Investors
AMERICAN TOWER: Moody's Gives Positive Outlook; Keeps 'Ba1' Rating
ANDERSON HOMES: Final Cash Collateral Hearing Set for June 22
ANDERSON HOMES: Wants to Obtain Loan Advances from Paragon
ANDERSON HOMES: Wants to Obtain $15MM in Advances from Regions
ANDERSON HOMES: Wants to Obtain Loan Advances from KeySource Bank
ANDERSON HOMES: Wants to Obtains Loan Advances from RBC Centura
ARIZONA DIALTONE: Case Summary & 20 Largest Unsecured Creditors
ATRIUM COS: Forbearance Agreement Cues S&P's Rating Cut to 'D'
AUTOBACS STRAUSS: Seeks September 2 Extension of Plan Deadline
AUTOBACS STRAUSS: Court Denies Severance Program for Officers
AVCORP INDUSTRIES: In Talks to Restructure Debt, Obtain More Funds
BANK OF AMERICA: Sale of 1.2BB Shares of Stock Brings in $13BB
BANK OF AMERICA: Fitch Downgrades Preferred Stock Rating to 'B'
BANKUNITED FINANCIAL: May Be Put Into Receivership as Part of Sale
BARZEL FINCO: Moody's Comments on Company Deferral Agreement
BEARINGPOINT INC: Proceeds Sharing of Japan Unit Declined by Judge
BEDROCK MARKETING: Trustee Not Bound by Co.'s Agent's Statements
BIO-RAD LABORATORIES: Moody's Affirms Corp. Family Rating at 'Ba2'
BIOMET INC: Moody's Changes Outlook to Stable; Affirms 'B2' Rating
BUILDING MATERIALS: Lender Talks May Lead to Bankruptcy Filing
BUILDING MATERIALS: Has $45MM Q1 Loss; Balance Sheet Upside Down
CAPMARK FINANCIAL: Compliance to Leverage Ratio Covenant Waived
CHARDON RUBBER: Files for Ch. 11 to Implement $3.87MM Asset Sale
CHESTNUT INVESTMENTS: Case Summary & 10 Largest Unsec. Creditors
CHRYSLER LLC: Dealer Group Says Cuts to Hurt Sales
CHRYSLER LLC: Gets Nod for Stipulation on JPM Letters of Credit
CHRYSLER LLC: Judge Says Move for Retirees Panel Premature
CHRYSLER LLC: Bridgestone Won't Continue Supplies w/o Payment
CHRYSLER LLC: Dow Balks at Protocol for Sec. 503(b)(9) Claims
CHRYSLER LLC: Has Interim Order for Utilities to Maintain Services
CHRYSLER LLC: Fifth Third Bank Proposes to Draw From Deposit
CHRYSLER LLC: Initial Case Management Conference on June 4
CHRYSLER LLC: Suppliers, Other Parties Keep Track of Case
CHRYSLER LLC: Dealers Band Together, Seek Asset Sale Delay
CHUNDURI V CHELAPATI: Voluntary Chapter 11 Case Summary
CLARKE COLLEGE: Moody's Affirms 'Ba1' Rating on 1998 Bonds
CONGOLEUM CORP: March 31 Balance Sheet Upside Down by $93.6MM
COOPER-STANDARD AUTOMOTIVE: Moody's Cuts Default Rating to 'Caa3'
COEUR D'ALENE: S&P Puts 'CCC' Corp. Rating on Positive CreditWatch
COVANTA HOLDING: Moody's Affirms Corporate Family Rating at 'Ba2'
DANNY R ORMSBY: Case Summary & 20 Largest Unsecured Creditors
DEVELOPERS DIVERSIFIED: Fitch Cuts Issuer Default Rating to 'BB'
E*TRADE FINANCIAL Appoints Roessner as Exec-VP and General Counsel
EASTER SEALS: Files for Chapter 11 Bankruptcy Protection
EIGHT ARMS: Case Summary & 20 Largest Unsecured Creditors
FLEETWOOD ENTERPRISES: Has $53MM Bid from AIP for RV Business
FLEXTRONICS INTERNATIONAL: Fitch Keeps 'BB+' Issuer Default Rating
FOAMEX INTERNATIONAL: U.S. Trustee, et al., Cry Foul on Asset Sale
FORD MOTOR: Prefers Dealership Consolidation Than Ending Contracts
FPL ENERGY: Moody's Cuts Ratings on Senior Secured Bonds to 'Ba1'
FRED DEUTSCH: Files for Chapter 11 Bankruptcy Protection
FRENCH LICK: S&P Withdraws CC Corporate Rating At Issuer Request
GENERAL MOTORS: Nader Calls on Congress to Review Bankruptcy Plan
GENERAL MOTORS: UAW Balks at Plans to Hike Cars from Overseas
GUROSA CORP: Court Orders Plan Filing in 120 Days
GOV'T OF GUAM: S&P Puts 'B+' Rating on $275 Million Bonds
GOV'T OF GUAM: S&P Withdraws 'B+' Rating on $50 Million Bonds
HAYES LEMMERZ: Proposes Garden City as Claims and Noticing Agent
INN OF THE MOUNTAIN: S&P Downgrades Issuer Credit Rating to 'D'
JABIL CIRCUIT: Fitch Affirms Issuer Default Rating at 'BB+'
JOE A SIGUA: Case Summary & 20 Largest Unsecured Creditors
JOYSTAR/TRAVELSTAR: Unsec. Creditors Want Case Converted to Ch. 7
KERRY ALLAN KRUSZEWSKI: Case Summary & 11 Largest Unsec. Creditors
KOFI KYEI- ASARE: Case Summary & 17 Largest Unsecured Creditors
HARTFORD FINANCIAL: Moody's Hikes Ba1 Jr Sub Notes to 'Developing'
HIGH RIVER: Still in Default of Standard Bank Loan
INTEGRA TELECOM: Moody's Changes Default Rating to 'Ca/LD'
ION MEDIA: Files Ch. 11 to Implement Pre-Negotiated Restructuring
JG WENTWORTH: 3 Affiliates to Reorganize Under Chapter 11
JIM PALMER: Court Confirms Plan of Reorganization
LEONARD O WALLACE: Case Summary & 2 Largest Unsecured Creditors
MACKINAW POWER: Fitch Affirms 'BB-' Rating on $147 Mil. Loan
MARINA BAY: Weak Economy, Permit Delays Blamed for Ch. 11 Filing
MARK IV: S&P Retains 'D' Issue-Level Ratings on Pre-Petition Debt
MARK IV: Taps Houlihan Lokey as Investment Banker & Fin. Advisor
MAROT RENTAL: Case Summary & 9 Largest Unsecured Creditors
MGM MIRAGE: NJ Agency Tells Co. to Disengage From Macau Partner
MGM MIRAGE: S&P Upgrades Corporate Credit Rating to 'CCC+'
MIKE THO LUONG: Case Summary & 17 Largest Unsecured Creditors
MONTEREY TOWN: Voluntary Chapter 11 Case Summary
MYLAN INC: Moody's Changes Outlook to Positive; Keeps 'B1' Rating
NANOGEN INC.: Case Summary & 20 Largest Unsecured Creditors
NOBLE INTERNATIONAL: Wants Court's OK to Sell Shares in Noble BV
NORTEL NETWORKS: Coughlin Files Class Action vs. Former Execs
PATRIOT HOMES: May Use Cash Collateral of Wells Fargo Until May 29
PATRIOT HOMES: Plan Filing Period Extended to July 24
PECOS SBR: Case Summary & 10 Largest Unsecured Creditors
PETRORIG: PetroMENA Units File for Chapter 11 Bankruptcy
PETRORIG: Case Summary & 3 Largest Unsecured Creditors
PHARMACEUTICAL ALTERNATIVES: Court Converts Case to Chapter 7
PHARMENG INTERNATIONAL: Sales Process Commenced, Bids Due June 3
PHILADELPHIA NEWSPAPERS: Can Continue Using Cash for Operations
PHOTRONICS INC: Pact Amendment Won't Affect S&P's 'B-' Rating
PLIANT CORP: Disclosure Statement Hearing Adjourned on June 11
PORTER HOLDINGS: Case Summary & 3 Largest Unsecured Creditors
QUANTUM CORP: S&P Changes CreditWatch on 'CC' Rating to Developing
QUEBECOR WORLD: Plan Going to Creditors for Vote
RAYMOND J GLENN: Case Summary & 17 Largest Unsecured Creditors
REGENT BROADCASTING: Moody's Downgrades Default Rating to 'Caa2'
REGIONS FINANCIAL: Moody's Downgrades Bank Strength Rating to 'D+'
RENFRO CORP: S&P Downgrades Corporate Credit Rating to 'B-'
RH DONNELLEY: Moody's Changes Default Rating to 'Ca/LD' from 'Ca'
RICKARD B MERCER: Case Summary & 13 Largest Unsecured Creditors
RIDER AUTO: Court OKs Sale Pact With Jabco-Maggi Auto
RITZ CAMERA: To Auction 400 of 800 Camera Stores May 27
SANMINA-SCI CORPORATION: Fitch Cuts Issuer Default Rating to 'B'
SCIENTIFIC GAMES: Moody's Assigns 'Ba3' Rating on $200 Mil. Notes
SCIENTIFIC GAMES: S&P Assigns 'BB-' Rating on $200 Mil. Notes
SEACOAST BANKING: Halts All Dividend & Some Interest Payments
SEDONA RACQUET: Voluntary Chapter 11 Case Summary
SEMGROUP LP: Files Chapter 11 Plan & Disclosure Statement
SEMGROUP LP: Files Liquidation, Valuation Analyses, Projections
RITZ CAMERA: To Auction 400 of 800 Camera Stores May 27
SEMGROUP LP: Seeks to Pay Terrence Ronan's Legal Fees
SEMGROUP LP: SemStream Unit Asks Court to Approve Koch Settlement
SEMGROUP LP: Taps Russell Reynolds as Headhunter
SILICON GRAPHICS: Closes $42.5 Million Asset Sale to Rackable
SIMPLY MEDIA: 1st Cir. Dismisses Owner's Wife's Frivolous Appeal
SOS LLC: Case Summary & 11 Largest Unsecured Creditors
SPORTS BELLE: Case Summary & 20 Largest Unsecured Creditors
STANFORD GROUP: Antiguan Receivers Allowed to File Ch. 15 Petition
STANFORD GROUP: Less Than $1-Bil. Available to Pay $7.2B Deposits
STAR TRIBUNE: Seeks to Reject Drivers/Helpers Union CBA
STERLING FINANCIAL: Fitch Downgrades Issuer Default Rating to 'BB'
STEVE MAKI: Voluntary Chapter 11 Case Summary
STOCK BUILDING: Will Lay Off 2,200 Workers & Cancel 210 Leases
SYNCORA HOLDINGS: Unit Files Q1 Statutory Financial Statements
SYNCORA HOLDINGS: BCP Unveils May 15 Results of Tender Offer
TASNEE BUNCHIEN: Voluntary Chapter 11 Case Summary
TEKOIL AND GAS: ERG Resources Buying Some Gas & Mineral Leases
TISHMAN SPEYER: High Leverage Prompts S&P to Junk Corp. Ratings
TOLUCA LAKE: Case Summary & 20 Largest Unsecured Creditors
TRONOX INC: Proposes Severance and Bonus Programs
TXCO RESOURCES: Files Chapter 11 Due to Liquidity Woes
TXCO RESOURCES: Case Summary & 20 Largest Unsecured Creditors
VICORP RESTAURANTS: Court Extends Plan Filing Period to June 4
VICORP RESTAURANTS: Court Okays Appointment of A. Carroll as CRO
WATERWORKS INC: Wants Zeisler & Zeisler as Bankruptcy Counsel
WELLMAN INC: Paid $19.1MM to Kirkland, 6 Others for Ch. 11 Work
WESTERN MASSACHUSETTS: Creditors Panel Taps Bacon Wilson as Attys
WHETSTONE DEVELOPMENT: Case Summary & 19 Largest Unsec. Creditors
WII COMPONENTS: Moody's Withdraws 'Caa1' Corporate Family Rating
YARMOUTH AT NORTH: Voluntary Chapter 11 Case Summary
YELLOWSTONE CLUB: CrossHarbor to Acquire Firm for $115 Million
YOUNG BROADCASTING: Seeks Until Sept. 14 to File Chapter 11 Plan
YOUNG BROADCASTING: Wants to Throw Out ICNews & AP Contracts
YRC WORLDWIDE: S&P Maintains 'CCC' Corporate Credit Rating
* Fitch Says Rising CMBS Delinquencies Mostly in Distressed States
* Fitch Says U.S. CREL CDO Delinquencies Above 7%
* KCC and Administar Evaluate Potential Integration
* Upcoming Meetings, Conferences and Seminars
*********
750 JEFFERSON: Files Schedules of Assets and Liabilities
--------------------------------------------------------
750 Jefferson Avenue LLC filed with the U.S. Bankruptcy Court for
the Southern District of Florida its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $20,000,000
B. Personal Property $138,000
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $11,750,000
E. Creditors Holding
Unsecured Priority
Claims
F. Creditors Holding
Unsecured Non-priority
Claims $532,500
----------- -----------
TOTAL $20,138,000 $12,282,500
A copy of the Debtor's schedules of assets and liabilities is
available at:
http://bankrupt.com/misc/750Jefferson.SAL.pdf
About 750 Jefferson Avenue LLC
Headquartered in Miami Beach, Florida, 750 Jefferson Avenue LLC
filed for Chapter 11 protection on March 16, 2009 (Bankr. S.D.
Fla. Case No. 09-14451). Joel M. Aresty, Esq. represents the
Debtor in its restructuring efforts. The Debtor's financial
condition as of March 15, 2009, showed total assets of $16,000,000
and total debts of $17,082,600. The Debtor did not file a list of
20 largest unsecured creditors.
750 JEFFERSON: Creditor Asks Court to Declare Debtor a SARE
-----------------------------------------------------------
Alton Michigan LLC, a creditor in 750 Jefferson Avenue LLC's
bankruptcy case, asks the U.S. Bankruptcy Court for the Southern
District of Florida to declare that 750 Jefferson Avenue LLC is a
single asset real estate debtor subject to Sec. 362(d)(3) of the
Bankruptcy Code, and to award any other relief that the Court
deems to be just and proper under the circumstances.
Under Sec. 362(d) of the Bankruptcy Code, on request of a creditor
with a claim secured by the single asset real estate and after
notice and a hearing, the court will grant relief from the
automatic stay to the creditor unless the debtor files a feasible
plan of reorganization or begins making interest payments to the
creditor within 90 days from the date of the order for relief.
Pursuant to Sec. 362(d)(3), the interest payments must be equal to
the current fair market interest rate on the value of the
creditor's interest in the real estate.
Alton tells the Court that the Debtor's sole asset consists of a
nine building, 135-unit mixed condominium and apartment complex,
bordered by Michigan Avenue, Alton Road, and 19th Street in South
Beach area of Miami Beach known as Fairway Village, and that
Fairway Village meets each of the three criteria required under
Sec. 101(51B) of the Bankruptcy Code for a real estate property or
project to be declared a single asset real estate.
About 750 Jefferson Avenue LLC
Headquartered in Miami Beach, Florida, 750 Jefferson Avenue LLC
filed for Chapter 11 protection on March 16, 2009 (Bankr. S.D.
Fla. Case No. 09-14451). Joel M. Aresty, Esq. represents the
Debtor in its restructuring efforts. The Debtor's financial
condition as of March 15, 2009, showed total assets of $16,000,000
and total debts of $17,082,600. The Debtor did not file a list of
20 largest unsecured creditors.
ABET TECHNOLOGIES: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Abet Technologies LLC
a Delaware limited liability Company
9446 Hamlin Ave.
Evanston, IL 60203
Bankruptcy Case No.: 09-17878
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: A. Benjamin Goldgar
Debtor's Counsel: David K. Welch, Esq.
Crane Heyman Simon Welch & Clar
135 S Lasalle St.
Suite 3705
Chicago, IL 60603
Tel: (312) 641-6777
Fax: (312) 641-7114
E-mail: dwelch@craneheyman.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/ilnb09-17878.pdf
The petition was signed by Gary A. Woodward, chief executive
officer of the Company.
ACCURIDE CORPORATION: Moody's Cuts Corp. Family Rating to 'Caa3'
----------------------------------------------------------------
Moody's Investors Service lowered Accuride Corporation's Corporate
Family and Probability of Default Rating to Caa3 from Caa1. In a
related action the ratings of the company's first out bank credit
facility were lowered to Caa1 from B2, the rating for the senior
subordinated bonds was lowered to Ca from Caa2, and a rating of
Caa3 was assigned to the company's last-out bank credit facility.
The outlook is negative.
The downgrade of Accuride's Corporate Family Rating to Caa3
reflects the negative impact on the company's credit metrics and
liquidity resulting from continued dramatically reduced demand for
commercial vehicles in North America. These conditions adversely
affected the company's performance through the first quarter of
2009 resulting in performance no longer reflected in the prior
rating. As industry pressures are expected to continue through
2009, Accuride's management has indicated a high likelihood that
the company will violate its recently amended covenants. The
company has further indicated that in addition to possibly further
amending the bank credit facility, alternative debt structures are
also being evaluated.
The negative outlook incorporates the continuing prospects for
weak commercial vehicle demand in North America as high
unemployment rates depress consumer demand for shipped goods. The
outlook also considers the high likelihood of additional
compromises to the company's debt structure which may be
considered a distressed exchange by Moody's, or a bankruptcy
filing. Management maintains that its market leadership position
in the commercial vehicle industry is not being eroded through
price competition and that it continues to maintain sufficient
capacity to support an eventual recovery in order volumes.
However, risk of a default has been elevated by the company's near
term performance.
In January 2009 the company successfully renegotiated its
financial covenants in exchange for repositioning approximately
$70 million of the senior secured term loan owned by an affiliate
of Sun Capital Securities Group, LLC to "last-out" as to payment.
Ratings lowered:
Accuride Corporation
-- Corporate Family, to Caa3 from Caa1;
-- Probability of Default, to Caa3 from Caa1;
-- First out senior secured bank credit facilities, to Caa1
(LGD2, 23%) from B2 (LGD3, 30%);
-- Senior subordinated notes, to Ca (LGD5, 81%) from Caa2 (LGD5,
82%)
Accuride Canada Inc.
-- First out senior secured bank credit facility, to Caa1 (LGD2,
23%) from B2 (LGD3, 30%)
Rating assigned
-- Last- out senior secured bank credit facilities, Caa3 (LGD4,
54%);
The last rating action was on January 15, 2009 when the Corporate
Family Rating was lowered to Caa1.
Accuride Corporation, headquartered in Evansville, Indiana, is a
diversified North American manufacturer and supplier of commercial
vehicle components. Principal products include wheels, wheel-end
components and assemblies, truck body and chassis parts, and
seating assemblies. Revenues in 2008 were approximately $931
million.
AFFILIATED FOODS: Court Extends Schedules Filing for 30 More Days
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Arkansas
extended by 30 days Affiliated Foods Southwest, Inc., and its
debtor-affiliates' time to their schedules.
The Debtors relate that the extension to file their schedules of
assets and liabilities, schedules of executory contracts and
unexpired leases, and statements of financial affairs is in the
best interest of the estates.
Little Rock, Arkansas-based Affiliated Foods Southwest, Inc., and
its affiliates filed for Chapter 11 on May 5, 2009 (Bankr. E. D.
Ark. Case No. 09-13178). W. Michael Reif, Esq., at Dover Dixon
Horne and Heller, Draper, Hayden, Patrick & Horn, L.L.C.,
represent the Debtors in their restructuring efforts. The Debtors
listed assets between $10 million to $50 million and debts between
$100 million to $500 million.
AFFILIATED FOODS: Gets Interim OK to Hire Heller Draper as Counsel
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Arkansas
authorized, on an interim basis, Affiliated Foods Southwest, Inc.,
and its debtor-affiliates to employ Heller, Draper, Hayden,
Patrick & Horn, L.L.C., as counsel.
Heller Draper is expected to:
a. advise the Debtors with respect to their rights, powers and
duties as debtors and debtors-in-possession in the continued
operation and management of their businesses and
properties;
b. prepare and pursue confirmation of a Plan of Reorganization
and approval of a disclosure statement;
c) prepare on behalf of the Debtors all necessary applications,
motions, answers, proposed orders, other pleadings, notices,
schedules and other documents, and review all financial and
other reports to be filed;
d) advise the Debtors concerning and preparing responses to
applications, motions, pleadings, notices and other
documents which may be filed by other parties herein;
e. appear in Court to protect the interests of the Debtors
before this Court;
f. represent the Debtors in connection with use of cash
collateral or obtaining postpetition financing;
g) advise the Debtors concerning and assist in the negotiation
and documentation of financing agreements, cash collateral
orders and related transactions;
h) investigate the nature and validity of liens asserted
against the property of the Debtors, and advise the Debtors
concerning the enforceability of said liens;
i. investigate and advise the Debtors concerning, and take
action as may be necessary to collect, income and assets in
accordance with applicable law, and the recovery of property
for the benefit of the Debtor's estate;
j. advise and assist the Debtors in connection with any
potential property dispositions;
k. advise the Debtors concerning executory contract and
unexpired lease assumptions, assignments and rejections and
lease restructuring, and recharacterizations;
l. assist the Debtors in reviewing, estimating and resolving
claims asserted against the Debtors' estate;
m. commence and conduct litigation necessary and appropriate to
assert rights held by the Debtors, protect assets of the
Debtors' Chapter 11 estates or otherwise further the goal of
completing the Debtors' successful reorganization; and
n) perform all other legal services for the Debtors which may
be necessary and proper in these cases.
The Debtors asserted that Heller Draper's services will complement
rather than duplicate the services to be performed by Dover Dixon
Horne, PLLC, its local bankruptcy and special counsel.
The hourly rates of Heller Draper's personnel are:
William H. Patrick, III $425
Jan M. Hayden $425
Tristan Manthey $350
Associates $225 - $300
Paralegal $ 80 - $120
Mr. Hayden told the Court that pre-bankruptcy, Heller Draper
received a $100,000 retainer to serve as security for services
and the filing fees for the bankruptcy cases. On May 1 and May 5,
2009, Heller Draper received additional retainers of $175,000.
These retainers were placed in the firm's trust account. As of
the petition date, the Debtors do not owe Heller Draper any
amounts for legal services rendered before the petition date.
Mr. Hayden assured the Court that Heller Draper is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Mr. Hayden can be reached at:
Heller, Draper, Hayden, Patrick & Horn, L.L.C.
650 Poydras Street, Suite 2500
New Orleans, LA 70130-6103
Tel: (504) 299-3300
Fax: (504) 299-3399
About Affiliated Foods Southwest
Little Rock, Arkansas-based Affiliated Foods Southwest, Inc. and
its affiliates filed for Chapter 11 on May 5, 2009 (Bankr. E. D.
Ark. Case No. 09-13178). W. Michael Reif, Esq., at Dover Dixon
Horne represents the Debtors in their restructuring efforts. The
Debtors listed assets between $10 million to $50 million and debts
between $100 million to $500 million.
AFFILIATED FOODS: Has Interim OK for Dover Dixon as Local Counsel
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Arkansas
authorized, on an interim basis, Affiliated Foods Southwest, Inc.,
and its debtor-affiliates to employ Dover Dixon Horne, PLLC, as
local bankruptcy counsel and special counsel.
Dover Dixon is expected to:
i. advise the Debtors and counsel on the local rules and court
procedures for the Court;
ii. provide meeting facilities and support staff to assist the
Debtors and counsel while in Arkansas;
iii. facilitate filing pleadings with the Clerk of Court;
iv. appear before the Court on behalf of the Debtors;
v. render other legal and advisory services as may be requested
by the Debtors in connection with this engagement; and
vi. continue prepetition pending legal matters and litigation
including but not limited to collection efforts; the sale of
certain assets; corporate legal matters, benefits,
environmental, finance and intellectual property.
The Debtors asserted that Dover Dixon's services will complement
rather than duplicate the services to be performed by Heller,
Draper, Hayden, Patrick & Horn, LLC, its bankruptcy and
reorganization counsel.
The hourly rates of Dover Dixon's personnel are:
Steve L. Riggs $225
Gary B. Rogers $225
W. Michael Rief $200
Associates $165 - $180
Paralegal $80 - $120
Mr. Riggs, a partner at Dover Dixon, told the Court that pre-
bankruptcy, the firm received a $75,000 retainer to serve as
security for services to be rendered prepetition. This retainer
was placed in a trust account.
As of the petition date, the Debtors do not owe Dover Dixon any
amounts for legal services rendered prepetition, and Dover Dixon
is holding in its Trust Account $64,762, for post-petition legal
services, after deducting fees remaining to be paid through May 4,
2009, from the retainer.
Mr. Riggs assured the Court that the firm is a "disinterested
person" as that term is defined in Section 101(14) of the
bankruptcy Code.
Mr. Riggs can be reached at:
Dover Dixon Horne PLLC
425 W. Capitol Ave., Ste. 3700
Little Rock, AR 72201-3465
Tel: (504) 375-9151
Fax: (504) 375-6484
About Affiliated Foods Southwest
Little Rock, Arkansas-based Affiliated Foods Southwest, Inc. and
its affiliates filed for Chapter 11 on May 5, 2009 (Bankr. E. D.
Ark. Case No. 09-13178). W. Michael Reif, Esq., at Dover Dixon
Horne and Heller, Draper, Hayden, Patrick & Horn, L.L.C.,
represent the Debtors in their restructuring efforts. The Debtors
listed assets between $10 million to $50 million and debts between
$100 million to $500 million.
AFFILIATED FOODS: U.S. Trustee Appoints 5-Member Creditors Panel
----------------------------------------------------------------
The U.S. Trustee for Region 13 appointed five creditors to serve
on the official committee of unsecured creditors in Affiliated
Foods Southwest, Inc., and its debtor-affiliates' Chapter 11
cases:
The Committee members are:
1. Kraft Foods, Inc.
Attn: Sandra Schirmang, Sr. Director of Credit
Three Lakes Drive
Northfield, IL 60093
Tel: (847) 646-6719
Fax: (847) 646-4479
2. Nestle USA
Attn: Pete Knox
800 N. Brand Blvd.
Glendale, CA 91203
Tel: (818) 549-5779
Fax: (818)549-5050
3. General Mills, Inc.
Attn: David Pender, Senior Credit Manager
Number One General Mills Blvd.
Minneapolis, MN 55426
Tel: (763) 764-3789
Fax: 763-764-8228
4. Sherwood Food Distributors
Attn: Gary J. Karp
12499 Evergreen Road
Detroit, MI 48228
Tel: (313) 659-7315
Fax: (313) 659-7415
5. Turner Holdings, LLC
Attn: Mike Flagg
6901 Interstate 30
Little Rock, AR 72209
Tel: 501-748-1730
Official creditors' committees have the right to employ legal
and accounting professionals and financial advisors, at the
Debtor's expense. They may investigate the Debtor's business
and financial affairs. Importantly, official committees serve
as fiduciaries to the general population of creditors they
represent. Those committees will also attempt to negotiate the
terms of a consensual Chapter 11 plan -- almost always subject
to the terms of strict confidentiality agreements with the
Debtors and other core parties-in-interest. If negotiations
break down, the Committee may ask the Bankruptcy Court to
replace management with an independent trustee. If the
Committee concludes reorganization of the Debtor is impossible,
the Committee will urge the Bankruptcy Court to convert the
Chapter 11 cases to a liquidation proceeding.
About Affiliated Foods Southwest
Little Rock, Arkansas-based Affiliated Foods Southwest, Inc., and
its affiliates filed for Chapter 11 on May 5, 2009 (Bankr. E. D.
Ark. Case No. 09-13178). Tristan Manthey, Esq., at Heller Draper
Hayden Patrick & Horn and W. Michael Reif, Esq., at Dover Dixon
Horne represent the Debtors in their restructuring efforts. The
Debtors listed assets between $10 million to $50 million and debts
between $100 million to $500 million.
AGT CRUNCH: Can File Schedules and Statements Until June 20
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended until June 20, 2009, AGT Crunch Acquisition LLC and its
debtor-affiliates' time to file their schedules of assets and
liabilities, schedules of executory contracts and unexpired
leases, and statements of financial affairs.
The extension is in the best interests of the Debtors and their
estates, their creditors, and all parties-in-interest.
AGT Crunch Acquisition LLC filed for Chapter 11 on May 6, 2009,
(Bankr. S. D. N.Y. Case No. 09-12889)
New York-based AGT Crunch Acquisition LLC and its affiliates filed
for Chapter 11 on May 6, 2009 (Bankr. S. D. N.Y. Lead Case No. 09-
12889). Davin J. Hall, Esq., at Dechert LLP represents the
Debtors in their restructuring efforts. The Debtors have assets
and debts both ranging from $100 million to $500 million.
AGT CRUNCH: U.S. Trustee Appoints 7-Member Creditors Committee
--------------------------------------------------------------
Hon. Diana G. Adams, the U.S. Trustee for Region 2, appointed
seven creditors to serve on the official committee of unsecured
creditors in AGT Crunch Acquisition LLC and its debtor-affiliates'
Chapter 11 cases:
The Committee members are:
1. DFD Development, LP
Attn: Jules Demclock, Sole Manager of General Partner
352 Park Avenue South, 15th Floor
New York, NY 10010
Tel: (212) 481-8200
Fax: (212) 481-9586
2. 8000 Sunset Boulevard Owner, LLC
Attn: Dirk Degenaars, Managing Director
150 N. Wacker Dr., No. 800
Chicago, IL 60806
Tel: (312) 499-1981
Fax: (312) 499-1901
3. 25 Broadway Sublandlord, LLC
Attn: Aaron Wolfson
c/o The Wolfson Group
One State Street Plaza
New York, NY 10004
Tel: (212) 344-5210
Fax: (212) 363-8459
4. 2700 Halsted Building, LLC
Attn: Janet Fischer, Property Manager
1332 N. Halsted St., No. 216
Chicago, IL 60642
Tel: (312) 204-9944
Fax: (312) 475-1188
5. Bigtime Design Studios
Attn: Orlando Lamas, President
901 NE 79th Street
Miami, FL 33138
Tel: (305) 758-4566
Fax: (305) 808-3463
6. Tower Place, LP
Attn: Faye Phillips, Vice-President
c/o Rreef
3340 Peachtree Road, Suite 250
Atlanta, GA 30326
Tel: (404) 467-6559
Fax: (404) 467-6556
7. Hollywood Horizons Properties, LLC
Attn: Ron Franklin, Manager
120 Central Park South
New York, NY 10019
Tel: (212) 506-2527
Fax: (212) 847-5927
Official creditors' committees have the right to employ legal
and accounting professionals and financial advisors, at the
Debtor's expense. They may investigate the Debtor's business
and financial affairs. Importantly, official committees serve
as fiduciaries to the general population of creditors they
represent. Those committees will also attempt to negotiate the
terms of a consensual Chapter 11 plan -- almost always subject
to the terms of strict confidentiality agreements with the
Debtors and other core parties-in-interest. If negotiations
break down, the Committee may ask the Bankruptcy Court to
replace management with an independent trustee. If the
Committee concludes reorganization of the Debtor is impossible,
the Committee will urge the Bankruptcy Court to convert the
Chapter 11 cases to a liquidation proceeding.
New York-based AGT Crunch Acquisition LLC and its affiliates filed
for Chapter 11 on May 6, 2009 (Bankr. S. D. N.Y. Lead Case No. 09-
12889). Davin J. Hall, Esq., at Dechert LLP represents the
Debtors in their restructuring efforts. The Debtors have assets
and debts both ranging from $100 million to $500 million.
AMERICAN INT'L: Names Six Nominees to Board of Directors
--------------------------------------------------------
Liam Pleven and Joann S. Lublin at The Wall Street Journal report
that American International Group Inc. has named six nominees for
election to its board of directors.
WSJ relates that the candidates have extensive experience in
corporate America and serve on other corporate boards. Four of
them, according to the report, are former CEOs. The report states
that the candidates include:
-- Robert S. "Steve" Miller,
-- Delphi Corp.'s executive chairperson and former CEO;
-- Laurette T. Koellner, a former senior vice president at
Boeing Co.;
-- Douglas Steenland, former CEO of Northwest Airlines Corp.;
-- Christopher Lynch, a retired KPMG partner;
-- Harvey Golub, a former head of American Express Co.; and
-- Arthur Martinez, who ran Sears, Roebuck & Co.
The board "worked closely" with AIG's three government-appointed
trustees in selecting the nominees, WSJ says, citing AIG CEO
Edward Liddy. WSJ, citing a person familiar with the matter,
relates that Ms. Koellner was proposed by the trustees and outside
recruiters Spencer Stuart.
People familiar with the matter said that Steven Bollenbach, the
lead independent director at AIG, won't be re-elected at this
year's annual meeting set for June 30, WSJ relates. The sources,
according to the report, said that Mr. Bollenbach's post is
unlikely to be filled. The report says that Martin S. Feldstein,
a Harvard economics professor, won't also be re-elected.
A person familiar with the matter said that there will likely be
at least one more director chosen for AIG's board at some point
after the annual meeting because it still lacks someone "with a
clear Washington connection," WSJ states. The report quoted the
source as saying, "There has to be a better rapport between the
company's board and the political process" in Washington.
Mr. Liddy, according to WSJ, has said that he wants to leave AIG
within a year, so the newly overhauled board could soon have the
task of searching for his successor.
Based in New York, American International Group, Inc. (AIG), is
the leading international insurance organization with operation in
more than 130 countries and jurisdictions. AIG companies serve
commercial, institutional and individual customers through the
most extensive worldwide property-casualty and life insurance
networks of any insurer. In addition, AIG companies are leading
providers of retirement services, financial services and asset
management around the world. AIG's common stock is listed on the
New York Stock Exchange, as well as the stock exchanges in Ireland
and Tokyo.
During the third quarter of 2008, requirements to post collateral
in connection with AIG Financial Products Corp.'s credit default
swap portfolio and other AIGFP transactions and to fund returns of
securities lending collateral placed stress on AIG's liquidity.
AIG's stock price declined from $22.76 on September 8, 2008, to
$4.76 on September 15, 2008. On that date, AIG's long-term debt
ratings were downgraded by Standard & Poor's, a division of The
McGraw-Hill Companies, Inc., Moody's Investors Service and Fitch
Ratings, which triggered additional requirements for liquidity.
These and other events severely limited AIG's access to debt and
equity markets.
On September 22, 2008, AIG entered into an $85 billion revolving
credit agreement with the Federal Reserve Bank of New York and,
pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000
shares of Series C Perpetual, Convertible, Participating Preferred
Stock to a trust for the benefit of the United States Treasury.
At September 30, 2008, amounts owed under the facility created
pursuant to the Fed Credit Agreement totaled $63 billion,
including accrued fees and interest.
Since September 30, AIG has borrowed additional amounts under the
Fed Facility and has announced plans to sell assets and businesses
to repay amounts owed in connection with the Fed Credit Agreement.
In addition, subsequent to September 30, 2008, certain of AIG's
domestic life insurance subsidiaries entered into an agreement
with the NY Fed pursuant to which the NY Fed has borrowed, in
return for cash collateral, investment grade fixed maturity
securities from the insurance subsidiaries.
On November 10, 2008, the U.S. Treasury agreed to purchase,
through its Troubled Asset Relief Program, $40 billion of newly
issued AIG perpetual preferred shares and warrants to purchase a
number of shares of common stock of AIG equal to 2% of the issued
and outstanding shares as of the purchase date. All of the
proceeds will be used to pay down a portion of the Federal Reserve
Bank of New York credit facility. The perpetual preferred shares
will carry a 10% coupon with cumulative dividends.
AIG and the Fed also agreed to revise the existing FRBNY credit
facility. The loan terms were extended from two to five years to
give AIG time to complete its planned asset sales in an orderly
manner. The equity interest that taxpayers will hold in AIG,
coupled with the warrants, will total 79.9%.
At September 30, 2008, AIG had $1.022 trillion in total
consolidated assets and $950.9 billion in total debts.
Shareholders' equity was $71.18 billion, including the addition of
$23 billion of consideration received for preferred stock not yet
issued.
The Troubled Company Reporter reported on March 4, 2009, that
Moody's Investors Service confirmed the A3 senior unsecured debt
and Prime-1 short-term debt ratings of American International
Group, Inc. AIG's subordinated debt rating has been downgraded to
Ba2 from Baa1. The rating outlook for AIG is negative. This
rating action follows AIG's announcement of net losses of
$62 billion for the fourth quarter and $99 billion for the full
year of 2008, along with a revised restructuring plan supported by
the U.S. Treasury and the Federal Reserve. This concludes a
review for possible downgrade that was initiated on September 15,
2008.
AMERICAN INT'L: SEC to Distribute $843-Mil. to Harmed Investors
---------------------------------------------------------------
The Securities and Exchange Commission said a federal court has
approved the distribution of more than $843 million to harmed
investors in the American International Group, Inc. from a Fair
Fund that the SEC established after the company's settlement of an
SEC enforcement action for accounting fraud.
The AIG Fair Fund's court-appointed distribution agent estimates
that checks will be mailed to more than 257,000 affected AIG
investors within the next few months.
In the Fair Funds provisions of the Sarbanes-Oxley Act, Congress
granted the SEC increased authority to help harmed investors by
allowing both ill-gotten gains and civil money penalties to be
distributed to them directly. Previously, only ill-gotten gains
could be distributed to investors. The SEC has returned more than
$5 billion in Fair Funds to investors since the 2002 passage of
the Sarbanes-Oxley Act.
"The return of these funds to harmed investors is another example
of our determined effort to protect investors from those who
engage in corporate malfeasance," said James Clarkson, Acting
Director of the SEC's New York Regional Office.
"The Commission continues to utilize the tools that Congress
provided to ensure that funds are returned to harmed investors to
the greatest extent possible," said Dick D'Anna, Director of the
SEC's Office of Collections and Distributions.
The SEC charged AIG with accounting fraud on February 9, 2006,
alleging that the company materially falsified its financial
statements from at least 2000 until 2005 through a variety of sham
transactions and entities, and reported materially false and
misleading information about its financial condition. The court
entered a final judgment against AIG on February 17, 2006, to
which AIG consented without admitting or denying the allegations.
Pursuant to the final judgment, AIG paid a total of $800 million
($700 million in disgorgement and $100 million in penalties). The
U.S. District Court for the Southern District of New York entered
an order on June 14, 2007, authorizing the Commission to establish
a Fair Fund to include all of the funds paid by AIG.
Investor questions regarding the distribution should be directed
to the distribution agent by:
* Calling toll-free: 1-866-486-4809
* Visiting the Fair Fund Web site:
http://www.aigsettlementadministration.com/
* Writing to: U.S. SEC v. AIG, Inc. FAIR FUND, c/o Kenneth R.
Feinberg, Distribution Agent, P.O. Box 19302, Washington,
D.C. 20036-9302
Based in New York, American International Group, Inc., is the
leading international insurance organization with operation in
more than 130 countries and jurisdictions. AIG companies serve
commercial, institutional and individual customers through the
most extensive worldwide property-casualty and life insurance
networks of any insurer. In addition, AIG companies are leading
providers of retirement services, financial services and asset
management around the world. AIG's common stock is listed on the
New York Stock Exchange, as well as the stock exchanges in Ireland
and Tokyo.
During the third quarter of 2008, requirements to post collateral
in connection with AIG Financial Products Corp.'s credit default
swap portfolio and other AIGFP transactions and to fund returns of
securities lending collateral placed stress on AIG's liquidity.
AIG's stock price declined from $22.76 on September 8, 2008, to
$4.76 on September 15, 2008. On that date, AIG's long-term debt
ratings were downgraded by Standard & Poor's, a division of The
McGraw-Hill Companies, Inc., Moody's Investors Service and Fitch
Ratings, which triggered additional requirements for liquidity.
These and other events severely limited AIG's access to debt and
equity markets.
On September 22, 2008, AIG entered into an $85 billion revolving
credit agreement with the Federal Reserve Bank of New York and,
pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000
shares of Series C Perpetual, Convertible, Participating Preferred
Stock to a trust for the benefit of the United States Treasury.
At September 30, 2008, amounts owed under the facility created
pursuant to the Fed Credit Agreement totaled $63 billion,
including accrued fees and interest.
Since September 30, AIG has borrowed additional amounts under the
Fed Facility and has announced plans to sell assets and businesses
to repay amounts owed in connection with the Fed Credit Agreement.
In addition, subsequent to September 30, 2008, certain of AIG's
domestic life insurance subsidiaries entered into an agreement
with the NY Fed pursuant to which the NY Fed has borrowed, in
return for cash collateral, investment grade fixed maturity
securities from the insurance subsidiaries.
On November 10, 2008, the U.S. Treasury agreed to purchase,
through its Troubled Asset Relief Program, $40 billion of newly
issued AIG perpetual preferred shares and warrants to purchase a
number of shares of common stock of AIG equal to 2% of the issued
and outstanding shares as of the purchase date. All of the
proceeds will be used to pay down a portion of the Federal Reserve
Bank of New York credit facility. The perpetual preferred shares
will carry a 10% coupon with cumulative dividends.
AIG and the Fed also agreed to revise the existing FRBNY credit
facility. The loan terms were extended from two to five years to
give AIG time to complete its planned asset sales in an orderly
manner. The equity interest that taxpayers will hold in AIG,
coupled with the warrants, will total 79.9%.
At September 30, 2008, AIG had $1.022 trillion in total
consolidated assets and $950.9 billion in total debts.
Shareholders' equity was $71.18 billion, including the addition of
$23 billion of consideration received for preferred stock not yet
issued.
The Troubled Company Reporter reported on March 4, 2009, that
Moody's Investors Service confirmed the A3 senior unsecured debt
and Prime-1 short-term debt ratings of American International
Group, Inc. AIG's subordinated debt rating has been downgraded to
Ba2 from Baa1. The rating outlook for AIG is negative. This
rating action follows AIG's announcement of net losses of
$62 billion for the fourth quarter and $99 billion for the full
year of 2008, along with a revised restructuring plan supported by
the U.S. Treasury and the Federal Reserve. This concludes a
review for possible downgrade that was initiated on September 15,
2008.
AMERICAN TOWER: Moody's Gives Positive Outlook; Keeps 'Ba1' Rating
------------------------------------------------------------------
Moody's Investors Service has changed the outlook for the ratings
of American Tower Corporation to positive from stable based on the
company's strong operating performance, significant deleveraging
and strong cash flow growth that it achieved over the past two
years, all of which bode well for the prospect of future rating
lift to an investment grade profile as signaled by the revised
positive outlook.
Moody's has taken these rating actions:
Issuer -- American Tower Corporation
* Outlook changed to Positive from Stable
Ratings affirmed:
* Corporate Family Rating -- Ba1
* Probability-of-Default Rating -- Ba1
* $325 million term loan facility -- Ba1, LGD4 - 57%
* $1.25 billion revolving credit facility -- Ba1, LGD4 - 57%
* 7% Senior Notes due 2017 -- Ba1, LGD4 - 57%
* 7.125% Senior Notes due 2012 -- Ba1, LGD4 - 57%
* 7.5% Senior Notes due 2012 -- Ba1, LGD4 - 57%
* 5% Senior Convertible Notes due 2010 -- Ba1, LGD4 - 57%
* Speculative Grade Liquidity -- Affirmed SGL-1
Moody's believes that the business outlook for the wireless tower
sector is likely to remain favorable through the next several
years, and AMT's good market position will enable its strong
earnings and cash flow momentum to continue, which largely
supports the company's Ba1 corporate family rating. Moody's
believes that the company may be in a position to attain
investment grade status if management demonstrates a commitment to
maintain a conservative financial profile. The company has guided
to a net Debt/EBITDA leverage ratio range of between 4.0x and
6.0x. The upper end of that range is beyond investment grade
metrics deemed appropriate for the Company, and Moody's generally
does not count leverage on a net debt basis for telecommunications
companies. However, Moody's recognizes that the company has been
disciplined in its growth initiatives both domestically and
internationally over the past couple of years.
In Moody's view, the fundamentals of the tower business are
buttressed by the increasingly limited supply of new tower
locations in the U.S., the cumbersome process to site new towers
and the ongoing upgrades of the wireless carriers' networks.
Moody's also notes that much of AMT's revenues are contractually
derived from its relationships with the largest national wireless
operators across the U.S., which largely have investment grade
ratings.
AMT's ratings were assigned by evaluating factors Moody's believes
are relevant to the credit profile of the issuer, such as i) the
business risk and competitive position of the company versus
others within its industry, ii) the capital structure and
financial risk of the company, iii) the projected performance of
the company over the near to intermediate term, and iv)
management's track record and tolerance for risk. These
attributes were compared against other issuers both within and
outside of AMT's core industry and AMT's ratings are believed to
be comparable to those of other issuers of similar credit risk.
Moody's most recent rating action for AMT was on March 24, 2008
when a Ba1 rating was assigned to the company's $325 million term
loan.
Based in Boston, MA, American Tower Corporation is a wireless
tower operator with annual revenues of $1.5 billion.
ANDERSON HOMES: Final Cash Collateral Hearing Set for June 22
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina has granted Anderson Homes, Inc., et al., authority to
continue using their construction lenders' cash collateral to pay
operating expenses, in accordance with a budget.
As reported in the Troubled Company Reporter on March 20, 2009,
the Construction Lenders holding liens on certain sale properties
and the approximate amounts due to each are:
Amount
------------
Bank of America $0.25 million
Capital Bank $2.6 million
KeySource Bank $1.1 million
Paragon Commercial Bank $4.3 million
RBC Centura Bank $2.0 million
Regions Bank $4.9 million
Wachovia Bank $4.8 million
In addition, certain secured creditors holding deeds of trust on
certain sale properties are James D. Goldston and William
Goldston, owed about $568,000; and Stock Building Supply, Inc.,
owed $1,562,942.
A final hearing on the motion will be held at 2:00 p.m. on
June 22, 2009, at which time the Court will further consider the
motion for authorization to use cash collateral.
A full-text copy of the Court's third interim order dated May 15,
2009, is available at:
http://bankrupt.com/misc/Anderson.3rdorder.pdf
A full-text copy of the budget, attached to the Court's second
interim order dated April 24, 2009, is available at:
http://bankrupt.com/misc/anderson.2ndorder.pdf
About Anderson Homes, Inc.
Headquartered in Raleigh, North Carolina, Anderson Homes, Inc.,
was formed over 25 years ago and has built homes and developed
neighborhoods in the Research triangle region. In the year 2008,
it built over 300 homes, and has had sales revenue in excess of
$60,000,000. Its sole shereholder is David Servoss, who is also
the president.
Anderson Homes, Inc., and its affiliates filed for Chapter 11
protection on March 16, 2009 (Bankr. E.D. N.C. Lead Case No. 09-
02062). Gerald A. Jeutter, Jr., Esq., and John A. Northen, Esq.,
at Northen Blue, LLP represent the Debtors in their restructuring
efforts. The Debtors listed total assets of $17,190,001 and total
debts of $13,742,840.
ANDERSON HOMES: Wants to Obtain Loan Advances from Paragon
----------------------------------------------------------
Anderson Homes, Inc., et al., ask the U.S. Bankruptcy Court for
the Eastern District of North Carolina for authority to obtain
loan advances from Paragon Commercial Bank under an existing
credit facility to complete improvements on, and sell, certain
properties.
The Debtors tell the Court that they are dependent upon continued
and uninterrupted financing in order to complete improvements and
sell properties, without which no reorganization will be possible.
As adequate protection to Paragon as a condition to making said
advances, the Debtor will comply with the terms of and conditions
as set forth in the Court's second order authorizing the Debtors
to use their construction lenders' cash collateral.
The Debtors contend that Paragon Commercial Bank is owed about
$4.3 million pursuant to:
a. A&D revolving line of credit with Bridgewater Land Resource,
LLC in the amount of $3.8 million for the purchase and
development of lots and raw land in the Bridgewater
subdivision in Holly Springs, NC.
b. A&D non-revolving line credit with Bridgewater in the amount
of $1.3 million for the development of the townhouse site
known as Ridgeston Townhome Subdivision in Holly Springs, NC.
c. Guidance line of credit in the amount of $5 million to
Anderson Homes to finance residential construction and
developed lots.
The Debtors believe that the above facilities are secured by first
liens on properties in Briar Chapel, Bridgewater and Bridgewater
West having an aggregate value of approximately $6.3 million.
Paragon has agreed to continue funding under the Paragon Loan
Documents and in the ordinary course of business, subject to
approval by the Court and upon the following terms and conditions:
a. Paragon will continue to fund the cost to complete the
improvements upon Lots 152 & 179, Bridgewater, under the
existing loans and up to the existing loan amounts.
b. Paragon will continue to fund the cost to complete the
improvements upon properties which are now subject to an
existing contract of sale with a third-party purchaser (the
"Existing Pre-Sales").
c. Paragon will fund the cost to complete the improvements upon
properties which subsequently become subject to a contract
of sale with a third-party purchaser (the "New Pre-Sales");
subject to certain requirements.
d. Paragon may agree to fund and/or to continue to fund the
cost to complete the improvements upon properties which are
not yet subject to a contract of sale with a third-party
purchaser ("Spec Homes"), in the discretion of Paragon and
on a case by case basis as and when requested by the
Debtors.
e. Upon closing of an Existing Pre-Sale or a New Pre-Sale, the
sale proceeds will be disbursed as set forth in the Second
Cash Collateral Order; provided however, in the event of the
sale of a townhome in a multi-unit building, the application
of the net sale proceeds will be as the Debtors and Paragon
may agree or as may be ordered by the Court after notice and
hearing.
f. With respect to the Bridgewater Townhome A&D Loan, which has
a current outstanding balance of $1.3 million:
i. The loan term will be extended for 12 months;
ii. Interest at prime plus 1.5% with a minimum rate of
5.75%, and a fee of 0.75% of the principal amount
($770,827).
iii. No remaining availability.
g. Paragon has agreed to provide such post-petition financing,
with the ability to extend loans which mature in the
meantime in the ordinary course of business, pending
confirmation of a plan of reorganization, but terminable
immediately upon (i) the filing of an objection to, or the
commencement of an action to avoid or subordinate any of the
claims, liens, security interests or rights of set-off
asserted by Paragon in its proof of claim, (ii) appointment
of a trustee, or (iii) conversion of this case to Chapter 7.
As reported in the Troubled Company Reporter on March 20, 2009,
the Construction Lenders holding liens on certain sale properties
and the approximate amounts due to each are:
Amount
------------
Bank of America $0.25 million
Capital Bank $2.6 million
KeySource Bank $1.1 million
Paragon Commercial Bank $4.3 million
RBC Centura Bank $2.0 million
Regions Bank $4.9 million
Wachovia Bank $4.8 million
In addition, certain secured creditors holding deeds of trust on
certain sale properties are:
a. James D. Goldston and William Goldston, owed about
$568,000; and
b. Stock Building Supply, Inc., owed $1,562,942.
A full-text copy of the Court's 2nd interim order dated April 24,
2009, is available at:
http://bankrupt.com/misc/anderson.2ndorder.pdf
About Anderson Homes, Inc.
Headquartered in Raleigh, North Carolina, Anderson Homes, Inc.,
was formed over 25 years ago and has built homes and developed
neighborhoods in the Research triangle region. In the year 2008,
it built over 300 homes, and has had sales revenue in excess of
$60,000,000. Its sole shereholder is David Servoss, who is also
the president.
Anderson Homes, Inc., and its affiliates filed for Chapter 11
protection on March 16, 2009 (Bankr. E.D. N.C. Lead Case No. 09-
02062). Gerald A. Jeutter, Jr., Esq., and John A. Northen, Esq.,
at Northen Blue, LLP represent the Debtors in their restructuring
efforts. The Debtors listed total assets of $17,190,001 and total
debts of $13,742,840.
ANDERSON HOMES: Wants to Obtain $15MM in Advances from Regions
--------------------------------------------------------------
Anderson Homes, Inc., et al., ask the U.S. Bankruptcy Court for
the Eastern District of North Carolina for authority to obtain
loan advances of up to $15 million from Regions Bank under the
Regions builder line of credit to fund the cost to complete the
improvements upon properties which are under construction.
Upon closing of an Existing Construction property, the sale
proceeds will be disbursed as set forth in the second cash
collateral order; provided however, in the event of the sale of a
townhouse in a multi-unit building, the application of the net
sale proceeds will be as the Debtors and Regions may agree or as
may be ordered by the Court after notice and hearing.
The Debtors contend that Regions Bank is owed approximately
$4.9 million pursuant to a builder line of credit in the amount of
$15 million, secured by first mortgage liens on sale property
having an aggregate amount of approximately $5.8 million.
Regions has agreed to provide post-petition financing for an
interim period of eight months, pending confirmation of a plan of
reorganization, but terminable immediately upon (i) the filing of
an objection to, or the commencement of an action to avoid or
subordinate any of the claims, liens, security interests or rights
of set-off asserted by Regions in its proof of claim, (ii)
appointment of a trustee, or (iii) conversion of this case to
Chapter 7.
Builder Line Revised Terms
TERMINATION DATE: The termination date for the Builder line Loan
is extended to September 9, 2009.
LOAN AMOUNT : $15,000,000
ADVANCE RATES : The advance rate for Project Loans for lot
acquisitions loans will be 75% of the approved
lot costs. Lot costs must be evidenced by a
fully executed arms-length settlement
statement. The advance rate for Project Loans
for construction loans will be the lesser of:
(i) 80% of appraised value of the finished
Project; and (ii) the arms-length sales price
for the Project; in any event not to exceed 90%
of the approved costs for the Project.
LOAN FEES : A fee of 1/2% of the approved maximum Project
Loan amount will be charged on all speculative
construction Projects and lot acquisition
Projects and a fee of 1/2% of the approved
maximum Project Loan amount will be charged on
all pre-sales construction Projects. Fees will
be payable at closing of the Project Loan.
INTEREST RATE: For all new Project Loans approved after the
date of this Renewal Commitment, the annual
interest rate charged under the Builder Line
Loan will be Region Financial Corporation's
Commercial Base Rate, plus 1.0%.
GUARANTORS : David T. Servoss and Linda Servoss
Christopher C. Stark and Jennifer Stark
STARTS AHEAD OF
SALES : Regions will allow a maximum of $7,000,000 in
in speculative construction Project Loans and
an' additional $2,000,000.00 in speculative lot
acquisition Project Loans to be funded under
the Builder Line at anyone time. Model units
will be included in the above limitations.
Notwithstanding the preceding to the contrary,
the approval of financing for speculative
Project Loans will be determined by the Bank,
in its sole discretion, on a case by case
basis.
As reported in the Troubled Company Reporter on March 20, 2009,
the Construction Lenders holding liens on certain sale properties
and the approximate amounts due to each are:
Amount
------------
Bank of America $0.25 million
Capital Bank $2.6 million
KeySource Bank $1.1 million
Paragon Commercial Bank $4.3 million
RBC Centura Bank $2.0 million
Regions Bank $4.9 million
Wachovia Bank $4.8 million
In addition, certain secured creditors holding deeds of trust on
certain sale properties are:
a. James D. Goldston and William Goldston, owed about
$568,000; and
b. Stock Building Supply, Inc., owed $1,562,942.
A full-text copy of the Court's 2nd interim order dated April 24,
2009, is available at:
http://bankrupt.com/misc/anderson.2ndorder.pdf
About Anderson Homes, Inc.
Headquartered in Raleigh, North Carolina, Anderson Homes, Inc.,
was formed over 25 years ago and has built homes and developed
neighborhoods in the Research triangle region. In the year 2008,
it built over 300 homes, and has had sales revenue in excess of
$60,000,000. Its sole shereholder is David Servoss, who is also
the president.
Anderson Homes, Inc., and its affiliates filed for Chapter 11
protection on March 16, 2009 (Bankr. E.D. N.C. Lead Case No. 09-
02062). Gerald A. Jeutter, Jr., Esq., and John A. Northen, Esq.,
at Northen Blue, LLP represent the Debtors in their restructuring
efforts. The Debtors listed total assets of $17,190,001 and total
debts of $13,742,840.
ANDERSON HOMES: Wants to Obtain Loan Advances from KeySource Bank
-----------------------------------------------------------------
Anderson Homes, Inc., et al., ask the U.S. Bankruptcy Court for
the Eastern District of North Carolina for authority to obtain
loan advances from KeySource Bank under and existing credit
facility and KeySource Loan Documents, to complete improvements
and sell properties.
The Debtors also seek authority to provide adequate protection to
Keysource as a condition to making such advances, including
continued compliance with the terms and conditions as set forth in
the Second Cash Collateral order.
The Debtors tell the Court that KeySource has agreed to continue
funding under the KeySource Loan Documents and in the ordinary
course of business, subject to approval by the Court and upon the
following terms and conditions:
a. KeySource will continue to fund the cost to complete the
improvements upon properties which are now subject to an
existing contract of sale with a third-party purchaser (the
"Existing Pre-Sales").
b. With respect to multi-unit townhome buildings, KeySource
will continue to fund the cost to complete the improvement
to the extent necessary to finish the exterior and the
the interior through sheetrock, with such amount allocated
in equal shares among the units in such building and
subject to the Debtors providing an estimate of such items
and approval by KeySource, with the funding necessary to
complete the interior finish of each unit deferred until an
acceptable sale contract is obtained.
c. KeySource will fund the cost to complete the improvements
upon properties which subsequently become subject to a
contract of sale with a third-party purchaser (the "New
Pre-Sales"); subject to certain requirements.
d. Upon closing of an Existing Pre-Sale or a New Pre-Sale, the
sale proceeds will be disbursed as set forth in the Second
Cash Collateral order; provided however, in the event of
the sale of a townhome in a multi-unit building, the
application of the net sale proceeds will be as set forth
above.
e. KeySource has agreed to provide such post-petition
financing for an interim period of 8 months, pending
confirmation of a plan of reorganization, but terminable
immediately upon (i) the filing of an objection to, or the
commencement of an action to avoid or subordinate any of
the claims, liens, security interests or rights of set-off
asserted by KeySource in its proof of claim, (ii)
appointment of a trustee, or (iii) conversion of this case
to Chapter 7.
The Debtors contend that KeySource is owed approximately
$1.1 million secured by first mortgage liens upon a number of
properties in Bridgewater, Cobblestone, Edgewater, and Haw Village
having an aggregate value of approximately $1.3 million.
As reported in the Troubled Company Reporter on March 20, 2009,
the Construction Lenders holding liens on certain sale properties
and the approximate amounts due to each are:
Amount
------------
Bank of America $0.25 million
Capital Bank $2.6 million
KeySource Bank $1.1 million
Paragon Commercial Bank $4.3 million
RBC Centura Bank $2.0 million
Regions Bank $4.9 million
Wachovia Bank $4.8 million
In addition, certain secured creditors holding deeds of trust on
certain sale properties are:
a. James D. Goldston and William Goldston, owed about
$568,000; and
b. Stock Building Supply, Inc., owed $1,562,942.
A full-text copy of the Court's 2nd interim order dated April 24,
2009, is available at:
http://bankrupt.com/misc/anderson.2ndorder.pdf
About Anderson Homes, Inc.
Headquartered in Raleigh, North Carolina, Anderson Homes, Inc.,
was formed over 25 years ago and has built homes and developed
neighborhoods in the Research triangle region. In the year 2008,
it built over 300 homes, and has had sales revenue in excess of
$60,000,000. Its sole shareholder is David Servoss, who is also
the president.
Anderson Homes, Inc. and its debtor-affiliates filed for Chapter
11 protection on March 16, 2009, (Bankr. E.D. N.C. Lead Case
No. 09-02062). Gerald A. Jeutter, Jr., Esq., and John A. Northen,
Esq., at Northen Blue, LLP, represent the Debtors in their
restructuring efforts. The Debtors listed total assets of
$17,190,001 and total debts of $13,742,840.
ANDERSON HOMES: Wants to Obtains Loan Advances from RBC Centura
---------------------------------------------------------------
Anderson Homes, Inc., et al., ask the U.S. Bankruptcy Court for
the Eastern District of North Carolina for authority to obtain
loan advances from RBC Centura Bank under an existing credit
facility and RBC Loan Documents, in order to complete improvements
and sell properties.
The Debtors also seek authority to provide adequate protection to
RBC as a condition to make such advances by continued compliance
with the terms and conditions as set forth in the Second Cash
Collateral Order.
The Debtors tell the Court that RBC has agreed to continue funding
under the RBC Loan Documents and in the ordinary course of
business, subject to approval by the Court and upon the following
terms and conditions:
a. RBC will continue to fund the cost to complete the
improvements upon properties which are under construction
(the "Existing Construction").
b. Upon closing of an Existing Construction property, the sale
proceeds will be disbursed as set forth in the Second Cash
Collateral Order; provided however, in the event of the
sale of a townhome in a multi-unit building, the
application of the net sale proceeds will be as the Debtors
and RBC may agree or as may be ordered by the Court after
notice and hearing.
RBC has agreed to provide such post-petition financing for an
interim period of 4 months, pending confirmation of a
plan of reorganization, but terminable immediately upon (i)
the filing of an objection to, or the commencement of an
action to avoid or subordinate any of the claims, liens,
security interests or rights of set-off asserted by RBC in
its proof of claim, (ii) appointment of a trustee, or (iii)
conversion of this case to Chapter 7.
The Debtors contend that RBC is owed approximately $2 million
pursuant to (i) a residential construction line of credit in the
amount of $5 million and (ii) promissory notes in the aggregate
amount of $2,672,957, all secured by first mortgage liens upon
sale properties in Cobblestone, Ridgefield, and Villas at Forest
Hills, having an aggregate value of approximately $2.4 million.
As reported in the Troubled Company Reporter on March 20, 2009,
the Construction Lenders holding liens on certain sale properties
and the approximate amounts due to each are:
Amount
------------
Bank of America $0.25 million
Capital Bank $2.6 million
KeySource Bank $1.1 million
Paragon Commercial Bank $4.3 million
RBC Centura Bank $2.0 million
Regions Bank $4.9 million
Wachovia Bank $4.8 million
In addition, certain secured creditors holding deeds of trust on
certain sale properties are:
a. James D. Goldston and William Goldston, owed about
$568,000; and
b. Stock Building Supply, Inc., owed $1,562,942.
A full-text copy of the Court's 2nd interim order dated April 24,
2009, is available at:
http://bankrupt.com/misc/anderson.2ndorder.pdf
About Anderson Homes, Inc.
Headquartered in Raleigh, North Carolina, Anderson Homes, Inc.,
was formed over 25 years ago and has built homes and developed
neighborhoods in the Research triangle region. In the year 2008,
it built over 300 homes, and has had sales revenue in excess of
$60,000,000. Its sole shareholder is David Servoss, who is also
the president.
Anderson Homes, Inc. and its debtor-affiliates filed for Chapter
11 protection on March 16, 2009, (Bankr. E.D. N.C. Lead Case
No. 09-02062). Gerald A. Jeutter, Jr., Esq., and John A. Northen,
Esq., at Northen Blue, LLP represent the Debtors in their
restructuring efforts. The Debtors listed total assets of
$17,190,001 and total debts of $13,742,840.
ARIZONA DIALTONE: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Arizona Dialtone, Inc.
c/o Wranicke & Littler
1411 N. Third Street
Phoenix, AZ 85004
Bankruptcy Case No.: 09-10665
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Debtor's Counsel: Thomas E. Littler, Esq.
Warnicke & Littler, P.L.C.
1411 N. Third ST.
Phoenix, AZ 85004
Tel: (602) 256-0400
Fax: (602) 256-0345
E-mail: administrator@warnickelittler.com
Estimated Assets: $100,001 to $1,000,000
Estimated Debts: $1,000,001 to $100,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/azb09-10665.pdf
The petition was signed by Thomas W. Bade, president of the
Company.
ATRIUM COS: Forbearance Agreement Cues S&P's Rating Cut to 'D'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on vertically integrated manufacturer of aluminum and vinyl
windows Atrium Cos. Inc. to 'D' from 'CCC-'. In addition, S&P
lowered the issue-level rating on the company's senior secured
bank credit facilities to 'D' from 'CCC-'. The recovery rating is
'4', albeit at the lower end of the range, indicating S&P's
expectation for average (30% to 50%) recovery for lenders in the
event of a payment default.
The rating actions stem from the company's announcement that it
entered into a forbearance agreement with its lenders and in
conjunction with that agreement did not make the scheduled
interest payment on its senior secured bank credit facility on
May 11, 2009.
Regarding the interest payments, a payment default has not
occurred relative to the legal provisions of the bank facility, as
the company secured a forbearance agreement from bank lenders and
its accounts receivable lender agreeing not to pursue their
default-related rights and remedies during the forbearance period.
"However, S&P consider a default to have occurred regarding the
missed interest payment 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 forbearance
period," said Standard & Poor's credit analyst Tobias Crabtree.
AUTOBACS STRAUSS: Seeks September 2 Extension of Plan Deadline
--------------------------------------------------------------
Autobacs Strauss Inc., doing business as Strauss Discount Auto, is
asking the U.S. Bankruptcy Court for the District of Delaware to
extend its exclusive period to file a Chapter 11 plan until
September 2, Bloomberg's Bill Rochelle reported. This is
Autobacs' first request for an extension, which will be heard by
the Court on May 29. Strauss closed some stores and is analyzing
whether others should be shuttered.
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.
The Chapter 11 case is Strauss's third. The preceding Chapter 11
case ended with confirmation of a Chapter 11 plan in April 2007.
The Company was then named R&S Parts & Service Inc.
AUTOBACS STRAUSS: Court Denies Severance Program for Officers
-------------------------------------------------------------
Judge Christopher Sontchi of the U.S. Bankruptcy Court for the
District of Delaware denied Autobacs Strauss Inc.'s request to
implement a severance program for its officers. Although the
Company and its official committee of unsecured creditors
negotiated a settlement in connection with the program, Judge
Sontchi declined to approve the sale, noting that the seven
covered individuals are officers and are prohibited from receiving
severance payments under changes made to bankruptcy law by
Congress in 2005.
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, and Philadelphia and Bethlehem in
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.
The Chapter 11 filing is Strauss's third. The preceding Chapter
11 case ended with confirmation of a Chapter 11 plan in April
2007. The Company was then named R&S Parts & Service Inc.
AVCORP INDUSTRIES: In Talks to Restructure Debt, Obtain More Funds
------------------------------------------------------------------
Avcorp Industries, Inc., says that as at March 31, 2009, it was
not in compliance with the financial covenants associated with its
operating line of credit provided by a Canadian chartered bank.
The Company has not obtained a waiver from the debt holder for
this non-compliance and for anticipated future breaches.
Also, as at March 31, 2009, the Company was not in compliance with
its financial covenants associated with the convertible debenture
held by Export Development Canada. The Company has not obtained a
waiver from the debenture holder for these non-compliances and for
anticipated future breaches. On March 13, 2009, Export
Development Canada served notice to the Company requiring that if
the non-compliances are not rectified within 60 days of the notice
date, all balances will become payable on demand. The Company is
currently negotiating the terms of repayment with Export
Development Canada.
Moreover, subsequent to the end of the quarter, the landlord for
one of the Company's operations issued to the Company a demand for
C$208,000 rent and related expenses which are in arrears. The
Company is currently negotiating the payment of arrears and future
rent with the Landlord.
Avcorp says its current and forecasted financing requirements for
2009 and 2010 exceed cash from operations and its current
availability of the operating line of credit. The Company is in
the process of obtaining additional debt financing or equity,
renegotiating debt repayments, reducing operating expenses and
managing customer payments to existing terms to provide liquidity
in excess of forecasted requirements.
"A number of financing activities are being pursued as of the date
of this report. It is important to note that the success of these
activities cannot be assured," Avcorp says.
On May 15, 2009, Avcorp released financial results for the quarter
ended March 31, 2009. During the quarter ended March 31, 2009,
the Company recorded a loss from operations of C$1,989,000 on
C$22,087,000 revenue, as compared to C$183,000 earnings from
operations on C$31,151,000 revenue for the same quarter of the
preceding year; and a net loss for the current quarter of
C$3,172,000 as compared to a net loss of C$423,000 for the quarter
ended March 31, 2008.
First quarter 2009 continued softening of customers' order book
has caused the Company to review operations and further reduce
union and non-union employees. This has necessitated a C$325,000
charge against income for the quarter ended March 31, 2009.
Current quarter income was also adversely affected by foreign
exchange losses amounting to C$1,044,000 and unrealized derivative
losses totaling C$654,000.
Gross profit (revenue less cost of sales) for the quarter ended
March 31, 2009, was 14.2% of revenue as compared to 12.1% of
revenue for the quarter ended March 31, 2008.
Continued strong operational performance improvements in assembly
and fabrication lines and proportionately reduced labor costs have
in-part mitigated the adverse effect on the Company's cost
structure resulting from the substantial decrease in revenues.
Cash flows from operating activities during the current quarter
consumed C$681,000 of cash, as compared to providing C$1,529,000
of cash during the quarter ended March 31, 2008. The Company has
a working capital deficit of C$5,745,000 as at March 31, 2009 --
at December 31, 2008, it had a C$2,065,000 deficit -- primarily as
a result of classifying the C$4,122,000 convertible debenture held
by Export Development Canada as current portion of long-term debt,
and an accumulated deficit of C$59,571,000 at March 31, 2009 -- at
December 31, 2008, accumulated deficit was C$56,213,000.
At March 31, 2009, the Company had C$59.3 million in total assets
and C$46.3 million in total liabilities.
The Company has not paid C$186,000 of Preferred Share dividends
which were payable as at March 31, 2009.
About Avcorp Industries
Vancouver, British Columbia-based Avcorp Industries Inc. designs
and builds major airframe structures for some of the world's
leading aircraft companies, including Boeing, Bombardier, and
Cessna. With more than 50 years of experience, 520 skilled
employees and 354,000 square feet of facilities, Avcorp offers
integrated composite and metallic aircraft structures to aircraft
manufacturers, a distinct advantage in the pursuit of contracts
for new aircraft designs, which require lower-cost, light-weight,
strong, reliable structures. Avcorp is a Canadian public company
traded on the Toronto Stock Exchange (CA:AVP).
BANK OF AMERICA: Sale of 1.2BB Shares of Stock Brings in $13BB
--------------------------------------------------------------
Bank of America Corp. has raised $13 billion after selling about
1.25 billion shares of common stock, Dan Fitzpatrick at The Wall
Street Journal reports, citing people familiar with the matter.
According to WSJ, the sale is part of BofA's previously disclosed
plan to sell common shares as it tries to come up with about
$33.9 billion in equity to meet the U.S. government's stress test
requirements. WSJ notes that BofA is more than halfway to its
$33.9 billion mark as set by U.S. regulators. WSJ, citing people
familiar with the matter, relates that BofA sold on Tuesday a
block of 825 million shares at $10. The sources said that BofA
sold previously sold about 425 million shares, the report states.
BofA also sold a stake in China Construction Bank for about
$7.3 billion.
BofA, WSJ relates, said that it would be able to raise the
required equity without taking additional government investment or
converting the government's existing preferred shares into common
stock. WSJ states that BofA said that it would raise about
$33.9 billion through:
-- asset sales,
-- the offering of 1.25 billion shares,
-- a conversion of privately held preferred shares to common,
and
-- future earnings.
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.
BANK OF AMERICA: Fitch Downgrades Preferred Stock Rating to 'B'
---------------------------------------------------------------
Fitch Ratings has downgraded various ratings of Bank of America
Corporation and subsidiaries, reflecting concerns surrounding the
headwinds that the company is facing over the near- to
intermediate-term, both with regard to asset quality and capital
needs. Following the Supervisory Capital Assessment Program (SCAP
stress test) conducted by U.S. bank supervisors, BAC is required
to raise an additional $33.9 billion in common equity by early
November 2009, a daunting task in any environment.
Considering the meaningful uncertainty which surrounds both near-
term credit costs and market conditions, Fitch believes there is a
heightened level of execution risk in meeting the capital
requirement, which, in turn, indicates a heightened level of
performance risk for the various classes of hybrid capital
securities. Management has outlined a plan to raise the mandated
amount of common equity and has recently sold part of its stake in
China Construction Bank as part of its efforts to accomplish this.
However, success in reaching the goal requires market access,
ability to arrange sales of other units at a sufficient price, and
maintenance of earnings above SCAP projections. Fitch believes
that near-term earnings may be the most difficult of these three
factors.
Aside from capital considerations, BAC continues to face a
challenging operating environment over the intermediate-term.
Foremost among the challenges is the potential for higher levels
of losses in several portfolio sectors under stress, particularly
home equity loans and credit cards. BAC also is faced with the
integration of several complex recent mergers and the potential
for further mark-to-market charges in distressed assets such as
collateralized debt obligations, leveraged loans, and commercial
mortgage-backed securities.
The ratings actions reflect these concerns. Fitch believes the
risk of dividend omission or deferral on preferred and trust
preferred securities has increased, with omission of dividends on
preferred stock the higher of the two risks. Accordingly, the
preferred stock rating has been lowered to `B' from `BB' and trust
preferred ratings have been lowered to `BB-' from `BB'. Both
preferred and trust preferred ratings remain on Rating Watch
Negative.
Fitch has also downgraded BAC's Individual rating to `D' from
'C/D' and has removed it from Rating Watch Negative. The
Individual Rating downgrade reflects the expectation for continued
deterioration in credit quality and sensitivity to distressed
market conditions, which hamper the prospects for BAC's
profitability. This rating is consistent with that of an entity
with elevated vulnerability to adverse external trends but with
some remaining margin of flexibility.
Fitch has affirmed BAC's long- and short-term IDRs at 'A+/F1+',
which are linked to government support, and for which the Rating
Outlook is Stable. Fitch has also affirmed ratings on senior,
subordinated, and deposit instruments for all entities, since
these ratings are based on the IDRs. Fitch notes that the
government has repeated that it intends to provide support to Bank
of America and its subsidiaries. In light of this, Fitch has
affirmed BAC's `1' support rating and 'A+' Support Floor. The
Support Ratings and Support Floors apply to the senior obligations
of the parent company and other nonbank operating subsidiaries as
well as of the bank entities. In Fitch's rating criteria, a
bank's standalone risk is reflected in Fitch's individual ratings
and the prospect of external support is reflected in Fitch's
support ratings. Collectively these ratings drive Fitch's long-
and short-term IDRs.
Resolution of the Rating Watch on preferred/trust preferred issues
will depend on the success of the capital raising plan as well as
an improvement in BAC's earnings and asset quality outlook. Over
the long-term, assuming the intermediate-term challenges are
surmounted, BAC's formidable franchise and leading position in
consumer and commercial lending and asset management offer
considerable upside potential.
Fitch has withdrawn issuer ratings of Countrywide Bank FSB. That
bank has now been merged into Bank of America N.A. and no longer
exists as a separate entity.
Fitch has downgraded these ratings and has retained them on Rating
Watch Negative:
Bank of America Corporation
-- Preferred stock to `B' from `BB'.
Merrill Lynch & Co. Inc.
-- Preferred stock to `B' from `BB'.
BankAmerica Corporation
-- Preferred stock to `B' from `BB'.
BAC Capital Trust I - VIII
-- Trust preferred securities to `BB-' from `BB'.
BAC Capital Trust X - XV
-- Trust preferred securities to `BB-' from `BB'.
BAC AAH Capital Funding LLC I - XIX
-- Trust preferred securities to `BB-' from `BB'.
BAC LB Capital Funding Trust I - II
-- Trust preferred securities to `BB-' from `BB'.
BankAmerica Capital II, III
-- Trust preferred securities to `BB-' from `BB'.
BankAmerica Institutional Capital A, B
-- Trust preferred securities to `BB-' from `BB'.
BankBoston Capital Trust III-IV
-- Trust preferred securities to `BB-' from `BB'.
Barnett Capital Trust III
-- Trust preferred securities to `BB-' from `BB'.
Countrywide Capital I, III, IV, V
-- Trust preferred securities to `BB-' from `BB'.
First Republic Preferred Capital Corp.
-- Trust preferred securities to `BB-' from `BB'.
First Republic Preferred Capital Corp. II
-- Trust preferred securities to `BB-' from `BB'.
Fleet Capital Trust II, V, VIII, IX
-- Trust preferred securities to `BB-' from `BB'.
MBNA Capital A, B, D, E
-- Trust preferred securities to `BB-' from `BB'.
Merrill Lynch Preferred Capital Trust III, IV, and V
-- Trust preferred securities to `BB-' from `BB'.
Merrill Lynch Capital Trust I, II and III
-- Trust preferred securities to `BB-' from `BB'.
NB Capital Trust II, III, IV
-- Trust preferred securities to `BB-' from `BB'.
Fitch has downgraded these ratings and has removed them from
Rating Watch Negative:
Bank of America Corporation
-- Individual to `D' from 'C/D'.
Bank of America N.A.
-- Individual to `D' from 'C/D'.
Bank of America Georgia, N.A
Bank of America Oregon, National Association
Bank of America Rhode Island, National Association
Bank of America California, National Association
-- Individual to `D' from 'C/D'.
FIA Card Services N.A.
LaSalle Bank Corporation
MBNA Europe Bank Ltd.
-- Individual to `D' from 'C/D'.
Merrill Lynch & Co. Inc.
Merrill Lynch International Bank
Merrill Lynch Bank USA
Merrill Lynch Bank & Trust Co., FSB
Merrill Lynch Canada Finance
-- Individual to `D' from 'C/D'.
Fitch has affirmed these ratings with a Stable Outlook:
Bank of America Corporation
-- Long-term debt guaranteed by TLGP at `AAA';
-- Short-term debt guaranteed by TLGP at `F1+';
-- Long-term IDR at `A+';
-- Long-term senior debt at `A+';
-- Long-term subordinated debt at `A';
-- Short-term IDR at 'F1+';
-- Short-term debt at `F1+';
-- Support at '1';
-- Support Floor at `A+'.
Bank of America N.A.
-- Long-term debt guaranteed by TLGP at `AAA';
-- Short-term debt guaranteed by TLGP at `F1+';
-- Long-term deposits at `AA-';
-- Long-term IDR at `A+';
-- Long-term senior debt at `A+';
-- Long-term subordinated debt at `A';
-- Short-term IDR at 'F1+';
-- Short-term deposits at `F1+';
-- Short-term debt at `F1+';
-- Support at '1';
-- Support Floor at `A+'.
Banc of America Securities Limited
-- Long-term IDR at `A+';
-- Short-term IDR at 'F1+'.
Banc of America Securities LLC
-- Long-term IDR at 'A+';
-- Short-term IDR at 'F1+'.
B of A Issuance B.V.
-- Long-term IDR at `A+';
-- Long-term senior debt: at 'A+';
-- Subordinated debt at 'A';
-- Support '1'.
Bank of America Georgia, N.A.
Bank of America Oregon, National Association
Bank of America Rhode Island, National Association
Bank of America California, National Association
-- Long-term IDR at `A+';
-- Short-term IDR at 'F1+';
-- Support at '1';
-- Support Floor at `A+'.
FIA Card Services N.A.
-- Long-term deposits at `AA-';
-- Long-term IDR at `A+';
-- Long-term senior debt at `A+';
-- Long-term subordinated debt at `A';
-- Short-term IDR at 'F1+';
-- Short-term deposits at `F1+';
-- Short-term debt at `F1+';
-- Support at '1';
-- Support Floor at `A+'.
MBNA Canada Bank
-- Long-term IDR at `A+';
-- Long-term senior debt at `A+';
-- Long-term subordinated debt at `A';
-- Short-term IDR at 'F1+'.
MBNA Europe Bank Ltd.
-- Long-term IDR at `A+';
-- Long-term senior debt at `A+';
-- Long-term subordinated debt at `A';
-- Short-term IDR at 'F1+';
-- Support '1'.
LaSalle Bank Corporation
-- Long-term IDR at `A+';
-- Short-term IDR 'F1+';
-- Support at '1';
-- Support Floor at `A+'.
Merrill Lynch & Co., Inc.
-- Long-term IDR at 'A+';
-- Long-term senior at 'A+';
-- Subordinated debt at 'A';
-- Short-term IDR at 'F1+';
-- Commercial paper at `F1+';
-- Support at '1';
-- Support Floor at `A+.
Merrill Lynch International Bank Ltd.
-- Long-term IDR at 'A+';
-- Short-term IDR at `F1+';
-- Support at '1'.
Merrill Lynch S.A.
-- Long-term IDR at 'A+';
-- Long-term senior at 'A+';
-- Support at '1'.
Merrill Lynch Bank USA
-- Long-term IDR at 'A+';
-- Long-term deposits at 'AA-';
-- Short-term IDR at `F1+';
-- Short-term deposits at 'F1+';
-- Support at '1';
-- Support Floor at `A+'.
Merrill Lynch Bank & Trust Co., FSB
-- Long-term IDR at 'A+';
-- Long-term deposits at 'AA-';
-- Short-term IDR at `F1+';
-- Short-term deposits at 'F1+';
-- Support at '1';
-- Support Floor at `A+'.
Merrill Lynch Canada Finance
-- Long-term IDR at 'A+';
-- Long-term senior at 'A+';
-- Short-term IDR at `F1+';
-- Support at '1'.
Fitch has affirmed these ratings:
Merrill Lynch Finance (Australia) Pty LTD
-- Short-term IDR at `F1+';
-- Commercial Paper at `F1+'.
Merrill Lynch & Co., Canada Ltd.
-- Short-term IDR at `F1+';
-- Short-term debt at`F1+'.
BankAmerica Corporation
-- Long-term senior debt at `A+';
-- Long-term subordinated debt at `A'.
Countrywide Bank FSB
-- Long-term deposits at `A+';
-- Short-term deposits at `F1+'.
Countrywide Financial Corp.
-- Long-term senior debt `A+';
-- Long-term subordinated debt `A'.
Countrywide Home Loans, Inc.
-- Long-term senior debt `A+'.
First Republic Bank
-- Subordinated debt at 'A'.
FleetBoston Financial Corp
-- Long-term subordinated debt at `A'.
LaSalle Bank N.A.
LaSalle Bank Midwest N.A.
United States Trust N.A.
-- Long-term Deposits at `AA-';
-- Short-term deposits at `F1+'.
LaSalle Funding LLC
-- Long-term senior debt at `A+'.
MBNA Corp.
-- Long-term senior debt at `A+';
-- Long-term subordinated debt at `A';
-- Short-term debt at 'F1+'.
NationsBank Corp
-- Long-term senior debt at `A+';
-- Long-term subordinated debt at `A'.
NationsBank, N.A.
-- Long-term senior debt at `A+'.
NCNB, Inc.
-- Long-term subordinated debt at `A'.
Fitch has withdrawn these ratings:
Countrywide Bank FSB
-- Long-term IDR `A+';
-- Long-term senior `A+';
-- Short-term IDR `F1+';
-- Short-term debt `F1+';
-- Individual 'C/D';
-- Support `1';
-- Support Floor `A+'.
BANKUNITED FINANCIAL: May Be Put Into Receivership as Part of Sale
------------------------------------------------------------------
Alistair Barr at MarketWatch reports that these private-equity
firms have submitted bids for BankUnited Financial:
1. Carlyle Group,
2. Blackstone Group, and
3. WL Ross & Co. and Centerbridge Capital Partners
Mr. Barr says John Kanas, the former chief executive of North Fork
Bank, is advising the WL Ross and Centerbridge tandem. The report
notes that Mr. Kanas has been a senior adviser to Wilbur Ross
since February, helping the firm track down, reorganize and manage
investments in the troubled financial sector. A source told Mr.
Barr that the Kanas group submitted their bid before the deadline
for offers expired on Tuesday. WL Ross and Centerbridge didn't
respond to requests for comment on Tuesday, the report adds.
Mr. Barr further relates that other bidders for BankUnited are
expected. He says TD Bank and Goldman Sachs are expected to team
up to bid, as noted by The Wall Street Journal. J.C. Flowers &
Co., was also reportedly among potential bidders, Mr. Barr says.
Spokesmen for these firms declined to comment.
However, another source told Mr. Barr that the Federal Deposit
Insurance Corp. is likely to the bank into receivership as part of
the sale process.
"If that happens, current common shareholders of BankUnited may be
almost totally wiped out. That's what happened to shareholders of
Washington Mutual and IndyMac last year, when those lenders were
seized by regulators then sold afterward," Mr. Barr says.
BankUnited shares fell 21% to close at 70 cents, Mr. Barr notes.
Mr. Barr says a spokesman for the FDIC and William Ruberry, a
spokesman at the Office of Thrift Supervision, which regulates
BankUnited declined to comment.
Since July 2008, BankUnited and BankUnited, FSB, its wholly owned
subsidiary, have entered into various agreements with the Office
of Thrift Supervision that have progressively increased the
Company's regulatory monitoring and reporting requirements and
added significant restrictions on its operations.
On April 14, 2009, the Board of Directors of the Bank entered into
a Stipulation and Consent to Prompt Corrective Action Directive
with the OTS. The PCA Agreements reiterated several mandatory
operating restrictions of previous agreements, including the Cease
and Desist Orders entered into with the OTS on September 19, 2008.
The PCA Agreements direct the Bank to be capitalized by a merger
with or an acquisition by another financial institution or another
entity, or through the sale of all or substantially all of the
Bank's assets and liabilities to another financial institution or
another entity, within 20 days of the issuance of the PCA
Agreements, pursuant to a written definitive agreement that the
Bank was required to execute within 15 days of the effective date
of the PCA Agreements, unless such timeframes were extended in
writing by the OTS.
The PCA Agreements further required the Bank to achieve and
maintain, at a minimum, these ratios:
(i) Total Risk Based Capital Ratio of 8%;
(ii) Tier I Core Risk Based Capital Ratio of 4%; and
(iii) Leverage Ratio of 4% within 20 days of the effective date
of the PCA Agreements.
Based on its March 31, 2009 reported capital levels, BankUnited
Financial would need to raise approximately $1.0 billion to meet
the Total Risk Based Capital Ratio of 8%, approximately
$706 million to meet the Tier I Core Risk Based Capital Ratio of
4% and approximately $937 million to meet the Leverage Ratio of
4%. The 20-day period to raise capital and achieve the mandatory
minimum capital requirements under the PCA Agreements expired on
May 4, 2009 without compliance by the Bank. As a result of the
circumstances, the Bank is subject to regulatory enforcement
actions, including the Federal Deposit Insurance Corporation
receivership. These events raise substantial doubt about the
Company's ability to continue as a going concern.
Efforts to Raise Capital
BankUnited Financial has been actively trying to raise capital at
the holding company level for over a year. These efforts have
required substantial time, resources and energy from BankUnited
Financial's senior management, who has persistently sought to
identify investors and structure a feasible transaction. Although
management continues to seek capital at the holding company level,
BankUnited Financial's efforts at this time primarily relate to a
direct recapitalization of the Bank. No assurance can be given
that BankUnited Financial will be able to raise capital at either
the Bank or the holding company level. In addition, a
recapitalization of the Bank without a simultaneous
recapitalization of the holding company would reduce or eliminate
the Company's ownership in the Bank, thus raising substantial
doubt about the Company's ability to continue as a going concern.
As reported by the Troubled Company Reporter on May 15, 2009,
BankUnited expects to report a loss of $443.1 million or $12.55
per share for the second quarter 2009 compared to a loss of $65.8
million or $1.88 per share for the quarter ended March 31, 2008.
For the six months ended March 31, 2009, it expects to report a
loss of approximately $920.6 million, or $26.08 per share compared
to a loss of $91.3 million, or $2.61 per share for the same period
in 2008.
The Company said the increase in loss is primarily a result of its
continuing recognition of significant provisions for loan losses
related to its payment option adjustable rate mortgage portfolio,
lower net interest income due to higher nonperforming assets,
additional cost of maintaining excess cash for liquidity purposes,
other-than-temporary impairments, the write-off of goodwill and
higher losses and carrying costs associated with repossessed real
estate. As of March 31, 2009, the Company maintains reserves of
approximately $1.0 billion for losses on its loan portfolio.
BankUnited Financial said it is working diligently to try to
complete the filing of its 2008 Form 10-K, First Quarter 2009 Form
10-Q and Second Quarter 2009 Form 10-Q by June 15, 2009. However,
no assurances can be given concerning its ability to file by
June 15, 2009. If BankUnited Financial does not file by June 15,
2009, it intends to request additional time from NASDAQ to make
the required filings, although there is no assurance that they
will grant the Company additional time.
At May 7, 2009, the Bank had total cash and cash equivalents of
$1.3 billion compared to $1.2 billion and $513 million at
September 30, 2008 and 2007, respectively. The increase from
September 30, 2007 was primarily driven by an increase in retail
deposit balances and payments received on the Bank's loans and
investment securities. Management elected to increase cash and
cash equivalents in response to market disturbances that adversely
affected the liquidity position at other financial institutions.
Since November 2008 the Bank has had no available borrowing
capacity with the Federal Home Loan Bank of Atlanta. As a
consequence, BankUnited Financial has been repaying the FHLB
borrowings as they mature. Similarly, the Bank has had no
available borrowing capacity from brokered deposits since July
2008, which BankUnited Financial has also been paying as they
mature.
As permitted by the terms of the Company's trust preferred
securities, during the fourth fiscal quarter in 2008 -- the
quarter ended September 30, 2008 -- BankUnited Financial had
elected to defer approximately $13.6 million of the annual debt
service obligation on the trust preferred securities. Pursuant to
the indentures for the trust preferred securities, BankUnited
Financial is permitted to defer interest payments for 20
consecutive quarters. To date, BankUnited Financial has deferred
interest payments for three consecutive quarters.
BankUnited Financial, however, said it cannot defer annual
payments of approximately $16.8 million of combined interest
obligations on our Convertible Senior Notes, HiMEDS Units senior
notes, and senior debentures, of which $8.4 million is required to
be paid between April 1, 2009 and September 30, 2009.
Additionally, the holding company incurs non-fixed cash charges
for general and administrative matters of approximately
$3.6 million per quarter. The PCA Agreements prohibit the Bank
from making dividend payments to the holding company and the
holding company has few other sources of income. Therefore, no
assurances can be given that the Company will be able to make the
required payments on the debt after the available liquid assets at
the holding company level are depleted.
About BankUnited
BankUnited Financial Corp. -- http://www.bankunited.com/-- is the
holding company for BankUnited FSB, the largest banking
institution headquartered in Coral Gables, Florida. Serving
customers through 85 branches in 13 coastal counties, BankUnited
offers a full spectrum of consumer and commercial banking products
and services, including online products.
BARZEL FINCO: Moody's Comments on Company Deferral Agreement
------------------------------------------------------------
Moody's Investors Service commented that Barzel Finco Inc.'s
announcement of a deferral agreement and the failure to make the
scheduled interest payment due on May 15, 2009 on its 11.5% senior
secured notes would not immediately impact the company's ratings
(including the Ca corporate family rating/probability of default
rating) though they may be affected at the end of the original 30-
day grace period.
Moody's last rating action for Barzel Finco Inc. was on April 22,
2009, when the corporate family rating was lowered to Ca from
Caa1.
Headquartered in Norwood, Massachusetts, Barzel Industries
(formerly known as Novamerican Steel Inc.) processes,
manufactures, and distributes carbon steel, stainless steel, and
aluminum products primarily in the United States and Canada. The
company operates two processing facilities, five manufacturing
facilities, five tubing mills, and five distribution facilities.
Barzel Finco Inc is an intermediate holding company where the
asset based bank revolving credit facility and senior secured
notes reside.
BEARINGPOINT INC: Proceeds Sharing of Japan Unit Declined by Judge
------------------------------------------------------------------
According to Bloomberg's Bill Rochelle, BearingPoint Inc. didn't
receive permission from the U.S. Bankruptcy Court for the Southern
District of New York to turn over $100 million in proceeds from
the sale of its Japanese business to secured lenders. The judge
told the Company to think up a new structure that would avoid
paying taxes in Japan while not giving all the proceeds to the
secured lenders, in response to objections from creditors.
BearingPoint intended a traditional reorganization by proposing to
issue new stock to unsecured creditors and holders of $690 million
in subordinated notes, pursuant to a Chapter 11 plan. The
Company, however, changed its course and sold its units.
The Company has sold its public services group to Deloitte LLP for
$350 million. Its commercial services business goes up for
auction May 27, with bids due May 25, and PricewaterhouseCoopers
LLP as lead bidder with its $25 million offer.
On April 2, 2009, BearingPoint International Bermuda Holdings
Limited, BearingPoint's indirect subsidiary, entered into a Share
Sale Agreement with PwC Advisory Co., Ltd., the Japanese member
firm of the PricewaterhouseCoopers global network of firms, for
the sale of BearingPoint's consulting business in Japan to PwC
Japan for roughly $45 million.
On April 17, 2009, BearingPoint and certain of its subsidiaries
entered into a definitive agreement with PricewaterhouseCoopers
LLP pursuant to which BearingPoint agreed to sell a substantial
portion of its assets related to its Commercial Services business
unit, including Financial Services, to PwC. In addition, an
affiliate of PwC also entered into a definitive agreement to
purchase the equity interests of BearingPoint Information
Technologies (Shanghai) Limited, a subsidiary of BearingPoint that
operates a global development center in China, and certain assets
of a separate global development center in India. The aggregate
purchase price for these three transactions is roughly
$25 million.
About BearingPoint Inc.
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.
BEDROCK MARKETING: Trustee Not Bound by Co.'s Agent's Statements
----------------------------------------------------------------
WestLaw reports that evidence of out-of-court statements allegedly
made by the owner and manager of bankrupt limited liability
companies was not admissible, as statements by a party opponent,
in an adversary proceeding (Bankr. D. Utah Adv. Pro. No. 08-02077)
that was brought not by the LLCs themselves, but by the trustee of
their Chapter 7 estates to recover on promissory notes that the
debtors had obtained prepetition. The trustee represented the
interests of the estate and was not bound by statements of the
debtors' agent. In re Bedrock Marketing, LLC, --- B.R. ----, 2009
WL 1158817, http://is.gd/BgKh(Bankr. D. Utah Case No. 08-20308).
The Chapter 7 trustee overseeing the liquidation of Bedrock
Marketing, LLC (and Enlightened Management, LLC) is:
Gary E. Jubber, Esq.
Fabian & Clendenin
215 South State Street, Suite 1200
Salt Lake City, UT 84111-2323
Weston Wade Sleater, the obligor under the promissory notes the
Chapter 7 trustee is attempting to collect, is represented by:
Ronald S. George, P.A.
389 N. Mink Creek Road
Pocatello, ID 83204
BIO-RAD LABORATORIES: Moody's Affirms Corp. Family Rating at 'Ba2'
------------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Bio-Rad
Laboratories, Inc. including the Corporate Family Rating of Ba2
and the Probability of Default Rating of Ba2. Moody's also
changed the outlook to positive from stable.
The positive outlook reflects the successful integration of the
DiaMed acquisition as well as the company's continued track record
of solid operating performance and cash flow generation. The
positive outlook is also supported by potential upside from
increased government funding to academic research which Moody's
believes could benefit Bio-Rad starting in 2010. While Bio-Rad's
financial metrics are currently strong for the Ba2 rating
category, the ratings are constrained by the risk that a continued
weak economy could begin to have a more pronounced affect on
revenue growth and profitability, particularly in the Life Science
division. Further, Moody's believes the company could increase
financial leverage in order to pursue acquisitions. If the
economic impact on Bio-Rad continues to be modest and the company
takes a moderate approach to new debt and acquisitions, Moody's
could upgrade the ratings.
The Ba2 Corporate Family Rating reflects Bio-Rad's scale and
leading competitive position within its core, niche markets. The
ratings are further supported by the recurring nature of roughly
70% of revenues and Bio-Rad's diversified geographic, end-market
and customer base. Bio-Rad's methodology implied rating under
Moody's Global Medical Products & Device Industry Methodology is
"Ba1".
Ratings affirmed/LGD estimates revised:
-- Corporate Family Rating, Ba2
-- Probability of Default Rating, Ba2
-- $200 million Senior Unsecured Subordinated Notes, due 2014,
Ba3 (LGD5, 72%)
-- $225 million Senior Unsecured Subordinated Notes, due 2013,
Ba3 (LGD5, 72%)
The outlook is positive.
The last rating action was December 13, 2004 when Moody's rated
Bio-Rad's 2014 notes and changed the outlook to stable from
positive.
Bio-Rad, based in Hercules, California, manufactures and supplies
life science research, healthcare, analytical chemistry and other
markets with products used to separate, identify, analyze and
purify the components of complex chemical and biological
materials. The company operates in two worldwide industry
segments, Life Science and Clinical Diagnostics. The Life Science
segment includes products for drug discovery and food pathogen
testing, primarily in the laboratory setting. The Clinical
Diagnostic segment includes tests used to detect, identify and
quantify substances in blood or other body fluids and tissues,
primarily used in hospital and reference laboratories. Bio-Rad
reported revenues of $1.74 billion for the twelve months ended
March 31, 2009.
BIOMET INC: Moody's Changes Outlook to Stable; Affirms 'B2' Rating
------------------------------------------------------------------
Moody's Investors Service changed Biomet, Inc.'s outlook to stable
from negative and changed the company's Speculative Grade
Liquidity Rating to SGL-2 from SGL-3. At the same time, Moody's
affirmed the company's existing debt ratings (B2 CFR).
The change in outlook reflects a more stable business profile,
highlighted by better than industry growth rates in core
reconstructive, fixation and spinal products.
"While the orthopedic sector is not immune to economic pressures,
Biomet's growth rates have exceeded its peers," said Diana Lee, a
Moody's Senior Credit Officer. "New product introductions and
sales force enhancements should help support Biomet's sales
trends," Lee continued.
The B2 CFR continues to reflect Biomet's very high leverage and
weak financial metrics, which are key rating constraints.
Biomet's SGL-2 rating considers better internal sources of cash --
partly due to drawdowns of Biomet's revolver at the end of last
year -- which should cover cash outflows over the next 12 months.
In addition, despite this drawdown, the company should have access
to an ample amount of external liquidity.
Rating changed:
Biomet, Inc.:
-- Speculative liquidity rating to SGL-2 from SGL-3
Ratings affirmed:
Biomet, Inc.:
-- Corporate Family Rating at B2
-- $350 Million Asset backed revolver at Ba2 (LGD2, 16%)
-- $400 Million Secured cash flow revolver at B1 (LGD3, 34%)
-- $3.547 Billion Secured term loan at B1 (LGD3, 34%)
-- $775 Million Unsecured senior notes at B3 (LGD4, 65%)
-- $775 Million Unsecured PIK option notes at B3 (LGD4, 65%)
-- $1.015 Billion Unsecured subordinated notes at Caa1 (LGD6,
93%)
-- PDR at B2
The last rating action for Biomet was taken on September 25, 2007,
when Moody's assigned initial ratings, including a B2 CFR with a
negative outlook, following the LBO transaction.
Biomet, Inc, based in Warsaw, Indiana, is one of the leading
manufacturers of orthopedic implants, specializing in
reconstructive devices.
BUILDING MATERIALS: Lender Talks May Lead to Bankruptcy Filing
--------------------------------------------------------------
Building Materials Holding Corporation said it is currently
negotiating with lenders to develop debt and capital structures to
support its long-term strategic plan and business objectives.
BMHC expects that the negotiations may lead to a bankruptcy filing
which BMHC anticipates would reflect the agreement of the lenders
and would provide for the payment in full of all amounts owing to
key vendors and the uninterrupted supply of goods and services to
customers. Equity holders may be substantially diluted or be
eliminated in a bankruptcy filing.
According to BMHC, there can be no assurance the negotiations will
result in debt and capital structures acceptable to BMHC and the
lenders or an agreement that would achieve BMHC's goals. If the
negotiations fail, BMHC said it would not be able to continue as a
going concern and would be forced to seek relief through
bankruptcy filing without an agreement of the lenders. BMHC said
it also continues to pursue alternative financing arrangements as
well as evaluate other financing options.
BHMC last week said it obtained an extension of the waiver from
its lenders that continues to waive the monthly Adjusted EBITDA,
forecast and projection requirements of its credit agreement and
continues to allow the Company to borrow up to $20 million through
June 29, 2009.
Based on financial information for February 2009, the Company was
not in compliance with the monthly Adjusted EBITDA requirement of
its credit agreement. In March 2009, BMHC obtained a limited
waiver through April 15, 2009, for lack of compliance with the
monthly Adjusted EBITDA requirement and BMHC preserved access to
limited liquidity permitting it to borrow up to $20 million under
the revolver. Previously, BMHC had obtained waivers for financial
covenants due to lower than planned operating performance as of
both June 2008 and December 2007.
Due to the difficulty of reliably projecting its operating results
within the depressed business conditions of the homebuilding
industry, BMHC believes that it is likely that it will not be able
to meet the financial covenants of its credit agreement during
2009. Also, BMHC's independent registered public accounting firm
included a going concern explanatory paragraph in their report on
BMHC's financial statements for 2008, citing among other things,
the uncertainty that BMHC would remain in compliance with the
financial covenants. The going concern explanatory paragraph
constitutes a default under BMHC's credit agreement. In April
2009, BMHC obtained a waiver for the going concern explanatory
paragraph.
In April 2009, BMHC's lenders also agreed to extend the limited
waiver through June 1, 2009.
According to BMHC, pursuant to the May 2009 limited waiver, the
Company's capital expenditures are limited to $100,000 from the
date of the extended limited waiver. Lenders approving each of
the March, April and May 2009 limited waivers were paid a fee of
0.10% of their revolver commitment and their portion of the
outstanding principal amount of the term note.
As of March 31, 2009, there were $2.3 million borrowings
outstanding under the revolver and $313.8 million was outstanding
under the term note.
For March 2009, BMHC was not in compliance with the monthly
Adjusted EBITDA requirement of its credit agreement. BMHC added
that, as the limited waiver for the financial covenants is less
than a year, it is probable BMHC will not be in compliance with
these financial covenants within the next year and given there is
no amendment or other financing agreement currently in place, the
revolver and term note are classified as a current liability in
the consolidated balance sheet.
BMHC anticipates tax refunds of $56 million as a result of net
operating losses for 2008. The refunds, BMHC said, will be
applied to reduce the amount outstanding under the term loan
facility to approximately $275 million. The remaining portion of
the tax refund will be available for working capital needs after
payment of any borrowings under the revolver. BMHC's professional
advisors have advised that receipt of the refund is anticipated in
mid- to late May 2009.
According to BHMC, "We may not be able to meet near-term working
capital and scheduled interest and debt payment requirements if
cash flows are inadequate from our reduced operating activities or
if our access to the revolver portion of our credit facility is
restricted because we are unable to reach an agreement with our
lenders. Absent any waiver, forbearance or modification to our
current credit agreement, we believe our recurring losses from
operations, interest and debt burden amid declining sales and
potential inability to generate sufficient cash flow to meet our
obligations and sustain our operations raise substantial doubt
about our ability to continue as a going concern."
"Additionally, our long-term future is dependent on more normal
levels of single-family housing starts and our ability to
implement and maintain cost structures, including reduced interest
and debt that align with single-family housing trends. If this
fails to transpire or if we cannot obtain a waiver, forbearance or
modification to our current credit agreement or other financing
options, we may not be able to continue as a going concern and may
be forced to seek relief through a bankruptcy filing," BMHC added.
About Building Materials Holding Corp.
Based in Boise, Idaho, Building Materials Holding Corporation
(BLGM) -- http://www.bmhc.com/-- is one of the largest providers
of building materials and residential construction services in the
United States. The Company serves the homebuilding industry
through two recognized brands: as BMC West, the Company
distributes building materials and manufacture building components
for professional builders and contractors in the western and
southern states; and as SelectBuild, it provides construction
services to high-volume production homebuilders in key markets
across the country.
* * *
As reported by the Troubled Company Reporter on April 20, 2009,
Moody's Investors Service lowered BMHC'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.
BUILDING MATERIALS: Has $45MM Q1 Loss; Balance Sheet Upside Down
----------------------------------------------------------------
Building Materials Holding Corporation reported sales for the
first quarter of 2009 decreased 51% to $167 million from
$343 million in the same quarter a year ago.
Net loss for the first quarter of 2009 increased to $45.2 million
or $1.53 per share from a net loss of $33.9 million or $1.17 per
share in the same quarter a year ago.
At March 31, 2009, BMHC had $480.1 million in total assets and
$481.3 million in total liabilities, resulting in $1.16 million in
stockholders' deficit.
Commenting on first quarter results, Robert E. Mellor, Chairman
and Chief Executive Officer, stated, "The operating environment
for the homebuilding industry remained very challenging during the
first quarter of 2009. We continued to focus on our restructuring
initiatives to improve cost efficiencies and preserve liquidity.
"We are working with our lenders toward a restructuring of our
credit facility and balance sheet and we appreciate their
continuing support. We are pleased to have obtained an extension
of the waiver from our lenders that allows the Company to continue
to borrow up to $20 million under our revolver.
"We also appreciate the continued hard work of our employees and
ongoing support from our vendors during these unprecedented times.
We greatly value the loyalty of our customers and look forward to
continuing to provide them with high quality materials and
services," concluded Mr. Mellor.
For the quarter, sales declined 51% to $167 million from
$343 million in the same quarter a year ago. The depressed
conditions in the general homebuilding industry continue to be
reflected in BHMC's markets. Sales were lower in all of BHMC's
regions. As of March 2009, single-family housing starts for the
U.S. were at an annualized rate below 400,000 and single-family
permits in BHMC's markets were at an annualized rate of 100,000.
For the quarter, loss from continuing operations increased over
the prior year's first quarter as a result of:
-- lower sales volume, particularly construction services,
-- gross margin compression from competitive market conditions
and
-- deleveraging of selling, general and administrative
Expenses as fixed capacity costs combined with facility
consolidation and closure costs of $4.9 million in the
first quarter of 2009 resulted in SG&A increasing to 37.0%
from 24.6% of sales in the prior year's first quarter.
Excluding the $4.9 million of consolidation and closure
costs, first quarter 2009 SG&A expenses were 34.1% of
sales.
A full-text copy of BHMC's quarterly report is available at no
charge at http://ResearchArchives.com/t/s?3d09
About Building Materials Holding Corp.
Based in Boise, Idaho, Building Materials Holding Corporation
(BLGM) -- http://www.bmhc.com/-- is one of the largest providers
of building materials and residential construction services in the
United States. The company serves the homebuilding industry
through two recognized brands: as BMC West, the company
distributes building materials and manufacture building components
for professional builders and contractors in the western and
southern states; as SelectBuild, it provides construction services
to high-volume production homebuilders in key markets across the
country.
* * *
As reported by the Troubled Company Reporter on April 20, 2009,
Moody's Investors Service lowered BMHC'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.
CAPMARK FINANCIAL: Compliance to Leverage Ratio Covenant Waived
---------------------------------------------------------------
Capmark Financial Group Inc. intends to enter into amendments to
the senior credit facility and bridge loan agreement.
On May 8, 2009, Capmark received a commitment from certain lenders
under its bridge loan agreement and senior credit facility to
provide a new term loan facility of up to $1.5 billion. Proceeds
from the Facility, along with $75.0 million in cash, will be used
to refinance a portion of Capmark's bridge loan agreement and
senior credit facility. The Facility will be secured by a pledge
and security interest on substantially all of Capmark's U.S. and
Canadian non-bank mortgage loans and foreclosed real estate. The
maturity date of the Facility will be March 23, 2011, provided
that if certain conditions relating to the restructuring of
Capmark's senior notes due 2010 have not been met, the maturity
date of the Facility will be accelerated to April 2010.
According to Capmark, the Amendments will extend the maturity date
under the bridge loan agreement to the maturity date of the
Facility, conform the financial covenants in those agreements to
the financial covenants in the Facility and amend certain other
provisions of those agreements, including amendments necessary to
enter into the Facility. The Facility and the Amendments are
subject to a number of closing conditions, including the
negotiation and execution of definitive agreements and related
documents satisfactory to the lenders.
To facilitate the execution of definitive agreements with respect
to the Facility and the Amendments, Capmark has extended the
maturity date of 100% of its outstanding bridge loan to May 21,
2009. Additionally, the required lenders under the senior credit
facility and the bridge loan agreement have agreed to waive
Capmark's compliance with the leverage ratio covenant for the
quarters ended December 31, 2008 and March 31, 2009. These
waivers are effective through May 21, 2009.
Capmark is seeking to document and close the Facility and the
Amendments by May 21, 2009. If Capmark does not close the
Facility by May 21, 2009, and the lenders under the senior credit
facility and bridge loan agreement fail to waive or eliminate the
leverage ratio covenant beyond May 21, 2009, and further extend
the maturity of the bridge loan agreement, Capmark will default
under these agreements upon expiration of the waivers and the
extension and the majority lenders under such agreements can
immediately declare all loans due and payable.
Capmark on Friday reported a net loss of $727.7 million for the
quarter ended March 31, 2009, compared to a net loss of
$212.9 million for the quarter ended March 31, 2008. The
operating results for the first quarter of 2009 were impacted by
continued adverse market conditions that resulted in net losses on
loans of $229.2 million due to valuation losses, net losses on
investments and real estate of $247.4 million largely due to
impairment charges on real estate investments in Capmark's Asian
Operations business segment and $143.5 million of losses from
investments in joint ventures and partnerships resulting from
declines in the fair value of the assets held through such
investments.
Capmark's net loss totaled $727.7 million for the three months
ended March 31, 2009, compared to a net loss of $212.9 million for
the three months ended March 31, 2008. The $514.8 million
increase in net loss was primarily due to lower noninterest
income, a higher provision for loan losses and the absence of an
income tax benefit on the losses incurred for the three months
ended March 31, 2009.
Noninterest income was impacted by continued adverse market
conditions that resulted in increased net losses on Capmark's
loans, investments and real estate of $107.6 million and declines
in its fee and investment income of $172.4 million largely
attributable to equity in losses of joint ventures and
partnerships.
The increase in net losses was attributable to an increase in net
losses on investments and real estate of $235.6 million largely
due to impairment charges on real estate investments in Capmark's
Asian Operations business segment, partially offset by a decline
in net losses on loans of $128.0 million reflecting lower downward
changes in fair value recognized on Capmark's portfolio of loans
held for sale in the three months ended March 31, 2009, due to the
sale of 39 European loans in 2008.
The decline in fee and investment income of $172.4 million was
largely due to an increase in losses from equity investments in
joint ventures and partnerships and declines in mortgage servicing
fees, trust fees and placement fees. Capmark's loss from equity
investments in joint ventures and partnerships increased
$133.5 million primarily due to declines in fair value of the
assets held through such joint ventures and partnerships.
Mortgage servicing fees declined $12.8 million primarily due to
lower assumption fees. Trust fees decreased $11.8 million
primarily due to the lower interest rate environment. Placement
fees declined $10.3 million primarily due to a decrease in loan
origination volume.
Capmark's provision for loan losses totaled $98.7 million for the
three months ended March 31, 2009 compared to $7.6 million for the
three months ended March 31, 2008. The increase in provision for
loan losses reflects an overall increase in Capmark's loans held
for investment from a year ago, an increase in impaired loans for
which a specific allowance is recorded and the impact of declining
asset quality on the remaining loans held for investment in its
portfolio due to challenging economic conditions.
Capmark established a valuation allowance on its deferred tax
assets that resulted in the absence of an income tax benefit on
the losses incurred for the three months ended March 31, 2009.
As of March 31, 2009, Capmark had readily available cash
(excluding cash held at Capmark Bank) of approximately
$1.4 billion and Capmark Bank had approximately $1.8 billion in
cash. During the three months ended March 31, 2009, net cash
provided by operating activities totaled $1.2 billion due to the
sale of U.S. Treasury securities classified as trading.
Capmark used net cash of $44.8 million in investing activities for
the three months ended March 31, 2009, primarily for the purchase
of $65.8 million of equity investments under existing commitments
to our fund and partnership investments and the origination of
$248.6 million of loans held for investment, which was offset in
part by the receipt of $283.9 million from the repayment of loans
held for investment.
For the three months ended March 31, 2009, net cash provided by
financing activities totaled $1.4 billion due to a net increase of
$1.5 billion in deposit liabilities at Capmark Bank.
To date, Capmark has continued to take actions to maintain
liquidity to support its business operations such as obtaining a
commitment to refinance its senior credit facility and bridge loan
and focusing its efforts on originating loans for government
sponsored enterprises and third parties of $900.0 million for the
three months ended March 31, 2009. In addition, Capmark has
materially reduced its proprietary originations and investments
and, other than funding of previously committed loans,
substantially all of its originations for the three months ended
March 31, 2009, were funded by Capmark Bank.
Challenging economic conditions have resulted in declining asset
quality in recent quarters, including the first quarter of 2009,
resulting in adverse credit migration and increases in non-
performing loans. The factors contributing to the decline in
asset quality include weak economic conditions, market
illiquidity, declining commercial real estate fundamentals,
Capmark's concentration of transitional real estate and declining
real estate values.
As of March 31, 2009, the carrying value of Capmark's loan
portfolio held for investment was $8.0 billion, net of an
allowance for loan losses totaling $167.5 million and fair value
and other adjustments totaling $46.4 million as a result of
valuation adjustments on loans transferred in a prior year from
held for sale designation.
As of March 31, 2009, Capmark's loan portfolio held for sale was
carried at a fair value of $3.8 billion representing an aggregate
discount of approximately $1.0 billion to the portfolio's
aggregate unpaid principal balance of $4.8 billion.
As of March 31, 2009, total reserves on the loan portfolios held
for investment and held for sale (including allowance for loan
losses and fair value and other adjustments) were 9.2% of the
unpaid principal balance of the loan portfolio.
As of March 31, 2009, Capmark's real estate investments had a
carrying value of $1.7 billion, which reflects Capmark recording
impairment charges of $122.7 million during the first quarter of
2009 related to its real estate holdings in Asia.
As of March 31, 2009, Capmark had $21.1 billion in total assets
and $$20.4 billion in total liabilities.
About Capmark
Based in Horsham, Pennsylvania, Capmark Financial Group Inc. --
http://www.capmark.com/-- is a diversified company that provides
a broad range of financial services to investors in commercial
real estate-related assets. Capmark has three core businesses:
lending and mortgage banking, investments and funds management,
and servicing. Capmark operates in North America, Europe and
Asia.
CHARDON RUBBER: Files for Ch. 11 to Implement $3.87MM Asset Sale
----------------------------------------------------------------
According to Bill Rochelle at Bloomberg, Chardon Rubber Co. filed
a Chapter 11 petition with an agreement in hand to sell assets to
Westinghouse Air Brake Technologies Corp. for $3.87 million.
Chardon wants an auction on July 6 if there is a bid to compete
with Westinghouse. The Company contemplates a July 7 sale
hearing.
Chardon, the report relates, blamed the filing on the decline in
the auto and construction industries. Revenue of $37.8 million in
2006 shrank to a projected $16 million this year.
Bloomberg, citing court documents, say Chardon owes $2.2 million
to the first-lien bank lender and another $300,000 on a second-
lien claim. Trade suppliers are owed $2.5 million, according to
Chief Operating Officer Marian K. Devoe.
Chardon Rubber Co., filed for Chapter 11 on May 15 (Bankr. N.D.
Ohio Case No.: 09-14348). Judge Pat E. Morgenstern-Clarren
handles the case. Jean Robertson, Esq., at Calfee, Halter &
Griswold LLC, is the Debtor's counsel. The Company says disclosed
assets between $1,000,001 and $10,000,000, and debts between
$10,000,001 and $50,000,000.
CHESTNUT INVESTMENTS: Case Summary & 10 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: Chestnut Investments, LLC
511 Fourth Avenue
1st Floor
Asbury Park, NJ 07712
Bankruptcy Case No.: 09-22717
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
District of New Jersey (Trenton)
Debtor's Counsel: Dennis M. Mahoney, Esq.
One Woodbridge Center
Suite 240
Woodbridge, NJ 07095
Tel: (732) 855-1776
E-mail: dmmahoneypa@aol.com
Total Assets: $1,112,825
Total Debts: $1,820,000
A full-text copy of the Debtor's petition, including a list of its
10 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/njb09-22717.pdf
The petition was signed by Thomas W. Bade, president of the
Company.
CHRYSLER LLC: Dealer Group Says Cuts to Hurt Sales
--------------------------------------------------
A group of dealers called the Chrysler National Dealers
Council a statement before the U.S. Bankruptcy Court for the
Southern District of New York in response to Chrysler's request to
terminate 789 dealership contracts. While the group filed its
papers in the form of a statement, and not an objection, it urged
Judge Arthur Gonzalez to consider "all relevant information"
before authorizing Chrysler's request to cut 25% of its dealers.
The CNDC argues, among other things, that there is no evidence
that Chrysler would be able to improve sales if dealers are cut.
As reported by the TCR on May 15, 2009, Chrysler LLC and its
affiliates submitted to Judge Arthur Gonzalez of the U.S.
Bankruptcy Court for the Southern District of New York a motion
seeking authority to reject, effective as of June 9, 2009,
Chrysler, Jeep, Dodge or Dodge Truck dealership agreements with
789 dealers. A list of the 789 Dealership Agreements is available
for free at:
http://bankrupt.com/misc/Chrysler_Rejected_Delears.pdf
Chrysler has identified dealership contracts that it will assign,
together with its key operating assets to a New Chrysler, a
company to be 20% owned by Fiat S.p.A., in connection with the
11 U.S.C. Sec. 363 transaction. A list of these contracts is
available at:
http://bankrupt.com/misc/Chrysler_Designated_Dealer_Agreements.pdf
Counsel of the CNDC, Michael L. Bernstein, Esq., at Arnold &
Porter LLP, in Washington, D.C., pointed out that:
1. Dealers produce revenue, not expense, for Chrysler.
There is no evidence that by rejecting dealership agreements
New Chrysler will save money to any material degree or
enhance its competitive position in the automobile market.
To the contrary, closing dealers narrows distribution and
reduces Chrysler's sales and income as fewer dealers buy
fewer cars and retail sales are lost to other brands.
2. Dealers absorb inventory risks.
Chrysler also benefits from a wide dealer network because
dealers, rather than Chrysler, bear the risk on unsold cars
and cars in transit from the factory. An average automobile
dealer owns $4.9 million in new car inventory. Fewer dealers
will mean less inventory available to the public. Lower
inventory reduces the chances that a customer will find the
car they are looking for and therefore hurts sales. A wider
supply of inventory improves Chrysler's competitive position
and it is again an improvement for which the dealers, not
Chrysler, bear the cost.
3. Dealers invest in facilities and customer service.
The physical facilities to which Chrysler customers go -- the
showrooms, new car lots, customer service areas, parts
centers, the facilities where used cars are handled and
exchanged -- are all paid for by dealers, not Chrysler. These
investments are roughly $2.5 million per dealer. Dealers
also pay for advertising, training, regulatory compliance
efforts and personnel to ensure that the customer's
experience with Chrysler products is smooth and successful.
4. Maintaining the Network is essential to Chrysler's future.
Chrysler witnesses have been very clear that the company's
value as a going concern -- and accordingly its value to
Fiat -- are closely tied to preserving customer confidence in
the viability of Chrysler. For example, warranty programs
and extended service programs are among the most important
interactions most people have with Chrysler. These important
services are provided almost exclusively through the self-
funded dealer network at virtually no delivery cost to
Chrysler.
The CNDC also urges the Court, in ruling on Chrysler's rejection
request, not to foreclose the right of any dealer whose contract
Chrysler proposes to reject to argue that it is entitled to
whatever protections may be afforded by applicable non-bankruptcy
law. Any dealer whose contract is proposed to be rejected should
have a full and fair opportunity to assert any rights it may have
under applicable law, Mr. Bernstein asserts.
The CNDC is a council of Chrysler dealers from across the country
that are elected by the dealership body as a whole to represent
Chrysler dealers in issues of mutual concern and interest. The
NDC interacts with Chrysler regularly with respect to
manufacturer-dealer issues. Each dealership serves an average of
9,800 Chrysler customers. The CNDC's attorneys are:
Michael L. Bernstein, Esq.
James L. Cooper, Esq.
Kenneth L. Schwartz, Esq.
Anthony D. Boccanfuso, Esq.
ARNOLD & PORTER LLP
555 Twelfth Street, N.W.
Washington, D.C. 20004
(202) 942-5000
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.
In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake.
Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC. The Treasury purchased senior
preferred stock from GMAC LLC. In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009. Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability. However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.
The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.
On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002). U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller lenders,
including hedge funds that he didn't name -- "a small group of
speculators" -- refused to make the concessions agreed to by the
Company's major debt holders and workers.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.
Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.
Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion
in cash at that time.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Gets Nod for Stipulation on JPM Letters of Credit
---------------------------------------------------------------
Chrysler LLC sought and obtained approval from the U.S. Bankruptcy
Court for the Southern District of New York approval of a
stipulation regarding their letters of credit with JPMorgan Chase
Bank, N.A.
Pursuant to "Applications and Agreements for Irrevocable Standby
Letter of Credit" each dated July 20, 2007 -- the Reimbursement
Agreements -- among the parties, JPMorgan issued two letters of
credit:
(i) letter of credit reference number TPTS-346618
in the face amount of $4,740,871 issued to Liberty Mutual
Insurance Company, and
(ii) letter of credit reference number TPTS-346619 in the face
amount of $14,300,000 issued to Illinois Workers
Compensation Commission, for the account of the Debtor.
All present and future obligations of the Debtors with respect to
the Letters of Credit and under the Reimbursement Agreements are
secured and cash collateralized under a Cash Collateral Agreement
dated as of July 30, 2007, between the Debtors and JPMorgan
pursuant to which JPMorgan holds $19,612,226 in account number
*****57961 -- the Cash Collateral Account -- which account is
subject to JPMorgan's sole dominion and control.
The Debtors have requested that JPMorgan permit the extension for
a period of 12 months of the Illinois LC as the failure to extend
the Illinois LC would entitle the beneficiary to draw upon it.
Accordingly, the parties entered into a Stipulation which
provides that:
(a) The Debtors are authorized to request, and JPMorgan
is authorized to permit, the extension for a period
of 12 months of the Illinois LC in accordance with its
terms;
(b) The Debtors are authorized to execute and deliver all
documents and agreements reasonably requested by JPMorgan
in connection with the extension of the Letters of Credit
and are authorized to pay, when due, all obligations with
respect to the L/Cs, including all issuance fees and any
margin or interest charges, in each case at the rates
applicable to the Letters of Credit immediately prior to
the Petition Date;
(c) In the event that JPMorgan will honor a drawing request of
a beneficiary under a Letter of Credit and the Debtors
will not have reimbursed JPMorgan in full and in cash for
the drawing within two business days, the automatic stay
provisions of Section 362 of the Bankruptcy Code will be
deemed vacated without further notice or court order to
the extent necessary to permit JPMorgan to apply amounts
in the Cash Collateral Account against all Obligations
then due in accordance with the Reimbursement Agreement
and the Cash Collateral Agreement; and
(d) Any payments or proceeds remitted to JPMorgan pursuant to
the provisions of the Stipulation or any subsequent Court
order will be received free and clear of any claim,
charge, assessment or other liability.
The Debtors expect that the beneficiary of the Illinois LC would
be entitled to draw on the Illinois LC and will do so, absent a
replacement or extension. Although there can be no assurances
that the beneficiary will actually draw against the Illinois
LC, the Debtors believe that the extension of it pursuant to the
Stipulation will benefit the Debtors' estates by providing a
basis for the beneficiary to further delay any draw against the
Illinois LC.
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.
In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake.
Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC. The Treasury purchased senior
preferred stock from GMAC LLC. In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009. Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability. However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.
The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.
On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002). U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller lenders,
including hedge funds that he didn't name -- "a small group of
speculators" -- refused to make the concessions agreed to by the
Company's major debt holders and workers.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.
Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.
Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion
in cash at that time.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Judge Says Move for Retirees Panel Premature
----------------------------------------------------------
The National Chrysler Retirement Organization, an organization
representing the interests of non-union retirees of Chrysler LLC
and its affiliated Debtor entities, asked the U.S. Bankruptcy
Court for the Southern District of New York to authorize and
instruct the United States Trustee for Region 2 to appoint an
Official Non-Union Retiree Committee. The NCRO noted that there
are more than 16,000 non-union retirees and surviving spouses
receiving health insurance benefits from the Debtors that are
slated for elimination.
Chrysler objected to the proposal, noting that pursuant to Section
1114((d) of the Bankruptcy Code, the appointment of a committee of
retired employees is mandated only when the debtors seek to modify
or terminate retiree benefits, or if the court approves otherwise
deems it appropriate. According to the Debtors, they have
continued to pay all retiree benefits postpetition and have made
no determination to modify or terminate those benefits. Thus,
the Debtors contend, the appointment of Section 1114 committee is
premature and represents a waste of their estate's assets.
The NCRO, through counsel, Trent P. Cornell, Esq., at Stahl Cowen
Crowley Addis LLC, in Chicago, Illinois, countered that the
Debtors are "de facto terminating or modifying" their non-union
retiree plans by virtue of excluding them from the sale of
substantially all the Debtors' assets to New CarCo Acquisition
LLC, the company 20% owned by Fiat S.p.A.
At the hearing held May 14, 2009, the parties argued whether a
Section 1114 retiree committee is necessary when it is not yet
decided whether the purchaser of Chrysler's assets will modify or
terminate the retirees' benefits.
The attorneys for Chrysler said the Section 1114 retiree committee
wasn't necessary because benefits would continue under the new
company, reports Stephen Kersey of bizzia.com. It is expected
that Fiat will retain benefits for the Chrysler retirees, but
with cost increases for the higher-compensated retired workers,
he said.
Though this is not guaranteed, Judge Gonzalez agreed that a
Section 1114 retiree committee wasn't necessary as the decision
about the benefits would be made by the Fiat group after the
sale, not by Chrysler, Mr. Kersey said. Consequently, Judge
Gonzalez denied the NCRO's Request without prejudice to NCRO's
counsel to bring the request before the Court in three days'
notice.
"We are gratified that Chrysler LLC has acknowledged the
obligation to its 19,000 salaried (non-union) retirees and their
families by agreeing to move their pension and retiree benefit
obligations over to the New Company, as the company's attorneys
set forth in front of Judge Gonzalez today," relates a statement
released by NCRO.
"Because of this assurance, there is no reason to form a Retiree
Committee under Section 1114 of the Bankruptcy Code . . . We
look forward to working with Chrysler as it adjusts the wording
on retiree obligations in its sales documents to include salaried
retirees," the statement said.
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.
In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake.
Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC. The Treasury purchased senior
preferred stock from GMAC LLC. In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009. Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability. However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.
The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.
On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002). U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller lenders,
including hedge funds that he didn't name -- "a small group of
speculators" -- refused to make the concessions agreed to by the
Company's major debt holders and workers.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.
Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.
Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion
in cash at that time.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Bridgestone Won't Continue Supplies w/o Payment
-------------------------------------------------------------
Bridgestone Americas Tire Operations LLC, f/k/a Bridgestone
Firestone North American Tire LLC, asks the U.S. Bankruptcy Court
for the Southern District of New York to set aside the order
confirming the protections of Section 362, 365, and 525 of the
Bankruptcy Code or, in the alternative, amend the Performance
Order, to affirmatively protect BATO's right to reciprocal
postpetition performance.
To ensure the continued stream of supplies and assure suppliers
that they will be paid, the Debtors have sought and obtained an
order confirming:
(i) the administrative expense priority status of the Debtors'
undisputed and liquidated obligations to suppliers and
service providers for the postpetition delivery of goods
and services; and
(ii) that the Debtors have authority to pay those expenses in
the ordinary course of their business.
According to Robert C. Goodrich, Jr., Esq., at Stites & Harbison
PLLC, in Nashville, Tennessee, BATO did not receive advance
notice of the Performance Order or have the opportunity to object
to its entry.
Mr. Goodrich asserts that, contrary to what the Debtors
represented, the Performance Order was not merely confirmatory of
the provisions of Sections 362, 365, and 525 because it obligates
non-Debtor counterparties to executory contracts to perform
regardless of whether the Debtors are making postpetition
payments and regardless of whether the Debtors otherwise are
performing postpetition.
There is no basis under the Bankruptcy Code to compel performance
by a non-debtor counterparty absent assumption of an executory
contract, and nonperformance by a non-debtor counterparty is not
a violation of the automatic stay, Mr. Goodrich argues. He adds
that to the extent BATO is compelled by injunction to ship Tires
or related goods to the Debtors pending assumption or rejection,
it is entitled to reasonable assurance of reciprocal performance.
Mr. Goodrich further asserts that recognizing the administrative
claim status of the claim of the non-debtor counterparty arising
from a performance is not any guarantee of payment and does not
constitute "reasonable assurance of reciprocal performance." He
adds that BATO cannot determine whether the Debtors' are
administratively solvent, but given the apparent under-secured
nature of the prepetition secured claims and the priming nature
of the DIP facility, administrative solvency appears doubtful.
Mr. Goodrich notes that BATO does not dispute that postpetition
shipments may be essential to the Debtors' survival, but vendors
should not be compelled to ship without reasonable assurances of
payment to solve the problem.
BATO sells tires to the Debtors on credit terms, both as a
supplier and by selling replacement tires through retail stores
to dealers, for which BATO is paid by the Debtors, who in turn
bill the dealers.
Union Pacific Railway Company echoes BATO's contentions. Union
Pacific Railway Company and its affiliated entities have
prepetition claims against one or more of the Debtors arising
under prepetition contracts in an amount exceeding $15,000,000.
The claims arose in the ordinary course of Union Pacific's
business before the Petition Date.
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.
In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake.
Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC. The Treasury purchased senior
preferred stock from GMAC LLC. In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009. Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability. However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.
The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.
On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002). U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller lenders,
including hedge funds that he didn't name -- "a small group of
speculators" -- refused to make the concessions agreed to by the
Company's major debt holders and workers.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.
Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.
Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion
in cash at that time.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Dow Balks at Protocol for Sec. 503(b)(9) Claims
-------------------------------------------------------------
Chrysler LLC has sought authority from the U.S. Bankruptcy Court
for the Southern District of New York to implement a set of
uniform procedures in relation to the assertion of claims entitled
to priority under Section 503(b)(9) of the Bankruptcy Code for
goods received within 20 days before the Petition Date.
The Debtors estimate that within the 20-day period immediately
before the Petition Date, they received about $800 million worth
of goods from suppliers, most of which have not yet been paid.
The Debtors propose to require 503(b)(9) claimants to file proofs
of claim by a court-approved deadline. To the extent a Section
503 Claim is allowed, it will be paid pursuant to a Chapter 11
Plan of the Debtors to be confirmed by the Court.
Dow Chemical Objection
The Dow Chemical Company says that the claim procedures may be
necessary to provide the Debtors with the opportunity to address
the allowance of the claims in an orderly and efficient manner.
The company says, however, that it does not agree that the claims
-- administrative priority claims under Section 503 of the
Bankruptcy Code -- are or should be subject to Sections 501 and
502 of the Bankruptcy Code.
"Dow is concerned that the approval by the Court of the Debtors'
use of sections 501 and 502 of the Bankruptcy Code and Bankruptcy
Rules 3001 through 3007 as the mechanism for the assertion and
allowance of the claims may be subsequently interpreted as a
ruling by the Court that the claims may be disallowed under
section 502(d)," says, Anne Aaronson, Esq., at Dilworth Paxson
LLP, in Philadelphia, Pennsylvania.
To ensure that the company as well as the other claimants are not
precluded or estopped from litigating the application of Section
502(d) to their claims, Dow asks the Court that the final order
should contain a provision clarifying that the order won't
affect, preclude or prohibit the claimants or any other party-in-
interest from challenging the applicability of Sections 501, 502,
and 502(d) to their claims in the Debtors' bankruptcy cases or in
any other proceedings.
Dow also asks the Court to include a provision stating that the
claim settlement procedures won't affect the rights and remedies
of the claimants or any other party-in-interest with regard to
avoidance actions.
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.
In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake.
Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC. The Treasury purchased senior
preferred stock from GMAC LLC. In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009. Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability. However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.
The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.
On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002). U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller lenders,
including hedge funds that he didn't name -- "a small group of
speculators" -- refused to make the concessions agreed to by the
Company's major debt holders and workers.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.
Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.
Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion
in cash at that time.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Has Interim Order for Utilities to Maintain Services
------------------------------------------------------------------
Judge Arthur Gonzalez of the U.S. Bankruptcy Court for the
Southern District of New York has granted, on an interim basis,
the Debtors' request to deem utility companies adequately assured
of Chrysler's performance. The Court also approved, in all
respects, the Debtors' proposed adequate assurance procedures,
opt-out procedures and modified adequate assurance procedures.
A final hearing to resolve any objections to the request will be
held on May 28, 2009.
Judge Gonzalez ruled that no Utility Company may (i) alter,
refuse, terminate or discontinue utility services to, or
discriminate against, the Debtors on the basis of the
commencement of the Chapter 11 cases or on account of unpaid
prepetition invoices, or (ii) require additional assurance of
payment, other than the proposed adequate assurance, as a
condition to the Debtors receiving utility services pending the
entry of a final order.
The Debtors are also allowed to deposit, as adequate assurance
for the sole benefit of the Utility Companies not subject to the
Daimler Guarantee, $1,158,487 into a newly created, segregated,
interest bearing account by May 20, 2009. The Debtors previously
offered an adequate assurance deposit of $5,991,487.
At the May 15, 2009 hearing, Albert Togut, Esq., Togut, Togut &
Segal LLP, in New York, explained that the drop in the deposit's
amount is because the Debtors will not deposit any amount for the
Utility Companies that have filed objections to the Request. The
Debtors asked for a May 28 final hearing to resolve the
objections.
The Debtors are further authorized, in their sole discretion and
in consultation with the Official Committee of Unsecured
Creditors, to amend the Utility Service List to add or delete any
Utility Company.
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.
In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake.
Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC. The Treasury purchased senior
preferred stock from GMAC LLC. In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009. Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability. However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.
The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.
On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002). U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller lenders,
including hedge funds that he didn't name -- "a small group of
speculators" -- refused to make the concessions agreed to by the
Company's major debt holders and workers.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.
Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.
Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion
in cash at that time.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Fifth Third Bank Proposes to Draw From Deposit
------------------------------------------------------------
Fifth Third Bank and Chrysler LLC signed a prepetition Letter of
Credit Reimbursement and Security Agreement, under which the bank
issued five letters of credit for the account of Chrysler in the
sum of $147,705,383.
Under the agreement, Chrysler is obligated to pay Fifth Third the
sum of all payments, including interest and expenses, that the
bank makes to a beneficiary or any other party, whether by reason
of a draw under the agreement or otherwise. The total value of
Chrysler's outstanding liabilities equals $147,705,383, plus
costs, interest and fees.
To secure Chrysler's liabilities to Fifth Third, the bank was
granted a first priority security interest in Chrysler's rights
in cash collateral, investment or other depository accounts with
the bank as collateral security for the letters of credit and
their proceeds.
On July 27, 2007, Fifth Third and Chrysler entered into a Deposit
Account Control Agreement, under which Chrysler granted the bank
a security interest in certain earmarked deposit accounts held at
the bank. Currently, $148,997,923 of cash is on deposit in these
accounts.
In May 2009, Safeco Insurance Company issued a demand for a draw
upon its Letter of Credit in the sum of $111,444,533. Based on
information from Chrysler representatives, Fifth Third expects to
receive additional demands for draws upon the other Letters of
Credit.
ISDA Master Agreement
Chrysler and Fifth Third are also parties to certain documents
and agreements, under which the companies have entered into
arrangements for foreign currency and commodity forwards and
swaps including an ISDA Master Agreement (Multicurrency-Cross
Border) dated October 17, 2007.
Certain events of default have occurred under the ISDA Agreement,
and as a result Fifth Third has exercised its right to terminate
the ISDA Agreement, effective May 13, 2009.
As a result of the early termination of the ISDA Agreement,
Chrysler is indebted to Fifth Third for certain termination
amounts. The termination amounts include a defaulted payment for
$348,950 which was due on May 5, 2009.
Fifth Third is in the process of calculating the termination
amounts, but estimates that the total principal amount owed by
Chrysler for early termination of the ISDA Agreement will range
from $4.5 to $5.8 million.
By this motion, Fifth Third asks the Court to lift the automatic
stay to permit the bank to:
(i) apply funds in the earmarked deposit accounts to
Chrysler's liabilities resulting from current and future
draws upon the Letters of Credit, as well as its
liabilities under the ISDA Agreement; and
(ii) exercise any and all remedies under the Letter of Credit
Reimbursement and Security Agreement and Deposit Account
Control Agreements.
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.
In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake.
Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC. The Treasury purchased senior
preferred stock from GMAC LLC. In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009. Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability. However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.
The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.
On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002). U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller lenders,
including hedge funds that he didn't name -- "a small group of
speculators" -- refused to make the concessions agreed to by the
Company's major debt holders and workers.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.
Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.
Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion
in cash at that time.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Initial Case Management Conference on June 4
----------------------------------------------------------
Judge Arthur J. Gonzales of the United States Bankruptcy Court of
the Southern District of New York will conduct an initial case
management conference in the bankruptcy cases of Chrysler LLC at:
Room 523
United States Bankruptcy Court
One Bowling Green,
New York, NY 10004
on June 4, 2009, at 10:00 a.m., New York time, or as soon as a
counsel may be heard, to consider the efficient administration of
the Debtors' Chapter 11 cases, which may include topics like
retention of professionals, creation of a committee to review
budget and fee requests, use of alternative dispute resolution,
timetables and scheduling of additional case management
conferences.
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.
In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake.
Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC. The Treasury purchased senior
preferred stock from GMAC LLC. In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009. Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability. However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.
The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.
On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002). U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller lenders,
including hedge funds that he didn't name -- "a small group of
speculators" -- refused to make the concessions agreed to by the
Company's major debt holders and workers.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.
Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.
Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion
in cash at that time.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Suppliers, Other Parties Keep Track of Case
---------------------------------------------------------
Several attorneys to suppliers, creditors, and stakeholders of
Chrysler LLC have filed notices of appearance and request for
service of papers in the Chapter 11 cases of Chrysler LLC.
These parties include:
Counsel Client
------- ------
Shearman and Sterling
LLP and Skadden, Arps,
Slate, Meagher & Flom LLP Daimler AG, and Daimler North
America Corp. Daimler owns 19.9%
of the membership interest of
Chrysler.
Gerard Uzzi, Esq.,
White & Case LLP Chrysler Non-TARP Lenders. These
group of hedge funds held more
than $295,000,000 principal
amount of the senior secured
first lien debt. They were
branded by U.S. President Barack
Obama as "speculators" in public
criticism for refusing to join
Chrysler's biggest banks in the
government-brokered deal to wipe
out Chrysler's $6.9 billion debt
and move forward with an out-of-
court alliance with Fiat.
Marc Kieselstein, Esq.,
Kirkland & Ellis LLP Johnson Controls, Inc. According
to Chrysler's list of its 50
largest unsecured creditors, JCI
held the third largest with its
$50,312,511 trade claim.
Michael L. Bernstein, Esq.
Arnold & Porter LLP Chrysler National Dealers
Council. The CNDC, a council of
Chrysler dealers from across
U.S., will come to court to argue
that Chrysler's plans to cut 789
of 3,200 dealers will further
hurt sales and would result to
thousands of job losses.
Salvatore A. Barbatano, Esq.
Foley & Lardner LLP Various suppliers, including
Getrag Transmissions
Manufacturing LLC. Getrag and
Chrysler entered into a joint
venture where a Tipton, Indiana
facility was being built for
Getrag solely for the
manufacturing of dual clutch
transmissions for Chrysler.
Chrysler, however, terminated
their project agreements after
Getrag failed to obtain
financing. The parties assert
claims against each other.
The suppliers represented by Foley & Lardner are:
(a) ABC Group Inc. and Subsidiaries
2 Norelco Drive
Toronto, Ontario,
Canada M9L 2X6
(b) Ficosa North America, SA de CV
Ficosa North America, Corp.
87 Wyatt Court
Crossville, TN 38555
(c) Omron Automotive Electronics Inc.
Omron Dualtec Automotive Electronics Inc.
c/o Omron Management Center of America
1 Commerce Drive
Chicago, IL 60173-5302
(c) Acument Global Technologies, Inc.
840 W. Long Lake Road
Suite 450
Troy, MI 48098
(b) GETRAG Corporation
GETRAG Transmissions Manufacturing LLC
Getrag KG
Getrag Ford Transmissions
1848 Getrag Parkway
Newton, NC 28658
(c) Peterson American Corporation
21200 Telegraph Road
P. O. Box 5059
Southfield, MI 48086-5059
(d) American Tooling Center Inc.
Superior Cam Inc.
Midland Design Services Inc.
c/o Diversified Tooling Group
31240 Stephenson Highway
(e) Madison Heights, MI 48071
Grupo Antolin North America Inc.
1700 Atlantic Blvd.
Auburn Hills, MI 48326
(f) Roush Manufacturing, Inc.
Roush Industries, Inc.
12445 Levan Rd.
Livonia, MI 48150
(e) Anchor Danly Inc.
2590 Ouellette Ave.
Windsor, Ontario N8X 1L7
Henniges Automotive and Subsidiaries
36600 Corporate Drive
Farmington Hills, MI 48331
(g) TI Group Automotive Systems L.L.C.,
TI Group Automotive Systems S. de R. L. de C. V.
TI Automotive Canada Inc.
12345 East Nine Mile Road
Warren, MI 48090-2001
(h) Android Industries LLC
2155 Executive Blvd.
Auburn Hills, MI 48326
(i) Intermet Corporation
301 Commerce Street
Suite 2901
Fort Worth, TX 76102
(j) Tower Automotive Inc.
27275 Haggerty Road
Suite 680
Novi, MI 48377
(k) BBi Enterprises, Inc.
36800 Woodward Avenue,
Suite 2
Bloomfield Hills, Michigan 48304
(l) Intra Corporation
885 Manufacturers Drive
Westland, MI 48186
(m) Vari-Form, Inc.
c/o TYDE Group Worldwide LLC
12345 East Nine Mile Road
Warren, MI 48090
(n) Cooper-Standard Automotive Inc.
Financial Shared Services - AP
P. O. Box 311
207 South West Street
Auburn, IN 46706
(o) Meridian Automotive Systems LLC
Meridian Automotive Systems, Inc.
999 Republic Drive
Allen Park, Michigan 48101
(p) Warren Industries, Inc.
22805 Interstate Drive
Clinton Township, MI 48035
(q) Webasto Roof Systems Inc
1757 Northfield Drive
Rochester, MI 48309
(r) Cummins Inc.
Cummins Power Generation Inc.
Cummins Filtration Inc.
Cummins Emission Solutions Inc.,
Cummins Fuel Systems
Cummings Turbo Technologies
Diesel Recon Company
500 Jackson Street
Mail Code: 60701
Columbus, IN 47201
(s) Meridian Lightweight Technologies, Inc.
25 MacNab Avenue
Strathroy, ON N7G 4H6
(t) Woory Industrial
29600 Northwestern Highway
Suite 102
Southfield, MI 48034
(u) Design Systems, Inc.
38799 West Twelve Mile Road
Suite 100
Farmington Hills, MI 48331-2903
(v) NewPage Corp.
8540 Gander Creek Drive
Miamisburg, OH 45066
(w) Yokohama Tire Corporation
601 SO. Acacia Avenue
Fullerton, CA 92831
(x) EMCON Technologies LLC
1050 Wilshire
Suite 200
(y) Troy, MI 48084
Old World Industries, Inc.
4065 Commercial Avenue
Northbrook, IL 60062-1851
(z) Automotive Corporation, Inc.
c/o Concord International, Inc.
3221 W. Big Beaver Road, #110
Troy, MI 48084
A list of the requesting parties-in-interest as of May 14 is
available for free at:
http://bankrupt.com/misc/Chrysler_NOA_051409.pdf
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.
In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake.
Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC. The Treasury purchased senior
preferred stock from GMAC LLC. In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009. Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability. However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.
The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.
On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002). U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller lenders,
including hedge funds that he didn't name -- "a small group of
speculators" -- refused to make the concessions agreed to by the
Company's major debt holders and workers.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.
Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.
Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion
in cash at that time.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Dealers Band Together, Seek Asset Sale Delay
----------------------------------------------------------
The Committee of Chrysler Affected Dealers, the largest national
group protesting Chrysler's request to cancel 789 dealer franchise
agreements, has objected to Chrysler's proposed asset sale and has
asked the U.S. Bankruptcy Court to delay hearings that would
approve the sale and rejection of the dealer franchise agreements.
"Chrysler's proposed asset sale and request for immediate
termination of dealer franchises will destroy several hundred
independent businesses, ruin the livelihoods of their owners,
cause the loss of thousands of jobs and precipitate inevitable
personal and business bankruptcies flowing from the closing of the
affected dealers," said Stephen D. Lerner, head of the bankruptcy
and restructuring practice at Squire, Sanders & Dempsey L.L.P.
Mr. Lerner leads the team representing the dealer committee, which
represents the collective interests of nearly 300 dealers in 45
states. The number of dealers joining the committee's efforts
grows daily.
The committee filed a broad objection to Chrysler's motion seeking
authority to sell nearly all its assets to the Fiat/UAW controlled
"New Chrysler." The committee also requested a continuance,
asking the court to delay the hearing dates and deadlines related
to the proposed sale and rejection motion so the committee has a
full and fair opportunity to take discovery and present its
defense.
"The relief Chrysler seeks is unprecedented and improper," Mr.
Lerner said. "We believe Chrysler's efforts through the sale and
rejection motions violate due process, the US Bankruptcy Code,
other federal statutes and the laws of all 50 states that are
specifically designed to protect the interests of dealers and
prevent the immeasurable harm that Chrysler is inflicting on these
dealers."
"The Bankruptcy Court will be required to address several matters
of first impression and Chrysler has by design given the affected
dealers only three business days to respond. The emotional and
financial catastrophe that would be wrought by the relief
requested in these motions need not happen and should not happen,
and certainly not with only three business days' notice," Mr.
Lerner said.
He added that under well-settled principles of bankruptcy law and
fundamental notions of due process, Chrysler's restructuring, as
proposed, cannot lawfully happen.
The Committee requests the court require Chrysler to subject its
restructuring proposal to the transparency, fairness and equal
treatment of similarly situated creditors mandated by the
disclosure and plan confirmation provisions of the Bankruptcy
Code, and to give the affected dealers the notice and procedural
protections that due process and the Bankruptcy Rules command.
"Chrysler's restructuring transaction is an improper and
impermissible sub rosa plan that seeks to use the thinly veiled
guise of an asset sale to subvert the normal distribution scheme
and creditors' procedural rights as mandated by Chapter 11 in
direct contravention of the basic goal of Chapter 11
reorganization," Mr. Lerner said.
Contact:
Drez Jennings
Media Relations Manager
Squire, Sanders & Dempsey L.L.P.
+1.216.802.7301
djennings@ssd.com
Founded in 1890, Squire, Sanders & Dempsey L.L.P. --
http://www.ssd.com/-- has lawyers in 32 offices and 15 countries
around the world.
Roundtable Calls on Obama to Save Chrysler Jobs
The American Policy Roundtable has called upon President Barack
Obama to intervene and stop the termination of 789 Chrysler
dealerships across the nation. The contract termination was
announced last week by Chrysler operating under the protection of
federal bankruptcy court.
"Chrysler is now operating with public tax dollars. Those dollars
should not be spent in illegal and unethical practices, such as
breaking legal contacts with dealers who have done nothing wrong,"
said David Zanotti, President and CEO of the nonprofit American
Policy Roundtable. "These dealers and all their employees make
Chrysler money every single day. They are not liabilities, they
are profit centers. Throwing these people out of work without just
cause is just plain rotten. This action will also diminish the
value of every Chrysler, Dodge and Jeep on the highway today and
devalue Chrysler in the future. The President and Congress must
intervene and stop this injustice."
The Roundtable issued an immediate call for help to over 20,000
supporters and allies across the nation urging them to call
President Obama and members of the U.S. Congress. The alert is
also featured on the Web site http://www.APRoundtable.org/ The
Chrysler Question will also be a feature on upcoming episodes of
The Public Square(R), the Roundtable's radio broadcast heard on
over 150 radio stations across the nation.
The American Policy Roundtable, founded in 1980 is an independent,
non-profit education and research organization promoting the
principles of the Declaration of Independence and U.S.
Constitution in public policy.
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures 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.
In 2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake.
Pursuant to the U.S. Government's Automotive Industry Financing
Program, the U.S. Department of the Treasury made emergency loans
to General Motors Corp., Chrysler Holding LLC, and Chrysler
Financial Services Americas LLC. The Treasury purchased senior
preferred stock from GMAC LLC. In exchange, Chrysler and GM
submitted restructuring plans to the Treasury on February 17,
2009. Upon submission, President Obama's Designee on the Auto
Industry determined that the restructuring plans did not meet the
threshold for long-term viability. However, on March 30, 2009,
both GM and Chrysler were granted extensions to complete the
restructuring plans to comply with the requirements set forth
under the Automotive Industry Financing Program.
The U.S. Government told Chrysler March 31, 2009, it would provide
up to $6 billion in financing if (i) Chrysler and Fiat SpA could
complete a deal by the end of April -- on top of the $4 billion
Chrysler has already received -- and (ii) Chrysler would obtain
concessions from constituents to establish a viable out-of-court
plan.
On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case
No. 09-50002). U.S. President Barack Obama said that Chrysler had
to file for bankruptcy after the automaker's smaller lenders,
including hedge funds that he didn't name -- "a small group of
speculators" -- refused to make the concessions agreed to by the
Company's major debt holders and workers.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.
Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal
LLP, as conflicts counsel; Capstone Advisory Group LLC, and
Greenhill & Co. LLC, for financial advisory services; and Epiq
Bankruptcy Solutions LLC, as its claims agent.
Chrysler says that as of December 31, 2008, it had $39,336,000,000
in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion
in cash at that time.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHUNDURI V CHELAPATI: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Chunduri V. Chelapati
21 Shadowcast
Newport Beach, CA 92657-1647
Bankruptcy Case No.: 09-14611
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
Central District Of California (Santa Ana)
Judge: Erithe A. Smith
Debtor's Counsel: Teresa A. Blasberg, Esq.
Blasberg & Associates
526 N Juanita Ave
Los Angeles, CA 90004
Tel: (323) 515-3578
Fax: (323) 661-2940
E-mail: tablasberg@earthlink.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by C.V. Chelapati.
CLARKE COLLEGE: Moody's Affirms 'Ba1' Rating on 1998 Bonds
----------------------------------------------------------
Moody's Investors Service has affirmed the Ba1 long-term rating on
Clarke College's Series 1998 bonds issued through Dubuque County,
Iowa, with $5.4 million outstanding. The College's rating outlook
is revised to stable from positive, reflecting expected enrollment
challenges with modestly lower enrollment, resulting in
constrained operating performance.
Legal Security: General obligation of the College.
Debt Related Derivatives: None.
Strengths
* Established student market position and stable enrollment that
is expected to continue for this small, Catholic, liberal arts
college located in Dubuque, Iowa. For Fall 2008, the College
reported enrollment of 1,032 full-time equivalent students, down
6% from 1,099 FTEs in Fall 2007; however, Moody's note that the
enrollment was generally consistent with levels reported since
Fall 2004. Clarke offers academic programs unique in the
region, including a Bachelors of Fine Arts, Doctorate of
Physical Therapy, and a number of adult completion degrees (its
TimeSavers programs) including a Masters of Business
Administration, a Masters of Science in Nursing, a Masters of
Art in Education, and a Bachelors of Applied Science to be
launched in Fall 2009. Despite the enrollment decrease, net
tuition revenue has grown, rising nearly 9% in FY 2008 from the
previous year. With Clarke's program offerings and identity as
a Catholic higher education institution in Eastern Iowa, Moody's
expect the College to maintain its market niche.
* Operating performance to remain balanced based on careful
budgeting practices and implementation of cost management
efforts as needed to address final enrollment levels. For FY
2008, Clarke produced a three year average operating margin of
13.2%, as calculated by Moody's assuming a 5% endowment spend
rate. The dramatic rise in surplus reflects the recognition of
a $10.4 million unrestricted bequest; however, Moody's note that
the operating margin excluding gifts remained generally stable
at -4.2% from the -3.5% in FY 2007, substantially improved from
the -14.7% margin in FY 2006 The improvement reflects growing
tuition revenues as well as cost management initiatives. The
College expects generally breakeven operations for the current
FY 2009 resulting from lower tuition revenue due to a lower-
than-budgeted freshman class offset by cost containment efforts
taken to adjust operations for the reduced revenues.
* Decrease in outstanding debt as the College repaid short-term
borrowings to bridge cash flow needs, with total debt dropping
to $6.2 million from a high of $13.1 million in FY 2004. The
College historically issued Revenue Anticipation Notes to meet
ongoing operating cash needs throughout the year, then drew on a
line of credit in order to repay the RANs each year when due.
The lower amount of total outstanding debt is due to Clarke's
focus on improving its cash flow generation and operating
performance. The College intends to access only its bank line
to fund working capital needs for the summer months, with
repayment generally in August upon receipt of tuition revenues.
Moody's note that the normal summer draws of the College are
generally $3.5 million, which substantially increases its
outstanding debt for a few months. The College reports it has
no plans to issue debt for capital purposes for the next two
years.
* Increased financial resources, with total financial resources
rising to $28.2 million in FY 2008 from $17.1 million the prior
year; unrestricted financial resources increased to $17.6
million and represented over 60% of total resources. The
substantial growth in resources was driven by the recognition of
a $10.4 million unrestricted bequest during FY 2008, with half
received during FY 2008 and the remainder in May 2009. As a
result of the growth, resource coverage for the fiscal year-end
2008 improved dramatically, with expendable financial resources
cushioning outstanding debt by 2.9 times and operations by 0.9
times, or nearly one full year of annual operating expenses.
However, the College is experiencing market losses similar to
other institutions; if Moody's reduces expendable and total
resources by 30% to reflect recent market losses and endowment
spending, they decline to $9.4 million and $19.8 million,
respectively, and the cushion of expendable financial resources
to debt decreases to 1.5 times, representing still adequate
coverage. Moody's expect resources to remain generally stable
or to decline modestly, reflecting weak investment performance
and at least stable operating performance.
Challenges
* Expected enrollment challenges as the College draws from a
highly competitive market for its core undergraduate program
with an array of public and private higher education
institutions, all in a demographically challenged state. Clarke
is relatively small, with fewer than 1,200 full-time equivalent
students, and highly reliant on student related charges to fund
operations (generally 80% or more of total operating revenues).
The College enrolled fewer freshman than budgeted for the prior
Fall 2008; for the upcoming Fall 2009, it has budgeted for a
small increase in first-time freshman over actual freshmen of
the prior fall.
* Expected longer-term capital needs following the completion of
the College's campus master plan, including investment in
student housing, recreation facilities and renovation of
academic space. Debt plans beyond the next few years are
uncertain, although Moody's notes that the College's age of
plant has steadily increased in recent years and stood at a high
18.2 years, as calculated by Moody's, in FY 2008. Clarke plans
to launch a comprehensive campaign during the next few years,
although the goal and timeline have yet to be determined.
Outlook
The stable outlook reflects Moody's expectation of stable
financial resources, generally stable enrollment and modest growth
in net tuition revenues, with no new debt.
What Could Change the Rating - UP
Consistently balanced operating performance, with growth in liquid
financial resources providing a greater cushion for debt and
operations; increased enrollment and growth in net tuition
revenues.
What Could Change the Rating - DOWN
Borrowing without commensurate growth of financial resources or
incremental revenues to cover debt service; decline in enrollment
and minimal to no growth in tuition revenues; persistent operating
deficits.
Key Indicators (FY 2008 Financial Results; Fall 2008 enrollment
data):
* Ratios in parentheses represent a proforma 30% decline in total
financial resources that fully impacts expendable financial
resources to reflect expected investment losses and endowment
spending
* Total Enrollment: 1,032 Full-Time Equivalent Students
* Expendable Financial Resources: $17.8 million ($9.4 million)
* Total Financial Resources: $28.2 million ($19.8 million)
* Total Direct Debt: $6.2 million
* Expendable Financial Resources to Direct Debt: 2.9 times (1.5
times)
* Expendable Financial Resources to Operations: 0.9 times (0.5
times)
* Average Three Year Operating Margin: 13.2% (includes recognition
of $10.4 million gift during 2008)
The last rating action was on May 9, 2008 when the rating of
Clarke College was affirmed and the outlook revised to positive
from stable.
CONGOLEUM CORP: March 31 Balance Sheet Upside Down by $93.6MM
-------------------------------------------------------------
Congoleum Corporation said sales for the three-month period ended
March 31, 2009 were $30.1 million, compared with sales of
$47.7 million reported in the first quarter of 2008, a decrease of
37%. The net loss for the quarter was $4.1 million, compared with
net income of $1.7 million in the first quarter of 2008. Net loss
per share was $0.50 in the first quarter of 2009 compared with net
income of $0.20 per share in the first quarter of 2008. Results
for the first quarter of 2008 included $1.0 million of interest
income on a note for a legal fee settlement.
At March 31, 2009, Congoleum had $166.7 million in total assets
and $260.4 million in total liabilities, resulting in
$93.6 million in stockholders' deficit.
"While we had anticipated considerable sales weakness going into
the first quarter, actual demand was even worse than we expected.
Softness in the manufactured housing industry, normally a
significant portion of our business, was particularly acute, with
first quarter sales falling 66% below year earlier levels. We
also saw significant further reductions in our distributors'
inventories, which we had felt were already at minimal levels,"
Roger S. Marcus, Chairman of the Board, said Thursday.
"We had made a great deal of progress during 2008 reducing our
cost structure in response to the dramatic downturn in business.
It is worthwhile to note some of the unusual negative factors
which affected the first quarter. First and foremost was the
extraordinary decline in sales to manufactured housing. The
extent of this decline cost $2.0 to $2.5 million in gross profit
including overhead contribution. Second was a decrease of over
$4 million in inventories in the residential product distribution
channel, which cost us another $1.5 to $2.0 million in gross
profit. Third, we incurred an additional $1 million in pension
expense in the first quarter of 2009 versus 2008 due to low
discount rates at December 31, 2008. Finally, we recorded a
$.5 million severance charge during the first quarter in
connection with further cost reductions. Excluding these items,
we would have been profitable for the quarter in spite of the
abysmal condition of the market for residential remodel and
builder products.
Mr. Marcus continued "Based on the first quarter, we have assumed
little or no improvement in manufactured housing demand over the
balance of the year, and have lowered our sales and production
plans accordingly. We implemented another significant reduction
in expenses and headcount late in March in response to these
market conditions to bring our break-even point down to a level
roughly in line with our reduced sales forecast."
"While market conditions remain weak, we have seen some glimmers
of improvement in residential remodel demand that provide some
indication the market has at least bottomed out. The steps we
have taken to reduce costs should help us get through this
downturn, and the combination of our lean cost structure and
minimal distributor inventories positions us to benefit
considerably from any improvement in demand."
Mr. Marcus concluded with "As previously reported, we have
appealed the bankruptcy court's decision finding our most recent
reorganization plan unconfirmable and that process continues.
There are a few discrete issues that the bankruptcy judge
considered obstacles to confirmation, and we expect that the
district court judge will resolve these issues and provide
guidance with respect to proceedings going forward. We expect a
decision from the district court during the third quarter of 2009,
which we hope should set the stage for proceeding with
confirmation of a plan and put this asbestos reorganization behind
us."
A full-text copy of Congoleum's quarterly report is available at
no charge at http://ResearchArchives.com/t/s?3d0a
About Congoleum
Based in Mercerville, New Jersey, Congoleum Corporation (OTC:
CGMC) -- http://www.congoleum.com/-- manufactures and sells
resilient sheet and tile floor covering products with a wide
variety of product features, designs and colors.
The Company filed for Chapter 11 protection on December 31, 2003
(Bankr. N.J. Case No. 03-51524) as a means to resolve claims
asserted against it related to the use of asbestos in its products
decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and
Kerry A. Brennan, Esq., at Pillsbury Winthrop Shaw Pittman LLP,
and Paul S. Hollander, Esq., and James L. DeLuca, Esq., at Okin,
Hollander & DeLuca, LLP, represent the Debtors.
The Asbestos Claimants' Committee is represented by Peter Van N.
Lockwood, Esq., and Ronald Reinsel, Esq., at Caplin & Drysdale,
Chtd. The Bondholders' Committee is represented by Michael S.
Stamer, Esq., and James R. Savin, Esq., at Akin Gump Strauss Hauer
& Feld LLP. Nancy Isaacson, Esq., at Goldstein Isaacson, PC,
represents the Official Committee of Unsecured Creditors.
R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker,
LLC, the Court-appointed Futures Claimants Representative, is
represented by Roger Frankel, Esq., Richard Wyron, Esq., and
Jonathan P. Guy, Esq., at Orrick Herrington & Sutcliffe LLP, and
Stephen B. Ravin, Esq., at Forman Holt Eliades & Ravin LLC.
American Biltrite, Inc. (AMEX: ABL), which owns 55% of Congoleum,
is represented by Matthew Ward, Esq., Mark S. Chehi, Esq.,
Christopher S. Chow, Esq., and Matthew P. Ward, Esq., at Skadden
Arps Slate Meagher & Flom.
Various entities have filed bankruptcy plans for the Debtors. In
February 2008, the legal representative for future asbestos-
related claimants; the asbestos claimants' committee; the official
Committee of holders of the Company's 8-5/8 % Senior Notes due
August 1, 2008; and Congoleum jointly filed a joint plan of
reorganization. Various objections to the Joint Plan were filed.
In June 2008, the Bankruptcy Court issued a ruling that the Joint
Plan was not legally confirmable.
In August 2008, the Bondholders' Committee, the ACC, the FCR,
representatives of holders of prepetition settlements and
Congoleum entered into a term sheet describing the proposed
material terms of a new plan of reorganization and a settlement of
avoidance litigation with respect to prepetition claim settlement.
Certain insurers and a large bondholder filed objections to the
Litigation Settlement or reserved their rights to object to
confirmation of the Amended Joint Plan. The Bankruptcy Court
approved the Litigation Settlement in October 2008. The Amended
Joint Plan was filed in November 2008.
In January 2009, certain insurers filed a motion for summary
judgment seeking denial of confirmation of the Amended Joint Plan.
On February 26, 2009, the Bankruptcy Court rendered an opinion
denying confirmation of the Amended Joint Plan. Moreover, the
Bankruptcy Court dismissed Congoleum's bankruptcy case.
On February 27, 2009, Congoleum and the Bondholders' Committee
appealed the Order of Dismissal and the ruling denying plan
confirmation to the U.S. District Court for the District of New
Jersey. On March 3, the Bankruptcy Court stayed the Order of
Dismissal pending entry of a final non-appealable decision
affirming the Order of Dismissal. Appeal proceedings are underway
before the District Court.
COOPER-STANDARD AUTOMOTIVE: Moody's Cuts Default Rating to 'Caa3'
-----------------------------------------------------------------
Moody's Investors Service lowered the Probability of Default and
Corporate Family Rating of Cooper-Standard Automotive Inc., to
Caa3 and Ca, respectively. The ratings of the existing senior
secured bank credit facilities were lowered to Caa2 from B1, the
rating of the guaranteed senior unsecured notes to Ca from Caa1,
and the rating of the guaranteed senior subordinated notes to Ca
from Caa3. In a related action the Speculative Grade Liquidity
Rating was affirmed at SGL-4. The rating outlook remains
negative.
The lowering of Cooper Standard's Probability of Default Rating to
Caa3 reflects the dramatic impact that deteriorating global
automotive production volumes is having on the company's operating
performance. These conditions are expected to continue through
2009 and for Cooper Standard the effects will be exacerbated by
the extended OEM shutdowns as GM (approximately 16% of total sales
in 2008) and Chrysler (approximately 7%) seek to curtail excess
inventories. As a result of these conditions, the company is
uncertain whether it will continue to be in compliance with its
debt covenants through 2009. The company announced it is
assessing alternative responses to this situation, such as
obtaining waivers or amendments, or utilizing the equity cure
right provisions under the senior secured bank credit facilities.
The negative outlook reflects Moody's belief that, absent a
significant improvement in industry conditions, Cooper Standard's
capital structure, which includes a considerable amount of bank
and bond debt, is unsustainable. Beyond the need for covenant
relief, Moody's believes that some form of distressed
restructuring of the debt could be likely; any such distressed
debt exchange would be viewed as a default for rating purposes.
The SGL-4 Speculative Grade Liquidity rating continues to reflect
the expectation of a weak liquidity profile over the near term.
Cash on hand at March 31, 2009 was about $88 million. The company
is expected to consume cash over the coming months due to weak
business trends, and near term debt maturities. Cooper-Standard
is highly reliant on external financing sources to preserve its
liquidity. The $125 million revolving credit facility has about
$109 million outstanding on March 31, 2009 and $5.9 million of
availability after considering LC requirements. As mentioned
above, the company's financial covenant, a senior secured debt to
consolidated EBITDA test, is expected to be breached over the
coming quarters. At March 31, 2009, the test level was 2.5 to 1.0
compared to a required maximum of 3.0 to 1.0. There are limited
avenues of alternate liquidity as essentially all the company's
assets are pledged under the credit facilities.
Ratings Lowered:
-- Probability of Default Rating, to Caa3 from Caa1
-- Corporate Family Rating, to Ca from Caa1
-- Senior secured credit agreement for borrowers Cooper-Standard
and Cooper-Standard Canada, to Caa2 (LGD3, 39%) from B1
(LGD2, 20%) consisting of:
- guaranteed senior secured revolving credit (US$
denominated) at Cooper-Standard, due December 2010;
- guaranteed senior secured revolving credit (US$ or C$
denominated) at Cooper-Standard Canada, due December 2010;
- guaranteed senior secured term loan A (C$ denominated) at
Cooper-Standard Canada, due December 2010;
- guaranteed senior secured term loan B (US$ denominated) at
Cooper-Standard Canada, maturing December 2011;
- guaranteed senior secured term loan C (US$ denominated) at
Cooper-Standard, maturing December 2011;
- guaranteed senior secured term loan D (US$ and Euro
denominated) at Cooper-Standard, maturing December 2011;
- guaranteed senior secured add-on USD90MM equivalent add-on
term loan E
-- Guaranteed senior unsecured notes maturing December 2012, to
Ca (LGD5, 72%) from Caa1 (LGD4, 52%);
-- Guaranteed senior subordinated unsecured notes maturing
December 2014, to Ca ( LGD6 96%) from Caa3 (LGD6 91%)
Ratings affirmed
-- Speculative Grade Liquidity Rating to SGL-4
The last rating action on Cooper-Standard was on December 8, 2008
when the ratings were lowered to Caa1
Cooper-Standard Automotive, Inc., headquartered in Novi, Michigan,
is a portfolio company of The Cypress Group and Goldman Sachs
Capital Partners. It is a leading global manufacturer of fluid
handling systems (approximately 53% of revenues); and body
sealing, and noise, vibration, and harshness control systems
(approximately 47%) for automotive vehicles. The company sells
about 80% of its products directly to automotive original
equipment manufacturers. Annual revenues in 2008 were
approximately $2.6 billion.
COEUR D'ALENE: S&P Puts 'CCC' Corp. Rating on Positive CreditWatch
------------------------------------------------------------------
Standard & Poor's Ratings Services said that it placed its
ratings, including its 'CCC' corporate credit rating, on Coeur
d'Alene Mines Corp. on CreditWatch with positive implications.
The CreditWatch listing reflects S&P's assessment that near term
operating cash flow generation will likely increase due to the
combination of higher metal volumes and continued favorable gold
and silver prices. Idaho-based Coeur d'Alene completed
construction of its Palmarejo mine and successfully started
operating it in the first quarter of 2009, which is increasing
volumes.
Still, the company's liquidity position remains somewhat thin
because its near-term capital spending plan of approximately
$70 million will likely necessitate additional external funding.
As a result, S&P expects Coeur d'Alene will seek to raise capital
through sale leasebacks, gold leases, and other sources over the
next several months, similar to what it accomplished during the
past few months, to ensure appropriate funding of its spending
plan and provide enhanced cushion to its overall liquidity
position.
In resolving S&P's CreditWatch listing, S&P will review the
company's liquidity position for the next few months, including
any potential capital raising opportunities, in light of its
spending plans. If, at the conclusion of S&P's analysis, an
upgrade is warranted, S&P currently expects it would likely be
limited to one notch. This is because S&P believes the
improvement in the company's liquidity will likely be marginal
until it is able to benefit from the increased output and
favorable metal prices over a significant period of time.
COVANTA HOLDING: Moody's Affirms Corporate Family Rating at 'Ba2'
-----------------------------------------------------------------
Moody's Investors Service has affirmed Covanta Holding
Corporation's Corporate Family Rating and Probability of Default
Rating at Ba2 and its speculative grade liquidity rating at SGL-1,
and has assigned a Ba3 rating to the company's planned issuance of
$300 million of senior unsecured convertible debentures due 2014.
Moody's also upgraded Covanta's existing convertible debentures to
Ba3 from B1, the company's bank facilities issued at Covanta
Energy Corporation to Ba1 from Ba2, and the Hempstead Industrial
Development Agency, NY 5% IRBs (Hempstead IRBs) due 2010
(guaranteed by Covanta ARC LLC) to Baa2 from Baa3. The rating
outlook for Covanta is stable.
Covanta's rating affirmation reflects the highly predictable
earnings and cash flow expected from a diversified portfolio of
primarily contracted energy-from-waste projects principally
located throughout the US. The rating considers the strong
operating performance of the portfolio and the relative high
barriers to entry for most competing technologies. These
strengths are balanced by the highly leveraged capital structure
in place as well as the degree of structural subordination that
exists at Covanta and at CEC. More than $1.0 billion of secured
project level debt is senior to debt at Covanta and CEC, and in
most cases, project level documentation requires satisfaction of a
restricted payments test before dividends can be paid to Covanta
or CEC.
The rating recognizes that a substantial portion of Covanta's
project level debt will continue to amortize over the next five
years, thereby benefiting creditors at Covanta and CEC. As
exemplified by the convertible offering, the rating factors in
Moody's expectation that existing project debt amortization will
likely be replaced by additional corporate or project level debt
to finance new development projects and/or acquisitions. The Ba2
rating factors in the potential impact to the company's earnings
and cash flow from the current global economic recession to
include the demand for waste requiring disposal, the related
impact on pricing for such services, as well as the decline in
commodity prices which impacts both energy and scrap metal
pricing. Moody's observes that Covanta's recent credit metrics
strongly position the company in the Ba rating category as Moody's
calculate Covanta's cash flow (CFO pre-WC) to debt to be in the
mid-high teens, cash flow coverage of interest expense to be in
excess of 4.0x and free cash flow to debt to be in excess of 10%
for the past two years. Factoring in the incremental convertible
debt offering and the scheduled debt amortization during 2009,
Moody's expects near-term credit metrics to slightly weaken from
these recent historical levels as total debt is expected to be 5-
7% higher at year-end 2009.
The upgrade of Covanta's convertible debt to Ba3 from B1 and the
assignment of a Ba3 rating to the new convertible offering
incorporates the expected increase in Covanta's enterprise value
following the convertible offering and acknowledges the higher
component of unsecured debt in Covanta's capital structure,
suggesting that recovery prospects will be more closely aligned
with the company's Ba2 CFR.
The upgrade of CEC's secured bank facilities to Ba1 from Ba2
reflects the improved recovery prospects for this structurally
superior class of debt given the larger component of unsecured
debt in the capital structure, as well as the direct benefit to
CEC's lenders from the continued amortization of project level
secured debt. Approximately $575 million of project level debt
representing 55% of Covanta's total project level debt will
amortize through the end of 2012.
The upgrade of the Hempstead IRBs to Baa2 from Baa3 reflects the
improved collateral position of this security given the repayment
of senior debt at Hempstead. The upgrade further recognizes the
new tip fee contract extension with the Town of Hempstead for an
additional 25 years commencing in August 2009.
Covanta's SGL-1 rating reflects Moody's expectation that the
company will maintain a very good liquidity profile over the next
4 quarter period as a result of its generation of strong internal
cash flows, maintenance of cash balances and access to committed
credit availability. The SGL-1 rating considers the predictable
cash flow generation expected for the next four quarters based
upon the highly contracted portfolio that exists and Covanta's
historically strong plant operating performance. Moody's believes
that excess cash flow after the payment of required debt
amortization ($169 million) could reach $170 million during 2009.
Such cash flow is likely to be used to invest in development
projects or to fund acquisitions. Aside from the $169 million in
required debt maturities that exist across the company's projects,
the only other required amortization payment is a $6.5 million
payment due on the CEC secured term loan.
Covanta's cash flow is expected to continue benefitting from the
utilization of net operating loss carryforwards. At December 31,
2008, Covanta had approximately $591 million of NOLs.
Unrestricted cash on hand at Covanta at 03/31/2009 was around $159
million. Moody's observes that the projects' ongoing liquidity,
debt service and maintenance requirements continue to be met by
the funding of reserve accounts at the project level ($329 million
at 03/31/2009). In addition to the $159 million of unrestricted
cash, the company had availability of around $315 million under
two credit facilities that expire in 2013 and 2014.
As of March 31, 2009, the company was in compliance with all of
the financial covenants under its credit facilities. Moody's
believes that with the incurrence of the incremental convertible
debt and the fact that the leverage test in the company's credit
facilities becomes more restrictive at December 31, 2009, the
degree of head room under the company's financial covenants will
tighten from historical levels. Moody's, however, believes that
Covanta can manage this issue given the predictable nature of the
company's cash flow.
Net proceeds from the offering, which will strengthen liquidity,
will be used to fund general corporate purposes, the company's key
development projects, including its 1,700 metric tons/day energy-
from-waste project in Dublin, Ireland, and to fund potential
acquisitions.
The stable outlook on Covanta's rating reflects Moody's
expectation that: (i) the energy-from-waste projects' contracts
with the respective municipalities and utilities will remain in
place through their current maturities; (ii) Covanta's management
will continue to operate the plants at high availability levels
and maintain stability with regard to administrative, operating,
and maintenance expenses; (iii) Covanta will be able to utilize
all of its NOLs and (iv) Covanta will continue to finance its
development projects and acquisitions in a manner that is neutral
to credit quality.
The last rating action on Covanta occurred on January 22, 2007
when the CFR was upgraded to Ba2, a Ba2 rating was assigned to
CEC's secured bank facilities, and a B1 rating was assigned to
Covanta's unsecured convertible debentures.
Covanta 's ratings were assigned by evaluating factors believed to
be relevant to its credit profile, such as i) the business risk
and competitive position of Covanta versus others within its
industry or sector, ii) the capital structure and financial risk
of Covanta, iii) the projected performance of Covanta over the
near to intermediate term, and iv) Covanta 's history of achieving
consistent operating performance and meeting financial plan goals.
These attributes were compared against other issuers both within
and outside of Covanta 's core peer group and Covanta 's ratings
are believed to be comparable to ratings assigned to other issuers
of similar credit risk.
The ratings for Covanta's individual securities were determined
using Moody's Loss Given Default methodology.
Ratings Affected Include:
Rating Assigned
Issuer: Covanta Holding Corporation
-- Senior Unsecured Conv./Exch. Bond/Debenture, Assigned Ba3 (84
- LGD5)
Ratings Upgraded
Issuer: Covanta Holding Corporation
-- Senior Unsecured Conv./Exch. Bond/Debenture, Upgraded to Ba3
(84 - LGD5) from B1 (89 - LGD5)
Issuer: Covanta Energy Corporation
-- Senior Secured Term Loan, Revolving Credit, and Letter of
Credit Facility, Upgraded to Ba1 (33 -LGD3) from Ba2 (46 -
LGD3)
Guarantor: Covanta ARC LLC
-- Hempstead Industrial Development Agency, NY 5% IRBs due 2010,
Upgraded to Baa2 (12 - LGD2) from Baa3 (22 - LGD2)
Ratings Affirmed :
Issuer: Covanta Holding Corporation
-- Corporate Family Rating at Ba2,
-- Probability of Default Rating at Ba2
-- Speculative Grade Liquidity Rating at SGL-1
Ratings Affirmed / LGD assessments revised:
Guarantor: Covanta ARC LLC
-- Niagara County Industrial Devel. Agency, NY, Series 2001 IRBs
at Baa2 (LGD2, 12% from LGD1, 7%)
-- Delaware County Industrial Dev. Auth., PA, Series 1997-A IRBs
at Ba1 (LGD3, 35% from LGD2, 27%)
-- Connecticut Resources Recovery Authority, Ser. A and Ser.
1992 A IRBs at Ba1 (LGD3, 35% from LGD2, 27%)
Primarily a waste-to-energy company with a client base composed
largely of local municipal governments, Covanta is headquartered
in Fairfield, New Jersey and during 2008, operating revenues were
approximately $1.7 billion.
DANNY R ORMSBY: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Joint Debtors: Danny R. Ormsby
Christa Maria Ormsby
3333 Harbor View Dr.
San Diego, CA 92106
Bankruptcy Case No.: 09-06797
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
Southern District of California (San Diego)
Debtors' Counsel: Mohamad F. Haffar, Esq.
The Law Offices of Haffar & Associates
402 West Broadway, Ste. 400
San Diego, CA 92101
E-mail: mfh@haffarlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtors' petition, including a list of
their 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/casb09-06797.pdf
The petition was signed by the Joint Debtors.
DEVELOPERS DIVERSIFIED: Fitch Cuts Issuer Default Rating to 'BB'
----------------------------------------------------------------
Fitch Ratings has downgraded these credit ratings of Developers
Diversified Realty Corporation:
-- Issuer Default Rating to 'BB' from 'BBB-';
-- $1.3 billion unsecured revolving credit facilities to 'BB'
from 'BBB-';
-- $1.4 billion unsecured medium term notes to 'BB' from 'BBB-';
-- $656.8 million unsecured convertible notes to 'BB' from 'BBB-
';
-- $555 million preferred stock to 'B+' from 'BB+'.
The Rating Outlook remains Negative. Fitch will provide a
detailed analysis of its downgrade on DDR shortly.
E*TRADE FINANCIAL Appoints Roessner as Exec-VP and General Counsel
------------------------------------------------------------------
E*Trade Financial Corporation said Karl A. Roessner has been
appointed to the position of Executive Vice President and General
Counsel, effective immediately, reporting to Donald H. Layton,
Chairman and CEO. Mr. Roessner assumes responsibility for the
oversight, guidance and direction of legal, regulatory and
compliance matters. He will also act as Corporate Secretary to
the Company's Board of Directors.
"Mr. Roessner joins the management team of E*TRADE FINANCIAL with
an invaluable depth of experience in legal matters related to
balance sheet management, including capital raising initiatives,"
said Mr. Layton.
Mr. Roessner has more than 16 years of experience practicing law,
most recently as a partner in the Mergers and Acquisitions group
of Clifford Chance US LLP, one of the world's leading law firms.
There, he advised clients on negotiated public and private
transactions, management and leveraged buyouts, and capital
raising activities.
Mr. Roessner has an eight-year history with E*TRADE, having
represented the Company primarily with respect to acquisitions and
divestitures in the brokerage space, including the acquisitions of
BrownCo and Harrisdirect and most recently, the divestiture of
E*TRADE Canada.
Mr. Roessner earned his undergraduate degree in business
administration from Siena College and his J.D. from St. Johns
University School of Law.
About E*TRADE FINANCIAL
The E*TRADE FINANCIAL family of companies provides financial
services including trading, investing and related banking products
and services to retail investors. Securities products and
services are offered by E*TRADE Securities LLC (Member
FINRA/SIPC). Bank products and services are offered by E*TRADE
Bank, a Federal savings bank, Member FDIC, or its subsidiaries.
* * *
As reported by the Troubled Company Reporter on May 18, 2009,
Moody's Investors Service downgraded to Caa3 from B2 the ratings
on the senior unsecured bonds of E*TRADE. Moody's also lowered to
B3 from B2 E*TRADE's long-term issuer rating. All long-term
ratings including those of E*TRADE's thrift subsidiary, E*TRADE
Bank (BFSR at D-, Deposit Rating at Ba3), remain on review for
possible downgrade, originally commenced on April 29, 2009.
E*TRADE Bank's short-term rating remains Not-Prime.
The downgrade of the bond ratings to Caa3 reflects the increased
probability of material credit losses for E*TRADE's senior
bondholders as a result of the company's stated strategy to employ
debt-for-equity exchanges as the primary tool in reducing leverage
and improving the company's precarious financial condition.
E*TRADE said in a regulatory filing that it "anticipate[d] that
the primary method for reducing [its] debt will involve debt-for-
equity exchanges."
EASTER SEALS: Files for Chapter 11 Bankruptcy Protection
--------------------------------------------------------
Clay Carey at The Tennessean reports that Easter Seals Tennessee,
Inc., has filed for Chapter 11 bankruptcy protection before the
U.S. Bankruptcy Court for the Middle District of Tennessee.
Easter Seals' top officials said that the Company filed for
bankruptcy to get out from the almost $10 million it owes its
banks, The Tennessean relates.
According to The Tennessean, Easter Seals will close a fitness
center it operates on Woodmont Boulevard that serves more than 200
clients. The report states that the Company will also forfeit
land in Green Hills and Wilson County to the banks it owes. The
report quoted Bill Andrews, chairperson of the Easter Seals
Tennessee board of directors, as saying, "This will allow us to
reorganize, eliminate these debts and continue on as an
organization."
The Tennessean notes that Easter Seals has cut programs, reduced
staff, and closed a child development center in the past two years
to save cash. It tried unsuccessfully to sell its headquarters in
Green Hills and a 100-acre campground on Old Hickory Lake, The
Tennessean states.
Nashville, Tennessee-based Easter Seals Tennessee, Inc., filed for
Chapter 11 bankruptcy protection on May 17, 2009 (Bankr. M.D.
Tenn. Case No. 09-05597). Glenn Benton Rose, Esq., at Harwell
Howard Hyne Gabbert Et Al assists the Company in its restructuring
efforts. The Company listed $1,000,001 to $10,000,000 in assets
and $10,000,001 to $50,000,000 in debts.
EIGHT ARMS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Eight Arms, Inc.
dba Silver Mine Subs
5160 Clearwater Drive
Loveland, CO 80538
Bankruptcy Case No.: 09-19381
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
District of Colorado (Denver)
Judge: Michael E. Romero
Debtor's Counsel: Lee M. Kutner, Esq.
303 E. 17th Ave.
Ste. 500
Denver, CO 80203
Tel: (303) 832-2400
Fax: (303) 832-1510
E-mail: lmk@kutnerlaw.com
Estimated Assets: $100,001 to $500,000
Estimated Debts: $500,001 to $1,000,000
A list of the Company's 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/cob09-19381.pdf
The petition was signed by David Larkins, president of the
Company.
FLEETWOOD ENTERPRISES: Has $53MM Bid from AIP for RV Business
-------------------------------------------------------------
The Press-Enterprise, citing court documents, said Fleetwood
Enterprise Inc. has a bidder for part of its RV business.
According to the report, New York-based private equity firm
American Industrial Partners LP has offered $53 million for the
Company's motor-home business, including five plants in Decatur,
Indiana, and all of its motor-home brands. Excluded in the deal
are the Company's manufacturing locations in Riverside and its
manufactured housing division.
According to The Press-Enterprise, subject to approval by the U.S.
Bankruptcy Court for the Central District of California of the
sale process, an auction, under which Patriarch will be the
stalking horse bidder, will be held on June 22. Competing bids
will be due June 18.
Fleetwood has an $80 million debtor-in-possession credit facility
from lenders, led by Bank of America, N.A. as agent.
Other Assets Have Buyer
According to Bloomberg's Bill Rochelle, Fleetwood Enterprises was
authorized by the Bankruptcy Court to sell a plant in La Grande,
Oregon, for $2 million. As reported in the Troubled Company
Reporter on April 30, 2009, Fleetwood signed a deal for the sale
of its La Grande plant for US$1.8 million to Arbutus RV & Marine
Sales Ltd., the largest recreational-vehicle dealer in British
Columbia.
Fleetwood Enterprises has separately asked the Bankruptcy Court
for permission to sell the stock of non-Debtor Fleetwood De Mexico
S.A. de C.V. and other assets related to Fleetwood's non-operating
travel trailer manufacturing facility in Mexico to Krystal
Enterprises LLC and Edward P. Grech, free and clear of all liens,
claims, interests and encumbrances. The Buyers have offered to pay
US$150,000 in cash for the Mexicali Assets.
About Fleetwood Enterprises
Headquartered Riverside, California, Fleetwood Enterprises --
http://www.fleetwood.com/-- produces recreational vehicles and
manufactured homes. The Company has about 9,000 associates
working in facilities strategically located throughout the nation.
The Company and 19 of its affiliates filed for Chapter 11
protection on March 10, 2009 (Bankr. C.D. Calif. Lead Case No.
09-14254). Craig Millet, Esq., at Gibson, Dunn & Crutcher LLP,
represents the Debtors in their restructuring efforts. The
Debtors proposed Ernst & Young LLP as auditor, FTI Consulting Inc.
as consultant, and Greenhill & Co. LLC as financial advisor.
PFF Bancorp Inc., a bank holding company, said it only
gained access to its books and records in January following the
takeover in November of subsidiary PFF Bank & Trust. PFF was
given an extension until July 16 of the exclusive right to
propose a liquidating Chapter 11 plan. The holding company's
bankruptcy began in December. The bank's deposits were
transferred to U.S. Bank NA. The petition listed assets of
$7.8 million against debt totaling $131.7 million as of Nov. 17.
The case is In re PFF Bancorp Inc., 08-13127, U.S. Bankruptcy
Court, District of Delaware (Wilmington).
FLEXTRONICS INTERNATIONAL: Fitch Keeps 'BB+' Issuer Default Rating
------------------------------------------------------------------
Fitch Ratings has affirmed these ratings for Flextronics
International Ltd.:
-- Issuer Default Rating at 'BB+';
-- Senior unsecured credit facility at 'BB+';
-- Senior subordinated notes at 'BB-'
The Rating Outlook is Stable.
The affirmations and Stable Outlook reflect these considerations:
-- Fitch expects Flextronics' EBITDA margins, which declined to
2.7% in the March 2009 quarter from 4.4% in the prior year
period, to improve modestly over the next 12 to 24 months as
the company reduces fixed expense commensurate with the
current revenue run rate and potentially begins to absorb
excess manufacturing capacity from modestly improving
revenue;
-- Fitch expects Flextronics to continue to manage its cash
conservatively over the next 12 months with uses of free cash
flow limited primarily to internal investment and debt
reduction with a lower emphasis on acquisitions which could
negatively impact the company's currently very solid
liquidity position. Flextronics has $435 million in debt
maturities over the next 18 months which Fitch expects to be
redeemed from existing cash balances;
-- Fitch expects Flextronics to produce strong free cash flow,
even in the current environment as the company benefits from
minimal working capital requirements and reduced capital
spending plans. Fitch estimates that Flextronics has
produced average annual free cash flow of nearly $500 million
each of the past three years; and
-- Fitch estimates leverage (total debt / total operating
EBITDA) to be 3.1 times (x) currently (approximately 4.1x
when adjusted for off-balance sheet receivable financing and
operating leases) and expects leverage to decline modestly in
fiscal 2010 (end March 2010) as Flextronics reduces its total
debt outstanding. Interest coverage has declined to 4.3x
from 6.4x in the prior year period.
Rating strengths include:
-- Significant advantage in scale and scope of operations as the
second largest provider of electronics manufacturing services
in the world;
-- Strong track record of execution as evidenced by peer leading
return on invested capital and cash conversion cycle days;
-- Blue chip customer base with strong exposure to faster
growing market segments, particularly in the consumer space;
and
-- High working capital provides an additional source of
liquidity in a market downturn.
Ratings concerns include these:
-- Flextronics has an aggressive acquisition growth strategy in
an industry with significant execution risk with minimal room
for execution missteps due to the relatively low profit
margin inherent in the business model;
-- A difficult competitive environment which has pressured
profitability across the industry; and
-- Flextronics has customer concentration risk, although at the
low-end of the range typical for the electronic manufacturing
services industry, with its top 10 customers accounting for
approximately 50% of revenue in fiscal 2009 (ending March
2009).
Positive rating actions could occur based on improved and
sustained EBITDA margins combined with expected reductions in
total debt outstanding. Conversely, the ratings could be
negatively affected if profitability and revenue run rates
continue to be negatively influenced by the economic downturn or
if working capital management deteriorates and negatively impacts
liquidity.
Liquidity as of March 31, 2009 was solid with $1.8 billion in cash
and a fully available $2 billion senior unsecured revolving credit
facility which expires in May 2012. Additionally, Fitch expects
Flextronics to produce strong free cash flow, even in the current
environment with minimal working capital requirements and reduced
capital spending plans. Fitch estimates that Flextronics has
produced average annual free cash flow of nearly $500 million each
of the past three years. Flextronics utilizes an accounts
receivable securitization facility as well as accounts receivable
sales agreements for additional liquidity purposes.
Total debt as of March 31, 2009 was $3 billion and consisted
primarily of i) $195 million in 0% junior convertible subordinated
notes due July 2009 which Fitch expects to be redeemed from
existing cash; $1.7 billion outstanding under a senior unsecured
term loan facility, of which approximately $500 million is due in
October 2012 with the remainder due in October 2014; $240 million
in 1% convertible subordinated notes due August 2010; $400 million
in 6.5% senior subordinated notes due May 2013; and $400 million
in 6.25% senior subordinated notes due November 2014. Flextronics
also has approximately $200 million outstanding under its accounts
receivable securitization facility and $350 million outstanding
under various accounts receivable sales agreements.
FOAMEX INTERNATIONAL: U.S. Trustee, et al., Cry Foul on Asset Sale
------------------------------------------------------------------
Several parties including Roberta A. DeAngelis, the United States
Trustee for Region 3, and the official committee of unsecured
creditors, object to the proposed bidding procedures that will
govern the sale of substantially all of Foamex International Inc.
and its debtor-affiliates.
The Debtors' proposed stalking-horse bidder, MP Foam DIP LLC, has
agreed to purchase the Debtors' assets -- including equity
securities of certain the Debtors' direct or indirect subsidiaries
-- for $105 million under a certain asset purchase agreement. The
purchaser is an affiliate of the Debtors' debtor-in-possession
lender, Matlin Patterson Global Advisers LLC.
The U.S. Trustee filed papers before the U.S. Bankruptcy Court for
the District of Delaware, asserting that all net proceeds from the
sale should be available for all creditors. The U.S. Trustee
objects the creation of the two escrow accounts, citing that their
creation violates the distribution priorities of Bankruptcy Code.
The Creditors Committee tells the Court that the proposed sale
could leave a substantial debt with the estates without the
protection of a confirmable and feasible Chapter 11 plan of
reorganization or liquidation. The Committee asserts that the
sale should be contingent to the filing and confirmation of a
Chapter 11 plan, wherein any successful bidder should provide:
a) cash sufficient to satisfy all administrative expenses and
priority claims as part of a Chapter 11 plan;
b) sufficient funding for the plan process and the expenses
that will accrue during the post confirmation wind-down
period; and
c) for reasonable treatment to all unsecured creditors.
Other parties protect to the sale includes ACE Companies, Law
Debenture Trust Company of New York, and Steering Committee of
First Lien Lenders.
About Foamex International
Foamex International Inc. (FMXL) -- http://www.foamex.com/--
headquartered in Media, PA, produces polyurethane foam-based
solutions and specialty comfort products. The Company services
the bedding, furniture, carpet cushion and automotive markets and
also manufactures high-performance polymers for diverse
applications in the industrial, aerospace, defense, electronics
and computer industries.
Foamex and eight affiliates first filed for Chapter 11 protection
on September 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-
12693). On February 2, 2007, the U.S. Bankruptcy Court for the
District of Delaware confirmed the Debtors' reorganization plan.
The Plan became effective and the Company emerged from Chapter 11
bankruptcy on February 12, 2007.
Foamex missed $7.3 million in interest payments due at the end of
the January 21 grace periods on the Company's $325 million first-
lien term loan and the $47 million second-lien term loan.
On February 18, 2009, Foamex International and seven affiliates
filed separate voluntary Chapter 11 petitions (Bankr. D. Del. Lead
Case No. 09-10560). The Hon. Kevin J. Carey presides over the
cases. Ira S. Dizengoff, Esq., Phillip M. Abelson, Esq., and
Brian D. Geldert, Esq., at Akin Gump Strauss Hauer, in New
York, represent the Debtors as counsel. Mark E. Felger, Esq., and
Jeffrey R. Waxman, Esq., at Cozen O'Connor, in Wilmington,
Delaware, represent the Debtors as Delaware counsel. Investment
Banker is Houlihan Lokey; accountant is McGladrey & Pullen LLP;
and claims and noticing agent is Epiq Bankruptcy Solutions LLC.
Sharon L. Levine, Esq., at Lowenstein Sandler, represents the
Official Committee of Unsecured Creditors as counsel. David M.
Fournier, Esq., Evelyn J. Meltze, Esq., and Leigh-Anne M. Raport,
Esq., at Pepper Hamilton LLP, represent the Committee as Delaware
counsel. As of September 28, 2008, the Debtors had $363,821,000
in total assets, and $379,710,000 in total debts.
FORD MOTOR: Prefers Dealership Consolidation Than Ending Contracts
------------------------------------------------------------------
Bill Vlasic at The New York Times reports that Ford Motor Co.'s
North American sales director James D. Farley said that the
Company had been pushing steadily to consolidate its dealers,
rather than trying to end contracts or let them expire.
The NY Times relates that Ford has cut its dealer network by 700
since 2005 and currently has 3,700. Mr. Farley said that Ford's
dealership reductions would be small compared with the cuts by
General Motors Corp. and Chrysler LLC.
Some customers affected by Chrysler's dealership cut, primarily
those in rural areas, will transfer to Ford dealerships, The NY
Times states, citing Mr. Farley.
Mr. Farley, according to The NY Times, said that Ford wouldn't
offer greater sales incentives to match any price cuts brought by
the sell-off of inventories at GM and Chrysler.
The NY Times notes that the cuts at GM and Chrysler were partly
focused on smaller and rural dealers. The NY Times quoted Mr.
Farley as saying, "We don't think it's productive to just get rid
of rural dealers."
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles in
200 markets across six continents. With about 260,000 employees
and about 100 plants worldwide, the company's core and affiliated
automotive brands include Ford, Jaguar, Land Rover, Lincoln,
Mercury, Volvo, Aston Martin, and Mazda. The Company provides
financial services through Ford Motor Credit Company.
The Company has operations in Japan in the Asia Pacific region. In
Europe, the Company maintains a presence in Sweden, and the United
Kingdom. The Company also distributes its brands in various
Latin-American regions, including Argentina and Brazil.
* * *
As reported by the Troubled Company Reporter on April 15, 2009,
Standard & Poor's Ratings Services said it raised its ratings on
Ford Motor Co. and related entities, including the corporate
credit rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor
Credit Co. are unchanged, at 'CCC+', and the ratings on FCE Bank
PLC, Ford Credit's European bank, are also unchanged, at 'B-',
maintaining the one-notch rating differential between FCE and its
parent Ford Credit. S&P said that the outlook on all entities is
negative.
Moody's Investors Service in December 2008 lowered the Corporate
Family Rating and Probability of Default Rating of Ford Motor
Company to Caa3 from Caa1 and lowered the company's Speculative
Grade Liquidity rating to SGL-4 from SGL-3. The outlook is
negative. The downgrade reflects the increased risk that Ford
will have to undertake some form of balance sheet restructuring to
achieve the same UAW concessions that General Motors and Chrysler
are likely to achieve as a result of the recently-approved
government bailout loans. Such a balance sheet restructuring
would likely entail a loss for bond holders and would be viewed by
Moody's as a distressed exchange and consequently treated as a
default for analytic purposes.
FPL ENERGY: Moody's Cuts Ratings on Senior Secured Bonds to 'Ba1'
-----------------------------------------------------------------
Moody's Investors Service downgraded FPL Energy Virginia Funding
Corporation's senior secured bonds due 2019 to Ba1 from Baa3. The
outlook is stable. The rating action concludes the review for
possible downgrade initiated on December 16, 2008.
The downgrade primarily reflects weaker than expected financial
performance resulting in consistently lower than projected debt
service coverage averaging less than 1.4x over the last several
years. Moody's expects a noticeable decline in EBITDA for fiscal
years 2009 and 2010 following reduced electricity demand and weak
economic conditions in the region compared to prior years.
Furthermore, a larger percentage of total revenues generated by
the project are less predictable energy revenues that lack a full
pass-through of fuel costs at the project. While the initial
rating anticipated the 50% drop in dependable capacity payments to
$5.8933/kW-mo from $10.2567/kW-mo beginning May 2007 as structured
under the PPA, Moody's expects that the project's coverages in the
future will need to be sufficiently stronger than current levels
to account for this increased percentage of uncertain energy
revenues. Finally, the plant has had some operational problems
recently including an event due to human error leading to a 29%
forced outage in June 2007 as well as minor outages in May and
November 2008. The plant's availability of 83% in 2007 and 2008
is also fairly low for a combined cycle facility.
The stable outlook reflects FPL's vested interest in the project
as both fuel manager and operator and continued strong oversight
at the project. The stable outlook also reflects Moody's
expectation that financial performance is not likely to
deteriorate further from recent guidance. The rating could face
downward pressure if fuel margins shrink further and the plant
experiences weak operational performance resulting in capacity
payment reductions. The project rating could face upward momentum
if it is able to achieve coverages in excess of 1.4x on a
sustainable basis.
The last rating action was on Dec 16, 2008 when the project's
ratings were placed on review for downgrade.
FPL Energy Virginia is a special purpose Delaware corporation
established to issue the senior secured bonds. FPL Energy
Virginia is indirectly owned by FPL Energy, LLC, the unregulated,
energy generating subsidiary of FPL Group, Inc. (A2 Issuer
Rating). Doswell Limited Partnership, a Virginia limited
partnership owns a nominal 708 MW gas-fired combined cycle power
generation facility and a nominal 171 MW gas-fired simple cycle
power generation facility, in Hanover County, Virginia. Doswell
unconditionally guarantees repayment of the bonds. Doswell is an
indirect, wholly-owned subsidiary of FPL Energy.
Doswell is contracted to sell its dependable capacity and
electrical energy produced by the 665 MW combined cycle facility
to Virginia Electric and Power Company (VEPCO: Baa1 Issuer Rating,
positive outlook) under a power purchase and operating agreement
(CC-PPOA) that expires on May 5, 2017, with an option to extend
for up to five years upon mutual agreement of both parties. The
171 MW facility operates as a merchant plant.
FRED DEUTSCH: Files for Chapter 11 Bankruptcy Protection
--------------------------------------------------------
The Real Deal reports that Fred Deutsch has filed for Chapter 11
bankruptcy protection before the U.S. Bankruptcy Court for the
Southern District of New York.
The Department of Buildings posted on its Web site that the
project had a stop work order served on April 30.
Mr. Deutsch, Linda Collins at Brooklyn Daily Eagle relates, listed
$10 million to $50 million in liabilities and $1 million to
$10 million in assets.
Fred Deutsch is a developer of a Brooklyn residential project in
Greenwood Heights. It owns the LD Development.
FRENCH LICK: S&P Withdraws CC Corporate Rating At Issuer Request
----------------------------------------------------------------
On May 18, 2009, Standard and Poor's Ratings Service withdrew its
ratings on French Lick Resorts & Casino LLC, including the 'CC'
corporate credit rating, per the issuer's request.
Ratings List
Withdrawn
French Lick Resorts & Casino LLC
To From
-- ----
Corporate Credit Rating NR CC/Negative/--
Senior Secured NR C
Recovery Rating NR 5
NR -- Not rated.
GENERAL MOTORS: Nader Calls on Congress to Review Bankruptcy Plan
-----------------------------------------------------------------
In a letter to Senator Chris Dodd and Congressman Barney Frank,
consumer advocate Ralph Nader called on the Senate and House
banking committees to hold thorough hearings to protect taxpayers'
investments and seek answers to several issues, including:
-- Is the task force right in pushing for elimination of as
many brands as it has demanded?
-- Is the task force asking for too many plants to close?
-- Do GM and Chrysler really need to close as many dealerships
as have been announced? Is the logic of closing dealers to
enable the remaining dealers to charge higher prices; and
if so, why is the government facilitating such a move? Is
it reasonable and fair for GM to impose liability for
disposing of unsold cars on dealers with which it severs
relations, as Chrysler has apparently done?
-- Has the task force evaluated the social ripple effects on
suppliers, innovation, dealers, newspapers, banks and
others that hold company stock or are company creditors,
and other unique harms that might stem from bankruptcy?
-- Would a government-driven bankruptcy process comport with
the rights of owner-shareholders?
-- Why has the task force maintained the Bush administration-
Negotiated obligation for unionized auto workers at GM and
Chrysler to accept wages comparable to those in non-
unionized Japanese company plants in the United States?
-- Is the task force obtaining guarantees that, after
restructuring with U.S. taxpayer financing, GM cars sold in
the United States be made in the United States? If not,
why not?
-- How will bankruptcy affect GM's overseas operations, with
Special reference to China and GM corporate entanglements
with Chinese partners? Are they and their profits being
exempted from the restrictions and cutbacks imposed on
domestic operations? If there is such a disparity, is it
reasonable and unavoidable?
-- How will bankruptcy affect GM's obligations to parties
engaged in pending litigation in the courts with GM
regarding serious injuries suffered because of design or
product defects?
-- What guarantees is the task force obtaining to ensure that
the GM of the future invests in safer and more fuel
efficient vehicles, and what investments will the new
company make in ecologically sustainable technologies? How
will a potential bankruptcy filing affect, ignore or
preclude any such future investments and commitments?
On the Net: http://www.Nader.org/
'Main Street' Bondholders Come to Capitol Hill
GM "Main Street" bondholders will be joined by the New Democratic
Network's Michael Moynihan at a press conference Thursday, 9:15
a.m., May 21, to discuss their interest in a fair and equitable
solution and to highlight their Congressional meetings on Capitol
Hill. The 60 Plus Association launched a "Main Street"
bondholders coalition after receiving hundreds of E-mails and
phone calls from supporters concerned about their investments in
GM. Following recent gatherings of hundreds of small bondholders
in Warren, Michigan; Philadelphia, Pennsylvania, and Tampa,
Florida, the Main Street Bondholders gather to discuss the
nationwide impact of this bankruptcy issue. About a quarter of
all GM bondholders are average American citizens, that invested in
Fortune 500 Company, GM, to setup their future financial plans,
which included settling into retirement, medical expenses, small
businesses, and providing for their children's college fund.
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 by the Troubled Company Reporter, GM reported net loss
of $6.0 billion, including special items, in the first quarter of
2009. This compares with a reported net loss of $3.3 billion in
the year-ago quarter. Excluding special items, the Company
reported an adjusted net loss of $5.9 billion in the first quarter
of 2009 compared to an adjusted net loss of $381 million in the
first quarter of 2008. As of March 31, 2009, GM had $82.2 billion
in total assets and $$172.8 billion in total liabilities,
resulting in $90.5 billion in stockholders' deficit.
On April 27, General Motors presented the U.S. Department of
Treasury with an updated plan as required by the loan agreement
signed by GM and the U.S. Treasury on December 31, 2008. The plan
addresses the key restructuring targets required by the loan
agreement, including a number of the critical elements of the plan
that was submitted to the U.S. government on December 2, 2008.
Among these are: U.S. market competitiveness; fuel economy and
emissions; competitive labor cost; and restructuring of the
company's unsecured debt. It also includes a timeline for
repayment of the Federal loans, and an analysis of the Company's
positive net present value.
The plan details the future reduction of GM's vehicle brands and
nameplates in the U.S., further consolidation in its workforce and
dealer network, accelerated capacity actions and enhanced
manufacturing competitiveness, while maintaining GM's strong
commitment to high-quality, fuel-efficient vehicles and advanced
propulsion technologies.
GM also launched a bond exchange offer for roughly $27 billion of
unsecured public debt. If successful, the bond exchange would
result in the conversion of a large majority of this debt to
equity.
GM is also in talks with the UAW to modify the terms of the
Voluntary Employee Benefit Association, and with the U.S. Treasury
regarding possible conversion of its debt to equity. The current
bond exchange offer is conditioned on the converting to equity of
at least 50% of GM's outstanding U.S. Treasury debt at June 1,
2009, and at least 50% of GM's future financial obligations to the
new VEBA. GM expects a debt reduction of at least $20 billion
between the two actions.
In total, the U.S. Treasury debt conversion, VEBA modification and
bond exchange could result in at least $44 billion in debt
reduction.
GM filed with the Securities and Exchange Commission a
registration statement related to its exchange offer. The filing
incorporates the revised Viability Plan. A full-text copy of the
filing is available at http://ResearchArchives.com/t/s?3c09
A full-text copy of GM's viability plan presented in February 2009
is available at http://researcharchives.com/t/s?39a4
Going Concern Doubt
Deloitte & Touche LLP, has said there is substantial doubt about
GM's ability to continue as a going concern after reviewing GM's
2008 financial report. Deloitte cited the Company's recurring
losses from operations, stockholders' deficit and failure to
generate sufficient cash flow to meet the Company's obligations
and sustain the its operations. It said GM's future is dependent
on the Company's ability to execute the Company's Viability Plan
successfully or otherwise address these matters. If the Company
fails to do so for any reason, the Company would not be able to
continue as a going concern and could potentially be forced to
seek relief through a filing under the U.S. Bankruptcy Code.
Standard & Poor's Ratings Services on April 10 lowered its issue-
level rating on GM's $4.5 billion senior secured revolving credit
facility to 'CCC-' (one notch above the 'CC' corporate credit
rating on the company) from 'CCC'. It revised the recovery rating
on this facility to '2' from '1', indicating its view that lenders
can expect substantial (70% to 90%) recovery in the event of a
payment default. The corporate credit rating remains unchanged,
at 'CC', reflecting its view of the likelihood that GM will
default -- through either a bankruptcy or a distressed debt
exchange.
Moody's Investors Service said February 18 that the risk of a
bankruptcy filing by GM and Chrysler remains high. The last
rating action on GM and Chrysler was a downgrade of their
Corporate Family Ratings to Ca on December 3, 2008.
GENERAL MOTORS: UAW Balks at Plans to Hike Cars from Overseas
-------------------------------------------------------------
Tom Krisher at The Associated Press reports that the United Auto
Workers union has urged members to call or e-mail President Barack
Obama to protest General Motors Corp.'s planned imports and
factory closures.
The AP relates that GM is planning to import vehicles from other
countries while it closes 16 U.S. factories. The report says that
GM hasn't identified which factories it will shut down or whether
the 16 plants include previously disclosed closures. GM,
according to the report, said that it is negotiating the details
with the union.
The AP quoted UAW as saying, "The UAW strongly objects to GM's
plan to close 16 manufacturing facilities in the United States,
while at the same time dramatically increasing the number of
vehicles it will be importing from Mexico, Korea, Japan and China
for sale in this country." GM wants to almost double the number
of imports from those countries, costing 21,000 jobs in the U.S.,
the report states, citing the union.
GM, says The AP, admitted in documents submitted to Congress that
it wants to start importing small cars from China beginning in
2011. The percentage of cars made and sold in the U.S. will
remain stable, with fewer imports likely from Canada, The AP
states, citing GM. Industry analysts explained that GM needs to
import small cars from countries with lower labor costs to remain
competitive, as the market for subcompacts in the U.S. is somewhat
uncertain, The AP relates.
GM to Close Salisbury Chevrolet
General Motors said on May 15 that it would start reducing its
dealer network from 5,969 stores to approximately 3,600 by the end
of 2010. GM says it has begun contacting dealers regarding this
move.
NEWS10 relates that Salisbury Chevrolet is one of the dealers that
GM would be ending a franchise relationship. NEWS10 quoted
Salisbury Chevrolet owner Anna Gerrity as saying, "To think that
you could close down dealerships and that's gonna' put you in a
better financial position, I think it's foolhardy." It makes no
sense to close Salisbury Chevrolet, one of the most successful
Chevy dealers in the region and which sold 528 new cars in 2008,
the report states, citing Ms. Gerrity. According to the report,
Ms. Gerrity said, "We're definitely going to contest the
termination letter."
Citing Salisbury Chevrolet's Sales Manager Dan Carlton, NEWS10
relates that three more Chevrolet dealers in the Capital Region
received the termination letter, but have not yet come forward.
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 by the Troubled Company Reporter, GM reported net loss
of $6.0 billion, including special items, in the first quarter of
2009. This compares with a reported net loss of $3.3 billion in
the year-ago quarter. Excluding special items, the Company
reported an adjusted net loss of $5.9 billion in the first quarter
of 2009 compared to an adjusted net loss of $381 million in the
first quarter of 2008. As of March 31, 2009, GM had $82.2 billion
in total assets and $$172.8 billion in total liabilities,
resulting in $90.5 billion in stockholders' deficit.
On April 27, General Motors presented the U.S. Department of
Treasury with an updated plan as required by the loan agreement
signed by GM and the U.S. Treasury on December 31, 2008. The plan
addresses the key restructuring targets required by the loan
agreement, including a number of the critical elements of the plan
that was submitted to the U.S. government on December 2, 2008.
Among these are: U.S. market competitiveness; fuel economy and
emissions; competitive labor cost; and restructuring of the
company's unsecured debt. It also includes a timeline for
repayment of the Federal loans, and an analysis of the Company's
positive net present value.
The plan details the future reduction of GM's vehicle brands and
nameplates in the U.S., further consolidation in its workforce and
dealer network, accelerated capacity actions and enhanced
manufacturing competitiveness, while maintaining GM's strong
commitment to high-quality, fuel-efficient vehicles and advanced
propulsion technologies.
GM also launched a bond exchange offer for roughly $27 billion of
unsecured public debt. If successful, the bond exchange would
result in the conversion of a large majority of this debt to
equity.
GM is also in talks with the UAW to modify the terms of the
Voluntary Employee Benefit Association, and with the U.S. Treasury
regarding possible conversion of its debt to equity. The current
bond exchange offer is conditioned on the converting to equity of
at least 50% of GM's outstanding U.S. Treasury debt at June 1,
2009, and at least 50% of GM's future financial obligations to the
new VEBA. GM expects a debt reduction of at least $20 billion
between the two actions.
In total, the U.S. Treasury debt conversion, VEBA modification and
bond exchange could result in at least $44 billion in debt
reduction.
GM filed with the Securities and Exchange Commission a
registration statement related to its exchange offer. The filing
incorporates the revised Viability Plan. A full-text copy of the
filing is available at http://ResearchArchives.com/t/s?3c09
A full-text copy of GM's viability plan presented in February 2009
is available at http://researcharchives.com/t/s?39a4
Going Concern Doubt
Deloitte & Touche LLP, has said there is substantial doubt about
GM's ability to continue as a going concern after reviewing GM's
2008 financial report. Deloitte cited the Company's recurring
losses from operations, stockholders' deficit and failure to
generate sufficient cash flow to meet the Company's obligations
and sustain the its operations. It said GM's future is dependent
on the Company's ability to execute the Company's Viability Plan
successfully or otherwise address these matters. If the Company
fails to do so for any reason, the Company would not be able to
continue as a going concern and could potentially be forced to
seek relief through a filing under the U.S. Bankruptcy Code.
Standard & Poor's Ratings Services on April 10 lowered its issue-
level rating on GM's $4.5 billion senior secured revolving credit
facility to 'CCC-' (one notch above the 'CC' corporate credit
rating on the company) from 'CCC'. It revised the recovery rating
on this facility to '2' from '1', indicating its view that lenders
can expect substantial (70% to 90%) recovery in the event of a
payment default. The corporate credit rating remains unchanged,
at 'CC', reflecting its view of the likelihood that GM will
default -- through either a bankruptcy or a distressed debt
exchange.
Moody's Investors Service said February 18 that the risk of a
bankruptcy filing by GM and Chrysler remains high. The last
rating action on GM and Chrysler was a downgrade of their
Corporate Family Ratings to Ca on December 3, 2008.
GUROSA CORP: Court Orders Plan Filing in 120 Days
-------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
ordered Gurosa Corp. to propose and file a disclosure statement
and a Plan of Reorganization within 120 days from the petition.
The Debtor will appear at a status hearing on Sept. 9, 2009, at
9:00 a.m. at the U.S. Bankruptcy Court, 3rd floor, 600 East
Harrison, Brownsville, Texas for further orders to effectuate a
Plan of Reorganization.
Creditors, equity interest owners and the U.S. Trustee may appear
and be heard at the hearing.
Brownsville, Texas-based Gurosa Corporation filed for Chapter 11
on May 4, 2009 (Bankr. S.D. Tex. Case No. 09-10261). Soliz Law
Firm PLLC represents the Debtor in its restructuring efforts. The
Debtor listed $100 million to $500 million in assets and $100
thousand to $500 thousand in debts.
GOV'T OF GUAM: S&P Puts 'B+' Rating on $275 Million Bonds
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term
rating to the government of Guam's $275 million series 2009A
general obligation bonds. At the same time, Standard & Poor's
affirmed its 'B+' rating on Guam's existing GO debt. The outlook
is stable.
"The rating continues to reflect our view of the general
government's highly speculative-grade credit characteristics,
including its massive historical budget imbalance and long-term
liabilities, which have led to continuous operating cash flow
pressure and a negative general fund balance position," said
Standard & Poor's credit analyst Paul Dyson. "It also reflects
our assessment of GovGuam's increased political willingness to
establish a long-term plan to improve its financial position,
including addressing its history of annual budget imbalance, as
well as significant long-term liabilities. While S&P's 'B+'
rating is speculative grade and assumes that additional financial
volatility exists, S&P believes that Guam will still meet debt
service payments."
Management will use the proceeds to fund some of the items in a
$275 million, legislature-authorized GO bond package that is part
of a deficit-financing plan approved in the fiscal 2009 budget.
Guam, the westernmost U.S. territory, is the Marianas
Archipelago's largest and southernmost island, as well as the
largest of Micronesia's 2,000 islands. The island is nearly 3,700
miles west-southwest of Honolulu and 1,500 miles southeast of
Tokyo.
GOV'T OF GUAM: S&P Withdraws 'B+' Rating on $50 Million Bonds
-------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'B+' rating on the
Government of Guam's $50 million series 2008A general obligation
bonds, given the bonds, which were slated to sell in fall 2008,
never sold.
In a separate release, Standard & Poor's assigned its 'B+' rating
to GovGuam's $275 million GO bonds, series 2009A.
HAYES LEMMERZ: Proposes Garden City as Claims and Noticing Agent
----------------------------------------------------------------
Hayes Lemmerz International, Inc., and its debtor-affiliates ask
the U.S. Bankruptcy Court for the District of Delaware for
permission to employ The Garden City Group, Inc., as claims and
noticing agent.
GCG will, among other things:
a) prepare and serve required notices in the Chapter 11 cases;
b) maintain copies of all proofs of claim and proofs of
interest filed; and
c) maintain official claims register.
Jeffrey S. Stein, vice president of GCG, tells the Court that GCG
received a $50,000 retainer.
Mr. Stein assures the Court that GCG is a "disinterested person"
as that term is defined in Section 101(14) of the Bankruptcy Code.
About Hayes Lemmerz International, Inc.
Originally founded in 1908, Hayes Lemmerz International, Inc.
(NasdaqGM: HAYZ) is a worldwide producer of aluminum and steel
wheels for passenger cars and light trucks and of steel wheels for
commercial trucks and trailers. The Company is also a supplier of
automotive powertrain components. The Company has global
operations with 23 facilities, including business, sales offices
and manufacturing facilities, located in 12 countries around the
world. The Company sells products to every major North American,
Asian and European manufacturer of passenger cars and light trucks
and to commercial highway vehicle customers throughout the world.
The Company and certain affiliates filed for bankruptcy on May 11,
2009 (Bankr. D. Del. Case No. 09-11655) after reaching agreements
with lenders holding a majority of the Company's secured debt.
The Company's principal bankruptcy attorneys are Skadden, Arps,
Slate, Meagher & Flom, LLP. Lazard Freres & Co., LLC serves as the
Company's financial advisors. AlixPartners, LLP serves as the
Company's restructuring advisors. The Garden City Group, Inc.,
serves as the Debtors' claims and notice agent. As of January 31,
2009, the Debtors had total assets of $1,336,600,000 and total
debts of $1,405,200,000.
This is the Company's second trip to the bankruptcy court, dubbed
a Chapter 22. Hayes Lemmerz and its direct and indirect domestic
subsidiaries and one subsidiary in Mexico filed for bankruptcy in
December 2001 before the U.S. Bankruptcy Court for the District of
Delaware. The Chapter 11 filings were precipitated by declining
market conditions and the Company's excessive debt burdens,
according to Mr. Clawson, who also served as chairman and chief
executive officer at that time.
In the first Chapter 11 case, the Court confirmed the Company's
reorganization plan in May 2003, allowing the Company to exit
bankruptcy in June 2003. In accordance with the 2003 Plan,
approximately $2.1 billion in prepetition debt and other
liabilities were discharged. The Plan provided for holders of
prepetition secured claims to receive $478.5 million in cash and
53.1% of the reorganized company common stock. Holders of senior
note claims were to receive $13 million in cash and 44.9% of the
New Common Stock, and holders of general unsecured claims were to
receive 2% of the New Common Stock. Hayes Lemmerz' prior common
stock and securities were cancelled as of June 3, 2003.
INN OF THE MOUNTAIN: S&P Downgrades Issuer Credit Rating to 'D'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its issuer credit
rating for Inn of the Mountain Gods Resort and Casino to 'D' from
'CCC'. S&P also lowered the issue-level rating on IMG's
$200 million 12% senior unsecured notes due November 15, 2010 to
'D' from 'CCC'.
The rating actions stem from S&P's understanding, as indicated per
the indenture trustee, that IMG did not make the $12 million
interest payment on the notes due May 15, 2009. 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.
JABIL CIRCUIT: Fitch Affirms Issuer Default Rating at 'BB+'
-----------------------------------------------------------
Fitch Ratings has affirmed the ratings for Jabil Circuit, Inc.:
-- Issuer Default Rating 'BB+';
-- Senior unsecured revolving credit facility 'BB+';
-- Senior unsecured debt 'BB+'.
The Rating Outlook has been revised to Positive from Stable.
The revision in Outlook reflects these considerations:
-- Fitch expects Jabil to utilize excess cash, generated in part
from reduced working capital requirements, to reduce
outstanding debt over the next 12 to 24 months, potentially
lowering leverage (total debt to total operating EBITDA)
below 2.0 times (x) or 2.5x to 3.0x on an adjusted basis
(includes off-balance sheet debt and operating leases).
Fitch expects Jabil will aim to keep leverage at or below
2.0x on a long-term basis, although temporary increases in
leverage may be necessary to fund small acquisitions or
working capital necessary during periods of significant
revenue growth.
-- Fitch believes that Jabil continues to increase its share of
the global EMS market as the company has been less negatively
impacted from the global economic downturn than its peers due
to new program wins. Jabil's revenue for the latest twelve
month period ending Feb. 28, 2009 is essentially flat versus
down in excess of 10% for the average of its Tier 1 North
American peers (Flextronics, Celestica and Sanmina) for the
LTM period ending Mar. 31, 2009.
-- Jabil's EBITDA margins for the LTM period have declined to
4.4% from 4.8% while EBITDA margins for its peers
collectively have fallen to 3.1% from 3.9%. Fitch believes
Jabil's relative superior margin performance is reflective of
the company's aggressive cost cuts over the past several
quarters and disciplined management approach to competing for
new business.
The ratings continue to reflect these considerations:
-- Strong diversification relative to the industry and
significant exposure to non-traditional EMS sectors which are
expected to exhibit higher long-term growth rates as
companies increasingly seek to outsource manufacturing
operations.
-- Annual free cash flow on a normalized basis should average
$200 million or greater, although Fitch believes meaningful
upside will be constrained by significant capital spending
needs. Quarterly free cash flow is expected to remain
volatile due to the industry's high working capital
intensity.
-- Strong working capital management with cash conversion cycle
days of 30 (adjusted for the sale of accounts receivable),
ahead of most peers.
-- Fitch anticipates Jabil will opportunistically pursue
strategic acquisitions to enhance its vertical integration
capabilities going forward, which Fitch believes could be at
least partially debt financed.
Further positive rating action could occur if Jabil utilizes
excess cash to reduce debt as expected and is successful in
maintaining its relatively strong EBITDA margins. Conversely, the
Rating Outlook could be stabilized if debt reduction does not
occur or the company suffers EBITDA margin or revenue declines
significantly below current Fitch expectations.
The ratings are supported by these considerations:
-- Strong management team with a track record of delivering best
in class execution with a disciplined approach to growing the
business.
-- Advantages in scale as one of the largest of the tier 1 EMS
vendors with a balanced global manufacturing footprint,
including a strong mix of facilities in low-cost regions.
-- Significant working capital balance provides an alternate
source of liquidity during business downturns.
Rating concerns include these:
-- Need for vertical integration represents an on-going
strategic shift and could lead to additional debt financed
acquisitions.
-- Industry pricing pressure, driven by excess manufacturing
capacity as well as struggling competitors, has driven
profitability levels below expectations for all tier one
North American EMS providers over the past several years.
-- Significant execution risks in managing a large global
manufacturing operation are compounded by the inherently low
profit margins in the business model.
Liquidity as of Feb. 28, 2009 was solid consisting primarily of
$775 million in cash and a fully available $800 million senior
unsecured revolving credit facility which expires in July 2012.
Jabil also utilizes two accounts receivable securitization
facilities for additional liquidity purposes, including an on-
balance sheet $200 million committed foreign receivables and an
off balance sheet $250 million North American receivables
securitization facility, both expiring in March 2010 after being
recently renewed.
Total debt as of Feb. 28, 2009 was $1.2 billion and consisted
primarily of $300 million in 5.875% senior unsecured noted due
July 2010; a $380 million senior unsecured term loan due July
2012; $400 million in 8.25% senior unsecured notes due March 2019;
and $75 million outstanding under the aforementioned foreign
receivables facility. Jabil also had $227 million outstanding
under its off-balance sheet North American receivables
securitization facility which is included in Fitch's calculation
of adjusted debt.
JOE A SIGUA: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Joint Debtors: Joe A. Sigua
aka Jose A. Sigua
Cynthia G. Sigua
480 s wells ave
Reno, NV 89502
Bankruptcy Case No.: 09-51526
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
District of Nevada (Reno)
Judge: Gregg W. Zive
Debtors' Counsel: Kevin A. Darby, Esq.
Darby Law Practice, LTD.
200 South Virginia ST.,
Suite 800
Reno, NV 89501
Tel: (775) 322-1237
Fax: (775) 996-7290
E-mail: kevin@darbylawpractice.com
Total Assets: $3,619,448
Total Debts: $3,559,178
A full-text copy of the Debtors' petition, including a list of
their 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/nvb09-51526.pdf
The petition was signed by the Joint Debtors.
JOYSTAR/TRAVELSTAR: Unsec. Creditors Want Case Converted to Ch. 7
-----------------------------------------------------------------
George Dooley at TravelAgentCentral reports that the unsecured
creditors committee in Joystar Inc/Travelstar's Chapter 11 case
asked the U.S. Bankruptcy Court for the Southern District of
Florida to convert the case to Chapter 7 liquidation.
As reported by he Troubled Company Reporter on February 16, 2009,
the Court previously granted JoyStar's request to convert its
Chapter 7 involuntary liquidation case to Chapter 11
reorganization.
The Committee, according to TravelAgentCentral, is also asking the
Court to appoint a Chapter 11 trustee if the conversion wouldn't
be possible.
TravelAgentCentral quoted the committee as saying, "While this
debtor has been in a Chapter 11 proceeding for only three months,
it has already become clear that its reputation is so poor that it
has no meaningful prospect for reorganization and that liquidation
of the estate is in the best interest of creditors."
Joystar, says TravelAgentCentral, was a publicly traded travel
agency licensed in Florida and California. Citing the committee,
the report states that the Debtor is a "host agency" that used
lead sheets, cold calls, and multi-level marketing techniques to
build a roster of several thousand 'member agents' who could place
travel bookings with cruise lines and other travel providers.
Citing the committee, TravelAgentCentral states that Joystar
hasn't maintained its Florida and California licenses, and has
lost its IATAN and CLIA membership. Joystar has also been dropped
as an approved booking agent by Royal Caribbean and Carnival, its
two principal cruse lines, TravelAgentCentral relates.
According to court documents, the Committee claimed that:
-- the Debtor has been collecting deposit refunds from travel
providers identified to particular customers but has not
been forwarding those refunds to the clients;
-- the Debtor stopped paying commissions to most of its sub-
agents by September 2008, but continued to collect monthly
membership fees from its sub-agents through December
without advising them that it was not paying commissions;
-- the Debtor has lost money every year since it was the
subject of a reverse merger with Advanced Refrigeration
Technologies, Inc., in 2004, and hasn't filed any
quarterly reports with the SEC or on the pink sheets since
May 2008, at which time it reported dramatic losses;
-- the Debtor has failed to pay more than one-half million
dollars in payroll taxes, including after the Internal
Revenue Service recorded a prepetition lien against the
company and assessed the Alversons personally, and hasn't
made any effort to protect the IRS's interest in cash
collateral or to obtain the IRS's permission to use cash
collateral;
-- the Debtor doesn't have errors and omissions insurance as
it has claimed on its Web site. Until sometime in April
2009, its Web site continued to represent that sub-agents
will receive 70% to 100% of the highest commission levels
in the travel industry, including from such travel
providers as Carnival Cruise Lines; and
-- the Debtor has shut down its Web site, disconnected its
phone and not provided documents to the committee. The
Debtor continues to spend the cash receipts, mostly
override commissions, and applying the funds primarily to
the payment of salaries to the Alversons, without the
permission of the IRS which has a lien upon the receipts
because of the recorded tax liens.
JoyStar/TravelStar is based in Aliso Viejo, California.
KERRY ALLAN KRUSZEWSKI: Case Summary & 11 Largest Unsec. Creditors
------------------------------------------------------------------
Debtor: Kerry Allan Kruszewski
7217 Kerry Court
Fairview, TN 37062
Bankruptcy Case No.: 09-05604
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
Middle District of Tennessee (Nashville)
Judge: Keith M. Lundin
Debtor's Counsel: Steven L. Lefkovitz, Esq.
Law Offices Lefkovitz & Lefkovitz
618 Church St
Ste 410
Nashville, TN 37219
Tel: (615) 256-8300
Fax: (615) 250-4926
E-mail: Stevelefkovitz@aol.com
Total Assets: $608,250
Total Debts: $675,268
A full-text copy of the Debtor's petition, including a list of its
11 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/tnmb09-05604.pdf
The petition was signed by Mr. Kruszewski.
KOFI KYEI- ASARE: Case Summary & 17 Largest Unsecured Creditors
---------------------------------------------------------------
Joint Debtors: Kofi Kyei- Asare
Beatrice Kyei-Asare
13108 English Turn Drive
Silver Spring, MD 20904
Bankruptcy Case No.: 09-18973
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
District of Maryland (Greenbelt)
Judge: Wendelin I. Lipp
Debtors' Counsel: Howard M. Heneson, Esq.
810 Glen Eagles Court
Suite 301
Towson, MD 21286
Tel: (410) 494-8388
Fax: (410) 494-8389
E-mail:hheneson@bankruptcymd.com
Total Assets: $2,943,783
Total Debts: $3,001,468
A full-text copy of the Debtors' petition, including a list of
their 17 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/mdb09-18973.pdf
The petition was signed by the Joint Debtors.
HARTFORD FINANCIAL: Moody's Hikes Ba1 Jr Sub Notes to 'Developing'
------------------------------------------------------------------
Moody's Investors Service affirmed the credit ratings of The
Hartford Financial Services Group, Inc. and its key operating
subsidiaries, and changed the outlook for the ratings to
developing, from negative. The rating action follows The
Hartford's announcement that the US Treasury Department has
provided preliminary approval for the company to participate in
the Treasury's Capital Purchase Program -- a component of the
Troubled Asset Relief Program -- in the amount of $3.4 billion.
The developing outlook for The Hartford's ratings reflects a
continued high level of uncertainty regarding the company's
overall credit profile, with a mix of both opportunities and
risks.
Moody's believes that access to TARP funding improves The
Hartford's overall financial flexibility by providing additional
capital that can be used to support the group's insurance
operating subsidiaries if needed. Potentially offsetting some of
this benefit is a perceived stigma in the marketplace with
accepting TARP funds that could negatively affect the company's
reputation and franchise, thereby dampening new sales and policy
retention.
"While it will help alleviate near term capital strain, the
acceptance of TARP funds is not without risks," said Moody's
Senior Credit Officer Paul Bauer. "The addition of the US
Treasury as a major stakeholder of the company adds an element of
political risk and could result in restrictions to operational
flexibility."
Over the medium term, Moody's expects continued weak financial
performance at The Hartford's life companies due to substantial
business exposure to variable annuities with guarantees, and
potential capital volatility from investment performance. Helping
offset some of this weakness is the expectation of continued
strong underwriting earnings from the group's property and
casualty operations.
Moody's will continue to monitor the shifting risk profile of The
Hartford, with particular attention given to: (1) capitalization
levels and financial flexibility at the consolidated organization;
(2) continued exposure to losses from investment performance and
variable annuities products; (3) the elevated political and
headline risk that would follow the acceptance of TARP funds; (4)
changes in the company's market reputation and franchise strength
which could impact new business development and policy retention;
and (5) the relative standing of subordinated creditors vis-…-vis
the addition of the US Treasury as a key stakeholder.
These ratings were affirmed and their outlook changed to
developing from negative:
* Hartford Financial Services Group, Inc. -- senior long-term
unsecured debt at Baa3; junior subordinated notes at Ba1:
provisional senior unsecured debt shelf at (P)Baa3; provisional
subordinated debt shelf at (P)Ba1; provisional preferred shelf
at (P)Ba2; short-term rating for commercial paper at Prime-3;
* Hartford Capital III - preferred stock at Ba1;
* Hartford Capital IV -- provisional preferred shelf at (P)Ba1;
* Hartford Capital V -- provisional preferred shelf at (P)Ba1;
* Hartford Capital VI -- provisional preferred shelf at (P)Ba1;
* Hartford Life, Inc. -- senior long-term unsecured debt at Baa3;
* Glen Meadow Pass-Through Trust -- senior secured debt at Ba1;
* Hartford Life & Accident Insurance Company -- insurance
financial strength at A3;
* Hartford Life Insurance Company -- insurance financial strength
at A3; short-term insurance financial strength at Prime-2;
senior unsecured medium term note program at Baa1;
* Hartford Life & Annuity Insurance Company -- insurance financial
strength at A3;
* Hartford Life Global Funding Trusts-senior secured funding
agreement-backed notes at A3;
* Hartford Life Institutional Funding -- senior secured funding
agreement-backed notes at A3;
* Hartford Fire Insurance Company -- insurance financial strength
at A2;
* Hartford Accident & Indemnity Co. -- insurance financial
strength at A2;
* Hartford Casualty Insurance Co. -- insurance financial strength
at A2;
* Trumbull Insurance Company -- insurance financial strength at
A2;
* Hartford Insurance Company of Illinois -- insurance financial
strength at A2;
* Hartford Insurance Company of Midwest -- insurance financial
strength at A2;
* Hartford Insurance Company of Southeast -- insurance financial
strength at A2;
* Hartford Lloyd's Insurance Company -- insurance financial
strength at A2;
* Hartford Underwriters Insurance Company -- insurance financial
strength at A2;
* Nutmeg Insurance Company -- insurance financial strength at A2;
* Pacific Insurance Company, Limited -- insurance financial
strength at A2;
* Property & Casualty Insurance Company of Hartford -- insurance
financial strength at A2;
* Sentinel Insurance Company -- insurance financial strength at
A2;
* Twin City Fire Insurance Company -- insurance financial strength
at A2.
The Hartford is an insurance and financial services organization
that offers a wide variety of property and casualty as well as
life and annuity insurance products through its insurance
operating subsidiaries. For the first quarter of 2009, The
Hartford reported revenues of $5.4 billion and a net loss of $1.2
billion. Shareholders' equity at March 31, 2009 was $7.9 billion.
The last rating action occurred on March 30, 2009 when Moody's
downgraded the senior debt rating of The Hartford to Baa3 from
Baa1.
HIGH RIVER: Still in Default of Standard Bank Loan
--------------------------------------------------
High River Gold Mines Ltd. reported on Friday its financial
results and operational highlights for the three-month period
ended March 31, 2009.
First quarter highlights:
-- Net income for the first quarter of C$900,000;
-- Cash flow from operations was C$29.7 million, up from
(C$300,000) last year;
-- Cash and cash equivalents increased to C$25.0 million from
C$19.1 million as at 2008 year-end;
-- The working capital deficit improved to (C$29.7) million
from (C$42.1) million as at 2008 year-end;
-- Current and long term debt levels declined to C$175.8
million from C$188.1 million as at 2008 year-end;
The Company reported lower than expected gold production at the
Taparko-Bouroum Open-pit Gold Mine due to mill shutdowns during
the quarter. Production levels at the Berezitovy Open-pit Gold
Mine continue to be constrained by disk filter plant under-
performance. Due to capital constraints, no exploration activity
occurred on the Prognoz Silver Exploration Project.
On January 2, 2009, High River announced that it had advised
Somita trade creditors that it will slow down payments for
accounts payable for a brief period in light of lower than
expected cashflows from the group's operations, and that it
planned to pay suppliers for current purchases of goods and
services. High River also indicated that it was continuing to
pursue discussions relating to additional debt and equity
financing required to ensure that it is able to meet its financial
obligations.
On March 17, 2009, High River said the results of a NI 43-101
compliant gold reserve and resource estimate, as of December 31,
2007, on the Zun-Holba and Irokinda Gold mines.
On March 25, 2009, High River reported that the acquisition of the
Chaya Nickel Deposit will not be completed. An initial payment of
approximately US$4.15 million made in February 2008, which
represents all acquisition costs incurred to-date, has been
written off as at the 2008 year end.
On March 30, 2009, High River said OAO Severstal and a Special
Committee comprised of High River independent directors have been
unable to agree on terms of any transaction whereby Severstal
would acquire the remaining outstanding common shares of High
River or provide debt or equity financing to High River. In
addition, Terrence Lyons, Chairman of the Board of High River and
a member of the Company's Special and Audit Committees, tendered
his resignation, effective March 31, 2009, due to the demands of
his other business interests.
On March 31, 2009, High River said it would be late in filing its
audited financial statements, management's discussion and
analysis, annual information form and related CEO and CFO
certifications for the year ended December 31, 2008 due to
concerns raised by the board of directors regarding production
numbers received by the Company from the Berezitovy Gold mine.
The concerns were subsequently addressed to the satisfaction of
the board of directors and the financial statements and other
filings were released on April 29, 2009.
On April 8, 2009, High River announced the resignation of John W.
Crow from the Company's board of directors, and the appointment of
Alexey Khudyakov and Karl Glackmeyer to the board of directors.
Alexey Khudyakov assumed the role of Chairman of the board of
directors.
On April 20, 2009, High River said two loans, with a total amount
outstanding of US$27 million, were assigned by Standard Bank Plc
to Severstal, and continue to be in default. Also, Steven Poad,
CFO of High River, was appointed to the board of directors on an
interim basis until the next annual meeting of shareholders of
High River.
On May 1, 2009, High River announced the resignation of Roman
Deniskin from the Company's board of directors.
At March 31, 2009, the Company had C$734.6 million in total assets
and C$255.1 million in total liabilities.
About High River
Toronto, Ontario-based High River Gold Mines Ltd. (CA:HRG) is a
gold company with interests in producing mines and advanced
exploration projects in Burkina Faso and Russia.
INTEGRA TELECOM: Moody's Changes Default Rating to 'Ca/LD'
----------------------------------------------------------
Moody's Investors Service changed the Probability of Default
Rating for Integra Telecom, Inc. to Ca/LD from Ca, reflecting the
limited default via stoppage of interest payments on the Senior
Secured Second Lien Credit Facility at its wholly-owned
subsidiary, Integra Telecom Holdings, Inc. The Ca rating for the
Senior Secured Second Lien Credit Facility remains unchanged,
albeit under review for possible further downgrade, as it already
reflects an ultimate expected loss level given the default event.
Moody's downgraded the rating for Integra's Senior Unsecured PIK
Loan to C from Ca, reflecting higher impairment expectations in
the pending restructuring. The ratings for the Senior Secured
First Lien Credit Facility were lowered to B2 from B1. Moody's
affirmed the Caa1 Corporate Family Rating, and maintained the
review for further possible downgrade of all ratings (other than
Integra's Senior Unsecured PIK Loan) pending the outcome of its
negotiations with its creditors.
Downgrades:
Issuer: Integra Telecom, Inc.
-- Probability of Default Rating, Downgraded to Ca/LD from Ca
-- Senior Unsecured PIK Loan, Downgraded to C (LGD6 - 95%) from
Ca (LGD5 - 89%)
Issuer: Integra Telecom Holdings, Inc.
-- Senior Secured First Lien Bank Credit Facility, Downgraded to
B2 (LGD2 - 21%) from B1 (LGD2 - 21%)
The stoppage of interest payments constitutes an event of default
under Moody's methodologies. The limited default designation is
likely to stay in place until a resolution is reached either
through an out-of-court restructuring or a reorganization of its
debt via a formal bankruptcy filing. Under the proposal being
negotiated between the Company and its lenders, total debt is
likely to be cut in half, leading to an arguably stronger credit
profile following the restructuring and prospective restoration of
the Company's growth potential.
As Moody's stated in its special comment on the U.S. Competitive
Local Exchange Carriers (August 2008, document # 110730), the
history of CLEC restructurings has demonstrated rapid
deterioration of value for companies operating in bankruptcy, and
failed CLECs can bring potentially low recoveries to lenders.
Therefore, Moody's believes that CLEC lenders would be more
willing to keep a CLEC out of default if a realistic turnaround
plan is in place.
In the event that the Company does not come to terms with its
lenders on an out-of-court restructuring, Moody's will likely
downgrade Integra's PDR to D and its CFR and instrument ratings to
ultimate expected loss levels, followed by a likely near-term
withdrawal of the ratings in the event of a bankruptcy filing. On
the other hand, the conclusion of the review following a
successful restructuring may result in an upgrade of the corporate
family rating if Moody's believes that the company permanently
right-sized its debt capital structure based on its business plan
and path to expand free cash flow growth.
Moody's most recent rating action for Integra was on May 6, 2009
when the Company's PDR was downgraded to Ca from Caa1 based on the
heightened probability of a debt restructuring.
Integra is headquartered in Portland, Oregon, and provides
telecommunications services to small and medium-sized enterprises
and other communications companies.
ION MEDIA: Files Ch. 11 to Implement Pre-Negotiated Restructuring
-----------------------------------------------------------------
ION Media Networks, Inc., reached an accord with a group of
holders of over 60% of its first lien senior secured debt on the
terms of a pre-negotiated financial restructuring that would
extinguish all of its indebtedness through a debt-to-equity
conversion.
The financial restructuring contemplates extinguishing over $2.7
billion in legacy indebtedness and preferred stock and
capitalizing the company with a $150 million new funding
commitment underwritten by a group of first lien holders.
Participation in the new funding commitment, which is part of a
$300 million facility that converts into equity upon completion of
the restructuring, will be made available to all holders of ION's
first lien senior secured debt.
To implement the terms of the pre-negotiated restructuring on an
expeditious basis, ION filed voluntary Chapter 11 petitions in
United States Bankruptcy Court for the Southern District of New
York.
"We are pleased with the support from our first lien senior debt
holders to resolve the company's legacy debt issues and fund our
television growth plans. We look forward to working with all
senior debt holders and other stakeholders to facilitate a
complete and expeditious restructuring," said Brandon Burgess,
ION's Chairman and CEO. "We are positioning the business for
growth and will emerge from the restructuring in a strong position
to serve viewers, clients, and stakeholders."
ION's business model is focused on capturing growth through
improved programming and distribution. Ratings for ION Television
showed double digit increases in the first quarter, driven by new
programming additions, including NCIS, Boston Legal, and popular
motion pictures. Additional syndicated shows, such as Criminal
Minds and Ghost Whisperer, will join the network line-up in the
second half of the year, along with several original show
premieres, including the crime drama Durham County, starring Hugh
Dillon. The company also continues to enhance its strong
nationwide distribution, as seen in recent expanded carriage deals
with DirecTV and Dish Network.
ION will continue its operations in the normal course through the
financial restructuring process and provide uninterrupted service
to its viewers and clients. In light of the pre-negotiated
restructuring supported by holders representing a majority of its
outstanding first lien debt outstanding, the company expects that
it will complete the process on an accelerated basis.
Moelis & Company LLC is serving as financial advisor to ION and
Kirkland & Ellis LLP is serving as legal counsel for the
restructuring.
About ION Media Networks
New York-based ION Media Networks, Inc. --
http://www.ionmedia.com/-- owns and operates the nation's largest
broadcast television station group and ION Television, which
reaches over 96 million U.S. television households via its
nationwide broadcast television, cable and satellite distribution
systems, and features popular TV series and movies from the award-
winning libraries of RHI Entertainment, CBS Television, NBC
Universal, Sony Pictures Television, Twentieth Television and
Warner Bros., among others. Using its digital multicasting
capability, the Company has launched several digital TV brands,
including qubo, a channel for children focusing on literacy and
values, and ION Life, a channel dedicated to active living and
personal growth. It also has launched Open Mobile Ventures
Corporation, a business unit focused on the research and
development of portable, mobile and out-of-home transmission
technology using over-the-air digital television spectrum.
JG WENTWORTH: 3 Affiliates to Reorganize Under Chapter 11
---------------------------------------------------------
J.G. Wentworth said three of its non-operating parent holding
company level affiliates -- JGW Holdco, LLC, J.G. Wentworth LLC,
and J.G. Wentworth, Inc. -- have filed a voluntary reorganization
plan under Chapter 11 of the U. S. Bankruptcy Code in the U. S.
Bankruptcy Court for the District of Delaware. The filing is what
is known as a prepackaged chapter 11.
Prior to filing the company solicited acceptance of a plan of
reorganization from its $370 million term lenders. Over 90% of
the term lenders approved the plan. They are the only creditors
impacted by the plan. The plan will allow the company to
substantially reduce its debt load at the parent holding company
level while providing the enterprise with $100 million of new
equity to support ongoing operations. Its operating units will
continue to conduct business without interruption during the
reorganization process, which is expected to be completed within
30 days or so.
In addition, the company has secured a commitment for debtor-in-
possession financing to supplement its working capital and provide
adequate liquidity during the proceedings.
J.G. Wentworth's decision to file for Chapter 11 follows an
extensive review of alternatives to address pressures from
extremely challenging capital markets and high borrowing costs,
and was unanimously approved by the company's board of directors.
The reorganization plan offers the most effective solution to
overcoming these financial challenges and is in the long-term best
interest of the company. This filing is the most efficient
vehicle for implementing that plan.
David Miller, Chief Executive Officer, said, "J.G. Wentworth
serves a very important market niche, and we have successfully
provided liquidity to tens of thousands of customers over the
years. However, we have recently faced significant challenges due
to the well-published disruption of the ABS market. After careful
review, we made the decision to restructure the business through a
Chapter 11 filing so that we can strengthen our balance sheet and
be better positioned for the future. I am excited by the
potential at J.G. Wentworth and believe that by taking the
appropriate actions now, this business will move forward
effectively. A strengthened J.G. Wentworth will offer customers
more options as they seek cash for their illiquid assets, with the
same great service they've come to expect."
Since only senior term debt at the parent holding company level is
being affected and DIP financing has been contracted for,
customers completing a transaction with J.G. Wentworth will not be
impacted by the filing. Its vendors and employees also will not
be impacted by this process. "This is one of the necessary steps
to implement the agreed plan as we work to strengthen the business
and return to profitability," Mr. Miller said. "The Board and I
would like to thank our employees, vendors and customers for their
ongoing support as we work to complete Wentworth's reorganization.
With this support, we have the opportunity to leverage our market
position and our brand to emerge from this proceeding as a
stronger and healthier company."
About J.G. Wentworth
J.G. Wentworth, Inc. -- http://www.jgwentworth.com/-- based in
Bryn Mawr, Pennsylvania, is the nation's oldest, largest and most
respected buyer of deferred payments for illiquid financial assets
like structured settlements and annuities. Since 1992, J.G.
Wentworth has purchased over $3 billion of future payment
obligations from consumers and is also the nation's largest
securitizer of structured settlement and annuity backed notes.
JIM PALMER: Court Confirms Plan of Reorganization
-------------------------------------------------
The U.S. Bankruptcy Court for the District of Montana has
confirmed the plan of reorganization filed by Jim Palmer Trucking,
Inc.
The Plan calls for unsecured creditors to be repaid 44% of what
they are owed, payable over a 5-year period.
In a statement, Steven R. Peacock, CEO of ActionView
International, Inc., said, ""While Jim Palmer Trucking's approved
Plan of Reorganization did not ultimately include the terms that
we had hoped for, this repayment is still an asset that we expect
will provide additional value for ActionView shareholders in our
proposed acquisition transaction."
"We expect to provide additional information on the terms of the
transaction and how the repayment of the Jim Palmer Trucking debt
is expected to factor into the transaction once a Letter of Intent
is announced," Mr. Peacock said.
ActionView provided a $250,000 loan to Jim Palmer in May 2008 and
is seeking repayment of the loan.
About ActionView International
The operating subsidiary of Murrieta, California-based ActionView
International -- http://www.actionviewinternational.com/--
custom-designs, develops, and manufactures vividly illuminated
motion billboards. ActionView places its signs into high traffic
locations and markets advertising space on the signs. ActionView
shares advertising revenue generated from the billboards with
advertising agencies, the local business partner and the location
owner. The benefit to advertisers is exposure in high traffic
locations at reasonable costs due to the scrolling feature and
multiple advertisers.
About Jim Palmer
Headquartered in Missoula, Montana, Jim Palmer Trucking Inc. --
http://www.jimpalmertrucking.com/-- offers truckload
transportation of temperature-controlled cargo. The company
operates throughout the US from terminals in Missoula, Montana;
Salina, Kansas; and Tampa.
The Debtor and two of its affiliates filed for separate Chapter 11
protection on July 15, 2008, (Bankr. D. Mont. Lead Case No.: 08-
60922). James A. Patten, Esq., represents the Debtors in their
restructuring efforts. The Debtors have $11,897,554 in total
assets and $12,089,808 in total debts.
LEONARD O WALLACE: Case Summary & 2 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Leonard O. Wallace
Pamela J. Wallace
1504 E. Plaza
Post Falls, ID 83854
Bankruptcy Case No.: 09-20496
Chapter 11 Petition Date: May 14, 2009
Court: United States Bankruptcy Court
District of Idaho (Coeur d' Alene)
Judge: Terry L. Myers
Debtor's Counsel: Bruce A. Anderson, Esq.
1400 Northwood Ctr. Ct. #C
Coeur d'Alene, ID 83814
Tel: (208) 667-2900
Fax: (208) 667-2150
E-mail: baafiling@ejame.com
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The Debtors' 2 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Jamar Associates Services $67,000
9494 N. Government Way
Coeur D Alene, ID 83815
Groen Stephens and Klinge Legal Fees 4,443
11100 NE 8th St. Ste. 750
Bellevue, WA 98004
Leonard and Pamela J. Wallace signed a joint Chapter 11 petition.
MACKINAW POWER: Fitch Affirms 'BB-' Rating on $147 Mil. Loan
------------------------------------------------------------
Fitch Ratings affirms the 'BBB-' rating on Mackinaw Power, LLC's
$288.9 million ($264.3 million outstanding) senior secured bonds
(senior bonds), and affirms the 'BB-' rating on Mackinaw Power
Holdings, LLC's $147 million ($142 million outstanding) senior
secured term loan (term loan). The debt proceeds were used to
finance the acquisition of four contracted natural gas-fired
generating facilities in Georgia. Mackinaw is an indirect wholly
owned subsidiary of MPH, which is an indirect wholly owned
subsidiary of ArcLight Energy Partners Fund III, L.P.
Fitch has evaluated the credit quality of the senior bonds and
term loan on a stand-alone basis, independent of ArcLight's credit
quality. The lack of debt or single majority shareholders at the
parent level and lack of other project ownership and creditors at
intermediate holding companies substantially mitigates concerns
regarding the possibility of substantive consolidation in the
event of bankruptcy.
The rating affirmation reflects historical and expected financial
and operating performance consistent with base case projections.
Debt service coverage ratios were 1.78 times (x) in 2007 and 1.45x
in 2008 on the senior bonds, and 1.39x in 2007 and 1.10x in 2008
on the term loan, generally exceeding base case projections.
Stable cash flows are largely dependent on achieving minimum
availability levels required under Mackinaw's tolling agreements
to avoid reductions in capacity payments. In spite of a forced
outage at the single largest generating unit in late 2007,
Mackinaw was able to preserve full capacity payments for the
period through the election of the alternate delivery point and
financial settlement mechanisms allowed under its tolling
agreements.
Availability levels are expected to remain in excess of tolling
agreement requirements for all the Mackinaw assets. The
cancellation of a parts and services agreement for one of the
Mackinaw facilities is not expected to have a material effect on
financial performance, as elimination of monthly fees and the
ability to source third-party parts and services may offset a
potential termination payment.
The assigned ratings reflect Fitch's assessment of the ability to
provide full and timely payment of the debt service obligations
solely from operating cash flows. Debt service obligations for
the senior bonds include scheduled interest and principal
payments. Debt service obligations for the term loan require only
quarterly interest payments prior to maturity. The rating of the
senior bonds is based on contracted cash flows. The term loan
rating is based on consolidated debt service coverage for the
senior bonds and the term loan, due to the structural
subordination of the term loan. The term loan rating also
considers refinancing risk and the lack of a covenanted
amortization profile. No term loan amortization occurred through
2008, but $5 million in term loan debt was repaid in April 2009,
and term loan DSCRs are expected to remain consistent with the
assigned rating category. Were less debt to be amortized than
expected by Fitch relative to contractually available revenues, or
refinancing risks to be further elevated, the credit rating could
deteriorate.
The generating facilities are all located in Georgia and consist
of one combined-cycle facility with a capacity of 500 megawatts
and three peaking facilities with a combined capacity of 1,370
megawatts. The generating facilities sell energy and capacity
through long-term tolling agreements with Georgia Power Company
(Fitch IDR of 'A') and Constellation Energy Commodities Group,
Inc., guaranteed by Constellation Energy (IDR 'BBB', Rating Watch
Evolving). Asset management and operating and maintenance
services are provided by Consolidated Asset Management Services, a
joint venture between an ArcLight affiliate and Sutton Ventures
Group.
MARINA BAY: Weak Economy, Permit Delays Blamed for Ch. 11 Filing
----------------------------------------------------------------
Martin C. Daks at Njbiz.com reports that poor economy and delays
in getting certificates of occupancy from the city led to Marina
Bay at Rio Grande, LLC's bankruptcy filing.
Court documents say that delays in getting certificates of
occupancy delayed the closings and wiped out sales deals.
Njbiz.com quoted John Leon, partner in Atlantic City firm Subranni
Ostrove & Zauber who represents Marina Bay owner Gary Papa, as
saying, "As I understand it, my client had trouble obtaining
permits from Wildwood." Mr. Papa said that he invested about
$5 million into the project and had 20 sales contracts in hand for
the 36-unit building, says Njbiz.com.
Njbiz.com states that some buyers willing to pay $500,000 or more
per unit got caught short by the credit crunch. According to
court documents, the credit markets had taken a serious turn for
the worse by the time the certificates of occupancy were issued.
Mr. Papa said in court documents, "Although we started showing the
building with a Realtor on site every day, we couldn't sell any
units because the banks were just not extending credit. We had
many interested purchasers, but they could not obtain the required
financing."
Marina Bay's bankruptcy filing temporarily puts a hold on the
efforts of mortgagor Royal Bank America to force a sale of the
Wildwood property, Njbiz.com says. A hearing is set for May 26,
according to the report.
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). The Debtor listed $10 million to $50 million
in assets and $10 million to $50 million in debts.
MARK IV: S&P Retains 'D' Issue-Level Ratings on Pre-Petition Debt
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it has revised its
recovery ratings on Mark IV Industries Inc.'s senior secured (pre-
petition) credit facilities. All issue-level ratings on Mark IV's
pre-petition debt remain at 'D' (the same as the corporate credit
rating on the company).
The recovery rating on the company's first-lien debt has been
revised to '5' from '3', indicating S&P's expectation that holders
may expect modest (10% to 30%) recovery upon resolution of the
bankruptcy. The recovery rating on Mark IV's second-lien term
loan has been revised to '6' from '5', indicating S&P's
expectation that holders may expect negligible (0 to 10%) recovery
upon resolution of the bankruptcy.
The revised recovery ratings reflect S&P's assessment of the
effect of Mark IV's $90 million debtor-in-possession financing on
pre-petition lender recoveries. (For the complete recovery
analysis, please see Standard & Poor's recovery report on Mark IV
to be published immediately after this report on RatingsDirect.)
Mark IV and certain of its U.S. subsidiaries and affiliates filed
for Chapter 11 bankruptcy protection on April 30, 2009 (please
refer to Standard & Poor's research update on Mark IV published
May 1, 2009).
Ratings List
Mark IV Industries Inc.
Corporate Credit Rating D/--/--
Recovery Ratings Revised
Dayco Europe Srl
To From
-- ----
Senior Secured
US$150 mil. revolving credit fac
bank ln due 12/31/2010 D D
Recovery Rating 5 3
US$100 mil. term loan A (euro equivalent)
bank ln due 12/31/2010 D D
Recovery Rating 5 3
Dayco Products LLC
To From
-- ----
Senior Secured
US$150 mil. revolving credit fac
bank ln due 12/31/2010 D D
Recovery Rating 5 3
US$747 mil. term loan B bank ln
due 06/23/2011 D D
Recovery Rating 5 3
US$150 mil. second-lien term loan
bank ln due 12/31/2011 D D
Recovery Rating 6 5
MARK IV: Taps Houlihan Lokey as Investment Banker & Fin. Advisor
---------------------------------------------------------------
Mark IV Industries, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York for
permission to employ Houlihan Lokey Howard & Zukin Capital, Inc.,
as investment banker and financial advisor.
Houlihan Lokey will:
a) assist in the development, preparation and distribution of
selected information, documents and other materials in an
effort to create interest in and to consummate any
transaction, including, if appropriate, advise the Debtors
in the preparation of an offering memorandum;
b) assist the Debtors in soliciting and evaluating indications
of interest and proposals regarding any transaction from
current and potential lenders and equity investors;
c) assist the Debtors with the development, structuring,
negotiation and implementation of any transaction;
d) advise and attend meetings of the Debtors' board of
directors, creditors groups, official constituencies and
other interested parties; and
e) provide other financial advisory and investment banking
services necessary to accomplish the foregoing.
Saul Burian, a managing director of Houlihan Lokey, tells the
Court that the firm's fee structure includes:
a) a nonrefundable cash fee of $200,000;
b) a fee in the amount of $7,000,000, payable in cash on the
date of confirmation of a Plan of Reorganization under
Chapter 11;
c) a European debt financing fee: if the parties agree that a
transaction is feasible and the Debtors request that
Houlihan Lokey proceed with the transaction, Houlihan Lokey
will be paid the sum of (i) a non-refundable retainer fee of
$75,000 and (ii) upon the consummation of a European Debt
financing transaction, a fee that is equal to the greater of
(A) $1,000,000 and (B) 4% of the gross proceeds of any
indebtedness raised or committed;
d) in the event that the Debtors request that Houlihan Lokey
provide investment banking or financial advisory services
beyond the services described in clauses, Houlihan Lokey
will enter into a separate agreement with the Debtors
relating to the type of transaction involved and containing
customary terms and conditions.
e) in addition to all of the other fees and expenses, and
regardless of whether any transaction is consummated, the
Debtors will, upon Houlihan Lokey's request, reimburse
Houlihan Lokey for its reasonable out-of-pocket expenses
incurred.
Mr. Burian adds that prior to Mark IV's petition date, the Debtors
paid approximately $925,000 plus expenses in full payment of the
monthly fees for the months of January through April 2009, and
partial payment for May 2009, and reimbursement of Houlihan
Lokey's expenses billed through approximately April 2009.
Houlihan Lokey has received no other compensation from the
Debtors. As of the petition date, Houlihan Lokey did not hold a
prepetition claim against the Debtors for fees or expenses related
to services rendered in connection with the engagement.
Mr. Burian assures the Court that Houlihan Lokey is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Mark IV Industries
Headquartered in Amherst, New York, Mark IV Industries, Inc. --
http://www.mark-iv.com/-- is a privately held leading global
diversified manufacturer of highly engineered systems and
components for vehicles, transportation infrastructure and
equipment. The Company's systems and components are designed to
promote a cleaner and safer environment and include power
transmission, air admission and cooling, advanced radio frequency,
and information display, technologies. The Company has a
geographically diverse innovation, marketing and manufacturing
footprint.
The Company and 17 of its affiliates filed for Chapter 11
protection on April 30, 2009 (Bankr. S.D. N.Y. Lead Case No.
09-12795). Jay M. Goffman, Esq., Eric Ivester, Esq., and
Matthew M. Murphy, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. The
Debtors selected Zolfo Cooper as restructuring advisor; Houlihan
Lokey as investment banker and financial advisor; Sitrick and
Company as public relations advisor; and Epiq Bankruptcy Solutions
LLC as claims agent. When the Debtors filed for protection from
their creditors, they listed assets between $100 million and
$500 million, and debts of more than $1 billion.
MAROT RENTAL: Case Summary & 9 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Marot Rental & Development, Corp.
PO Box 363035
San Juan, PR 00936
Bankruptcy Case No.: 09-03992
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
District of Puerto Rico (Old San Juan)
Judge: Bankruptcy Judge Enrique S. Lamoutte Inclan
Debtor's Counsel: Jesus Santiago Malavet, Esq.
Santiago Malavet and Santiago Law Office
470 Sagrado Corazon Street
San Juan, PR 00915
Tel: (787) 727-3058
Fax: (787) 726-5906
E-mail:smslopsc@prtc.net
Total Assets: $1,251,510
Total Debts: $1,692,576
A full-text copy of the Debtor's petition, including a list of its
9 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/prb09-03992.pdf
The petition was signed by Juan Ramon Natal Henriquez, president
of the Company.
MGM MIRAGE: NJ Agency Tells Co. to Disengage From Macau Partner
---------------------------------------------------------------
Jonathan Cheng at The Wall Street Journal reports that the New
Jersey Division of Gaming Enforcement (DGE) has recommended that
that MGM Mirage detach itself from Pansy Ho, its Macau joint-
venture partner and a daughter of Macau gambling magnate Stanley
Ho.
According to WSJ, MGM Mirage struck a 50-50 partnership in 2004
with Ms. Ho to develop, build, and operate the MGM Grand Macau.
MGM, says WSJ, has a 6% market share in the Chinese gambling
enclave.
WSJ relates that state gambling officials will look at the New
Jersey agency's report as they consider whether to renew MGM
Mirage's New Jersey casino license.
In a June 2005 report to the New Jersey Casino Control Commission
on the application of Borgata for renewal of MGM Mirage's casino
license, the DGE stated that it was conducting an investigation of
the relationship of MGM Mirage with its joint venture partner in
Macau and that it would report any material information to the New
Jersey Commission it deemed appropriate.
On May 18, 2009, the DGE issued a report to the New Jersey
Commission on its investigation. While the report itself is
confidential, at the conclusion of the report, the DGE
recommended, among other things, that:
(i) the Company's Macau joint venture partner be found to be
unsuitable;
(ii) the Company be directed to disengage itself from any
business association with its Macau joint venture
partner;
(iii) the Company's due diligence/compliance efforts be found
to be deficient; and
(iv) the New Jersey Commission hold a hearing to address the
report.
The DGE is responsible for investigating licensees and prosecuting
matters before the New Jersey Commission. However, the report is
merely a recommendation and is not binding on the New Jersey
Commission, which has sole responsibility and authority for
deciding all regulatory and licensing matters. The New Jersey
Commission has not yet taken any action with respect to the
report, including whether or when a hearing should be scheduled.
The Company does not believe that the report will have a material
adverse effect on it. However, since the report was issued on
May 18, 2009, it is still being reviewed by the Company and may be
the subject of a hearing by the New Jersey Commission; therefore,
no assurance can be given as to the ultimate impact of the report.
Ms. Ho said in a statement that she was aware of the New Jersey
agency's report and its recommendation "that I be found to be an
unsuitable person under the New Jersey Casino Control Act" and
that MGM Mirage discontinue its joint venture with her in Macau.
According to WSJ, Ms. Ho said that she and her advisers needed
time to read the report before deciding how best to respond.
MGM Mirage, WSJ states, said that it has cooperated with DGE in
its probe. WSJ quoted MGM Mirage as saying, "While we disagree
with the recommendation of the [New Jersey Division of Gaming
Enforcement], we look forward to presenting our position at the
hearing."
WSJ says that the report from New Jersey regulators could force
MGM to make a decision between operations in Macau, which is a
lucrative market many consider gambling's future, and its current
holdings and plans for New Jersey.
MGM Mirage said in a SEC filing on Tuesday that DGE's report is
"merely a recommendation and is not binding on the New Jersey
Commission." The commission, according to WSJ, decides regulatory
and licensing matters.
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.
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 January 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'.
MGM MIRAGE: S&P Upgrades Corporate Credit Rating to 'CCC+'
----------------------------------------------------------
Standard & Poor's Ratings Services said it raised its corporate
credit and issue-level ratings on Las Vegas-based MGM MIRAGE and
its subsidiaries, as outlined in S&P's May 13, 2009 press release.
S&P raised the corporate credit rating to 'CCC+' from 'CCC',
reflecting the substantial boost to MGM MIRAGE's intermediate-term
liquidity profile provided by the recent $2.5 billion capital
raise (prior to any over-allotments on the equity offering). S&P
also removed all ratings from CreditWatch, where they were placed
with positive implications on May 13, 2009, following MGM MIRAGE's
announced plans to raise at least $2.5 billion of capital. The
rating outlook is developing.
Also, as previously outlined, S&P revised its recovery rating on
MGM MIRAGE's existing 13% senior secured notes to '1' from '2'.
The '1' recovery rating indicates S&P's expectation of very high
(90%-100%) recovery for noteholders in the event of a payment
default. In accordance with S&P's notching criteria for a
recovery rating of '1', S&P raised its issue-level rating on these
notes to 'B' (two notches higher than the 'CCC+' corporate credit
rating) from 'CCC+'. The holders of the 13% senior secured notes
have an equal and ratable lien in the collateral securing the new
senior secured notes in addition to their lien on the equity
interests and assets of the New York-New York property.
Furthermore, as previously outlined, S&P revised its recovery
rating on MGM MIRAGE's senior unsecured debt to '4' from '3'. The
'4' recovery rating indicates S&P's expectation of average (30%-
50%) recovery for debtholders in the event of a payment default.
The revised recovery rating reflects the $1.5 billion of senior
secured debt added to the capital structure, which is senior to
these obligations. S&P's issue-level rating on these securities
was raised to 'CCC+' (at the same level as the corporate credit
rating) from 'CCC'.
Finally, S&P raised its issue-level rating on the company's
subordinated debt to 'CCC-' (two notches lower than the 'CCC+'
corporate credit rating) from 'CC'. The recovery rating on these
securities remains at '6', indicating S&P's expectation of
negligible (0%-10%) recovery in the event of a payment default.
"Our upgrade of MGM MIRAGE's corporate credit rating reflects the
recent completion of a $2.5 billion capital raise, which included
$1 billion of common equity (prior to any over-allotments)," said
Standard & Poor's credit analyst Ben Bubeck. In addition, in
conjunction with the capital raise, the company entered into a
comprehensive amendment to its bank facility. Among other issues,
the amendment eliminated the total leverage and interest charge
coverage ratios and replaced them with a quarterly minimum EBITDA
test and a limitation on annual capital expenditures. The
amendment also permanently waived any potential default from the
inclusion of the "going concern" language in recent filings.
MIKE THO LUONG: Case Summary & 17 Largest Unsecured Creditors
-------------------------------------------------------------
Joint Debtors: Mike Tho Luong
Connie Sin Chong
1040 Amito Drive
Berkeley, CA 94705
Bankruptcy Case No.: 09-44232
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
Northern District of California (Oakland)
Debtors' Counsel: Marc Voisenat, Esq.
Law Offices of Marc Voisenat
1330 Broadway #1035
Oakland, CA 94612
Tel: (510) 272-9710
E-mail: voisenat@gmail.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtors' petition, including a list of
their 17 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/canb09-44232.pdf
MONTEREY TOWN: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Monterey Town Center, LLC
5689 Algonquin Way
San Jose, CA 95138
Bankruptcy Case No.: 09-53800
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
Northern District of California (San Jose)
Judge: Arthur S. Weissbrodt
Debtor's Counsel: Dan Q. Do, Esq.
Law Offices of Do and Do
300 S 1st St. #320
San Jose, CA 95113
Tel: (408) 292-5505
Total Assets: $4,250,000
Total Debts: $3,970,767
The Company says it does not have unsecured creditors who are non
insiders when they filed their petition.
The petition was signed by Michael Luu, member of the Company.
MYLAN INC: Moody's Changes Outlook to Positive; Keeps 'B1' Rating
-----------------------------------------------------------------
Moody's Investors Service revised the rating outlook on Mylan Inc.
to positive from stable. At the same time, Moody's upgraded
Mylan's Speculative Grade Liquidity Rating to SGL-1 from SGL-2.
In addition, Moody's affirmed Mylan's other existing ratings
including the B1 Corporate Family Rating and B1 Probability of
Default Rating.
These rating actions follow several quarters of good operating
performance, helping to alleviate Moody's earlier concerns about
Mylan's previously negative cash flow. These actions also follow
Mylan's recent debt reduction, including the prepayment of all
required 2009 and 2010 amortization payments under the credit
agreement.
"Mylan's global expansion strategy is paying off," stated Moody's
Senior Vice President Michael Levesque.
"The benefits of Mylan's global size and scale, vertical
integration and cost synergies are becoming increasingly evident,
placing upward pressure on the credit rating," continued Levesque.
An upgrade of Mylan's ratings could be possible over the next 12
to 18 months if Moody's believes Mylan can comfortably sustain key
cash flow to debt ratios within Moody's "Ba" ranges for
pharmaceutical companies. These ranges are CFO/Debt of 15% to 25%
and FCF/Debt of 10% to 15%. While Mylan's ratios are fairly well
below these ranges currently, the numbers appear attainable in
2010.
Mylan's B1 ratings continue to reflect its good size and scale as
the #3 player in the global generics pharmaceutical, offset by
substantially higher financial leverage than peers following the
October 2007 acquisition of Merck Generics, and modest though
improving free cash flow.
Ratings affirmed:
-- Corporate Family Rating at B1
-- Probability of Default Rating at B1
Ratings affirmed with LGD point estimate adjustments:
-- Senior sec. revolving credit facility of $750 million due
2013 at Ba3 (LGD3, 34%)
-- Senior sec. Term Loan A due 2013 at Ba3 (LGD3, 34%)
-- Senior sec. Term Loan B due 2014 at Ba3 (LGD3, 34%)
Rating upgraded:
-- Speculative Grade Liquidity to SGL-1 from SGL-2
Moody's does not rate Mylan's convertible notes of $600 million
due 2012, the $575 million convertible notes due 2015, or the
mandatory convertible preferred stock due 2010.
Moody's last rating action on Mylan took place on September 9,
2008 when Moody's upgraded Mylan's senior secured credit
facilities to Ba3 from B1.
Headquartered in Canonsburg, Pennsylvania, Mylan Inc. is a
specialty pharmaceutical company. In 2008 Mylan reported total
revenues of approximately $5.1 billion.
NANOGEN INC.: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Nanogen, Inc.
10398 Pacific Center Court
San Diego, CA 92121
Bankruptcy Case No.: 09-11696
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Epoch Biosciences, Inc. 09-11697
Nanotronics, Inc. 09-11698
Type of Business: Nanogen, Inc., is a manufacturer of advanced
human diagnostic products.
Chapter 11 Petition Date: May 13, 2009
Court: United States Bankruptcy Court
District of Delaware
Judge: Kevin J. Carey
Debtor's Counsel: Karen B. Skomorucha, Esq.
Ricardo Palacio, Esq.
William Pierce Bowden, Esq.
Ashby & Geddes, P.A.
500 Delaware Avenue
8th Floor
P.O. Box 1150
Wilmington, DE 19899
Tel: (302) 654-1888
Fax: (302) 654-2067
E-mail: kskomorucha@ashby-geddes.com
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
------ --------------- ------------
Cowen and Company, LLC Trade Debt $738,823
1221 Avenueof the Americas
New York, NY 10020
Morgan, Lewis & Brockus, LLP Trade Debt $485,912
1701 Market Street
Philadelphis, PA 19103-2921
Synteract, Inc. Trade Debt $414,115
5759 Fleet St., Ste. 100
Carlsbad, CA 92008
Nexus Properties, Inc. Trade Debt $399,153
Townsend & Townsend Trade Debt $394,427
Ernst & Young LLP Trade Debt $385,427
O'Melveny & Myers LLP Trade Debt $267,394
Mintz, Levin, Cohn, Ferris Trade Debt $172,684
Glovsk
HX Diagnostics Trade Debt $132,882
International Point of Care Trade Debt $122,459
Kilroy Realty LP Trade Debt $121,031
Handylab, Inc. Trade Debt $115,414
Rose Ryan Trade Debt $92,515
Clinical Trials Centre Trade Debt $86,872
The Trout Group LLC Trade Debt $82,261
Medical College of WI Trade Debt $79,637
Nasdaq Stock Market Inc. Trade Debt $69,470
Hei Inc. Trade Debt $69,930
Bell Boyd ad Lloyd LLP Trade Debt $61,711
Delaware Sec. of State Trade Debt $57,857
NOBLE INTERNATIONAL: Wants Court's OK to Sell Shares in Noble BV
----------------------------------------------------------------
Noble International, Ltd., et al., ask the U.S. Bankruptcy Court
for the Eastern District of Michigan to approve bidding procedures
for the sale of all of Noble International, Ltd.'s issued and
outstanding shares in Noble European Holdings BV, together with
the direct and indirect holdings and assets of Noble BV, free and
clear of liens and encumbrances except for certain permitted
encumbrances, subject to higher and better bids at an auction.
ArcelorMittal S.A., a Luxembourg corporation, has agreed to act as
a stalking horse bidder for the sale of the assets. As
consideration, the stalking horse bidder will pay $2,100,000 in
cash to the Seller and accept said acquired assets subject to any
and all liabilities of the transferred entities on the closing
date, including the BNP Debt. The Seller has represented that the
liabilities of the transferred entities for borrowed money at
March 31, 2009, including the BNP Debt, were EUR80.24 million.
Under the Asset Purchase Agreement, the stalking horse bidder is
entitled to a break-up fee equal to $4,000,000 in event the sale
is consummated with a third party not the stalking horse bidder.
The Debtors have proposed May 26, 2009, at 4:00 p.m. (Prevailing
Eastern Time) as the deadline for the submission of bids.
If necessary, an auction will commence on May 28, 2009, at
10:00 a.m. (Prevailing Eastern Time) at the offices of counsel to
the Debtors, Foley & Lardner LLP, One Detroit Center, 500 Woodward
Ave., Suite 2700, Detroit, MI 48226-3489.
The Debtors propose to schedule the sale hearing for May 29, 2009,
at 10:00 a.m. (Prevailing Eastern Time).
Objections to the sale, if any, must be filed with the Court so as
to be received on or before 4:00 p.m. (Prevailing Eastern Time) on
May 27, 2009.
A full-text copy of the the Debtor's motion, including the
proposed bidding procedures and an execution copy of the Asset
Purchase Agreement is available for free at:
http://bankrupt.com/misc/noble.BPmotion.pdf
Headquartered in Warren, Michigan, Noble International, Ltd. --
http://www.nobleintl.com/home.html/-- provides flat, tubular,
shaped and enclosed formed structures to automotive original
equipment manufacturers and their suppliers, for use in automobile
applications, including doors, fenders, body side panels, pillars,
bumpers, door beams, load floors, windshield headers, door tracks,
door frames, and glass channels.
Noble Int'l and its affiliates filed for Chapter 11 protection on
April 15, 2009 (Bankr. E. D. Mich. Case No. 09-51720). David G.
Dragich, Esq., and Judy A. O'Neill, Esq., at Harrington Dragich
O'Neill; Jennifer Hayes, Esq., and Ryan S. Bewersdorf, Esq., at
Foley & Lardner LLP, represent the Debtors as counsel. Daniel M.
McDermott, the United States Trustee for Region 9, appointed 3
creditors to serve on an official committee of unsecured
creditors. Eric David Novetsky, Esq., Jay L. Welford, Esq.,
Judith Greenstone Miller, Esq., Paul R. Hage, Esq., and Richard E.
Kruger, Esq., at Jaffe Raitt Heuer & Weiss, represent the
creditors committee as counsel. The Debtors disclosed total
assets of $190,763,000 and total debts of $38,691,000, as of
January 10, 2009.
NORTEL NETWORKS: Coughlin Files Class Action vs. Former Execs
-------------------------------------------------------------
Coughlin Stoia Geller Rudman & Robbins LLP commenced a class
action in the United States District Court for the Southern
District of New York on behalf of purchasers of the securities of
Nortel Corp. between May 2, 2008 and September 17, 2008,
inclusive, seeking to pursue remedies under the Securities
Exchange Act of 1934. Nortel is not named in the action as a
defendant because it and its core operating subsidiaries filed for
bankruptcy protection in January 2009.
The complaint charges certain of Nortel's former executives with
violations of the Exchange Act. Nortel supplies end-to-end
networking products and solutions that help organizations enhance
and simplify communications.
The complaint alleges that, throughout the Class Period,
defendants failed to disclose material adverse facts about the
Company's true financial condition, business and prospects.
Specifically, the complaint alleges that defendants failed to
disclose the following adverse facts, among others: (i) that
demand for the Company's products was declining as carriers cut
back their capital expenditures and other customers deferred
purchase decisions; (ii) that the Company's financial results were
materially overstated as the Company was failing to properly write
down its goodwill; (iii) that the Company's restructuring was not
meeting with success as the Company was struggling to cut costs
and improve profitability; and (iv) as a result of the foregoing,
defendants lacked a reasonable basis for their positive statements
about the Company, its business, operations, earnings and
prospects.
On September 17, 2008, Nortel issued a press release announcing
its "preliminary view on certain third quarter results." The
Company also announced that it was engaging in a "comprehensive
review" of Nortel's business and that "planning" was "underway for
further restructuring and other cost reduction initiatives." In
response to the Company's announcement, the price of Nortel stock
declined from $5.30 per share to $2.68, on heavy trading volume.
The Plaintiff seeks to recover damages on behalf of all purchasers
of Nortel securities during the Class Period. The plaintiff is
represented by Coughlin Stoia, which has expertise in prosecuting
investor class actions and extensive experience in actions
involving financial fraud.
Contact: Samuel H. Rudman, Esq.
David A. Rosenfeld, Esq.
Tel: (800) 449-4900
(619) 231-1058
E-mail: djr@csgrr.com
Any member of the putative class may move the Court to serve as
lead plaintiff through counsel of their choice, or may choose to
do nothing and remain an absent class member.
Coughlin Stoia Geller Rudman & Robbins LLP --
http://www.csgrr.com/-- a 190-lawyer firm with offices in San
Diego, San Francisco, Los Angeles, New York, Boca Raton,
Washington, D.C., Philadelphia and Atlanta, is active in major
litigations pending in federal and state courts throughout the
United States.
About Nortel Networks
Headquartered in Ontario, Canada, Nortel Networks Corporation
(NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next-
generation technologies, for both service provider and enterprise
networks, support multimedia and business-critical applications.
Nortel's technologies are designed to help eliminate today's
barriers to efficiency, speed and performance by simplifying
networks and connecting people to the information they need, when
they need it. Nortel does business in more than 150 countries
around the world. Nortel Networks Limited is the principal direct
operating subsidiary of Nortel Networks Corporation.
Nortel Networks Corp., Nortel Networks Inc. and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young has been appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group. The Monitor also sought recognition of the CCAA
Proceedings in the Bankruptcy Court under Chapter 15 of the
Bankruptcy Code.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary
Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll
& Rooney PC, in Wilmington, Delaware, serves as Chapter 15
petitioner's counsel.
Certain of Nortel's European subsidiaries have also made
consequential filings for creditor protection. The Nortel
Companies related in a press release that Nortel Networks UK
Limited and certain subsidiaries of the Nortel group incorporated
in the EMEA region have each obtained an administration order
from the English High Court of Justice under the Insolvency Act
1986. The applications were made by the EMEA Subsidiaries under
the provisions of the European Union's Council Regulation (EC)
No. 1346/2000 on Insolvency Proceedings and on the basis that
each EMEA Subsidiary's centre of main interests is in England.
Under the terms of the orders, representatives of Ernst & Young
LLP have been appointed as administrators of each of the EMEA
Companies and will continue to manage the EMEA Companies and
operate their businesses under the jurisdiction of the English
Court and in accordance with the applicable provisions of the
Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated and Nortel Networks (CALA) Inc., have material
operations and are not part of the bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of $11.6 billion and consolidated liabilities
of $11.8 billion. The Nortel Companies' U.S. businesses are
primarily conducted through Nortel Networks Inc., which is the
parent of majority of the U.S. Nortel Companies. As of
September 30, 2008, NNI had assets of about $9 billion and
liabilities of $3.2 billion, which do not include NNI's guarantee
of some or all of the Nortel Companies' about $4.2 billion of
unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
PATRIOT HOMES: May Use Cash Collateral of Wells Fargo Until May 29
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Indiana has
extended for the sixth consecutive four-week period its final
order, dated October 16, 2008, granting Patriot Homes, Inc., et
al., authority to obtain secured credit, to use cash collateral,
and to use advances from Wells Fargo Bank, National Association,
beyond its current termination date of April 3, 2009, to and
including May 29, 2009, to pay wages, utilities, and other
necessary expenses of preserving and liquidating the collateral,
in accordance with a budget.
As of the Petition Date, Debtors are obligated to Lender in the
aggregate principal amount of $8,673,652, secured by substantially
all of the assets and properties of the Debtors (other than
Patriot General, Inc., and Patriot Mfg. Limited, Inc.).
Pursuant to the Court's Sixth Amended Final Order, interest on the
postpetition advances will accrue at the annual rate equal to
Prime Rate plus 6.625% and fees for each Letter of Credit will
accrue at the annual rate of 8% of the amount that may be drawn
thereon. Lenders may make post-petition advances to the Debtor
from the receipts by Lender of proceeds from the sale, collection
or other disposition of the collateral which have occurred on or
after February 28, 2009. The Debtor will be authorized to use
cash collateral to the limited extent provided by the Order which,
as to Lender, will be for the sole purpose of applying receipts
and cash collateral to pay Lender.
As adequate protection for the use of Cash Collateral and as
security for the post-petition advances, Lender shall have a
superpriority claim and a postpetition prior and paramount
security interest in all of the Debtors' (a) existing and future
personal property, and (b) real property, subject to a "carve-out"
for professional fees.
As adequate protection of other creditors that may claim an
interest in the Debtors' cash collateral, said other creditors
shall be granted replacement liens in Debtors' postpetition assets
of the same class of property, and in the same order of priority,
as any lien said other creditors may have in the prepetition
assets of the Debtors.
All prepetition collateral shall secure all prepetition and
postpetiton debt and obligations of the Debtors to Lender, and all
prepetition cash collateral may be applied by Lender, at its sole
discretion, to the prepetition or postpetition debts and
obligations of Debtors to it.
Headquartered in Middlebury, Indiana, Patriot Homes, Inc.
-- http://www.patriothomes.com/-- makes modular houses. The
Debtor and 7 of its debtor-affiliates filed separate motions for
Chapter 11 relief on Sept. 28, 2008 (Bankr. N.D. Ind. Lead Case
No. 08-33347). Bell Boyd & Lloyd, LLP, is the Debtors' bankruptcy
counsel. Rebecca Hoyt Fisher, Esq., at Laderer & Fischer,
represents the Official Committee of Unsecured Creditors as
counsel. In its schedules, Patriot Homes disclosed total assets
of $1,715,900 and total debts of $17,918,377.
PATRIOT HOMES: Plan Filing Period Extended to July 24
-----------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Indiana has
extended Patriot Homes, Inc., et al.'s exclusive periods to file a
plan through July 24, 2009. The Court also extended the Debtors'
exclusive period to solicit acceptances for their plan until
September 25, 2009.
The Debtors told the Court that they need an extension as they
require additional time to continue to (i) sell certain assets in
order to evaluate alternative exit structures and (ii) negotiate
with their senior secured prepetition lender, Wells Fargo Business
Credit, and the official committee of unsecured creditors.
Headquartered in Middlebury, Indiana, Patriot Homes, Inc.
-- http://www.patriothomes.com/-- makes modular houses. The
Debtor and 7 of its debtor-affiliates filed separate motions for
Chapter 11 relief on September 28, 2008 (Bankr. N.D. Ind. Lead
Case No. 08-33347). Bell Boyd & Lloyd, LLP, is the Debtors'
bankruptcy counsel. Rebecca Hoyt Fisher, Esq., at Laderer &
Fischer, represents the Official Committee of Unsecured Creditors
as counsel. In its schedules, Patriot Homes disclosed total
assets of $1,715,900 and total debts of $17,918,377.
PECOS SBR: Case Summary & 10 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Pecos SBR, LLC
4055 S Sarival avenue
Goodyear, AZ 85338
Bankruptcy Case No.: 09-10700
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Bankruptcy Judge Enrique S. Lamoutte Inclan
Debtor's Counsel: Edwin B. Stanley, Esq.
Simbro & Stanley, PLC
8767 East Via De Commercio #103
Scottsdale, AZ 85258-3374
Tel: (480) 607-0780
Fax: 480-907-2950
E-mail: bstanley@simbroandstanley.com
Total Assets: $4,500,000
Total Debts: $4,420,300
A full-text copy of the Debtor's petition, including a list of its
10 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/azb09-10700.pdf
The petition was signed by Robert Russell, manager of the Company.
PETRORIG: PetroMENA Units File for Chapter 11 Bankruptcy
--------------------------------------------------------
Ajay Kamalakaran and Richard Solem at Reuters report that PetroRig
I Pte Ltd, PetroRig II Pte Ltd, and PetroRig III Pte Ltd. filed
for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court
for the Southern District of New York.
According to court documents, PetroRig I, PetroRig II, and
PetroRig III listed up to $500 million in assets and up to
$500 million in liabilities.
Reuters relates that PetroRig I has $264 million of bond debt,
with Norsk Tillitsmann as trustee for the bondholders. Reuters
states that the Debtors entered agreements to constructed three
ultra-deepwater semi-submersible drilling with Singapore's
Sembcorp Marine. According to the report, the rigs were scheduled
for delivery from Sembcorp's Jurong Shipyard in April 2009,
September 2009, and January 2010.
Reuters states that PetroMENA, the Debtors' parent company, has
struggled to put together financing to complete construction of
the rigs. PetroMENA bondholders, according to Reuters, said in
April 2009 that the company was in default on its bonds, which the
company disagreed.
Reuters relates that the Oslo bourse suspended the trade in shares
of PetroMENA on Monday, when they were down 19% at 0.38 crowns,
giving the company a market capitalization of about $8.6 million.
Court documents say that PetroRig I requested that all three
units, which were established to build drilling rigs in Singapore,
be considered as a consolidated unit.
Akin Gump Strauss Hauer & Feld LLP represents the Debtors in their
restructuring efforts, Reuters relates.
PetroRig I Pte Ltd, PetroRig II Pte Ltd, and PetroRig III Pte Ltd
are rig-owning Singapore subsidiaries of Norwegian oilfield
driller PetroMENA.
PETRORIG: Case Summary & 3 Largest Unsecured Creditors
------------------------------------------------------
Debtor: PetroRig I Pte. Ltd.
14 Ann Siang Road, #02-01
Singapore 069694
Bankruptcy Case No.: 09-13083
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
PetroRig II Pte. Ltd. 09-13084
PetroRig III Pte. Ltd. 09-13085
Chapter 11 Petition Date: May 17, 2009
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: James M. Peck
Debtor's Counsel: Ira S. Dizengoff, Esq.
Akin Gump Strauss Hauer & Feld LLP
One Bryant Park
New York, NY 10036
Tel: (212) 872-1000
Fax: (212) 872-1002
E-mail: idizengoff@akingump.com
Estimated Assets: $100,000,001 to $500,000,000
Estimated Debts: $100,000,001 to $500,000,000
The Debtor's 3 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Norsk Tillitsmann ASA bond debt $260,000,000
Postboks 1470 Vika
Oslo, Norway 0116
Aker MH AS trade debt $2,863,567
Dvergsnes, Serviceboks 413
Kristiansand, Norway N-4604
Larsen Oil & Gas Pte. Ltd. trade debt unliquidated
12 International Business Park
Singapore 609920
PetroRig I's petition was signed by Timothy Bernlohr, director of
the Company.
PHARMACEUTICAL ALTERNATIVES: Court Converts Case to Chapter 7
-------------------------------------------------------------
Kathie Dickerson Coshocton Tribune reports that the U.S.
Bankruptcy Court for the Southern District of Ohio has converted
Pharmaceutical Alternatives, Inc.'s Chapter 11 reorganization case
to Chapter 7 liquidation.
Coshocton Tribune relates that a federal probe into Pharmaceutical
Alternatives' unit, Three Rivers Infusion & Pharmacy Specialists,
continues, separate from the bankruptcy proceedings.
According to Coshocton Tribune, a trustee acting for the Court
made a recommendation to dismiss the bankruptcy protection case in
March 2009, citing "gross mismanagement of the estate." The
trustee, Coshocton Tribune states, claimed that Pharmaceutical
Alternatives:
-- hadn't filed timely reports,
-- used cash collateral without authorization,
-- failed to attend meetings with creditors, and
-- failed to pay proper fees.
Court documents say that the Debtor is enjoying the benefits of
bankruptcy protection without complying with the requirements of
the Bankruptcy Code or the U.S. Trustee Guidelines. According to
the documents, a visit by a bankruptcy analyst on March 5, 2009,
revealed a number of accounting irregularities. Coshocton Tribune
relates that the IRS filed a memorandum supporting the trustee's
motion to dismiss the case or convert it to a Chapter 7
bankruptcy.
Coshocton, Ohio-based Pharmaceutical Alternatives, Inc. --
http://www.pharmaceuticalalternatives.com/-- sells food
supplements. Pharmaceutical Alternatives is the parent company of
Three Rivers Infusion and Pharmacy Specialists.
As reported in the Troubled Company Reporter on November 11, 2008,
Pharmaceutical Alternatives -- dba Three Rivers Infusion and
Pharmacy Specialists, Three Rivers Option Care, Midwest Infusion
Services, and Holzier Infusion Services -- filed for Chapter 11
protection on November 5, 2008 (Bankr. S. D. Ohio Case No. 08-
60905).
PHARMENG INTERNATIONAL: Sales Process Commenced, Bids Due June 3
----------------------------------------------------------------
PharmEng International Inc. said that pursuant to an order of the
Ontario Superior Court of Justice dated May 5, 2009, A. Farber &
Partners Inc., of Toronto, Ontario has been appointed the interim
receiver of the assets and businesses of PharmEng International
Inc., Keata Pharma Inc., and PharmEng Technology Inc. for the
purpose of marketing the companies' assets and businesses for
sale.
Offers for PharmEng's businesses are to be submitted to Farber by
no later than 5:00 p.m. (Toronto time) on June 3, 2009.
On April 14, 2009, PharmEng initiated reorganization proceedings
under the Bankruptcy and Insolvency Act and Farber was named as
the companies' proposal trustee in those proceedings. The
appointment of Farber as interim receiver is part of the
reorganization process and is intended to market and maximize the
value of PharmEng's business and assets. Farber will not be
taking control of PharmEng's business and, during this process,
Keata Pharma's facility in Arnprior, Ontario and PharmEng
Technolgy Inc's consulting business will continue to carry on
business in the ordinary course under the companies' management.
With regard to the Keata Pharma facility in North Sydney, Nova
Scotia, Farber will work in consultation with Enterprise Cape
Breton Corporation and other secured creditors in an effort to
sell the North Sydney plant to potential strategic buyers.
Information on PharmEng's reorganization proceedings and the sales
process can be found at http://www.farberfinancialgroup.com/
About PharmEng International
PharmEng International Inc. (CA:PII) -- http://www.pharmeng.com/
-- headquartered in Toronto, Canada, is a full-service consulting
and contract manufacturing company that serves the pharmaceutical
and biotechnology industries in North America and internationally.
Consulting services include project management, engineering, GMP,
validation, calibration, regulatory compliance and certified
training. Contract manufacturing includes pharmaceutical support,
formulation development, laboratory testing, and finished solid
dosage and liquid products. PharmEng's shares trade on the TSX
Venture Exchange under the symbol PII.
PHILADELPHIA NEWSPAPERS: Can Continue Using Cash for Operations
---------------------------------------------------------------
Philadelphia Inquirer reports that the U.S. Bankruptcy Court for
the Eastern District of Pennsylvania has allowed Philadelphia
Newspapers LLC to continue using its cash from operations to run
the business through June 26.
According to Philadelphia Inquirer, the Court was scheduled to
hold a hearing on the matter on May 19 but was postponed when
Philadelphia Newspapers reached an agreement with key lenders.
The next hearing will be on June 25, says Philadelphia Inquirer.
Philadelphia Newspapers, LLC -- http://www.philly.com/-- owns and
operates numerous print and online publications in the
Philadelphia market, including the Philadelphia Inquirer, the
Philadelphia Daily News, several community newspapers, the
region's number one local Web site, philly.com, and a number of
related online products. The Company's flagship publications are
the Inquirer, the third oldest newspaper in the country and the
winner of numerous Pulitzer Prizes and other journalistic
recognitions, and the Daily News.
Philadelphia Newspapers and its certain affiliates filed for
Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D.
Pa. Case No. 09-11204). Proskauer Rose LLP is the Debtors'
bankruptcy counsel, while Lawrence G. McMichael, Esq., at Dilworth
Paxson LLP is the local counsel. The Debtors' financial advisor
is Jefferies & Company Inc. The Debtors listed assets and debts
of $100 million to $500 million. The United States Trustee has
appointed a three-member Official Committee of Unsecured
Creditors, which is represented by Ben Logan, Esq., and other
lawyers at O'Melveny & Myers LLP.
PHOTRONICS INC: Pact Amendment Won't Affect S&P's 'B-' Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services said that the announcement by
Brookfield, Connecticut-based Photronics Inc. that it has amended
its credit agreement does not currently affect S&P's 'B-' rating
on the company. The rating remains on CreditWatch with developing
implications, where it was placed on Nov. 6, 2008. S&P placed the
ratings on CreditWatch due to Photronics' inability, in the credit
market environment at that time, to raise at least $75 million in
permanent capital per the second amendment to its June 6, 2007
credit agreement. The capital would have been used to reduce
borrowings under the company's senior secured revolving credit
facility and provide additional cushion under its senior leverage
covenants.
On May 15, 2008, Photronics announced an amendment to its credit
agreement, which extended the maturity to January 31, 2011, from
January 31, 2010, and modified its financial covenants. While
Standard & Poor's views the amendment as a positive measure, S&P
expects to resolve the CreditWatch listing following further
clarification of the details of the amendment and a review of the
company's recent financial performance relative to the new
covenant levels.
S&P could raise the rating higher within the 'B' category with a
stable rating outlook if the amended covenants give Photronics a
sufficient and relatively sustainable cushion under them based on
operating performance and debt levels for the April 2009 quarter.
If the current covenant cushion is not sustainable, S&P could
potentially lower the rating.
PLIANT CORP: Disclosure Statement Hearing Adjourned on June 11
--------------------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware adjourned, at the behest of the Official
Committee of Unsecured Creditors, the hearing on June 11, 2009, at
2:00 p.m., to approve a disclosure statement for the first amended
joint Chapter 11 plan of reorganization proposed by Pliant
Corporation and its debtor-affiliates. The disclosure statement
hearing was originally set for May 13, 2009.
Judge Walrath terminated the Debtors' exclusive plan filing and
solicitation periods.
The Committee argued that the Debtors' plan is inferior to the
plan proposed by Apollo Management VII LP that the Debtors refused
to consider due to the economic benefits they will receive if
their own plan is approved by the Court. There is a need to
adjourn the hearing to address the problems in the Debtors'
disclosure statement and plan, and consider the Apollo plan
proposal, the Committee said.
The Committee contended that the Apollo plan proposal provides a
better treatment for all of the Debtors' stakeholders other than
their management. Under Apollo's plan, unsecured creditors will
receive illiquid warrants worth only 0.5% of their claims compared
to a minimum recovery of 17.5% of their claims in cash under its
earlier plan. But, the Debtors refused to consider the more
superior plan of Apollo, the Committee said.
According to the Troubled Company Reporter on May, 18, 2009,
Apollo's plan would pay the first-lien lenders with $75 million
cash and $156 million in new first-lien notes. Unsecured
creditors will recover 17.5% to be paid in cash. Second-lien
noteholders would receive common stock including the right to
force the company to buy the equity. Apollo would backstop the
so-called put with $175 million. Apollo, the Committee adds, has
arranged $150 million in exit financing
The plan that Debtors' negotiated with constituents pre-bankruptcy
offers 100% of the stock of the reorganized company to holders of
$393 million in first-lien notes. Other creditors, including the
holders of $262 million in second-lien notes, would receive
warrants to buy new stock. Holders of more than two-thirds of the
first-lien notes have already have already expressed support for
the Plan, the TCR said.
About Pliant Corp.
Headquartered in Schaumburg, Illinois, Pliant Corporation produces
polymer-based films and flexible packaging products for food,
beverage, personal care, medical, agricultural and industrial
applications. The Company has operations in Australia, New
Zealand, Germany, and Mexico.
The Debtor and 10 of its affiliates filed for Chapter 11
protection on January 3, 2006 (Bankr. D. Del. Lead Case No.
06-10001). James F. Conlan, Esq., at Sidley Austin LLP, and Edmon
L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway,
Stargatt & Taylor, represented the Debtors in their restructuring
efforts. The Debtors tapped McMillan Binch Mendelsohn LLP, as
Canadian counsel. As of September 30, 2005, the Company had
$604.3 million in total assets and $1.19 billion in total debts.
The Debtors emerged from Chapter 11 on July 19, 2006.
Pliant Corp. and its affiliates again filed for Chapter 11 after
reaching terms of a pre-packaged restructuring plan. The
voluntary petitions were filed Feb. 11, 2009 (Bank. D. Del. Case
Nos. 09-10443 through 09-10451). The Hon. Mary F. Walrath
presides over the cases. Jessica C.K. Boelter, Esq., at Sidley
Austin LLP, in Chicago, Illinois, and Edmon L. Morton, Esq., at
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware, provide bankruptcy counsel to the Debtors.
Epiq Bankruptcy Solutions LLC acts as claims and noticing agent.
The U.S. Trustee for Region 3 appointed five creditors to serve on
an Official Committee of Unsecured Creditors. The Committee
selected Lowenstein Sandler PC as its counsel. As of
September 30, 2008, the Debtors had $688.6 million in total assets
and $1.03 billion in total debts.
PORTER HOLDINGS: Case Summary & 3 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Porter Holdings, L.C.
Porter Holdings, Inc.
1017 Downshire Chase
Virginia Beach, VA 23452
Bankruptcy Case No.: 09-72053
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
Eastern District of Virginia (Norfolk)
Debtor's Counsel: Dennis T. Lewandowski, Esq.
Kaufman & Canoles, P. C.
Post Office Box 3037
Norfolk, VA 23514
Tel: (757) 624-3252
Fax: (757) 624-3169
E-mail:dtlewand@kaufcan.com
Estimated Assets: $1,000,001 to $100,000,000
Estimated Debts: $1,000,001 to $100,000,000
A full-text copy of the Debtor's petition, including a list of its
3 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/vaeb09-72053.pdf
The petition was signed by William R. Porter, member of the
Company.
QUANTUM CORP: S&P Changes CreditWatch on 'CC' Rating to Developing
------------------------------------------------------------------
Standard & Poor's Ratings Services said that its CreditWatch
placement for its 'CC' corporate credit rating on Quantum Corp.
has been revised to developing from negative.
"The CreditWatch update follows Quantum's announcement on May 12,
2009, that it has revised its tender offer for its convertible
bonds, increasing the offer and lowering the total amount that
will be tendered. At the same time, S&P lowered its senior
secured issue-level rating to 'CC' from 'B-'. That rating remains
on CreditWatch with Developing implications," said Standard &
Poor's credit analyst Lucy Patricola.
QUEBECOR WORLD: Plan Going to Creditors for Vote
------------------------------------------------
Quebecor World (USA) Inc. overcame final objections at a May 15
hearing and won approval from the U.S. Bankruptcy Court for the
Southern District of New York for the disclosure statement
explaining their Chapter 11 plan, Bloomberg's Bill Rochelle said.
With the Court's order affirming the adequacy of the information
in the disclosure statement in explaining the terms of the Plan,
creditors may now begin voting on the Plan, which calls for giving
unsecured creditors notes for 50 percent of their claims so long
as claims in the class don't exceed $150 million in total.
According to QUEBECOR BANKRUPTCY NEWS, Quebecor World (USA), Inc.,
and its debtor affiliates filed with the Bankruptcy Court a second
amended Plan of Reorganization and Disclosure Statement explaining
the Plan prior to the May 15 hearing on the approval of the
Disclosure Statement.
The amended Plan and Disclosure Statement, among others,
incorporates additional information and exhibits to address the
objections to the Disclosure Statement. The amended Plan and
Disclosure Statement also incorporates the Court's order
approving the Debtors $750 million exit financing and the recent
proposal from R.R. Donnelley & Sons Company to buy all or
substantially all of QWI's assets for $1.35 billion.
A blacklined version of the 2nd Amended Disclosure Statement is
available for free at http://bankrupt.com/misc/qwi2ndds.pdf
A blacklined version of the 2nd Amended Plan is available for
free at http://bankrupt.com/misc/qwi2ndplan.pdf
As reported by the TCR on May 14, 2009, Quebecor World Inc.
received an unsolicited, non-binding and conditional indication of
interest from R.R. Donnelley & Sons Company to acquire all or
substantially all of the assets of Quebecor World. RR Donnelley
proposes to pay the Quebecor Debtors in the aggregate:
* cash in an amount equal to the cash amount contemplated for
distribution under the draft First Amended Plan of
Reorganization proposed with respect to the U.S. bankruptcy
proceeding and the draft Plan of Reorganization and
Compromise proposed with respect to the Canadian
reorganization of QWI, which RR Donnelley believe is
approximately US$700,000,000; plus
* cash on balance sheet -- estimated as of June 30, 2009, at
$257,000,000 pursuant to the Plans; plus
* 30 million shares of RRD common stock, which represent
approximately 15% of RRD's outstanding shares and have a
value of US$394,200,000 based on the closing trading price on
May 11, 2009. RRD common stock is listed for trading on the
New York Stock Exchange, and the current market
capitalization of RRD is approximately US$2.7 billion.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (CA:IQW) --
http://www.quebecorworldinc.com/-- provides market solutions,
including marketing and advertising activities, well as print
solutions to retailers, branded goods companies, catalogers and to
publishers of magazines, books and other printed media. It has
127 printing and related facilities located in North America,
Europe, Latin America and Asia. In the United States, it has 82
facilities in 30 states, and is engaged in the printing of books,
magazines, directories, retail inserts, catalogs and direct mail.
The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina, and the British Virgin Islands.
Ernst & Young, Inc., the monitor of Quebecor World Inc., and its
affiliates' reorganization proceedings under the Canadian
Companies' Creditors Arrangement Act, filed a petition under
Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court
for the Southern District of New York on September 30, 2008, on
behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The Chapter 15
case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at
Allen & Overy LLP, in New York, serves as counsel to the Chapter
15 petitioner.
QWI and certain of its subsidiaries commenced the CCAA proceedings
before the Quebec Superior Court (Commercial Division) on
January 20, 2008. The following day, 53 of QWI's U.S.
subsidiaries, including Quebecor World (USA), Inc., filed
petitions under Chapter 11 of the U.S. Bankruptcy Code.
The Honorable Justice Robert Mongeon oversees the CCAA case.
Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the
Company in the CCAA case. Ernst & Young Inc. was appointed as
Monitor.
Quebecor World (USA) Inc., its U.S. subsidiary, along with other
U.S. affiliates, filed for chapter 11 bankruptcy before the U.S.
Bankruptcy Court for the Southern District of New York (Lead Case
No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter
LLP, represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The Company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective January 28, 2008.
QWI is the only entity involved in the CCAA proceedings that is
not a Debtor in the Chapter 11 Cases.
As of June 30, 2008, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$3,412,100,000 total
liabilities of US$4,326,500,000 preferred shares of US$62,000,000
and total shareholders' deficit of US$976,400,000.
RAYMOND J GLENN: Case Summary & 17 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Raymond J. Glenn
204 Maple Street
Englewood, NJ 07631
Bankruptcy Case No.: 09-22763
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Debtor's Counsel: Anthony Sodono, III, Esq.
Trenk, DiPasquale, et al.
347 Mt. Pleasant Avenue
Suite 300
West Orange, NJ 07052
Tel: (973) 243-8600
Fax: (973) 243-8600
Email: asodono@trenklawfirm.com
Total Assets: $1,463,300
Total Debts: $3,117,021
A full-text copy of Mr. Glenn's petition, including a list of his
17 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/njb09-22763.pdf
The petition was signed by Mr. Glenn.
REGENT BROADCASTING: Moody's Downgrades Default Rating to 'Caa2'
----------------------------------------------------------------
Moody's Investors Service downgraded the probability of default
rating of Regent Broadcasting LLC to Caa2 from Caa1 and its
corporate family rating to Caa1 from B3 based on intensifying
default risk. This action concludes the review for downgrade
commenced March 11, 2009. Moody's also changed the outlook to
developing, indicating the potential for ratings to move either up
or down depending on the outcome of ongoing lender discussions.
Default risk has risen with the passage of time and Regent's lack
of evident progress in achieving an amendment to its financial
covenants, which the company is likely to breach in 2009.
Furthermore, this potential inability to comply with its financial
covenants triggered going concern language in its 2008 form 10-k,
constituting an event of default under Regent's credit agreement.
Lenders sent a notice of default to the company, and the 30 day
period for remedying it has elapsed. Regent lacks sufficient
liquidity to fund repayment of the approximately $195 million of
loans should lenders exercise their legal rights to accelerate
payment of the full outstanding balance.
However, the company continues to generate positive free cash flow
despite the challenging climate for radio advertising and also to
perform better than many of its peers, which should enhance its
position in negotiating with its lenders. The one notch gap
between the Caa1 CFR and the Caa2 PDR indicates the potential for
an above average recovery should a restructuring occur, and
Regent's underlying cash flow generation and relatively moderate
leverage profile support this assumption.
Moody's will continue to evaluate Regent's ability to achieve a
bank amendment that creates a greater cushion of covenant
compliance and provides access to its $75 million revolving credit
facility, as well as the impact of the related costs (both upfront
and ongoing in the form of higher interest) on Regent's ability to
generate free cash flow. Success in achieving an amendment that
facilitates continued positive free cash flow and provides
adequate cushion under covenants could yield positive ratings
momentum. Conversely, inability to achieve a viable amendment
could result in a multi notch downgrade.
Moody's also affirmed the SGL-4 liquidity rating, which
incorporates the company's inability to satisfy potential
acceleration of its outstanding debt and projected inability to
comply with its financial covenants.
Regent Broadcasting LLC
-- Probability of Default Rating, Downgraded to Caa2 from Caa1
-- Corporate Family Rating, Downgraded to Caa1 from B3
-- Senior Secured Bank Credit Facility, Downgraded to Caa1,
LGD3, 35% from B3, LGD3, 35%
-- Outlook, Changed To Developing From Rating Under Review
The last rating action was on March 11, 2009, when Moody's placed
Regent's ratings under review for downgrade.
Regent Broadcasting LLC owns and operates 62 stations located in
13 markets. Its revenue for 2008 was approximately $95 million.
REGIONS FINANCIAL: Moody's Downgrades Bank Strength Rating to 'D+'
------------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Regions
Financial Corporation (senior to Baa3 from A3) and its
subsidiaries, including its lead bank, Regions Bank (bank
financial strength to D+ from C+, long term deposits to Baa1 from
A2, and short-term deposits to Prime-2 from Prime-1). Regions'
hybrid securities, including its preferred shelf (to (P)B1 from
(P)Baa2), trust preferreds (to Ba2 from Baa1), and bank level
preferred (to Ba2 from Baa1) remain on review for possible
downgrade. Following these rating actions, other than the
aforementioned hybrid securities that remain on review, Moody's
outlook on Regions and its subsidiaries is negative.
These actions had no impact on the FDIC guaranteed debt issued by
Regions Bank, which remains at Aaa with a stable outlook.
The downgrade reflects Moody's view that Regions' is likely to
report losses at least through 2009 and likely into 2010 as a
result of rising credit costs. Moody's believes these losses will
largely be attributable to its concentrations in residential home
builder and home equity loans, particularly in Florida.
Consequently, Regions' capital position will come under pressure
in the near to medium term.
Regions' CRE portfolio represents 2.8 times tangible common
equity, with approximately one-half comprised of construction and
land -- asset categories that are experiencing significant
deterioration. Moody's further noted Regions' concentration in
home equity, which equals approximately 1.8 times TCE. These
portfolios have been a primary factor behind the near doubling of
Regions' nonperforming assets over the past year. Nonperforming
assets (including 90+) as a percentage of TCE plus reserves were
35% at March 31, 2009. Moody's loss expectations on these
portfolios have increased and the rating agency expects further
deterioration in these portfolios as the credit cycle unfolds.
Although Regions entered this period with relatively sound capital
ratios -- at March 31, 2009, Tier 1 risk-based was 10.41% and
Moody's adjusted tangible common equity ratio was 7.77% - Moody's
believes Regions' capital position is likely to be increasingly
challenged by the substantial credit costs it faces.
Moody's negative outlook on Regions considers the possibility that
in a more pronounced economic downturn than is currently expected,
the company's performance might be negatively impacted, not only
from asset quality deterioration, but also from pressure on
businesses dependent on the level of asset prices, such as trust
and investment management. That could weaken earnings and add to
the downward pressure on Regions' capital base.
The review of Regions' hybrid securities reflects Moody's opinion
that the probability of a missed dividend or interest payment on
these securities has increased because Regions must raise capital
in response to the outcome of the U.S. government's stress test.
During its review, Moody's will focus on these: (a) the likelihood
that Regions can successfully raise capital from its own resources
-- including through common equity issuance, asset sales, and
internal capital generation; (b) the likelihood that Regions will
need to suspend payments on its preferred or hybrid securities in
order to increase the success of any exchange offers, (c) the
likelihood that Regions will require additional capital from the
U.S. government, including the conversion of any additional TARP
preferred or the need to take additional U.S. government capital,
and (d) the expected loss on each security if the company were to
eliminate payments on the security. Moody's expects to conclude
the review in several weeks.
The rating agency added that Regions' bank-level debt and deposit
ratings were only lowered two notches versus the three notch
downgrade to the company's BFSR because of the likelihood of
systemic support for Regions in a period of financial distress.
Moody's believes that given Regions' leading deposit market shares
in Alabama, Mississippi and Arkansas, as well as its solid market
shares in the company's other markets, the bank would benefit from
systemic support in a period of financial distress. However,
systemic support is less beneficial for holding company creditors,
in Moody's view. Therefore, the notching between the holding
company's and bank's long-term ratings has widened.
Moody's last rating action on Regions was on May 5, 2009, when the
ratings were placed under review for possible downgrade.
Issuer: AmSouth Bancorporation
Downgrades:
-- Subordinate Regular Bond/Debenture, Downgraded to Ba1 from
Baa1
Outlook Actions:
-- Outlook, Changed To Negative From Rating Under Review
Issuer: AmSouth Bank
Downgrades:
-- Subordinate Regular Bond/Debenture, Downgraded to Baa2 from
A3
Outlook Actions:
-- Outlook, Changed To Negative From Rating Under Review
Issuer: Regions Asset Management Company, Inc.
Downgrades:
-- Preferred Stock Preferred Stock, Downgraded to Ba2 from Baa1
Issuer: Regions Bank
Downgrades:
-- Bank Financial Strength Rating, Downgraded to D+ from C+
-- Issuer Rating, Downgraded to Baa1 from A2
-- OSO Rating, Downgraded to P-2 from P-1
-- Deposit Rating, Downgraded to P-2 from P-1
-- OSO Senior Unsecured OSO Rating, Downgraded to Baa1 from A2
-- Multiple Seniority Bank Note Program, Downgraded to a range
of Baa2 to P-2 from a range of A3 to P-1
-- Subordinate Regular Bond/Debenture, Downgraded to Baa2 from
A3
-- Senior Unsecured Deposit Rating, Downgraded to Baa1 from A2
Outlook Actions:
-- Outlook, Changed To Negative From Rating Under Review
Issuer: Regions Financial Corporation
Downgrades:
-- Issuer Rating, Downgraded to a range of Baa3 to P-3 from a
range of A3 to P-2
-- Multiple Seniority Shelf, Downgraded to a range of (P)B1 to
(P)Baa3 from a range of (P)Baa2 to (P)A3
-- Multiple Seniority Shelf, Downgraded to a range of (P)B1 to
(P)Baa3 from a range of (P)Baa2 to (P)A3
-- Multiple Seniority Shelf, Downgraded to a range of (P)B1 to
(P)Baa3 from a range of (P)Baa2 to (P)A3
-- Subordinate Regular Bond/Debenture, Downgraded to Ba1 from
Baa1
-- Subordinate Shelf, Downgraded to (P)Ba1 from (P)Baa1
-- Senior Unsecured Regular Bond/Debenture, Downgraded to Baa3
from A3
Issuer: Regions Financing Trust II
Downgrades:
-- Preferred Stock Preferred Stock, Downgraded to Ba2 from Baa1
-- Preferred Stock Shelf, Downgraded to (P)Ba2 from (P)Baa1
Issuer: Regions Financing Trust III
Downgrades:
-- Preferred Stock Preferred Stock, Downgraded to Ba2 from Baa1
-- Preferred Stock Shelf, Downgraded to (P)Ba2 from (P)Baa1
Issuer: Regions Financing Trust IV
Downgrades:
-- Preferred Stock Shelf, Downgraded to (P)Ba2 from (P)Baa1
Issuer: Regions Financing Trust V
Downgrades:
-- Preferred Stock Shelf, Downgraded to (P)Ba2 from (P)Baa1
Issuer: Regions Financing Trust VI
Downgrades:
-- Preferred Stock Shelf, Downgraded to (P)Ba2 from (P)Baa1
Issuer: Union Planters Bank, National Association
Downgrades:
-- Subordinate Regular Bond/Debenture, Downgraded to Baa2 from
A3
Outlook Actions:
-- Outlook, Changed To Negative From Rating Under Review
Issuer: Union Planters Corporation
Downgrades:
-- Subordinate Regular Bond/Debenture, Downgraded to Ba1 from
Baa1
-- Senior Unsecured Regular Bond/Debenture, Downgraded to Baa3
from A3
Outlook Actions:
-- Outlook, Changed To Negative From Rating Under Review
Issuer: Union Planters Preferred Funding Corp.
Downgrades:
-- Preferred Stock Preferred Stock, Downgraded to Ba2 from Baa1
RENFRO CORP: S&P Downgrades Corporate Credit Rating to 'B-'
-----------------------------------------------------------
Standard & Poor's Ratings Service said that it lowered its
corporate credit rating on Mount Airy, North Carolina-based Renfro
Corp. to 'B-' from 'B', and removed all the issue-level ratings
from CreditWatch, where S&P placed them with negative implications
on Dec. 11, 2008 following Renfro's weak third-quarter operating
performance and tighter-than-anticipated covenant cushion levels.
Although the company was able to meet its financial covenants as
of fiscal year-ended Jan. 31, 2009, with adequate cushion, S&P
remain concerned about the weak retail environment and its effect
on the company's performance and ability to maintain sufficient
cushion on its financial covenants for the fiscal year-ending
January 2010. Although the company was able to improve credit
protection measures by the fiscal year-ended Jan. 31, 2009, S&P
believes the weak retail environment may hamper Renfro's near-term
operating performance.
S&P also lowered the rating on the company's $145 million senior
secured term loan to 'B-' from 'B' and maintained the recovery
rating of '4', indicating the expectation for average (30%-50%)
recovery in a payment default.
Renfro designs, manufactures, and markets men's, women's, and
children's socks, selling primarily to mass merchandisers.
However, 75% of Renfro's sales are in the sport sock category.
S&P believes the sock manufacturing segment is somewhat
fragmented, with other major brands such as Hanes and Gold Toe.
The outlook on Renfro is negative. "Standard & Poor's is
concerned about the company's ability to maintain sufficient
cushion on its leverage covenant and to improve its operating
performance amid the current weak retail environment," said
Standard & Poor's credit analyst Bea Chiem. S&P could lower the
ratings in the near term if Renfro continues to experience weak
operating trends, resulting in tight covenant cushion levels. S&P
estimate that about a 15% decline in trailing 12-month EBITDA from
current levels (assuming debt does not increase significantly from
current levels) would result in Renfro's inability to meet its
leverage covenant for the April quarter.
"We would consider revising the outlook to stable if the company
can improve covenant cushion levels, reduce debt leverage, and
maintain adequate liquidity," she continued.
RH DONNELLEY: Moody's Changes Default Rating to 'Ca/LD' from 'Ca'
-----------------------------------------------------------------
Moody's Investors Service has changed R.H. Donnelley Corporation's
Probability of Default rating to Ca/LD, from Ca, signaling the
limited default that has occurred following the lapse of a 30-day
grace period after the company's failure to make a scheduled
coupon payment on its senior unsecured notes, which was due on
April 15, 2009. Although Donnelley's debtholders have agreed to
forbear from taking any action with respect to the missed interest
payment, Moody's regards Donnelley's failure to make payment
within the just completed grace period as an event of default.
Moreover, Moody's continue to expect that the company will soon
announce a pre-packaged bankruptcy, distressed exchange and/or
other restructuring measures as a means of addressing its over-
leveraged balance sheet. All of Donnelley's other ratings have
remain unchanged.
Donnelley's Caa2 Corporate Family Rating continues to incorporate
the near-term pressure presented by tightening financial
maintenance covenants of R.H. Donnelley Inc. and Dex Media West,
as well as the funding needs posed by the December 2009 maturity
of R.H. Donnelley Inc.'s $75 million revolving credit facility and
the sizeable step-up in the level of its requisite term loan
amortization payments to more than $200 million per quarter
starting in Q1 2010. This pressure is further exacerbated by the
August 2010 maturity of approximately $385 million of maturing Dex
West notes. The rating does continue to incorporate Moody's view
that, in the event of a default, debtholders would likely receive
above average recovery, especially creditors of the operating
companies -- R.H. Donnelley Inc., Dex Media East, and Dex Media
West.
Moreover, Donnelley's ratings continue to broadly reflect its
persistently high leverage, its vulnerability to weakened market
conditions facing the yellow pages publishing business, the
increasing threat posed by competing directory publishers and web-
based directory service providers in virtually all of its markets,
the lack of equity support provided to debtholders (following a
substantial decline in the market value of the company's equity),
and the dependence of the holding companies (R. H. Donnelley
Corporation and Dex Media, Inc.) upon the receipt of continued
covenant-compliant restricted payments from the three major
operating companies in order to service their obligations.
The continuing negative rating outlook underscores Moody's concern
that, over the intermediate term, R.H. Donnelley will likely
experience substantially higher levels of customer payment
delinquencies and non-renewals as recessionary conditions continue
to grip all of its markets, as well as the correspondingly
increasing likelihood of default.
Of note, the standalone financial metrics of Dex Media East, Dex
Media West and R.H. Donnelley Inc. are materially stronger than
those of the consolidated entity. While Dex Media East faces no
unmanageable debt maturities until 2014, Dex Media West's $385
million notes mature in August 2010, and as previously noted R.H.
Donnelley Inc.'s $75 million revolving credit facility matures in
December 2009 and its scheduled term loan payments step up to $209
million per quarter starting at the end of March 2010. Moody's
considers that both Dex Media West and R.H. Donnelley Inc. will be
challenged to meet these repayment obligations, absent an
amendment. In the event of a complete restructuring of the
consolidated entities, Moody's will consider assigning CFRs to
each of these three companies to reflect their businesses on a
standalone basis. Moody's considers that each of the operating
companies currently represents an acceptable level of refinancing
risk; however, lenders are likely to accommodate such refinancing
only in exchange for more stringent terms and at a significantly
higher cost.
On May 14, 2009, R.H. Donnelley announced that its lenders and
bondholders had agreed to forbear until May 28, 2009 from taking
any action with respect to the company's failure to make the April
15, 2009 coupon payment. The company also said that it would miss
the scheduled May 15, 2009 interest payment on notes issued by
subsidiaries R.H. Donnelley Inc., Dex Media, Inc. and Dex Media
West LLC, and plans to exercise a 30 day grace period while it
continues to have discussions with debtholders about a potential
debt restructuring plan.
Details of the rating actions are:
Ratings changed:
R.H. Donnelley Corporation
* Probability of Default Rating -- to Ca/LD from Ca
Other Ratings:
R. H. Donnelley Corporation
* Corporate Family rating - Caa2
* Speculative Grade Liquidity rating - SGL-4
* 6.875% senior notes due 2013 - Ca, LGD4, 54%
* 6.875% Series A-1 senior discount notes due 2013 - Ca, LGD4, 54%
* 6.875% Series A-2 senior discount notes due 2013 - Ca, LGD4, 54%
* 8.875% Series A-3 senior notes due 2016 - Ca, LGD4, 54%
* 8.875% series A-4 senior notes due 2017 - Ca, LGD4, 54%
R.H. Donnelley Inc.
* Senior secured revolving credit facility due 2009 - B1, LGD1, 4%
* Senior secured revolving credit facility due 2011 - B1, LGD1, 4%
* Senior secured term loan D due 2011- B1, LGD1, 4%
* 11.75% senior unsecured notes due 2015 - B3, LGD2, 14%
Dex Media Inc.
* 8% senior unsecured global notes due 2013 - Caa3, LGD3, 30%
* 9% senior discount global notes due 2013 - Caa3, LGD3, 30%
Dex Media East LLC
* Senior secured revolving credit facility due 2013 - B1, LGD1, 4%
* Senior secured term loan A due 2013 - B1, LGD1, 4%
* Senior secured term loan B due 2014 - B1, LGD1, 4%
Dex Media West LLC
* Senior secured revolving credit facility due 2013 - B1, LGD1, 4%
* Senior secured term loan A due 2013 - B1, LGD1, 4%
* Senior secured term loan B due 2014 - B1, LGD1, 4%
* 8.5% senior unsecured notes due 2010 - B3, LGD2, 14%
* 5.875% senior unsecured notes due 2011 - B3, LGD2, 14%
* 9.875% senior subordinated notes due 2013 - Caa2, LGD2, 21%
The rating outlook remains negative.
The last rating action occurred on April 15, 2009 when Moody's
downgraded R.H. Donnelley's CFR to Caa2 and PDR to Ca.
R.H. Donnelley's ratings were assigned by evaluating factors
Moody's believe are relevant to the credit profile of the issuer,
such as i) the business risk and the competitive position of the
company versus others in its industry, ii) the capital structure
and the financial risk of the company, iii) the projected
financial and operating performance of the company over the near-
to-intermediate term, and iv) management's track record and
tolerance of risk. These attributes were compared against other
issuers both within and outside of R.H. Donnelley's core industry
and R.H. Donnelley's ratings are believed to be comparable to
those of other issuers of similar credit risk.
Headquartered in Cary, North Carolina, R. H. Donnelley is one of
the largest U.S. yellow page directory publishing companies. The
company reported revenues of approximately $2.5 billion for the
LTM period ended March 30, 2009.
RICKARD B MERCER: Case Summary & 13 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Rickard B. Mercer
P.O. Box 2410
Kill Devil Hills, NC 27948
Bankruptcy Case No.: 09-04088
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
Eastern District of North Carolina (Wilson)
Judge: J. Rich Leonard
Debtor's Counsel: George M. Oliver, Esq.
Oliver & Friesen, PLLC
PO Box 1548
New Bern, NC 28563
Tel: (252) 633-1930
Fax: (252) 633-1950
Email: efile@oliverandfriesen.com
Total Assets: $8,256,277
Total Debts: $6,349,223
A full-text copy of Mr. Mercer's petition, including a list of his
13 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/nceb09-04088.pdf
The petition was signed by Mr. Mercer.
RIDER AUTO: Court OKs Sale Pact With Jabco-Maggi Auto
-----------------------------------------------------
Nick Malawskey at Centredaily.com reports that the Hon. John J.
Thomas of the U.S. Bankruptcy Court for the Middle District of
Pennsylvania has approved a sale agreement between Rider Auto,
Inc., and the Jabco-Maggi Auto Group.
Centredaily.com relates that Judge Thomas allowed Rider Auto to
sell off its assets free and clear of all liens and claims to
Jabco-Maggi Auto.
Centredaily.com states that as agreed, Rider Auto would sell to
Jabco-Maggi Auto its material assets, including its vehicle
inventory, parts inventory, miscellaneous tangible assets, and
property related to the operation of the Company's Cadillac,
Buick, Pontiac, GMC, Saab, Hyundai, and Mazda dealership. Court
documents say that Jabco-Maggi Auto would buy the Rider vehicle
fleet at the factory invoice, minus alterations.
According to Centredaily.com, these assets are excluded from the
sale:
-- the name "Rider,"
-- the used motor vehicle inventory, and
-- the financial assets of Rider Auto.
Centredaily.com says that Jabco-Maggi Auto would provide Rider
Auto president and owner Chuck Rider with two new leased vehicles
-- one of them a Cadillac Escalade or its equivalent -- and give
him the option to purchase three vehicles per year, essentially at
the dealer's cost. Jabco-Maggi Auto, according to the report,
will also provide Rider with four season tickets to Penn State
home football games each year.
State College, Pennsylvania-based Rider Auto, Inc., was one of the
largest dealerships in Centre County. The Company filed for
Chapter 11 bankruptcy protection on December 1, 2008 (Bankr. M.D.
Pa. Case No. 08-04493). Robert E. Chernicoff, Esq., at Cunningham
and Chernicoff PC assists the Company in its restructuring
efforts. The Company listed $1,000,000 to $10,000,000 in assets
and $1,000,000 to $10,000,000 in debts.
RITZ CAMERA: To Auction 400 of 800 Camera Stores May 27
-------------------------------------------------------
Bloomberg's Bill Rochelle reports that Ritz Camera Centers Inc.,
will hold a May 27 auction to sell leases at the 400 shops it
intends to close. Under the court-approved sale process, bids are
due May 21, and the U.S. Bankruptcy Court for the District of
Delaware will convene a hearing on June 23 to consider approval of
the sale.
Headquartered in Beltsville, Maryland, Ritz Camera Centers, Inc.
-- http://www.ritzcamera.com/-- sells digital cameras and
accessories, and electronic products. The Company filed for
Chapter 11 protection on February 22, 2009 (Bankr. D. Del. Case
No. 09-10617). Irving E. Walker, Esq., Gary H. Leibowitz, Esq.,
at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Baltimore,
represent the Debtor as counsel. Norman L. Pernick, Esq., and
Karen M. Mckinley, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, P.A., in Wilmington, Delaware, represent the Debtor as
local counsel. Thomas & Libowitz, P.A. is Debtor's special
corporate counsel and conflicts counsel. Marc S. Seinsweig, at
FTI Consulting, Inc, acts as the Debtor's chief restructuring
officer. Kurtzman Carson Consultants LLC is the claims and
noticing agent. Attorneys at Cooley Godward Kronish LLP
represent the official committee of unsecured creditors as lead
counsel. The Committee selected Bifferato LLC as Delaware
counsel. In its schedules, the Debtor listed total assets of
$277 million and total debts of $172.1 million.
SANMINA-SCI CORPORATION: Fitch Cuts Issuer Default Rating to 'B'
----------------------------------------------------------------
Fitch Ratings has downgraded Sanmina-SCI Corporation's Issuer
Default Rating and debt ratings:
-- IDR to 'B' from 'B+';
-- Senior secured credit facility to 'BB/RR1' from 'BB+/RR1';
-- Senior unsecured notes to 'BB-/RR2' from 'BB+/RR1';
-- Senior subordinated debt to 'CCC/RR6' from 'B/RR5'.
The Rating Outlook is Stable.
The ratings downgrade reflects these considerations:
-- Sanmina's revenue declined 34% in the fiscal second quarter
(end March 2009) over the prior year period. While largely
reflective of the overall macro economic environment this is
a greater decline than peers which Fitch believes reflects
Sanmina's continuing loss of market share relative to other
tier one electronic manufacturing services vendors.
-- Leverage (total debt to operating EBITDA) has increased to
6.2 times (x) from 5.5x while interest coverage has increased
to 2.0x from 1.9x, over the prior year period. This
primarily reflects a decline in EBITDA to $234 million in the
latest twelve month period (ending March 2009) from $272
million in the prior year period. Fitch expects EBITDA to
fall further on an LTM basis as the current depressed revenue
run rate and margin level becomes annualized by the end of
fiscal 2009 (ending September 2009).
-- While Sanmina retains a significant cash balance and ample
liquidity, the company's debt outstanding at $1.5 billion
remains in excess of cash plus net working capital with
minimal expectations for positive free cash flow excluding
contributions from reduced working capital in the foreseeable
future.
The Stable Outlook reflects these considerations:
-- Ample liquidity with only a modest $176 million debt maturity
in 2010;
-- Expectations that the company's revenue decline has
stabilized for the moment although the timing of any
potential return to growth is highly uncertain, and risk of a
renewed business decline due to the macro environment or lost
market share remains; and
-- Fitch believes that Sanmina should achieve greater
stabilization in profitability once the macro economic
environment improves as its reorganization actions have
reduced excess manufacturing capacity and shifted an
increased percentage of operations to low cost regions
providing a more competitive cost structure.
Rating strengths include:
-- Sanmina's position as still one of the largest global EMS
providers with higher than industry average exposure to
complex manufacturing services which tend to be more stable
and less prone to competitive threats;
-- Countercyclical nature of working capital cash flows inherent
in the EMS industry which tend to provide a significant
source of liquidity during business downturns; and
-- Fitch believes that the long-term opportunity for revenue
growth in non-traditional markets for Sanmina including
industrial, defense and medical systems, should partially
mitigate potential further revenue declines in the Enterprise
Computing and Communications markets.
Rating concerns include Fitch's expectation that the EMS market
will remain highly competitive with continued pressure on
profitability across all North American tier one competitors. In
addition, Sanmina has downsized its business considerably over the
past several years through restructuring and divestitures to a
point where the remaining business is significantly smaller than
leading tier one service providers in a market where scale is of
significant importance. The company has yet to demonstrate that
its revised business focus can consistently generate sufficient
margins and cash flow as the economic downturn began shortly after
Sanmina had completed the divestiture of its personal computing
operations in mid-2008.
The ratings could be positively impacted by a sustained return to
top-line growth coupled with improved EBITDA margins approaching
historical levels of near 5%. Conversely, the ratings could be
negatively impacted by events that lead to a decline in available
liquidity without an offsetting decline in debt outstanding
including the use of cash for acquisitions or shareholder friendly
actions.
As of March 31, 2009, liquidity was solid and consisted of $851
million in cash plus a $135 million senior secured credit
facility, expiring March 2013, which was fully available to the
company. In addition, Sanmina utilizes various off-balance sheet
accounts receivable sales facilities, totaling approximately $250
million, for additional liquidity purposes. Fitch expects free
cash flow in fiscal 2009 (ending September 2009) to be upwards of
$100 million to $200 million, largely reflecting positive cash
inflows from reduced working capital requirements due to declining
revenue trends.
Total debt as of March 31, 2009 was $1.5 billion and consisted of:
i) $176 million in senior unsecured floating rate notes due June
2010; ii) $271 million in senior unsecured floating rate notes due
June 2014; iii) $400 million in senior subordinated 6.75% notes
due February 2013; and iv) $600 million in senior subordinated
8.125% notes due March 2016.
The Recovery Ratings and notching reflect Fitch's recovery
expectations under a distressed scenario, as well as Fitch's
expectation that the enterprise value of Sanmina, and hence
recovery rates for its creditors, will be maximized in liquidation
rather than in a going concern enterprise value scenario. In
estimating Sanmina's liquidation value under a distressed
scenario, Fitch applied advanced rates of 80%, 20%, and 10% to
Sanmina's current balance of accounts receivable, inventory, and
property, plant and equipment, respectively. That leads to a
distressed enterprise value estimate of approximately $770
million, providing the basis for a waterfall analysis to determine
recovery ratings. The current 'RR1' recovery rating for Sanmina's
secured credit facility reflects Fitch's belief that 100% recovery
is realistic. As is standard with Fitch's recovery analysis, the
revolver and accounts receivable facility are fully drawn and cash
balances fully depleted to reflect a stress event. The current
'RR2' Recovery Rating for the senior unsecured debt reflects
Fitch's estimate that a recovery of 70% to 90% would be
achievable. The current 'RR6' Recovery Rating for the senior
subordinated debt reflects Fitch's estimate that a recovery of
only 0% to 10% would be achievable.
SCIENTIFIC GAMES: Moody's Assigns 'Ba3' Rating on $200 Mil. Notes
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Scientific
Games International, Inc.'s proposed $200 million senior
subordinated note offering. The notes will be guaranteed by
Scientific Games Corporation, the parent company of SGI, and its
wholly-owned domestic subsidiaries. SGC's and SGI's existing
ratings were affirmed. SGC's and SCI's rating outlooks are
stable.
Proceeds from the new note offering can be used for general
corporate purposes, including SGI's senior subordinated
convertible debentures that can be put to the company in June
2010.
Rating assigned:
-- SGI $200 million senior subordinated notes due 2019 at Ba3
(LGD 5, 82%)
Ratings affirmed and LGD assessments revised:
-- SGC Corporate Family Rating at Ba2
-- SGC Probability of Default Rating at Ba2
-- SGC $200 million 6.25% senior subordinated notes due 2012 at
Ba3 (LGD 5, 82%)
-- SGI $550 million term loan at Baa3 maturing 2013 (LGD 2, 23%)
-- SGI $250 million revolving credit facility expiring 2013 at
Baa3 (LGD 2, 23%)
-- SGI $200 million 7.875% senior subordinated notes due 2016 at
Ba3 (LGD 5, 82%)
SGC's Ba2 Corporate Family Rating reflects its leading position in
the faster growing instant ticket segment of the lottery industry,
good contract retention rates, improved cost structure, and solid
growth prospects internationally. Key concerns include increased
price competition for new contracts and re-bids, earnings
concentration, and credit metrics that are considered weak for the
current rating. The stable outlook anticipates that margin
improvement and reduced capital spending going forward will
improve credit metrics to a level more consistent with the current
rating.
Moody's latest rating action was on June 2, 2008 when Moody's
assigned a Ba3 rating to SCI's $200 million senior subordinated
notes.
Scientific Games Corporation is a provider of services, systems,
and products to lottery industry, the wide area gaming inudstry
and the pari-mutuel wagering industry. The company operates in
three business segments: Printed Products, Lottery Systems, and
Diversified Gaming. The company generates about $1.1 billion of
annual revenues.
SCIENTIFIC GAMES: S&P Assigns 'BB-' Rating on $200 Mil. Notes
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its issue-level and
recovery ratings to Scientific Games International Inc.'s proposed
$200 million senior subordinated notes due 2019. The notes were
rated 'BB-' (one notch lower than the 'BB' corporate credit rating
on parent company Scientific Games Corp.) with a recovery rating
of '5', indicating S&P's expectation of modest (10% to 30%)
recovery for lenders in the event of a payment default (These
ratings are based on preliminary terms and conditions.)
In addition, S&P affirmed all of its outstanding ratings on
Scientific Games, including the 'BB' corporate credit rating. The
rating outlook is stable.
"The 'BB' rating on New York City-based Scientific Games Corp.
reflects the highly competitive market conditions in the lottery
and pari-mutuel industries, the mature nature and capital
intensity of the online lottery industry, and the company's
acquisitive growth strategy," said Standard & Poor's credit
analyst Melissa Long.
Still, Scientific Games maintains a leadership position in the
instant ticket lottery and pari-mutuel systems segments of the
gaming industry, which fuels substantial recurring revenue and a
stable cash flow base given long-term contracts. The company also
has consistently demonstrated credit measures in line with its
rating. The rating also reflects S&P's expectation that the
company will have sufficient liquidity on hand to meet conditions
outlined in its credit agreement regarding the put feature in its
convertible debentures.
Scientific Games is the leading integrated supplier of instant
tickets, systems, and services to lotteries worldwide, and a
leading supplier of server-based gaming machines and interactive
sports betting terminals and systems, as well as wagering systems
and services, to pari-mutuel operators. While the company remains
a distant second in the online lottery segment behind industry
leader Lottomatica SpA, the instant ticket portion of the lottery
market has grown more rapidly in recent periods. In addition, the
company is a licensed pari-mutuel gaming operator in Connecticut,
Maine, and The Netherlands, and a major worldwide supplier of
prepaid phone cards to cellular telephone companies.
SEACOAST BANKING: Halts All Dividend & Some Interest Payments
-------------------------------------------------------------
Seacoast Banking Corporation of Florida (Nasdaq: SBCF), a bank
holding company whose principal subsidiary is Seacoast National
Bank, announced Tuesday that the Company's board of directors has
determined to suspend regular quarterly cash dividends on its
outstanding common stock and preferred stock as a result of
recently adopted Federal Reserve policies related to dividend and
other payments in light of stressed market conditions. The
Company's board of directors took this action in consultation with
the Federal Reserve as required by recent policy guidance.
The Company's board of directors also intends to defer
distributions on its $53.6 million of outstanding trust preferred
securities issued by three statutory trusts Seacoast owns:
-- SBCF Capital Trust I, formed on March 31, 2005,
for the purpose of issuing $20,000,000 in trust
preferred securities;
-- SBCF Statutory Trust II, formed on December 16,
2005, also for the purpose of issuing $20,000,000
in trust preferred securities; and
-- SBCF Statutory Trust III, formed on June 29, 2007,
for the purpose of issuing $12,000,000 in trust
preferred securities.
Seacoast says it is "well capitalized" for regulatory purposes
with a Tier 1 leverage capital ratio of 9.13%, a Tier 1 risk-based
capital ratio of 12.72% and a total risk-based capital ratio of
14.01% at March 31, 2009, and has sufficient capital and liquidity
to pay scheduled dividends and distributions on its preferred
stock, common stock and trust preferred securities. The Company
believes suspending dividend payments and deferring interest
payments "will provide further support for its strong capital
position."
Seacoast Banking Corporation of Florida -- http://www.snl.com/--
has approximately $2.3 billion in assets, and is one of the
largest independent commercial banking organizations in Florida.
Seacoast has 41 offices in South and Central Florida and is
headquartered on Florida's Treasure Coast, which is one of the
wealthiest areas in the nation.
SEDONA RACQUET: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Sedona Racquet Club Properties, LLC
100 Racquet Road
Sedona, AZ 86336
Bankruptcy Case No.: 09-10659
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Debtor's Counsel: Pernell W. Mcguire, Esq.
Mcguire Gardner, Pllc
320 N. Leroux
Suite A
Flagstaff, AZ 86001
Tel: (928) 779-1173
Fax: (928) 779-1175
Email: pmcguire@mcguiregardner.com
Total Assets: $5,196,912
Total Debts: $2,502,500
The Company says it does not have unsecured creditors who are non
insiders when it filed its petition.
The petition was signed by John DePoe, managing member of the
Company.
SEMGROUP LP: Files Chapter 11 Plan & Disclosure Statement
---------------------------------------------------------
SemGroup L.P., SemCrude L.P., and their debtor affiliates filed
with the U.S. Bankruptcy Court for the District of Delaware their
Joint Plan of Reorganization and Disclosure Statement explaining
the Plan on May 15, 2009.
The Plan will allow the Debtors to emerge from Chapter 11
reorganized around its core businesses with a restructured,
deleveraged balance sheet designed to maximize recoveries to
creditors who will become the owners of the Reorganized SemGroup
Companies.
The Debtors expect their total available distributable value as of
the Effective Date to be approximately $2.26 billion consisting of
a combination of cash, New Term Notes, New Common Stock and
Warrants. The Debtors will also contribute certain Causes of
Action to a Litigation Trust and distribute Litigation Trust
Interests and Producer Preferred Distribution Rights to the
holders of certain Allowed Claims.
Key provisions of the Debtors' Plan include:
* Reorganization of all business units with the exception of
the domestic operations of Debtor SemMaterials, L.P., the
assets of which have previously been sold in a series of
transactions.
* Creditors will own substantially all of the equity of the
reorganized company.
* $500 million senior secured revolving credit facility to be
provided by a subset of SemGroup LP's Prepetition Lenders.
Borrowings under the facility will provide working capital
to the company once it exits Chapter 11 protection, Letters
of Credit, and allow the Company to re-enter the crude
marketing business.
* Emergence from Chapter 11 as a publicly traded company.
* The creation and funding of a Litigation Trust for the
purpose of continuing to pursue certain claims of the
estate.
* Issuance of $300 million in New Secured Notes.
* Refinancing of an existing $120 million secured facility
used to partially fund construction of the White Cliffs
pipeline.
* The Plan contemplates the Canadian subsidiaries will remain
a part of the reorganized company. Concurrent with the U.S.
proceedings, the Canadian subsidiaries are undergoing
reorganization in a Canadian court.
* The Company expects to maintain its headquarters in Tulsa,
Oklahoma.
The Debtors expect that Allowed Claims and Administrative Expense
Claims to be treated pursuant to the Plan will total about $4,860
million, which includes:
-- $5.7 million of outstanding obligations under the
Postpetition Financing Agreement;
-- $50 million of other Allowed Administrative Expense Claims;
-- $2.93 million of Allowed Claims in respect of obligations
under the Prepetition Credit Agreement;
-- $414 million of Allowed Claims of Producers, including
Producer Secured Claims, Unsecured Claims entitled to
priority under Section 503(b)(9) of the Bankruptcy Code and
General Unsecured Claims;
-- up to $155 million of Allowed Claims entitled to priority
under Section 503(b)(9) other than Claims of Producers;
-- $610 million of Senior Note Claims; and
-- $537 million of General Unsecured Claims.
The Reorganized Debtors will retain $50 million of Cash for
working capital and will distribute remaining Cash, New Term
Notes, New Common Stock, Warrants, Producer Preferred
Distribution Rights and Litigation Trust Interests to holders of
Allowed Claims.
The Debtors estimate and the Plan assumes that during the course
of the Chapter 11 Cases, use of cash collateral has resulted in a
diminution of value of prepetition collateral of the Prepetition
Lenders and the Producers aggregating $473 million. As a result,
$485 million of the Debtors' asset value that was unencumbered as
of the Petition Date is now encumbered by postpetition adequate
protection claims.
Pursuant to the Plan, the Prepetition Lenders will receive (i)
all of the New Term Notes, (ii) a substantial majority of the New
Common Stock for their remaining secured Claims, and (iii)
additional shares of the New Common Stock for their unsecured
deficiency claim. If New Common Stock were to be allocated Pro
Rata among all holders of Secured Claims, the Prepetition Lenders
would receive approximately 99.9% of the New Common Stock,
inclusive of both the secured and unsecured portion of their
Allowed Claims. As an inducement to holders of other Unsecured
Claims to accept the Plan, the Prepetition Lenders' allotment of
New Common Stock is to be reduced to provide up to 4.1% of New
Common Stock to the holders of other Unsecured Claims, provided
the applicable Classes vote to accept the Plan.
If a Class of the Senior Notes Claims or a Class of the General
Unsecured Claims approves the Plan, then the holders in that
Class will receive their Pro Rata Share of (i) 4.1% of the shares
of New Common Stock, and (ii) Warrants for 4.1% of the New Common
Stock, all subject to dilution from the Management Stock. If the
Class of the Senior Notes Claims or the Class of the General
Unsecured Claims rejects the Plan, then those holders will
receive their allocated portion of 0.1% of the shares of New
Common Stock and no Warrants. Any shares of New Common Stock
that would have been distributed to the holders of a Class of
Senior Notes Claims or a Class of General Unsecured Claims will
be distributed instead to the holders of the Lender Deficiency
Claims.
"The filing of the plan and disclosure statement is a major
milestone in SemGroup's restructuring," Terry Ronan, the
company's president and chief executive, said in a press release.
"The plan will allow SemGroup to exit bankruptcy with a stronger
balance sheet, reduced debt, and more efficient operations to
ensure the company remains a leader in the gathering, storage,
transportation and distribution of crude oil, refined petroleum
products, and natural gas."
"I would like to thank all of our talented employees who have
worked so hard to make this plan possible and ensure SemGroup's
place atop the industry for years to come," Mr. Ronan said.
"While we have accomplished much, there's still a lot of work
ahead of us. We all need to remain focused to make the
restructuring a success."
Restructuring Transactions
On the Effective Date, the Reorganized Debtors will effectuate
these transactions in this order:
(1) The Debtors will transfer to SemGroup all of their
outstanding obligations related to Secured Claims and
Unsecured Claims that are being discharged pursuant to the
Plan.
(2) SemGroup will contribute all of its ownership interests in
its directly-owned subsidiaries to SemGroup Finance in
exchange for (i) all of the outstanding stock of SemGroup
Finance, which consists of 41,400,000 shares of New Common
Stock, (ii) Warrants to purchase 1,789,474 shares of New
Common Stock, and (iii) the New Term Notes.
(3) The Plan Currency will be distributed to holders of
Allowed Claims.
Exit Facility
The effectiveness of the Plan is conditioned on the entry of New
Holdco into an exit facility on the Effective Date. The
definitive terms of the Exit Facility have not yet been
negotiated but contemplates these terms:
* The maximum principal amount outstanding at any one time
pursuant to the Exit Facility will be up to $500 million.
* On the Effective Date, the Exit Facility will be undrawn,
other than letters of credit issued under the Postpetition
Financing Agreement that are currently estimated at
approximately $160 million.
* The Exit Facility will terminate on the three-year
anniversary of the Effective Date. On the termination
date, all amounts outstanding under the Exit Facility will
be due and payable, together with any and all accrued and
unpaid interest thereon to that date.
* The borrowings under the Exit Facility will be used to (i)
provide working capital to the Reorganized SemGroup
Companies on and after the Effective Date for general
corporate purposes, (ii) collateralize letters of credit
issued under the Postpetition Financing Agreement, (iii)
issue letters of credit in the ordinary course of its
business, and (iv) re-enter the crude marketing business,
consistent with the Risk Management Policy to be adopted by
SemCrude.
* The Exit Facility will be a revolving credit facility and
will contain no restrictions or blocks on availability,
other than restrictions on SemCrude's ability to utilize
the Exit Facility for trading activities. Due to current
market conditions, it is anticipated that the Exit Facility
will only be available from all or a portion of the
Prepetition Lenders. The Prepetition Lenders will own
substantially all of the New Common Stock.
* New Holdco will be the borrower under the Exit Facility and
will pay interest at market rates.
* The Exit Facility will contain customary representations,
affirmative and negative covenants, events of default and
other terms and provisions to be agreed upon.
* The Exit Facility will contain customary provisions to be
agreed upon by New Holdco and the Exit Lenders.
The Debtors say it is possible the terms may be modified on or
prior to the Effective Date and the definitive terms of the Exit
Facility, including, without limitation, any intercreditor
agreement.
Issuance of New Common Stock
Upon filing the New Holdco Certificate of Incorporation, which
will be filed with the Secretary of State of Delaware on the
Effective Date, New Holdco will be authorized to issue 100
million shares of New Common Stock, $0.01 par value per share.
Shares of Class A New Common Stock will be issued, however,
shares of Class B New Common Stock will be available on request.
Holders of the New Common Stock will be entitled to participate,
in proportion to the number of shares of New Common Stock held,
in the net assets of New Holdco available for distribution to the
holders of shares of New Common Stock in the event of
liquidation, dissolution or winding up of the affairs of New
Holdco. Holders of shares of New Common Stock will not be
entitled to any preemptive, subscription, conversion or
redemption rights.
The Class A New Common Stock and the Class B New Common Stock
will be identical in all respects, except that the Class B New
Common Stock will not be eligible for trading on a national
securities exchange or a national market system. The Class B New
Common Stock will be held by entities who are restricted from
holding margin stock. The Class B New Common Stock will
automatically convert into Class A New Common Stock upon the
transfer of that stock to an entity which is permitted to hold
margin stock or at the request of the holder.
Distribution of Warrants
New Holdco will issue Warrants to purchase a number of shares of
New Common Stock equal to 4.1% of the number of fully diluted
shares of New Common Stock as of the Effective Date, subject only
to dilution from the issuance of New Common Stock under the
Management Incentive Plan. The Warrants will be exercisable for
shares of Class A Common Stock or, upon request, Class B Common
Stock. The number of Warrants issued on the Effective Date will
depend on whether all Classes of the Senior Notes Claims and the
General Unsecured Claims vote to approve the Plan.
Each Warrant will be exercisable to acquire one share of New
Common Stock. The strike price will be $25. The Warrants will
expire on the fifth year anniversary of the Effective Date.
Issuance of the New Term Notes
New Holdco will be the issuer of the New Term Notes. The New
Term Notes will be issued pursuant to an indenture governed by
New York law and will mature on the seventh anniversary of the
Effective Date. The total aggregate principal amount of the New
Term Notes to be issued under the indenture will be $300 million.
The principal amount of the New Term Notes will bear interest at
the rate of 9% per annum, with the interest accruing from the
Effective Date. Interest will be paid quarterly in arrears. New
Holdco will have the option to PIK all interest payments for the
first two years. If New Holdco elects to PIK any interest
payments, then the interest rate for that payment will be
increased from 9% to 11% and will be added to the principal
amount of the New Term Notes.
Producer Note
Any Producer with an Allowed Producer Secured Claim in excess of
its Allowed 20-Day Day Claim will have a Producer Preferred
Distribution Right to receive any Cash received from the Disputed
Production Receivables up to the amount of those excesses. The
Producer Preferred Distribution Rights will be evidenced by the
Producer Secured Note. The Official Producers' Committee has
asserted that the amount of the Disputed Production Receivables
exceeds the amount of the Producer Secured Claims to be satisfied
by the Producer Preferred Distribution Rights.
Litigation Trust Arrangements
On the Effective Date, New Holdco will enter into the Litigation
Trust Agreement pursuant to which the Litigation Trust Funds will
be advanced to the Litigation Trust. The Litigation Trust Funds
will be secured by all of the assets of the Litigation Trust and
will be paid to the Prepetition Lenders before the holders of the
Producer Preferred Distribution Rights and the Litigation Trust
Interests receive any distributions on account of those
interests.
Section 1145 Securities
To the extent provided in Section 1145 of the Bankruptcy Code and
under applicable non-bankruptcy law, the issuance under the Plan
of the Plan Currency will be exempt from registration under the
Securities Act of 1933, as amended, and all rules and regulations
promulgated thereunder.
Adoption of the Management Incentive Plan
On the Effective Date, New Holdco will adopt the Management
Incentive Plan. The solicitation of votes on the Plan is deemed
a solicitation of the holders of New Common Stock for approval of
the Management Incentive Plan for purposes of Sections 162(m) and
422 of the Internal Revenue Code of 1986, as amended, as well as
Section 16 of the Exchange Act of 1934, as amended, and any stock
exchange listing requirements.
The purpose of the Management Incentive Plan is to attract,
retain and motivate officers, employees, and non-employee
directors providing services to the Reorganized SemGroup
Companies and to promote the success of the Reorganized SemGroup
Companies' businesses by providing the participants of the
Management Incentive Plan with appropriate equity-based
incentives to maximize future shareholder value. The Management
Incentive Plan will be implemented by the Compensation Committee
of the Board of New Holdco. The Board's Compensation Committee
will have the power under the Management Incentive Plan to grant
any one or a combination of the following equity and equity-based
grants (a) stock options, (b) stock appreciation rights, (c)
restricted stock, (d) other stock-based awards, and (e)
performance-based compensation awards.
Selection of New Holdco Board and officers
The initial Board of New Holdco will consist of seven members,
composed of (a) the chief executive officer, (b) the Bank
Nominees, and (c) the Official Committee of Unsecured Creditors
Nominee. A majority of the Board will be independent directors
in accordance with the listing requirements of the New York Stock
Exchange or other recognized national securities exchange or
market system on which the Class A New Common Stock may be
listed. A majority of the members of the Board will also be
experts or have experience in one or more aspects of the
Reorganized SemGroup Companies' business. The term of the
initial directors will be one year and thereafter the directors
will be elected by the holders of New Common Stock in accordance
with the Certificate of Incorporate and Bylaws of New Holdco.
The initial members of the Board of New Holdco will be set forth
in the Plan Supplement, along with their biographical
information.
A full-text copy of the Plan of Reorganization is available for
free at http://bankrupt.com/misc/semgroupplan.pdf
A full-text copy of the Disclosure Statement is available for
free at http://bankrupt.com/misc/semgroupds.pdf
A full-text copy of the terms used in the Debtors' Plan and
Disclosure Statement is available for free at:
http://bankrupt.com/misc/semgroupterms.pdf
Classification and Treatment of Claims
The Debtors' Plan provides for these classifications and treatment
of claims:
Class Description Treatment
----- ----------- ---------
N/A Administrative Unimpaired. Payment of each
Expense Claims Allowed Administrative
Expense Claims in full in
cash. Not entitled to vote.
Estimated amount of claims:
Up to $155 million.
Estimated at $105 million.
Estimated Recovery: 100%
N/A Postpetition Unimpaired. Payment of each
Financing Claims Allowed Postpetition
Financing Claims in full in
cash. Not entitled to vote.
Estimated amount of claims:
$165 million
Estimated Recovery: 100%
N/A Professional Unimpaired. Payment of each
Compensation and Allowed Postpetition
Reimbursement Claims Compensation and
Reimbursement Claims in full
in cash. Not entitled to
vote.
Estimated amount of claims:
$50 million
Estimated recovery: 100%
N/A Priority Tax Claims Unimpaired. Payment of each
Allowed Priority Tax Claims
in full in cash. Not
entitled to vote.
Estimated amount of claims:
$0
Estimated recovery: 100%
1-26 Priority Non-Tax Impaired. Payment of
Claims Allowed Priority Non-Tax
Claims in full in cash.
Not entitled to vote.
Estimated amount of claims:
$0
Estimated recovery: 100%
27-52 Secured Tax Claims Impaired. Payment of each
Secured Tax Claims in full
in cash. Not entitled to
vote.
Estimated amount of claims:
$0
Estimated recovery: 100%
53-69 Producer Secured Impaired. Each holder of an
Claims Allowed Producer Secured
Claim will receive (i) Cash
in the amount of its Allowed
20-Day Claim, to the extent
that holder has an Allowed
20-Day Claim, (ii) its Pro
Rata Share of Producer Cash,
and (iii) its Pro Rata Share
of the Producer Preferred
Distribution Rights.
Entitled to vote.
Estimated amount of claims:
up to $414 million.
Estimated at $185 million.
Estimated recovery: 100%
70-95 Secured Working Impaired. Each holder of an
Capital Lender Allowed Secured Working
Claims Capital Lender Claim will
receive its Pro Rata Share
of (i) $475 million of
Lender Cash, (ii) 61.2% or
$183 million of the New Term
Notes, and (iii) about 24
million shares of New Common
Stock, constituting about
59% of New Holdco, subject
to dilution from the
Warrants and the Management
Stock. Entitled to vote.
Estimated claim amounts:
$2,127 million
Estimated recovery: 59.1%
96-121 Secured Revolver/ Impaired. Each holder of
Term Lender Claims an Allowed Secured
Revolver/Term Lender Claims
will receive its Pro Rata
Share of (i) $51 million of
Lender Cash, (ii) 38.8% or
$117 million of the New Term
Notes, and (iii) about 15
million shares of New Common
Stock, constituting about
37% of New Holdco, subject
to dilution from the
Warrants and the Management
Stock. Entitled to vote.
Estimated claims amount:
$811 million
Estimated recovery: 67.7%
122 White Cliffs Credit Impaired. Each holder of an
Agreement Claim Allowed SemCrude Pipeline
Credit Facility Claim will
be paid in full. The White
Cliffs Credit Agreement will
be amended, extended and
reinstated on terms to be
agreed by the holders of the
White Cliffs Credit
Agreement. Entitled to
vote.
Estimated claims amount:
$120 million
Estimated recovery: 100%
123-148 Other Secured Claims Unimpaired. Each holder of
an Other Secured Claim will
receive one of the following
distributions:
* the payment of that
holder's Allowed Secured
Claim in full in Cash;
* the sale or disposition
proceeds of the property
securing any Allowed
Other Secured Claim to
the extent of the value
of its interest in that
property;
* the surrender to the
holder of any Allowed
Other Secured Claim of
the property securing
that Claim; or (iv)
other distributions as
will be necessary to
satisfy the requirements
of the Plan. Not
entitled to vote.
Estimated claim amounts:
$0
Estimated recovery: N/A
149-174 Senior Notes Claims Impaired. If a Class
votes to accept the
Plan, then each holder
of an Allowed Senior
Note Claim in that Class
will receive an
estimated recovery of up
to 6.79%, which will
consist of a Pro Rata
Share of (i) New Common
Stock, subject to
dilution from the
Warrants and the
Management Stock, (ii)
Warrants, subject to
dilution from the
Management Stock and,
(iii) Litigation Trust
Interests.
If a Class votes to
reject the Plan, then
each holder of an
Allowed Senior Note
Claim in that Class will
receive an estimated
recovery of 0.12%, which
will consist of a Pro
Rata Share of (i) New
Common Stock, subject to
dilution from the
Warrants and the
Management Stock, and
(ii) Litigation Trust
Interests. Entitled to
vote.
Estimated claim amounts:
$610 million
Estimated recovery:
0.12% to 6.74%
175-200 Lender Deficiency Claims Impaired. Each holder
of an Allowed Lender
Deficiency Claim will
receive an estimated
recovery of 0.12%, which
will consist of its Pro
Rata Share of 50% of the
Litigation Trust
Interests, subject to
the Producer Preferred
Distribution Rights. If
one or more Classes of
either the Senior Notes
Claims or the General
Unsecured Claims votes
to reject the Plan, then
each holder of an
Allowed Lender
Deficiency Claim will
receive the number of
shares of New Common
Stock that would have
been distributed to the
holders of Claims in
those Classes if those
Classes would have voted
to accept the Plan, up
to an estimated recovery
of 3.99%. Entitled to
vote.
Estimated claim amounts:
$1,079 million
Estimated recovery:
0.12% to 3.99%
201-226 General Unsecured Impaired. If a Class
Claims votes to accept the
Plan, then each holder
of an Allowed General
Unsecured Claim in that
Class will receive an
estimated recovery of up
to 3.71%, which will
consist of a Pro Rata
Share of (i) New Common
Stock, subject to
dilution from the
Warrants and the
Management Stock, (ii)
Warrants, subject to
dilution from the
Management Stock, and
(iii) Litigation Trust
Interests.
If a Class votes to
reject the Plan, then
each holder of an
Allowed Senior Note
Claim in that Class
will receive an
estimated recovery of
0.09%, which will
consist of a Pro Rata
Share of (i) New Common
Stock, subject to
dilution from the
Warrants and the
Management Stock, and
(ii) Litigation Trust
Interests. Entitled to
vote.
Estimated claim amounts:
$537 million
Estimated recovery: 0.0%
to 3.83%
227-252 Intercompany Claims Impaired. Each holder
of an Allowed
Intercompany Claim will
receive its Pro Rata
Share of the New Common
Stock that it would have
received if that Allowed
Intercompany Claim were
an Allowed General
Unsecured Claim, which
New Common Stock will be
redistributed to holders
of Allowed Secured
Working Capital Lender
Claims in accordance
with the Plan. Entitled
to vote.
Estimated claim amounts:
$7,270 million
Estimated recovery: N/A
253-278 Intercompany Equity Impaired and not
Interests entitled to vote.
Estimated claim amounts:
N/A
Estimated recovery: N/A
279 Semgroup Equity Impaired. Each holder
Interests of a Semgroup Equity
Interest will receive no
distribution in the
Plan. Entitled to vote.
Estimated claim amounts:
N/A
Estimated recovery: 0%
SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream
service company providing the energy industry means to move
products from the wellhead to the wholesale marketplace. SemGroup
provides diversified services for end users and consumers of crude
oil, natural gas, natural gas liquids, refined products and
asphalt. Services include purchasing, selling, processing,
transporting, terminaling and storing energy. SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No.
08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark
D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller,
Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A.
Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors
in their restructuring efforts. Kurtzman Carson Consultants
L.L.C. is the Debtors' claims agent. The Debtors' financial
advisors are The Blackstone Group L.P. and A.P. Services LLC.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act. The CCAA stay expires on
Nov. 21, 2008.
SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts. In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy
News. The newsletter tracks the chapter 11 proceedings undertaken
by SemGroup L.P. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-700)
SEMGROUP LP: Files Liquidation, Valuation Analyses, Projections
---------------------------------------------------------------
SemGroup L.P., SemCrude L.P., and their debtor affiliates filed
with the U.S. Bankruptcy Court for the District of Delaware
liquidation and valuation analyses and financial projections in
support of their Joint Plan of Reorganization and Disclosure
Statement.
Pursuant to Section 1129(a)(7) of the Bankruptcy Code, each holder
of an impaired claim or equity interest must either (a) accept the
Plan of Reorganization or (b) receive or retain under the Plan
property of a value, as of the effective date, that is not less
than the value that non-accepting holder would receive or retain
if the Debtors were liquidated under Chapter 7 of the Bankruptcy
Code. In connection with this requirement, the Debtors prepared a
hypothetical liquidation analysis to provide information so that
the Court may determine that the Plan is in the best interests of
all classes impaired by the Plan.
The Debtors assumed that an appointed Chapter 7 trustee will
retain lawyers, financial advisors, and investment bankers to
assist in the liquidation. Further, the Debtors assume that they
will obtain authorization to use a certain level of "cash
collateral" to fund a minimum baseline level of operation of the
business during the liquidation to fund asset sales and wind-down
of the estate.
The Liquidation Analysis further assumes the business units are
marketed as going concerns on an accelerated timeline and sale
transactions are consummated within a relatively short time from
commencement of liquidation. Given the accelerated time frame,
erosion of value is assumed driven by, among other things: (a)
negative customer and supplier reaction; (b) the loss of key
personnel; (c) lack of meaningful financing to fund working
capital or provide letters of credit; (d) predatory actions of
competitors; (e) the interruption of construction and capital
improvement projects; and (f) the general forced nature of the
sale.
The Debtors have determined that confirmation of the Plan will
provide all creditors a recovery that is not less than they would
receive pursuant to a liquidation of the Debtors under Chapter 7.
In addition, the Debtors believe that the value of distributions,
to the extent available, from the liquidation proceeds would be
further reduced because those distributions in a Chapter 7 case
may not occur until after the nine month period assumed in the
analysis. Moreover, in the event litigation were necessary to
resolve claims asserted in the Chapter 7 case, the delay could be
further prolonged and administrative expenses further increased.
SemGroup, L.P., et al.
Liquidation Analysis - Proceeds
($ in millions)
Recovery
-------------------
Low High
------- --------
Gross Proceeds Available
for Distribution:
Cash $952 $952
Asset Values:
SemCrude L.P. 150 200
White Cliffs Pipeline LLC 160 220
------- --------
Subtotal - US Crude Operations 315 420
SemCAMS ULC 115 155
SemCanada Crude Company 125 160
------- --------
Subtotal - Canadian Operations 240 316
SemStream L.P. 115 150
SemGas L.P. 45 60
SemLogistics Milford Haven 55 75
SemMexico LLC 10 15
------- --------
Subtotal - Gross Proceeds
from Fixed Assets 779 1,036
Litigation Recoveries - -
------- --------
Total Gross Proceeds $1,731 $1,988
======= ========
Costs Associated with Liquidation
Chapter 7 Trustee Fees ($80) ($90)
Professional Fees (60) (55)
Business Unit Operating Costs (75) (61)
Overhead (16) (10)
------- --------
Total Liquidation Costs (230) (215)
Net Proceeds Available
for Distribution $1,501 $1,773
======= ========
Mid-point of Net Proceeds
Available for Distribution $1,637
======
SemGroup, L.P., et al.
Liquidation Analysis - Allocation of Proceeds
($ in millions)
Allowable Midpoint Midpoint
Claim Recovery Recovery
--------- -------- --------
Net Proceeds Available
for Distribution $1,637
Postpetition Secured Claims
Professional Fee Carve-out $24 $24 100%
Superpriority Admin. DIP 165 165 100%
------ ------ --------
Total Unclassified 189 189 100%
Proceeds Available for Remaining Claims 1,448
Prepetition Secured Claims
Revolver $668 $328 49%
Working Capital Facility 1,734 726 42%
Term B Notes 143 71 49%
GECC Construction Project Financing 120 120 100%
Certain Producer Claims 414 - -
Secured Financial Trades 480 201 42%
------ ------ --------
Total Secured Claims 3,560 1,447 41%
Proceeds Available for
Administrative/Priority
Claims -
Administrative/Priority Claims
Administrative Claims $5 $- 0%
503(b)(9) Claims 295 - 0%
Postpetition Trade & Other 96 - 0%
------ ------ --------
Total Administrative/Priority Claims 396 - 0%
Proceeds Available for
Unsecured Claims -
General Unsecured Claims
Certain Producer Claims 75 $- 0%
Accounts Payable 277 - 0%
Senior Notes 610 - 0%
Unsecured Financial Trades 29 - 0%
Litigation Claims TBD - 0%
SERP Claims 13 - 0%
Rejection Claims 100 - 0%
Intercompany Claims 7,270 - 0%
------ ------ --------
Total General Unsecured 8,374 - 0%
Proceeds Available for
Equity Interests - 0%
Total Distributions $1,636
======
A full-text copy of the Liquidation Analysis is available for
free at http://bankrupt.com/misc/semgroupliquidation.pdf
Valuation Analysis
In connection with certain matters relating to the Plan of
Reorganization, the Debtors asked that Blackstone prepare a
valuation analysis of the SemGroup Companies' businesses. The
valuation analysis was prepared by Blackstone based on the
Projections.
In preparing its analysis, Blackstone has, among other things:
-- reviewed certain operating and financial forecasts prepared
by the Debtors with the assistance of AlixPartners,
including the Projections;
-- discussed with management and AlixPartners the key
assumptions related to the Projections;
-- reviewed certain other financial and operating data of the
SemGroup Companies;
-- discussed with management and AlixPartners the current
operations and prospects of the SemGroup Companies;
-- employed generally accepted valuation techniques;
-- considered the indications of interest received from
various third parties regarding a transaction with the
SemGroup Companies; and
-- considered other analyses as Blackstone deemed appropriate
and necessary under the circumstances.
According to the Debtors, Blackstone relied on and assumed,
without independent verification, the accuracy and completeness
of the financial and other information provided to or discussed
with it by the Debtors or obtained by it from public sources.
Blackstone has not audited, reviewed, or compiled the
accompanying information in accordance with generally accepted
accounting auditing standards, or otherwise, the Debtors add.
Blackstone has employed generally accepted valuation techniques
in estimating the reorganization value of the SemGroup Companies.
Blackstone performed valuation analysis of the SemGroup Companies
on both a consolidated basis and a sum-of-the-part basis, whereby
each individual business was valued separately and the values
were aggregated to estimate the value of the SemGroup Companies.
In preparing its valuation, Blackstone considered these generally
accepted valuation techniques:
-- Discounted Cash Flow Analysis,
-- Comparable Public Company Analysis, and
-- Precedent Transactions Analysis.
As a result of the analyses, review, discussions, considerations,
and assumptions, Blackstone provided to the Debtors an estimate
that the Total Equity Value of the Reorganized SemGroup Companies
on a "reorganization value" basis is a range of approximately
$1.4 to $1.6 billion, with a midpoint of $1.5 billion.
Blackstone reduced the TEV estimate by the estimated pro forma
debt of the Reorganized SemGroup Companies as of September 30,
2009, to calculate the implied reorganized equity value of the
Reorganized SemGroup Companies. The amount was then divided by
the number of shares of New Common Stock expected to be
outstanding after consummation of the Plan to determine the
estimated per share reorganized equity value.
Accordingly, Blackstone estimates that the Reorganized SemGroup
Companies' mid-point total reorganized equity value is $1.035
billion or $25 per share of New Common Stock, before the impact
of the New Common Stock issuable under the Management Incentive
Plan, and Warrants issued pursuant to the Plan.
Financial Projections
To demonstrate the feasibility of the Plan, the Debtors prepared
financial projections for the five years ending on December 31,
2013, with the assistance of their retained professionals. The
Projections reflect the Debtors' most recent estimates of the
results of operations, cash flows, and financial position of the
Reorganized SemGroup Companies. Consequently, the Projections
reflect the Debtors' judgment as to expectations of market and
business conditions, expected future operating performance, and
the occurrence or nonoccurrence of certain future events, all of
which are subject to change.
The Projections present, according to the Debtors, Reorganized
SemGroup Companies' projected results of operations, cash flows,
and financial position for the five years ended December 31,
2013, and reflect the Debtors; judgment as of May 15, 2009, the
date that the Projections were published. Although the Debtors
are of the opinion that these assumptions are reasonable under
current circumstances, those assumptions are subject to inherent
uncertainties, including but not limited to, material changes to
the economic environment, commodity prices, transportation fees
and spreads, supply and demand of commodities, competitive
environment, and other factors affecting the Debtors' businesses.
The likelihood, and related financial impact, of a change in any
of these factors cannot be predicted with certainty, the Debtors
state. Consequently, actual financial results could differ
materially from the Projections, the Debtors tell the Court.
In connection with the development of the Plan, the Projections
have not been audited or reviewed by independent accountants, the
Debtors say. The Projections assume the Plan will be implemented
in accordance with its stated terms and that consummation of the
Plan will occur on September 30, 2009.
Reorganized SemGroup, L.P.
Projected Income Statement
($ in millions)
2009 2010 2011 2012 2013
---------- ---------- ---------- ---------- ----------
Revenue $1,517,209 $2,874,044 $3,671,929 $3,988,757 $4,293,310
Cost of Sales 1,179,751 2,437,848 3,192,016 3,502,881 3,785,920
---------- ---------- ---------- ---------- ----------
Gross Margin 337,458 436,196 479,913 485,876 507,390
Expenses
Operating 205,239 150,895 175,725 172,135 186,031
Selling, General
and Admin. 103,636 93,868 98,882 101,658 104,347
Depreciation &
Amortization 84,582 82,903 81,272 81,155 75,234
---------- ---------- ---------- ---------- ----------
Total Expenses 393,457 327,666 355,879 354,948 365,612
EBIT (55,998) 108,530 124,034 130,928 141,778
Other (Income) Expenses
Loss on Asset Sales 73,323 - - - -
Gain on Cancellation
of Debt - - - - -
Interest Expense 20,148 44,199 46,835 42,875 39,317
Foreign Currency
Transaction Loss 595 - - - -
Other, Net (71) - - - -
---------- ---------- ---------- ---------- ----------
Total Other
(Income)/Expenses 93,996 44,199 46,835 42,875 39,317
Income Before
Reorganization
Items, Income
Taxes, and (149,994) 64,331 77,199 88,053 102,462
Minority Interest
Total Reorganization
Expense 208,137 - - - -
---------- ---------- ---------- ---------- ----------
Income Before
Income Taxes and
Minority Interest (358,131) 64,331 77,199 88,053 102,462
Income Tax Expense 1,583 26,592 32,645 36,109 40,382
---------- ---------- ---------- ---------- ----------
Income Before
Minority Interest (359,714) 37,739 44,554 51,944 62,080
Minority Interest
Expense 235 - - - -
---------- ---------- ---------- ---------- ----------
Net Income ($359,949) $37,739 $44,554 $51,944 $62,080
========== ========== ========== ========== ==========
Memo: EBITDA 34,744 191,433 205,306 212,083 217,013
SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream
service company providing the energy industry means to move
products from the wellhead to the wholesale marketplace. SemGroup
provides diversified services for end users and consumers of crude
oil, natural gas, natural gas liquids, refined products and
asphalt. Services include purchasing, selling, processing,
transporting, terminaling and storing energy. SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No.
08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark
D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller,
Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A.
Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors
in their restructuring efforts. Kurtzman Carson Consultants
L.L.C. is the Debtors' claims agent. The Debtors' financial
advisors are The Blackstone Group L.P. and A.P. Services LLC.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act. The CCAA stay expires on
Nov. 21, 2008.
SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts. In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy
News. The newsletter tracks the chapter 11 proceedings undertaken
by SemGroup L.P. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-700)
RITZ CAMERA: To Auction 400 of 800 Camera Stores May 27
-------------------------------------------------------
Bloomberg's Bill Rochelle reports that Ritz Camera Centers Inc.,
will hold a May 27 auction to sell leases at the 400 shops it
intends to close. Under the court-approved sale process, bids are
due May 21, and the U.S. Bankruptcy Court for the District of
Delaware will convene a hearing on June 23 to consider approval of
the sale.
Headquartered in Beltsville, Maryland, Ritz Camera Centers, Inc.
-- http://www.ritzcamera.com/-- sells digital cameras and
accessories, and electronic products. The Company filed for
Chapter 11 protection on February 22, 2009 (Bankr. D. Del. Case
No. 09-10617). Irving E. Walker, Esq., Gary H. Leibowitz, Esq.,
at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Baltimore,
represent the Debtor as counsel. Norman L. Pernick, Esq., and
Karen M. Mckinley, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, P.A., in Wilmington, Delaware, represent the Debtor as
local counsel. Thomas & Libowitz, P.A. is Debtor's special
corporate counsel and conflicts counsel. Marc S. Seinsweig, at
FTI Consulting, Inc, acts as the Debtor's chief restructuring
officer. Kurtzman Carson Consultants LLC is the claims and
noticing agent. Attorneys at Cooley Godward Kronish LLP
represent the official committee of unsecured creditors as lead
counsel. The Committee selected Bifferato LLC as Delaware
counsel. In its schedules, the Debtor listed total assets of
$277 million and total debts of $172.1 million.
SEMGROUP LP: Seeks to Pay Terrence Ronan's Legal Fees
-----------------------------------------------------
SemGroup L.P., SemCrude L.P., and their debtor affiliates ask the
U.S. Bankruptcy Court for the District of Delaware for authority
to pay James L. Kincaid, Esq., and other professionals of Crowe &
Dunleavy, P.C., in the connection with their representation of
Terrence Ronan, chief executive officer of SemGroup G.P., L.L.C.,
in the action SGGP filed in the U.S. District Court for the
Northern District of Oklahoma, as well the adversary action filed
against Mr. Ronan by John Catsimatidis and his associates in the
U.S. Bankruptcy Court for the District of Delaware.
SGGP sued Mr. Ronan in the Oklahoma Action for his alleged refusal
to accept the direction of SGGP's management committee, in
violation of SGGP's operation agreement. The Debtors, in an
adversary proceeding against the Catsimatidis Group, successfully
sought the Bankruptcy Court's injunction of the Oklahoma Action.
Thereafter, the Catsimatidis Group amended its answer in the
Catsimatidis adversary to include certain third party claims
against Mr. Ronan. The Catsimatidis Group filed against Mr. Ronan
claims for breach of loyalty. The Catsimatidis Group also
asserted that it is authorized to direct Mr. Ronan's actions in
regard to the Debtors' reorganization.
Mr. Ronan has incurred, and will continue to incur, legal fees and
expenses to defend himself, L. Katherine Good, Esq., at Richards,
Layton & Finger, P.A., in Wilmington, Delaware, says. Pursuant to
the Second Amended and Restated Agreement of Limited Partnership
of SemGroup effective as of April 2005, as amended; the Operating
Agreement of SemManagement, L.L.C., effective as of October 2003,
as amended; and Mr. Ronan's Employment Agreement dated March 2008
with SemManagement, Mr. Ronan is entitled to indemnification for
these fees and expenses, she notes.
"The claims of the Catsimatidis Group against Mr. Ronan in the
Oklahoma Action and Catsimatidis Adversary are, in reality,
claims against the Debtors themselves," she says. "Thus, in
defending himself against their claims, Mr. Ronan is defending
the Debtors' reorganization process itself," Ms. Good tells the
Court.
About SemGroup LP
SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream
service company providing the energy industry means to move
products from the wellhead to the wholesale marketplace. SemGroup
provides diversified services for end users and consumers of crude
oil, natural gas, natural gas liquids, refined products and
asphalt. Services include purchasing, selling, processing,
transporting, terminaling and storing energy. SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No.
08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark
D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller,
Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A.
Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors
in their restructuring efforts. Kurtzman Carson Consultants
L.L.C. is the Debtors' claims agent. The Debtors' financial
advisors are The Blackstone Group L.P. and A.P. Services LLC.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act. The CCAA stay expires on
Nov. 21, 2008.
SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts. In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy
News. The newsletter tracks the chapter 11 proceedings undertaken
by SemGroup L.P. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-700)
SEMGROUP LP: SemStream Unit Asks Court to Approve Koch Settlement
-----------------------------------------------------------------
Debtor SemStream, L.P., asks the U.S. Bankruptcy Court for the
District of Delaware to approve a stipulation it entered into with
Koch Supply & Trading, L.P. in connection with a Sales Agreement
and certain Trading Agreements between the parties.
Before the Petition Date, Semstream delivered propane to KS&T
under the Sales Agreement for which KS&T owes $926,100. Also, the
parties determined that KS&T owes SemStream $460,890 after mutual
set-off of obligations under the Trading Agreements. Thereafter,
after a review of its records and the calculations accompanying
KS&T's Claim No. 4602, SemStream believes that KS&T owes it an
aggregate $1,386,990 under the Sales Agreements and Trading
Agreements.
Accordingly, the parties stipulate that KS&T pay SemStream
$1,386,990 in full settlement of all amounts that may be owing by
either SemStream or KS&T, and that the parties release each other
of all mutual claims.
About SemGroup LP
SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream
service company providing the energy industry means to move
products from the wellhead to the wholesale marketplace. SemGroup
provides diversified services for end users and consumers of crude
oil, natural gas, natural gas liquids, refined products and
asphalt. Services include purchasing, selling, processing,
transporting, terminaling and storing energy. SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No.
08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark
D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller,
Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A.
Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors
in their restructuring efforts. Kurtzman Carson Consultants
L.L.C. is the Debtors' claims agent. The Debtors' financial
advisors are The Blackstone Group L.P. and A.P. Services LLC.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act. The CCAA stay expires on
Nov. 21, 2008.
SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts. In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy
News. The newsletter tracks the chapter 11 proceedings undertaken
by SemGroup L.P. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-700)
About SemGroup LP
SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream
service company providing the energy industry means to move
products from the wellhead to the wholesale marketplace. SemGroup
provides diversified services for end users and consumers of crude
oil, natural gas, natural gas liquids, refined products and
asphalt. Services include purchasing, selling, processing,
transporting, terminaling and storing energy. SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No.
08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark
D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller,
Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A.
Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors
in their restructuring efforts. Kurtzman Carson Consultants
L.L.C. is the Debtors' claims agent. The Debtors' financial
advisors are The Blackstone Group L.P. and A.P. Services LLC.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act. The CCAA stay expires on
Nov. 21, 2008.
SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts. In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy
News. The newsletter tracks the chapter 11 proceedings undertaken
by SemGroup L.P. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-700)
SEMGROUP LP: Taps Russell Reynolds as Headhunter
------------------------------------------------
SemGroup L.P., SemCrude L.P., and their debtor affiliates, in
preparation for the filing of their Chapter 11 plan of
reorganization, formed a SemGroup Executive Search Committee --
consisting of three members of the DIP Lenders' steering committee
and two members of the Official Committee of Unsecured Creditors
-- to assist the Debtors in identifying individuals who will serve
as chief executive officer, chief financial officer, and members
of a six-person board of directors of the ultimate parent company,
SemGroup Companies.
Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, says Russell Reynolds has provided similar
services in the Chapter 11 cases Mirant, NRG Energy, Entegra
Power, and Kaiser Aluminum, among other large Chapter 11 cases in
the energy industry.
For the contemplated services, the Debtors will pay Russell
Reynolds:
(a) a flat fee of $300,000 for its successful search of a CEO;
(b) a $150,000 flat fee for a successful search of a CFO;
(c) a $390,000 flat fee for recruiting six members of the
HoldCo board of directors. If more than six directors are
appointed, the Debtors will pay the firm $60,000 for each
additional director appointed;
(d) a $7,500 flat cost recovery for each of the three searches
to cover search-related expenses that are difficult to
allocate to individual projects; and
(e) reimbursement for reasonable out-of-pocket expenses
incurred in connection with the search.
The engagement letter provides that fees are payable in three
equal monthly installments at the initiation of the applicable
assignment and at the beginning of the second and third months
after initiation. A copy of the Russell Reynolds engagement
letter can be accessed at no charge at:
http://bankrupt.com/misc/semgroup_russellreynoldsletter.pdf
The U.S. Bankruptcy Court for the District of Delaware will
consider the Debtors' proposal on June 2, 2009. Objections must
be filed no later than May 26.
About SemGroup LP
SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream
service company providing the energy industry means to move
products from the wellhead to the wholesale marketplace. SemGroup
provides diversified services for end users and consumers of crude
oil, natural gas, natural gas liquids, refined products and
asphalt. Services include purchasing, selling, processing,
transporting, terminaling and storing energy. SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No.
08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark
D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller,
Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A.
Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors
in their restructuring efforts. Kurtzman Carson Consultants
L.L.C. is the Debtors' claims agent. The Debtors' financial
advisors are The Blackstone Group L.P. and A.P. Services LLC.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act. The CCAA stay expires on
Nov. 21, 2008.
SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts. In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy
News. The newsletter tracks the chapter 11 proceedings undertaken
by SemGroup L.P. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-700)
SILICON GRAPHICS: Closes $42.5 Million Asset Sale to Rackable
-------------------------------------------------------------
Silicon Graphics, Inc., said it completed on May 8, 2009, the sale
of substantially all of its assets, excluding certain intellectual
property assets, to Rackable Systems, Inc.
Pursuant to an Asset Purchase Agreement dated March 31, 2009, as
amended, Silicon Graphics sold its assets for $42.5 million in
cash, plus the assumption of certain liabilities associated with
the acquired assets. The Asset Purchase Agreement was approved by
the United States Bankruptcy Court for the Southern District of
New York.
SGI's stockholders will not receive any proceeds in respect of the
sale, nor are they expected to receive proceeds from any other
transactions completed in the course of SGI's Chapter 11
proceedings.
Last week, SGI said it has not prepared financial statements for
the quarter ended March 27, 2009 or otherwise assembled the
information required to prepare its Quarterly Report on Form 10-Q
for the quarter ended March 27, 2009, which was due May 11, 2009.
As a result of the closing of the Asset Purchase Agreement, the
former management team and virtually all of the finance
organization of SGI are no longer employed at SGI, and SGI's
overall staffing has been reduced to a skeleton group headed by a
new chief restructuring officer tasked with overseeing the
completion of the bankruptcy proceeding. As a result, SGI will
not be able without unreasonable effort and expense to file its
Form 10-Q. SGI will file on Form 8-K the monthly operating
reports that it provides to the U.S. Bankruptcy Trustee.
As reported by the Troubled Company Reporter, Doug Britt, Senior
Vice President of Worldwide Sales of SGI, left employment with SGI
on May 7, 2009. The next day, Robert Ewald, Chief Executive
Officer; Gregory S. Wood, Senior Vice President and Chief
Financial Officer; and Timothy Pebworth, Vice President and Chief
Accounting Officer, left employment with SGI. All departures were
in connection with the closing of the Rackable transaction. Mr.
Wood will continue as a consultant with SGI for a transition
period.
About Silicon Graphics Inc.
Headquartered in Sunnyvale, California, Silicon Graphics Inc. --
http://www.sgi.com/-- delivers an array of server, visualization,
and storage software.
This is the second bankruptcy filing for Silicon Graphics. The
Debtors first filed for Chapter 11 on May 8, 2006 (Bankr. S.D.N.Y.
Case Nos. 06-10977 through 06-10990). Gary Holtzer, Esq., and
Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, represent the
Debtors in their restructuring efforts. The Court confirmed
the Debtors' Plan of Reorganization on Sept. 19, 2006. When the
Debtors filed for protection from their creditors, they listed
total assets of $369,416,815 and total debts of $664,268,602.
The Company and 14 of its affiliates filed for protection for the
second time on April 1, 2009 (Bankr. S.D. N.Y. Lead Case No.
09-11701). Mark R. Somerstein, Esq., at Ropes & Gray LLP,
represents the Debtors in their restructuring efforts. The
Debtors proposed AlixPartners LLC as restructuring advisor;
Houlihan Lokey Howard & Zukin Capital, Inc., as financial advisor;
and Donlin, Recano & Company, Inc., as claims and noticing agent.
When the Debtors filed for protection from their creditors, they
listed $390,462,000 in total assets and $526,548,000 in total
debts as of 2008.
SIMPLY MEDIA: 1st Cir. Dismisses Owner's Wife's Frivolous Appeal
----------------------------------------------------------------
Steven M. Notinger, the Chapter 7 Trustee overseeing the
liquidation of the estates of David Deaver Brown and Simply Media,
Inc., sued to recover allegedly fraudulent payments made to
Christina Brown (Mr. Brown's wife), individually and in her
capacity as Trustee of First Marcus Trust, and damages for Mrs.
Brown's participation in an alleged civil conspiracy.
In a jury trial before the Honorable Steven J. McAuliffe in the
United States District Court for the District of New Hampshire,
evidence from Mr. Notinger and his witnesses showed that David and
Christina Brown had formed Simply Media, a company making (or
purporting to make) CDs, and had gotten friends to invest in it
based on fictitious financial statements and a compelling sales
pitch; that the Browns used the invested funds to pay for their
personal expenses over several years including the mortgage on
their home, personal dry cleaning bills, credit card bills, rent
on their daughters' apartments, medical bills, vacation and school
tuition; and that when the funds were exhausted, Simply Media and
Mr. Brown filed for bankruptcy. Based on evidence received at a
pre-trial hearing and Mrs. Brown's trial testimony when called by
Mr. Notinger, Judge McAuliffe sanctioned Mrs. Brown for
deliberately destroying records by precluding her from testifying
as to why the diverted corporate funds constituted legitimate
business expenses. A jury returned a verdict against Mrs. Brown
for $1,103,508.60 on the fraudulent transfer claim and $2,968,071,
later reduced to $1,648,000, on the civil conspiracy claim.
Mrs. Brown appealed to the United States Court of Appeals for the
First Circuit (No. 08-2275), arguing that:
(1) positions taken by Mr. Notinger in other litigation
against former board members of Simply Media, after the
jury returned a verdict in this case, were inconsistent
with his positions in this litigation;
(2) the New Hampshire Business Corporation Act, N.H. Rev.
Stat. Ann. Sec. 293-A:1.01 et seq. (2009), authorized the
payments, which could be regarded as serving business
ends; and
(3) the spoliation sanction for deliberate destruction of
evidence imposed by the district court was error.
Finding that Mrs. Brown's brief failed to contain "a statement of
facts relevant to the issues submitted for review with appropriate
references to the record" and an argument "with citations to the
authorities and parts of the record on which the appellant relies"
as required by Rule 28 of the Federal Rules of Appellate
Procedure, a three-judge panel dismissed Mrs. Brown's appeal.
Additionally, the three-judge panel directed James V. Tabner,
Esq., Mrs. Brown's counsel, to show cause by written response "as
to why the court should not order payment by him personally of
attorney's fees and double costs for needlessly consuming the time
of the court and opposing counsel with a brief that renders the
appeal frivolous."
SOS LLC: Case Summary & 11 Largest Unsecured Creditors
------------------------------------------------------
Debtor: SOS, LLC
266f Reservation Rd
Suite 336
Marina, CA 93933
Bankruptcy Case No.: 09-53789
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
Northern District of California (San Jose)
Debtor's Counsel: Elaine M. Seid, Esq.
McPharlin, Sprinkles and Thomas
10 Almaden Blvd. #1460
San Jose, CA 95113
Tel: (408) 293-1900
Email: emseid@mstpartners.com
Estimated Assets: $1,000,001 to $100,000,000
Estimated Debts: $1,000,001 to $100,000,000
A full-text copy of the Debtor's petition, including a list of its
11 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/canb09-53789.pdf
The petition was signed by Steve Schroeder, managing member of the
Company.
SPORTS BELLE: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Sports Belle, Inc.
PO Box 50243
Knoxville, TN 37950
Bankruptcy Case No.: 09-32782
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
Eastern District of Tennessee (Knoxville)
Debtor's Counsel: Thomas Lynn Tarpy, Esq.
Hagood, Tarpy & Cox PLLC
Suite 2100
Riverview Tower
900 South Gay Street
Knoxville, TN 37902-1537
Tel: (865) 525-7313
Email: ltarpy@htandc.com
Total Assets: $7,457,888
Total Debts: $969,917
A list of the Company's 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/tneb09-32782.pdf
The petition was signed by Jesse C. Lee, president of the Company.
STANFORD GROUP: Antiguan Receivers Allowed to File Ch. 15 Petition
------------------------------------------------------------------
According to Bloomberg News, Judge David Godbey of the U.S.
District Court for the Northern District of Texas, who is
overseeing the receivership resulting from the alleged $8 billion
fraud by R. Allen Stanford, has issued an order allowing the
Antiguan receivers for Stanford International Bank Ltd. to file a
Chapter 15 petition in his court in Dallas.
Chapter 15 of U.S. Bankruptcy Code is designed to block U.S.
lawsuits against foreign companies with U.S. operations while they
reorganize overseas.
"The court finds the Antiguan receivers have shown good cause to
be granted leave" to file their petition, Judge Godbey wrote in a
May 15 order, without saying whether that petition would be
granted, according to Bloomberg. The ruling reverses a prior
decision that only his appointed receiver had authority to seek
bankruptcy relief.
Ralph S. Janvey was appointed by the Dallas Court on Feb. 16,
2009, as receiver of SIBL and its units and was ordered to take
possession of all the assets and records of SIBL, its units and
its executives. However, a court in Antigua has also appointed
liquidators for Stanford's assets in the Carribean. Nigel
Hamilton-Smith and Peter Wastell of Vantis Plc were appointed as
liquidators of the Stanford bank by Judge David Courtenay Harris,
a member of the High Court of Justice for Antigua and Barbuda, a
part of the nine-nation Eastern Caribbean Supreme Court.
According to Bloomberg, Ralph Janvey had opposed intervention in
the case by his Antiguan counterparts. Mr. Janvey's lawyer, Kevin
Sadler, has argued Wastell and Hamilton-Smith were acting at the
behest of the Antiguan government, which Mr. Sadler said owes the
Stanford bank $140 million.
Although all of SIBL's financial operations, including CD sales,
were controlled and managed from Stanford's offices in the U.S.,
it was domiciled in the Caribbean island nation of Antigua and
Barbuda. It appears that SIBL may have been established in
Antigua in order to take advantage of Antiguan bank secrecy laws
and to minimize regulatory inspection, says Mr. Janvey has said in
papers submitted to the District Court.
The Antiguan Liquidators noted in a document posted in Vantis' Web
site that while Mr. Janvey has insisted that the U.S. should be
the center of Stanford's liquidation proceedings, they insist that
centre of main interest ("COMI") for SIB is Antigua. Messrs.
Smith and Wastell acknowledges that the decision on where COMI
rests is important in the recovery and distribution of the assets
of SIB. "As part of our role in recovering the assets of SIB we
have issued COMI recognition applications in the United Kingdom,
Switzerland, Canada and the United States. Those applications
have been challenged by the US Receiver," the Antiguan Liquidators
pointed out.
U.S. Operations Shut By Receiver
Ralph S. Janvey, receiver for the Stanford Companies, performed a
study of whether any of the Stanford companies were financially
viable -- and thus could continue to be operated and perhaps sold
as going businesses. In his April 23 report, he said that
analysis of Stanford's financial records and operational data
revealed that all the major Stanford U.S. financial businesses
depended upon continued sales of certificates of deposit (CDs)
and/or other allegedly fraudulent activities.
Mr. Janvey noted that, while to the outside world, the Stanford
financial businesses appeared to be independently viable, the
principal purpose and focus of most of the combined operations was
to attract and funnel outside investor funds into the Stanford
companies through the sale of CDs issued by Stanford's offshore
entity SIBL. Stanford's financial statements show that the low
third party revenue and high cost structures of the U.S. broker
dealer and related financial operations were not capable of
sustaining freestanding operations without the revenue they
received upon their sale of SIBL CDs, as well as the infusion of
investment capital, all or most substantially all of which was
derived from CD sales.
Stanford's records reflect that from at least 2005 forward, SIBL
generally paid Stanford Group Company a commission or fee of
approximately 3% of the face amount of each CD sold by Stanford
Group Company. These commissions were instrumental to the
maintenance and viability of Stanford Group Company's operations,
constituting 39% of its total revenues of $246 million in 2008.
Even with that infusion of funds, growth of the business required
additional investment capital, which was generally obtained from
the sale of CDs by SIBL.
Therefore, the Receiver determined that almost all U.S. business
operations should be ceased to reduce the ongoing costs of
unprofitable operations. This necessitated, among other things:
-- The termination of employment of more than 1,000 U.S.
employees on March 6, 2009.
-- The permanent closure of 36 offices in leased locations in
33 U.S. cities. Before physically closing each office, the
representatives of the Receiver have:
* allowed local employees to collect personal belongings;
* packed all documentary and electronic evidence and
shipped it to a single warehouse in Houston; and
* liquidated or otherwise disposed of furniture and other
fixed assets in a manner that maximizes value to the
Estate.
--?Termination or rejection of each lease. A lease is
"terminated" if the landlord agrees to termination without
further liability on the part of the Estate other than as
documented in a termination agreement. The Receiver is
unilaterally "rejecting" the remainder of the leases. The
Receiver has sent notice of such rejections so that the
Estate's ongoing obligation to pay rent for these leases
will cease no later than April 30, 2009.
About Stanford Group
Stanford companies operated by selling certificates of deposit in
more than 100 discrete locations spanning 15 states in the United
States and 13 countries in Europe, the Caribbean, Canada and Latin
America. Stanford claimed to have more than 30,000 clients located
in 133 countries.
Domiciled in Antigua, Stanford International Bank Limited --
http://www.stanfordinternationalbank.com/-- is a member of
Stanford Private Wealth Management, a global financial services
network with US$51 billion in deposits and assets under management
or advisement. Stanford Private Wealth Management serves more
than 70,000 clients in 140 countries.
* * *
The Securities and Exchange Commission, on February 17, charged
Mr. Stanford and three of his companies for orchestrating a
fraudulent, multi-billion dollar investment scheme centering on an
US$8 billion Certificate of Deposit program. Mr. Stanford's
companies include SIBL, Stanford Group Company, and investment
adviser Stanford Capital Management. As reported in the Troubled
Company Reporter-Latin America on April 8, 2009, Bloomberg News
said U.S. District Judge David Godbey seized all of Mr. Stanford's
corporate and personal assets and placed them under the control of
court-appointed SGC receiver Ralph Janvey.
Ralph S. Janvey was appointed on February 16, 2009, by the United
States District Court for the Northern District of Texas to take
possession of all the assets and records of Stanford International
Bank, Ltd., Stanford Group Company, Stanford Capital Management,
LLC, R. Allen Stanford, James M. Davis, and Laura Pendergest-Holt
and of all entities they own or control.
STANFORD GROUP: Less Than $1-Bil. Available to Pay $7.2B Deposits
-----------------------------------------------------------------
Nigel Hamilton-Smith and Peter Wastell, liquidators and receiver-
managers of Stanford International Bank in Antigua, sent letters
to all investors of SIB, setting out their initial findings in
relation to the actions that have been taken both as receiver-
managers and liquidators, and their initial views on the financial
position of SIB.
According to Messrs. Smith and Wastell, records indicated that as
of February 19, 2009 the Bank had 27,992 active clients.
Including accrued interest to February 19, 2009 the Bank's records
indicate a total of US$7.2 billion is owed to depositors.
"Since our appointment we have been seeking to confirm the true
value of the Bank's assets," the Liquidators say. They estimate
that SIB has these assets:
* Cash assets -- US$46 million
* Assets held by financial institutions -- US$472 million
* Sums invested / loaned to corporations -- US$470 million
* Tracing claims -- uncertain
"Total asset values could therefore be below US$1 billion against
depositor liabilities of US$7.2 billion," Messrs. Smith and
Wastell say. The Liquidators though have not yet tallied all
claims against Stanford. It said that its online claims
management system will be operational by June 30, 2009, and will
be available at http://www.vantisplc.com/Stanford
The assets they have identified include:
-- As of close of business on Wednesday, February 18, 2009,
SIB's records detailed the cash balances being held of
US$46 million with monies being held in Antigua, Canada,
United Kingdom and the United States.
-- Significant amounts of paperwork detail accounts with
financial institutions and corporations where it would
appear that SIB had invested monies:
* Paperwork shows assets, which include equities, bonds,
private equity investments and cash, being held with
financial institutions up to a maximum value of US$472
million, although these values have to be confirmed.
* Reporting schedules from Stanford Group Company the
latest being December 31, 2008, showed 17 different
equity investments managed on behalf of SIB totaling
US$365 million and loans to 7 companies of a further
US$105 million, although these values, according to the
Liquidators, may have been significantly inflated.
* The last return submitted to the Antiguan Financial
Services Regulatory Commission in September 2008
detailed that other Stanford entities held in excess of
US$4 billion on behalf of SIB. Initial responses
received from the US Receiver indicate that they have
been unable to confirm any monies being held on behalf
of SIB.
-- According to its balance sheet, SIB has non investment
assets valued at US$6.2 million, which include:
* The freehold property at 1000 Airport Boulevard,
Coolidge, St John's, Antigua which is occupied by Bank
of Antigua;
* A further 3 small parcels of land in Antigua;
* Office furniture and IT equipment within the Bank's
head office at No.11 Pavillion Drive, St John's,
Antigua, the office furniture and IT equipment in
Montreal, Canada; and
* A number of motor vehicles.
According to the Liquidators, Swiss financial institutions have
refused to release information without an order of the Swiss
Court. The Liquidators have made the required applications to the
Swiss Court to obtain full disclosure of assets held on behalf of
SIB.
Messrs. Smith and Wastell were appointed receiver-managers Feb. 19
and liquidators on April 16. They say their appointment arose
because of the restraining order obtained by the U.S. Securities
and Exchange Commission in the United States of America which
meant that SIB no longer had access to its bank accounts (which
were held in a number of countries including Canada, Switzerland,
the United Kingdom, Panama and the United States) to continue its
operations. Separately SIB was in receipt of significant volumes
of e-mails, telephone calls and personal visits from depositors
seeking confirmation that their investments were safe and, in many
instances, seeking the withdrawal of their funds which could not
be processed.
About Stanford Group
Stanford companies operated by selling certificates of deposit in
more than 100 discrete locations spanning 15 states in the United
States and 13 countries in Europe, the Caribbean, Canada and Latin
America. Stanford claimed to have more than 30,000 clients located
in 133 countries.
Domiciled in Antigua, Stanford International Bank Limited --
http://www.stanfordinternationalbank.com/-- is a member of
Stanford Private Wealth Management, a global financial services
network with US$51 billion in deposits and assets under management
or advisement. Stanford Private Wealth Management serves more
than 70,000 clients in 140 countries.
* * *
The Securities and Exchange Commission, on February 17, charged
Mr. Stanford and three of his companies for orchestrating a
fraudulent, multi-billion dollar investment scheme centering on an
US$8 billion Certificate of Deposit program. Mr. Stanford's
companies include SIBL, Stanford Group Company, and investment
adviser Stanford Capital Management. As reported in the Troubled
Company Reporter-Latin America on April 8, 2009, Bloomberg News
said U.S. District Judge David Godbey seized all of Mr. Stanford's
corporate and personal assets and placed them under the control of
court-appointed SGC receiver Ralph Janvey.
Ralph S. Janvey was appointed on February 16, 2009, by the United
States District Court for the Northern District of Texas to take
possession of all the assets and records of Stanford International
Bank, Ltd., Stanford Group Company, Stanford Capital Management,
LLC, R. Allen Stanford, James M. Davis, and Laura Pendergest-Holt
and of all entities they own or control.
Nigel Hamilton-Smith and Peter Wastell of Vantis Plc were
appointed as liquidators and receiver-managers of the Stanford
bank by the High Court of Justice for Antigua and Barbuda.
STAR TRIBUNE: Seeks to Reject Drivers/Helpers Union CBA
-------------------------------------------------------
Star Tribune Holdings Corporation and The Star Tribune Company are
asking the U.S. Bankruptcy Court for the District of Delaware for
permission to reject their collective bargaining agreement with
the miscellaneous drivers and helpers union.
The Debtors are also filed with the Court a memorandum of law in
support of their rejection request that they planned to file under
seal to protect the estate.
The Debtors tell the Court that the chances for emerging from
bankruptcy as a viable business will be placed in great doubt if
they are unable to reject the agreement. If they failed to reject
the agreement, they have to liquidate of which withdrawal
liability will be paid in a liquidating plan or a Chapter 7
trustee, the Debtors lament.
The Court has not set a date to consider the Debtors' rejection
request but objections, if any, are due May 27, 2009, at 5:00 p.m.
A full-text copy of the Debtors' redacted memorandum of law in
support to their request is available for free at:
http://ResearchArchives.com/t/s?3d0b
Headquartered in Minneapolis, Minnesota, The Star Tribune Company
-- http://www.startribune.com/-- operates the largest newspaper
in the U.S. state of Minnesota and published seven days each week
in an edition for the Minneapolis-Saint Paul metropolitan area.
The Company and its affiliate, Star Tribune Holdings Corporation,
filed for Chapter 11 protection on January 15, 2009 (Bankr. S.D.
N.Y. Lead Case No. 09-10245). Marshall Scott Huebner, Esq., James
I. McClammy, Esq., and Lynn Poss, Esq., at Davis Polk & Wardwell,
represent the Debtors in their restructuring efforts. Blackstone
Advisory Services L.P. is the Debtors' financial advisor. Diana
G. Adams, the U.S. Trustee for Region 2, selected seven members to
the official committee of unsecured creditors in the Debtors'
Chapter 11 cases. Scott Cargill, Esq., and Sharon L. Levine,
Esq., at Lowenstein Sandler PC, represents the Committee as
counsel. When the Debtors filed for protection from their
creditors, they listed assets and debts between
$100 million and $500 million each.
* * *
The Court has extended the Debtors' exclusive periods to file a
plan of reorganization until August 13, 2009.
STERLING FINANCIAL: Fitch Downgrades Issuer Default Rating to 'BB'
------------------------------------------------------------------
Fitch Ratings downgraded Sterling Financial Corporation's ratings
to reflect elevated levels of nonperforming loans, recent poor
operating performance and the prospect for continued losses for
the remainder of 2009. The long-term and short-term Issuer
Default Ratings of STSA and its subsidiaries were downgraded to
'BB' and 'B', respectively. The Outlook is Negative.
Fitch has taken these rating actions on Sterling Financial
Corporation:
-- Long-term IDR downgraded to 'BB' from 'BBB-';
-- Short-Term IDR downgraded to 'B' from 'F3';
-- Individual Rating downgraded to 'D' from 'C';
-- Preferred Stock downgraded to 'B' from 'BB+';
-- Support affirmed at '5';
-- Support Floor affirmed at 'NF'.
Fitch placed STSA's ratings on Watch Negative in January 2009,
after the announcement of its 2008 results. Subsequently, first-
quarter 2009 operating performance showed continued pressure on
profitability from escalated credit costs. The largest credit
risks and losses are emanating from the construction and
acquisition and development portfolios. Excluding construction
loans, credit quality metrics have remained relatively stable.
Nevertheless, with construction loans representing 79% of its
nonperforming loan book, Fitch believes a quick recovery in
operating performance and asset quality metrics is unlikely in the
near term. With this said, Fitch recognizes actions management
has taken to realize losses inherent in the construction
portfolio. Over the last six months, management charged off $248
million of loans to reflect current market value of underlying
collateral. Taking this into consideration, the adjusted ratio of
reserves to NPLs at March 31, 2009 is 86.4% compared to the
reported 36.6%.
STSA's capital and liquidity position have improved over the last
18 months. As a participant in the U.S. Treasury's Capital
Purchase Program, it sold $303 million of preferred stock in late
2008. To further maintain and build capital, the dividend on its
common stock was suspended in January 2009. At March 31, 2009,
Tier 1 capital stood at 11.7%; however, tangible common equity
capital has declined to 4.78%, a ratio likely to remain under
pressure as losses continue to be recognized. The liquidity
position has also been enhanced by deposit inflows and a notable
decline in end-of-period loan balances. While the deterioration
of credit metrics is a leading factor in the downgrade, capital
maintenance and liquidity management have placed STSA in an
adequate position to weather the unprecedented stress on operating
performance from the high level of NPAs. Profitability in 2008
was largely affected by elevated provisions to the loan loss
reserve and goodwill impairment. Further, in first-quarter 2009,
continued provisioning for loan losses was the driver of the
reported loss. On a positive note, the net interest margin
expanded 17 basis points (bps) due to favorable shifts in its
deposit base which reduced the overall cost of funding.
The Negative Outlook reflects uncertainty in the severity of
further declines in real estate values and its impact on
profitability and capital metrics. If further degradation of real
estate values comes to pass, the losses STSA may recognize will
continue to hamper efforts to work through problem loans and
stabilize operating performance. A declining trend to capital
ratios in tandem with an escalation of losses from its loan
portfolios may necessitate additional rating action.
In addition, Fitch has taken this rating action on STSA's affected
subsidiaries:
Sterling Savings Bank
-- Long-term IDR downgraded to 'BB' from 'BBB-';
-- Long-term Deposits downgraded to 'BB+' from 'BBB';
-- Short-Term IDR downgraded to 'B' from 'F3';
-- Short-Term Deposits downgraded to 'B' from 'F3';
-- Individual Rating downgraded to 'D' from 'C';
-- Support affirmed at '5';
-- Support Floor affirmed at 'NF'.
STEVE MAKI: Voluntary Chapter 11 Case Summary
---------------------------------------------
Joint Debtors: Steve Maki
aka Stephen A. Maki
dba Riverwalk Apartments
dba Cancun Palace
dba Los Robles Apartments
dba Maki Properties
dba Orangevale Apartments
Christy Dawn Maki
aka Christy D. Laframboise
PO Box 1625
Rocklin, CA 95677
Bankruptcy Case No.: 09-29876
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
Eastern District of California (Sacramento)
Judge: Christopher M. Klein
Debtors' Counsel: Paul R. Bartleson, Esq.
1007 7th St #214
Sacramento, CA 95814
Tel: (916) 447-6640
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
The Debtors did not file a list of their 20 largest unsecured
creditors when they filed their petition.
The petition was signed by the Joint Debtors.
STOCK BUILDING: Will Lay Off 2,200 Workers & Cancel 210 Leases
--------------------------------------------------------------
Court documents say that Stock Building Supply Holdings LLC will
lay off as many as 2,200 workers of its 7,220 and cancel about 210
additional lumberyard and showroom leases.
The new round of restructuring will be needed to keep Stock
Building out of liquidation, Lee Weisbecker Contributor at
Business First of Louisville reports, citing lawyers representing
the Company.
Business First quoted Stock Building spokesperson Giovanna Konicke
as saying, "We are not commenting about specific locations at this
point. We are in the process of notifying employees."
Business First relates that Stock Building filed a notice with the
state in October 2008 that it would close its showroom and
lumberyard in La Grange, as part of a restructuring that resulted
in the closure of 86 facilities.
According to Business First, the Gores Group purchased 51% of
Stock Building, fka Carolina Builders, from Wolseley PLC on May 6,
2009. The report states that as agreed, Stock Building filed for
Chapter 11 reorganization to satisfy its creditors. Gores, says
the report, will recapitalize Stock Building through the injection
of $75 million worth of preferred stock and a line of credit
totaling $125 million. The report quoted the Stock Building's
lawyers as saying, "Without the recapitalization contemplated by
the plan and additional investments from Gores, the business can't
continue as a going concern," and the Company aims to preserve
5,000 jobs in its restructuring effort.
Headquartered in Raleigh, North Carolina, Stock Building Supply
Holdings LLC -- http://www.stockbuildingsupply.com/-- supplies
building products to builders, contractors and other customers in
the United States. The Company and 25 of its affiliates filed for
Chapter 11 protection on May 6, 2009 (Bankr. D. Del. Lead Case No.
09-11554). Shearman & Sterling LLP and Young, Conaway, Stargatt &
Taylor, represent the Debtors in their restructuring efforts. The
Debtors selected FTI Consulting as restructuring consultant. When
the Debtors' sought for protection from their creditors, they
listed assets between $50 million and $100 million, and debts
between $10 million and $50 million.
SYNCORA HOLDINGS: Unit Files Q1 Statutory Financial Statements
--------------------------------------------------------------
Syncora Guarantee Inc. filed on May 18, 2009, financial statements
in accordance with statutory accounting principles, as prescribed
and permitted in the State of New York, as of and for the three
months ending March 31, 2009, with the New York Insurance
Department.
As an entity regulated by the NYID, Syncora Guarantee is required
to prepare its financial statements in accordance with SAP
prescribed or permitted by the NYID, which differs materially from
accounting principles generally accepted in the United States. In
particular, in accordance with SAP, Syncora Guarantee's guarantees
of credit default swap contracts are accounted for as insurance
contracts and appropriate recognition in Syncora Guarantee's SAP
basis financial statements is provided for Syncora Guarantee's
best estimate of its ultimate losses and loss adjustment expenses
associated with claims on such insurance contracts, whereas under
GAAP Syncora Guarantee's guarantees of CDS contracts are accounted
for as derivative contracts and are reported at fair value. Under
GAAP, reserves for unpaid losses and loss adjustment expenses are
not recognized on such derivative contracts.
In addition, under New York State law, Syncora Guarantee is
required to maintain minimum policyholders' surplus, determined in
accordance with SAP, of at least $65 million. However, on May 18,
2009, Syncora Guarantee filed its March 31, 2009 Quarterly
Statement with the NYID, which included its unaudited SAP
financial statements, and reported therein a policyholders'
deficit at March 31, 2009, determined in accordance with SAP, of
approximately $3.8 billion. This failure to maintain positive
statutory policyholders' surplus and non-compliance with the
statutory minimum policyholders' surplus requirement permits the
NYID to intervene in Syncora Guarantee's operations and seek court
appointment as rehabilitator or liquidator of Syncora Guarantee.
An unaudited summary balance sheet data of Syncora Guarantee as of
March 31, 2009:
($ amounts in millions) As of 03/31/09
----------------------- --------------
Assets:
Bonds $1,145
Cash 2,035
Other assets 229
Total assets $3,410
Liabilities:
Losses and loss adjustment expenses $6,177
Unearned premiums 723
Mandatory contingency reserves 286
Other liabilities 62
Total liabilities $7,248
Policyholders' deficit (3,838)
Total liabilities and policyholders' deficit $3,410
About Syncora Holdings
Based in Hamilton, Bermuda, Syncora Holdings Ltd., formerly
Security Capital Assurance Limited, is a holding company whose
operating subsidiaries provide financial guarantee insurance,
reinsurance, and other credit enhancement products to the public
finance and structured finance markets throughout the United
States and internationally. The Company's businesses consists of
Syncora Guarantee Inc. (formerly XL Capital Assurance Inc.) and
its wholly owned subsidiary, XL Capital Assurance (U.K.) Limited
(XLCA-UK) and Syncora Guarantee Re Ltd. (formerly XL Financial
Assurance Ltd.). The segments of the Company are financial
guarantee insurance and financial guarantee reinsurance. The
financial guarantee insurance segment offers financial guarantee
insurance policies and credit-default swaps (CDS) contracts. The
financial guarantee reinsurance segment reinsures financial
guarantee policies and CDS contracts issued by other monoline
financial guarantee insurance companies.
Junk Ratings
Prior to the first quarter of 2008, the Company had maintained
triple-A ratings from Moody's, Fitch and S&P, and these ratings
had been fundamental to its historical business plan and business
activities. However, in response to the deteriorating market
conditions, the rating agencies updated their analyses and
evaluations of the financial guarantee insurance industry
including the Company. As a result, the Company's IFS ratings
have been downgraded by the rating agencies and the rating
agencies have placed its IFS ratings on creditwatch/ratings watch
negative or on review for further downgrade. Consequently, the
Company suspended writing substantially all new business in
January 2008.
On March 9, 2009, Moody's downgraded to "Ca" from "Caa1" the IFS
ratings of Syncora Guarantee and Syncora Guarantee-UK, with the
ratings placed on developing outlook, and on January 29, 2009, S&P
downgraded to "CC" from "B" the IFS ratings of Syncora Guarantee
and Syncora Guarantee-UK, with the ratings placed on negative
outlook. Effective August 27, 2008, the Company terminated the
agreement for the provision of ratings with Fitch. Since it has
suspended writing substantially all new business, the Company
believes ratings from two agencies are sufficient. Moody's, S&P
and Fitch have also downgraded the Company's debt and other
ratings.
The rating agency actions reflect Moody's, S&P's and Fitch's
current assessment of the Company's creditworthiness, business
franchise and claims-paying ability. This assessment reflects the
Company's direct and indirect exposures to the U.S. residential
mortgage market, which has precipitated its weakened financial
position and business profile based on increased reserves for
losses and loss adjustment expenses, realized and unrealized
losses on credit derivatives and modeled capital shortfalls.
$2.4 Billion Policyholders' Deficit
As reported by the Troubled Company Reporter on March 17, 2009,
Syncora Guarantee has reported a policyholders' deficit of
$2.4 billion as of December 31, 2008. Failure to maintain
positive statutory policyholders' surplus or non-compliance with
the statutory minimum policyholders' surplus requirement permits
the New York Superintendent of Insurance to seek court appointment
as rehabilitator or liquidator of Syncora Guarantee.
As a result of this material adverse development, and in
accordance with the Company's strategic plan, effective as of
March 5, 2009, Syncora Guarantee signed a non-binding letter of
intent with certain of the Counterparties whereby the parties
agreed to negotiate in good faith to seek to promptly agree on
mutually agreeable definitive documentation, in the form of a
master transaction agreement and related agreements. In addition,
pursuant to the RMBS Transaction Agreement, dated as of March 5,
2009, on March 11, 2009, the fund referenced therein commenced a
tender offer to acquire certain residential mortgage-backed
securities that are insured by Syncora Guarantee. The 2009 MTA and
tender offer represent the principal elements of the second phase
of the Company's strategic plan.
As of Dec. 31, 2008, Syncora Guarantee has $3.90 billion in
assets, and debts of $3.17 billion, according to its Annual Report
on Form 10-K. The Company reported a $1.42 billion net loss for
year 2008. A full-text copy of the Company's Annual Report is
available at no charge at http://ResearchArchives.com/t/s?3b59
PricewaterhouseCoopers LLP in New York in its audit report says
there is substantial doubt about the Company's ability to continue
as a going concern.
SYNCORA HOLDINGS: BCP Unveils May 15 Results of Tender Offer
------------------------------------------------------------
The BCP Voyager Master Funds SPC, Ltd., acting on behalf of and
for the account of, the Distressed Opportunities Master Segregated
Portfolio, said Monday that in its offer for 56 classes of
residential mortgage backed securities insured by Syncora
Guarantee Inc. as of May 15, 2009, RMBS securities have been
tendered into the offer in the amounts stated:
Aggregate
Principal
Balance in
US$ Tendered
CUSIP No. Security Description as of 05/15/09
--------- -------------------- --------------
39539BAA1 Greenpoint Mortgage
Funding Trust
2006-HE1 33,382,839
126685DT0 Countrywide Home
Equity Loan Trust
2006D 80,898,196
39539JAA4 GreenPoint Mortgage
Funding Trust
2007-HE1 -
45664UAA3 Indymac Home Equity
Mortgage Loan Asset
Backed Trust Series
2006-H3 15,161,480
86801CAA1 STICS 2007-1 331,860
65538BAA7 Nomura NAAC 2007-S2 -
41161PL35 Harborview Mortgage
Pass-Through
Certificates 2006-4 94,469,790
12668VAC3 Countrywide Home
Equity Loan Trust
2006-S7 34,712,000
126685DS2 Countrywide Home
Equity Loan Trust
2006D -
1248MKAB1 C-BASS Mortgage Loan
Asset-Backed
Certificates, Series
2007-SL1 30,369,037
41161MAB6 Harborview Mortgage
Pass-Through
Certificates Series
2006-5 -
12587PEM8 BSSP 2007-R5 (Bear
Stearns) 77,837,319
126685AT3 CWABS, Home Equity
Revolving Loan Trust
2005-K -
12668VAF6 Countrywide Home
Equity Loan Trust
2006-S7 -
52524PBT8 Lehman XS Trust,
Series 2007-6 3,175,334
12668VAE9 Countrywide Home
Equity Loan Trust
2006-S7 -
785778QA2 SACO I Trust 2006-1 10,923,492
12668VAB5 Countrywide Home
Equity Loan Trust
2006-S7 10,000,000
07401UAB9 Bear Stearns Second
Lien Trust 2007-SV1 10,000,000
126685AU0 CWABS, Home Equity
Revolving Loan Trust
2005-K 9,648,005
126673QB1 Countrywide Home
Equity Loan Trust
2004R 27,781,824
456612AE0 Indymac Indx Mortgage
Loan Trust 2006-AR6 36,721,979
12668VAD1 Countrywide Home
Equity Loan Trust
2006-S7 -
52524TAS3 Lehman XS Trust,
Series 2007-8H 56,484,371
12668VAA7 Countrywide Home
Equity Loan Trust
2006-S7 14,200,689
41161PL68 Harborview Mortgage
Pass-Through
Certificates 2006-4 -
1248MKAA3 C-BASS Mortgage Loan
Asset-Backed
Certificates, Series
2007-SL1 -
30248EAA6 First Franklin
Mortgage Loan Trust
Series 2007-FFB-SS 86,037,468
75114GAB5 RALI 2006-QO4 Trust -
525248BL3 Lehman XS Trust,
Series 2007-5H -
41161PE41 Harborview Mortgage
Pass-Through
Certificates
2006-CB1 -
75114GAE9 RALI 2006-QO4 Trust -
41161PQ22 Harborview Mortgage
Pass-Through
Certificates 2006-4 -
126685AX4 CWABS, Home Equity
Revolving Loan Trust
2005-K -
456612AB6 Indymac Indx Mortgage
Loan Trust 2006-AR6 -
525248BK5 Lehman XS Trust,
Series 2007-5H -
68402SAE9 Option One Mortgage
Loan Trust 2007-HL1 -
23332UGP3 Downey Savings and
Loan Mortgage Trust
Series 2006-AR1 -
41161PP72 Harborview Mortgage
Pass-Through
Certificates 2006-4 -
126673QA3 Countrywide Home
Equity Loan Trust
2004R -
23332UGL2 Downey Savings and
Loan Mortgage Trust
Series 2006-AR1 -
126673MY5 Countrywide Home
Equity Loan Trust
2004Q 14,955,895
126685AW6 CWABS, Home Equity
Revolving Loan Trust
2005-K 94,058
07401UAU7 Bear Stearns Second
Lien Trust 2007-SV1 -
41161PG64 Harborview Mortgage
Loan Trust 2006-BU1 -
68402SAA7 Option One Mortgage
Loan Trust 2007-HL1 -
41161PXG3 Harborview Mortgage
Loan Trust 2005-15 -
86363GBS2 Structured Adjustable
Rate Mortgage Loan
Trust, Series 2007-3 -
126673MX7 Countrywide Home
Equity Loan Trust
2004Q -
41161PUM3 Harborview Mortgage
Pass-Through
Certificates 2005-11 -
525245CP9 Lehman XS Trust,
Series 2007-3 -
41161PG98 Harborview Mortgage
Loan Trust 2006-BU1 -
68402SAD1 Option One Mortgage
Loan Trust 2007-HL1 -
41161PUJ0 Harborview Mortgage
Pass-Through
Certificates 2005-11 -
68402SAC3 Option One Mortgage
Loan Trust 2007-HL1 -
68402SAB5 Option One Mortgage
Loan Trust 2007-HL1 165,703
The offer is being conducted only with qualified institutional
buyers and is exempt from registration under Section 4(2) of the
Securities Act of 1933, as amended. The certificates that may be
issued pursuant to the consent option in the offer have not been
and, at the time of the closing of the transaction, will not be
registered under the Securities Act or any state securities laws.
The certificates may not be offered or sold in the United States
absent registration under, or an applicable exemption from, the
registration requirements of the Securities Act and applicable
state securities laws.
About Syncora Holdings
Based in Hamilton, Bermuda, Syncora Holdings Ltd., formerly
Security Capital Assurance Limited, is a holding company whose
operating subsidiaries provide financial guarantee insurance,
reinsurance, and other credit enhancement products to the public
finance and structured finance markets throughout the United
States and internationally. The Company's businesses consists of
Syncora Guarantee Inc. (formerly XL Capital Assurance Inc.) and
its wholly owned subsidiary, XL Capital Assurance (U.K.) Limited
(XLCA-UK) and Syncora Guarantee Re Ltd. (formerly XL Financial
Assurance Ltd.). The segments of the Company are financial
guarantee insurance and financial guarantee reinsurance. The
financial guarantee insurance segment offers financial guarantee
insurance policies and credit-default swaps (CDS) contracts. The
financial guarantee reinsurance segment reinsures financial
guarantee policies and CDS contracts issued by other monoline
financial guarantee insurance companies.
Junk Ratings
Prior to the first quarter of 2008, the Company had maintained
triple-A ratings from Moody's, Fitch and S&P, and these ratings
had been fundamental to its historical business plan and business
activities. However, in response to the deteriorating market
conditions, the rating agencies updated their analyses and
evaluations of the financial guarantee insurance industry
including the Company. As a result, the Company's IFS ratings
have been downgraded by the rating agencies and the rating
agencies have placed its IFS ratings on creditwatch/ratings watch
negative or on review for further downgrade. Consequently, the
Company suspended writing substantially all new business in
January 2008.
On March 9, 2009, Moody's downgraded to "Ca" from "Caa1" the IFS
ratings of Syncora Guarantee and Syncora Guarantee-UK, with the
ratings placed on developing outlook, and on January 29, 2009, S&P
downgraded to "CC" from "B" the IFS ratings of Syncora Guarantee
and Syncora Guarantee-UK, with the ratings placed on negative
outlook. Effective August 27, 2008, the Company terminated the
agreement for the provision of ratings with Fitch. Since it has
suspended writing substantially all new business, the Company
believes ratings from two agencies are sufficient. Moody's, S&P
and Fitch have also downgraded the Company's debt and other
ratings.
The rating agency actions reflect Moody's, S&P's and Fitch's
current assessment of the Company's creditworthiness, business
franchise and claims-paying ability. This assessment reflects the
Company's direct and indirect exposures to the U.S. residential
mortgage market, which has precipitated its weakened financial
position and business profile based on increased reserves for
losses and loss adjustment expenses, realized and unrealized
losses on credit derivatives and modeled capital shortfalls.
$2.4 Billion Policyholders' Deficit
As reported by the Troubled Company Reporter on March 17, 2009,
Syncora Guarantee has reported a policyholders' deficit of
$2.4 billion as of December 31, 2008. Failure to maintain
positive statutory policyholders' surplus or non-compliance with
the statutory minimum policyholders' surplus requirement permits
the New York Superintendent of Insurance to seek court appointment
as rehabilitator or liquidator of Syncora Guarantee.
As a result of this material adverse development, and in
accordance with the Company's strategic plan, effective as of
March 5, 2009, Syncora Guarantee signed a non-binding letter of
intent with certain of the Counterparties whereby the parties
agreed to negotiate in good faith to seek to promptly agree on
mutually agreeable definitive documentation, in the form of a
master transaction agreement and related agreements. In addition,
pursuant to the RMBS Transaction Agreement, dated as of March 5,
2009, on March 11, 2009, the fund referenced therein commenced a
tender offer to acquire certain residential mortgage-backed
securities that are insured by Syncora Guarantee. The 2009 MTA
and tender offer represent the principal elements of the second
phase of the Company's strategic plan.
As of December 31, 2008, Syncora Guarantee has $3.90 billion in
assets, and debts of $3.17 billion, according to its Annual Report
on Form 10-K. The Company reported a $1.42 billion net loss for
year 2008. A full-text copy of the Company's Annual Report is
available at no charge at http://ResearchArchives.com/t/s?3b59
PricewaterhouseCoopers LLP in New York in its audit report says
there is substantial doubt about the Company's ability to continue
as a going concern.
TASNEE BUNCHIEN: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Tasnee Bunchien
1622 34th Avenue
San Francisco, CA 94122
Bankruptcy Case No.: 09-31311
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
Northern District of California (San Francisco)
Debtor's Counsel: Kenneth R. Graham, Esq.
Law Office of Kenneth R. Graham
171 Mayhew Way #208
Pleasant Hill, CA 94523
Tel: (925) 932-0170
Email: ken@1031focus.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Tasnee Bunchien.
TEKOIL AND GAS: ERG Resources Buying Some Gas & Mineral Leases
--------------------------------------------------------------
On April 15, 2009, Tekoil & Gas Gulf Coast, LLC, filed a motion
seeking, among other things, (a) authority to sell certain oil,
gas or mineral leases and other related assets, as further
described in the Sale Motion, free and clear of all liens, claims,
encumbrances, and interests, (b) approval of certain procedures
for the solicitation of bids and the conduct of an auction with
respect to the Sale and the assumption and assignment of related
executory contracts and unexpired leases and related cure amounts,
and (c) the scheduling of a hearing with the Court to approve the
Sale.
On May 15, 2009, the U.S. Bankruptcy Court for the Southern
District of Texas entered an order approving the Bidding
Procedures (Doc. 384).
As a result, Gulf Coast is soliciting bids for the sale of the
Assets. The bid deadline for the Assets is May 29, 2009, at
5:00 p.m. Central Time. If Gulf Coast receives more than one
Qualified Bid for the Assets, Gulf Coast will hold an auction on
June 2, 2009 at 9:00 a.m. Central Time at the office of Gulf
Coast's counsel, Neligan Foley, LLP, or at such later time or
other place as Gulf Coast shall determine and notify all Qualified
Bidders. At the auction, all Qualified Bidders may bid and
participate pursuant to the terms of the Bidding Procedures. The
auction will continue until Gulf Coast, in its sole discretion,
determines the highest and best offer and the next highest and
best offer. Gulf Coast may announce at the auction additional
procedural rules for conducting the auction that are not
inconsistent with the Bidding Procedures. A copy of the Sale
Motion and the Bidding Procedures Order may be obtained by (a)
accessing the Court's Web site at http://www.txsb.uscourts.gov
(please note that a PACER password is required to access documents
on the Court's Web site), or (b) contacting Gulf Coast's counsel:
Carolyn Perkins
Neligan Foley, LLP
325 N. St. Paul, Suite 3600
Dallas, Texas 75201
Telephone (214) 840-5300
The Sale Hearing is currently scheduled to be held on June 10,
2009, at 11:15 a.m. Central Time at the United States Bankruptcy
Court for the Southern District of Texas, 515 Rusk St., Courtroom
No. 401, Houston, Texas 77002, before the Honorable Letitia Z.
Paul, United States Bankruptcy Judge. The Sale Hearing may be
adjourned from time to time without further notice to creditors or
parties in interest other than by announcement of the adjournment
in open court or on the Court's docket.
Objections to the Sale Motion, including Gulf Coast's request to
approve the sale of the Assets free and clear of all liens,
claims, encumbrances, and interests, to assume and assign
executory contracts and unexpired leases and to establish related
cure amounts, must be in writing, filed, and served so as to be
actually received by June 8, 2009, at 12:00 noon Central Time by:
(1) Patrick J. Neligan, Jr., Esq.
Neligan Foley, LLP
325 N. St. Paul, Suite 3600
Dallas, TX 75201
E-mail: pneligan@neliganlaw.com
Counsel for Gulf Coast
(2) Ellen Hickman, Esq.
Assistant U.S. Trustee
515 Rusk St., Suite 3516
Houston, TX 77002
E-mail: ellen.hickman@usdoj.gov
(3) James H. Hutchinson, Esq.
4801 Woodway, Suite 100E
Houston, Texas 77056
E-mail: jhhutchlaw@gmail.com
Counsel for ERG Resources, L.L.C.
(4) the Successful Bidder (if ERG is not the
Successful Bidder), at such address that
shall be provided in a notice filed with
the Court promptly after the auction;
(5) John F. Higgins, IV, Esq.
Porter & Hedges, LLP
1000 Main St., 36th Floor
Houston, TX 77002-6336
E-mail: jhiggins@porterhedges.com
Counsel for the Official Committee of
Unsecured Creditors
(6) Stephen Pezanosky, Esq.
Haynes and Boone, LLP
201 Main Street, Suite 2200
Fort Worth, Texas 76102
E-mail: Stephen.pezanosky@haynesboone.com
Counsel for J. Aron & Company
Based in Houston, Tekoil & Gas Corporation and its subsidiaries
-- http://www.tekoil.com/-- own interests in four oil and gas
properties, including the Trinity Bay, Redfish Reef, Fishers Reef,
and North Point Bolivar fields located in Galveston Bay, Texas.
The company was incorporated in Florida in 2004. Edward L.
Rothberg, Esq., at Weycer Kaplan Pulaski & Zuber, Nancy Lee
Ribaudo, Esq., and Patrick J. Neligan, Jr., Esq., at Neligan Foley
LLP, represent the Debtors as counsel. David Ronald Jones, Esq.,
John F. Higgins, Esq., and Joshua Nielson Eppich, Esq., at Porter
& Hedges, LLP, represent the Official Committee of Unsecured
Creditors of Tekoil & Gas Corp. as counsel. When Tekoil & Gas
Corp. filed for protection from its creditors, it listed assets of
$10 million to $50 million, and liabilities of $10 million to
$50 million.
Based in Spring, Texas, Tekoil and Gas Gulf Coast, LLC is an
acquisition subsidiary of Tekoil & Gas Corp.
Tekoil & Gas Corporation filed for Chapter 11 protection on
June 10, 2008 (Bankr. S.D. Tex. Case No. 08-80270).
Tekoil and Gas Gulf Coast filed a separate petition for Chapter 11
relief on Aug. 29, 2008 (Bankr. S.D. Tex. Case No. 08-80405).
Nancy Lee Ribaudo, Esq., and Patrick J. Neligan, Jr. at Neligan
Foley LLP, represent Tekoil and Gas Gulf Coast as counsel.
On October 1, 2008, the Court ordered the joint administration of
the Debtors' bankruptcy cases.
TISHMAN SPEYER: High Leverage Prompts S&P to Junk Corp. Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Tishman Speyer Real Estate D.C. Area Portfolio
(Borrower) L.P. to 'CCC' from 'B+'. At the same time, S&P lowered
all other TSDC-related credit ratings, affecting $570 million in
secured debt. S&P's '4' recovery rating remains unchanged on the
unsecured debt. Additionally, S&P revised its outlook on TSDC to
negative.
"These rating actions were driven by our concerns regarding TSDC's
very high leverage and weak coverage metrics, which have been
affected by declining asset values and slower-than-anticipated
leasing progress amid weak economic conditions," said credit
analyst Linda Phelps. "We believe the partnership's ability to
remain in compliance with financial covenants for its fully drawn
credit facility is unlikely. Concerns related to a possible
future breach of financial covenants under the current credit
agreement have also led to a going concern disclosure in TSDC's
recently provided 2008 audited financial statements, which, in
turn, has been asserted by the agent, Lehman Bros., to constitute
a technical default under the credit agreement."
Despite the very strong asset quality and the expected relative
stability of TSDC's property portfolio, the company may not be
successful in modifying its credit agreement. In addition, weak
economic conditions could further erode the partnership's
currently very weak credit metrics. S&P would lower its ratings
to 'D' if payments on the rated obligation are jeopardized. S&P
would look for TSDC to meaningfully improve its credit metrics and
liquidity position, which would likely require additional capital
investment or a recapitalization, to drive any ratings momentum.
TOLUCA LAKE: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Toluca Lake Vintage, LLC
10639-10648 Woodbridge
Toluca Lake, CA 91062
Bankruptcy Case No.: 09-15680
Type of Business: The Debtor is a single asset real estate
company.
Chapter 11 Petition Date: May 14, 2009
Court: United States Bankruptcy Court
Central District Of California (San Fernando Valley)
Judge: Geraldine Mund
Debtor's Counsel: Victor A Sahn, Esq.
333 S Hope St. 35th Fl.
Los Angeles, CA 90071-1406
Tel: (213) 626-2311
Fax: (213) 629-4520
E-mail: vsahn@sulmeyerlaw.com
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
------ --------------- ------------
Zitting Brothers Construction Trade Debt $499,469
P.O. Box 178
Hurricane, UT 84737
IM Air Conditioning Trade Debt $178,056
18320 Oxnard Street, Ste. 3
Tarzana, CA 91356
Accent Drywall Corporation Trade Debt $70,321
22232 Del Valle Street
Woodland Hills, CA 91364
The Gilmore Company Trade Debt $60,000
Pozzi Hill, Inc. Trade Debt $58,510
Wholesale Door & Window Trade Debt $57,500
Progressive Insulation & Trade Debt $40,970
Windows
Builders Showcase Interiors Trade Debt $32,631
Thyssenkrupp Elevator Corp. Trade Debt $28,849
Dragon Steel Trade Debt $25,592
City of Los Angeles Trade Debt $25,580
G & H Fire Protection Trade Debt $23,000
Cell-Crete Corp. Trade Debt $21,597
Universal Iron Works, Inc. Trade Debt $21,420
Southwest Specialties Trade Debt $19,750
Color Concepts Trade Debt $17,173
Natare Corporation Trade Debt $14,620
Fireside Hearth & Home Trade Debt $13,873
Pirate Staffing Trade Debt $11,436
Modern Roofing Trade Debt $10,800
The petition was signed by Gary M. Frey, manager of the company.
TRONOX INC: Proposes Severance and Bonus Programs
-------------------------------------------------
Tronox Inc. has proposed to the U.S. Bankruptcy Court for the
Southern District of New York an incentive bonus program for top
officers and a separate severance package for 323 salaried, non-
officer workers.
According to Bloomberg's Bill Rochelle, executives covered by the
incentive program, which includes the top four officers, are to
receive bonuses if the company's earnings meet targets or
projected sales prices are realized. The amount of the proposed
bonuses were not stated in the proposal. The severance program
for the salaried workers, on the other hand, would cost up to $1.4
million if Tronox is acquired by an investor. If the buyer is
from the industry, the cost is projected to reach $3.9 million.
Bill Rochelle notes that Tronox is required to sign a contract
with a buyer before May 31.
About Tronox Inc.
Tronox Inc. is the world's third largest maker of titanium dioxide
behind DuPont Co. and Saudi-owned National Titanium Dioxide Co.,
known a Cristal, according to Bloomberg.
Tronox has $1.6 billion in total assets, including $646.9 million
in current assets, as at September 30, 2008. The company has
$881.6 million in current debts and $355.9 million in total
noncurrent debts.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.
N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases. The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.
Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B. Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK. As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of
class B common stock.
Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TXCO RESOURCES: Files Chapter 11 Due to Liquidity Woes
------------------------------------------------------
TXCO Resources Inc. (Nasdaq:TXCO) and its subsidiaries have filed
voluntary petitions for relief under Chapter before the U.S.
Bankruptcy Court for the Western District of Texas.
The Company said in a statement that the filing was precipitated
by a series of events that led to a contraction in TXCO's
liquidity, impairing its ability to operate its business. The
Company has continued to experience substantial difficulties
in meeting short-term cash needs, particularly in relation to
vendor commitments. Extreme volatility in energy prices and a
deteriorating global economy have created difficulties in the
capital markets and have hindered TXCO's ability to raise debt
and/or equity capital. Faced with these constraints, and after
extensive efforts to improve the Company's liquidity, TXCO and its
subsidiaries filed their chapter 11 petitions.
The Company has filed a variety of first day motions with the
Court that, with Court approval, will allow it to continue to
conduct business without interruption. These motions are
primarily designed to obtain post bankruptcy financing and
minimize the impact on the Company's operations, customers and
employees. During the reorganization process, suppliers should
expect to be paid for post-petition purchases of goods and
services in the ordinary course of business.
TXCO filed a motion with the Bankruptcy Court for an interim order
seeking approval of an anticipated debtor-in-possession financing
pursuant to a Summary of Terms and Conditions with potential DIP
lenders. The DIP Term Sheet contemplates that certain lenders
would provide to TXCO debtor-in-possession financing composed of a
multiple draw term loan facility in an aggregate principal amount
of up to $32,000,000, with an initial $12,500,000 anticipated to
be made available on an interim basis subject to the fulfillment
by TXCO of specified conditions precedent, including entry by the
Bankruptcy Court of an interim order. The anticipated
commitment of the DIP lenders to provide DIP loans under the DIP
Facility is subject to a number of conditions, including entry by
the Bankruptcy Court of an interim order and completion of loan
documentation satisfactory in form and substance to the DIP
lenders.
About TXCO Resources
TXCO Resources is an independent oil and gas enterprise with
interests in the Maverick Basin, the onshore Gulf Coast region and
the Marfa Basin of Texas, and the Midcontinent region of western
Oklahoma. TXCO's business strategy is to acquire undeveloped
mineral interests and internally developing a multi-year drilling
inventory through the use of advanced technologies, such as 3-D
seismic and horizontal drilling. It accounts for its oil and gas
operations under the successful efforts method of accounting and
trades its common stock on Nasdaq's Global Select Market under the
symbol "TXCO."
TXCO RESOURCES: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: TXCO Resources Inc.
777 E. Sonterra Blvd., Suite 350
San Antonio, TX 78258
Bankruptcy Case No.: 09-51807
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Eagle Pass Well Service, L.L.C. 09-51808
TXCO Drilling Corp. 09-51809
Charro Energy, Inc. 09-51810
Output Acquisition Corp. 09-51811
TXCO Energy Corp. 09-51812
OPEX Energy, LLC 09-51813
Texas Tar Sands, Inc. 09-51814
Maverick Gas Marketing, Ltd. 09-51815
Maverick-Dimmit Pipeline, Ltd. 09-51816
11 PPL Operating, Inc. 09-51817
Chapter 11 Petition Date: May 17, 2009
Court: United States Bankruptcy Court
Western District of Texas (San Antonio)
Judge: Ronald B. King
Debtors' General
Restructuring
Counsel: Deborah D. Williamson, Esq.
E-mail: dwilliamson@coxsmith.com
Lindsey D. Graham, Esq.
Cox Smith Matthews Incorporated
112 E. Pecan, Suite 1800
San Antonio, TX 78205
Tel: (210) 554-5275
Fax: (210) 226-8395
Debtors'
Corporate
Counsel &
Conflicts
Counsel: Fulbright and Jaworski, L.L.P.
Debtors'
Financial
Advisor: Albert S. Conly as
Chief Restructuring Officer
FTI Consulting Inc.
Debtors'
Financial
Advisor for
Assets Sale: Goldman, Sachs & Co.
Debtors'
Financial
Advisors
And Investment
Bankers: Global Hunter Securities, LLC
Debtors'
Claims Agent: Administar Services Group LLC
Total Assets as of March 31, 2009: $431,898,000
Total Debts as of March 31, 2009: $323,833,000
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Weatherford Artificial Lift Trade debt $7,979,709
Systems
PO Box 200937
Houston, TX 77216
Strata Directional Technology Trade debt $5,119,007
PO Box 200827
Dallas, TX 75320
MTZ Vacuum Service Trade debt $4,686,312
PO Box 1555
Uvalde, TX 78802
Patterson-UTI Drilling Co Trade debt $4,217,639
Capital Well Service LLC Trade debt $3,462,240
BJ Services Company Trade debt $2,937,864
Thomas Energy Services Inc. Trade debt $2,732,764
Doug Frazier Trade debt $1,882,356
C&J Spec Rent Services Inc. Trade debt $1,245,615
Halliburton Energy Services Trade debt $1,043,621
Cornerstone E&P Company Trade debt $1,022,307
Smith International Inc. Trade debt $826,342
Standard Tube Co. Trade debt $821,268
Baker Hughes Trade debt $799,277
Stinger Wellhead Protection Trade debt $627,688
Nabors Well Services Co. Trade debt $587,489
McGuire Industries Inc. Trade debt $511,997
St. Mary Land & Exploration Trade debt $484,540
Precision Gas Well Testing Trade debt $472,132
Thomas Petroleum Ltd. Trade debt $463,736
The petition was signed by James E. Sigmon, CEO of the Company.
VICORP RESTAURANTS: Court Extends Plan Filing Period to June 4
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
extended VI Acquisition Corp. and VICORP Restaurants, Inc.'s
exclusive period to file a plan until June 4, 2009, and their
exclusive period to solicit acceptances of a plan until July 31,
2009.
This is the Debtors' third extension of their exclusive periods.
Headquartered in Denver, Colorado, VICORP Restaurants, Inc. and VI
Acquisition Corp. -- http://www.vicorpinc.com/-- operate family-
dining restaurants under the Village Inn and Bakers Square brands.
The Debtors also operate 3 pie production facilities that produce
pies that are offered in the Debtors' restaurants and are sold to
select third-party customers including supermarkets and other
restaurant chains.
The Debtors filed separate petitions for Chapter 11 relief on
April 3, 2008 (Bankr. D. Del. Lead Case No. 08-10623). Kimberly
Ellen Connolly Lawson, Esq., Kurt F. Gwynne, Esq., and Richard A.
Robinson, Esq., at Reed Smith LLP, Ann C. Cordo, Esq., and Donna
L. Culver, Esq., at Morris Nichols Arsht & Tunnell, and Joseph E.
Cotterman, Esq., at Gallagher & Kennedy, P.A., represent the
Debtors as counsel. The Debtors selected The Garden City Group,
Inc. as their claims agent. Abhilash M. Raval, Esq., Dennis
Dunne, Esq., and Samuel Khalil, Esq., at Milbank Tweed Hadley &
McCloy LLP, Domenic E. Pacitti, Esq., and Michael W. Yurkewicz,
Esq., at Klehr Harrison Harvey Branzburg & Ellers, represent the
Official Committee of Unsecured Creditors of the Debtors.
When the Debtors filed for protection from their creditors, they
listed estimated assets of $100 million to $500 million and debts
of $100 million to $500 million.
VICORP RESTAURANTS: Court Okays Appointment of A. Carroll as CRO
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
approved the appointment of Anthony J. Carroll as chief
restructuring officer of VI Acquisition Corp. and VICORP
Restaurants, Inc, nunc pro tunc to April 13, 2009. Mr. Carroll
will be employed by the Debtors for a period of six months.
As the Debtors chief restructuring officer, Mr. Carroll will
primarily be responsible for the wind-down of the Debtors'
estates.
For the first four months of his employment as CRO, Mr. Carroll
will receive a salary of $23,000 per month. For the fifth and
sixth months of his employment, Mr. Carroll will received $15,000
per month.
As reported in Troubled Company Reporter on March 31, 2009,
the Debtors consummated the sale of substantially all of their
assets to American Blue Ribbon Holdings, LLC on March 27, 2009.
Mr. Carroll, who served as the Debtors' chief financial officer
from February 4, 2004, to March 27, 2009, succeeds Mr. Hazem Ouf
as the Debtors' lead executive officer. Mr. Ouf, the Debtors'
former president and chief restructuring officer, resigned
subsequent to the sale of the Debtors' assets to take a position
with American Blue Ribbon Holdings.
About VICORP Restaurants
Headquartered in Denver, Colorado, VICORP Restaurants, Inc. and VI
Acquisition Corp. -- http://www.vicorpinc.com/-- operate family-
dining restaurants under the Village Inn and Bakers Square brands.
The Debtors also operate 3 pie production facilities that produce
pies that are offered in the Debtors' restaurants and are sold to
select third-party customers including supermarkets and other
restaurant chains.
The Debtors filed separate petitions for Chapter 11 relief on
April 3, 2008 (Bankr. D. Del. Lead Case No. 08-10623). Kimberly
Ellen Connolly Lawson, Esq., Kurt F. Gwynne, Esq., and Richard A.
Robinson, Esq., at Reed Smith LLP, Ann C. Cordo, Esq., and Donna
L. Culver, Esq., at Morris Nichols Arsht & Tunnell, and Joseph E.
Cotterman, Esq., at Gallagher & Kennedy, P.A., represent the
Debtors as counsel. The Debtors selected The Garden City Group,
Inc. as their claims agent. Abhilash M. Raval, Esq., Dennis
Dunne, Esq., and Samuel Khalil, Esq., at Milbank Tweed Hadley &
McCloy LLP, Domenic E. Pacitti, Esq., and Michael W. Yurkewicz,
Esq., at Klehr Harrison Harvey Branzburg & Ellers, represent the
Official Committee of Unsecured Creditors of the Debtors.
When the Debtors filed for protection from their creditors, they
listed estimated assets of $100 million to $500 million and debts
of $100 million to $500 million.
WATERWORKS INC: Wants Zeisler & Zeisler as Bankruptcy Counsel
-------------------------------------------------------------
Waterworks, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Connecticut for permission to
employ Zeisler & Zeisler, P.C., as their counsel.
Zeisler & Zeisler will:
a) advise the Debtors of their rights, powers and duties as
debtors and debtors-in-possession continuing to operate and
manage their businesses and properties;
b) advise the Debtors concerning and assist in the negotiation
and documentation of financing agreements, debt
restructuring, cash collateral orders and related
transactions;
c) review the nature and validity of liens asserted against the
property of the Debtors and advise the Debtors concerning
the enforceability of the liens;
d) advise the Debtors concerning the actions that they might
take to collect and to recover property for the benefit of
the Debtors' estates;
e) preparing on behalf of the Debtors certain necessary and
appropriate applications, motions, pleadings, draft orders,
notices, schedules and other documents, and review all
financial and other reports to be filed in these Chapter 11
cases;
f) advise the Debtors concerning, and preparing responses to,
applications, motions, pleadings, notices and other papers
which will be filed and served in their Chapter 11 cases;
g) counsel the Debtors in connection with the formulation,
negotiation and promulgation of a plan of reorganization and
related documents or sale of their businesses; and
h) perform all other legal services for and on behalf of the
Debtors which will be necessary or appropriate in the
administration of the Chapter 11 cases.
Pre-bankruptcy, Z&Z received a retainer of $100,000 which was
applied on account of legal fees and expenses incurred in
representing the Debtors prior to the bankruptcy filing and in
contemplation of and in connection with the Chapter 11 cases.
To the best of the Debtors' knowledge, Z&Z is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached at:
Zeisler & Zeisler
558 Clinton Ave
Bridgeport, CT 06605
Tel: (203) 368-4234
Fax: (203) 367-9678
About Waterworks, Inc.
Headquartered in Danbury, Connecticut, Waterworks, Inc., fka PDS
Associates, Inc. -- http://www.waterworks.com/-- sells bathroom
accessories.
The Company and its affiliates filed for Chapter 11 on May 3, 2009
(Bankr. D. Conn. Lead Case No. 09-50870). James Berman, Esq., and
Jed Horwitt, Esq., at Zeisler and Zeisler represent the Debtors in
their restructuring efforts. The Debtors listed $10 million to
$50 million in both assets and debts.
WELLMAN INC: Paid $19.1MM to Kirkland, 6 Others for Ch. 11 Work
---------------------------------------------------------------
For worked performed in Wellman Inc.'s 11-month Chapter 11 case,
the U.S. Bankruptcy Court for the Southern District of New York
awarded these fees and expense for the professionals retained in
the case:
Retained Professional Allowed Fees Allowed Expenses
--------------------- ------------ ----------------
Kirkland & Ellis LLP
(Attorneys for the Debtors) $8,280,622.70 $257,326.70
Edwards Angell Palmer
& Dodge LLP
(Conflicts and Special Counsel
for the Debtors) $2,705,586.25 $250,560.22
Lazard FrŠres & Co. LLC
(Investment Banker and
Financial Advisor for the
Debtors) $4,015,280.00 $42,748.28
Ernst & Young LLP
(Auditors and Tax Advisors for
the Debtors) $1,433,602.00 $8,383.00
AccuVal Associates, Inc.
(Appraisers to the Debtors) $356,046.25 $52,867.31
Ropes & Gray LLP
(Official Committee of
Unsecured Creditors) $985,577.50 $47,163.92
FTI Consulting, Inc.
(Financial Advisors to the
Official Committee of
Unsecured Creditors) $700,806.45 $760.57
Judge Stuart M. Bernstein said Wellman's case was a "poster child
for what Chapter 11 is supposed to be."
About Wellman Inc.
Headquartered in Fort Mill, South Carolina, Wellman Inc. ([OTC]:
WMANQ.OB) -- http://www.wellmaninc.com/-- manufactures and
markets packaging and engineering resins used in food and beverage
packaging, apparel, home furnishings and automobiles. They
manufacture resins and polyester staple fiber a three major
production facilities.
The Company and its debtor-affiliates filed for Chapter 11
protection on February 22, 2008 (Bankr. S.D. N.Y. Case No.
08-10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in
New York City, represented the Debtors. Lazard Freres & Co., LLC,
acted as the Debtors' financial advisors and investment bankers.
Conway, Del Genio, Gries & Co., LLC, was retained as the Debtors'
chief restructuring advisor.
The United States Trustee for Region 2 appointed seven members to
the Official Committee of Unsecured Creditors. Mark R.
Somerstein, Esq., at Ropes & Gray LLP, served as the Committee's
bankruptcy counsel. FTI Consulting, Inc., served as the panel's
financial advisors. Kurtzman Carson Consultants was claims agent.
Wellman Inc., in its bankruptcy petition, listed total assets of
$124,277,177 and total liabilities of $600,084,885, as of
Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG,
Inc., listed assets between $500 million and $1 billion on a
stand-alone basis at the time of the bankruptcy filing. Debtor-
affiliates Fiber Industries Inc., Prince Inc., and Wellman of
Mississippi Inc., listed assets between $100 million and
$500 million at the time of their bankruptcy filings.
Wellman Inc. obtained confirmation of its reorganization plan on
January 14, 2009, and consummated its plan six days later.
WESTERN MASSACHUSETTS: Creditors Panel Taps Bacon Wilson as Attys
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors in Western
Massachusetts Lifecare Corporation's Chapter 11 case asks the U.S.
Bankruptcy Court for the District of Massachusetts for permission
to employ Bacon Wilson, P.C., as counsel.
Bacon Wilson will represent the Creditors Committee in the
Debtor's Chapter 11 case.
Paul R. Salvage, Esq., a member at Bacon Wilson, tells the Court
that Bacon Wilson has not received a retainer in relation with its
representation. The firm intends to apply for compensation of
professional services and reimbursement of expenses.
Mr. Salvage assures the Court that Bacon Wilson is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Mr. Salvage can be reached at:
Bacon Wilson, P.C.
33 State Street
Springfield, MA 01103
Tel: (413) 781-0560
Fax: (413) 739-7740
Springfield, Massachusetts-based Western Massachusetts Lifecare
Corporation, a/k/a Reeds Landing, provides residential care
services. The Company filed for Chapter 11 on May 4, 2009 (Bankr.
D. Mass. Case No. 09-30737). Sean Monahan, Esq., at Choate Hall &
Stewart represents the Debtor in its restructuring efforts. The
Debtor listed $10,000,001 to $50,000,000 in assets and $50,000,001
to $100,000,000 in debts.
WHETSTONE DEVELOPMENT: Case Summary & 19 Largest Unsec. Creditors
-----------------------------------------------------------------
Debtor: Whetstone Development Company
6262 North Swan Road, Suite 200
Tucson, AZ 85718
Bankruptcy Case No.: 09-10701
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
District of Arizona (Tucson)
Judge: Eileen W. Hollowell
Debtor's Counsel: Eric Slocum Sparks, Esq.
110 S Church Ave #2270
Tucson, AZ 85701
Tel: (520) 623-8330
Fax: (520) 623-9157
Email: eric@ericslocumsparkspc.com
Estimated Assets: $1,000,001 to $100,000,000
Estimated Debts: $10,000,001 to $50,000,000
A full-text copy of the Debtor's petition, including a list of its
19 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/azb09-10701.pdf
The petition was signed by James D. Lynch, vice president and
secretary of the Company.
WII COMPONENTS: Moody's Withdraws 'Caa1' Corporate Family Rating
----------------------------------------------------------------
Moody's Investors Service withdrew all of the ratings on WII
Components Inc. for business reasons.
These ratings were withdrawn:
* Caa1 - Corporate family rating;
* Caa1 - Probability of default rating; and
* B3 (LGD3-34%) rating on the Senior Unsecured Notes, due 2012.
The last rating action on WII Components Inc. was the downgrade of
the corporate family rating to Caa1 from B2 on February 2, 2009.
WII Components Inc. is a leading manufacturer of hardwood cabinet
doors and related components in the United States, selling
primarily to kitchen and bath cabinet original equipment
manufacturers. Revenues for the twelve months ending December 31,
2008 were $193 million.
YARMOUTH AT NORTH: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Yarmouth At North Shore III, LP
PO Box 185
Lindenhurst, NY 11757
Bankruptcy Case No.: 09-73580
Chapter 11 Petition Date: May 18, 2009
Court: United States Bankruptcy Court
Eastern District of New York (Central Islip)
Judge: Alan S. Trust
Debtor's Counsel: Anthony DeCarolis, Esq.
7 Wood Drive
Oyster Bay, NY 11771
Tel: (516) 922-7870
Fax: (516) 922-2787
Email: ad.esq@hillstreetsystems.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Alfredo Daddio, partner of the Company.
YELLOWSTONE CLUB: CrossHarbor to Acquire Firm for $115 Million
--------------------------------------------------------------
Kahrin Deines at The Associated Press reports that CrossHarbor
Capital Partners will pay $115 million for the Yellowstone Club.
"Almost $30 million is going to the unsecured creditors," The AP
quoted Thomas Beckett, the attorney for the creditors' committee,
as saying. The AP states that of the $115 million to be paid for
Yellowstone Club, about $35 million will be in cash while some
$80 million will be in the form of a promissory note to Credit
Suisse.
The AP relates that CrossHarbor and Credit Suisse reached the
court-approved deal on Monday, paving the way for the possible
confirmation of a reorganization plan within the next week. The
Hon. Ralph Kirscher of the U.S. Bankruptcy Court for the District
of Montana issued a partial ruling last week that other creditors'
claims will be taken first before that Credit Suisse loan. Judge
Kirscher, according to the report, approved the deal on Monday.
His final confirmation of the bankruptcy reorganization plan may
take another week, says the report.
According to The AP, Credit Suisse made a $375 million loan to
Yellowstone Club in 2005, and was the only other bidder in an
auction that was repeatedly stalled over legal rows.
Credit Suisse also wins dismissal of litigation claiming that the
loan it made to Yellowstone Club in 2005 was fraudulent and drove
the Company into bankruptcy, The AP relates.
The AP states that some complaints against Yellowstone Club,
including two objections filed by Tour de France star Greg LeMond,
will also be dismissed under the agreement.
Tim Blixseth, former owner and one of Yellowstone Club's founders,
still faces charges that he violated his fiduciary duty to the
Company when he used most of the 2005 loan to pay down personal
debts and purchase luxury estates in Scotland, France, and Mexico,
The AP reports.
Located near Big Sky, Montana, Yellowstone Club --
http://www.theyellowstoneclub.com/-- is a private golf and ski
community with more than 350 members, including Bill Gates and Dan
Quayle. The Company was founded in 1999.
Yellowstone Mountain Club LLC and its affiliates filed for
Chapter 11 on November 10, 2008 (Bankr. D. Montana, Case No. 08-
61570). The Company's owner affiliate Edra D. Blixseth, filed for
Chapter 11 on March 27, 2009 (Case No. 09-60452).
Connie Sue Martin, Esq., David A. Ernst, Esq., Lawrence R Ream,
Esq., Richard G. Birinyi, Esq., Stephen Deatherage, Esq., Thomas
L. Hutchinson, Esq., and Troy Greenfield, Esq., at Bullivant
Houser Bailey PC; and James A. Patten, Esq., at Patten, Peterman,
Bekkedahl & Green PLLC, represent the Debtors as counsel. The
Debtors hired FTI Consulting Inc. and Ronald Greenspan as CRO.
The official committee of unsecured creditors in the case are
represented by J. Thomas Beckett, Esq., and David P. Billings,
Esq., at Parsons, Behle and Latimer, as counsel, and James H.
Cossitt, Esq., at local counsel. Credit Suisse, the prepetition
first lien lender, is represented by Skadden, Arps, Slate, Meagher
& Flom.
YOUNG BROADCASTING: Seeks Until Sept. 14 to File Chapter 11 Plan
----------------------------------------------------------------
Young Broadcasting Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to further
extend their exclusive periods to:
-- file a Chapter 11 plan of reorganization until September 14,
2009; and
-- solicit acceptances of that plan until Nov. 13, 2009.
The Debtors' current exclusive plan filing period ends June 15 and
solicitation period expires on August 13.
An extension will help the Debtors avoid filing of a premature
plan of reorganization and would ensure that their plan best
addresses the interest of the Debtors, and their creditors and
estate, says Peter D. Wolfson, Esq., at Sonnenschein Nath &
Rosenthal LLP, in New York.
A hearing is set for June 2, 2009, 11:00 a.m., to consider the
Debtors' request. Objections, if any, are due May 28 by 4:00 p.m.
About Young Broadcasting
Young Broadcasting, Inc. -- http://www.youngbroadcasting.com/--
owns 10 television stations and the national television
representation firm, Adam Young Inc. Five stations are affiliated
with the ABC Television Network (WKRN-TV - Nashville, TN, WTEN-TV
- Albany, NY, WRIC-TV - Richmond, VA, WATE-TV - Knoxville, TN, and
WBAY-TV -Green Bay, WI), three are affiliated with the CBS
Television Network (WLNS-TV - Lansing, MI, KLFY-TV - Lafayette, LA
and KELO- TV - Sioux Falls, SD), one is affiliated with the NBC
Television Network (KWQC-TV - Davenport, IA) and one is affiliated
with MyNetwork (KRON-TV - San Francisco, CA). In addition, KELO-
TV-Sioux Falls, SD is also the MyNetwork affiliate in that market
through the use of its digital channel capacity.
The Company and its affiliates filed for Chapter 11 protection on
February 13, 2009 (Bankr. S.D. N.Y. Lead Case No. 09-10645). Jo
Christine Reed, Esq., at Sonnenschein Nath & Rosenthal LLP,
represents the Debtors in their restructuring efforts. Andrew N.
Rosenberg, Esq., at Paul Weiss Rifkind Wharton & Harrison LLP,
represents the Official Committtee of Unsecured Creditors as
counsel. The Debtors selected UBS Securities LLC as consultant;
Ernst & Young LLP as accountant; Epiq Bankruptcy Solutions LLC as
claims agent; and David Pauker chief restructuring officer.
At February 28, 2009, the Debtors had $334.9 million in total
assets and $936.7 million in total liabilities.
YOUNG BROADCASTING: Wants to Throw Out ICNews & AP Contracts
------------------------------------------------------------
Young Broadcasting Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York for
permission to reject, separately, executory contracts with the
Associated Press and ICNews Inc.
The Debtors relates that ICNews provided data and images related
to local media content specific to the San Francisco Bay Area for
use in the their news programming while the Associated Press
provided news and other media content for use in the news
programming of certain of the Debtors. The services covered by
those contracts, the Debtors say, no longer serve any benefit to
them.
Rejection of the two contracts will improve their cash flow and
assist them in managing their future operations, the Debtors point
out. Unnecessary administrative expenses for obligations for
these contracts will also be avoided, the Debtors add.
A hearing is set for June 2, 2009, at 11:00 p.m., to consider the
Debtors' rejection requests. Objections, if any, are due May 28,
2009, by 4:00 p.m.
About Young Broadcasting
Young Broadcasting, Inc. -- http://www.youngbroadcasting.com/--
owns 10 television stations and the national television
representation firm, Adam Young Inc. Five stations are affiliated
with the ABC Television Network (WKRN-TV - Nashville, TN, WTEN-TV
- Albany, NY, WRIC-TV - Richmond, VA, WATE-TV - Knoxville, TN, and
WBAY-TV -Green Bay, WI), three are affiliated with the CBS
Television Network (WLNS-TV - Lansing, MI, KLFY-TV - Lafayette, LA
and KELO- TV - Sioux Falls, SD), one is affiliated with the NBC
Television Network (KWQC-TV - Davenport, IA) and one is affiliated
with MyNetwork (KRON-TV - San Francisco, CA). In addition, KELO-
TV-Sioux Falls, SD is also the MyNetwork affiliate in that market
through the use of its digital channel capacity.
The Company and its affiliates filed for Chapter 11 protection on
February 13, 2009 (Bankr. S.D. N.Y. Lead Case No. 09-10645). Jo
Christine Reed, Esq., at Sonnenschein Nath & Rosenthal LLP,
represents the Debtors in their restructuring efforts. Andrew N.
Rosenberg, Esq., at Paul Weiss Rifkind Wharton & Harrison LLP,
represents the Official Committtee of Unsecured Creditors as
counsel. The Debtors selected UBS Securities LLC as consultant;
Ernst & Young LLP as accountant; Epiq Bankruptcy Solutions LLC as
claims agent; and David Pauker chief restructuring officer.
At February 28, 2009, the Debtors had $334.9 million in total
assets and $936.7 million in total liabilities.
YRC WORLDWIDE: S&P Maintains 'CCC' Corporate Credit Rating
----------------------------------------------------------
Standard & Poor's Ratings Services said that it is maintaining its
'CCC' long-term corporate credit rating on YRC Worldwide Inc. on
CreditWatch with negative implications. S&P had revised the
CreditWatch implications to negative from positive on April 24,
2009, reflecting concerns that the company may not be able to meet
its amended bank covenants.
"The CreditWatch update follows news of the Overland Park, Kansas-
based trucking company's amendment to its credit facilities, which
eliminates the second-quarter minimum EBITDA financial covenant.
The maximum gross capital expenditures and minimum liquidity
covenants remain in place," said Standard & Poor's credit analyst
Anita Ogbara.
In addition, YRC representatives were quoted in media reports as
saying that the company may request funds from TARP to fund its
multi-employer pension expense, which totals approximately
$550 million to $600 million annually. YRC is a major participant
in the International Brotherhood of Teamsters union's various
multi-employer pension plans. These expenses are currently
included in YRC's salaries, wages, and benefits expense, but S&P
considers a company's contingent obligation to fund multi-employer
pension plan deficits as a debt-like liability. In 2008, YRC paid
pension expenses totaling $554 million and health and welfare
benefits totaling $532 million. The company estimates that
approximately half of the beneficiaries of these multi-employer
pension plans are non-YRC employees and accordingly is pursuing
alternatives to relieve some portion of this expense.
If the company were to terminate or withdraw from these plans
(which S&P considers highly unlikely) the most recent estimated
withdrawal liability according to the company would be an
estimated $4 billion (which could be paid out over a 15- to 20-
year period) on a pretax basis. However, that estimate is based
on information from late 2007, and S&P believes that the
subsequent sharp deterioration in financial asset values and the
decline in interest rates has likely worsened the funding status
of these plans.
Standard & Poor's analytical approach to multi-employer plans
recognizes that their liabilities can change depending on a number
of factors, including: future market performance, the outcome of
future contract negotiations, the size and timing of company
contributions, actuarial assumptions, and the default of other
plan participants. S&P does not include these contingent
obligations in S&P's adjusted credit metrics, but take these
factors into account in assessing the company's overall financial
risk.
S&P will review the company's earnings prospects for the remainder
of 2009 to judge the likelihood of a bank covenant breach and
prospects, if necessary, for additional amendments to its
covenants. S&P could lower the rating if S&P believes that the
company will not be able to meet its covenant requirements or if
liquidity becomes further constrained.
* Fitch Says Rising CMBS Delinquencies Mostly in Distressed States
------------------------------------------------------------------
New defaults corresponding to loans located in U.S. states with
the most economic stress are emerging for U.S. CMBS as monthly
late-pays increased 25 basis points to 1.78%, according to the
latest U.S. CMBS loan delinquency index results from Fitch
Ratings.
"Emerging trends suggest that collateral located in states facing
the bleakest economic conditions are seeing systemic declines in
occupancy and net operating income, which have pushed property
valuations lower and loan default rates higher," said Fitch
Managing Director and U.S. CMBS Group Head Susan Merrick.
'Maturity defaults represent a diminishing proportion of the index
at 8.3%, while performance defaults continue to rise'.
Michigan has the highest proportion of loans currently in default
for any state, with 6.89% of all loans at least 60 days delinquent
or in foreclosure. The Michigan delinquencies consist of 100
loans totaling $501 million, and include 20% of all delinquent
industrial loans across the index. Other states with the weakest
loan performance and steadily increasing state-wide delinquency
rates include:
-- Tennessee 6.57%,
-- Ohio 4.34%,
-- Indiana 4%,
-- Rhode Island 3.76%,
While the loans secured by properties located in the worst
performing states account for less than 6% of the Fitch-rated
universe by balance, they make up nearly one-fourth of all real
estate owned loans tracked in the index -- an indication that
special servicers are finding limited opportunities to work out or
to quickly dispose of assets in these locations. Each of the
preceding states has an unemployment rate significantly higher
than the 8.9% national rate.
Fitch has also identified an acceleration in CMBS loan defaults
for those states with the worst performing housing markets, as
measured by home price depreciation and foreclosure rates. Over
the past six months, delinquencies corresponding to loans
collateralized by properties in California, Florida, and Nevada
have risen at a pace nearly twice as fast as that of other states.
Fitch notes that in recent months, the volume of loans leaving the
index each month due to resolution has increased. However, the
pace of new delinquencies continues to outweigh resolutions. Last
month, $383 million of loans (eight bps) resolved, compared to
resolutions of $289 million (six bps) and $121 million (two bps)
three and six months prior, respectively. Of the 68 loans which
were delinquent in March but did not reappear in April's index,
only 4% paid off, while 22% were liquidated for a loss and an
additional 22% were modified or extended by the servicer. Fitch
has found that the remaining half of resolutions are likely to
return to the index in future periods. These loans were generally
brought current (or remained 30 days delinquent) as the respective
borrowers made partial payments; lockboxes swept excess cash flow;
or reserve accounts were applied to debt service deficiency
amounts. For instance, the Riverton Apartments loan, which in
March was excluded from the index due to the repayment from
reserve accounts of past due amounts, reappeared in the April
reading due to foreclosure actions filed by the servicer.
To date, the loan delinquency index has not been heavily impacted
by the chapter 11 bankruptcy filing of mall owner and operator
General Growth Properties (GGP). The CMBS loans sponsored by GGP
which have been included in the bankruptcy filing have been or
will be transferred to special servicing, but will not be included
in the delinquency index unless balloon defaults occur upon
maturity or monthly debt service payments are discontinued.
Fitch's delinquency index includes 1,432 delinquent loans totaling
$8.5 billion, out of the Fitch rated universe of approximately
43,000 loans totaling $479 billion.
* Fitch Says U.S. CREL CDO Delinquencies Above 7%
-------------------------------------------------
Over 20 newly delinquent assets led to an increase in U.S.
commercial real estate loan CDO delinquencies to 7.8% for April
2009, up from 6.5% in March 2009, according to the latest CREL CDO
delinquency index from Fitch Ratings. Fitch currently rates 35
CREL CDOs encompassing approximately 1,100 loans and 370 rated
securities/assets with a balance of $23.8 billion.
The CREL DI has now surpassed 7% with over 75% of all Fitch rated
CREL CDOs containing at least one delinquent loan. "At this rate
of increase, the delinquencies for CREL CDOs are likely to exceed
15% by the end of this year," said Senior Director Karen Trebach.
Individual CDO delinquency rates ranged from 0% to approximately
24% of the CDO par balance, in the April reporting period.
New delinquencies included an A-note secured by a General Growth
Properties, Inc. affiliated regional mall. The borrower was
listed as a debtor in GGP's April 2009 bankruptcy court filing.
Other exposure to GGP in the CREL DI includes seven real estate
bank loan interests in seven different CDOs (51 basis points). On
April 16, Fitch downgraded GGP's and GGP's wholly-owned subsidiary
The Rouse Company's Issuer Default Ratings (IDR) to 'D' with
related bank loan facilities and unsecured senior notes affirmed
at 'C/RR5', suggesting below average recovery prospects ranging
from 11% to 30%.
CREL CDO asset managers continue to trade impaired assets out of
CDOs at a discount, including at least eleven credit impaired
interests from seven different CDOs. Ten of these assets were
sold at prices ranging from 2% to 50% of par while one mezzanine
loan was written off as a total loss. Three of these assets were
included in last month's CREL DI. Fitch considers all losses to
par in its evaluation of the credit enhancement available for each
CDO tranche.
29 loans, including one matured balloon, were extended in the
April reporting period. Many of these were short term extensions
to allow time to negotiate longer term extensions, or pursue
refinancing, which in most cases, Fitch expects will be
unobtainable.
While whole loans and A-notes comprise the highest percentage of
asset type in the CREL DI at 73%, mezzanine debt is the next
highest at 13.1%, up from 8% in March 2009. Due to the unsecured
nature of mezzanine debt and generally high leverage on these
positions, Fitch assumes little to no recoveries in its analysis
of these delinquencies.
Loans backed by interests in land represent the highest percentage
of assets in the CREL DI at approximately 27.7%. The next highest
percentage is multifamily at 23.1%.
The CREL DI includes loans that are 60 days or longer delinquent,
matured balloon loans, and the current month's repurchased assets.
* KCC and Administar Evaluate Potential Integration
---------------------------------------------------
Kurtzman Carson Consultants LLC, in an affidavit submitted in
Wellman Inc.'s Chapter 11 case, where it was the claims and
noticing agent, said that it and Administar operate as separate
entities but are "currently evaluating potential integration
opportunities."
On April 13, 2009, Computershare West, Inc., a subsidiary of
Computershare, Limited, purchased all of the outstanding ownership
interests of KCC. KCC continues to operate as a separate,
segregated business unit.
Administar -- http://www.administarllc.com/-- a claims and
noticing agent, is also an indirect subsidiary of Computershare
Limited.
Computershare Limited is a financial services and technologies
provided for the global securities industry.
KKC -- http://www.kccllc.net/-- has 130 active cases, which
include General Growth Properties Inc., Delphi Corp. and Tribune
Co.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
May 12-15, 2009
AMERICAN BANKRUPTCY INSTITUTE
Litigation Skills Symposium
Tulane University, New Orleans, La.
Contact: http://www.abiworld.org/
May 14-16, 2009
ALI-ABA
Chapter 11 Business Reorganizations
Langham Hotel, Boston, Massachusetts
Contact: http://www.ali-aba.org
June 10-13, 2009
ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS
25th Annual Bankruptcy & Restructuring Conference
The Ritz-Carlton Orlando Grande Lakes
Orlando, Florida
Contact: http://www.aria.org/
June 11-14, 2009
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa
Traverse City, Michigan
Contact: http://www.abiworld.org/
June 21-24, 2009
INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY &
BANKRUPTCY PROFESSIONALS
8th International World Congress
TBA
Contact: http://www.insol.org/
July 16-19, 2009
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Mt. Washington Inn
Bretton Woods, New Hampshire
Contact: http://www.abiworld.org/
July 29-Aug. 1, 2009
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Conference
The Westin Hilton Head Island Resort & Spa,
Hilton Head Island, S.C.
Contact: http://www.abiworld.org/
Aug. 6-8, 2009
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Conference
Hotel Hershey, Hershey, Pa.
Contact: http://www.abiworld.org/
Sept. 10-11, 2009
AMERICAN BANKRUPTCY INSTITUTE
Complex Financial Restructuring Program
Hyatt Regency Lake Tahoe, Incline Village, Nevada
Contact: http://www.abiworld.org/
Sept. 10-12, 2009
AMERICAN BANKRUPTCY INSTITUTE
17th Annual Southwest Bankruptcy Conference
Hyatt Regency Lake Tahoe, Incline Village, Nevada
Contact: http://www.abiworld.org/
Oct. 2, 2009
AMERICAN BANKRUPTCY INSTITUTE
ABI/GULC "Views from the Bench"
Georgetown University Law Center, Washington, D.C.
Contact: http://www.abiworld.org/
Oct. 5-9, 2009
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Desert Ridge, Phoenix, Arizona
Contact: 312-578-6900; http://www.turnaround.org/
Oct. 20, 2009
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Paris Las Vegas, Las Vegas, Nev.
Contact: http://www.abiworld.org/
Dec. 3-5, 2009
AMERICAN BANKRUPTCY INSTITUTE
21st Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, California
Contact: 1-703-739-0800; http://www.abiworld.org/
Apr. 29-May 2, 2010
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
June 17-20, 2010
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa, Traverse City, Michigan
Contact: 1-703-739-0800; http://www.abiworld.org/
July 7-10, 2010
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Ocean Edge Resort, Brewster, Massachusetts
Contact: 1-703-739-0800; http://www.abiworld.org/
July 14-17, 2010
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Conference
The Ritz-Carlton Amelia Island, Amelia, Fla.
Contact: http://www.abiworld.org/
Aug. 5-7, 2010
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 4-8, 2010
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
Dec. 2-4, 2010
AMERICAN BANKRUPTCY INSTITUTE
22nd Annual Winter Leadership Conference
Camelback Inn, Scottsdale, Arizona
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 31-Apr. 3, 2011
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
June 9-12, 2011
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa
Traverse City, Michigan
Contact: http://www.abiworld.org/
Dec. 1-3, 2011
AMERICAN BANKRUPTCY INSTITUTE
23rd Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, California
Contact: 1-703-739-0800; http://www.abiworld.org/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via
e-mail to conferences@bankrupt.com are encouraged.
Last Updated: May 10, 2009
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Ma. Theresa Amor J. Tan Singco, Ronald C. Sy, Joel Anthony
G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.
Copyright 2009. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
*** End of Transmission **