/raid1/www/Hosts/bankrupt/TCR_Public/090602.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, June 2, 2009, Vol. 13, No. 151
Headlines
17 PROPERTIES: Case Summary & Largest Unsecured Creditor
9140 BACKLICK: Case Summary & 15 Largest Unsecured Creditors
ACCENTIA BIOPHARMA: May Use Cash Collateral Until June 23
ADVANCED ENERGY: Fitch Affirms Issuer Default Rating at 'BB'
AL'S RIG SERVICE: Voluntary Chapter 11 Case Summary
ALLIS-CHALMERS ENERGY: Moody's Cuts Corp. Family Rating to 'B3'
ALVIN OAK HOLLOW: Voluntary Chapter 11 Case Summary
AMERICAN COMMUNITY: Case Summary & 4 Largest Unsecured Creditors
AMERICAN GREETINGS: S&P Downgrades Corporate Credit Rating to 'BB'
ANEKONA W: Case Summary & 20 Largest Unsecured Creditors
ASARCO LLC: Harbinger Files Plan & Disclosure Statement
ASARCO LLC: Harbinger Proposes to Pay Unsecured Claims in Full
ASARCO LLC: Court to Consider Plan Solicitation Procedures June 5
ASOCIADOS DE SAN JUAN: Case Summary & 20 Largest Unsec. Creditors
ATLANTIC MARINE: Moody's Affirms 'B2' Corporate Family Rating
ATLAS PIPELINE: S&P Downgrades Corporate Credit Rating to 'B-'
BALL CORP: Fitch Affirms Issuer Default and Debt Ratings at 'BB'
BH S&B: Wants Plan Filing Period Extended to September 15
BROOKFIELD PROPERTIES: S&P Affirms 'BB+' Preferred Stock Rating
CANNERY CASINO: Moody's Confirms 'B2' Corporate Family Rating
CANWEST LIMITED: Interest Nonpayment Cues S&P's 'D' Ratings
CARAUSTAR INDUSTRIES: Files for Chapter 11 Protection in Georgia
CARUASTER INDUSTRIES: Case Summary & 20 Largest Unsec. Creditors
CENTRAL VALLEY: Case Summary & 20 Largest Unsecured Creditors
CHARLES ALLEN KAMINS: Case Summary & 24 Largest Unsec. Creditors
CHEMTURA CORP: Creditors' Committee Taps Garden City as Info Agent
CHEMTURA CORP: Creditors' Committee Can Hire Akin Gump as Counsel
CHEMTURA CORP: Creditors' Committee Taps Houlihan Lokey as Advisor
CHIEF JOSEPH: Owes $600,000 From Projects in Jackson, Wyoming
CHRYSLER LLC: Court Approves Sale of Assets to Fiat SpA
CHRYSLER LLC: Indiana Entities Lack Standing to Challenge Actions
CHRYSLER LLC: Robert Manzo Explains May 20 Liquidation Analysis
CITI INSTITUTIONAL: Moody's Junks Ratings on Funds to 'Caa/MR5'
CITI INSTITUTIONAL ENHANCED: Moody's Junks Ratings on Funds
COACTIVE TECHNOLOGIES: Moody's Junks Corporate Family Rating
COMMUNITY BANCORP: Delays 10-Q Filing; Gets Delisting Notice
CONGREGATION BETH: Case Summary & 20 Largest Unsecured Creditors
CROSS LAKE: Seeks Court Okay of Plan of Compromise & Arrangement
DAVID P. GUILOT: Case Summary & 5 Largest Unsecured Creditors
DELPHI CORP: Reaches Agreement With GM on Sale of Assets
DEX MEDIA: Fitch Downgrades Issuer Default Rating to 'D'
DEX MEDIA EAST: Fitch Downgrades Issuer Default Rating to 'D'
DEX MEDIA WEST: Fitch Downgrades Issuer Default Rating to 'D'
DIAGNOSTIC IMAGING: Moody's Affirms 'B2' Corporate Family Rating
DIRECT MONEY: Involuntary Chapter 11 Case Summary
FERRO CORP: S&P Junks Corporate Credit Rating From 'B-'
FIRSTLIGHT POWER: Moody's Changes Outlook on B1 Rating to Negative
FISHER COMMUNICATIONS: S&P Cuts Corporate Credit Rating to 'B-'
FLEETWOOD ENTERPRISES: Files CMH Purchase Agreement With SEC
FOOTHILLS RESOURCES: Court Extends DIP Facility thru August 19
FOOTHILLS RESOURCES: Plan Filing Period Extended to October 9
FORD MOTOR: Prepares to Gain Market Share, To Increase Production
FRIAR TUCK INN: Case Summary & 20 Largest Unsecured Creditors
GENERAL MOTORS: Files for Ch 11; Management Changes in 60 Days
GENERAL MOTORS: Case Summary & 50 Largest Unsecured Creditors
GENERAL MOTORS: New GM Will Be Launched Within Next Three Months
GENERAL MOTORS: Reaches Agreement With Delphi on Sale of Assets
GENERAL MOTORS: Moody's Cuts Probability of Default to D
GENERAL MOTORS: S&P Cuts Corp. Credit Rating to D on Ch 11 Filing
GENERAL MOTORS: Chapter 11 Filing Cues Fitch to Cut IDR to 'D'
GOODY'S LLC: Reschedules Auction of IP Assets to June 16
GTC BIOTHERAPEUTICS: Effects One-for-10 Reverse Common Stock Split
HARRAH'S ENTERTAINMENT: Moody's Keeps Junk Corp. Family Ratings
HARRAH'S ESCROW: Moody's Gives Caa1 Rating on $1.375 Billion Notes
HARRAH'S OPERATING: Moody's Gives Caa1 Rating on $1.375 Bil. Notes
HAWAII SUPERFERRY: Case Summary & 20 Largest Unsecured Creditors
HAYES LEMMERZ: Delisted From Nasdaq; Files Credit Pact Amendments
HSF HOLDING: Files for Chapter 11 Bankruptcy Protection
INDUSTRIAL ENTERPRISES: 5 Affiliates Seek Bankruptcy Protection
JEEP EAGLE: Case Summary & 20 Largest Unsecured Creditors
JEFFREY MARC ROCKLAND: Case Summary & 20 Largest Unsec. Creditors
JORGE SANCHEZ: Case Summary & 20 Largest Unsecured Creditors
JOSE E. BERTRAN: Case Summary & 12 Largest Unsecured Creditors
KEVIN BRYANT LORNE: Case Summary & 6 Largest Unsecured Creditors
LEAP WIRELESS: Cricket Proposes $1 Billion Private Placement
LEAP WIRELESS: Stockholders Approves Third Amended 2004 Plan
LEIGH RZASA: Case Summary & 13 Largest Unsecured Creditors
LEGG MASON: Moody's Junks Ratings on Funds
LINDA F. SCHAEFER: Case Summary & 15 Largest Unsecured Creditors
LUCKY CHASE: Files Amended List of 20 Largest Unsecured Creditors
LUCKY CHASE: Files Schedules of Assets and Liabilities
LUCKY CHASE: May Use Cash Collateral of AmTrust Bank
LUMINENT MORTGAGE: Files 2nd Amended Plan and Disclosure Statement
LYONDELL CHEMICAL: Can Assume ACE Insurance Program Agreements
LYONDELL CHEMICAL: Wants to Hire PwC as Independent Auditor
LYONDELL CHEMICAL: Wants to Hire Nexant Inc. as Industry Expert
LYONDELL CHEMICAL: Can Hire Deloitte Tax as Tax Advisor
MCKINNEY AVENUE: Voluntary Chapter 11 Case Summary
MCSTAIN ENTERPRISES: Case Summary & 17 Largest Unsecured Creditors
METALDYNE CORPORATION: Chapter 11 Filing Cues Moody's 'D' Rating
METALDYNE CORP: Want to Obtain $11.7MM DIP Financing from DBNY
MICHAEL JOHN: Case Summary & 10 Largest Unsecured Creditors
MILLER PARK: Case Summary & 20 Largest Unsecured Creditors
MK REAL ESTATE: Voluntary Chapter 11 Case Summary
MPI EAGLES: Case Summary & 20 Largest Unsecured Creditors
NELSTAD MATERIAL: Voluntary Chapter 11 Case Summary
NEWFIELD EXPLORATION: Fitch Affirms Issuer Default Rating at 'BB+'
NEWFOUNDLAND GOLDBAR: Securities Gets Suspended from Trading
NOBLE INTERNATIONAL: Board Appoints Craig Parsons as President
NORVERGENCE INC: Chapter 7 Trustee Can Pursue Fraud Claims
NOVA CHEMICALS: S&P Keeps 'CCC+' Long-Term Corporate Credit Rating
NOVA HOLDING: Veolia ES Resigns From Creditors Committee
NOVA HOLDING: Can Use WestLB Cash Collateral Until June 19
ODYSSEY PETROLEUM: 2008 Financial Statements Nears Completion
ORE PHARMA: Gets NASDAQ Delisting Notice
PACIFICNET INC: Changes Management, Appoints William Chan as CEO
PARTICLE DRILLING: Case Summary & 20 Largest Unsecured Creditors
PHYSICIANS CHOICE: Case Summary & 9 Largest Unsecured Creditors
PPLACE ONE: Case Summary & 20 Largest Unsecured Creditors
PRIMUS TELECOM: Files Exhibits Related to Plan Solicitation
QUEBECOR WORLD: Moody's Assigns 'B1' Corporate Family Rating
QIMONDA NA: Seeks Approval of Incentive Plan for Key Employees
RAILPOWER TECHNOLOGIES: Gets Additional Extension of Stay Period
REVLON INC: Implements Worldwide Organizational Restructuring
REVLON INC: Operating Affiliate Amends U.S. Benefit Pension Plan
RH DONNELLEY: Chapter 11 Filing Prompts S&P's Rating Cut to 'D'
RH DONNELLEY: Fitch Downgrades Issuer Default Rating to 'D'
RH DONNELLEY: Moody's Cuts Probability of Default Rating to 'D'
RHD: Fitch Downgrades Issuer Default Rating to 'D'
RICHARD W. MANN: Case Summary & 20 Largest Unsecured Creditors
RITE AID: Moody's Assigns 'B3' Rating on $400 Mil. 2015 Loan
RITE AID: S&P Assigns 'B+' Rating on $400 Million Tranche 4 Loan
RITZ CAMERA: Seeks to Establish Aug. 3 as Claims Bar Date
ROBERT MANUFACTURING: Case Summary & 20 Largest Unsec. Creditors
ROMARINO G. ZERI: Case Summary & 20 Largest Unsecured Creditors
ROMULO A. CREDO: Case Summary & 20 Largest Unsecured Creditors
SEDONA VICTORVILLE: Case Summary & 3 Largest Unsecured Creditors
SEMGROUP ENERGY: Completes Execution of Asphalt Storage Pacts
SEMGROUP ENERGY: Posts $11.8MM Net Loss in Quarter Ended Sept. 30
SEMGROUP LP: Creditors' Committee Seeks to Amend Quinn Retention
SEMGROUP LP: ConocoPhillips Still Negotiating $11.6MM Payment
SIMMOND BEDDING: Forbearance Pact With Lenders Extended to Jun 30
SKINNER ENGINE: Asbestos-Related Chapter 11 Plan Fails
SONIC AUTOMOTIVE: Expects Involuntary Chapter 11 Filing
SOURCE INTERLINK: Gets NASDAQ Delisting Notice
SPANISH SPRINGS: Case Summary & 7 Largest Unsecured Creditors
STEPHEN C. DOWNING: Case Summary & 1 Largest Unsecured Creditor
STERLING MINING: Gets Right to Assume, Cure Sunshine Lease & Mine
TENET HEALTHCARE: Tender Offer Won't Affect Moody's 'B3' Rating
TEREX CORP: S&P Assigns 'BB-' Rating on $300 Mil. Senior Notes
UNIFRAX HOLDING: S&P Gives Negative Outlook & Affirms 'B' Rating
VALEANT PHARMACEUTICALS: Moody's Assigns 'Ba3' Rating on Offering
VAQUERO ROBLES: Case Summary & 7 Largest Unsecured Creditors
WASHINGTON MUTUAL: Fitch Puts Low-B Ratings on Notes on Pos. Watch
WC WOOD: Voluntary Chapter 15 Case Summary
WEIRTON MUNICIPAL: Fitch Cuts Ratings on $7.5 Mil. Bonds to 'BB+'
WOO LLC: Case Summary & 4 Largest Unsecured Creditors
WSB FINANCIAL: Gets NASDAQ Delisting Notice
WYLE HOLDINGS: Moody's Reviews 'B2' Corporate Family Rating
WYLE LABORATORIES: Moody's Reviews Ba3 Ratings on Two Loans
* Large Companies With Insolvent Balance Sheets
*********
17 PROPERTIES: Case Summary & Largest Unsecured Creditor
--------------------------------------------------------
Debtor: 17 Properties, LLC
145 Route 17
Upper Saddle River, NJ 07458
Bankruptcy Case No.: 09-23940
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Judge: Novalyn L. Winfield
Debtor's Counsel: Richard D. Trenk, Esq.
Trenk, DiPasquale, Webster,
Della Fera & Sodono, P.C.
347 Mt. Pleasant Avenue
Suite 300
West Orange, NJ 07052
Tel: (973) 243-8600
Email: rtrenk@trenklawfirm.com
Total Assets: $4,500,100
Total Debts: $4,873,615
A full-text copy of the Debtor's petition, including the identity
of its largest unsecured creditor, is available for free at:
http://bankrupt.com/misc/njb09-23940.pdf
The petition was signed by Leigh Rzasa Ormes, sole partner of the
Company.
9140 BACKLICK: Case Summary & 15 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: 9140 Backlick LLC
44050 Ashburn Plaza #195-630
Ashburn, VA 20147
Bankruptcy Case No.: 09-14308
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
Eastern District of Virginia (Alexandria)
Judge: Robert G. Mayer
Debtor's Counsel: Christopher S. Moffitt, Esq.
218 North Lee St. 3rd Floor
Alexandria, VA 22314-2631
Tel: (703) 683-0075
Fax: (425) 952-8213
Email: csm@moffittlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
15 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/vaeb09-14308.pdf
The petition was signed by David Cameron, president of the
Company.
ACCENTIA BIOPHARMA: May Use Cash Collateral Until June 23
---------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida has
granted Accentia BioPharmaceuticals, Inc., et al., permission to
use Cash Collateral from May 13, 2009, and continuing through and
including June 23, 2009, to pay ordinary, necessary and reasonable
operating expenses incurred by the Debtors in connection with the
operation of their businesses, in accordance with a budget.
The use of Cash Collateral has been consented to by Valens
Offshore and Valens US and the official committee of unsecured
creditors. As adequate protection, each of the Lenders was
granted a replacement lien on postpetition collateral of the same
description as that subject to the lenders' prepetition liens.
A hearing on the continued use of Cash Collateral for the period
following the expiration date will be held on June 23, 2009, at
3:45 p.m.
Headquartered in Tampa, Florida, Accentia BioPharmaceuticals Inc.
(Nasdaq: ABPI) -- http://www.accentia.net/-- is a vertically
integrated biopharmaceutical company focused on the development
and commercialization of drug candidates that are in late-stage
clinical development and typically are based on active
pharmaceutical ingredients that have been previously approved by
the FDA for other indications. The Company's lead product
candidate is SinuNase(TM), a novel application and formulation of
a known therapeutic to treat chronic rhinosinusitis.
Additionally, the Company has acquired the majority ownership
interest in Biovest International Inc. and a royalty interest in
Biovest's lead drug candidate, BiovaxID(TM) and any other biologic
products developed by Biovest. The Company also has a specialty
pharmaceutical business, which markets products focused on
respiratory disease and an analytical consulting business that
serves customers in the biopharmaceutical industry.
Accentia Biopharmaceuticals and nine affiliates filed for
Chapter 11 protection on November 10, 2008 (Bankr. M.D. Florida,
Lead Case No. 08-17795). Charles A. Postler, Esq., and Elena P.
Ketchum, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa,
Florida; Jonathan B. Sbar, Esq., at Rocke, McLean & Sbar, P.A.,
represent the Debtors as counsel. Adam H. Friedman, Esq., at
Olshan Grundman Frome Rosenzweig, and Paul J. Battista, Esq., at
Genovese Joblove & Battista PA, represent the official committee
of unsecured creditors as counsel. In their bankruptcy petition,
the Debtors listed assets of $134,919,728 and debts of $77,627,355
as of June 30, 2008.
Based in Tampa, Florida, Biovest International Inc. (OTC BB: BVTI)
-- http://www.biovest.com/-- is a pioneer in the development of
advanced individualized immunotherapies for life-threatening
cancers of the blood system. Biovest is a majority-owned
subsidiary of Accentia Biopharmaceuticals Inc., with its remaining
shares publicly traded. Biovest International Inc.'s consolidated
balance sheet at June 30, 2008, showed $5.9 million in total
assets, $36.8 million in total liabilities, and $4.6 million in
non-controlling interests in variable interest entities, resulting
in a $35.5 million total stockholders' deficit.
ADVANCED ENERGY: Fitch Affirms Issuer Default Rating at 'BB'
------------------------------------------------------------
Fitch Ratings has affirmed AEI's 'BB' Issuer Default Rating and
the 'BB rating on its US$1 billion term loan and US$500 million
revolving credit facility. The Rating Outlook is Stable.
AEI's ratings reflect the company's solid portfolio of energy
companies, which are focused in four primary lines of business:
electric distribution, power generation, natural gas distribution,
and natural gas transportation, and generate a relatively
predictable cash flow stream to AEI. The company's key operating
assets have a relatively stable base of revenues and cash flows as
the bulk of their revenues are either from contracted Power
Purchase Agreements or from regulated energy businesses; stable
operating cash flow translates to more predictable dividend flows
to AEI. Financial leverage at the operating company level as
measured by debt to EBITDA is low to moderate on average and many
of the key assets exhibit investment grade-like characteristics
excluding sovereign related risks. Most operating companies
generate revenues in local currency, which exposes the parent
company to fluctuations in exchange rates.
AEI's cash flows are, for the most part, dividends received from
its operating subsidiaries and are somewhat concentrated in six
operating companies. These key assets are expected to provide in
excess of 70% of total distributions to the parent company on
average over the next several years absent a significant
acquisition or divestiture within the portfolio. The largest
contributor to AEI's total distributions is Elektro, a moderately
low-risk electric distribution business serving approximately
2.2 million customers in the state of Sao Paulo, Brazil. At the
end of 2008, Elektro represented 43% of total proportional EBITDA
and 36% of total subsidiary distributions to AEI. Elektro
operating company leverage is low, with total debt to EBITDA of
0.9 times (x) for fiscal year-end 2008. The company's other key
operating assets are Promigas (Colombia, 8% of total 2008
subsidiary distributions), Generadora San Felipe Limited
Partnership (Dominican Republic, 5%), Trakya Elektrik (Turkey,
13%), Luz del Sur (Peru, 4%) and Chilquinta (Chile, 0%).
Distributions from Chilquinta and Luz del Sur are expected to grow
in size over the medium term and Trakya's distributions will
moderate to approximately 5% of total subsidiary distributions.
The company's operating assets are concentrated in Latin America
as approximately 77% of total subsidiary distributions to the
parent company in 2008 came from this region. Geographic
diversification is expected to gradually increase over the longer
term as AEI seeks to expand and grow its portfolio outside of the
region. Presently, the company's most important markets are Brazil
('BBB-', Stable Outlook) and Colombia ('BB+', Stable Outlook),
where AEI has sizable investments in electric distribution and
natural gas transportation businesses. During 2008, these two
countries together accounted for 68% and 44% of AEI's consolidated
operating income and total subsidiary distributions to the parent
company, respectively.
AEI's cash flow and geographic diversification moderately reduce
the company's exposure to a downturn in any particular market,
regulatory changes, and/or a key operating asset.
AEI's financial leverage measures are moderate and consistent with
the rating category. Consolidated leverage, as measured by total
consolidated debt to consolidated EBITDA, was 3.7x as of
December 31, 2008. On a proportional basis, which is based on the
company's ownership interest, leverage is low at the operating
company level with total proportional operating company debt to
proportional operating company EBITDA of 1.8x; including parent
company debt in this ratio, leverage increases to approximately
3.6x at the end of 2008. At the parent company level only, AEI
reported a total parent company debt to cash flow from
subsidiaries (defined as dividends received plus interest income
minus general and administrative expenses), of approximately 3.2x
for the same period.
At the end of 2008, total consolidated debt was US$3.9 billion;
approximately US$1.8 billion or 45% was at the holding company and
the US$2 billion balance at its operating subsidiaries. At
December 31, 2008, parent company debt was composed of a
US$936 million senior secured term loan, a US$495 million senior
secured revolving credit facility, and a US$352 million of
subordinated payment-in-kind notes. The PIK notes have limited
acceleration rights and the company has issued a tender offer to
covert the notes to equity. During the first quarter of 2009,
AEI's shareholder, Ashmore Investment Management, converted
US$118 million of its PIK notes into equity, reducing somewhat the
parent company's leverage. Operating company debt is generally
funded in local currencies, reducing foreign exchange risk.
AEI's credit ratings incorporate the structural subordination of
the parent company debt to the debt at its operating companies.
AEI is an energy holding company that relies on dividends and
interest and principal payments from intercompany loans to service
its debt; the vast majority of the dividends received are from
companies controlled by AEI. Subsidiary distributions to the
parent company covered debt service, estimated at US$145 million,
by approximately 4.4x and, going forward, distributions are
expected to cover debt service in excess of 3.0x. During 2008,
consolidated EBITDA, as measured by operating income plus
depreciation and amortization, was US$1,081 million. Total
subsidiary distributions to AEI equaled approximately
US$550 million during 2008. Going forward, Fitch expects
distributions to AEI to range in the US$425 million to
US$475 million per annum and will vary depending on exchange rate
fluctuations.
AEI owns and operates energy infrastructure businesses in power
generation, power distribution, natural gas transportation and
services, natural gas distribution and retail fuel. AEI's assets
consist of 39 energy companies, most of which AEI directly or
indirectly controls. AEI's most important asset is Brazilian
electric distribution company, Elektro, which represents
approximately 32% of the parent company cash flow generation.
AL'S RIG SERVICE: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Al's Rig Service, LLC
101 South 8 Mile Road
Cheyenne, WY 82601
Bankruptcy Case No.: 09-20490
Chapter 11 Petition Date: May 30, 2009
Court: United States Bankruptcy Court
District of Wyoming (Cheyenne)
Judge: Peter J. McNiff
Debtor's Counsel: Paul Hunter, Esq.
2616 Central Avenue
Cheyenne, WY 82001
Tel: (307) 637-0212
Email: attypaulhunter@prodigy.net
Estimated Assets: $100,001 to $500,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
when it filed its petition.
The petition was signed by Allen W. Johnson, owner of the Company.
ALLIS-CHALMERS ENERGY: Moody's Cuts Corp. Family Rating to 'B3'
---------------------------------------------------------------
Moody's Investors Service downgraded Allis-Chalmers Energy, Inc.'s
Corporate Family Rating to B3 from B2, its Probability of Default
Rating to B3 from B2, and its senior unsecured note ratings to
Caa1 (LGD 4, 61%) from B3 (LGD 4, 61%). The ratings remain on
review for further possible downgrade.
The downgrade reflects weaker than expected earnings as a result
of deepening sector weakness in North America, which even with
lower debt levels, is expected to result in financial leverage
levels that are incompatible with the prior B2 Corporate Family
Rating. The ratings remain under review for downgrade reflecting
the company's announcement that it is commencing a cash tender
offer on its $255 million 9% senior notes due 2014 and
$250 million 8.5% senior notes due 2017.
ALY plans to buy back up to $100 million in principal of its 9%
senior notes due 2014 and up to $25 million in principal of its
senior notes due 2017 via a modified Dutch auction. The tender
offer will be funded through a common stock rights offering
(expected proceeds of between $80 and $89 million) and convertible
perpetual preferred stock offering (expected proceeds of between
$35 and $36 million), with approximately $80 million being used to
fund the tender offer and $37 million being used to repay drawings
under its revolving bank credit facility due 2012. Lime Rock
Partners V, L.P., has agreed, subject to the certain conditions,
to backstop the rights offering and to purchase the preferred
stock. As a result, Lime Rock is expected to gain four seats on
ALY's board, with voting control capped at 35%.
Given that the tender offer, as currently proposed, represents
both a significant discount to par and a meaningful portion of
ALY's total debt, Moody's would likely view the culmination of the
tender offer as a distressed exchange and would classify the
transaction as a limited default if the tender offer closes.
Moody's would also downgrade the senior unsecured note ratings to
a level consistent with the expected loss implied by the terms of
the tender offer.
The successful completion of the tender offer is not likely to
positively affect ALY's B3 Corporate Family Rating. While the
tender offer will result in a reduction in the company's financial
leverage and interest payment savings, as well as increased
covenant compliance headroom, Moody's remains concerned over
deepening oilfield services sector weakness, particularly in North
America. ALY's 2009 operating results are expected to be weaker
than previously anticipated, as upstream producers have continued
to reduce capital spending, which has reduced sector capacity
utilization and pricing power. While Moody's notes that ALY's
earnings should benefit from its cost reduction efforts, as well
as its considerable international exposure, a high proportion of
ALY's cash flows remain tied to drilling activity, which is one of
the more volatile segments within the services sector and which
has faced a steep drop off in activity levels in North America.
Moreover, the oilfield services industry is very competitive and
several of ALY's business lines directly compete against larger
more strongly capitalized competitors that have greater financial
flexibility and more entrenched market positions than ALY.
Moody's last rating action on ALY dates from February 20, 2009, at
which time Moody's changed the rating outlook to negative and
downgraded ALY's senior unsecured notes to B3 (LGD4, 61%) from B2
(LGD4, 57%),
Allis-Chalmers Energy Inc., headquartered in Houston, Texas, is a
provider of oilfield services and products for oil and gas
companies.
ALVIN OAK HOLLOW: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Alvin Oak Hollow Associates, LTD.
7373 East Doubletree Ranch Road
Suite 225
Scottsdale, AZ 85258
Bankruptcy Case No.: 09-11952
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Houston Promenade Associates I, LTD 09-32395
NE 40 Partners, Limited Partnership 09-30478
Old Hillcroft II Associates LTD 09-32402
Pearland Westside Associates Limited 09-09407
Chapter 11 Petition Date: May 30, 2009
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Sarah Sharer Curley
Debtor's Counsel: Shelton L. Freeman, Esq.
Deconcini Mcdonald Yetwin & Lacy Pc
7310 North 16th Street #330
Phoenix, AZ 85020
Tel: (602) 282-0500
Fax: (602) 282-0520
Email: tfreeman@dmylphx.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 Raymond G. Tiedje.
AMERICAN COMMUNITY: Case Summary & 4 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: American Community Newspapers Inc.
aka American Community Newspapers
14875 Landmark Boulevard
Suite 1110
Dallas, TX 75254
Bankruptcy Case No.: 09-11854
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
American Community Newspapers LLC 09-11446
Amendment I, Inc. 09-11447
Leesburg Today, Inc. 09-11448
Loudoun Magazine, Inc. 09-11449
Loudoun Business, Inc. 09-11450
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Judge: Kevin J. Carey
Debtor's Counsel: William E. Chipman, Jr., Esq.
Landis Rath & Cobb LLC
919 North Market Street
Suite 1800
Wilmington, DE 19801
Tel: (302) 467-4437
Fax: (302) 467-4450
Email: chipman@lrclaw.com
Estimated Assets: $0 to $50,000
Estimated Debts: $10,000,001 to $50,000,000
A full-text copy of the Debtor's petition, including a list of its
4 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/deb09-11854.pdf
The petition was signed by David Kosofsky, chief financial officer
of the Company.
AMERICAN GREETINGS: S&P Downgrades Corporate Credit Rating to 'BB'
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on American
Greetings Corp., including the long-term corporate credit rating
to 'BB' from 'BB+'. At the same time, S&P lowered its rating on
the company's senior secured debt to 'BB+' from 'BBB-', one notch
higher than the corporate credit rating on the company. The debt
consists of a $350 million revolving credit facility maturing in
2011 and a $100 million term loan (fully drawn at Feb. 28, 2009)
maturing 2013. The recovery rating on this debt remains at '2',
indicating that lenders can expect significant (70%-90%) recovery
in the event of a payment default. In addition, S&P lowered the
ratings on the company's $222 million senior unsecured notes due
2016 to 'B+' from 'BB-', two notches lower than the corporate
credit rating on the company and kept the recovery rating at '6',
indicating that lenders can expect negligible (0%-10%) recovery in
the event of payment default.
S&P removed all ratings from CreditWatch, where S&P had placed
them with negative implications on Dec. 23, 2008, and subsequently
lowered them to 'BB+' and maintained them on CreditWatch on
Jan. 14, 2009, reflecting S&P's concerns about weaker-than-
expected operating performance and higher leverage.
"The ratings on American Greetings reflect its aggressive
financial policies, strong market position, and broad product
offerings within the greeting card industry," said Standard &
Poor's credit analyst Chris Johnson. "We believe the company
faces some near-term integration risk following its recent
acquisition of Recycled Paper Greetings and its purchase of the
Papyrus brand from Schurman Fine Papers." The company no longer
has a retail presence following the sale of its retail stores to
Schurman Fine Papers for $6 million on April 17, 2009.
Cleveland, Ohio-based American Greetings is the second-largest
manufacturer and distributor of greeting cards and other social
expression products such as gift-wrap, party goods, stationery,
balloons, and related items. S&P believes that growth in the
company's core greeting card business will continue to be
constrained by the industry's slow growth, and mature
characteristics. While American Greetings may continue trying to
expand its AG interactive segment, this segment represents a
modest portion of its overall sales.
The outlook is stable, reflecting S&P's belief that operating
performance will improve moderately in fiscal 2010 resulting in
modestly improved credit measures, including leverage in the 3.5x
area. S&P could revise the outlook to negative if adjusted debt
to EBITDA does not improve as expected from S&P's current pro
forma estimated level of about 4x or if the company adopts more-
aggressive financial policies. S&P estimates that leverage would
remain in the 4x area if annual sales declines approach 10% and
EBITDA margins don't improve to at least above 8.5%.
Alternatively, S&P would consider revising the outlook to positive
if the company is able to grow existing sales and leverage
approaches 3x while funds from operations to debt approaches 25%.
ANEKONA W: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Anekona W, LLC
P.O. Box 1237
Kamuela, HI 96743
Bankruptcy Case No.: 09-01181
Type of Business: The Debtor is in the Miscellaneous Personal
Services, N.E.C. industry in Hawaii.
Chapter 11 Petition Date: May 27, 2009
Court: District of Hawaii (Honolulu)
Judge: Robert J. Faris
Debtor's Counsel: William H. Gilardy, Jr., Esq.
wgilardy@yhpro.com
William H. Gilardy, Jr., AAL, ALC
1620 Ala Moana Blvd., Ste. 510
Honolulu, HI 96815
Tel: (808) 237-4100
Fax: (808) 237-4101
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The Debtor's Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
City & County of Honolulu $73,188
848 S. Beretenia St., Ste. 3
Honlulu, HI 96813
Gusto LLC $20,743
15621 Red Hill Ave., Ste. 100
Tustin, CA 92780
Clear Channel Radio $13,163
PO Box 50623
Los Angeles, CA 90074-0623
D. Otani Produce $12,282
HFM Foodservice $11,622
Savannah Enterprises $7,500
Mitsubishi Electric & Electronics $6,910
Ricoh Americas Corporatio $6,726
Galaxy Hotel Systems LLC $6,222
Dust-Tex $5,036
Fresh Island Fish $4,668
Southern Wine & Spirits $4,619
King Food Service $4,019
Fireman's Fund Insurance $4,187
Young Laundry & Cleaning $3,785
Sprint $3,739
The Llikai Hotel $3,199
OfficeMax Inc. - Hawaii $3,164
Xerox Corporation $2,951
Pepsi Bottling Group $2,841
The petition was signed by Brian Anderson, manager.
ASARCO LLC: Harbinger Files Plan & Disclosure Statement
-------------------------------------------------------
Harbinger Capital Partners Master Fund I, Ltd., delivered to the
U.S. Bankruptcy Court for the Southern District of Texas a
Chapter 11 Plan of Reorganization and Disclosure Statement for
ASARCO LLC, Southern Peru Holdings, LLC, AR Sacaton, LLC, and
ASARCO Master, Inc., on May 27, 2009. Harbinger is one of the
Debtors' major bondholders.
Judge Richard S. Schmidt will commence a hearing on June 5, 2009,
to consider the adequacy of Harbinger's Disclosure Statement
pursuant to Section 1129 of the Bankruptcy Code.
Harbinger previously sought and obtained the Court's permission
to file its own plan to take ASARCO LLC out of bankruptcy.
Harbinger also asked Judge Schmidt to terminate the exclusive
plan filing period and solicitation period afforded to the
Debtors and ASARCO Inc., as parent company. ASARCO LLC and its
Parent previously filed their own Chapter 11 plans and disclosure
statements.
The Harbinger Plan provides for the purchase of ASARCO LLC's
assets for $500 million and the assumption of certain
liabilities. Lawrence M. Clark, Jr., Harbinger's vice president,
signed the Harbinger Plan.
Copies of the Harbinger Plan and Disclosure Statement, as well a
redlined copy of the Harbinger Plan versus the Debtors' Plan, are
available for free at:
http://bankrupt.com/misc/ASARCO_Harbinger_Plan_05272007.pdf
http://bankrupt.com/misc/ASARCO_Harbinger_DS_05272007.pdf
http://bankrupt.com/misc/ASARCO_Harbinger_ComparedPlan.pdf
Both the counsel for ASARCO LLC and that of its Parent, however,
have concerns with respect to Harbinger's financial capability to
honor its offer. According to Reuter's Braden Reddall, lawyers
for ASARCO LLC and Grupo Mexico SAB de C.V. said Harbinger was
"bottom fishing" and sought some assurance to show that it was
not just trying to have ASARCO LLC's assets for a bargain.
Grupo Mexico said in a statement that it has deposited $1.3
billion, or the value of its current bid for the ASARCO LLC
assets, in an escrow account to assure creditors it had the cash
to fund its bid to regain control of ASARCO.
At a May 26, 2009, hearing, Judge Schmidt asked Harbinger to
provide some financial assurance that it would fulfill its
financial obligations under its plan.
The Harbinger Plan
Harbinger tells the Court that faced with the poor options
provided by the Debtors' Plan and the Parent's Plan and the
substantial likelihood that neither plan can be confirmed, it has
prepared its own plan, a purchase and sale agreement for use in
connection with the Harbinger Plan, and a rider to the Debtors'
Disclosure Statement. Harbinger avers that its Plan is
substantially similar to the Debtors' Plan.
Aside from the $500 million purchase of ASARCO LLC's assets by an
entity to be designated by Harbinger, the Harbinger Plan also
contemplates the assumption of certain of the Debtors'
liabilities, including:
-- all liabilities with respect to assumed contracts;
-- all amounts due and payable pursuant to all of the Debtors'
accounts payable as of the close of business on the Closing
Date relating to the Purchased Assets, other than certain
excluded payables;
-- all liabilities arising on or after the Closing Date with
respect to any transferred employee or any employee benefit
plan, or that are allocated to Harbinger, or that are
agreed to between Harbinger and the Debtors' unions; and
-- all liabilities, other than non-settled toxic tort claims,
relating to any environmental laws regarding any of the
real property asserted by governmental authorities related
to the Purchased Assets.
Majority of the proceeds from the sale of the ASARCO LLC assets
to Harbinger, together with other available plan consideration,
will be paid to holders of Allowed Claims largely in accordance
with the priorities established by the Bankruptcy Code:
(1) Holders of Administrative Claims, Priority Tax Claims, and
Priority Claims will be paid the Allowed Amount of their
Claims;
(2) Holders of Secured Claims, at the Harbinger Plan Sponsor's
option, will either be paid the Allowed Amount of their
Claims with any applicable postpetition interest or
reinstatement;
(3) Holders of Convenience Claims will be paid the Allowed
Amount of their Claims;
(4) Holders of Allowed Unsecured Asbestos Personal Injury
Claims and Unknown Asbestos Claims will receive 100% of
the interests in Reorganized Covington and their pro rata
share of the Plan Consideration, which will include cash
as well as the Liquidation Trust Interests and the SCC
Litigation Trust Interests;
(5) Holders of Allowed General Unsecured Claims will receive
their pro rata share of the Plan Consideration, which will
include cash as well as the Liquidation Trust Interests
and the SCC Litigation Trust Interests;
(6) Holders of Late-Filed Claims will receive interests in the
Liquidation Trust and the SCC Litigation Trust to be
applied in accordance with the Trust Interest Priorities;
(7) Holders of Subordinated Claims will receive interests in
the Liquidation Trust and the SCC Litigation Trust to be
applied in accordance with the Trust Interest Priorities;
and
(8) Holders of Interests will receive interests in the
Liquidation Trust and the SCC Litigation Trust to be
applied in accordance with the Trust Interest Priorities.
An Asbestos Trust will be established under the Harbinger Plan
for the benefit of Unsecured Asbestos Personal Injury Claims and
Unknown Asbestos Claims. However, unlike the Debtors' Plan and
the Parent's Plan, the Harbinger Plan does not provide for a
channeling injunction pursuant to Section 524(g) of the
Bankruptcy Code. Rather, holders of Unsecured Asbestos Personal
Injury Claims and Unknown Asbestos Claims must first be satisfied
by recourse against the Asbestos Trust.
Unsecured Asbestos Personal Injury Claimants will be enjoined
from ever asserting claims against the Harbinger Plan Sponsor.
Holders of Unknown Asbestos Claims would be enjoined from
asserting claims against the Harbinger Plan Sponsor until the
time as they have exhausted the remedies provided by the Asbestos
Trust and Asbestos Trust Distribution Procedures.
To the extent the Harbinger Plan Sponsor incurs any liability,
damages and costs associated with any third-party claims arising
out of or relating to the Harbinger Plan Sponsor's purchase of
ASARCO LLC's assets, the Liquidating Trust and the SCC Litigation
Trust will indemnify and hold the Harbinger Plan Sponsor
harmless, or otherwise reimburse or compensate the Harbinger Plan
Sponsor for any liability, damages and costs, provided that the
obligations of the Liquidating Trust and the SCC Litigation Trust
with respect to indemnity will be subordinate in all respects to
the payment in full of all Allowed General Unsecured Claims,
Allowed Unsecured Asbestos Personal Injury Claims and Late-Filed
Claims.
There will be an estimation with respect to ASARCO LLC's
liability on account of Asbestos Personal Injury Claims and
Unknown Asbestos Claims by the Bankruptcy Court, or the parties
will reach an agreement as to the aggregate Allowed Amount of
those Claims for purposes of the Harbinger Plan. However, as a
condition precedent to the Harbinger Plan, the estimated or
agreed upon amount of the Claims will not exceed $500,000,000 in
the aggregate.
Unlike the Debtors' Plan, the Litigation Claims contributed to
the Liquidation Trust under the Harbinger Plan will include
claims against Sterlite Industries that the Parent has estimated
may be worth as much as $3 billion, for the benefit of General
Unsecured Claims, Unsecured Asbestos Personal Injury Claims, Late
Filed Claims, Subordinated Claims and Interests.
In addition, unlike the Parent's Plan, the SCC Litigation Claim,
which the Debtors estimate was worth approximately $6.87 billion
as of April 1, 2009, will be contributed to the SCC Litigation
Trust for the benefit of General Unsecured Claims, Unsecured
Asbestos Personal Injury Claims, Late Filed Claims, Subordinated
Claims and Interests.
The Harbinger Plan will permit any alternative plan sponsor to
purchase substantially all of ASARCO LLC's assets provided that
the alternative plan sponsor (i) has made a cash bid of more than
$500,000,000, (ii) has agreed to perform under the Harbinger Plan
and related purchase and sale agreement without any additional
conditions or other modifications, (iii) has deposited at least
$500,000,000 into escrow as assurance of performance, and (iv)
has negotiated a collective bargaining agreement that is
acceptable to the United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial, and Service Workers
International Union. The Harbinger Plan does not provide for the
payment of any "topping fee" to Harbinger in the event an
alternative plan sponsor submits a higher bid.
Mr. Clark asserts that the Harbinger Plan has these significant
advantages over the Debtors' Plan and the Parent's Plan:
-- The Harbinger Plan does not require a trust under
Section 524(g) of the Bankruptcy Code or any extraordinary
rulings from the Court regarding the Debtors' asbestos
liability.
-- The Harbinger Plan preserves, and allows the Debtors'
creditors to benefit from, the Debtors' valuable litigation
claims against both Sterlite and the Parent.
-- Because it retains all of the Debtors' litigation rights,
the Harbinger Plan will eventually pay all creditors 100%
of their claims with interest.
-- The Harbinger Plan clearly satisfies:
(x) the hypothetical Chapter 7 liquidation test under
Section 1129(a)(7);
(y) the feasibility test under Section 1129(a)(11); and
(z) the absolute priority rule under Section 1129(b)(2);
-- The Harbinger Plan does not discriminate unfairly among
classes of creditors as required by Section 1129(b)(1) of
the Bankruptcy Code.
-- Harbinger has previously reached an agreement with the
Debtors' unions and are certain that they will again, and
thus, the Harbinger Plan has virtually no risk of union
rejection.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-
20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
ASARCO LLC filed a plan of reorganization on July 31, 2008,
premised on the sale of the Debtors' assets to Sterlite USA for
$2.6 billion. By October 2008, ASARCO LLC informed the Court that
Sterlite refused to close the proposed sale and thus, the Original
Plan could not be confirmed. The parties has since renewed their
purchase and sale agreement and ASARCO LLC has obtained Court
approval of a settlement and release contained in the new PSA for
the sale of the ASARCO assets for $1.1 billion in cash and a
$600 million note.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted its own plan which allows it to keep its equity
interest in ASARCO LLC by offering full payment to ASARCO's
creditors. AMC offered provide up to $2.7 billion in cash and a
$440 million guarantee to assure payment of all allowed creditor
claims, including payment of liabilities relating to asbestos and
environmental claims. AMC's plan is premised on the estimation of
the approximate allowed amount of the claims against ASARCO.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASARCO LLC: Harbinger Proposes to Pay Unsecured Claims in Full
--------------------------------------------------------------
The plan of reorganization submitted by Harbinger Capital
Partners Master Fund I, Ltd., for the restructuring of ASARCO LLC
and its debtor-affiliates groups claims and interests asserted
against the Debtors into 10 classes:
Class Description Treatment & Recovery
----- ----------- --------------------
N/A Administrative Paid in full, in cash.
Claims Est. Aggregate Amt: $441MM to $612MM
Est. Recovery: 100%
N/A Priority Tax Paid in full, in cash.
Claims Est. Aggregate Amt: $4MM
Est. Recovery: 100%
1 Priority Claims Paid in full, in cash.
Est. Aggregate Amt: De Minimis
Est. Recovery: 100%
Status: Unimpaired
Deemed to accept the Plan
Not entitled to vote
2 Secured Claims Holders will, at the election of the
Debtors, either (a) receive the
allowed amount, with postpetition
interest, in Cash, or (b) be
reinstated.
Est. Aggregate Amt: $28MM to $33MM
Est. Recovery: 100%
Status: Holders will vote, but only
the votes of claimants
receiving the Cash Payment
Option will be counted
3 General Holders will receive their pro rata
Unsecured Claims share of Plan Consideration,
consisting of Cash, Litigation Trust
Interests and SCC Litigation Trust
Interests.
Est. Aggregate Amt: $2.1B to $2.3B
Est. Recovery: 100%
Status: Impaired/Entitled to vote
4 Unsecured Holders will receive their pro rata
Asbestos share of Plan Consideration,
Personal consisting of Cash, Liquidation Trust
Injury Interests, and SCC Litigation Trust
Claims Interests.
Est. Aggregate Amt: To be determined
Est. Recovery: 100%
Status: Impaired/Entitled to vote
5 Convenience Holders will generally receive the
Claims allowed amount of the claim, in Cash,
on the Effective Date.
Est. Aggregate Amt: To be determined
Est. Recovery: 100%
Status: Unimpaired
Deemed to accept the Plan
Not entitled to vote
6 Late-Filed Holders will receive interests in
Claims the Liquidation Trust and the SCC
Litigation Trust to be applied in
accordance with the Trust Priorities
Est. Aggregate Amt: $10MM to $26MM
Est. Recovery: To be determined
Status: Impaired
Deemed to reject the Plan
Not entitled to vote
7 Subordinated Holders will receive interests in
Claims the Liquidation Trust and the SCC
Litigation Trust to be applied in
accordance with the Trust Priorities
Est. Aggregate Amt: To be determined
Est. Recovery: To be determined
Status: Impaired
Deemed to reject the Plan
Not entitled to vote
8 Interests in Holders will receive interests in
ASARCO the Liquidation Trust and the SCC
Litigation Trust to be applied in
accordance with the Trust Priorities
Est. Aggregate Amt: N/A
Est. Recovery: To be determined
Status: Impaired
Deemed to reject the Plan
Not entitled to vote
9 Interests in Holders will not receive or retain any
Asbestos property under the Plan on account of
Subsidiary the Interests
Debtors
Estimated Aggregate Amount: N/A
Estimated Recovery: 0%
Status: Impaired
Deemed to reject the Plan
Not entitled to vote
10 Interests in Holders will not receive or retain any
Other Subsidiary property under the Plan on account of
Debtors the Interests
Est. Aggregate Amt: N/A
Est. Recovery: 0%
Status: Impaired
Deemed to reject the Plan
Not entitled to vote
For purposes of distributions on account of interests in the
Liquidation Trust and SCC Litigation Trust, the phrase "Trust
Interest Priorities" means the priority of payment of all classes
of Claims that are receiving interests in the Liquidation Trust
and the SCC Litigation Trust on account of which the priority of
payments will be on account of:
(1) the Allowed Amounts of Claims in Class 3 and Class 4, on a
Pro Rata basis, until the claims are paid in full;
(2) Allowed Amounts of any Class 6 Claims, on a Pro Rata
basis, until the claims are paid in full;
(3) postpetition interest on any Allowed Amounts of any
Class 3, 4 or 6 Claims calculated at the higher of the
applicable non-default contract rate or the federal
judgment rate in accordance with Section 1962 of the
Judicial and Judiciary Procedures Code, on a Pro Rata
basis, until the claims are paid in full;
(4) the Plan Sponsor Subordinated Indemnity Claims until the
earlier of (i) exhaustion of any remaining assets in the
Liquidation Trust and the SCC Litigation Trust, and (ii)
50 years after the Effective Date;
(5) Class 7 Claims, on a Pro Rata basis, until the claims are
paid in full;
(6) postpetition interest on any Allowed Amounts of any
Class 7 Claims calculated at the higher of the applicable
non-default contract rate or the federal judgment rate in
accordance with Section 1962, on a Pro Rata basis, until
the claims are paid in full; and
(7) Class 8 Interests, on a Pro Rata basis.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-
20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
ASARCO LLC filed a plan of reorganization on July 31, 2008,
premised on the sale of the Debtors' assets to Sterlite USA for
$2.6 billion. By October 2008, ASARCO LLC informed the Court that
Sterlite refused to close the proposed sale and thus, the Original
Plan could not be confirmed. The parties has since renewed their
purchase and sale agreement and ASARCO LLC has obtained Court
approval of a settlement and release contained in the new PSA for
the sale of the ASARCO assets for $1.1 billion in cash and a
$600 million note.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted its own plan which allows it to keep its equity
interest in ASARCO LLC by offering full payment to ASARCO's
creditors. AMC offered provide up to $2.7 billion in cash and a
$440 million guarantee to assure payment of all allowed creditor
claims, including payment of liabilities relating to asbestos and
environmental claims. AMC's plan is premised on the estimation of
the approximate allowed amount of the claims against ASARCO.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASARCO LLC: Court to Consider Plan Solicitation Procedures June 5
-----------------------------------------------------------------
Judge Richard S. Schmidt of the U.S. Bankruptcy Court for the
Southern District of Texas has rescheduled the hearing to
consider ASARCO LLC and its debtor-affiliates' proposed
solicitation and tabulation procedures for the plan voting,
including approval of the forms of ballots and confirmation
notices, to June 5, 2009, at 10:00 a.m. CDT, in Corpus, Christi,
Texas. The Solicitation Procedures Hearing was previously set for
May 26.
Prior to the Court's ruling, ASARCO Incorporated and Americas
Mining Corporation sought a continuance of the hearing on the
Joint Disclosure Statement and Joint Solicitation Procedures of
the Chapter 11 plans submitted by the Debtors and the Parent.
The Parent's co-counsel, Trey A. Monsour, Esq., at Haynes and
Boone, LLP, in Dallas, Texas, asserted that a short continuance
of the Joint Disclosure Statement Hearing is necessary to allow
time for the Court to rule on the Debtors' environmental claim
settlements, and for the Debtors and the Parent to reflect the
results of that ruling in their Disclosure Statements. The
proposed Environmental Claim Settlements involve more than
$1 billion in proposed unsecured claims and administrative
expenses. The ultimate ruling on the Environmental Settlements
will have a tremendous impact on the recoveries to all creditors,
Mr. Mounsour asserted in a declaration in support of the Parent's
request submitted to the Court. Accordingly, Judge Schmidt
scheduled an emergency telephonic on May 22, 2009, at the Parent's
request.
The Court heard the arguments of parties-in-interest at the
May 22 hearing and subsequently ruled that:
(1) the deadline to object to the Disclosure Statement was
extended through May 29, 2009;
(2) the deadline to object to the confirmation of the
reorganization plan in the Debtors' cases is extended
through July 3, 2009; and
(3) the hearing to consider the Parent's request for a
continuance of the hearing the Joint Disclosure Statement
and Joint Solicitation Procedures is reset to June 5,
2009.
Accordingly, several parties submitted to the Court their
responses or objections to the Amended Disclosure Statement of
the Parent's Chapter 11 Plan on May 29, 2009. They include:
-- ASARCO LLC
-- Official Committee of Unsecured Creditors
-- United States of America
-- Citigroup Global Markets Inc.
-- Harbinger Capital Partners Master Fund I Ltd.
-- Deutsche Bank Trust Companies Americas
-- Wells Fargo Bank National Association
-- Wilmington Trust Company
-- Mitsui & Co.
-- the Texas Commission on Environmental Quality
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-
20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
ASARCO LLC filed a plan of reorganization on July 31, 2008,
premised on the sale of the Debtors' assets to Sterlite USA for
$2.6 billion. By October 2008, ASARCO LLC informed the Court that
Sterlite refused to close the proposed sale and thus, the Original
Plan could not be confirmed. The parties has since renewed their
purchase and sale agreement and ASARCO LLC has obtained Court
approval of a settlement and release contained in the new PSA for
the sale of the ASARCO assets for $1.1 billion in cash and a
$600 million note.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted its own plan which allows it to keep its equity
interest in ASARCO LLC by offering full payment to ASARCO's
creditors. AMC offered provide up to $2.7 billion in cash and a
$440 million guarantee to assure payment of all allowed creditor
claims, including payment of liabilities relating to asbestos and
environmental claims. AMC's plan is premised on the estimation of
the approximate allowed amount of the claims against ASARCO.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASOCIADOS DE SAN JUAN: Case Summary & 20 Largest Unsec. Creditors
-----------------------------------------------------------------
Debtor: Asociados De San Juan
Recinto Sur #251
San Juan, PR 00901
Bankruptcy Case No.: 09-04441
Chapter 11 Petition Date: May 30, 2009
Court: United States Bankruptcy Court
District of Puerto Rico (Old San Juan)
Debtor's Counsel: Carlos Rodriguez Quesada, Esq.
Law Office Of Carlos Rodriguez Ques
PO Box 9023115
San Juan, PR 00902-3115
Tel: (787) 724-2867
Email: cerqlaw@coqui.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/prb09-04441.pdf
The petition was signed by Vicente Sanchez Quiles, president of
the Company.
ATLANTIC MARINE: Moody's Affirms 'B2' Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service has affirmed the B2 corporate family
rating of Atlantic Marine Holding Company. The rating outlook is
stable.
The affirmation follows: 1) a recently amended tanker fabrication
contract between Atlantic Marine and a large customer, AHL, which
resolved work delays that were clouding near-term earnings
prospects; 2) an expectation of sustained adequate covenant
headroom under the company's bank credit facility; 3) an
expectation that, despite economic weakness, the company's backlog
levels should not significantly decline as pending bids hold
promise for maintaining utilization levels. The expectation of
adequate covenant headroom stems from the resolution of AHL tanker
fabrication work delays and earnings from two early 2009
acquisitions that were largely funded with cash from a preferred
stock issuance of $22 million to Atlantic Marine's financial
sponsor, J.F. Lehman and Company.
Atlantic Marine's B2 CFR reflects the company's small size,
dependence on large ship repair and fabrication contracts and the
risk associated to sales and gross profit from contract
concentration, juxtaposed to a moderate leverage profile, recent
history of debt funded dividends, and limited free cash flow
generation.
The stable outlook reflects an expectation that the adequate
liquidity profile should be sustained, that 2009 revenues should
materially increase over 2008 with EBITDA margin remaining
approximately on par with the 2008 level.
Other ratings affirmed:
-- Probability of default, B3
-- $45.0 million first lien revolving credit facility due 2013,
B2 LGD 3, 36%
-- $185.1 million first lien term loan due 2014, B2 LGD 3, 36%
Moody's last rating action on Atlantic Marine occurred on July 31,
2008 when the corporate family rating was downgraded to B2 from
B1.
Atlantic Marine Holding Company, headquartered in Jacksonville,
Florida, is a provider of ship maintenance, repair, overhaul, and
conversion and marine fabrication services for U.S. Navy,
government, commercial and offshore oil and gas industry vessels.
The company operates shipyards and dry docking facilities in
Jacksonville, Florida; Mobile, Alabama; Mayport, Florida; Boston,
Massachusetts; and Philadelphia, Pennsylvania. Last twelve months
ended March 31, 2009, revenues were $273 million.
ATLAS PIPELINE: S&P Downgrades Corporate Credit Rating to 'B-'
--------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered the corporate
credit rating for Atlas Pipeline Partners L.P. to 'B-' from 'B'
and removed them from CreditWatch with negative implications,
where S&P placed them on Dec. 15, 2008. The outlook is negative.
At the same time, S&P lowered Atlas's senior secured rating to 'B'
from 'B+' and senior unsecured rating to 'CCC' from 'CCC+'. The
senior secured recovery rating of '2' and senior unsecured
recovery rating of '6' remain unchanged. The '6' recovery rating
indicates that unsecured lenders can expect negligible (0%-10%)
recovery in the event of a payment default based on S&P's assumed
default scenario. The '2' recovery rating on the secured revolver
and term loan remains unchanged, notwithstanding expected debt
reductions following the asset sales, and indicates that secured
lenders can expect substantial (70%-90%) recovery if an event of
default occurs under the same default scenario. S&P will update
S&P's recovery report upon public confirmation that both the asset
sales and subsequent debt reductions have been completed.
"The rating actions follow our review and continued concerns that
Atlas's 2009 cash flow could significantly decline due to
substantially lower natural gas and NGL prices and the fact that
the company has a small percentage of its 2009 cash flow hedged,"
said Standard & Poor's credit analyst Michael Grande.
S&P believes the potential cash flow decline could put the company
at risk of breaching its leverage covenant in future quarters,
despite the expected deleveraging from proceeds received from the
NOARK pipeline sale and the Appalachian joint venture with The
Williams Cos. Inc. While the company is currently in discussions
with its lender group, S&P believes that any potential changes to
the credit agreement would reflect the company's elevated risk
profile.
S&P also revised the company's business risk profile to vulnerable
from weak, because S&P view the company has having a much higher
percentage of its cash flow at risk to low commodity prices
relative to most of its rated peers. This stems from the
company's monetization of certain in-the-money hedges for
liquidity purposes and its decision to unwind its crude proxy
hedges in June 2008. S&P also views Atlas' business profile as
weaker because the assets sales partially reduce the company's
geographic and asset diversity and sale of the NOARK pipeline
reduces the company's overall percentage of more stable, fee-based
cash flows. Although the reduction in the distribution and the
asset sales support near-term liquidity, it is S&P's opinion that
the lower distribution reduces Atlas's capital markets access and
limits the partnership's financial flexibility for the foreseeable
future. S&P also believes that the company's 2009 capital
spending and general working capital needs will partially offset
the near-term liquidity benefit from higher revolver availability
as a result of proceeds received from the asset sales.
The ratings on Atlas reflect high leverage, an elevated risk of
cash flow volatility, tighter liquidity over the next 12 months, a
weak commodity price environment, and limited geographic and asset
diversity. The company's well-positioned asset base in the Mid-
Continent and Appalachia regions and successful execution on a
number of small organic growth projects partially offset these
risks.
The negative outlook reflects S&P's continued concerns that the
potential for lower cash flow could result in weaker financial
metrics, financial covenant pressure, and tighter liquidity
through June 2010. S&P could lower the rating if the company's
liquidity position materially weakens, specifically having less
than $50 million in availability for two quarters. S&P could also
lower the rating if the company's leverage increases and pressures
the financial covenants or cash flows continue to deteriorate.
Given S&P's expectation that the company may have an elevated
financial risk profile in the near term and S&P's view that market
fundamentals are weak, S&P would not anticipate a positive outlook
or upgrade at this time. S&P would consider a positive outlook if
Atlas consistently hedged at least 70% of its current year equity
volumes, had excess liquidity of at least $100 million, and
achieved a total debt to EBITDA ratio below 4.5x over a 12- to 18-
month period.
BALL CORP: Fitch Affirms Issuer Default and Debt Ratings at 'BB'
----------------------------------------------------------------
Fitch Ratings has affirmed Ball Corp.'s Issuer Default Rating and
debt ratings:
-- IDR at 'BB';
-- Senior secured revolving credit facility at 'BB+';
-- Senior secured term bank debt at 'BB+';
-- Senior unsecured notes at 'BB'.
Approximately $2.5 billion of debt is covered by the ratings. The
Rating Outlook is Stable.
The rating affirmations and Stable Outlook incorporate Ball's
solid cash flow generation, stable credit metrics, leading market
positions in its product categories and current expectations in
the packaging end markets. In addition, Ball has been aggressive
in reducing over capacity and higher fixed costs by closing or
announcing the closing of eight manufacturing facilities in North
America. Annualized cost reductions from the facility closings
are expected to exceed $80 million over time. The costs
associated with the facilities closings are not expected to be
significant and should not materially affect operating results.
Capacity reductions are primarily due to greater plant
efficiencies and business mix reductions that were considered
unprofitable. Facility cost reductions coupled with additional
on-going cost savings with corporate overhead and other
initiatives, Fitch believes it's reasonable to expect the company
should realize material cost benefits in the second half of 2009
and into 2010 while improving profitability margins.
On a latest-12-month basis as of March 29, 2009, leverage
increased to 2.9 times as the company borrowed on its revolver to
fund working capital requirements. While first quarter revenue
and profitability were pressured by volume declines and higher
cost inventory, Fitch expects 2009 will be a solid year for Ball
as volume should improve into the summer months and cost
efficiencies begin to roll through. FCF levels based on Fitch
calculations for 2009 should be at least comparable to 2008 levels
of $283 million as Ball benefits from reduced capital spending as
the company has deferred international expansion investments until
the economic outlook improves. Management is currently guiding to
FCF expectations of approximately $335 million (CFO less capital
expenditures less dividends).
Due to the current credit markets and challenging economic
conditions, Ball has reprioritized the use of its FCF to focus on
debt reduction instead of share repurchases. In 2008, the company
had repurchased approximately $300 million shares of its common
stock. Currently, Fitch expects the company to use the majority
of its FCF to pay down debt under its revolver and approximately
$150 of current term loan amortizations. Consequently credit
metrics should strengthen during 2009. Ball does not have any
significant refinancing requirements until the $750 million of
secured credit facilities and approximately $1.1 billion of term
loans all mature in October 2011. Liquidity as of the first
quarter of 2009 was approximately $281 million, comprised of
$53 million in cash and $228 million of revolver availability.
Rating risks include the growing pension obligation, recent
profitability in the mature North American beverage can segment
which is Ball's largest group generating substantial cash flow and
potential acquisitions that would materially increase leverage.
However, Fitch believes Ball's balance sheet is relatively well-
positioned to take advantage of potential smaller sized
acquisitions. Ball's total pension deficit increased to
approximately $618 million on a global obligation of $1.4 billion,
not including its German pension plan obligation, which is
unfunded and the liability is included on the company's
consolidated balance sheet. Ball is expected to increase its
pension contribution by $25 million to approximately $100 million
in 2009. Depending on many assumptions and market conditions, this
obligation could continue to grow over time and consume a larger
percentage of FCF. During the first quarter of 2009, volume and
EBIT declined in the Americas beverage can segment high single
digits and 38% respectively due to a variety of factors including
weakness with carbonated soft drink and beer volumes as well as
inventory holding losses. Profitability is expected to improve in
the second half of 2009 as Ball should see benefits from on-going
cost saving initiatives, although volume improvements are key for
the company to meet FCF expectations for the full year 2009.
BH S&B: Wants Plan Filing Period Extended to September 15
---------------------------------------------------------
BH S&B Holdings LLC and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to extend
their exclusive period to file a plan through and including
September 15, 2009, and their exclusive period to solicit
acceptances for that plan through and including November 16, 2009.
This is the second request of the Debtors for an extension of
their exclusive periods.
The Debtors assert that a further extension of their exclusive
period will allow them and other interested parties time to
determine "whether formulation of a plan is possible and to
perform other necessary wind-down tasks."
The Debtors tell the Court that they have not reconciled all
claims asserted against them and still have to complete the
process of quantifying their potential exposure to administrative,
priority and unsecured claims, a process which is necessary to
their consideration of whether formulation of any plan is
appropriate.
About BH S&B
BH S&B Holdings LLC filed for bankruptcy protection together with
seven other affiliates on Nov. 19, 2008 (Bankr. S.D. N.Y. Lead
Case No. 08-14604). The seven debtor-affiliates are BH S&B
Distribution LLC, BH S&B Lico LLC, BH S&B Retail LLC, BHY S&B
Intermediate Holdco LLC, Cubicle Licensing LLC, Fashion Plate
Licensing LLC, and Heritage Licensing LLC.
BH S&B was formed by investment firms Bay Harbour Management and
York Capital Management in August 2008 to acquire the business
operations and assets of bankrupt retailer Steve & Barry's for
$163 million in August 2008. Steve and Barry's, based in Port
Washington, New York, was a specialty retailer of apparel and
accessories, selling, among other things, university apparel and
lifestyle brands, private-label casual clothing, and exclusive
celebrity endorsed apparel.
Steve & Barry's had 240 locations when it was bought and the new
owners had planned to cut that down to 173 stores. BH S&B had
intended to operate certain Steve & Barry's stores as going
concerns and to liquidate inventory at other locations. Since the
sale closing, however, for various reasons, including the general
health of the American economy and the state of the retail market
in particular, sales at all stores have been disappointing, and BH
S&B's revenue has suffered. As a result, BH S&B was not in
compliance with certain covenants under their senior secured
credit facility and had no prospects for continued financing of
their business as a going concern. In consultation with its
lenders, BH S&B decided that the appropriate course of action to
maximize value for the benefit of all of its stakeholders was an
orderly liquidation in Chapter 11.
Bay Harbour Management is an SEC registered investment advisor
with significant experience in purchasing distressed companies
and effectuating their turnaround. The firm's holdings have
included the retailer Barneys New York, the facilities based CLEC
Telcove, and the former Aladdin Casino, now operating on the Las
Vegas strip as the Planet Hollywood Resort and Casino following
its rebranding and turnaround.
York Capital Management is an SEC registered investment advisor
with offices in New York, London, and Hong Kong with more than
$15 billion in assets under management. York Capital was founded
in 1991 and specializes in value oriented and event driven equity
and credit investments.
BH S&B is 100% owned by BHY S&B Intermediate Holdco LLC.
BH S&B and its affiliates' chapter 11 cases are presided over by
the Honorable Martin Glenn. Joel H. Levitin, Esq., and Richard A.
Stieglitz, Jr., Esq., at Cahill Gordon & Reindel LLP, in New York,
serve as bankruptcy counsel to BH S&B and its affiliates. RAS
Management Advisors LLC acts as restructuring advisors, and
Kurtzman Carson Consultants LLC as claims and notice agent.
BROOKFIELD PROPERTIES: S&P Affirms 'BB+' Preferred Stock Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Brookfield Properties Corp. and its Toronto-based affiliate, BPO
Properties Ltd., to negative from stable. S&P continues to
analytically view these two related companies as one rated entity.
Brookfield retains an 89% equity interest (representing 54% of the
voting securities and 100% of the non-voting securities) in BPP.
At the same time, S&P affirmed its 'BBB' long-term corporate
credit rating on Brookfield and BPP and S&P's 'BB+' preferred
stock rating on the companies. The affirmation affects roughly
C$900 million of preferred stock and US$110 million of preferred
stock issued by Brookfield, and C$382 million of preferred stock
issued by BPP.
"The ratings continue to acknowledge Brookfield's long-term leases
to good-quality tenants, and still-positive mark-to-market rents
within the portfolio and exposure to currently healthier Canadian
markets provide a cushion for near-term lease rollover against
falling market rents," said Standard & Poor's credit analyst
Elizabeth Campbell. "However, the current economic downturn poses
the risk of tenant defaults that could cause unanticipated
vacancies, which would be challenging to re-lease."
Brookfield is reliant upon asset monetization proceeds and equity
issuance to bolster its liquidity position and reduce overall
leverage. The current environment of weak operating fundamentals,
lower office property valuations, and more-restrictive lender
underwriting in the U.S. will pose challenges to the company's
efforts to recapitalize its highly leveraged U.S. property fund
(debt is due in late 2011). S&P would lower the rating one notch
if the company does not meaningfully improve its liquidity
position this year or if fixed-charge coverage measures were to
decline from their current level (1.6x). S&P would consider
revising the outlook to stable if Brookfield's management
successfully addresses the longer-term recapitalization needs of
its U.S. fund while strengthening overall consolidated fixed-
charge coverage measures.
CANNERY CASINO: Moody's Confirms 'B2' Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service confirmed all ratings of Cannery Casino
Resorts, LLC, including its B2 Corporate Family Rating, B2
Probability of Default Rating, B1 first lien revolver and term
loan ratings, and Caa1 second lien term loan rating. A negative
outlook was assigned. This rating action concludes the review
process that was initiated on March 16, 2009.
The rating confirmation reflects Cannery's improved leverage and
added cushion in its covenants following the debt pay down from
the proceeds of Crown's preferred equity investment. Pro forma
for the preferred equity investment, debt/EBITDA (excluding
covenant add-backs allowable under the credit agreement) is about
6.0 times compared to 8.4 times at March 31, 2009. Without this
reduction in debt, and slower than expected ramp-up at The
Meadows, Cannery would not have been able to meet the June 30,
2009 6.25 times debt/EBITDA covenant contained in its credit
agreement.
The negative outlook considers Moody's expectation of continued
weak gaming demand trends, particularly in the Las Vegas locals
market, which accounts for almost half of overall revenues and a
third of Cannery's EBITDA (before management fees). It also
incorporates the ramp-up risk related to the company's permanent
facility at The Meadows in Pennsylvania. The company completed
its $160 million permanent facility in April 2009.
Ratings confirmed and assessments adjusted:
-- Corporate Family Rating at B2
-- Probability of Default Rating at B2
-- $350 million senior secured first lien term loan due 2013 at
B1 (LGD 3, 39% from LGD 3, 42%)
-- $110 million senior secured first lien revolver maturing in
2012 at B1 (LGD 3, 39% from LGD 3, 42%)
-- $285 million senior secured delayed draw term loan due 2013
at B1 (LGD 3, 39% from LGD 3, 42%)
-- $115 million senior secured second lien term loan due 2014 at
Caa1 (LGD 5, 88% from LGD 6, 92%)
The last rating action for Cannery was on March 16, 2009 when
Moody's placed the company's ratings on review for possible
downgrade.
Cannery Casino Resorts, LLC, is a privately held gaming company
that owns and operates one casino in Pennsylvania and three
casinos in Las Vegas, Nevada. The company generates about
$460 million of annual net revenue.
CANWEST LIMITED: Interest Nonpayment Cues S&P's 'D' Ratings
-----------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its ratings on
Toronto-based newspaper publisher Canwest Limited Partnership,
including the corporate credit and senior secured ratings to 'D'
(default) from 'CCC' and the rating on the C$75 million senior
subordinated credit facility due 2015 to 'D' from 'CC'. S&P also
lowered the rating on the company's US$400 million senior
subordinated notes due 2015 to 'C' from 'CC'. The recovery
ratings on the debt obligations are unchanged.
"The downgrade follows Canwest LP's expected nonpayment of
C$10 million in principal and interest expense due on its senior
secured credit facility," said Standard & Poor's credit analyst
Lori Harris.
In the unlikely event that the company makes the payments within
the cure period, S&P could raise the ratings. The failure to make
these payments and the expected noncompliance with financial
covenants for the quarter ending May 31 will constitute events of
default under Canwest LP's credit agreement and its C$75 million
senior subordinated credit facility.
The interest payment on Canwest LP's US$400 million senior
subordinated notes remains current, hence S&P haven't lowered the
ratings on this issue to 'D'. However, a demand for payment of
amounts owing under either of the defaulted facilities that is not
satisfied through payment or is not waived, postponed, or
rescinded within certain time periods, could result in an event of
default under the US$400 million senior subordinated notes.
Canwest LP's parent company Canwest Media Inc. (D/--/--) recently
disclosed that it would like to complete a recapitalization of
Canwest Media. Canwest LP has now indicated its interest in
negotiating a recapitalization of this business as well.
CARAUSTAR INDUSTRIES: Files for Chapter 11 Protection in Georgia
----------------------------------------------------------------
Caraustar Industries Inc., a manufacturer of recycled paperboard
and converted paperboard procpaperboard products, and its domestic
subsidiaries has filed for Chapter 11 protection in the United
States Bankruptcy Court for the Northern District of Georgia. The
petition was filed with the Court on May 31, 2009.
In a news release, Caraustar disclosed that it has reached
agreement with holders of approximately 83% of its 7-3/8% Senior
Notes maturing June 1, 2009, and 91% of its 7-1/4% Senior Notes
maturing May 1, 2010, on the terms of a financial restructuring
that would reduce the company's debt obligations by approximately
$135 million.
Under the pre-negotiated Plan of Reorganization that will be
submitted to the Court, the Company's common stock holders will
receive their pro rata share of $2.9 million, or about 10 cents
per share, subject to certain conditions, the company said.
Further, the Company's existing Senior Notes will be exchanged for
an aggregate of $85 million in new Senior Secured Notes and 100%
of the common stock of the reorganized company.
The reorganized company is expected to emerge as a private entity
with Wayzata Investment Partners LLC becoming the company's
controlling shareholder, Caraustar stated.
"Caraustar took decisive action to substantially reduce the
company's debt and prospectively reduce costs. Once our financial
restructuring is complete, we believe Caraustar's new capital
structure combined with the cost savings achieved by operating as
a private entity will provide a lean and flexible foundation for
sustainable profitability and better position the company to meet
the challenges of our industry and this recessionary economy head
on," said president and chief executive officer, Michael J.
Keough.
A key feature of the Plan is that all trade creditors, suppliers,
customers and employees will receive all amounts owed to them.
Caraustar has obtained approval from General Electric Capital
Corporation for a $75 million senior secured debtor-in-possession
revolving credit facility.
About Caraustar Industries
Caraustar Industries, Inc. -- http://www.caraustar.com/-- is one
of North America's largest integrated manufacturers of 100%
recycled paperboard and converted paperboard products. Caraustar
serves the four principal recycled boxboard product end-use
markets: tubes and cores; folding cartons; gypsum facing paper and
specialty paperboard products.
The company posted a net loss of $4.4 million in the first quarter
of 2009, compared to 2008 first quarter income of $123,000.
At March 31, 2009, the Company had $366.8 million in total assets
and $376.9 million in total liabilities.
CARUASTER INDUSTRIES: Case Summary & 20 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: Caraustar Industries, Inc.
5000 Austell Powder Springs Road, Suite 300
Austell, GA 30106
Bankruptcy Case No.: 09-73830
Debtor-affiliates filing subject to Chapter 11 petitions:
Entity Case No.
------ --------
Austell Holding Company, LLC 09-73835
Camden Paperboard Corporation 09-73836
Caraustar Custom Packaging Group, Inc. 09-73837
Currahee Partners, LLC 09-73838
Caraustar Custom Packaging Group (Maryland), Inc. 09-73839
Caraustar, G.P. 09-73840
Caraustar Industrial and Consumer Products Group 09-73841
Currahee Parners II, LLC 09-73842
Caraustar Mill Group, Inc. 09-73843
Caraustar Recovered Fiber Group, Inc. 09-73844
Chicago Paperboard Corporation 09-73845
Federal Transport, Inc. 09-73846
Gypsum MGC, Inc. 09-73847
Halifax Paper Board Company, Inc. 09-73848
McQueeney Gypsum Company 09-73849
Paragon Plastics, Inc. 09-73850
PBL Inc. 09-73851
Currahee Golf Club, L.L.C. 09-73852
McQueeney Gypsum Company, LLC 09-73853
Sprague Paperboard, Inc. 09-73854
RECCMG, LLC 09-73855
Type of Business: The Debtors are one of North America's largest
integrated manufacturers of 100% recycled
paperboard and converted paperboard products.
The Debtors serve the four principal recycled
boxboard product end-use markets: tubes and
cores; folding cartons; gypsum facing paper and
specialty paperboard products.
See http://www.caraustar.com/
Chapter 11 Petition Date: May 31, 2009
Court: Northern District of Georgia (Atlanta)
Judge: Mary Grace Diehl
Debtor's Counsel: James A. Pardo, Jr., Esq.
jpardo@kslaw.com
Mark M. Maloney, Esq.
mmaloney@kslaw.com
King & Spalding
1180 Peachtree Street
Atlanta, GA 30309
Tel: (404) 572-4600
Fax: (404) 572-5129
Estimated Assets: $50 million to $100 million
Estimated Debts: $100 million to $500 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
The Bank of New York Mellon 7-3/8% sr. notes $189,750
as indeture trustee
Atlanta Galleria
200 Galleria Parkway, NY
Suite 1900
Atlanta, GA 30339-5945
Tel: (770) 699-5108
The Bank of New York Mellon 7-1/4%sr. notes $189,750
as indeture trustee
Atlanta Galleria
200 Galleria Parkway, NY
Suite 1900
Atlanta, GA 30339-5945
Tel: (770) 699-5108
Hercules Inc. trade debt $422,220
1313 North Market Street
Wilmington, DE 19894-0001
Tel: (404) 767-6161
Oracle USA Inc. trade debt $440,000
Food Lion LLC trade debt $311,434
MeadwestVaco Corp. trade debt $278,111
Sensormatic Electronics Corp. trade debt $168,192
Graphic Packaging Int'l. Inc. trade debt $159,428
Atlas Die LLC trade debt $158,498
El Du Pont De Nemours & Co. trade debt $147,028
Corenso North America Corp. trade debt $129,211
Chem Tex Laboratories Inc. trade debt $99,933
Tronox LLC trade debt $92,250
Weavexx Corp. trade debt $70,799
Recycle America Waste trade debt $68,850
Thiele Kaolin Co. trade debt $67,573
Henkel Corp. trade debt $60,229
Coatings and Adhesive Corp. trade debt $59,451
Microsoft Services trade debt $58,800
Albany International Corp. trade debt $58,539
The petition was signed by Wilma Elizabeth Beaty, vice president,
general counsel and secretary.
CENTRAL VALLEY: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Central Valley Construction Engineering, Inc.
fka Central Valley Construction, Inc.
PO Box 6009
Stockton, CA 95206
Bankruptcy Case No.: 09-30863
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
Eastern District of California (Sacramento)
Judge: Thomas Holman
Debtor's Counsel: David C. Johnston, Esq.
PO Box 3212
Modesto, CA 95353
Tel: (209) 521-6260
Estimated Assets: $50,001 to $100,000
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/caeb09-30863.pdf
The petition was signed by Anthony G. Arnaiz, president of the
Company.
CHARLES ALLEN KAMINS: Case Summary & 24 Largest Unsec. Creditors
----------------------------------------------------------------
Joint Debtors: Charles Allen Kamins
dba Gold Rush Advertising
dba Real Estate Reader
dba My Wine Country Vacation
dba Kamins Ranch Wines
Teresa Marie Kamins
aka Teresa Galligan
dba Gold Rush Advertising
dba Kamins Ranch Wines
dba Real Estate Reader
dba My Wine Country Vacation
13 Inverness Drive
Santa Rosa, CA 94558
Bankruptcy Case No.: 09-11602
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
Northern District of California (Santa Rosa)
Judge: Alan Jaroslovsky
Debtors' Counsel: Ruth Elin Auerbach, Esq.
Law Offices of Ruth Elin Auerbach
711 Van Ness Ave. #440
San Francisco, CA 94102
Tel: (415)673-0560
Email: attorneyruth@sbcglobal.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 24 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/canb09-11602.pdf
The petition was signed by the Joint Debtors.
CHEMTURA CORP: Creditors' Committee Taps Garden City as Info Agent
------------------------------------------------------------------
The Official Committee of Unsecured Creditors in Chemtura Corp.
and its debtor-affiliates' Chapter 11 cases seeks authority from
the U.S. Bankruptcy Court for the Southern District of New York to
retain The Garden City Group, Inc., as its information agent, nunc
pro tunc to March 31, 2009.
As the Committee's information agent, GCG will:
(a) Establish and maintain an Internet-accessed Web site that
provides:
* a link or other form of access to the Web site
maintained by the Debtors' notice, claims, and balloting
agent at http://www.kccllc.net/chemturathat will
include, among other things, the case docket and claims
register;
* highlights of significant events in the Chapter 11
cases;
* a calendar with upcoming significant events in the
Chapter 11 cases;
* a general overview of the Chapter 11 process;
* press releases issued by the Committee or the Debtors;
* a registration form for creditors to request "real-time"
updates regarding the Chapter 11 Cases via electronic
mail;
* a form to submit creditor questions, comments, and
requests for access to information;
* responses to creditor questions, comments, and requests
for access to information, provided, that the Committee
may privately provide the responses in exercise of its
reasonable discretion, in the light of the nature of the
information request and the creditor's agreement to
confidentiality and trading constraints;
* answers to frequently asked questions;
* links to other relevant Web sites;
* the names and contact information for the Debtors'
counsel and restructuring advisor(s); and
* the names and contact information for the Committee's
counsel and financial advisor(s).
(b) Distribute updates regarding the Chapter 11 Cases via
electronic mail for creditors that have registered for
the service on the Committee Web site; and
(c) Establish and maintain a telephone number and e-mail
address for creditors to submit questions and comments.
The Committee believes that retaining GCG to assist it in
complying with its obligations under Section 1102(b)(3) will add
to the effective administration of the Debtors' Chapter 11 cases,
and reduce the overall expense of administering these cases,
Daniel H. Golden, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
New York, says.
GCG will be paid based on its customary rates, which are:
Professional Hourly Rate
------------ ------------
Senior Management $250 to $295
Directors, Senior Consultants $175 to $250
Assistant Vice Presidents $175 to $250
Project Mgrs., Sr. Project Mgrs. $125 to $150
Dept. Managers $125 to $150
Systems & Technology Staff $100 to $200
Graphic Support $125
Project Supervisors $95 to $110
Quality Assurance Staff $80 to $125
Project Administrators $70 to $85
Mailroom and Claims Control $55
Data Entry Processors $55
Administrative $45 to $70
GCG will also be reimbursed for all out-of-pocket expenses
reasonably incurred in connection with performing the
contemplated services. The Committee seeks that it, together
with the Debtors and the U.S. Trustee for Region 2, will have 10
days to advise GCG of any objections to any monthly invoice. If
an objection cannot be resolved, the Committee will schedule a
hearing with the Court to consider the disputed invoice.
Jeffrey S. Stein, vice president of The Garden City Group, Inc.,
in New York, assures the Court that GCG is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The Court will consider approval of the application on June 11,
2009 at 12:00 p.m. Objections to the employment application must
be filed by 11:30 a.m. on that date.
About Chemtura Corp
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D. N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC.
As of December 31, 2008, the Debtors had total assets of
$3.06 billion and total debts of $1.02 billion.
Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Chemtura Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHEMTURA CORP: Creditors' Committee Can Hire Akin Gump as Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors in Chemtura Corp.
and its debtor-affiliates' Chapter 11 cases sought and obtained
authority from the U.S. Bankruptcy Court for the Southern District
of New York to retain Akin Gump Strauss Hauer & Feld LLP as its
counsel, nunc pro tunc to March 26, 2009.
As the Committee's counsel, Akin Gump will:
(a) advise the Committee with respect to its rights, duties
and powers in the Debtors' Chapter 11 cases;
(b) assist and advise the Committee in its consultations with
the Debtors relative to the administration of these cases;
(c) assist the Committee in analyzing the claims of the
Debtors' creditors and the Debtors' capital structure and
in negotiating with holders of claims and equity
interests;
(d) assist the Committee in its investigation of the acts,
conduct, assets, liabilities and financial condition of
the Debtors and of the operation of the Debtors'
businesses;
(e) assist the Committee in its analysis of, and negotiations
with, the Debtors or any third party concerning matters
related to the assumption or rejection of certain leases
of non-residential real property and executory contracts,
asset dispositions, financing of other transactions and
the terms of one or more plans of reorganization for the
Debtors and accompanying disclosure statements and related
plan documents;
(f) assist and advise the Committee as to its communications
to the general creditor body regarding significant matters
in these cases;
(g) represent the Committee at all hearings and other
proceedings before the Bankruptcy Court;
(h) review and analyze motions, applications, orders,
statements, operating reports and schedules filed with the
Court and advise the Committee as to their propriety;
(i) advise and assist the Committee on any legislative,
regulatory or governmental activities;
(j) assist the Committee in preparing pleadings and
applications in furtherance of the Committee's interests
and objectives;
(k) assist the Committee in its review and analysis of all of
the Debtors' various agreements;
(l) prepare, on behalf of the Committee, any pleadings,
statements, motions, applications, memoranda, adversary
complaints, objections or comments on matters related to
the Debtors or their Chapter 11 cases;
(m) investigate and analyze any claims against the Debtors'
non-debtor affiliates; and
(n) perform other legal services as may be required or are
otherwise deemed to be in the interests of the Committee
in accordance with its powers and duties under Bankruptcy
Code, Bankruptcy Rules or other applicable law.
Akin Gump will be reimbursed for expenses incurred in its
representation of the Committee. For the services contemplated,
the firm will be paid based on these hourly rates:
Professional Hourly Rate
-------------- --------------
Partners $500 to $1,100
Counsel $470 to $810
Associates $290 to $580
Paraprofessionals $75 to $250
Daniel H. Golden, Esq., a partner at Akin Gump Strauss Hauer &
Feld LLP, in New York, informs the Court that prior to the
Petition Date, his firm represented the Debtors in two discreet
legislative and environmental matters. No services have been
rendered by Akin Gump since November 7, 2008, pertaining to those
matters, he says. The Debtors have agreed to waive any actual or
potential conflict of interest as to Akin Gump and have allowed
Akin Gump to withdraw as the Debtors' counsel and to be adverse
to the Debtors, he adds. In January 2009, Akin Gump received
from the Debtors $94,853 for fees and expenses. Akin Gump has
waived accounts receivable of less than $1,000 owed by Debtors in
connection with its prior representation of the Debtors.
Mr. Holden tells the Court that none of Akin Gump's
representations of creditors or other parties-in-interest
involved in the Debtors' Chapter 11 cases comprises a material
component of the firm's practice, nor does his firm currently
represent those parties in any issue relating to the Debtors'
Chapter 11 cases. Mr. Holden assures the Court that Akin Gump
neither holds nor represents any interest adverse to the
Committee, the Debtors, their creditors, or other parties-in-
interest or their attorneys in the Debtors' cases.
About Chemtura Corp
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D. N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC.
As of December 31, 2008, the Debtors had total assets of
$3.06 billion and total debts of $1.02 billion.
Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Chemtura Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHEMTURA CORP: Creditors' Committee Taps Houlihan Lokey as Advisor
------------------------------------------------------------------
The Official Committee of Unsecured Creditors in Chemtura Corp.
and its debtor-affiliates' Chapter 11 cases seek authority from
the U.S. Bankruptcy Court for the Southern District of New York to
retain Houlihan Lokey Howard & Zukin Capital, Inc., as its
financial advisor, nunc pro tunc to March 30, 2009.
The Committee asserts the contemplated services to be rendered by
Houlihan Lokey are necessary to enable it to assess and monitor
the efforts of the Debtors and their professionals to maximize
the value of their estates and to reorganize successfully.
As financial advisor, Houlihan Lokey will assist the Committee
in:
(a) the analysis of the Debtors' business plans and forecasts;
(b) the evaluation of the Debtors' assets and liabilities;
(c) the assessment of financial issues and options concerning
the sale of the Debtors, in whole or in part, and any
Chapter 11 plan of the Debtors;
(d) the analysis and review of the Debtors' financial and
operating statements;
(e) other financial analyses the Committee may require in
connection with the Debtors' cases;
(f) the determination of the appropriate capital structure for
the Debtors;
(g) the evaluation of the Debtors' debt capacity in light of
its projected cash flows;
(h) the review of claims and the related reconciliation,
estimation, settlement of those claims;
(i) the analysis of strategic alternatives available to the
Debtors;
(j) the identification of potential alternative sources of
liquidity in connection with any debtor-in-possession
financing, any Chapter 11 plans or otherwise;
(k) negotiations with the Debtors and third parties;
(l) testimony in court hearings, on the Committee's behalf;
and
(k) the provision of other financial advisory and investment
banking services as may be agreed by Houlihan Lokey and
the Committee.
The Committee proposes that Houlihan Lokey will be paid these
amounts for the contemplated services:
* A deferred fee of $3,000,000, which will be earned and
payable on the confirmation of a Chapter 11 plan of
reorganization or liquidation supported by the Committee
with respect to the Debtors, and will be paid on the
effective date of that plan.
* A monthly fee of $250,000 for the first three months, and
$225,000 per month thereafter. Beginning on the receipt
of the 10th monthly fee, 50% of the monthly fees timely
received thereafter by Houlihan Lokey will be credited
against the deferred fee.
* Reimbursement for reasonable out-of-pocket expenses
incurred by the firm.
The Committee believes that the ultimate benefit of Houlihan
Lokey's services cannot be measured by reference to the number of
hours expended by the firm's professionals.
Houlihan Lokey asks the Court to waive the requirement for the
firm to file time records, as the firm does not ordinarily
maintain time records, consistent with the practice of investment
bankers and financial advisors in other Chapter 11 cases whose
fee arrangements are not hour-based. Houlihan Lokey says it
will, nevertheless, maintain hourly records of the services
rendered for the Committee.
Christopher R. Di Mauro, a managing director at Houlihan Lokey
Howard & Zukin Capital, Inc., assures the Court that to the best
of his knowledge, neither Houlihan Lokey nor any of its
professionals and employees participating in the firm's
engagement with the Committee holds or represents any interest
adverse to the Debtors, their estates, creditors and other
parties-in-interest in matters for which the firm will be
retained.
About Chemtura Corp
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D. N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC.
As of December 31, 2008, the Debtors had total assets of
$3.06 billion and total debts of $1.02 billion.
Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Chemtura Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHIEF JOSEPH: Owes $600,000 From Projects in Jackson, Wyoming
-------------------------------------------------------------
KTVB.com reports that Chief Joseph, Idaho LLC owes debtors about
$600,000 dollars from projects in Jackson, Wyoming.
According to KTVB.com, Chief Joseph owner Rex Rammell will be
selling properties in other locations to pay off his debts.
Citing Mr. Rammell, Standard Journal relates that at the time of
the bankruptcy, Chief Joseph was invested in two development
projects in Jackson, Wyoming. KTVB.com quoted Mr. Rammell as
saying that the poor housing market was what hurt his projects.
The news source notes that one property is a spec home, which was
bought with money from the sale of Mr. Rammell's elk ranch. The
other property is a commercial development, which was acquired
through a loan from the Arkansas National Bank, according to
Standard Journal. Standard Journal points out that lacking the
capital to make payments, the properties were nearing foreclosure.
Standard Journal quoted Mr. Rammell as saying, "A friend had told
me that there was a new bank in town -- by the name of Arkansas
National Bank. They brought their money to Utah and Idaho and
loans were pretty easy to get -- they loaned us the money for the
second lot. Both projects were moving along and I was running for
the United States Senate (in 2008). Everything seemed to have a
bright future -- I had two properties in a hot market and a chance
at becoming a senator down the road. Then in May of 2008, right
in the middle of my Senate campaign, the FDIC called us up and
said that ANB was bankrupt."
The Associated Press relates that federal regulators closed ANB
Financial National Association banks after discovering "unsafe and
unsound" business practices there. The bank closure prevented Mr.
Rammell to get money for funding the development projects. "It
killed the project. Then the recession hit and the spec home
wouldn't sell -- its value also fell to beneath what we owed on
it," Standard Journal quoted Mr. Rammell as saying.
Rexburg, Idaho-based Chief Joseph, Idaho, LLC, filed for Chapter
11 bankruptcy protection on January 9, 2009 (Bankr. D. Idaho Case
No. 09-40023). Jay A. Kohler, Esq., who has an office in Idaho
Falls, Idaho, represents the Company in its restructuring efforts.
The Company listed $2,700,200 in assets and $2,253,794 in debts.
CHRYSLER LLC: Court Approves Sale of Assets to Fiat SpA
-------------------------------------------------------
Chrysler LLC and its affiliated debtors obtained approval from
Judge Arthur J. Gonzalez of the U.S. Bankruptcy Court for the
Southern District of New York to sell most of their assets to New
CarCo Acquisition LLC, a new company formed by Italy-based
automaker Fiat S.p.A.
"The Sale Motion is granted in its entirety and entry into and
performance under and in respect of the Purchase Agreement and the
Sale Transaction is approved," Judge Gonzalez said.
The court approval came Sunday night after a grueling three-day
hearing, commencing May 27, 2009.
In his 47-page ruling dated May 31, 2009, Judge Gonzalez said that
Chrysler established a "good business reason" for the sale of its
assets" and that the deal with Fiat is the only option that is
viable. The Court pointed out that the only alternative is the
immediate liquidation of Chrysler. "The terms of the Fiat
transaction present an opportunity that the marketplace alone
could not offer, and that certainly exceeds the liquidation
value," Judge Gonzalez said.
Under its deal with Fiat, Chrysler will receive $2 billion for the
sale of its assets, which include facilities, intellectual
property rights and those related to the research, production and
distribution of vehicles under brand names including Chrysler,
Jeep(R) and Dodge.
In return, Fiat will control 20% of Chrysler, which could be
increased to 35% if certain milestones are met. Meanwhile, 68%
will be owned by a union trust while the remaining 12% will be
shared by the U.S. and Canadian governments. The governments are
providing Chrysler with more than $4.9 billion in bankruptcy loan,
and the new alliance with about $6 billion of funding to start up
and maintain operations.
A full-text copy of the Judge Gonzalez's May 31 Opinion is
available for free at:
http://bankrupt.com/misc/Chrysler_OP&ORD_SaleMO.pdf
Not a Sub Rosa Plan
Judge Gonzalez dismissed allegations that the sale of the assets
is a sub rosa plan of reorganization, saying that Chrysler is
receiving fair value for the assets and that not a single penny of
value of its assets will go to anyone other than the first-lien
pre-bankruptcy lenders which are owed about $6.9 billion.
To recall, a group of Indiana pension funds which owns about $42.5
million of Chrysler's $6.9 billion in secured debt, questioned the
Fiat deal on grounds that it is an illegal sub rosa plan. They
also questioned the source of financing, saying that Chrysler is
an automotive company and should not have been accessing funds
under the Troubled Asset Relief Program of the U.S. government,
which was implemented to provide funds only for the purchase of
troubled assets from financial institutions.
Judge Gonzalez said that after the conclusion of the Fiat deal,
Chrysler will continue to administer its estate and will seek to
confirm a plan that will provide for the distribution of estate
assets.
"The classification of claims is independent of the sale process
and [Chrysler] is not attempting to evade the plan confirmation
procedures," he pointed out.
Judge Gonzalez also dismissed allegations that Chrysler breached
its fiduciary duty by not directly participating in the
negotiations among the first-lien lenders, the U.S. Treasury and
EDC.
According to Judge Gonzalez, there was evidence that neither the
steering committee formed by the first-lien lenders for the
negotiation nor the government agencies sought Chrysler's
participation in the negotiations despite the automaker's offer to
get involved. He further said that there was evidence that
Chrysler engaged in an 18-month worldwide search to seek potential
alliance partners, only that no other bidder stepped forward.
Prior to the Court's ruling, Chrysler filed in Court a revised
proposed order dated May 30, 2009 and an amended Master
Transaction Agreement and related documents, to address concerns
of creditors and other concerned parties, copies of which is
available for free at:
http://bankrupt.com/misc/ChryslerRevisedProposedSaleOrder.pdf
http://bankrupt.com/misc/ChryslerRevisedPurchaseAgreement.pdf
The revised Master Transaction Agreement has been designated by
Chrysler as the winning bid, and New CarCo Acquisition LLC, the
new company formed by Fiat, as the winning bidder. The automaker
did not designate a "lead bid" or a "secondary bid" since it did
not receive other qualified bids for the assets.
Objections Are Overruled
Judge Gonzalez overruled objections that have not yet been
withdrawn, waived or settled. More than 300 objections to the
sale have been filed with the Court including the objections of:
* Limited Liability Company "Automobile plant "GAZ"
* Miniature Precision Components Inc.
* Exco Engineering
* Iroquois Industries Inc.
* Leon Plastics Inc.
* Hoegh Autoliners AS
* State of Ohio
* Ad Hoc Committee Seeking Fairness for
Warranty and Lemon Law Claimants
* Active Burgess Mould & Design Inc., et al.
* Worthington Industries, et al.
* Department of Treasury of Michigan
* Avon Automotive
Except for GAZ, the other companies had already withdrawn their
objections prior to Judge Gonzalez' ruling. A report about the
status of the objections as of May 26, 2009 and an overview of
Chrysler's responses to the objections are available for free at:
http://bankrupt.com/misc/ChryslerStatusSaleObjections.pdf
Prior to the May 27 to 29 Sale Hearing, attorneys for the Debtors,
the Ad Hoc Committee of Consumer-Victims of Chrysler LLC, State of
Connecticut, Indiana Pension Funds and Robinson Brog Leinwand
Greene Genovese & Gluck P.C., on behalf of certain dealers, filed
their opening statements in Court.
Attorneys for the Debtors and the U.S. Department of Treasury
filed designations and counter-designations from the depositions
of Ronald Kolka, Matthew Feldman, Peter Grady, Steven Landry,
James Press, Thomas Lasorda, Robert Manzo and Robert Nardelli.
On behalf of 31 Affected Dealers, Eric J. Snyder, Esq., at Siller
Wilk LLP, in New York, also submitted an opening statement for the
denial of the proposed rejection of the dealership agreements.
Mr. Snyder argued that the unprecedented and unconstitutional
summary elimination of 789 dealers, some of whom have faithfully
served the debtor for three and four generations in the same
families, will result in a transfer of assets that will doom the
purchaser and add tens of millions of dollars of unnecessary
claims against the Debtors' bankruptcy estates.
Mr. Snyder compared Chrysler with carmaker Toyota saying the
Debtors' leadership is seeking to force Toyota's square peg into
Chrysler's round hole. Mr. Snyder also identified Joseph Roesner,
vice president of the Fontana Group, Inc., as witness whom the
Affected Dealers may call at the sale hearing.
In addition, the Indiana Pensioners tried to block approval of the
Sale by asking Judge Gonzalez to continue the Sale hearing for 30
days saying they "have not had a reasonable or sufficient
opportunity to prepare for the sale hearing." In support of the
request, the Pensioners' counsel, White & Case LLP, filed in Court
a declaration of Owen Pell, Esq., one of the firm's lawyers. In a
separate filing, the Pensioners asked Judge Gonzalez to strike
from the record the declarations of Chrysler officers Robert
Nardelli, Robert Manzo and James Chapman, which were filed just a
few hours before the Sale Hearing. The Pensioners said the
declarations are untimely, giving them no time to sufficiently
review and respond. The declarations generally recount the events
prior to Chrysler's bankruptcy filing and the circumstances
surrounding the proposed sale.
In a letter delivered to the Court, dated May 28, 2009, Gregory M.
Shumaker, Esq., at Jones Day, in Washington, D.C., informed the
Court that the Debtors have been exchanging confidential documents
and other information with certain objectors and other parties
pursuant to bilateral confidentiality agreements.
A copy of a confidentiality agreement with White & Case, on behalf
of Indiana Pensioners, for the Court's review and consideration,
is available for free at:
http://bankrupt.com/misc/Chrysler_IndianaConfidentialityPact.pdf
Counsel for John Bussian, et al., John F. Bloss, Esq. at
Robertson, Medlin & Blocker, PLLC, in Greensboro, North Carolina,
likewise submitted a letter to Court on May 28, 2009, asking for
permission to appear telephonically at the Sale Hearing.
Robert Nardelli's Declaration in Support of Sale
In his declaration filed in Court, Robert L. Nardelli, chairman
and chief executive officer Chrysler LLC, addressed certain
stakeholders' actions challenging management's decision to pursue
the sale transaction with Fiat S.p.A, insinuating, although never
directly stating, that the Debtors should have done something
else. Mr. Nardelli pointed out that the Company is burdened by
enormous liabilities, with expenses rapidly depleting, and cash
accounts and sales plummeting. Mr. Nardelli said the Company
searched diligently for the financing it so desperately needed.
However, no one would agree to provide Chrysler the billions of
dollars vital to its survival; that is, until the U.S. Treasury
agreed to do so.
The UST was the only lender willing to invest in the Company, Mr.
Nardelli told the Court.
According to Mr. Nardelli, the Objectors speculate that they
personally may have fared better if Chrysler liquidated. Mr.
Nardelli explained that based on the management team's expertise
and business acumen, the work product of their advisors, and the
notion and hope that Chrysler could continue and perhaps return to
profitability, the Company chose the Sale over liquidation.
The fact is that the secured lenders, including the Objectors,
will fare much better through the Sale than they would through a
liquidation, he said. Mr. Nardelli added that there was never an
attempt or an intention to harm the lenders. Just the opposite,
he said. Mr. Nardelli explained that he personally worked to
obtain the highest amount possible for them. In fact, just before
Chrysler filed for bankruptcy, he continued, the UST considered
offering more than $2 billion to the lenders to achieve unanimous
consent. Specifically, The UST offered $2.25 billion to the
secured lenders but made it clear that the offer would be open for
an hour only, and only if it received unanimous consent from the
secured lenders. While the secured lenders who are Objectors to
the Sale agreed to accept the offer, unanimous consent was not
obtained, he pointed out.
Mr. Nardelli said that while the Company wishes that customer
demand would have increased drastically in time to provide it the
liquidity it so desperately needed, this simply did not happen.
Faced with the choices presented and the information before him,
Mr. Nardelli told the Court that he is confident that approving
the Sale was an exercise of sound business judgment.
Chrysler to Close the Deal Promptly
Chrysler Chief Executive Robert Nardelli testified at the May 28
hearing that the automaker is ready to close the deal as soon as
Judge Gonzalez granted approval.
Even with the Court's approval of the Sale, however -- which
arrived barely a month after the Company sought bankruptcy
protection -- the deal's closing could be delayed as lawyers for
the Indiana Pensioners are expected to appeal the decision, notes
reports. An automatic 10-day stay is in effect to allow for any
appeal, though Chrysler's lawyers will almost certainly seek to
shorten that period, notes The New York Times.
The NY Times said "newly reorganized Chrysler could come out of
bankruptcy as early as this week" while The Wall Street Journal
notes that Chrysler could exit bankruptcy reorganization "as soon
as Monday."
To recall, an administration official said that Chrysler's
bankruptcy might take as long as two years and not the 60 days
projected by U.S. President Barack Obama, according to Bloomberg
News. The administration official, whose identity was withheld,
said that the two months projected by President Obama merely
applies to the sale of the automaker's best assets to a new
company, the report noted. Afterward, creditors would fight over
unwanted factories and other assets of the company.
Mr. Nardelli, who is to become a consultant at Chrysler's owner,
Cerberus Capital Management LP if the deal closes, admitted at the
hearing that the last thing he and his team wanted was to file for
bankruptcy. He also admitted that Chrysler intended to reorganize
as a standalone company, however, the government refused to fund
that effort, Bloomberg reported.
Alfredo Altavilla, Fiat powertrain executive, testified that Fiat
strongly recommended that Chrysler file for bankruptcy protection
as part of the transaction. He said that Fiat would not have
agreed to the deal if Chrysler had not sought bankruptcy
protection, the report said.
Fiat can walk away from the deal if it does not close by June 15.
Mr. Altavilla also testified during the hearing that Fiat plans to
name him and two others to the board that will head the new
company after Chrysler's bankruptcy, according to Bloomberg.
The two are Fiat Chief Executive Officer Sergio Marchionne and
former Exxon Mobil Vice Chairman Lucio Noto. Chrysler said the
new company's chairman will be Robert Kidder, a former CEO at
Borden Chemical Inc. and Duracell International Inc., Bloomberg
reported.
About Chrysler
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: Indiana Entities Lack Standing to Challenge Actions
-----------------------------------------------------------------
Judge Arthur J. Gonzalez of the U.S. Bankruptcy Court for the
Southern District of New York ruled that the Indiana State
Teachers Retirement Fund, Indiana State Police Pension Trust, and
the Indiana Major Move Construction do not have standing under the
Emergency Economic Stabilization Act of 2008 to challenge the
actions of the U.S. Treasury pursuant to the Troubled Asset Relief
Program in connection with Chrysler LLC and its debtor-affiliates'
Chapter 11 cases.
With respect to their secured claims, Judge Gonzalez held that the
Indiana Pensioners cannot allege an injury in fact for two
reasons:
(1) the Indiana Pensioners are bound, under the Collateral
Trust Agreement by the Administrative Agent's agreement,
to consent to the sale under Section 363(f)(2) of the
Bankruptcy Code and to receive $2 billion upon the release
of the collateral. The Administrative Agent agreed to the
disposition of the collateral as set forth under the terms
of the Section 363 Sale. Therefore, the Indiana
Pensioners are bound by that action and cannot allege an
injury.
(2) even if the Indiana Pensioners were not bound by the
Administrative Agent's actions, in the Court's opinion
Approving the Sale, the Court found that the value of the
collateral was no greater than $2 billion -- the same
amount the first lien senior secured lenders are
receiving under the transaction approved pursuant to the
Sale Opinion. Therefore, the Indiana Pensioners will
receive the pro-rata distribution of the value of the
collateral and cannot allege injury in fact.
Judge Gonzalez further added that even if the Indiana Pensioners
had an injury in fact with respect to their secured claim, they
cannot show the alleged injury is fairly traceable to the U.S.
Treasury's use of TARP funds. According to Judge Gonzalez, if a
non-governmental entity were providing the funding in the Cases,
the Indiana Pensioners would be alleging the same injury for
interference with their collateral. In this light, Judge Gonzalez
said, it is not the actions of the lender that the Indiana
Pensioners are challenging but rather the transaction itself.
Accordingly, turning to the unsecured deficiency claim of the
Indiana Pensioners, the Court found that the Indiana Pensioners
have similarly failed to show any injury in fact. In view of the
fact that the face value of liens on the collateral exceeds the
value of the collateral itself, all holders of unsecured claims
are receiving no less than what they would receive under a
liquidation, he said.
"Because the Indiana Funds do not have standing, the Court does
not reach the merits of any of the TARP and EESA issues raised by
the Indiana Funds," said Judge Gonzalez.
Accordingly, the Judge Gonzalez ruled that the Indiana Pensioners
lack standing to challenge the U.S. Treasury's actions under EESA
and TARP and the any request for relief related to the issues
regarding EESA and TARP is denied.
About Chrysler
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: Robert Manzo Explains May 20 Liquidation Analysis
---------------------------------------------------------------
Robert Manzo, executive director of Capstone Advisory Group, LLC,
had submitted to the U.S. Bankruptcy Court for the Southern
District of New York on May 21, 2009, an expert report with
respect his Liquidation Analysis for Chrysler LLC dated May 20,
2009, to reflect more recently available operating results and
account balances for the Company, as well as Chrysler's opening
cash balance as of the Petition Date.
Mr. Manzo says that notwithstanding that the more recent effort
reflects changes in the Company's financial position, as well as
changes in current market conditions, the methodologies and
analyses used in the May 20 Liquidation Analysis are entirely
consistent with those employed in the January 30 Liquidation
Analysis. In addition, both studies project that as a result of
overcapacity in the industry, and given the tight credit markets,
a liquidation could take from 24 to 30 months to complete.
According to Mr. Manzo, the May 20 Liquidation Analysis provides
two primary conclusions that, due to changes in the Company's
financial position, naturally differ from the January 30
Liquidation Analysis. Specifically, he says, the First Lien
holders are expected to recover less than 18% of their secured
claims at the time of filing. In fact, on the low end of the
range, if Chrysler's assets must be liquidated, the First Lien
holders may not recover anything at all for their claims. On a
net present value basis, the May 20 Liquidation Analysis predicts
that the First Lien holders will recover at most $1.2 billion. The
U.S. Treasury, whose collateral represents MOPAR Inventory and
certain real estate assets, is now expected to recover between 3%
and 5% of its secured claims compared to the 3% to 6% range
estimated in the January 30 Liquidation Analysis.
The second notable conclusion of the May 20 Liquidation Analysis
is that only two car lines would be sold as going concerns, Jeep
Wrangler and Dodge Viper. In the January 30 Liquidation Analysis,
it was assumed that the Company would also sell the Dodge Ram and
Dakota truck lines, along with certain car lines from the Brampton
production facility in Canada, on a going concern basis. Both
Liquidation Analyses employ the same methodology, but as a result
of differences between forecasted and actual EBITDA numbers for
the fiscal-year ending December 31, 2008, Mr. Manzo concluded that
the sale of the additional car lines on a going concern basis are
unlikely.
Limited buyer potential, industry overcapacity, and the
significant costs and time associated with any re-launch effort
will likely depress the amount of proceeds from any asset sales,
Mr. Manzo says. Accordingly, multiples in the lower end of the
range have been applied in this instance. The estimated proceeds
from the sale of certain profitable car lines on a going concern
basis available to satisfy the First Lien holders' claims now fall
in the range of between $156 million and $236 million, compared
with the January 30 forecast of between $452 million and $682
million.
Mr. Manzo assures the Court that the May 20 Liquidation Analysis
is a more accurate assessment of the true liquidation value of the
Company. At the time of the May 20 Liquidation Analysis, more
recent data points were available, Mr. Manzo adds.
Since Capstone's engagement began in November 2008, Mr. Manzo have
attended numerous meetings of the Chrysler Board to provide
professional guidance on restructuring options and to assist the
Board in its consideration of alternative financing strategies.
The Board's conclusion that a liquidation of the Company was the
least favorable option available, as compared with a potential
strategic alliance with Fiat, was not a surprise to those involved
in the restructuring process, he says. In its negotiations with
the First Lien holders and other interested parties, the Company
discussed the significant impact that liquidation would have on
Chrysler, as well as the significant advantages to aligning with a
strategic partner. Mr. Manzo says that the Board took all of
these factors into consideration in making its ultimate decision
to pursue the Fiat Alliance.
Subsequent to the Government's rejection of Chrysler's Long-Term
Viability Plan, no viable strategic partner aside from Fiat has
come forward, and no serious asset purchase proposals have
surfaced, Mr. Manzo explains. As part of Capstone's engagement,
Mr. Manzo have worked with the Debtors to evaluate proposed bids
received for the Company and its operating assets following the
Company's Chapter 11 filing. As of May 26, 2009, nine parties
have expressed interest in placing bids for Chrysler's assets.
Capstone created a "Summary of Interested Parties," dated
May 22, 2009, to monitor these proposals and track communications
with potential bidders, a copy of which is available for free at:
http://bankrupt.com/misc/Chrysler_ManzoDec_ExB.pdf
About Chrysler
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)
CITI INSTITUTIONAL: Moody's Junks Ratings on Funds to 'Caa/MR5'
---------------------------------------------------------------
Moody's Investors Service has downgraded to Caa/MR5 from Ba/MR5
the fund ratings of the short-term bond funds managed by Legg
Mason: Institutional Enhanced Portfolio (Hub), Citi Institutional
Enhanced Income Fund and Citi Institutional Enhanced Income Ltd.
(Spokes). Effective as of May 29, 2009, the Funds are scheduled
to close, and the remaining assets are being distributed in the
form of in-kind, pro-rata, distributions. Moody's rating action
is due to further deterioration in the average weighted credit
quality of the Funds' investment portfolio, the Funds' restricted
liquidity to meet cash redemptions, and the potential for further
losses. The Funds market risk ratings of MR5 remain unchanged.
The Funds, which are not money market funds, are organized as a
Hub and Spoke portfolio structure. Institutional Enhanced
Portfolio, the investment portfolio, is an open-end diversified
management investment company that is advised by Legg Mason
Partners Fund Adviser, with Western Asset Management, a wholly
owned subsidiary of Legg Mason, providing the day-do-day portfolio
management as the sub-advisor. Citi Institutional Enhanced Income
Fund and Citi Institutional Enhanced Income Ltd. are U.S. and
Cayman Island-based spoke funds, respectively.
Moody's will withdraw the ratings assigned to the Funds and the
investment portfolio upon their closure. For further information
on Moody's ratings withdrawal policy, please refer to Moody's
Withdrawal Policy on moody's.com.
The previous rating actions occurred as of December 19, 2008, at
which time the Funds' ratings, including market risk ratings, were
downgraded to Ba/MR5 from A/MR4.
CITI INSTITUTIONAL ENHANCED: Moody's Junks Ratings on Funds
-----------------------------------------------------------
Moody's Investors Service has downgraded to Caa/MR5 from Ba/MR5
the fund ratings of the short-term bond funds managed by Legg
Mason: Institutional Enhanced Portfolio (Hub), Citi Institutional
Enhanced Income Fund and Citi Institutional Enhanced Income Ltd.
(Spokes). Effective as of May 29, 2009, the Funds are scheduled
to close, and the remaining assets are being distributed in the
form of in-kind, pro-rata, distributions. Moody's rating action
is due to further deterioration in the average weighted credit
quality of the Funds' investment portfolio, the Funds' restricted
liquidity to meet cash redemptions, and the potential for further
losses. The Funds market risk ratings of MR5 remain unchanged.
The Funds, which are not money market funds, are organized as a
Hub and Spoke portfolio structure. Institutional Enhanced
Portfolio, the investment portfolio, is an open-end diversified
management investment company that is advised by Legg Mason
Partners Fund Adviser, with Western Asset Management, a wholly
owned subsidiary of Legg Mason, providing the day-do-day portfolio
management as the sub-advisor. Citi Institutional Enhanced Income
Fund and Citi Institutional Enhanced Income Ltd. are U.S. and
Cayman Island-based spoke funds, respectively.
Moody's will withdraw the ratings assigned to the Funds and the
investment portfolio upon their closure. For further information
on Moody's ratings withdrawal policy, please refer to Moody's
Withdrawal Policy on moody's.com.
The previous rating actions occurred as of December 19, 2008, at
which time the Funds' ratings, including market risk ratings, were
downgraded to Ba/MR5 from A/MR4.
COACTIVE TECHNOLOGIES: Moody's Junks Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating of CoActive Technologies, Inc., to Caa3 from B3. In
addition, the ratings on the first lien credit facility and term
loan were lowered to Caa2 from B2 and the rating on the second
lien term loan was lowered to Ca from Caa2. The rating outlook is
negative.
The downgrade reflects Moody's expectation that challenging end-
market conditions, particularly in the North American material
handling and European automotive sectors, and lower than
previously expected financial performance will pressure CoActive's
balance sheet leverage and financial flexibility for the remainder
of 2009 and potentially into 2010.
The negative outlook reflects Moody's view that compliance with
the covenants in CoActive's loan agreements will remain a
challenge over the near term without meaningful earnings
improvement or substantial debt reduction. However, CoActive's
existing cash balance and projected internal cash generation is
expected to provide sufficient liquidity to pay interest and
principle over the near term. Moody's added that a repurchase of
outstanding loans at a discount to par by the company or its
financial sponsor would likely be viewed as a distressed exchange
under Moody's definition of defaults.
These ratings have been downgraded:
-- Corporate Family Rating to Caa3 from B3;
-- Probability of default rating to Caa3 from B3;
-- Senior secured revolving credit facility to Caa2 (LGD3, 37%)
from B2 (LGD3, 35%);
-- Senior secured first lien term loan to Caa2 (LGD3, 37%) from
B2 (LGD3, 35%); and,
-- Senior secured second lien term loan to Ca (LGD5, 85%) from
Caa2 (LGD5, 85%).
The previous rating action on CoActive was the November 26, 2008
downgrade of the corporate family rating to B3.
CoActive is a worldwide leader in the designing, manufacturing and
marketing of customized electromechanical switches, interface
controls, and dome arrays.
COMMUNITY BANCORP: Delays 10-Q Filing; Gets Delisting Notice
------------------------------------------------------------
Community Bancorp, the holding company for Community Bank of
Nevada and Community Bank of Arizona, received notice from the
NASDAQ Stock Market on May 19, 2009, that it is not in compliance
with the continued listing requirements under NASDAQ Listing Rule
5250(c)(1) because it did not timely file its Form 10-Q for the
quarter ended March 31, 2009.
Under the NASDAQ rules, the Company has 60 calendar days from the
date of notice, or until July 20, 2009, to submit a plan to regain
compliance. If accepted, NASDAQ can grant the company an
extension of up to 180 calendar days from the filing's due date to
submit the delinquent filing.
The Company received on April 17, 2009, a similar non-compliance
notice regarding its failure to file its Form 10-K for the fiscal
year ended December 31, 2008. The Company has until June 17,
2009, to submit a plan to NASDAQ to regain compliance with the
continued listing requirements of NASDAQ because of the Initial
Delinquent Filing. Because of the Company's Initial Delinquent
Filing, any extension granted by NASDAQ to regain compliance due
to the Late 10-Q will be limited to 180 calendar days from the
Initial Delinquent Filing, or until October 12, 2009. The Company
intends to submit to NASDAQ by June 17, 2009, its plan to regain
compliance with respect to both the Initial Delinquent Filing and
the Late 10-Q.
About Community Bancorp
Community Bancorp -- http://www.community-bancorp.com/--
headquartered in Las Vegas, Nevada, is the holding company for
Community Bank of Nevada and Community Bank of Arizona. In 2002,
Community Bancorp was formed as the holding company of Community
Bank of Nevada, a Las Vegas based bank organized in July 1995 by
local community leaders and experienced bankers with the mission
of providing superior community banking services.
As of September 30, 2008, Community Bancorp had $1.78 billion in
total assets and $1.55 billion in total liabilities. Community
Bancorp reported a net loss of $2.96 million for the three months
ended September 30, 2008.
CONGREGATION BETH: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Congregation Beth Or
2075 Deerfield Road
Deerfield, IL 60015
Bankruptcy Case No.: 09-19684
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Bruce W. Black
Debtor's Counsel: Bradley Block, Esq.
Law Offices of Bradley Block
75 Tri State International
Lincolnshire, IL 60069
Tel: (224) 533-1075
Email: brad.block@bradblocklaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/ilnb09-19684.pdf
The petition was signed by Donald Horwitz, president of the
Company.
CROSS LAKE: Seeks Court Okay of Plan of Compromise & Arrangement
----------------------------------------------------------------
Cross Lake Minerals Ltd. applied to the Supreme Court of British
Columbia on or about May 25, 2009, for a Final Order approving the
plan of compromise and arrangement with its creditors under the
Companies' Creditors Arrangement Act and the Business Corporations
Act (British Columbia).
The Plan was approved by the general creditors of Cross Lake in a
manner required by the Order granted by the Court on April 7,
2009.
The completion of the Plan is subject to a number of conditions
including the completion of an investment agreement with Procon
Mining and Tunnelling Ltd. and the granting of the Final Order of
the Court approving the Plan.
Vancouver, British Columbia -- http://www.crosslakeminerals.com/
-- is a Vancouver-based Gold Mining and Development Company
focused on continued growth through exploration and acquisitions.
Cross Lake is very pleased to be the first new gold producer in
British Columbia in many years. To increase shareholder value,
the Company will continue to search for gold projects throughout
North America that complement the QR Mine and its expertise in
gold development.
DAVID P. GUILOT: Case Summary & 5 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: David P. Guilot
382 Ferry Road
Robinwood Farm
Sewickley, PA 15143
Bankruptcy Case No.: 09-23965
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
Western District of Pennsylvania (Pittsburgh)
Debtor's Counsel: Gary William Short, Esq.
436 Seventh Avenue
2317 Koppers Building
Pittsburgh, PA 15219
Tel: (412) 765-0100
Fax: (412) 765-2211
Email: gwshort@verizon.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
A list of the Company's 5 largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/pawb09-23965.pdf
The petition was signed by Mr. Guilot.
DELPHI CORP: Reaches Agreement With GM on Sale of Assets
--------------------------------------------------------
General Motors Corp. has reached an agreement with Delphi Corp.
regarding the sale of certain U.S. plants and Delphi's global
steering business to GM and the sale of most of Delphi's global
business operations to Platinum Equity LLC.
Jay Miller at The Wall Street Journal relates that Delphi will
emerge from its reorganization through a sale of assets to
Platinum Equity affiliate Parnassus Holdings II LLC, and with the
support of a GM affiliate, which will buy some of Delphi's plants.
GM, says WSJ, will provide $250 million of pre-emergence liquidity
through July 31.
According to WSJ, Delphi agreed to let Parnassus Holdings to
operate its businesses with capital and commitments of
$3.6 billion. The business will operate without the labor-related
legacy costs tied to the North American sites being acquired by
the GM affiliate, WSJ states.
Delphi is committed to completing these transactions through a 363
sale if stakeholder support is not sufficient to achieve prompt
confirmation of the modified plan.
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is a global supplier of mobile
electronics and transportation systems, including powertrain,
safety, steering, thermal, and controls & security systems,
electrical/electronic architecture, and in-car entertainment
technologies. Delphi technology is also found in computing,
communications, consumer accessories, energy and medical
applications. Delphi has approximately 146,600 employees and
operates 150 wholly owned manufacturing sites in 34 countries with
sales of $18.1 billion in 2008.
The Company filed for Chapter 11 protection on October 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on December 20,
2007. The Court confirmed the Debtors' First Amended Plan on
January 25, 2008. The Plan has not been consummated after a group
led by Appaloosa Management, L.P., backed out from their
proposal to provide US$2,550,000,000 in equity financing to
Delphi.
Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
DEX MEDIA: Fitch Downgrades Issuer Default Rating to 'D'
--------------------------------------------------------
Fitch Ratings has taken these rating actions on R.H. Donnelley
Corp. and subsidiaries:
RHD (Holding Company)
-- Issuer Default Rating downgraded to 'D' from 'C';
-- Senior unsecured notes affirmed at 'C/RR6'.
R.H. Donnelley, Inc. (Operating Company; Subsidiary of RHD)
-- IDR downgraded to 'D' from 'C';
-- Bank facility affirmed at 'CC/RR3';
-- Senior unsecured notes affirmed at 'C/RR6'.
Dex Media, Inc. (Subsidiary of RHD)
-- IDR downgraded to 'D' from 'C';
-- Senior unsecured notes affirmed at 'C/RR6'.
Dex Media West (Operating Company; Subsidiary of DXI)
-- IDR downgraded to 'D' from 'C';
-- Bank facility affirmed at 'B-/RR1';
-- Senior unsecured downgraded to 'C/RR4' from 'CC/RR3';
-- Senior subordinated affirmed at 'C/RR6'.
Dex Media East (Operating Company; Subsidiary of DXI)
-- IDR downgraded to 'D' from 'CC';
-- Bank facility downgraded to 'CC/RR3' from 'CCC/RR3'.
By definition, issuers with 'D' ratings have defaulted on all of
their obligations. The 'B-/RR1' rating on DXW's secured bank
facility reflects prospects of 91%-100% recovery. The 'CC/RR3'
rating on the RHDI and DXE secured bank facilities reflects 51%-
70% recovery prospects. The 'C' rating represents the lowest
possible issue rating for a defaulted security with below average
or poor recovery prospects.
These rating actions affect approximately $10 billion in total
debt as of March 31, 2009.
The downgrade reflects the announcement that RHD has initiated
voluntary Chapter 11 proceedings to restructure its debt
obligations. RHD stated that it had reached agreement in
principle with key creditors. The terms of the agreement include:
-- Reduction of $6.4 billion in debt, including $700 million in
secured debt repaid by cash at 100% principal recovery.
-- Approximately $6 billion of unsecured notes would be
exchanged for 100% of the equity in the restructured company
and $300 million of unsecured notes.
-- In addition to increased pricing, enhanced collateral and
guarantee package, the secured lenders will benefit from cash
sweeps of 65% for DXE and DXW and 60% for RHDI.
The filing has been made in the U.S. Bankruptcy Court for the
District of Delaware. The company will continue to operate its
businesses during the restructuring and has stated it has
sufficient cash to do so. The company has fully drawn from its
OpCo bank credit facilities and stated that cash on hand as of the
bankruptcy filing was over $300 million (March 31, 2009 cash
balances were reported at $533 million). RHD generated
approximately $550 million in free cash flow in 2008.
RHD expects to have $3.1 billion in secured debt and $3.4 billion
in consolidated debt after emerging from bankruptcy.
DEX MEDIA EAST: Fitch Downgrades Issuer Default Rating to 'D'
-------------------------------------------------------------
Fitch Ratings has taken these rating actions on R.H. Donnelley
Corp. and subsidiaries:
RHD (Holding Company)
-- Issuer Default Rating downgraded to 'D' from 'C';
-- Senior unsecured notes affirmed at 'C/RR6'.
R.H. Donnelley, Inc. (Operating Company; Subsidiary of RHD)
-- IDR downgraded to 'D' from 'C';
-- Bank facility affirmed at 'CC/RR3';
-- Senior unsecured notes affirmed at 'C/RR6'.
Dex Media, Inc. (Subsidiary of RHD)
-- IDR downgraded to 'D' from 'C';
-- Senior unsecured notes affirmed at 'C/RR6'.
Dex Media West (Operating Company; Subsidiary of DXI)
-- IDR downgraded to 'D' from 'C';
-- Bank facility affirmed at 'B-/RR1';
-- Senior unsecured downgraded to 'C/RR4' from 'CC/RR3';
-- Senior subordinated affirmed at 'C/RR6'.
Dex Media East (Operating Company; Subsidiary of DXI)
-- IDR downgraded to 'D' from 'CC';
-- Bank facility downgraded to 'CC/RR3' from 'CCC/RR3'.
By definition, issuers with 'D' ratings have defaulted on all of
their obligations. The 'B-/RR1' rating on DXW's secured bank
facility reflects prospects of 91%-100% recovery. The 'CC/RR3'
rating on the RHDI and DXE secured bank facilities reflects 51%-
70% recovery prospects. The 'C' rating represents the lowest
possible issue rating for a defaulted security with below average
or poor recovery prospects.
These rating actions affect approximately $10 billion in total
debt as of March 31, 2009.
The downgrade reflects the announcement that RHD has initiated
voluntary Chapter 11 proceedings to restructure its debt
obligations. RHD stated that it had reached agreement in
principle with key creditors. The terms of the agreement include:
-- Reduction of $6.4 billion in debt, including $700 million in
secured debt repaid by cash at 100% principal recovery.
-- Approximately $6 billion of unsecured notes would be
exchanged for 100% of the equity in the restructured company
and $300 million of unsecured notes.
-- In addition to increased pricing, enhanced collateral and
guarantee package, the secured lenders will benefit from cash
sweeps of 65% for DXE and DXW and 60% for RHDI.
The filing has been made in the U.S. Bankruptcy Court for the
District of Delaware. The company will continue to operate its
businesses during the restructuring and has stated it has
sufficient cash to do so. The company has fully drawn from its
OpCo bank credit facilities and stated that cash on hand as of the
bankruptcy filing was over $300 million (March 31, 2009 cash
balances were reported at $533 million). RHD generated
approximately $550 million in free cash flow in 2008.
RHD expects to have $3.1 billion in secured debt and $3.4 billion
in consolidated debt after emerging from bankruptcy.
DEX MEDIA WEST: Fitch Downgrades Issuer Default Rating to 'D'
-------------------------------------------------------------
Fitch Ratings has taken these rating actions on R.H. Donnelley
Corp. and subsidiaries:
RHD (Holding Company)
-- Issuer Default Rating downgraded to 'D' from 'C';
-- Senior unsecured notes affirmed at 'C/RR6'.
R.H. Donnelley, Inc. (Operating Company; Subsidiary of RHD)
-- IDR downgraded to 'D' from 'C';
-- Bank facility affirmed at 'CC/RR3';
-- Senior unsecured notes affirmed at 'C/RR6'.
Dex Media, Inc. (Subsidiary of RHD)
-- IDR downgraded to 'D' from 'C';
-- Senior unsecured notes affirmed at 'C/RR6'.
Dex Media West (Operating Company; Subsidiary of DXI)
-- IDR downgraded to 'D' from 'C';
-- Bank facility affirmed at 'B-/RR1';
-- Senior unsecured downgraded to 'C/RR4' from 'CC/RR3';
-- Senior subordinated affirmed at 'C/RR6'.
Dex Media East (Operating Company; Subsidiary of DXI)
-- IDR downgraded to 'D' from 'CC';
-- Bank facility downgraded to 'CC/RR3' from 'CCC/RR3'.
By definition, issuers with 'D' ratings have defaulted on all of
their obligations. The 'B-/RR1' rating on DXW's secured bank
facility reflects prospects of 91%-100% recovery. The 'CC/RR3'
rating on the RHDI and DXE secured bank facilities reflects 51%-
70% recovery prospects. The 'C' rating represents the lowest
possible issue rating for a defaulted security with below average
or poor recovery prospects.
These rating actions affect approximately $10 billion in total
debt as of March 31, 2009.
The downgrade reflects the announcement that RHD has initiated
voluntary Chapter 11 proceedings to restructure its debt
obligations. RHD stated that it had reached agreement in
principle with key creditors. The terms of the agreement include:
-- Reduction of $6.4 billion in debt, including $700 million in
secured debt repaid by cash at 100% principal recovery.
-- Approximately $6 billion of unsecured notes would be
exchanged for 100% of the equity in the restructured company
and $300 million of unsecured notes.
-- In addition to increased pricing, enhanced collateral and
guarantee package, the secured lenders will benefit from cash
sweeps of 65% for DXE and DXW and 60% for RHDI.
The filing has been made in the U.S. Bankruptcy Court for the
District of Delaware. The company will continue to operate its
businesses during the restructuring and has stated it has
sufficient cash to do so. The company has fully drawn from its
OpCo bank credit facilities and stated that cash on hand as of the
bankruptcy filing was over $300 million (March 31, 2009 cash
balances were reported at $533 million). RHD generated
approximately $550 million in free cash flow in 2008.
RHD expects to have $3.1 billion in secured debt and $3.4 billion
in consolidated debt after emerging from bankruptcy.
DIAGNOSTIC IMAGING: Moody's Affirms 'B2' Corporate Family Rating
----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Diagnostic
Imaging Group, LLC, including the B2 Corporate Family Rating and
the B3 Probability of Default Rating. The rating outlook remains
negative.
The affirmation of the negative rating outlook incorporates DIG's
underperformance versus Moody's expectations for free cash flow
generation over the past two years and some continued concerns
about the company's liquidity profile. Liquidity was somewhat
improved when, in mid-late 2008, DIG received cash proceeds of
approximately $35 million from new equity investors. However,
Moody's remain concerned about the company's ability to generate
on-going cash flow from operations, although DIG did demonstrate
positive free cash flow over the past two quarters following the
divestiture of several underperforming facilities in late 2008
(including the four New Jersey facilities).
Also, Moody's believes that DIG's underlying operating performance
over the past several years has been somewhat obscured by a series
of acquisitions and divestitures. Further, Moody's is concerned
about the company's availability of external liquidity as the
revolver size was recently reduced to $10 million (from
$25 million) and the revolver matures in early 2010. If DIG is
able to refinance its revolver, establish a track record of
improvement in organic revenue growth, working capital management
and free cash flow generation in its core continuing operations,
and uses cash flow to repay its term loan, Moody's could stabilize
the rating outlook. Inability to achieve any of these in the
near-term could lead to downward rating action.
Ratings affirmed:
-- $10 million, senior secured revolver due 2010: B1 (LGD2, 23%)
-- $110 million, senior secured term loan B due 2012: B1 (LGD2,
23%)
-- Corporate Family Rating, B2
-- Probability of Default Rating, B3
The ratings outlook is negative.
The last rating action was June 9, 2008, when Moody's affirmed the
ratings and negative outlook.
DIG'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 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 of tolerance for risk. These attributes
were compared against other issuers both within and outside of
DIG's core industry and DIG's ratings are believed to be
comparable to those other issuers of similar credit risk.
Headquartered in Hicksville, New York, Diagnostic Imaging Group is
principally engaged in establishing and operating fixed-site
diagnostic imaging and radiology facilities providing all types of
outpatient radiological services, including x-rays, CT scans,
mammography and MRIs. The company operates 32 multi-modality
centers in the New York metropolitan area and Florida. Combined
revenue for the twelve months ended March 31, 2009, approximated
$177 million. Evercore Capital Partners owns a majority stake in
DIG.
DIRECT MONEY: Involuntary Chapter 11 Case Summary
-------------------------------------------------
Alleged Debtor: Direct Money Source Inc
3470 Wilshire Blvd., #640
Los Angeles, CA 90010
Case Number: 09-23153
Type of Business: The Debtor is a property investor.
Involuntary Petition Date: May 28, 2009
Court: Central District Of California (Los Angeles)
Judge: Alan M. Ahart
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Vanna Phootrakul loan $325,000
5323 La Mirada Ave
Los Angeles, CA 90029
Aziz Meghji loan $42,000
10616 Venice Blvd
Culver City, CA 90232
Millenium Better Security LLC loan $70,000
3470 Wilshire Blvd #604
Los Angeles, CA
FERRO CORP: S&P Junks Corporate Credit Rating From 'B-'
-------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
Cleveland, Ohio-based Ferro Corp., including the corporate credit
rating, to 'CCC+' from 'B-', and removed the ratings from
CreditWatch, where they were placed on Feb. 2, 2009, with negative
implications. S&P lowered the rating on the company's
$172.5 million 6.5% convertible senior unsecured notes due 2013 to
'CCC-' from 'CCC+' and revised the recovery rating to '6', from
'5', indicating S&P's expectation for minimal (0% to 10%) recovery
in the event of a payment default.
"The rating downgrade reflects our expectation that continued
demand softness across the company's end markets will result in
weaker operating results in 2009," Standard & Poor's credit
analyst Liley Mehta said. "While the company's amendment to its
credit agreement in March 2009 loosened financial covenants, S&P
is concerned about compliance with the new minimum EBITDA covenant
in the next few quarters. Moreover, cash collateral requirements
related to the company's metal deposits program have reduced
liquidity in the past quarter," she said.
The outlook is negative. The outlook incorporates S&P's
heightened concern over liquidity if business conditions fail to
improve in the second half of 2009, placing further pressure on
cash flow generation, liquidity, and covenant compliance. A
recessionary business environment and sustained weak end markets
may further hurt earnings and cash flow generation in the near
term.
FIRSTLIGHT POWER: Moody's Changes Outlook on B1 Rating to Negative
------------------------------------------------------------------
Moody's revised the outlook for FirstLight Power Resources, Inc.
(FLP: B1 first lien and B3 second lien credit facilities) and its
subsidiary FirstLight Hydro Generating Company (Ba3 senior secured
first mortgage bonds) to negative from stable. Separately,
Moody's also withdrew its B2 Corporate Family Rating for FLP,
which had been applied at the parent level.
The change in rating outlooks reflects Moody's expectation that
over the near-to-medium term FLP's consolidated cash flow will be
significantly lower than anticipated, resulting in weak credit
metrics and potential covenant violations. The reduction in cash
flow stems primarily from lower actual and projected prices for
energy, forward reserves, and capacity in the New England markets
in which the company operates as a merchant power generator.
Although FLP has hedged a portion of its energy margin at higher
prices through 2011, a significant portion of its earnings remains
exposed to market prices, and will likely remain below
expectations until power market conditions improve.
Moody's believes that in the latter part of 2009, the combination
of FLP's reduced cash flows, and debt balances that have not
amortized as rapidly as envisioned by the FLP credit facilities,
will likely result in a ratio of consolidated debt to EBITDA (as
defined in the credit facilities) above permitted level(s).
Importantly, the credit facilities provide the ability for the
potential 2009 covenant default(s) to be cured, and Moody's
understand that, if necessary, FLP's ultimate parent GDF Suez
North America (GDF NA: unrated), a subsidiary of French energy
company GDF Suez SA (GDF Suez: Aa3 senior unsecured, stable) is
likely to affect such a near term cure. However, longer term,
unless market conditions improve significantly or there is
significant debt reduction, additional covenant breaches are
possible, and the ability to implement future cures is limited by
the documents.
In addition, assuming current market conditions persist, Moody's
anticipate that cash flow credit metrics will remain weak for an
extended period. For example, the ratio of consolidated cash flow
from operations, excluding working capital changes to adjusted
debt (calculated in accordance with Moody's standard analytic
adjustments) could remain in the mid-single digits which could put
downward pressure on the ratings.
The withdrawal of FLP's parent level CFR reflects Moody's opinion,
that following the acquisition of FLP's ultimate parent by GDF NA,
the company is more appropriately viewed as a consolidated,
special purpose, non-recourse subsidiary of a larger consolidated
family, rather than a parent company with its own project
subsidiary. In association with the withdrawal of the CFR,
Moody's have also withdrawn FLP's B2 Probability of Default rating
and its security specific Loss Given Default Assessments.
FLP and FLH's ratings were assigned by evaluating factors believed
to be relevant to the credit profile, such as i) the business risk
and competitive position of the companies versus others within its
industry or sector, ii) the capital structure and financial risk
of FLP and FLH, iii) the projected performance of the companies
over the near to intermediate term, and iv) the companies' history
of achieving consistent operating performance and meeting
financial plan goals. These attributes were compared against
other issuers both within and outside of FLP's core peer group and
FLP's and FLH's ratings are believed to be comparable to ratings
assigned to other issuers of similar credit risk.
Moody's last rating action on FLP occurred April 8, 2009, when its
Speculative Grade Liquidity rating was withdrawn. The last rating
action on FLH occurred November 20, 2008, when the Ba3 rating for
its senior secured debt was affirmed.
Headquartered in Hartford, Connecticut, FLP owns and operates
1,442 MW of merchant electric generating assets located in
Connecticut and Massachusetts. FLP's wholly-owned subsidiary
FirstLight Hydro Generating Company, owns 1,296 MW of
predominately hydroelectric generating facilities that include two
pumped storage hydro units, eleven conventional and run-of-river
hydro units, and one internal combustion peaking facility. FLP's
portfolio also includes a 146 MW coal-fired generating station
held in a separate subsidiary. FLP markets the output of its
assets through FirstLight Power Resources Management, LLC, the
group's marketing subsidiary.
FISHER COMMUNICATIONS: S&P Cuts Corporate Credit Rating to 'B-'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and issue-level ratings on Seattle, Washington-based Fisher
Communications Inc. by one notch and removed them from
CreditWatch, where they were placed with negative implications
Feb. 19, 2009. The previous CreditWatch listing was based on
S&P's concern about Fisher's deteriorating operating performance
in a recession and a non-election year. The corporate credit
rating was lowered to 'B-' from 'B', and the rating outlook is
stable.
"The ratings downgrade reflects our concern about Fisher's
deteriorating operating performance, and reduced flexibility
following a $31 million special dividend," said Standard & Poor's
credit analyst Jeanne Mathewson.
Revenue was down 25% in the first quarter, and EBITDA fell into
negative territory due to weak advertising demand. Lease- and
pension-adjusted leverage rose to 6.8x for the 12 months ended
March 31, 2009 (pro forma for $25 million in debt repayment so far
this year), up from 6.2x a year earlier.
The 'B-' reflects Fisher's weak EBITDA margin, high debt leverage,
and concentrated cash flow base. It also reflects S&P's concern
about competition from other major network-affiliated stations,
the parent companies of which have greater financial resources
than Fisher. TV broadcasting's good margin and discretionary cash
flow potential are modest positives that do not offset these risk
factors.
FLEETWOOD ENTERPRISES: Files CMH Purchase Agreement With SEC
------------------------------------------------------------
Fleetwood Enterprises, Inc., delivered to the Securities and
Exchange Commission an Asset Purchase agreement between Fleetwood
Enterprises, Inc., and Fleetwood Homes of Texas, L.P., an indirect
subsidiary of the Company, as sellers, and CMH Manufacturing,
Inc., as the purchaser.
A full-text copy of the Asset Purchase Agreement is available for
free at: http://researcharchives.com/t/s?3d7b
Under the terms of the Purchase Agreement, the Purchaser agreed to
purchase substantially all of the military housing assets of the
Sellers for $4,500,000 in cash, plus the assumption by the
Purchaser of certain assumed liabilities, all as specified in the
Purchase Agreement.
The closing of the proposed transaction was subject to certain
closing conditions and completion of the bankruptcy court approval
process. On May 27, 2009, the bankruptcy court approved the
proposed transaction and entered a sale order in connection
therewith. Shortly thereafter, the remaining closing conditions
were satisfied or waived and the proposed transaction closed on
May 28, 2009.
The net proceeds of the transaction, after paying costs associated
with the transaction, will be used to satisfy the obligations of
the Company and its subsidiaries to their creditors. The Company
does not anticipate that there will be proceeds ultimately
available to the Company from this transaction and other potential
asset sales sufficient, after payments to creditors, to result in
any distribution to the stockholders of the Company.
As reported by the Troubled Company Reporter on June 1, 2009,
pursuant to Fleetwood Enterprises' sale its Trendsetter military
housing assets to CMH Manufacturing, CMH will enter into new
contracts to complete current Trendsetter projects at Fort Sam
Houston and Fort Bliss, and for another building at Fort Sam
Houston. It is expected that CMH will make conditional job offers
to most of the unit's team members. Fleetwood's existing bonding
obligations on its military business, which Fleetwood backs with
letters of credit, will be significantly reduced as a result of
the transaction. CMH is a subsidiary of the Clayton Homes family
of companies, subsidiaries of Berkshire Hathaway. Trendsetter
manufactures modular barracks for the U.S. military in two
adjacent facilities located in Belton, Texas, south of Waco.
About Fleetwood
Headquartered Riverside, California, Fleetwood Enterprises --
http://www.fleetwood.com/-- produces recreational vehicles and
manufactured homes. Fleetwood motor home products are distributed
through a nationwide network of approximately 150 dealers. 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.
FOOTHILLS RESOURCES: Court Extends DIP Facility thru August 19
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
extended the maturity date of Foothills Resources, Inc., and its
debtor affiliates' existing DIP Facility with Regiment Capital
Special Situations Fund III. L.P. from May 19, 2009, through
August 19, 2009.
The Court also authorized the Debtors to continue using cash
collateral through the extended due date, in accordance with a
budget.
As reported in the Troubled Company Reporter on March 5, 2009,
Foothills Resources won final approval from the Bankruptcy
Court to borrow $2.5 million from Regiment Capital, Bloomberg's
Bill Rochelle said.
On February 23, 2009, Foothills Resources entered into the
DIP Credit Agreement with Regiment Capital, as Agent and DIP
Lender, and Foothills' wholly owned subsidiaries, Foothills
California, Inc., Foothills Oklahoma, Inc., and Foothills Texas,
Inc., as guarantors, subject to final approval by the Bankruptcy
Court.
The DIP Credit Agreement provides for term loans up to an
aggregate of $2.5 million. The proceeds of the Loans will be used
for working capital purposes, including the payment of fees,
costs, and expenses incurred in connection with the DIP Credit
Agreement and for expenditures consistent with a budget agreed
upon by the Company and the Lenders pursuant to the DIP Credit
Agreement. Interest will accrue under the DIP Credit Agreement at
12% per annum, provided that upon an event of default under the
DIP Credit Agreement, interest will accrue at an annual rate equal
to 2% above the annual rate otherwise applicable. The
Loans was originally set mature on the earliest of:
(a) March 16, 2009, if the final order of the Bankruptcy Court
has not been entered on or prior to that date,
(b) May 19, 2009, if the final order of the Bankruptcy Court
has been entered on or prior to March 16, 2009,
(c) the date of substantial consummation of a plan or
reorganization in the Chapter 11 Cases that has been
confirmed by an order of the Bankruptcy Court,
(d) the date of a sale of substantially all of the assets of
the Company, and
(e) at an earlier date on which all Loans and other obligations
for the payment of money will become due and payable in
accordance with the terms of the DIP Credit Agreement.
The obligations under the DIP Credit Agreement are secured,
subject to certain limited exceptions, by substantially all of the
assets of the Company and its subsidiaries, including a
superpriority administrative expense claim pursuant to Section
364(c)(1) of the Bankruptcy Code.
A full-text copy of the Foothill Resources DIP Credit Agreement is
available for free at http://researcharchives.com/t/s?39fd
Foothills Resources, Inc., is engaged in the acquisition,
exploration and development of oil and natural gas properties.
The company's operations are conducted primarily through its
wholly owned subsidiaries, Foothills California, Inc., Foothills
Texas, Inc., and Foothills Oklahoma, Inc.
On February 11, 2009, Foothills Resources and its wholly owned
subsidiaries, Foothills California, Foothills Oklahoma, and
Foothills Texas, filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No.
09-10452). Judge Christopher S. Sontchi handles the Chapter 11
cases. Akin Gump Strauss Hauer & Feld LLP is the Debtors' lead
bankruptcy counsel. Norman L. Pernick, Esq., and Patrick J.
Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard,
represent the Debtors as Delaware counsel. The Garden City Group,
Inc., is the claims agent for the Debtors. In its bankruptcy
petition, Foothills listed assets and debts of between $50 million
and $100 million each.
FOOTHILLS RESOURCES: Plan Filing Period Extended to October 9
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
extended Foothills Resources, Inc. and its affiliated debtors'
exclusive period to file a plan, through and including October 9,
2009, and their exclusive period to solicit acceptances of that
plan, through and including December 8, 2009.
The Debtors tell the Court that they devoted substantial time to
negotiate and obtain approval of the DIP Credit Agreement. The
Debtors aver that they need additional time to develop a
confirmable Chapter 11 plan that best benefits all of their
constituencies.
Foothills Resources, Inc., is engaged in the acquisition,
exploration and development of oil and natural gas properties.
The company's operations are conducted primarily through its
wholly owned subsidiaries, Foothills California, Inc., Foothills
Texas, Inc., and Foothills Oklahoma, Inc.
On February 11, 2009, Foothills Resources and its wholly owned
subsidiaries, Foothills California, Foothills Oklahoma, and
Foothills Texas, filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No.
09-10452). Judge Christopher S. Sontchi handles the Chapter 11
cases. Akin Gump Strauss Hauer & Feld LLP is the Debtors' lead
bankruptcy counsel. Norman L. Pernick, Esq., and Patrick J.
Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard,
represent the Debtors as Delaware counsel. The Garden City Group,
Inc., is the claims agent for the Debtors. In its bankruptcy
petition, Foothills listed assets and debts of between $50 million
and $100 million each.
FORD MOTOR: Prepares to Gain Market Share, To Increase Production
-----------------------------------------------------------------
Matthew Dolan at The Wall Street Journal reports that a Ford Motor
Co. official said that the Company plans to increase production of
cars and trucks in the third quarter 2009 by 10% from the level of
a year ago.
Citing Ford officials, WSJ relates that in the third quarter, the
Company will produce 150,000 cars and 310,000 trucks for a total
of 460,000 vehicles. Ford, says WSJ, built 184,000 cars and
234,000 trucks for a total of 418,000 in 2008. According to WSJ,
the planned move will be Ford's first significant production
increase in almost two years. WSJ notes that Ford is preparing to
gain market share while General Motors Corp. and Chrysler LLC are
bogged down in bankruptcy and restructuring.
WSJ says that as GM and Chrysler LLC are shutting down their
plants for almost all of the third quarter to focus on their
internal issues, Ford will have a chance to push sales through the
prime summer selling months.
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.
FRIAR TUCK INN: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Friar Tuck Inn of the Catskills, Inc.
4858 Route 32
Catskill, NY 12414
Bankruptcy Case No.: 09-11996
Debtor-affiliate filing separate Chapter 11 petition:
Entity Case No.
------ --------
Friar Tuck Resorts, Inc. 09-11997
Chapter 11 Petition Date: May 31, 2009
Court: United States Bankruptcy Court
Northern District of New York (Albany)
Debtor's Counsel: Sean C. Serpe, Esq.
Pelton Serpe LLP
111 Broadway, Floor 9
New York, NY 10006
Tel: (212) 725-3600
Email: serpe@peltonserpe.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/nynb09-11996.pdf
The petition was signed by Ross Caridi, chief executive officer of
the Company.
GENERAL MOTORS: Files for Ch 11; Management Changes in 60 Days
--------------------------------------------------------------
Kevin Helliker, Neil King Jr., and John D. Stoll at The Wall
Street Journal report that General Motors Corp. filed for Chapter
11 bankruptcy protection in the U.S. Bankruptcy Court for the
Southern District of New York on Monday.
Wallace Witkowski at MarketWatch relates that GM Chief Executive
Fritz Henderson said on Monday at a press conference that the
Company will make leadership changes within the next 60 days.
GM will also focus on its four core brands -- Chevrolet, Cadillac,
GMC, and Buick -- which will allow the reorganized company to
focus its market efforts, MarketWatch relates, citing Mr.
Henderson. According to MarketWatch, Mr. Henderson said that over
2009 GM will cut its salaried workforce by 22%, about one-third of
which have already been made.
WSJ states that though the government would own 60% of the new GM,
President Barack Obama said that auto executives "will call the
shots and make the decisions about turning this company around,"
emphasizing that the government would refrain from playing a
management role in all but the most critical areas.
National Auto Dealers Hope for a Short GM Bankruptcy
Chairman of the National Automobile Dealers Association John
McEleney stated in a news release that: "Even though this may have
been anticipated for some time, the bankruptcy of General Motors,
an American icon for a hundred years, still marks a historically
sad day for American business. Obviously, this was not a
preferred option. But the key now is to get out of bankruptcy as
quickly as possible. Since NADA represents all dealers -- both
domestic and international -- our concern is to minimize
disruption to the entire auto industry. The bankruptcy court also
should take special care not to trample on recognized rights under
state franchise laws. GM dealers are independent business owners,
men and women who have invested millions in their facilities and
are the cornerstones of the economies in their local communities.
GM has already announced drastic dealer cuts. NADA does not agree
with mass cuts in the dealer network. It is the GM dealer who
purchases GM vehicles to sell to the public. By cutting its
dealers, GM is cutting its own customer base. In addition, fewer
dealerships mean less convenience and less competition and more
unemployment. Therefore, drastic closures of dealerships on the
scale that GM announced are bad for the economy, bad for GM and
bad for the consumer. But unlike Chrysler, GM at least has
indicated it will allow a wind-down period for the dealers who are
not part of the new company. NADA fully expects GM to honor all
its obligations to the affected dealers, whether or not they
decide to wind down their operations. It's critical for GM to
treat each affected dealer fairly and equitably. It's also
important to point out that GM dealers will continue to honor all
warranties and will work with all parties concerned to make sure
that their customers are taken care of."
Wilmington Trust to Serve as Trustee in GM Bankruptcy
Wilmington Trust is serving as successor indenture trustee for
certain holders of $23.075 billion of unsecured debt securities
issued by General Motors Corporation. Wilmington Trust is not a
direct holder of debt issued by GM and has no direct credit
exposure to GM. In its role as successor indenture trustee,
Wilmington Trust receives a fee for performing administrative
services on behalf of bondholders it represents. "Our trustee
assignment in GM's bankruptcy is another indication of CCS'
position as a leading global provider of independent trustee and
administrative services for corporate clients," said Ted T.
Cecala, Wilmington Trust's chairman and chief executive officer.
GMAC Continues to Provide Auto Financing Products to GM
GMAC Financial Services is a creditor of General Motors Corp. and
as such is taking the appropriate steps to protect GMAC's
interests during GM's restructuring. GM has submitted a motion to
the U.S. Bankruptcy Court that, pending approval, would allow its
direct business with GMAC to continue in the ordinary course
during GM's restructuring. In addition, GMAC has been advised by
GM that GM will take appropriate steps in the bankruptcy court to
authorize a purchaser of the assets to comply with all of the
contracts with GMAC, including all payment obligations. GMAC
continues to provide automotive financing products and services to
GM and Chrysler dealers and customers, including retail auto
originations, wholesale financing, insurance products, and
servicing of customer loans. The company's non-automotive
activities also continue uninterrupted. GMAC is a bank holding
company with a newly appointed board of directors and a
diversified ownership structure. GMAC has not filed for
bankruptcy, nor does it intend to, and the company continues to
meet all of its obligations.
IUE-CWA Vows to Protect Retiree Health Care in GM Case
IUE-CWA, the Industrial Division of the Communications Workers of
America, is moving aggressively to protect the interests of more
than 41,000 represented retirees and their dependents with a
filing to stop General Motors' plan to sell its viable assets.
The objection, to be filed in the Southern District of New York
Bankruptcy Court, seeks to prevent GM's proposed Section 363 sale
that would strip GM of the resources needed to pay the health care
and other benefits promised IUE-CWA retirees. The union estimates
its claims against GM will top $5 billion, the vast majority of
which are the benefits owed to retirees. The union states that GM
is violating bankruptcy code with disparate treatment of groups of
retirees who have the same promised benefits, noting that under
Section 1114 the company must show that any proposed reduction is
fair and equitable when compared to how similar groups are dealt
with. The filing calls GM "not only unfair, but cruel," for
protecting lifetime health and life insurance benefits for
retirees similarly situated under the United Auto Workers while
leaving IUE-CWA retirees and another 6,500 retirees represented by
other unions with unsecured creditor claims against a company that
will have no assets if the planned sale goes through. IUE-CWA
reached agreement with GM on a voluntary employee beneficiary
association to cover its members in December 2008 but the company
refused to implement the VEBA citing requirements imposed by the
U.S. Treasury Department in its initial bailout assistance. Since
then, GM has made no offers on how to resolve the benefits issue.
"With the Treasury Department's apparent blessing, GM is trying to
subvert the bankruptcy process by using the sale to reorganize the
company without meeting any of the standards set by the bankruptcy
code," said IUE-CWA President Jim Clark. "If GM is successful, our
retirees will be left holding an empty bag. The law does not
allow favoritism for powerful creditors and we will not allow this
grossly unfair attempt to cheat our retirees to proceed
unchecked."
GM to Face Senators on Dealership Plans
Robert Schroeder at WSJ reports that the senators will also grill
the chiefs of GM and Chrysler LLC on Wednesday about the fate of
those companies' dealerships. WSJ relates that GM plans to close
about 2,600 dealerships by the end of 2010, while Chrysler is
exercising its right to reject contracts at 789 dealers, about a
quarter of its U.S. network.
According to WSJ, Senators Jay Rockefeller and Kay Bailey
Hutchison are calling Chrysler President James Press and Mr.
Henderson to testify before the Senate Committee on Commerce,
Science and Transportation. GM and Chrysler must answer questions
about "the short and insufficient time period" for dealers to
close, how dealers can minimize job losses, dealers' inability to
sell their inventories at cost and other issues, WSJ says, citing
Senators Rockefeller and Hutchison.
GM Proceeds With U.S. Plant Closures
GM has disclosed details of its accelerated manufacturing plan to
improve capacity utilization and flexibility for the New GM. GM
also reaffirmed it will build a small car at one of its U.S.
assembly plants on standby capacity status.
The manufacturing plan reduces GM's total number of assembly,
powertrain and stamping facilities in the U.S. from 47 in 2008 to
34 by the end of 2010 and 33 by 2012. These totals reflect GM's
recently announced plans to build a future small car in the U.S.
Under this plan, the New GM will achieve full capacity utilization
of its assembly operations in 2011, two years ahead of what was
scheduled in its Feb. 17 viability plan submission. This will
result in lower fixed costs per vehicle sold, and lower and more
efficient capital investment.
GM's Service and Parts Operations (SPO) announced today that it
will cease operations at three Parts Distribution Centers in
Boston; Columbus, Ohio; and Jacksonville, Florida, by December 31,
2009.
GM will also build a future small car in the U.S. utilizing a UAW-
GM assembly plant on standby capacity status, with major metal
stampings supported from a UAW-GM U.S. stamping plant also on
standby capacity. This new small car will play a vital role in
GM's plans to improve the fuel efficiency of its vehicle fleet.
Small cars represent one of the fastest growing segments in both
the U.S. and around the world. The re-tooled assembly plant will
be capable of building 160,000 cars annually. Selection of the
site will be determined in the future.
June 1 U.S. GM Manufacturing Optimization Plan Actions
Plant Status / Timing (date listed or
sooner depending on market demand)
Assembly
Orion, Michigan Standby Capacity -- September 2009
Pontiac, Michigan Close -- October 2009
Spring Hill, Tennessee Standby Capacity -- November 2009
Wilmington, Delaware Close -- July 2009
Stamping
Grand Rapids, Michigan Close -- June 2009 (previously
announced)
Indianapolis, Indiana Close -- December 2011
Mansfield, Ohio Close -- June 2010
Pontiac, Michigan Standby Capacity -- December 2010
Powertrain
Livonia Engine, Michigan Close -- June 2010
Flint North Components,
Michigan Close -- December 2010
Willow Run Site, Michigan Close -- December 2010
Parma Components, Ohio Close -- December 2010
Fredericksburg Components, Close -- December 2010
Virginia
Massena Castings,
New York Closed -- May 1, 2009 (previously
announced)
Service & Parts Operations
(SPO) Warehousing & Parts
Distribution Centers
Boston, Massachusetts Close -- December 31, 2009
Jacksonville, Florida Close -- December 31, 2009
Columbus, Ohio Close -- December 31, 2009
Tentative Hummer Sale
Citing people familiar with the matter, John D. Stoll at WSJ
relates that GM will start its second day of court proceedings by
disclosing the tentative sale of the Hummer brand. WSJ says that
GM is withholding the name of the buyer until a later date. The
buyer, according to WSJ, could take over the brand by the end of
the third quarter. WSJ states that the purchase price will also
be withheld. GM, says the report, will continue producing Hummer
H2 and H3 trucks and SUVs at its Louisiana and Indiana plants for
the buyer.
According to WSJ, the sources said that GM has been studying
strategic alternatives for the brand for a year, and has been
entertaining offers for Hummer from various parties. WSJ reports
that the bids were in the sub-$500 million range.
WSJ, citing a person familiar with the matter, state that the
Hummer brand would have been killed in bankruptcy court had GM not
found a buyer by early June.
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. 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. A full-text copy
of GM's viability plan presented in February 2009 is available at
http://researcharchives.com/t/s?39a4
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D. N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors'
restructuring officer. GM is also represented by Jenner & Block
LLP and Honigman Miller Schwartz and Cohn LLP as counsels.
Cravath, Swaine, & Moore LLP is providing legal advice to the GM
Board of Directors. GM's financial advisors are Morgan Stanley,
Evercore Partners and the Blackstone Group LLP.
GENERAL MOTORS: Case Summary & 50 Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: General Motors Corporation
aka GMC Truck Division
aka Automotive Market Research
aka NAO Fleet Operations
aka National Car Rental
aka GM Corporation
aka National Car Sales
aka GM Corporation-GM Auction Department
300 Renaissance Center
Detroit, Michigan 48265-3000
Bankruptcy Case No.: 09-50026
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Chevrolet-Saturn of Harlem, Inc. 09-13558
Saturn, LLC 09-50027
Saturn Distribution Corporation 09-50028
Related Information: General Motors Corp. (NYSE:GM) 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.
Chapter 11 Petition Date: June 1, 2009
Bankruptcy Court: U.S. Bankruptcy Court
for the Southern District of New York
(Manhattan)
Bankruptcy Judge: Honorable Robert E. Gerber
Debtors' Counsel: Harvey R. Miller, Esq.
Stephen Karotkin, Esq.
Joseph H. Smolinsky, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Tel: (212) 310-8350
Fax: (212) 310-8007
Jenner & Block LLP
Honigman Miller Schwartz and Cohn LLP
Debtors' Financial
Advisors: Morgan Stanley
Evercore Partners
Blackstone Group LLP
Restructuring
Officer: Al Koch, Esq.
AP Services, LLC,
an affiliate of AlixPartners, LLP
2000 Town Center, Suite 2400
Southfield, Michigan 48075
GM Board of
Directors'
Counsel: Cravath, Swaine, & Moore LLP
The Debtors' financial condition as of March 31, 2009:
Total Assets: $82,290,000,000
Total Debts: $172,810,000,000
The petition was signed by Frederick A. Henderson, president and
chief executive officer.
GM's 50 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Wilmington Trust Company Bond Debt $22,759,871,912
Rodney Square North
1100 North Market Street
Wilmington, DE 19890
United States
Attn: Geoffrey J. Lewis
Tel: (302) 636-6438
Fax: (302) 636-4145
International Union, Employee $20,560,000,000
United Automobile, Obligations
Aerospace and
Agricultural Implement
Workers of America (UAW)
8000 East Jefferson
Detroit, MI 48214
United States
Attn: Ron Gettlefinger
Tel: (313) 926-5201
Fax: (313) 331-4957
Deutsche Bank AG, Bond Debt $4,444,050,000
London As Fiscal Agent
Theodor-Heuss-Allee 70
Frankfurt, 60262
Germany
Attn: Stuart Harding
Phone:(44) 207 547 3533
Fax: (44) 207 547 6149
International Union of Employee $2,668,600,000
Electronic, Electrical, Obligations
Salaried, Machine and
Furniture Workers -
Communications
Workers of America
(IUE-CWA)
3461 Office Park Drive
Kettering, OH 45439
United States
Mr. James Clark
Tel: (937) 294-9764
Fax: (937) 298-633
Bank of New York Bond Debt $175,976,800
Mellon
One Wall Street
New York, NY 10286
United States
Attn: Gregory Kinder
Tel: (212) 815-2576
Fax: (212) 815-5595
Starcom Mediavest Trade Debt $121,543,017
Group, Inc.
35 W. Wacker Drive
Chicago, IL 60601
United States
Attn: Laura Desmond
Tel: (312) 220-3550
Fax: (312) 220-6530
Delphi Corp. Trade Debt $110,876,324
5725 Delphi Drive
Troy, MI 48098
United States
Attn: Rodney O'Neal
Tel: (248) 813-2557
Fax: (248) 813-2560
Robert Bosch GmbH Trade Debt $66,245,958
38000 Hills Tech Drive
Farmington Hills, MI 48331
United States
Attn: Franz Fehrenbach
Tel: (49 71) 1 811-6220
Fax: (49 71) 1 811-6454
Lear Corp. Trade Debt $44,813,396
21557 Telegraph Road
Southfield, MI 48033
United States
Attn: Robert Rossiter
Tel: (248) 447-1505
Fax: (248) 447-1524
Renco Group, Inc. Trade Debt $37,332,506
1 Rockefeller Plaza,
29th Floor
New York, NY 10020
United States
Lon Offenbacher
Tel: (248) 655-8920
Fax: (248) 655-8903
Enterprise Rent A Car Trade Debt $33,095,987
6929 N Lakewood Ave
Suite 100
Tulsa, OK 74117
United States
Attn: Greg Stubblefiled
Tel: (314) 512 3226
Fax: (314) 512 4230
Johnson Controls, Inc. Trade Debt $32,830,356
5757 N. Green Bay Avenue
Glendale, WI 53209
United States
Stephen A. Roell
Tel: (414)-524-2223
Fax: (414)-524-3000
Denso Corp. Trade Debt $29,229,047
24777 Denso Drive
Southfield, MI 48086
United States
Attn: Haruya Maruyama
Tel: (248) 350-7500
Fax: (248) 213-2474
TRW Automotive Trade Debt $27,516,189
Holdings, Corp.
12025 Tech Center Dr.
Livonia, MI 48150
United States
Attn: John Plant
Tel: (734) 855-2660
Fax: (734) 855-2473
Magna International, Inc. Trade Debt $26,745,489
337 Magna Drive
Aurora, ON L4G 7K1
Canada
Attn: Don Walker
Tel: (905) 726-7040
Fax: (905) 726-2593
American Axle & Mfg Trade Debt $26,735,957
Holdings, Inc.
One Dauch Drive
Detroit, MI 48211-1198
United States
Attn: Richard Dauch
Tel: (313) 758-4213
Fax: (313) 758-4212
Maritz Inc. Trade Debt $25,649,158
1375 North Highway Drive
Fenton, MO 63099
United States
Attn: Steve Maritz
Tel: (636) 827-4700
Fax: (636) 827-2089
Publicis Groupe S.A. Trade Debt $25,282,766
133 Ave des Champs Elysees
Paris, 75008
France
Attn: Maurice Levy
Tel: 33 01 4 443-7000
Fax: 33 01 4 443-7550
Hewlett Packard Co. Trade Debt $17,012,332
3000 Hanover Street
Palo Alto, CA 94304
United States
Attn: Mike Nefkens
Tel: (313) 230 6800
Fax: (313) 230 5705
Interpublic Group of Trade Debt $15,998,270
Companies, Inc.
1114 Avenue of the Americas
New York, NY 10036
United States
Attn: Michael Roth
Tel: (212) 704-1446
Fax: (212) 704.2270
Continental AG Trade Debt $15,539,456
Vahrenwalder Str. 9
D-30165 Hanover,
Germany
Attn: Karl-Thomas
Tel: 49-69-7603-2888
Fax: 49-69-7603-3800
Tenneco Inc. Trade Debt $14,837,427
500 North Field Drive
Lake Forest, IL 60045
United States
Attn: Gregg Sherrill
Tel: (847) 482-5010
Fax: (847) 482-5030
Yazaki Corp. Trade Debt $13,726,367
6801 Haggerty Road
Canton, MI 48187
United States
Attn: George Perry
Tel: (734) 983-5186
Fax: (734) 983-5197
International Automotive Trade Debt $12,083,279
Components
5300 Auto Club Drive
Dearborn, MI 48126
United States
Attn: James Kamsickas
Tel: (313) 253-5208
Fax: (313) 240-3270
Avis Rental Car Trade Debt $12,040,768
6 Sylvan Way
Parsippany, NJ 07054
United States
Attn: Robert Salerno
Tel: (973) 496-3514
Fax: (212) 413-1924
FMR Corp. Trade Debt $11,980,946
82 Devonshire St
Boston, MA 02109
United States
Attn: Robert J. Chersi
Tel: (617)563-6611
Fax: (617) 598-9449
AT&T Corp. Trade Debt $10,726,376
208 South Akard Street
Dallas, TX 75202
United States
Attn: Richard G. Lindner
Tel: (214) 757-3202
Fax: (214) 746-2102
Union Pacific Corp. Trade Debt $10,620,928
1400 Douglas Street
Omaha, NE 68179
United States
Attn: Robert M. Knight, Jr.
Tel: (402) 544-3295
Fax: (402) 501-2121
Warburg E M Pincus & Trade Debt $10,054,189
Co., Inc.
466 Lexington Ave
New York, NY 10017
United States
Attn: Joseph P. Landy
Tel: (212) 878-0600
Fax: (212) 878-9351
Visteon Corp.
One Village Center Drive Trade Debt $9,841,774
Van Buren Township,
MI 48111
United States
Attn: Donald J. Stebbins
Tel: (734) 710-7400
Fax: (734) 710-7402
US Steel Trade Debt $9,587,431
600 Grant Street Room 1344
Pittsburgh, PA 15219
United States
Attn: John Surma
Tel: (412) 433-1146
Fax: (412) 433-1109
Arcelor Mittal Trade Debt $9,549,212
19, Avenue De La Liberte
Luxembourg, L-2930
Luxembourg
Attn: Lakshmi Mittal
Tel: 44 20 7543 1131
Fax: 44 20 7629 7993
AK Steel Holding, Corp. Trade Debt $9,116,371
9227 Centre Pointe Drive
Westchester, OH 45069
United States
Attn: Jim Wainscott
Tel: (513) 425-5412
Fax: (513) 425-5815
CSX Corp. Trade Debt $8,884,846
500 Water Street, 15th Floor
Jacksonville, FL 32202
United States
Attn: Oscar Munoz
Tel: (904) 359-1329
Fax: (904) 359-1859
Hertz Corporation Trade Debt $8,710,291
14501 Hertz Quail Springs
Parkway
Oklahoma City, OK 73134
United States
Attn: .Elyse Douglas
Tel: (201) 450-2292
Fax: (866) 444-4763
Alpha S.A. de C.V. Trade Debt $8,209,133
Ave. Gomez Morin No. 1111
Sur Col. Carrizalejo
San Pedro Garza Garc?, N.
L. C.P. 66254
Mexico
Attn: Manuel Rivera
Tel: (52 81) 8 748 1264
Fax: (52 81) 8 748-1254
Voith AG Trade Debt $7,146,187
2200 N. Roemer Rd
Appleton, WI
United States
Attn: Hubert Lienhard
Tel: 49 7321 372301
Goodyear Tire & Rubber Co. Trade Debt $6,807,312
1144 E Market St
Akron, OH 44316-0001
United States
Attn: Robert Keegan
Tel: (330) 796-1145
Fax: (330) 796-2108
Manufacturers Trade Debt $6,695,777
Equipment & Supply Co.
2401 Lapeer Rd
Flint, MI 48503-4350
United States
Attn: Greg M. Gruizenga
Tel: (800) 373-2173
Fax: (810) 239-5360
Severstal O A O Trade Debt $6,687,993
4661 Rotunda Drive
P.O. Box 1699
Dearborn, MI 48120
United States
Attn: Gregory Mason
Tel: (313) 317-1243
Fax: (313) 337-9373
Exxon Mobil Corp. Trade Debt $6,248,959
5959 Las Colinas Boulevard
Irving, TX 75039
United States
Attn: James P. Hennessy
Tel: (703) 846-7340
Fax: (703) 846-6903
Hitachi Ltd. Trade Debt $6,168,651
955 Warwick Road
P.O. Box 510
Harrodsburg, KY 40330
United States
Attn: Yasuhiko Honda
Tel: 81 34 564-5549
Fax: 81 34 564-3415
Mando Corp. Trade Debt $5,459,945
4201 Northpark Drive
Opelika, AL 36801
United States
Attn: Zung Su Byun
Tel: 82 31 680-6114
Fax: 82 31 681-6921
General Physics Corp. Trade Debt $5,208,070
1500 W. Big Beaver Rd.
Troy, MI 48084
United States
Attn: Sharon Esposito Mayer
Tel: (410) 379-3600
Fax: (410) 540-5302
Sun Capital Partners, Inc. Trade Debt $4,747,353
5200 Town Center Circle,
Suite 600
Boca Raton, FL 33486
United States
Attn: Mr. Kevin
Tel: (561) 948-7514
Fax: (561) 394-0540]
Jones Lang Lasalle, Inc. Trade Debt $4,651,141
200 East Randolph Drive
Chicago, IL 60601
United States
Attn: Colin Dyer
Tel: (312) 228-2004
Fax: (312) 601-1000
McCann Erickson Trade Debt $4,603,457
238 11 Avenue, SE
Calgary, Alberta T2G OX8
Canada
Attn: Gary Lee
Tel: (646) 865 2606
Fax: (646) 865 8694
Flex-N-Gate Corp. Trade Debt $4,490,775
1306 East University Ave.
Urbana, IL 61802
United States
Attn: Shahid Khan
Tel: (217) 278-2618
Fax: (217) 278-2318
Bridgestone Corp. Trade Debt $4,422,763
535 Marriott Drive
Nashville, TN 37214
United States
Attn: Shoshi Arakawa
Tel: 81 33 567 0111
Fax: 81 33 567 9816
Cap Gemini America Inc. Trade Debt $4,415,936
623 Fifth Avenue, 33rd Floor
New York, NY 10022
United States
Attn: Thierry Delaporte
Tel: (212) 314-8327
Fax: (212) 314-8018
GM's 5 Largest Secured Creditors:
Entity Claim Amount
------ ------------
U.S. Department of Treasury $20,573,000,000
Citicorp USA, Inc. 3,865,000,000
JPMorgan Chase Bank, N.A. 1,488,000,000
Export Development Canada 400,000,000
GELCO Corporation 125,000,000
The Debtors disclose that General Motors Corporation directly owns
100% of the equity of Chevrolet-Saturn of Harlem, Inc., and
Saturn, LLC. Saturn LLC owns 100% of Saturn Distribution
Corporation's equity. GM indirectly owns 100% of Saturn
Distribution's equity.
State Street Bank and Trust Company owns 17.0% of GM's equity.
Neither Chevrolet-Saturn, GM, Saturn, nor Saturn Distribution
directly or indirectly owns 10% or more of any class of equity of
a corporation whose securities are publicly traded. Neither
Chevrolet-Saturn, Saturn, nor Saturn Distribution directly or
indirectly owns an interest in any joint venture or partnership.
GM directly or indirectly owns an ownership interest in more than
160 joint ventures and partnerships, a list of which is available
for free at http://bankrupt.com/misc/gm_jointventures.pdf
GENERAL MOTORS: New GM Will Be Launched Within Next Three Months
----------------------------------------------------------------
General Motors Corp. in a news release disclosed that it has
reached agreements with the U.S. Treasury and the governments of
Canada and Ontario to accelerate its reinvention and create a
leaner, stronger "New GM" positioned for a profitable, self-
sustaining and competitive future.
Pending approvals, the New GM is expected to launch in about 60 to
90 days as a separate and independent company from the current GM,
with two distinct advantages: it will be built from only GM's best
brands and operations, and it will be supported by a stronger
balance sheet due to a significantly lower debt burden and
operating cost structure than before. The New GM will incorporate
the terms of GM's recent agreements with the United Auto Workers
(UAW) and Canadian Auto Workers unions and will be led by GM's
current management team.
The New GM will execute the key elements of its April 27 viability
plan, along with additional initiatives, to achieve winning
financial results by putting customers first, concentrating on
adding to the company's line of award-winning cars and trucks
through four core brands and continuing to invest in green,
energy-saving technologies.
Under its plan, GM will sell substantially all of its global
assets to the New GM. To implement the sale agreement, GM and
three domestic subsidiaries have filed voluntary petitions for
relief under chapter 11 of the United States Bankruptcy Code in
the U.S. Bankruptcy Court for the Southern District of New York,
and the sale is subject to the approval of the Court. Because
GM's sale of assets to the New GM already has the support of the
U.S. Treasury, the UAW and a substantial portion of GM's unsecured
bondholders, GM expects the sale to be approved and consummated
expeditiously.
GM has asked the Court to approve a number of steps to protect
current and new GM customers, ensure that its operations will
continue uninterrupted during the court-supervised process, and
provide for a smooth transition to the New GM.
* GM dealers will continue to service GM vehicles and honor
GM warranties, and U.S. and Canadian government guarantees
of manufacturers' warranties are designed to reassure
consumers.
* GM will use its cash-on-hand and a new Debtor-in-Possession
(DIP) financing of approximately $33 billion to: ensure an
uninterrupted supply of goods and services and provide for
other cash requirements prior to closing of the asset sale;
fund liabilities to secured lenders; and provide
contingency funding to handle any potential unexpected
needs. Furthermore, in conjunction with the sale, the U.S.
Treasury and the Canadian and Ontario governments will
provide funds to administer the wind down of the remaining
assets and the closing of the chapter 11 cases.
* GM employees worldwide will become part of the New GM.
"Today [June 1] marks a defining moment in the reinvention of GM
as a leaner, more customer-focused, and more cost-competitive
company that, above all, can quickly generate winning bottom line
results," said Fritz Henderson, GM president and CEO. "The
economic crisis has caused enormous disruption in the auto
industry, but with it has come the opportunity for us to reinvent
our business. We are going to do it once and do it right. The
court-supervised process we are pursuing provides us with powerful
tools to accelerate and complete our reinvention, as well as
strong safeguards for our customers and our business. We are
focused on the job at hand, for the benefit of our customers,
employees, dealers, suppliers, retirees, taxpayers, investors and
other stakeholders.
"We recognize the sacrifices that so many have been asked to make
as we have worked to reinvent GM and the automobile," said
Henderson. "GM deeply appreciates the support and the
demonstration of confidence in our future by President Obama, the
Presidential Task Force on Autos, the Canadian and Ontario
governments, American and Canadian taxpayers, the unsecured
bondholders who are supporting the proposed sale transaction, the
UAW and CAW and their leadership, and the men and women of GM,
including our retirees. You have enabled us to carry out this
vital transformation for the good of GM, our customers and the
economy, and we are working to validate your trust each day.
"From day one, the New GM will be well-positioned to capitalize on
the award-winning vehicles we have developed and launched during
the past few years, and on our investments in exciting new
technologies like the Chevy Volt, so that we can build and return
value to our customers and to the millions who will have a stake
in our success. The New GM will play a critical role in the
future of the automobile, and assure that the U.S. has a strong
stake in this rapidly changing global manufacturing industry,"
Henderson said.
Business Operations Continue Globally
Without Interruption
GM's North American manufacturing operations continues to monitor
production output to make sure it aligns with market demand, and
currently intends to ramp up manufacturing operations as market
demand improves during the latter half of the year.
None of GM's operations outside of the U.S. are included in the
U.S. court filings or court-supervised process, and these filings
have no direct legal impact on GM's plans and operations outside
the U.S. GM confirmed that all business operations are continuing
without interruption in its Europe; Latin America, Africa and the
Middle East; and Asia Pacific regions.
"Worldwide, GM dealers are open for business, offering competitive
financing options on our award-winning vehicles, continuing to
honor our industry-leading warranty coverage, and providing
outstanding service," said Mr. Henderson. "Furthermore, the U.S.
Treasury and the Canadian governments have issued a strong vote of
confidence by backing GM's vehicle warranties."
"First Day" Motions
GM has filed various "first day" motions with the Court to ensure
the company's continued ability to conduct normal business
operations. Upon Court approval, GM will be expressly authorized,
among other things, to:
* Honor all obligations to customers and continue customer
programs, including warranties, without interruption
* Respect our operating and financing agreements with GMAC,
supporting continued wholesale financing for dealers and
retail financing for customers
* Pay dealers' open accounts and continue warranty and
incentive programs
* Pay essential suppliers and logistics providers for goods
and services provided before and after the company's court
filings
* Continue pay and benefits for employees and retirees;
however, the amount of non-qualified pension for some
executive retirees may be affected.
The New GM
GM's agreements with the U.S. Treasury, the Canadian and Ontario
governments and the UAW and CAW, in addition to the support of a
substantial portion of GM's unsecured bondholders, will enable the
New GM to be a leaner, faster and more customer-focused
enterprise, consistent with the vision, goals and plans of GM's
enhanced operating plan announced April 27.
The New GM will:
* Focus on four core brands in the U.S. -- Chevrolet,
Cadillac, Buick and GMC -- with fewer nameplates and a more
competitive level of marketing support per brand
* Effectively close the competitive gap in active worker
labor costs compared with transplant auto manufacturers
* More efficiently utilize U.S. capacity while increasing
over time the percentage of U.S. sales manufactured
domestically
* Feature lower structural costs enabling its North American
region to break even (on an adjusted EBIT basis) at a U.S.
total industry volume of approximately 10 million vehicles.
This rate is substantially below the 15 to 17 million
annual vehicle sales rates recorded from 1995 through 2007
* Achieve its lower structural costs in part by further
reducing 2009 salaried employment in North America from its
year-end total of 35,100 to approximately 27,200, and
continuing to improve its balance sheet by reducing retiree
benefits for salaried retirees and non-UAW hourly retirees
* Provide a higher level of customer service through a more
focused U.S. network of approximately 3,600 dealers
* Continue and increase its investment and leadership in fuel
economy and advanced propulsion technologies
Capital Structure of New GM
A critical element of GM's reinvention is to achieve a
significantly stronger and healthier balance sheet. On March 31,
2009, GM reported consolidated debt of $54.4 billion, along with
additional liabilities, including an estimated $20 billion
obligation to the UAW VEBA.
Under GM's agreements with the U.S. Treasury, the Canadian and
Ontario governments, and the UAW and CAW, and with the support of
a substantial portion of GM's unsecured bondholders, upon closing
of GM's sale of assets to the New GM, the New GM's capital
structure will be comprised of:
* Approximately $17 billion in total consolidated debt,
including:
-- $6.7 billion of debt owed to the U.S. Treasury
-- $1.3 billion of debt owed to the Canadian and Ontario
governments
-- $2.5 billion of notes issued to the new Voluntary
Employee Beneficiary Association (New VEBA)
-- Approximately $6.8 billion of other, primarily
international debt, but excluding Europe
* $9 billion of perpetual preferred stock with a 9 percent
annual dividend, payable quarterly in cash, $2.1 billion of
which will be issued to the U.S. Treasury, $0.4 billion of
which will be issued to the Canadian and Ontario
governments and $6.5 billion of which will be issued to the
New VEBA
* Common equity, 60.8 percent of which will be owned by the
U.S. Treasury, 11.7 percent of which will be owned by the
Canadian and Ontario governments, 17.5 percent of which
will be owned by the New VEBA, and 10 percent of which has
been reserved for GM for the benefit of the unsecured
bondholders and other unsecured creditors of GM
* Warrants granted to the New VEBA to acquire newly issued
shares in the New GM equal to 2.5 percent of its
outstanding common equity
* Warrants granted to GM at closing to acquire newly issued
shares in the New GM equal to 15 percent of its outstanding
common equity, with various exercise prices and expirations
Other than the $8 billion of debt owed to the U.S. Treasury and
the Canadian and Ontario governments by the New GM, all amounts
owed by GM or the New GM to the U.S. Treasury and Canadian and
Ontario governments would be equitized in exchange for the New GM
securities, and no other debt will be owed by GM to the U.S.
Treasury and the Canadian and Ontario governments.
GM Europe Restructuring
GM announced separately that GM Europe has an agreement for
EUR1.5 billion of bridge financing from the German government and
a Memorandum of Understanding to partner with Magna International
Inc. Under the agreement, the Opel/Vauxhall assets have been
pooled under Adam Opel GmbH, with the majority of the shares of
Adam Opel GmbH being put into an independent trust (the balance to
remain with General Motors), while final negotiations with Magna
proceed. Negotiations to close the agreement should take several
weeks. Additional details will be available at
http://media.gm.com/eur/gm/en/
New Products and Technologies on Track
The New GM, with its strong financial base and best-in-class
dealer network, will support a portfolio of award-winning
vehicles, including the Chevy Malibu (2008 North American Car of
the Year and J.D. Power and Associates' segment leader in its 2008
Initial Quality Survey), Cadillac CTS (Motor Trend Car of the
Year) and its Buick brand (tied for 1st place in J.D. Power and
Associates' 2009 Vehicle Dependability Study). The New GM will
have a number of key vehicle launches in 2009 and 2010, including:
* Chevrolet Camaro, a dramatic, moderately priced sport coupe
with highway fuel economy of up to 29 mpg
* An all-new Buick LaCrosse premium midsize sedan
* The luxury midsize Cadillac SRX crossover and CTS Sport
Wagon
* The Chevy Equinox and GMC Terrain, midsize crossovers with
class-leading highway fuel economy of 32 mpg
* The Chevy Cruze, GM's new global compact car
* The revolutionary Chevy Volt, an extended-range electric
vehicle that can travel up to 40 miles on battery power
alone with the extended-range capability of more than 300
total miles.
"Our products are our future, and our lineup of new cars and
crossovers are a great foundation for success," said Mr.
Henderson. "The New GM is here to stay, and our brands position
us to compete well in profitable segments with vehicles that are
second-to-none."
GM also reaffirmed its commitment to improve the fuel efficiency
of its vehicle fleet, meet or exceed new federal fuel economy and
emissions regulations, and push ahead with advanced propulsion
technology. GM will launch the Chevrolet Volt extended range
electric vehicle in 2010, expects to have 14 hybrid models in
production by 2012, and will have 65 percent of vehicles
alternative-fuel capable by 2014.
"The New GM will become a long-term global leader in the
development of fuel-efficient and advanced-technology vehicles,"
said Mr. Henderson. "In doing so, the New GM will contribute to
the development of advanced engineering and manufacturing
capabilities in the United States, which are critical to the
future of the U.S. economy."
GM's primary bankruptcy counsel is Weil, Gotshal & Manges LLP. GM
is also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsels. Cravath, Swaine, & Moore LLP
is providing legal advice to the GM Board of Directors. GM's
restructuring advisor is AP Services LLP and its financial
advisors are Morgan Stanley, Evercore Partners and the Blackstone
Group LLP.
More information about GM's chapter 11 cases is available at:
http://www.GM.com/restructuring/
Court filings and claims information are available at:
http://www.GMcourtdocs.com/
About General Motors
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries. In 2007, nearly 9.37 million GM cars and
trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.
GM Europe is based in Zurich, Switzerland, while General Motors
Latin America, Africa and Middle East is headquartered in Miramar,
Florida.
As reported 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. 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. A full-text copy
of GM's viability plan presented in February 2009 is available at
http://researcharchives.com/t/s?39a4
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D. N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors'
restructuring officer. GM is also represented by Jenner & Block
LLP and Honigman Miller Schwartz and Cohn LLP as counsels.
Cravath, Swaine, & Moore LLP is providing legal advice to the GM
Board of Directors. GM's financial advisors are Morgan Stanley,
Evercore Partners and the Blackstone Group LLP.
GENERAL MOTORS: Reaches Agreement With Delphi on Sale of Assets
---------------------------------------------------------------
General Motors Corp. has reached an agreement with Delphi Corp.
regarding the sale of certain U.S. plants and Delphi's global
steering business to GM and the sale of most of Delphi's global
business operations to Platinum Equity LLC.
Jay Miller at The Wall Street Journal relates that Delphi will
emerge from its reorganization through a sale of assets to
Platinum Equity affiliate Parnassus Holdings II LLC, and with the
support of a GM affiliate, which will buy some of Delphi's plants.
GM, says WSJ, will provide $250 million of pre-emergence liquidity
through July 31.
According to WSJ, Delphi agreed to let Parnassus Holdings to
operate its businesses with capital and commitments of
$3.6 billion. The business will operate without the labor-related
legacy costs tied to the North American sites being acquired by
the GM affiliate, WSJ states.
Delphi is committed to completing these transactions through a 363
sale if stakeholder support is not sufficient to achieve prompt
confirmation of the modified plan.
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. 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. A full-text copy
of GM's viability plan presented in February 2009 is available at
http://researcharchives.com/t/s?39a4
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D. N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors'
restructuring officer. GM is also represented by Jenner & Block
LLP and Honigman Miller Schwartz and Cohn LLP as counsels.
Cravath, Swaine, & Moore LLP is providing legal advice to the GM
Board of Directors. GM's financial advisors are Morgan Stanley,
Evercore Partners and the Blackstone Group LLP.
GENERAL MOTORS: Moody's Cuts Probability of Default to D
--------------------------------------------------------
Moody's Investors Service changed the Probability of Default
Rating of General Motors Corporation to D from Ca in response to
the Company's filing for protection from creditors under Chapter
11 of the US Bankruptcy Code. The ratings of the Company's
outstanding obligations remain unchanged -- Corporate Family
Rating at Ca, first-lien secured debt at Caa2, and unsecured debt
at C. The rating outlook was changed to developing from negative.
Ratings withdrawn include:
Shelf registration for senior unsecured, subordinated, and
preferred obligations: rated (P)C;
Commercial Paper: rated Not-Prime;
Speculative Grade Liquidity rating: SGL-4.
The last action on GM was a lowering of the company's family
recovery rate to 30% from 50% on April 21, 2009.
GENERAL MOTORS: S&P Cuts Corp. Credit Rating to D on Ch 11 Filing
-----------------------------------------------------------------
Standard & Poor's Ratings Services has lowered its corporate
credit rating on General Motors Corp. to 'D' from 'CC'. It also
lowered its issue-level ratings on the company to 'D'.
The rating actions were prompted by General Motors' filing for
Chapter 11 bankruptcy protection on June 1, 2009, in New York.
The U.S. Treasury Department, already GM's largest creditor, is
expected to provide the bulk of debtor-in-possession (DIP)
financing of $33 billion for GM. The Canadian government is
reported to be providing a portion of the DIP financing.
GM's bankruptcy filing marks the cumulative effect of many
factors, including strategic missteps, high legacy costs relative
to the reduced size of the current operations, overdependence on
large vehicles for profitability, an inability to significantly
alter customer perceptions of the Company's product quality
(despite evidence of improved quality in recent years), and, more
recently, the sudden and dramatic decline in industrywide vehicle
demand in the U.S. and around the world. In recognition of these
long-standing challenges, S&P lowered the ratings on GM out of
investment grade on May 5, 2005. GM has been rated 'B' or lower
for more than three years, even when the world economic situation
was robust. S&P lowered GM's rating to 'CC' in December 2008.
S&P believes the filing was caused by inadequate liquidity because
the company was unable to reach agreements with its bondholders to
reduce debt outside of bankruptcy and otherwise satisfy the U.S.
Treasury's terms for viability. S&P expects GM to emerge from
bankruptcy, but as a new entity in which the U.S. and Canadian
governments, GM's principal labor union, and prepetition unsecured
creditors will have a stake. According to GM and published
reports, the U.S. and Canadian (and Ontario) governments will own
60.8% and 11.7%, respectively, of the common equity of the new GM
entity, the main U.S. labor union (the United Auto Workers through
a new VEBA trust) 17.5%, and the prepetition bondholders 10%. S&P
expects assets, liabilities, and operations that are not included
in the new GM entity to be disposed of through the bankruptcy
process over time.
The recovery ratings on GM's senior secured term loan and
revolving credit facility remain at '1' and '2', respectively,
indicating S&P's expectation that lenders would receive very high
(90% to 100%) and substantial (70% to 90%) recovery in the event
of a default. The recovery ratings on GM's unsecured debt remain
at '6', indicating S&P's expectation that lenders would receive
negligible (0 to 10%) recovery. The recovery ratings are under
review as a result of the bankruptcy filing, and if additional
information becomes available that changes S&P's assumptions, S&P
will provide an updated recovery analysis. S&P understands from
published reports that GM will repay the senior secured lenders
from its DIP facility.
GM has said it plans to use a Section 363 sale process in
bankruptcy, through which a newly created GM entity will acquire
assets of the old GM. Pending approval of the bankruptcy court,
GM expects the debt structure of the new, reorganized GM to
include the following debt after the company emerges:
-- $6.7 billion owed to the U.S. Treasury;
-- $2.5 billion owed to a new retiree health care trust known as
a Voluntary Employee Beneficiary Association, or VEBA;
-- $1.3 billion owed to the Canadian and Ontario governments;
and
-- $6.8 billion of other debt (primarily international debt, but
excluding Europe).
In addition to the common equity ownership, GM said it expects the
new entity to have $9 billion of preferred equity, including
$2.5 billion owned by the U.S. Treasury and $6.5 billion owned by
the new VEBA trust. The capital structure envisions more than $50
billion of existing debt owed to the U.S. government being
converted into equity.
S&P understands that in advance of the bankruptcy, more than 50%
of the prepetition unsecured lenders agreed to accept 10% of the
equity plus warrants for additional equity in return for
eliminating their debt and an agreement that they would not oppose
the Section 363 sale. In S&P's opinion, the results of the
bondholders' offer improve the odds for a relatively quick Section
363 sale and an emergence by the new GM entity within an unusually
short time frame, perhaps as soon as early fall, based partly on
the apparent speed of the proceedings in the simpler, but similar,
Chrysler LLC bankruptcy case.
However, S&P believes that the sheer complexity of the GM
bankruptcy case -? the largest ever by an industrial manufacturer
in U.S. history -? including potential objections from numerous
parties, could result in delays that extend the process beyond the
time frame expected by GM and the U.S. government.
Furthermore, S&P is concerned about the effects of GM's (and
Chrysler's) widespread shutdown of its production facilities and
near-term permanent plant closings on both the credit quality of
the already beleaguered supply base and on GM's reorganization,
despite well-publicized efforts to mitigate these problems. Other
issues S&P believes GM is working to resolve are the fate of
former supplier Delphi Corp., which is in bankruptcy, and the plan
to sell a stake in GM's European operations to a consortium that
includes Magna International Inc. (BBB/Watch Neg/--).
GENERAL MOTORS: Chapter 11 Filing Cues Fitch to Cut IDR to 'D'
--------------------------------------------------------------
Recovery prospects appear low for GM bondholders, although
according to Fitch Ratings, ultimate recoveries remain highly
uncertain, as unsecured creditors will receive equity in the new
GM, the value of which will be driven largely by the success of
restructuring efforts in the company's North American operations.
Fitch has downgraded the Issuer Default Rating (IDR) of General
Motors to 'D' from 'C' following the company's Chapter 11
bankruptcy filing. The company's senior secured bank loans
remain at 'CCC/RR1', indicating that full recovery is expected.
The company's senior unsecured debt is downgraded to 'C/RR6',
indicating recoveries are expected to be in the range of 0%-10%.
Current asset valuations are derived primarily from GM's Asian
operations in Korea and China, as well as its Latin American
operations. Also affecting recoveries will be the company's
post-bankruptcy capital structure, which remains uncertain, and
the level of new unsecured claims that arise through the
bankruptcy process. The role of the government will be material
in shaping the resolution of claims in bankruptcy, and a
relatively small shift in recoveries could shift unsecured
creditor recoveries into the 'RR5' category (10%-30%). A list of
affected ratings is detailed below.
Fitch expects to re-rate the company upon emergence, although it
is viewed as unlikely that the IDR will be higher than 'CCC'.
Even with a successful navigation of the bankruptcy process, GM
is likely to emerge with a leveraged capital structure (including
pension and OPEB-related liabilities) and limited near-term free
cashflow prospects. General Motors still faces several years of
restructuring and product/brand realignment to reshape its
manufacturing footprint and product offerings into a viable,
long-term competitor across North American product segments. Even
with significant changes to GM's cost-structure, it will remain
challenging to introduce products with the technology, styling
and brand strength to achieve margins that are sufficient to meet
high capital requirements and liability obligations. The global
consumer reaction to GM's bankruptcy, in terms of sales
performance, also poses risk to the company's operations during
the bankruptcy process and could have an impact on ultimate
recovery prospects.
The progression of industry technologies - including fuel
efficiency, emission and safety standards - as well as higher
regulatory burdens, will continue to raise capital requirements
and the cost of capital for the industry, particularly for weaker
players. The high capital investment and R&D requirements, plus
a weak rebound in industry sales expected over the next several
years, indicate that GM may be challenged to return to positive
free cash flow generation in the near term. The hangover from
the global credit bubble, potentially higher long-term gas
prices, a new regulatory framework, and environmental concerns
may have permanently altered the long-term prospects for the
automotive industry, leading to muted industry sales and
materially suppressed margins across the industry over the long
term.
Industry pricing is likely to remain under substantial pressure
in the short term, as both Chrysler and GM reduce inventories to
ensure continued production, while closed dealerships are also in
the process of liquidating inventory. Any disruption in the
supply chain, or in the Chrysler bankruptcy process, could raise
the question in consumers' minds about the ability to manage a
complex GM bankruptcy, further impairing pricing, sales and GM's
ability to emerge from the process. Challenges in the supply
base will continue to inhibit the pace of margin improvement.
Fitch also expects that financing from the federal government
will be used to resolve the Delphi situation, although in a
manner that could also hamper margins. GM will continue to face
a competitive disadvantage versus transplant manufacturers with
margin advantages and significantly stronger capital resources.
To ensure that GM continues to remain in operation, Fitch assumes
that the federal government will continue to provide financing
support to the industry across multiple channels - to provide
direct liquidity for GM's ongoing operations, suppliers, retail
financing capacity and dealer floorplan financing. Access to
capital outside of the federal government is expected to remain
severely limited.
Minimal value is ascribed to GM's equity holdings in North
America and Europe. There remains some uncertainty as to the
capital structure upon emergence, primarily related to the
ultimate amount and conversion of U.S. and Canadian government
loans. GM currently has a modest level of secured bank debt, but
secured claims have been substantially increased as a result of
federal financing. Reports indicate that a substantial portion of
the government's financing will be converted to equity, but even
modest levels of debt, in combination with the company's
remaining legacy liabilities, will result in a leveraged capital
structure due to minimal free cash flow potential and high
capital expenditure requirements over the next several years.
Recoveries could benefit from the fact that the company's pension
programs are expected to remain in place, thereby excluding any
current claims from the PBGC (although funding requirements could
be negotiated through the bankruptcy process). The federal
government is likely to remain the lender of last resort over the
near term as external capital markets potentially remain closed
to GM, and leverage could continue to rise, post-emergence.
Fitch has taken these rating actions:
General Motors Corporation
-- IDR downgraded to 'D' from 'C';
-- Senior secured affirmed at 'CCC/RR1';
-- Senior unsecured downgraded to 'C/RR6' from 'C/RR5'.
General Motors of Canada Ltd.
-- Long-term IDR downgraded to 'D' from 'C';
-- Senior unsecured downgraded to 'C/RR6' from 'C/RR5'.
Fitch's rating definitions and the terms of use of such ratings
are available on the agency's public site, www.fitchratings.com.
Published ratings, criteria and methodologies are available from
this site, at all times. Fitch's code of conduct,
Confidentiality, conflicts of interest, affiliate firewall,
compliance and other relevant policies and procedures are also
available from the 'Code of Conduct' section of this site.
GOODY'S LLC: Reschedules Auction of IP Assets to June 16
--------------------------------------------------------
The auction of Goody's LLC, et al.'s interest in certain
intellectual property has been rescheduled to June 16, 2009, at
10:00 a.m. The auction will be held at Cooley Godward Kronish
LLP, 1114 Avenue of the Americas, New York, NY 10036
As reported in the Troubled Company Reporter on April 29, 2009,
the Bankruptcy Court approved procedures for the sale of the
Debtors' intellectual property and intangible assets. A copy of
the approved bidding procedures is available for free at
http://bankrupt.com/misc/Goody's.BP.pdf
Headquartered in Wilmington, Delaware, Goody's LLC, successor to
Goody's Family Clothing Inc., operates a chain of clothing stores.
Goody's LLC and 13 of its affiliates filed for Chapter 11
protection on January 13, 2009 (Bankr. D. Del. Lead Case No.
09-10124). M. Blake Cleary, Esq., at Young, Conaway, Stargatt &
Taylor, LLP; Paul G. Jennings, Esq., Gene L. Humphreys, Esq.,
Edward C. Meade, Esq., and Kristen C. Wright, Esq., at Bass Berry
& Sims PLC represent the Debtors as counsel. Skadden, Arps, Slate
Meagher & Flom, LLP is the Debtors' special counsel; FTI
Consulting Inc. is the Debtors' financial advisor.
Goody's Family Clothing Inc., as of May 31, 2008, operated 355
stores in several states with approximately 9,868 personnel of
which 170 employees are covered under a collective bargaining
agreement. Goody's Family and 19 of its affiliates filed for
Chapter 11 protection on June 9, 2008 (Bankr. D. Del. Lead Case
No. 08-11133). Gregg M. Galardi, Esq., and Marion M. Quirk, Esq.,
at Skadden Arps Slate Meagher & Flom LLP, and Paul G. Jennings,
Esq., at Bass, Berry & Sims PLC, represented the Debtors.
The Company emerged from bankruptcy October 20, 2008, after
closing more than 70 stores. The reorganized entity was named
Goody's LLC.
GTC BIOTHERAPEUTICS: Effects One-for-10 Reverse Common Stock Split
------------------------------------------------------------------
GTC Biotherapeutics, Inc., disclosed in a filing with the
Securities and Exchange Commission that on May 26, 2009, it filed
Articles of Amendment to its Restated Articles of Organization
with the Secretary of the Commonwealth of Massachusetts, which
effected a one-for-ten reverse stock split of its outstanding
common stock.
The reverse stock split became effective at 11:59 p.m. Boston time
on May 26, 2009, at which time each 10 outstanding shares of its
common stock were automatically combined into one (1) share of
common stock.
The reverse stock split reduced the number of the company's
outstanding shares of common stock from approximately 104,391,892
to 10,438,794, but each shareholder's percentage ownership
interest and proportional voting power will remain virtually
unchanged, except for minor changes that will result from the
cashing out of fractional shares created by the reverse stock
split. The company will not issue any fractional shares resulting
from the reverse stock split and will instead pay shareholders the
cash value of any fractional shares that would have otherwise been
issued. In addition, proportional adjustments will be made to its
equity awards, equity compensation plans, outstanding warrants and
Series D Preferred Stock to adjust for the reverse stock split.
As of the opening of the Nasdaq Capital Market on May 27, 2009,
the company's common stock began trading at the split-adjusted
level. For a period of 20 trading days, the company's common
stock will trade on a post-split basis under the trading symbol
"GTCBD." After this 20-day trading period, the company common
stock will resume trading under "GTCB."
The Company's transfer agent, American Stock Transfer & Trust Co.,
will send instructions to shareholders of record regarding the
exchange of outstanding stock certificates for new stock
certificates representing post-split shares.
A full-text copy of GTC Biotherapeutics' Articles of Amendment to
the Restated Articles of Organization is available for free at:
http://ResearchArchives.com/t/s?3d69
About GTC Biotherapeutics
Headquartered in Framingham, Massachusetts, GTC Biotherapeutics,
Inc. (NASDAQ: GTCB) -- http://www.gtc-bio.com-- develops,
supplies, and commercializes therapeutic proteins produced through
transgenic animal technology. The company is also developing a
portfolio of recombinant human plasma proteins with known
therapeutic properties. The company also has a monoclonal
antibody portfolio focused on follow-on biologics, including a
CD20 monoclonal antibody. The intellectual property of the
company includes a patent in the United States through 2021 for
the production of any therapeutic protein in the milk of any
transgenic mammal. Its transgenic production platform is
particularly well suited to enabling cost effective development of
proteins that are difficult to express in traditional recombinant
production systems as well as proteins that are required in large
volumes.
* * *
John B. Green, senior vice president, treasurer and chief
financial officer of the Company, related that on November 6,
2008, the company received a deficiency letter from the staff of
The Nasdaq Stock Market notifying it that it no longer satisfies
the $2.5 million minimum stockholders' equity requirement for
continued listing of its common stock on the Nasdaq Capital
Market.
GTC Biotherapeutics' September 28, 2008, balance sheet showed
total assets of $33,007,000 and total liabilities of $33,654,000,
resulting in total shareholders' deficit of $647,000. For the
three months ended September 28, 2008, the company posted a net
loss of $6,060,000 on revenues of $2,929,000, compared with a net
loss of $8,388,000 on revenues of $2,576,000 in the same period in
2007.
HARRAH'S ENTERTAINMENT: Moody's Keeps Junk Corp. Family Ratings
---------------------------------------------------------------
Moody's Investors Service changed the rating on the proposed
$1.375 billion first lien notes due 2017 to be issued by Harrah's
Operating Escrow LLC and Harrah's Escrow Corporation to Caa1 from
Caa3. Both companies are wholly owned subsidiaries of Harrah's
Operating Company, Inc. Harrah's Entertainment, Inc.'s Caa3
Corporate Family Rating, Caa3 Probability of Default Rating, and
SGL-4 Speculative Grade Liquidity were affirmed. The outlook
remains negative. The rating of the proposed first lien notes are
subject to final documentation.
The rating change reflects clarification of the transaction
structure by the company, and Moody's reconsideration of the
priority of claim of the proposed notes. Pursuant to
intercreditor arrangements, the new first lien notes will -- in
Moody's view -- be effectively pari-passu with the bank credit
facilities. According to a guarantor intercreditor agreement
between the banks and certain note-holders, the trustee under
HOC's 10.75% senior unsecured subsidiary guaranteed notes must
turn over to the bank lenders any payments received in respect of
any subsidiary guaranty. The bank agent will distribute proceeds
so turned over in accordance with the terms of a collateral
agreement between the company, the subsidiary pledgors, the
trustee, and collateral agent. A first lien intercreditor
agreement between the banks, the trustee, and collateral agent
will provide that the proceeds be shared ratably among all of the
first lien debt holders. As a result of these contractual
arrangements, the bank facilities and the proposed first lien
notes will be effectively pari-passu. Moody's previous
understanding was that the proposed notes would have a lower
priority of claim in bankruptcy than the bank facilities.
The affirmation of the long-term debt ratings of Harrah's
Entertainment, Inc.'s and Harrah's Operating Company, Inc.
(collectively, "Harrah's") acknowledges that the issuance of the
first lien debt will modestly improve Harrah's liquidity profile
by reducing the amount of secured debt that is subject to a
financial covenant test in HOC's bank facilities. However,
Moody's believes Harrah's may still breach its senior secured
leverage covenant within the next 12-month period unless operating
results begin to improve from current levels.
Rating changed:
-- Harrah's Operating Escrow LLC and Harrah's Escrow Corporation
(to be assumed by HOC) $1.375 billion senior secured notes
due 2017 to Caa1, LGD 2, 25% from Caa3, (LGD 4, 53%)
Ratings affirmed and assessments revised:
-- HET Corporate Family Rating at Caa3
-- HET Probability of Default rating at Caa3
-- HET Speculative Grade Liquidity rating at SGL-4
-- HOC senior secured guaranteed revolving credit facility at
Caa1 (LGD 2, 25%) from (LGD 2, 22%)
-- HOC senior secured guaranteed term loans at Caa1 (LGD 2, 25%
from LGD 2, 22%)
-- HOC senior unsecured guaranteed notes at Ca (LGD 5, 84%)
-- HOC senior unsecured debt at Ca (LGD 6, 91%)
-- HOC senior subordinated notes at Ca (LGD 6, 96%)
Moody's last action on Harrah's took place on May 27, 2009, when
Moody's assigned a Caa3 rating to the company's proposed
$1.0 billion first lien notes.
Harrah's Entertainment, Inc., through its wholly-owned subsidiary,
Harrah's Operating Company, Inc., owns or manages approximately 50
casinos. The company generates consolidated revenues of about
$9.7 billion.
HARRAH'S ESCROW: Moody's Gives Caa1 Rating on $1.375 Billion Notes
------------------------------------------------------------------
Moody's Investors Service changed the rating on the proposed
$1.375 billion first lien notes due 2017 to be issued by Harrah's
Operating Escrow LLC and Harrah's Escrow Corporation to Caa1 from
Caa3. Both companies are wholly owned subsidiaries of Harrah's
Operating Company, Inc. Harrah's Entertainment, Inc.'s Caa3
Corporate Family Rating, Caa3 Probability of Default Rating, and
SGL-4 Speculative Grade Liquidity were affirmed. The outlook
remains negative. The rating of the proposed first lien notes are
subject to final documentation.
The rating change reflects clarification of the transaction
structure by the company, and Moody's reconsideration of the
priority of claim of the proposed notes. Pursuant to
intercreditor arrangements, the new first lien notes will -- in
Moody's view -- be effectively pari-passu with the bank credit
facilities. According to a guarantor intercreditor agreement
between the banks and certain note-holders, the trustee under
HOC's 10.75% senior unsecured subsidiary guaranteed notes must
turn over to the bank lenders any payments received in respect of
any subsidiary guaranty. The bank agent will distribute proceeds
so turned over in accordance with the terms of a collateral
agreement between the company, the subsidiary pledgors, the
trustee, and collateral agent. A first lien intercreditor
agreement between the banks, the trustee, and collateral agent
will provide that the proceeds be shared ratably among all of the
first lien debt holders. As a result of these contractual
arrangements, the bank facilities and the proposed first lien
notes will be effectively pari-passu. Moody's previous
understanding was that the proposed notes would have a lower
priority of claim in bankruptcy than the bank facilities.
The affirmation of the long-term debt ratings of Harrah's
Entertainment, Inc.'s and Harrah's Operating Company, Inc.
(collectively, "Harrah's") acknowledges that the issuance of the
first lien debt will modestly improve Harrah's liquidity profile
by reducing the amount of secured debt that is subject to a
financial covenant test in HOC's bank facilities. However,
Moody's believes Harrah's may still breach its senior secured
leverage covenant within the next 12-month period unless operating
results begin to improve from current levels.
Rating changed:
-- Harrah's Operating Escrow LLC and Harrah's Escrow Corporation
(to be assumed by HOC) $1.375 billion senior secured notes
due 2017 to Caa1, LGD 2, 25% from Caa3, (LGD 4, 53%)
Ratings affirmed and assessments revised:
-- HET Corporate Family Rating at Caa3
-- HET Probability of Default rating at Caa3
-- HET Speculative Grade Liquidity rating at SGL-4
-- HOC senior secured guaranteed revolving credit facility at
Caa1 (LGD 2, 25%) from (LGD 2, 22%)
-- HOC senior secured guaranteed term loans at Caa1 (LGD 2, 25%
from LGD 2, 22%)
-- HOC senior unsecured guaranteed notes at Ca (LGD 5, 84%)
-- HOC senior unsecured debt at Ca (LGD 6, 91%)
-- HOC senior subordinated notes at Ca (LGD 6, 96%)
Moody's last action on Harrah's took place on May 27, 2009, when
Moody's assigned a Caa3 rating to the company's proposed
$1.0 billion first lien notes.
Harrah's Entertainment, Inc., through its wholly-owned subsidiary,
Harrah's Operating Company, Inc., owns or manages approximately 50
casinos. The company generates consolidated revenues of about
$9.7 billion.
HARRAH'S OPERATING: Moody's Gives Caa1 Rating on $1.375 Bil. Notes
------------------------------------------------------------------
Moody's Investors Service changed the rating on the proposed
$1.375 billion first lien notes due 2017 to be issued by Harrah's
Operating Escrow LLC and Harrah's Escrow Corporation to Caa1 from
Caa3. Both companies are wholly owned subsidiaries of Harrah's
Operating Company, Inc. Harrah's Entertainment, Inc.'s Caa3
Corporate Family Rating, Caa3 Probability of Default Rating, and
SGL-4 Speculative Grade Liquidity were affirmed. The outlook
remains negative. The rating of the proposed first lien notes are
subject to final documentation.
The rating change reflects clarification of the transaction
structure by the company, and Moody's reconsideration of the
priority of claim of the proposed notes. Pursuant to
intercreditor arrangements, the new first lien notes will -- in
Moody's view -- be effectively pari-passu with the bank credit
facilities. According to a guarantor intercreditor agreement
between the banks and certain note-holders, the trustee under
HOC's 10.75% senior unsecured subsidiary guaranteed notes must
turn over to the bank lenders any payments received in respect of
any subsidiary guaranty. The bank agent will distribute proceeds
so turned over in accordance with the terms of a collateral
agreement between the company, the subsidiary pledgors, the
trustee, and collateral agent. A first lien intercreditor
agreement between the banks, the trustee, and collateral agent
will provide that the proceeds be shared ratably among all of the
first lien debt holders. As a result of these contractual
arrangements, the bank facilities and the proposed first lien
notes will be effectively pari-passu. Moody's previous
understanding was that the proposed notes would have a lower
priority of claim in bankruptcy than the bank facilities.
The affirmation of the long-term debt ratings of Harrah's
Entertainment, Inc.'s and Harrah's Operating Company, Inc.
(collectively, "Harrah's") acknowledges that the issuance of the
first lien debt will modestly improve Harrah's liquidity profile
by reducing the amount of secured debt that is subject to a
financial covenant test in HOC's bank facilities. However,
Moody's believes Harrah's may still breach its senior secured
leverage covenant within the next 12-month period unless operating
results begin to improve from current levels.
Rating changed:
-- Harrah's Operating Escrow LLC and Harrah's Escrow Corporation
(to be assumed by HOC) $1.375 billion senior secured notes
due 2017 to Caa1, LGD 2, 25% from Caa3, (LGD 4, 53%)
Ratings affirmed and assessments revised:
-- HET Corporate Family Rating at Caa3
-- HET Probability of Default rating at Caa3
-- HET Speculative Grade Liquidity rating at SGL-4
-- HOC senior secured guaranteed revolving credit facility at
Caa1 (LGD 2, 25%) from (LGD 2, 22%)
-- HOC senior secured guaranteed term loans at Caa1 (LGD 2, 25%
from LGD 2, 22%)
-- HOC senior unsecured guaranteed notes at Ca (LGD 5, 84%)
-- HOC senior unsecured debt at Ca (LGD 6, 91%)
-- HOC senior subordinated notes at Ca (LGD 6, 96%)
Moody's last action on Harrah's took place on May 27, 2009, when
Moody's assigned a Caa3 rating to the company's proposed
$1.0 billion first lien notes.
Harrah's Entertainment, Inc., through its wholly-owned subsidiary,
Harrah's Operating Company, Inc., owns or manages approximately 50
casinos. The company generates consolidated revenues of about
$9.7 billion.
HAWAII SUPERFERRY: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: HSF Holding,Inc.
c/o The Corporation Trust Company
1209 Orange Street
Corporation Trust Center
Wilmington, DE 19801
Bankruptcy Case No.: 09-11901
Debtor-affiliates filing subject to Chapter 11 petitions:
Entity Case No.
------ --------
Hawaii Superferry Inc. 09-11902
Type of Business: The Debtors operate a transporation company.
Chapter 11 Petition Date: May 30, 2009
Court: District of Delaware (Delaware)
Debtor's Counsel: David B. Stratton, Esq.
Evelyn J. Meltzer, Esq.
Pepper Hamilton LLP
Hercules Plaza
Suite 5100, 1313 N. Market Street
Wilmington, DE 19899
Tel: (302) 777-6500
Fax: (302) 421-8390
Estimated Assets: $100 million to $500 million
Estimated Debts: $100 million to $500 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Continental Airlines Inc. contract $111,494
1600 Smith St., 34th Floor
Houston, Texas 77002
Tel: (800) 525-0280
The Sierra Club, Maui litigation $91,000
Tomorrow Inc. and Kahului
Harbor Coalition
2087 Wells Street
Wailuki, HI 96793-2221
Willis Marine North America insurance $87,177
One World Financial Centre
200 Liberty Street, 7th Floor
New York, NY 10281-1003
Waterfront A, LLC lease $84,082
Austal USA LLC services $78,198
IRS source income $74,980
Rolls-Royce Commercial services $72,300
Marine Inc.
Hawaiian Tug & Barge services $44,887
Deloitte & Touceh LLP services $44,694
Populsion Controls Eng. Labor $17,849
McNeil Wilson Comms Inc. services $16,152
Seabulk Towing services $11,314
Norton Lilly International fees $8,311
The Wackenhut Corporaton services $6,757
Google Inc. services $6,547
CH2M Hill services $6,500
Noise Control Eng. Inc. services $6,100
Bering Sea Eccotech disposal $5,551
Grainger supplies $5,460
Q Mark Research marketing $5,392
Service Rentals & Supplies rental $3,334
John Mullen & Co. Inc. services $3,228
The petition was signed by C. Alexander Harman, secretary and
manager.
HAYES LEMMERZ: Delisted From Nasdaq; Files Credit Pact Amendments
-----------------------------------------------------------------
NASDAQ Stock Market LLC informed the Securities and Exchange
Commission that it has removed Hayes Lemmerz International Inc.
from listing and registration under Section 12(b) of the
Securities Exchange Act of 1934.
Hayes Lemmerz International, Inc.'s stock was suspended on May 21,
2009 and has not traded on NASDAQ since that time. The delisting
will be effective June 8, 2009, ten days after NASDAQ filed the
Form 25 with the Securities and Exchange Commission.
Patrick C. Cauley, the company's vice president, general counsel
and secretary, disclosed in a separate regulatory filing that
Hayes Lemmerz filed a notice of effectiveness as to Post-Effective
Amendment No. 1 relating to the Registration Statement on Form
S-3 previously filed by Hayes Lemmerz International, Inc., on
March 16, 2007, as amended by Amendment No. 1 to Form S-3 filed on
May 25, 2007. The Registration Statement registered 4,038,462
shares of common stock, par value $0.01 per share, for resale by
certain selling stockholders.
The company, in another disclosure, filed with the SEC copies of:
-- Amendment No. 2, dated as of May 12, 2009, to Second Amended
and Restated Credit Agreement, dated as of May 30, 2007, as
amended by Amendment No. 1, dated as of January 30, 2009, by
and among Hayes Lemmerz International, Inc., HLI Operating
Company, Inc., Hayes Lemmerz Finance LLC?Luxembourg S.C.A.,
certain Lenders, Deutsche Bank AG, New York Branch, as DIP
Administrative Agent, Deutsche Bank Securities Inc. and
General Electric Capital Corporation, as Joint Book-Running
Lead Managers, Joint Lead Arrangers, and Joint Syndication
Agents for the DIP Facilities, and Deutsche Bank Securities
Inc., as Documentation Agent for the DIP Facilities.
A full-text copy of Amendment No. 2 is available for free
at: http://researcharchives.com/t/s?3d76
-- Second Amended and Restated Credit Agreement, dated as of
May 30, 2007, as amended by Amendment No. 1, dated as of
January 30, 2009, as further amended by Amendment No. 2,
dated as of May 12, 2009, by and among HLI Operating
Company, Inc., as U.S. Borrower, Hayes Lemmerz Finance LLC?
Luxembourg S.C.A., as Luxembourg Borrower, Hayes Lemmerz
International, Inc. and the other Debtors, each Lender party
thereto, each DIP Lender named therein, Citicorp North
America, Inc., as Prepetition Administrative Agent, Deutsche
Bank Trust Company Americas, as DIP Administrative Agent,
Deutsche Bank Securities Inc., as Prepetition Syndication
Agent, Citicorp North America, Inc., as Prepetition
Documentation Agent, Citigroup Global Markets Inc. and
Deutsche Bank Securities Inc., as Joint Book-Running Lead
Managers and Joint Lead Arrangers for the Prepetition
Facilities, and Deutsche Bank Securities Inc. and General
Electric Capital Corporation, as Joint Book-Running Lead
Managers, Joint Lead Arrangers, and Syndication Agents.
A full-text copy of the Second Amended and Restated Credit
Agreement is available for free at:
http://researcharchives.com/t/s?3d77
-- Guaranty, dated as of May 12, 2009, by and between the
Debtors named therein and Deutsche Bank AG, New York Branch,
as DIP Administrative Agent.
A full-text copy of the Guaranty is available for free at:
http://researcharchives.com/t/s?3d78
-- Depositary Agreement, dated as of May 12, 2009, by and among
HLI Operating Company, Inc., as U.S. Borrower, Hayes Lemmerz
Finance LLC?Luxembourg, S.C.A., as Luxembourg Borrower,
Deutsche Bank AG, New York Branch, as DIP Administrative
Agent, and Deutsche Bank Trust Company Americas, as
Depositary.
A full-text copy of the Depositary Agreement is available
for free at: http://researcharchives.com/t/s?3d79
-- Amendment No. 3, dated as of May 19, 2009, to Second Amended
and Restated Credit Agreement, dated as of May 30, 2007, as
amended by Amendment No. 1, dated as of January 30, 2009, as
further amended by Amendment No. 2, dated as of May 12,
2009, by and among Hayes Lemmerz International, Inc., HLI
Operating Company, Inc., Hayes Lemmerz Finance LLC?
Luxembourg S.C.A., the Lenders named therein, Deutsche Bank
AG, New York Branch, as DIP Administrative Agent, Deutsche
Bank Securities Inc. and General Electric Capital
Corporation, as Joint Book-Running Lead Managers, Joint Lead
Arrangers, and Joint Syndication Agents for the DIP
Facilities, and Deutsche Bank Securities Inc., as
Documentation Agent for the DIP Facilities.
A full-text copy of Amendment No. 3 is available for free
at: http://researcharchives.com/t/s?3d7a
About Hayes Lemmerz International
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, which was precipitated by
an unprecedented slowdown in industry demand and a tightening of
credit markets. The company plans to reduce its debt and
restructure its balance sheet.
Hayes Lemmerz and its direct and indirect domestic subsidiaries
and one subsidiary in Mexico first 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. 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 pre-petition 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.
HSF HOLDING: Files for Chapter 11 Bankruptcy Protection
-------------------------------------------------------
Pacific Business News reports that HSF Holding Inc. and its
subsidiary, Hawaii Superferry, Inc., have filed for Chapter 11
bankruptcy protection in the U.S. Bankruptcy Court for the
District of Delaware.
According to Pacific Business News, the Debtors listed
$100 million to $500 million in assets and $100 million and
$500 million in debts. Court documents say that Hawaii Superferry
had $1 million in cash.
Pacific Business News relates that Hawaii Superferry blamed a
Hawaii Supreme Court ruling that forced it to stop inter-island
ferry operations as well as the drop in tourism and high fuel
prices for the noted decline in its revenues. According to
Pacific Business, Hawaii Superferry effected a shutdown of its
service between Honolulu and Kahului after a March 16 ruling by
the state's high court that opined that a state law exempting the
Company from an environmental impact statement was
unconstitutional. Pacific Business News adds that Hawaii
Superferry faced a May 30 deadline for making an $2.9 million
interest payment on $68.7 million in bond financing.
Pacific Business News says HSF Holding owed:
-- the state of Hawaii a disputed amount of $731,080 for
minimum annual guarantee, fees, and revocable permit; and
-- Hawaii companies and organizations about $948,159,
including:
* $202,000 owed to Monarch Insurance Services, Inc., for
workers compensation insurance;
* $182,198 to Sodexo Inc. & affiliates, for food and
beverage and gift shop services; and
* $156,272 to three units of Anthology Marketing Group for
advertising, public relations, and market research
services.
HSF Holding Inc. operates as the parent company of Hawaii
Superferry, Inc., a Hawaiian inter-island ferry service expected
to commence operations in early 2007. The Company is planning to
use the latest generation of large, high-speed roll-on/roll-off
catamaran ferries. The ferries will be used to transport
travellers from island to island as well as transport agricultural
and bulk goods.
INDUSTRIAL ENTERPRISES: 5 Affiliates Seek Bankruptcy Protection
---------------------------------------------------------------
Robert L. Renck, Jr., president and chief executive officer of
Industrial Enterprises of America, Inc., disclosed in a regulatory
filing that aside from the company, five of its affiliates also
filed for bankruptcy:
* On April 30, 2009, Pitt Penn Holding Co., Inc., and Pitt Penn
Oil Co., LLC, each filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the District of Delaware in Wilmington,
under Case Nos. 09-11475 and 09-11476.
* On May 4, 2009, EMC Packaging, Inc., filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code
in the United States Bankruptcy Court for the District of
Delaware in Wilmington, under Case No. 09-11524.
* On May 6, 2009, Unifide Industries, LLC, and Today?s Way
Manufacturing LLC each filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the District of Delaware in Wilmington,
under Case Nos. 09-11587 and 09-11586.
According to Mr. Renck, the Company and the subsidiaries have
sought the protection of the Bankruptcy Code. The purpose of the
bankruptcy is to reorganize the company so that it can operate
profitably and resolve issues with our creditors. This endeavor
includes, but is not limited to, integrating corporate governance
and accounting, gathering the books and records of the Company and
the subsidiaries, arranging financing for operations going
forward, and assessing corporate assets and liabilities.
Mr. Renck says the Company and its subsidiaries intend to continue
to manage their properties and operate their businesses as
?debtors-in-possession? under the jurisdiction of the bankruptcy
court and in accordance with the applicable provisions of the
Bankruptcy Code and orders of the bankruptcy court.
New Management
In conjunction with the reorganization in bankruptcy, the Company
and the subsidiaries have undergone a comprehensive management
change. On April 30, 2009, Robert L. Renck, Jr., accepted an
appointment as a member of the Company?s Board of Directors and
accepted the position of President and Chief Executive Officer of
the Company. On May 1, 2009, the Company appointed Mike Dignazio
as the Company?s Chief Financial Officer and Vice President of
Finance. On May 8, 2009, John A. Ward, III accepted an appointment
as a member of the Company?s Board of Directors
Operations
In September 2008, the company had decided to reorganize its
structure by transferring its interest in Unifide, LLC, Today?s
Way and EMC to PPH and making them wholly-owned subsidiaries of
PPH rather than parent. According to Mr. Renck, that change was
not completed because of potential creditor objections and they
remain direct subsidiaries of IEAM.
Under new management, the Company has been conducting an ongoing
review of the financial records and the books and records of
subsidiaries and parent. As part of this review, the Company has
been endeavoring to gather and analyze the books and records from
various sources. To date, the Company?s review has focused upon
the intracompany transactions and the issuance of the Company?s
securities pursuant to certain agreements between the Company and
the subsidiaries and various consultants.
The Company is managing various litigations involving the Company
and the subsidiaries in various courts throughout the country.
These litigations fall into three basic categories: abandoned by
prior management, contested, and bankruptcy-related.
On April 27, 2009, the Company received a Grand Jury subpoena from
the New York County District Attorney?s Office seeking documents
and records relating to a broad range of the Company?s finances
and issuances of securities. The Company is endeavoring to comply
with the subpoena and the Manhattan DA fully. It is the express
policy of the Company to cooperate to the fullest extent
appropriate with law enforcement.
A full-text copy of the company's Form 8-K is available for free
at: http://researcharchives.com/t/s?3d7c
About Industrial Enterprises
Pittsburgh, Pennsylvania-based Industrial Enterprises of America,
Inc. filed for Chapter 11 protection on May 1, 2009, (Bankr. D.
Del. Case No. 09-11508). Five of its affiliates also filed
voluntary Chapter 11 petitions between April 30 and May 6, 2009.
Pace Reich, Esq., represents the Debtors in their restructuring
efforts. In its petition, Industrial Enterprises listed total
assets of $50,476,697 and total debts of $17,853,997.
JEEP EAGLE: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Jeep Eagle 17, Inc.
633 Route 17
Paramus, NJ 07652
Bankruptcy Case No.: 09-23708
Chapter 11 Petition Date: May 28, 2009
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Judge: Donald H. Steckroth
Debtor's Counsel: Richard D. Trenk, Esq.
Trenk, DiPasquale, Webster,
Della Fera & Sodono, P.C.
347 Mt. Pleasant Avenue
Suite 300
West Orange, NJ 07052
Tel: (973) 243-8600
Email: rtrenk@trenklawfirm.com
Total Assets: $252,671
Total Debts: $1,901,291
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/njb09-23708.pdf
The petition was signed by Leigh Rzasa Ormes, president of the
Company.
JEFFREY MARC ROCKLAND: Case Summary & 20 Largest Unsec. Creditors
-----------------------------------------------------------------
Joint Debtors: Jeffrey Marc Rockland
Suwatana Apairatana Rockland
P.O. Box 35055
Tucson, AZ 85740
Bankruptcy Case No.: 09-11901
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
District of Arizona (Tucson)
Judge: James M. Marlar
Debtors' 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
Total Assets: $3,481,034
Total Debts: $4,023,757
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/azb09-11901.pdf
The petition was signed by the Joint Debtors.
JORGE SANCHEZ: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Jorge Sanchez
1620 Campbell Ave.
San Jose, CA 95125
Bankruptcy Case No.: 09-54089
Chapter 11 Petition Date: May 27, 2009
Court: United States Bankruptcy Court
Northern District of California (San Jose)
Judge: Roger L. Efremsky
Debtor's Counsel: Shawn R. Parr, Esq.
Parr Law Group, PC
1625 The Alameda #101
San Jose, CA 95125
Tel: (408) 267-4500
Email: shawn@parrlawgroup.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of Mr. Sanchez's petition, including a list of
his 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/canb09-54089.pdf
The petition was signed by Mr. Sanchez.
JOSE E. BERTRAN: Case Summary & 12 Largest Unsecured Creditors
--------------------------------------------------------------
Joint Debtors: Jose E. Bertran Pasarell
Maria E. Perez Colon
Mc Leary #2073
San Juan, PR 00911
Bankruptcy Case No.: 09-04415
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
District of Puerto Rico (Old San Juan)
Debtors' Counsel: Carlos Rodriguez Quesada, Esq.
Law Office Of Carlos Rodriguez Ques
PO Box 9023115
San Juan, PR 00902-3115
Tel: (787) 724-2867
Email: cerqlaw@coqui.net
Total Assets: $3,725,604
Total Debts: $1,964,317
A full-text copy of the Debtors' petition, including a list of
their 12 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/prb09-04415.pdf
The petition was signed by the Joint Debtors.
KEVIN BRYANT LORNE: Case Summary & 6 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Kevin Bryant Lorne
dba Lorne Construction
#5 Calle Del Sierra
Stinson Beach, CA 94970
Bankruptcy Case No.: 09-11608
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
Northern District of California (Santa Rosa)
Debtor's Counsel: Ruth Elin Auerbach, Esq.
Law Offices of Ruth Elin Auerbach
711 Van Ness Ave. #440
San Francisco, CA 94102
Tel: (415)673-0560
Email: attorneyruth@sbcglobal.net
Total Assets: $3,065,233
Total Debts: $1,745,332
A full-text copy of Mr. Lorne's petition, including a list of his
6 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/canb09-11608.pdf
The petition was signed by Mr. Lorne.
LEAP WIRELESS: Cricket Proposes $1 Billion Private Placement
------------------------------------------------------------
Leap Wireless International Inc. said its operating subsidiary,
Cricket Communications Inc., intends to commence an offering of
approximately $1.1 billion in aggregate principal amount of senior
secured notes due 2016, to be offered and sold to qualified
institutional buyers in the United States pursuant to Rule 144A
and outside the United States pursuant to Regulation S under the
Securities Act of 1933, as amended.
The notes, the company said, will bear interest at a rate to be
determined at pricing and will be guaranteed on a senior secured
basis by Leap Wireless and certain of its indirect subsidiaries.
The notes and the guarantees will be secured by liens on
substantially all of the personal property of Leap Wireless,
Cricket Communications and the subsidiary guarantors, the Company
noted.
According to the company, the net proceeds from the offering will
be used to repay all amounts outstanding under Leap Wireless'
senior secured credit agreement and in connection with that
repayment, Leap Wireless intends to terminate the related
revolving credit facility. Leap Wireless intends to use any
remaining net proceeds, after the intended repayment and
associated expenses, for general corporate purposes, which could
include the expansion and improvement of its network footprint,
acquisitions of additional spectrum or complementary businesses
and over the longer term, the deployment of next-generation
network technology.
The senior secured notes have not been registered under the
Securities Act or any state securities laws and may not be offered
or sold in the United States without registration or an applicable
exemption from registration requirements, the Company stated.
About Leap Wireless
Based in San Diego, Leap Wireless International Inc. (Nasdaq:
LEAP) -- http://www.leapwireless.com/-- provides innovative,
high-value wireless services. With the value of unlimited
wireless services as the foundation of its business, Leap Wireless
pioneered its Cricket(R) service. The Company and its joint
ventures now operate in 29 states and hold licenses in 35 of the
top 50 U.S. markets. Through its affordable, flat-rate service
plans, Cricket Communications offers customers a choice of
unlimited voice, text, data and mobile Web services.
At September 30, 2008, the company's balance sheet showed total
assets of $5.0 billion, total liabilities of $3.4 billion and
stockholders' equity of $1.6 billion. The company has a total of
$826.3 million in unrestricted cash, cash equivalents and short-
term investments as of September 30, 2008. Capital expenditures
during the third quarter of 2008 were $190 million, including
expenditures associated with the build-out of new markets and
capitalized interest.
For three months ended September 30, 2008, the company posted net
loss of $48.7 million compared with net loss of $43.2 million for
the same period in the previous year. For nine months ended
September 30, 2008, the company posted net loss of $93.0 million
compared with net loss of $57.8 million for the same period in the
previous year.
* * *
According to the Troubled Company Reporter on April 29, 2009,
Standard & Poor's Ratings Services revised its outlook on Leap
Wireless International Inc. to positive from stable. At the same
time, S&P affirmed its ratings on the San Diego-based wireless
carrier, including the 'B-' long-term corporate credit rating and
'B+' secured bank loan rating on subsidiary Cricket Communications
Inc.
LEAP WIRELESS: Stockholders Approves Third Amended 2004 Plan
------------------------------------------------------------
Leap Wireless International Inc. stockholders approved the third
amendment to the 2004 Plan, which increased the number of shares
authorized for issuance under the 2004 Plan by 1,000,000 shares to
a total of 9,300,000 shares, at the 2009 annual meeting in
Renaissance Schaumburg Hotel & Convention Center in Schaumburg,
Illinois.
A full-text copy of the company's 2004 Plan is available for free
at http://ResearchArchives.com/t/s?3d75
About Leap Wireless
Based in San Diego, Leap Wireless International Inc. (Nasdaq:
LEAP) -- http://www.leapwireless.com/-- provides innovative,
high-value wireless services. With the value of unlimited
wireless services as the foundation of its business, Leap
pioneered its Cricket(R) service. The company and its joint
ventures now operate in 29 states and hold licenses in 35 of the
top 50 U.S. markets. Through its affordable, flat-rate service
plans, Cricket offers customers a choice of unlimited voice, text,
data and mobile Web services.
At September 30, 2008, the company's balance sheet showed total
assets of $5.0 billion, total liabilities of $3.4 billion and
stockholders' equity of $1.6 billion. The company has a total of
$826.3 million in unrestricted cash, cash equivalents and short-
term investments as of September 30, 2008. Capital expenditures
during the third quarter of 2008 were $190.0 million, including
expenditures associated with the build-out of new markets and
capitalized interest.
For three months ended September 30, 2008, the company posted net
loss of $48.7 million compared with net loss of $43.2 million for
the same period in the previous year. For nine months ended
September 30, 2008, the company posted net loss of $93.0 million
compared with net loss of $57.8 million for the same period in the
previous year.
* * *
According to the Troubled Company Reporter on April 29, 2009,
Standard & Poor's Ratings Services revised its outlook on Leap
Wireless International Inc. to positive from stable. At the same
time, S&P affirmed its ratings on the San Diego-based wireless
carrier, including the 'B-' long-term corporate credit rating and
'B+' secured bank loan rating on subsidiary Cricket Communications
Inc.
LEIGH RZASA: Case Summary & 13 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Leigh Rzasa-Ormes
17 Litchult Lane
Mahwah, NJ 07430
Bankruptcy Case No.: 09-23958
Chapter 11 Petition Date: May 29, 2009
Court: District of New Jersey (Newark)
Judge: Rosemary Gambardella
Debtor's Counsel: Richard D. Trenk, Esq.
Trenk, DiPasquale, Webster, Della Fera &
Sodono, P.C.
347 Mt. Pleasant Avenue, Suite 300
West Orange, NJ 07052
Tel: (973) 243-8600
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The Debtor's Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Mivilla Foods $1,760,000
226 Getty Avenue
Paterson, NJ 07503
Capital One $1,120,000
275 Broadhollow Road
Melville, NY 11747
Capital LP $450,000
825 Third Avenue, 37th Floor
New York, NY 1002
Marie Rzasa $386,000
17-3 Upper Saddle River Corp. $373,558
Schepisi & McLaughlin PA $320,000
Barry Gauglardi, Esq. $135,000
Blank Rome LLP $41,225
Bank of America $26,818
Chase $17,257
The Margolis Law $10,577
George Allison III $7,749
Saks Fifth Avenue $5,336
LEGG MASON: Moody's Junks Ratings on Funds
------------------------------------------
Moody's Investors Service has downgraded to Caa/MR5 from Ba/MR5
the fund ratings of the short-term bond funds managed by Legg
Mason: Institutional Enhanced Portfolio (Hub), Citi Institutional
Enhanced Income Fund and Citi Institutional Enhanced Income Ltd.
(Spokes). Effective as of May 29, 2009, the Funds are scheduled
to close, and the remaining assets are being distributed in the
form of in-kind, pro-rata, distributions. Moody's rating action
is due to further deterioration in the average weighted credit
quality of the Funds' investment portfolio, the Funds' restricted
liquidity to meet cash redemptions, and the potential for further
losses. The Funds market risk ratings of MR5 remain unchanged.
The Funds, which are not money market funds, are organized as a
Hub and Spoke portfolio structure. Institutional Enhanced
Portfolio, the investment portfolio, is an open-end diversified
management investment company that is advised by Legg Mason
Partners Fund Adviser, with Western Asset Management, a wholly
owned subsidiary of Legg Mason, providing the day-do-day portfolio
management as the sub-advisor. Citi Institutional Enhanced Income
Fund and Citi Institutional Enhanced Income Ltd. are U.S. and
Cayman Island-based spoke funds, respectively.
Moody's will withdraw the ratings assigned to the Funds and the
investment portfolio upon their closure. For further information
on Moody's ratings withdrawal policy, please refer to Moody's
Withdrawal Policy on moody's.com.
The previous rating actions occurred as of December 19, 2008, at
which time the Funds' ratings, including market risk ratings, were
downgraded to Ba/MR5 from A/MR4.
LINDA F. SCHAEFER: Case Summary & 15 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Linda F. Schaefer
3481 Banyan Street
Santa Rosa, CA 95403
Bankruptcy Case No.: 09-11573
Chapter 11 Petition Date: May 28, 2009
Court: United States Bankruptcy Court
Northern District of California (Santa Rosa)
Judge: Alan Jaroslovsky
Debtor's Counsel: Michael C. Fallon, Esq.
Law Offices of Michael C. Fallon
100 E St. #219
Santa Rosa, CA 95404
Tel: (707) 546-6770
Email: mcfallon@fallonlaw.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of Ms. Schaefer's petition, including a list of
her 15 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/canb09-11573.pdf
The petition was signed Ms. Schaefer.
LUCKY CHASE: Files Amended List of 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Lucky Chase II, LLC has filed with the U.S. Bankruptcy Court for
the Southern District of Florida an amended list of its 20 largest
unsecured creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
DCI Association Services Property management $48,309
2035 Harding Street services
Suite 200
Hollywood, FL 33020
US Alliance Management Security services $46,206
d/b/a US Security
P.O. Box 226618
Miami, FL 33122-6618
Sun Sentinel Vendor $36,000
P.O. Box 804866
Chicago, IL 60680-4110
Moody Plumbing, Inc. Plumbing services $26,892
Flatiron Capital Insurance premiums $26,651
HD Supply Facilities Supplies $21,872
The Sherwin Williams Co. Final judgement $21,585
dated 2/5/9
First Response Carpet Carpet cleaning $19,579
Cleaning services
Luke Brothers, Inc. Landscaping services $16,600
Southern Painting Painting services $15,907
Wilmar Industries Janitorial supplies $15,356
Sachs Sax Caplan, P.L. Legal services $10,140
South Florida Appliance Appliances $8,590
Alpat Company, Inc. Collection Agency $6,596
for AT&T
A 1 Fire Equipment Correction of fire $6,581
code violation
For Rent Magazine Advertising $5,652
HD Supply Facilities Supplies $5,135
Maintenance
Ortiz, Gabriela E. Lawsuit filed in the $5,000
County Court in and
for Miami-Dade County
FPL Utilities $2,686
Fieldstone Lester Shear & Legal services $2,000
Denberg, LLP
About Lucky Chase II, LLC
Headquartered in Pittsburgh, Pennsylvania, Lucky Chase II, LLC,
operates a single-asset, real estate company. The Company filed
for Chapter 11 on April 29, 2009 (Bankr. S. D. Fla. Case No.
09-18087). Arthur J. Spector, Esq., represents the Debtor in its
restructuring efforts. The Debtor's assets and debts both range
from $10 million to $50 million.
LUCKY CHASE: Files Schedules of Assets and Liabilities
------------------------------------------------------
Lucky Chase II, 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 $30,600,000
B. Personal Property $1,585,166
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $29,404,668
E. Creditors Holding
Unsecured Priority
Claims
F. Creditors Holding
Unsecured Non-priority
Claims $993,922
----------- -----------
TOTAL $32,185,166 $30,398,590
A full-text copy of Lucky Chase's schedules of assets and debts is
available at http://bankrupt.com/misc/LuckyChase.Schedules.pdf
About Lucky Chase II, LLC
Headquartered in Pittsburgh, Pennsylvania, Lucky Chase II, LLC,
operates a single-asset, real estate company. The Company filed
for Chapter 11 on April 29, 2009 (Bankr. S. D. Fla. Case No.
09-18087). Arthur J. Spector, Esq., represents the Debtor in its
restructuring efforts. The Debtor's assets and debts both range
from $10 million to $50 million.
LUCKY CHASE: May Use Cash Collateral of AmTrust Bank
----------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida has
granted Lucky Chase II, LLC permission, on an interim basis, to
use cash collateral of AmTrust Bank, in accordance with a budget.
Until entry of a final order authorizing the use of cash
collateral, the Debtor will not make any payments for professional
fees without prior approval by the Bankruptcy Court after notice
to AmTrust and the U.S. Trustee.
The Debtor is authorized to use the cash collateral to pay FTI
Consulting, Inc., and Keith F. Cooper up to a maximum amount of
$25,000 for fees and expenses incurred from the petition date
through and including June 24, 2009, which amount will exclude,
and is in addition to, their $25,000 pre-petition retainer.
A hearing with respect to the entry of a subsequent interim order
or a final order, as applicable, is scheduled for June 24, 2009,
at 9:30 a.m.
About Lucky Chase II, LLC
Headquartered in Pittsburgh, Pennsylvania, Lucky Chase II, LLC,
operates a single-asset, real estate company. The Company filed
for Chapter 11 on April 29, 2009 (Bankr. S. D. Fla. Case No.
09-18087). Arthur J. Spector, Esq., represents the Debtor in its
restructuring efforts. The Debtor's assets and debts both range
from $10 million to $50 million.
LUMINENT MORTGAGE: Files 2nd Amended Plan and Disclosure Statement
------------------------------------------------------------------
Luminent Mortgage Capital, Inc., and its affiliated debtors have
submitted for approval to the U.S. Bankruptcy Court for the
District of Maryland a disclosure statement with respect to their
Second Amended Joint Plan of Reorganization, dated as of May 14,
2009.
The Plan provides for:
-- The consummation of the transactions contemplated by the
ACC Settlement on the Effective Date of the Plan, the
proceeds of which will be used to make a number of the
payments contemplated by the Plan;
-- The conversion of Debtor Luminent Mortgage Capital, Inc.,
from a publicly traded real estate investment trust into a
private asset management company and the issuance of the
Reorganized Equity Units and the Reorganized Preferred
Equity Units to certain classes of Creditors;
-- The payment in full of all Allowed Other Secured Claims;
-- The payment in full of all Allowed Priority Non-Tax Claims;
-- The payment in full of all Allowed Unclassified Claims;
-- The distribution of the Reorganized Equity Units, the
Convenience Class Fund, the Unsecured Distribution Fund,
the Unsecured Distribution Fund, and the Subsequent
Unsecured Distribution Amount; and
-- The cancellation of all outstanding Interests in the
Debtors.
Pursuant to the Plan, the Secured Claims of ACC Parties under
Class 2 will receive 46% of the Reorganized Equity Units and other
consideration as is provided under the terms of the ACC Settlement
and the Plan.
General Unsecured Claims under Class 4(a) will receive their
ratable portion of (i) the Unsecured Distribution Fund, (ii) their
ratable portion of the Subsequent Distribution Amount and (iii)
29% of the Reorganized Equity Units.
Subordinated TRUPS claims will receive their ratable portion of
(A)(i) the Unsecured Distribution Fund, (ii) their ratable
portionof the Subsequent Distribution Amount and (iii) 29% of the
Reorganized Equity Units, and (B) 5% of the Reorganized Equity
Units.
Interests will not receive any property under the Plan and are
deemed to have voted to reject the Plan. Allowed Interests will
be cancelled on the Plan's Effective Date.
Estimated Estimated
Class Allowed Claims Recovery Treatment
----- -------------- --------- ---------
1 Priority Non-Tax
Claims $0 100% Unimpaired
2 Secured Claims of
ACC Parties $28,883,346 0% Impaired
3 Other Secured
Claims $0 100% Unimpaired
4(a) General
Unsecured Claims $93,000,000 3.23% Impaired
4(b) General
Unsecured Opt-Out
Claims $0* 0%* Impaired
5(a) Convenience Class
Claims $2,300,000 4.34% Impaired
5(b) Convenience
Opt-Out Claims $0** 0%** Impaired
6(a) Subordinated TRUPS
Claims $92,788,000 0% Impaired
6(b) Subordinated TRUPS
Opt-Out Claims $0*** 0%*** Impaired
7 Interests N/A 0% Impaired
* Assumes all Creditors in Class 4 will not make the Creditor
Opt-Out Election and therefore participate in distributions of
the Unsecured Distribution Fund under Class 4(a) of the Plan.
** Assumes all Creditors in Class 5 will not make the Creditor
Opt-Out Election and therefore participate in distributions of
the Convenience Class Fund under Class 5(a) of the Plan.
*** Assumes all Creditors in Class 6 will not make the Creditor
Opt-Out Election and therefore participate in distributions of
the 5% of the Reorganized Equity Units allocable under Class
6(a) of the Plan.
Only holders of claims in Classes 2, 4(a), 5(a) and 6(a) are
eligible to vote. Allowed Class 7 Interests will not receive any
property under the Plan and are deemed to have voted to reject the
Plan.
Cramdown
Pursuant to the "cramdown" provisions of the Bankruptcy Code, the
Debtors may seek confirmation of the Plan, despite the
non-acceptance of one or more impaired Classes of Claims and or
Interests, as set forth in Sec. 1129(b) of the Bankruptcy Code.
A full-text copy of the disclosure statement explaining the
Debtors' Second Amended Plan is available at:
http://bankrupt.com/misc/luminent.2ndAmendedDS.pdf
A full-text copy of Debtors' Second Amended Joint Plan of
Reorganization is available at:
http://bankrupt.com/misc/luminent.2ndAmendedPlan.pdf
About Luminent Mortgage
Luminent Mortgage Capital, Inc. (OTCBB: LUMCE), is a real estate
investment trust, or REIT, which, together with its subsidiaries,
has historically invested in two core mortgage investment
strategies. Under its Residential Mortgage Credit strategy, the
company invests in mortgage loans purchased from selected high-
quality providers within certain established criteria as well as
subordinated mortgage-backed securities and other asset-backed
securities that have credit ratings below AAA. Under its Spread
strategy, the company invests primarily in U.S. agency and other
highly-rated single-family, adjustable-rate and hybrid adjustable-
rate mortgage-backed securities.
Luminent and nine subsidiaries filed on September 5, 2008, for
relief under Chapter 11 of the U.S Bankruptcy Code in the United
States Bankruptcy Court for the District of Maryland, Baltimore
Division (Lead Case No. 08-21389). Immediately prior to the
filing, the Debtor executed a Plan Support and Forbearance
Agreement with secured creditor Arco Capital Corp., Ltd., WAMU
Capital Corp. and convertible noteholders representing 100% of the
outstanding principal amount of its convertible notes.
Joel I. Sher, Esq., at Shapiro Sher Guinot & Sandler, represents
the Debtors as counsel. The U.S. Trustee for Region 4 appointed
creditors to serve on an Official Committee of Unsecured
Creditors. Jeffrey Neil Rothleder, Esq., at Arent Fox LLP,
represents the Creditors Committee as counsel.
In its operating report for the month of September 2008, Luminent
Mortgage Capital, Inc., reported $1,960,516 in total assets and
$374,868,632 in total liabilities, resulting in a $372,908,116
stockholders' deficit.
LYONDELL CHEMICAL: Can Assume ACE Insurance Program Agreements
--------------------------------------------------------------
Lyondell Chemical Company and its 92 debtor-affiliates sought and
obtained authority from the United States Bankruptcy Court for the
Southern District of New York to:
(i) assume all policies issued to one or more of the Debtors
by ACE American Insurance Company and its affiliates
for workers' compensation and automobile liability
insurance and all related agreements;
(ii) enter into insurance policies and agreements in
conjunction with the assumption of the Insurance Program
and in order to renew the Insurance Program; and
(iii) provide collateral as contemplated in the Insurance
Agreements.
From 2003 to the present, ACE has provided the Debtors with a
casualty insurance program for workers' compensation and
automobile liability insurance. The Insurance Program is a large
deductible paid loss program providing statutory medical and wage
replacement benefits with a deductible of $1,000,000 per claim.
The Insurance Program expires on June 1, 2009. In May 2009, the
Debtors agreed to renewal terms of the Insurance Agreements, for
the period from June 1, 2009 through June 1, 2010, pursuant to
which certain policies providing workers' compensation and
automobile liability will be issued to certain of the Debtors.
Pursuant to the Insurance Program and the Insurance Agreements,
the Debtors are obligated to pay insurance premiums, deductibles
and related charges and expenses to ACE. The Debtors'
obligations are payable in an extended period of time and are
subject to future audits and adjustments. The aggregate
estimated premium payable to ACE with respect to the Insurance
Agreements is $837,878. The Debtors ultimately will owe
additional amounts in connection with deductibles and obligations
related to claims payments made by ACE.
As security for the Debtors' obligations under the Insurance
Program, the Debtors provided ACE with letters of credit prior to
the Petition Date for $3.06 million for the Insurance Program and
a paid loss deposit funds -- PLDF. In connection with the new,
postpetition Insurance Agreements, the Debtors have agreed to
provide ACE with collateral in the form of additional PLDF, as
well as letters of credit or cash aggregating $1.85 million. As
required by the Insurance Agreements, the Court approved these
protections afforded to ACE including:
(i) allowing ACE to draw upon the Collateral and apply the
proceeds to the Debtors' obligations;
(ii) granting ACE a superpriority security interest in and
permitted liens on the Collateral provided by the Debtors
to ACE and its proceeds;
(iii) authorizing the Debtors to enter into additional renewals
or extensions of the insurance policies and provide
additional letters of credit without further Court order;
(iv) providing that the Insurance Program, Insurance Agreements
and order granting the Request will not be altered by any
reorganization plan or other order of the Court; and
(v) providing that all Collateral provided by the Debtors to
ACE and its proceeds will secure all obligations of the
Debtors to ACE under the ACE Insurance Program and the
Insurance Agreements.
Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP, in
New York, told the Court that the Debtors are required to
maintain workers' compensation insurance as well as automobile
liability insurance under the laws of states where they operate
and pursuant to the operating guidelines issued by the United
States Trustee for Region 2. He noted that failure to adhere to
this requirement would result in ACE terminating the Insurance
Agreements. Without insurance coverage, the Debtors cannot
operate. While the Debtors believe that there are no existing
defaults under the ACE Insurance Program, to the extent that
there are amounts due, they will pay the amounts pursuant to the
Insurance Program in the ordinary course regardless of whether
when those claims arose.
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. It is the global leader in
polyolefins technology, production and marketing; a pioneer in
propylene oxide and derivatives; and a significant producer of
fuels and refined products, including biofuels. Through research
and development, LyondellBasell develops innovative materials and
technologies that deliver exceptional customer value and products
that improve quality of life for people around the world.
Headquartered in The Netherlands, LyondellBasell --
http://www.lyondellbasell.com/-- is privately owned by Access
Industries.
Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries, the world's third largest
independent chemical company. LyondellBasell became saddled with
debt as part of the US$12.7 billion merger. About a year after
completing the merger, LyondellBasell Industries' U.S. operations
and one of its European holding companies -- Basell Germany
Holdings GmbH -- filed voluntary petitions to reorganize under
Chapter 11 of the U.S. Bankruptcy Code on January 6, 2009, to
facilitate a restructuring of the company's debts. The case is In
re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case
No. 09-10023). Seventy-nine Lyondell entities, including Equistar
Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals
Inc., and Wyatt Industries, Inc., filed for Chapter 11. In May
2009, one of the cases was dismissed -- Case No. 09-10068 --
because it is duplicative of Case No. 09-10040 relating to Debtor
Glidden Latin America Holdings.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities. Lyondell Chemical estimated that consolidated
assets total US$27.12 billion and debts total US$19.34 billion as
of the bankruptcy filing date.
Lyondell has obtained approximately $8 billion in DIP financing to
fund continuing operations. The DIP financing includes two credit
agreements: a $6.5 billion term loan (comprising $3.25 billion in
new loans and a $3.25 billion roll-up of existing loans) and a
$1.57 billion asset-backed lending facility.
Luxembourg-based LyondellBasell Industries AF S.C.A. and another
affiliate were voluntarily added to Lyondell Chemical's
reorganization filing under Chapter 11 on April 24, 2009 in order
to seek protection against claims by certain financial and U.S.
trade creditors. On May 8, 2009, LyondellBasell Industries added
13 non-operating entities to Lyondell Chemical Company's
reorganization filing under Chapter 11 of the U.S. Bankruptcy
Code. All of the entities are U.S. companies and were added to
the original Chapter 11 filing for administrative purposes. The
filings will have no impact on current business or operations as
none of the entities manufactures or sells products.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LYONDELL CHEMICAL: Wants to Hire PwC as Independent Auditor
-----------------------------------------------------------
Lyondell Chemical Company and its 92 debtor-affiliates seek
permission from the United States Bankruptcy Court for the
Southern District of New York to employ PricewaterhouseCoopers LLP
as their independent auditor and accountant, nunc pro tunc to
January 6, 2009.
As the Debtors' auditor, PricewaterhouseCoopers will:
(a) audit the consolidated annual financial statements of
Lyondell Chemical Company, Equistar Chemicals, LP, and
Millennium Chemicals Inc. -- Audited Companies -- for the
fiscal year ended December 31, 2008 and thereafter;
(b) express an opinion on management's assessment of the
effectiveness of the Audited Companies' internal controls
over financial reporting as of December 31, 2008, and
thereafter;
(c) perform reviews of interim financial statements for the
three-month and nine-month periods ended September 30,
2008, and thereafter;
(d) perform full scope and limited-scope audits of the
Debtors' employee benefit plans' statement of net assets
available for benefits at December 31, 2008, and the
statement of changes in net assets available for benefits
for the year then ended; and
(e) render other audit and accounting services, including
assistance in connection with reports sought of the
Audited Companies by the Court, the U.S. Trustee for
Region 2, or parties-in-interest, as the Debtors, their
attorneys, or financial advisors may from time to
time request.
The Debtors will pay PricewaterhouseCoopers' professionals their
customary hourly rates:
Professional Level Rate per Hour
------------------ -------------
Partner/Managing Directors $400 to $1,300
Director/Senior Manager $250 to $800
Manager $200 to $525
Senior Associate $140 to $275
Associate $75 to $200
The Debtors will reimburse PricewaterhouseCoopers for expenses
incurred, including $25,000 incurred as of May 21, 2009.
PricewaterhouseCoopers has informed the Debtors that as of
February 28, 2009, it was owed $217,500 for incremental
postpetition services and expenditures. The Debtors anticipate
that they will incur an additional fixed fee with
PricewaterhouseCoopers with respect to bankruptcy-related
auditing and accounting services.
The Debtors' Audit Committee has preapproved $945,000 for
Incremental Audit Fees. Moreover, as of February 2009,
PricewaterhouseCoopers estimates the Incremental Audit Fees
provided since the Petition Date to be $145,000, which amount may
increase to the preapproved $945,000, depending on the time
expended.
In addition, in March 2009, the Debtors and
PricewaterhouseCoopers finalized a fee structure for the employee
benefit plans' services and agreed to a fixed fee of $517,200.
The Benefits Fee Estimate will be split between Lyondell for
$423,000 and Basell for $94,000. The Debtors disclosed that a
year before the Petition Date, they paid PricewaterhouseCoopers
$5,038,025 for audit and other special accounting services
provided.
To ensure compliance of the Bankruptcy Code and decrease the
overall administrative expenses associated with
PricewaterhouseCoopers' engagement, PricewaterhouseCoppers'
professionals engaged in the retention will consult with
PricewaterhouseCoppers' internal bankruptcy retention and billing
advisors. The Retention Advisors will render these services:
(i) assistance with the bankruptcy retention documents;
(ii) assistance with the disinterestedness disclosures; and
(iii) assistance with completion of the requisite fee
applications.
The Retention Advisors' hourly billing rates are:
Partner $780
Managing Director $675
Director/Senior Manager $565
Manager $400
Senior Associate $290
Associate $225
Paraprofessional $150
PricewaterhouseCoopers will apply to the Court for fees and
reimbursement of expenses in accordance with the applicable
provisions of the Bankruptcy Code, the Bankruptcy Rules, the
Local Rules and any additional procedures that may be established
by the court in the Chapter 11 cases.
Keith Rowden, a partner in PricewaterhouseCoopers, notes that
upon review, his firm is or was connected to certain parties-in-
interest. A list of these parties is available for free at:
http://bankrupt.com/misc/Lyondell_PwCDisclosure.pdf
However, Mr. Rowden maintains that PricewaterhouseCoopers is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code, because it:
(a) is not a creditor, equity security holder or insider of the
Debtors;
(b) is not and was not an investment banker for any outstanding
security of the Debtors;
(c) has not been, within three years before the Petition Date,
(i) an investment banker for a security of the Debtors; or
(ii) an attorney for an investment banker in connection with
the offer, sale, or issuance of a security of the
Debtors; and
(d) was not, within two years before the Petition Date, a
director, officer, or employee of the Debtors or of any
investment banker of the Debtors.
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. It is the global leader in
polyolefins technology, production and marketing; a pioneer in
propylene oxide and derivatives; and a significant producer of
fuels and refined products, including biofuels. Through research
and development, LyondellBasell develops innovative materials and
technologies that deliver exceptional customer value and products
that improve quality of life for people around the world.
Headquartered in The Netherlands, LyondellBasell --
http://www.lyondellbasell.com/-- is privately owned by Access
Industries.
Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries, the world's third largest
independent chemical company. LyondellBasell became saddled with
debt as part of the US$12.7 billion merger. About a year after
completing the merger, LyondellBasell Industries' U.S. operations
and one of its European holding companies -- Basell Germany
Holdings GmbH -- filed voluntary petitions to reorganize under
Chapter 11 of the U.S. Bankruptcy Code on January 6, 2009, to
facilitate a restructuring of the company's debts. The case is In
re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case
No. 09-10023). Seventy-nine Lyondell entities, including Equistar
Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals
Inc., and Wyatt Industries, Inc., filed for Chapter 11. In May
2009, one of the cases was dismissed -- Case No. 09-10068 --
because it is duplicative of Case No. 09-10040 relating to Debtor
Glidden Latin America Holdings.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities. Lyondell Chemical estimated that consolidated
assets total US$27.12 billion and debts total US$19.34 billion as
of the bankruptcy filing date.
Lyondell has obtained approximately $8 billion in DIP financing to
fund continuing operations. The DIP financing includes two credit
agreements: a $6.5 billion term loan (comprising $3.25 billion in
new loans and a $3.25 billion roll-up of existing loans) and a
$1.57 billion asset-backed lending facility.
Luxembourg-based LyondellBasell Industries AF S.C.A. and another
affiliate were voluntarily added to Lyondell Chemical's
reorganization filing under Chapter 11 on April 24, 2009 in order
to seek protection against claims by certain financial and U.S.
trade creditors. On May 8, 2009, LyondellBasell Industries added
13 non-operating entities to Lyondell Chemical Company's
reorganization filing under Chapter 11 of the U.S. Bankruptcy
Code. All of the entities are U.S. companies and were added to
the original Chapter 11 filing for administrative purposes. The
filings will have no impact on current business or operations as
none of the entities manufactures or sells products.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LYONDELL CHEMICAL: Wants to Hire Nexant Inc. as Industry Expert
---------------------------------------------------------------
Lyondell Chemical Company and its 92 debtor-affiliates sought and
obtained permission from the United States Bankruptcy Court for
the Southern District of New York the Court to employ Nexant Inc.
and its affiliates as their industry expert.
The Debtors relate that they need to retain a refining, chemical
and polymer industries expert and consultant with broad
experience in the pricing of commodities essential to their
businesses.
As the Debtors' industry expert, Nexant will provide:
(a) selected market, economic and technical data, and judgments;
(b) analysis of market, economic and technical information or
trends;
(c) asset appraisals, valuations or opportunity assessments;
(d) business appraisals, valuations or opportunity assessments;
(e) economic or market evaluations and forecasts;
(f) assessment of divestiture or liquidation targets;
(g) analysis of business strategies;
(h) review of specific business issues;
(i) asset inspections and review of operating reports;
(j) operating profit reviews and forecasts;
(k) other analyses, discussions or meetings, as sought; and
(l) reports, depositions or testimony on the matters, as
reasonably sought by the Debtors.
The Debtors will pay Nexant's professionals according to their
customary daily rates assuming that the professionals work eight
hours per day:
Position Rate per Day/Hour
-------- -----------------
Senior Vice President/Vice President $4,400/$550 per hour
Principal/Senior Project Manager $3,400/$425 per hour
Project Manager $3,000/$375 per hour
Senior Consultant $2,600/$325 per hour
Senior Analyst/Analyst $1,600/$200 per hour
Document Processor $800/$100 per hour
Moreover, Nexant professionals expected to be assigned to the
engagement and their customary hourly rates are:
Name Position Rate per Hour
---- -------- -------------
Michael J. Kratochwill vice president $550
Andrew Swanson vice president $550
Bruce F. Burke vice president $550
Roger Green vice president $550
John S. Boepple, senior project manager $425
William L. Tittle principal/senior $425
project manager
David Alston project manager $375
Alastair Hensman project manager $375
Luann M. Farrell senior consultant $325
Nelson M. Vasquez senior consultant $325
Andrew Powell consultant $275
Stewart Hardy consultant $275
Wansoo Byun consultant $275
Tammy P. Lo senior analyst $200
Will Cameron senior analyst $200
Alexander Eng analyst $200
Donnie Wickham analyst $200
Jody-Kaye Thomas analyst $200
Tzyy Lok analyst $200
Document Processing information
Operators researchers $100
The Debtors will reimburse Nexant of expenses incurred. Nexant
will apply for fee applications pursuant to Sections 330 and 331
of the Bankruptcy Code.
Michael J. Kratochwill, vice president at Nexant, disclosed that
upon review, his firm has connections with parties-in-interest in
the Debtors' Chapter 11 cases, a list of which is available for
free at http://bankrupt.com/misc/Lyondell_NexantDisclosure.pdf
Mr. Kratochwill assured the Court that Nexant does not hold or
represent an interest adverse to the Debtors' estates.
Accordingly, Mr. Kratochwill maintains that Nexant is a
"disinterested person" as that term is defined under Section
101(14) of the Bankruptcy Code.
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. It is the global leader in
polyolefins technology, production and marketing; a pioneer in
propylene oxide and derivatives; and a significant producer of
fuels and refined products, including biofuels. Through research
and development, LyondellBasell develops innovative materials and
technologies that deliver exceptional customer value and products
that improve quality of life for people around the world.
Headquartered in The Netherlands, LyondellBasell --
http://www.lyondellbasell.com/-- is privately owned by Access
Industries.
Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries, the world's third largest
independent chemical company. LyondellBasell became saddled with
debt as part of the US$12.7 billion merger. About a year after
completing the merger, LyondellBasell Industries' U.S. operations
and one of its European holding companies -- Basell Germany
Holdings GmbH -- filed voluntary petitions to reorganize under
Chapter 11 of the U.S. Bankruptcy Code on January 6, 2009, to
facilitate a restructuring of the company's debts. The case is In
re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case
No. 09-10023). Seventy-nine Lyondell entities, including Equistar
Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals
Inc., and Wyatt Industries, Inc., filed for Chapter 11. In May
2009, one of the cases was dismissed -- Case No. 09-10068 --
because it is duplicative of Case No. 09-10040 relating to Debtor
Glidden Latin America Holdings.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities. Lyondell Chemical estimated that consolidated
assets total US$27.12 billion and debts total US$19.34 billion as
of the bankruptcy filing date.
Lyondell has obtained approximately $8 billion in DIP financing to
fund continuing operations. The DIP financing includes two credit
agreements: a $6.5 billion term loan (comprising $3.25 billion in
new loans and a $3.25 billion roll-up of existing loans) and a
$1.57 billion asset-backed lending facility.
Luxembourg-based LyondellBasell Industries AF S.C.A. and another
affiliate were voluntarily added to Lyondell Chemical's
reorganization filing under Chapter 11 on April 24, 2009 in order
to seek protection against claims by certain financial and U.S.
trade creditors. On May 8, 2009, LyondellBasell Industries added
13 non-operating entities to Lyondell Chemical Company's
reorganization filing under Chapter 11 of the U.S. Bankruptcy
Code. All of the entities are U.S. companies and were added to
the original Chapter 11 filing for administrative purposes. The
filings will have no impact on current business or operations as
none of the entities manufactures or sells products.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LYONDELL CHEMICAL: Can Hire Deloitte Tax as Tax Advisor
-------------------------------------------------------
Lyondell Chemical Company and its 92 debtor-affiliates sought and
obtained permission from the United States Bankruptcy Court for
the Southern District of New York the Court to employ Deloitte Tax
LLP, to provide them tax consulting services, nunc pro tunc to
February 9, 2009.
As the Debtors' tax advisor, Deloitte Tax will:
(a) advise the Debtors regarding the restructuring or
bankruptcy emergence process, including the tax workplan;
(b) advise the Debtors on the cancellation of debt income for
tax purposes under Section 108 of the Internal Revenue
Code;
(c) advise the Debtors on post-bankruptcy tax attributes
available under the applicable tax regulations, and the
absorption of attributes based on the Debtors' operating
projections; including a technical analysis of the effects
of Section 1.1502-28 of the Treasury Regulation and the
interplay with Section 108/1017 of the Internal Revenue
Code; and assistance with preparing tax basis balance
sheets;
(d) advise the Debtors on the potential effect of the
Alternative Minimum Tax in various post-emergence
scenarios;
(e) advise the Debtors on the effects of tax rules under
Sections 382(l)(5) and (l)(6) of the Internal Revenue Code
pertaining to the post-bankruptcy net operating loss
carryovers and limitations on their utilization and the
Debtors' ability to qualify for Section 382(l)(5);
(f) advise the Debtors on the effects of tax rules under
Sections 382(l)(5) and (l)(6) pertaining to the post-
bankruptcy net operating loss carryovers and limitations
on their utilization and the Debtors' ability to qualify
for Section 382(l)(5);
(g) advise the Debtors in their work with creditors' counsel,
the Debtors' counsel, and the Debtors' financial advisors
on cash tax effects of restructuring and bankruptcy and
the post-restructuring tax profile, including a Plan of
Reorganization tax projection. This will include gaining
an understanding of the financial advisors' valuation
model and disclosure model to consider accuracy of tax
assumptions;
(h) advise the Debtors as to the proper tax treatment of
postpetition interest for state and Federal income tax
purposes;
(i) advise the Debtors as to the proper state and Federal
income tax treatment of prepetition and postpetition
reorganization costs, including restructuring-related
professional fees and other costs, the categorization and
analysis of the costs and the technical positions related;
(j) advise the Debtors in their evaluation and modeling of the
effects of liquidating, merging, or converting entities as
part of the restructuring, including the effects on
federal and state tax attributes, state incentives,
apportionment, and other tax planning;
(k) advise the Debtors in their effort to identify tax issues
and planning related to the restructuring of the Debtors
and their foreign affiliates;
(l) advise the Debtors on state income tax treatment and
planning for bankruptcy provisions in various
jurisdictions, including cancellation of debt calculation,
adjustments to attributes and tax basis, and limitations
on attribute utilization;
(m) advise the Debtors on responding to tax notices and audits
from various taxing authorities;
(n) advise the Debtors on procedures for tax refunds from tax
authorities and assistance with attaining tax refunds;
(o) advise the Debtors on income tax return reporting of
bankruptcy issues and related matters;
(p) advise the Debtors in their review and analysis of the tax
treatment of items adjusted for GAAP purposes as a result
of "fresh start" accounting as required for the emergence
date of the U.S. GAAP balance sheet in an effort to
identify the appropriate tax treatment of adjustments to
equity; and other tax basis adjustments to assets and
liabilities recorded;
(q) document, as appropriate, tax analysis, opinions,
recommendation, observations, and correspondences for any
proposed restructuring alternative tax issue or other tax
matter;
(r) advise the Debtors regarding other state or Federal income
tax questions that may arise in the course of the
engagement, as asked by the Debtors, and as may be agreed
to by Deloitte Tax;
(s) advise the Debtors in their effort to identify tax issues
and planning opportunities related to debt restructuring
and bankruptcy from a state and local perspective,
including advising the Debtors on state adoption of IRC
Section 108 on debt forgiveness and attribute reduction
under IRC Section 108(b)(5), state tax effects of Section
346 of the Bankruptcy Code, and state positions with
respect to state tax attribute utilization limitations
post-bankruptcy. As directed by the Debtors, Deloitte
Tax will research relevant state tax laws and apply them
to the Debtors' specific facts, including the importance
of tracking attributes -- net operating losses, credits
and capital loss carryovers -- on an entity by entity and
state by state basis. Again, as directed by the Debtors,
Deloitte Tax will also advise the Debtors on the states'
ability to file claims prior to the bar date for existing
or potential liabilities for income tax, sales and use tax
and property tax and the need to establish reserves for
these bankruptcy claims and handling notices issued which
will result from filing state tax returns in bankruptcy
without paying the tax. Deloitte Tax will document its
recommendations in a memorandum for use solely by the
Debtors' management;
(t) advise the Debtors in their efforts to preliminarily
identify tax issues and state and local planning
opportunities related to postrestructuring, including
evaluating structural strategies to assist the Debtors in
attempting to minimize state income taxes through the
utilization of net operating losses, creation of special
purpose entities or reorganization of the business along
functional lines, property taxes, sales and use taxes,
and other state and local taxes as appropriate; and
(u) advise the Debtors in their efforts to estimate the tax
basis in the stock in each of the Debtors' subsidiaries or
other entity interests.
The Debtors will pay Deloitte Tax's professionals according to
their customary hourly rates:
Title Rate per Hour
----- -------------
Partner/Director $540
Senior Manager $440
Manager $400
Senior Associate $250
Associate $170
The Debtors will reimburse Deloitte Tax for expenses incurred.
Deloitte Tax will file interim and final fee applications for
allowance of its fees and expenses pursuant to Sections 330 and
331 of the Bankruptcy Code.
As of January 6, 2009, the Debtors owed Deloitte Tax $52,000 for
prepetition services rendered.
Joel Hermes, partner at Deloitte Tax, discloses that upon review,
his firm has connections with parties-in-interest in the Debtors'
Chapter 11 cases, a full-text copy of which is available for free
at: http://bankrupt.com/misc/Lyondell_DeloitteDisclosure.pdf.
Despite those relationships, he maintains that Deloitte Tax does
not hold or represent any interest adverse to the Debtors. He
thus assures the Court that Deloitte Tax is a "disinterested
person" as the term is defined under Section 101(14) of the
Bankruptcy Code.
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. It is the global leader in
polyolefins technology, production and marketing; a pioneer in
propylene oxide and derivatives; and a significant producer of
fuels and refined products, including biofuels. Through research
and development, LyondellBasell develops innovative materials and
technologies that deliver exceptional customer value and products
that improve quality of life for people around the world.
Headquartered in The Netherlands, LyondellBasell --
http://www.lyondellbasell.com/-- is privately owned by Access
Industries.
Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries, the world's third largest
independent chemical company. LyondellBasell became saddled with
debt as part of the US$12.7 billion merger. About a year after
completing the merger, LyondellBasell Industries' U.S. operations
and one of its European holding companies -- Basell Germany
Holdings GmbH -- filed voluntary petitions to reorganize under
Chapter 11 of the U.S. Bankruptcy Code on January 6, 2009, to
facilitate a restructuring of the company's debts. The case is In
re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case
No. 09-10023). Seventy-nine Lyondell entities, including Equistar
Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals
Inc., and Wyatt Industries, Inc., filed for Chapter 11. In May
2009, one of the cases was dismissed -- Case No. 09-10068 --
because it is duplicative of Case No. 09-10040 relating to Debtor
Glidden Latin America Holdings.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities. Lyondell Chemical estimated that consolidated
assets total US$27.12 billion and debts total US$19.34 billion as
of the bankruptcy filing date.
Lyondell has obtained approximately $8 billion in DIP financing to
fund continuing operations. The DIP financing includes two credit
agreements: a $6.5 billion term loan (comprising $3.25 billion in
new loans and a $3.25 billion roll-up of existing loans) and a
$1.57 billion asset-backed lending facility.
Luxembourg-based LyondellBasell Industries AF S.C.A. and another
affiliate were voluntarily added to Lyondell Chemical's
reorganization filing under Chapter 11 on April 24, 2009 in order
to seek protection against claims by certain financial and U.S.
trade creditors. On May 8, 2009, LyondellBasell Industries added
13 non-operating entities to Lyondell Chemical Company's
reorganization filing under Chapter 11 of the U.S. Bankruptcy
Code. All of the entities are U.S. companies and were added to
the original Chapter 11 filing for administrative purposes. The
filings will have no impact on current business or operations as
none of the entities manufactures or sells products.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MCKINNEY AVENUE: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: McKinney Avenue Properties No. 2, LTD
2702 McKinney Avenue, Ste 200
Dallas, TX 75204
Bankruptcy Case No.: 09-33348
Debtor-affiliate filing Chapter 11 petitions on May 27, 2009:
Entity Case No.
------ --------
West End Parking Co. Ltd 09-33219
Chapter 11 Petition Date: May 30, 2009
Court: Northern District of Texas (Dallas)
Judge: Stacey G. Jernigan
Debtor's Counsel: Christopher J. Moser, Esq.
John Paul Stanford, Esq.
Quilling Selander Cummiskey & Lownds
2001 Bryan Street Suite 1800
Dallas, TX 75201-4240
Tel: (214) 871-2100
Fax: (214) 871-2111
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The Debtor did not file a list of 20 largest unsecured creditors.
The petition was signed by Richard Blacha, controller.
MCSTAIN ENTERPRISES: Case Summary & 17 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: McStain Enterprises, Inc.
aka McStain Neighborhoods
367 South McCaslin Boulevard, Suite 200
Louisville, CO 80027
Bankruptcy Case No.: 09-20249
Chapter 11 Petition Date: May 28, 2009
Court: United States Bankruptcy Court
District of Colorado
Debtor's Counsel: Joli A. Lofstedt, Esq.
Connolly, Rosania & Lofstedt, P.C.
950 Spruce St., Ste. 1C
Louisville, CO 80027
Tel: (303) 661-9292
Fax: (303) 661-9555
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
------ --------------- ------------
Scheer's Incorporated Trade debt $10,850,672
Hub International Scheer's
601 Oakmont Ln., Ste. 400
Westmont, IL 60559-5570
Key Bank Bank loan $3,000,000
36 S. State St., Ste. 2506
Salt Lake City, UT 84111
CRE400 Centennial LLC-
Crestone Trade debt $2,000,000
Dept 207
Denver, CO 80291-2007
William And Associates Bank loan $1,541,033
Eric Wittenberg Trade debt $538,737
City & County Of Trade debt $300,000
Denver-Sales Tax
First National Bank Bank loan $199,845
W.L. Contractors, Inc. Trade debt $133,555
GE Capital Trade debt $118,604
Merillat Cabinet Corp. Trade debt $97,404
Kent Hogan Trade debt $97,276
Connie Hogan Trade debt $97,276
Metco Landscape, Inc. Trade debt $53,073
Guy's Floor Service, Inc. Trade debt $48,539
Hillary Reed Interiors, Ltd. Trade debt $35,275
Namaste Solar Electric, Inc. Trade debt $24,246
Kyle Kucharski Engineering Trade debt $20,780
The petition was signed by Tom R. Hoyt, president.
METALDYNE CORPORATION: Chapter 11 Filing Cues Moody's 'D' Rating
----------------------------------------------------------------
Moody's Investors Service lowered Metaldyne Corporation's
Probability of Default, to D from Caa2 and Corporate Family Rating
to Ca from Caa2 following the Chapter 11 filing of Metalydyne and
its U.S. subsidiaries for Chapter 11. In a related action,
Moody's lowered the ratings of Metaldyne's remaining senior
unsecured notes and remaining senior subordinated notes to C from
Ca, lowered Metaldyne Company LLC's senior secured term loan
facility and senior secured synthetic letter of credit facility to
Caa3 from Caa1, and lowered the senior secured revolving credit
facility to Caa2 from Ba3.
The company also announced that it has entered into two nonbinding
Letters of Intent to sell a majority of its assets as going
concerns under a court supervised sale process under the U.S.
Bankruptcy Code. To fund its continuing operations during the
restructuring, Metaldyne has secured an $18.5 million debtor-in-
possession financing facility, subject to court approval.
Consistent with Moody's Withdrawal Policy, Moody's will withdraw
the ratings of Metaldyne.
Ratings lowered:
Metaldyne Corporation:
-- Corporate Family Rating, to Ca from Caa2;
-- Probability of Default Rating, to D from Caa2;
-- Remaining amount of tendered 10% guaranteed senior unsecured
notes due November 2013, to C (LGD6 96%) from Ca (LGD6 96%);
-- Remaining amount of tendered 11% guaranteed senior
subordinated notes due June 2012, to C (LGD6 96%) from Ca
(LGD6, 96%)
Metaldyne Company LLC:
-- guaranteed senior secured asset based revolving credit
facility, to Caa2 (LGD2, 20%) from Ba3 (LGD2, 13%);
-- $408 million remaining amount of guaranteed senior secured
term loan, to Caa3 (LGD3, 34%) from Caa1 (LGD3, 39%);
-- $60 million Synthetic L/C Facility, to Caa3 (LGD3, 34%) from
Caa1 (LGD3, 39%);
The last rating action was on November 26, 2008 when the Corporate
Family Rating was changed to Caa2 with a negative outlook,
subsequent to the completion of the company's distressed bond
tender.
Metaldyne Corporation, headquartered in Plymouth, Michigan, is a
leading global designer and supplier of metal-based components,
assemblies and modules for transportation related powertrain and
chassis applications including engine, transmission/transfer case,
wheel-end and suspension, axle and driveline, and noise and
vibration control products to the motor vehicle industry.
Metaldyne LLC is a wholly-owned operating company. Metaldyne was
purchased by Asahi Tec Corp in January 2007. While Metaldyne is a
restricted subsidiary of Asahi Tec, Metaldyne's Chairman and CEO
also serves as co-CEO of Asahi Tec.
METALDYNE CORP: Want to Obtain $11.7MM DIP Financing from DBNY
-------------------------------------------------------------
Metaldyne Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York for
authority to:
-- obtain credit and incur debt in the form a secured,
superpriority credit facility provided by Deutsche Bank
A.G., New York, up to a maximum principal amount of
$11.7 million on the interim basis;
-- use proceeds of the DIP Facility in accordance with a 13-
week consolidated cash flow forecast they prepared;
-- grant the DIP agent liens securing the prepetition credit
facilities and adequate protection replacement liens;
-- use, on an interim basis, $56 million of the cash collateral
in which the prepetition secured parties have an interest;
and
-- grant adequate protection superpriority claims and adequate
protection replacement liens to the prepetition agents and
prepetition secured parties.
Prepetition Indebtedness
The Debtors previously entered into a prepetition credit agreement
with The Bank of New York Mellon, Citicorp North America, Inc.,
Deutsche Bank Securities Inc. for a term loan of up to
$408 million. An additional $38.6 million in undrawn letters of
credit were issued, which, if drawn, increase the amounts to be
repaid under the prepetition term credit agreement. To secure
their obligations under the Prepetition Term Loan, the Debtors
granted the Prepetition Lenders security interests in
substantially all of their assets and properties. Additionally,
the Prepetition Term Lenders obtained a first priority mortgage on
3 of the Debtors facilities located in New Castle, Indiana;
Greenville, North Colina; and Farmington Hills, Michigan.
The Debtors also entered into an asset-based lending credit
agreement with JPMorgan Chase Bank, N.A., Citicorp North America,
and Wachovia Capital Finance Corporation (Central) for a loan of
up to $35.4 million. To secure their obligations under the ABL
Loan, the Debtors granted the Prepetition ABL Lenders security
interests in the common collateral. In addition, DBNY obtained a
second-priority mortgage on the mortgaged facilities.
Before they filed for bankruptcy, the Debtors also issued certain
notes. The Debtors' 2013 notes are unsecured obligations of which
$1.4 million in principal amount is outstanding as of the Petition
Date. The Debtors' 2012 notes are unsecured obligations of which
$29.3 million in principal amount is outstanding as of the
Petition Date.
The Debtors now seek a postpetition financing arrangement
comprised of:
-- financial accommodations from the Debtors' largest
customers, Ford Motor Company, Chrysler LLC and General
Motors Corporation;
-- use of cash collateral;
-- a debtor-in-possession financing provided by DBNY, as agent
and lender, and funded by the North American original
equipment manufacturers; and
-- the NCM Production agreement.
The Debtors maintain that their proposed financing arrangement is
individually sufficient to address their financing needs.
The salient terms of the Debtors' proposed DIP Facility are:
Total Facilities: The DIP facility is an $18.5 million
facility, subject to upward adjustments,
with $11.7 million being requested for use
in the interim period.
Term: The term of the DIP facility will terminate
on the earliest of: (i) the latest closing
date for the sale of some or all of the
Debtors' assets; (ii) the occurrence of an
event of default under the DIP facility
after any applicable cure period has expired
and any default has not been cured within
the applicable cure period; or (iii) 60 days
after the entry of the interim order,
provided that the Debtors may extend the
term for up to two consecutive 15-day
periods if sale orders have been entered and
if the Debtors would still have funding
availability under the terms of the interim
order or the final order.
Interest rates: The DIP facility will bear interest at a
prime rate of interest established from time
to time by JPMorgan Chase plus 2.0%, which
accrued interest will be added to the DIP
obligations.
Superpriority
Administrative
Claim Status (i) The DIP obligations will at all times
constitute an allowed superpriority
claim of the DIP lender and be payable
from and have recourse to all DIP
collateral and unencumbered foreign
stock. All DIP superpriority claims
will be subject to the carve-out.
(ii) Other than as provided in the interim
order, no cost or expenses of
administration or otherwise that have
been or may be incurred in these cases,
or in successor cases, and no priority
claims, or will be, senior to, prior to
or on a party with the DIP liens and
the DIP superpriority claims or the DIP
obligations, or with any other claims
of the DIP secured parties arising in
the interim order or under or in
connection with the DIP facility.
The DIP Facility also includes customary events of default.
In addition to the material terms of the DIP facility, the North
American OEMs have also agreed to provide other accommodations to
the Debtors in connection with the DIP Facility.
About Metaldyne Corporation
Headquartered in Plymouth, Michigan, Metaldyne Corporation --
http://www.metaldyne.com-- is a wholly owned subsidiary of Asahi
Tec, a Shizuoka, Japanbased chassis and powertrain component
supplier in the passenger car/light truck and medium/heavy truck
segments. Asahi Tec is listed on the Tokyo Stock Exchange.
Metaldyne is a leading global designer and supplier of metal based
components, assemblies and modules for transportation related
powertrain and chassis applications including engine,
transmission/transfer case, wheel end, and suspension, axle and
driveline, and noise and vibration control products to the motor
vehicle industry.
On January 11, 2007, in connection with a plan of merger, Asahi
Tee Corporation in Japan acquired the shares of Metaldyne. On the
same date, Asahi Tee contributed those shares to Metaldyne
Holdings, and Asahi Tee thereby became the indirect parent of
Metaldyne and its other units. RHJ International S.A. of Belgium
now holds approximately 60.1% of the outstanding capital stock of
Asahi Tec.
The Company own 23 different properties, including 14 domestic
manufacturing facilities in six states, and more than 10
manufacturing facilities North America, Europe, South America and
Asia.
For the fiscal year ended March 29, 2009, the company recorded
annual revenues of approximately $1.32 billion. As of March 29,
2009, utilizing book values, the company had assets of
approximately $977 million and liabilities of $927 million.
Metaldyne Corporation aka MascoTech, Inc., aka MascoTech Harbor,
Inc., Riverside Acquisition Corporation and Metaldyne Subsidiary
Inc. and its affiliates filed for Chapter 11 on May 27, 2009
(Bankr. S. D. NY Lead Case No. 09-13412). Richard H. Engman,
Esq., at Jones Day represents the Debtors in their restructuring
efforts. The Debtors propose to hire Judy A. O'Neill, Esq., at
Foley & Lardner LLP as conflicts counsel; Lazard Freres & Co. LLC
and AlixPartners LLP as financial advisors; and BMC Group Inc. as
claims agent. The Debtors have assets and debts both ranging from
$500 million to $100 million.
MICHAEL JOHN: Case Summary & 10 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Michael John Abraham King
4913 Timberhill Drive
Nashville, TN 37211-4374
Bankruptcy Case No.: 09-06028
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
Middle District of Tennessee (Nashville)
Judge: George C. Paine II
Debtor's Counsel: Roy C. Desha, Jr., Esq.
Law Office of Roy C. Desha, Jr.
1106 18th Ave S
Nashville, TN 37212
Tel: (615) 369-9600
Fax: (615) 369-9613
Email: bknotice@deshalaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
A full-text copy of Mr. King's petition, including a list of his
10 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/tnmb09-06028.pdf
The petition was signed by Mr. King.
MILLER PARK: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Miller Park Townhome Condominiums, LLC
c/o Scott Eisenberg, Receiver
255 East Brown Street
Suite 120
Birmingham, MI 48009
Bankruptcy Case No.: 09-57040
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
Eastern District of Michigan (Detroit)
Judge: Walter Shapero
Debtor's Counsel: Kenneth A. Nathan, Esq.
260 Franklin Center
29100 Northwestern Hwy.
Southfield, MI 48034
Tel: (248) 351-0099
Email: knathanecf@nathanneuman.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/mieb09-57040.pdf
The petition was signed by Scott Eisenberg.
MK REAL ESTATE: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: MK Real Estate Solutions LLC
178 Connie Park Drive
McKees Rocks, PA 15136
Bankruptcy Case No.: 09-23964
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
Western District of Pennsylvania (Pittsburgh)
Judge: Thomas P. Agresti
Debtor's Counsel: MK Real Estate Solutions LLC
PRO SE
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Elaine Kascak.
MPI EAGLES: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: MPI Eagles, LLC
3280 Peachtree Road, NW, Suite 600
Atlanta, GA 30305
Bankruptcy Case No.: 09-73804
Debtor-affiliates filing subject to Chapter 11 petitions:
Entity Case No.
------ --------
MPI Eagles, LLC 09-73804
MPI Ashley, LLC 09-73808
MPI Hunters, LLC 09-73811
MPI Reserve, LLC 09-73813
Chapter 11 Petition Date: May 30, 2009
Court: United States Bankruptcy Court
Northern District of Georgia (Atlanta)
Debtor's Counsel: Jimmy C. Luke, Esq.
jluke@foltzmartin.com
Foltz Martin, LLC
5 Piedmont Center, Suite 750
Atlanta, GA 30305
Tel: (404) 231-9397
Fax: (404) 237-1659
Estimated Assets: $10 million to $50 million
Estimated Debts: $50 million to $100 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
DPDH dba Advance Construction trade debt $175,247
1625 Bailey Creek Road
Conyers, GA 30094
Gwinett County Tas property tax $69,577
Commissioner
PO Box 372
Lawrenceville, GA 30046
Georgia Paving Inc. trade debt $5,800
3000 Northwoods Pkwy.
Suite 170
Nocross, GA 30071
Competitive Services LLC trade debt $4,135
Home Depot Supply fka trade debt $3,145
The Painting Co. trade debt $2,265
Landscape Management Services trade debt $2,265
Crowe Roofing Systems Inc. trade debt $1,450
CSS Servcies Inc. trade debt $1,161
Atlanta Apartment Guide trade debt $855
Drainmaters Plumbing Co. trade debt $475
Mojica, Marco tenant refund $348
Surface Care trade debt $270
Felton's Glass trade debt $250
Competitive Services LLC trade debt $145
Creative Companies trade debt $125
Office Depot trade debt $113
Aka Bile, Partrice tenant refund $73
Kerr, Jandy tenant refund $25
Harris, Sheena tenant refund $25
The petition was signed by Daniel J. Miles, manager.
NELSTAD MATERIAL: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Nelstad Material Corp.
40 Huntington Place
New Rochelle, NY 10801
Bankruptcy Case No.: 09-22918
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
Southern District of New York (White Plains)
Judge: Robert D. Drain
Debtor's Counsel: Scott S. Markowitz, Esq.
Tarter Krinsky & Drogin LLP
1350 Broadway, 11th Floor
New York, NY 10018
Tel: (212) 216-8000
Fax: (212) 216-8001
Email: smarkowitz@tarterkrinsky.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 John Capossela, vice-president of the
Company.
NEWFIELD EXPLORATION: Fitch Affirms Issuer Default Rating at 'BB+'
------------------------------------------------------------------
Fitch Ratings has affirmed Newfield Exploration Company's Issuer
Default Rating and debt ratings:
-- Issuer Default Rating 'BB+';
-- Senior unsecured 'BB+';
-- Senior unsecured bank facility 'BB+';
-- Senior subordinated notes 'BB-'.
The Rating Outlook is Stable.
The affirmation reflects Newfield's plans to live within
internally generated cash flows in 2009, as well as the company's
conservative management team, reasonable debt levels relative to
its peers (as measured on a debt/barrel of oil equivalent [boe]
basis), and the company's improved asset profile following the
2007 diversification away from the Gulf of Mexico. Newfield
continues to benefit in the current commodity price environment
from its significant commodity (extending through 2010) and basis
hedges (extending out to 2012). Offsetting factors include the
potential for additional debt to finance growth opportunities
(primarily M&A) and the weak fundamentals associated with the
natural gas market.
Credit metrics were strong as of March 31, 2009, as Newfield
generated latest 12 months EBITDAX of $1.433 billion which
resulted in interest coverage of 11.5 times (x) and leverage, as
measured by debt-to-EBITDAX of 1.6x. At year-end 2008, debt/boe
of proven reserves was $4.50/boe ($.75/mcfe) and debt/boe of
proven developed reserves was $7.27/boe ($1.21/mcfe).
Free cash flow (cash flow from operations less capital
expenditures) was negative $1,058 million during the LTM period
primarily related to the $750 million of cash payments associated
with the resetting of commodity hedges that Newfield did in 2008.
This was a key driver in the company's debt balances rising during
the year and is expected to be offset by the significantly higher
realizations on the new commodity hedges currently in place.
During the first quarter of 2009, Newfield only outspent cash
flows by approximately $56 million. Fitch expects Newfield to be
free cash flow neutral in 2009 as the company has significantly
curtailed capital expenditures during the year and as the company
continues to benefit from lower drilling and service costs.
Liquidity remains strong and is expected to improve throughout
2009 as costs continue to fall and the company's capital
expenditure program slows moderately from first quarter levels.
Newfield's liquidity stems from cash balances ($38 million on
March 31, 2009), remaining availability of $616 million on its
$1.25 billion senior unsecured credit facility (maturing in June
2012) and from operating cash flows ($931 million for the LTM
period ending March 31, 2009). The company's next debt maturity
is not until 2011 when the $175 million 7.625% senior notes
mature.
Key covenants are primarily associated with the senior unsecured
credit facility and include maximum debt to book capitalization
(60% covenant threshold), maximum total debt to EBITDA (3.5x
covenant level) and minimum net present value of oil and gas
properties to total debt (1.75x covenant level). It is important
to note that the debt to EBITDA covenant provides for adjustments
to back out the impacts of unrealized gains/losses on commodity
hedges, ceiling test writedowns and goodwill impairments. In
addition, the company's NPV covenant makes adjustments to debt
balances by only including 50% of the principal amount of the
senior subordinated notes. Tests for the NPV covenant are
performed annually in May and Newfield saw no reductions in
borrowing capacity as a result of this covenant in 2009.
Remaining covenants associated with the company's outstanding
senior unsecured and senior subordinated debt include limits on
incurring debt secured by liens, sale/leaseback transactions,
limits on the ability to engage in merger transactions, limits on
the ability to incur additional debt, limits on making restricted
payments, paying dividends or redeeming capital stock as well as
other restrictions.
Newfield is a mid-sized oil and gas exploration and production
company headquartered in Houston, Texas. Newfield has operations
in several major regions of the United States (Mid-Continent,
Rocky Mountains, South Texas, and deep water Gulf of Mexico), as
well as international offshore operations in Malaysia and China.
At year-end 2008, Newfield's reserves had grown to 492 mmboe (2.95
Tcfe), of which 62% was proven developed and approximately 72%
natural gas.
NEWFOUNDLAND GOLDBAR: Securities Gets Suspended from Trading
------------------------------------------------------------
Newfoundland Goldbar Resources Inc. has been advised by the TSX
Venture Exchange that the securities of the Company have been
suspended from trading effective March 18, 2009, due to non-
payment of NEX Listing Maintenance Fee.
The Company is also in default of Securities Regulations due to
its failure to file annual financial statements for the year ended
December 31, 2008, and has been added to the defaulting issuers'
list.
The Company has also been advised by their Transfer Agent,
Computershare, that all Stock Transfer services have been
suspended effective April 1, 2009, due to non-payment of fees.
Should the Company be unable to rectify these deficiencies, it
runs the risk of being delisted.
Newfoundland Goldbar Resources, Inc. engages in the mineral
exploration and related activities primarily in the provinces of
Nova Scotia and Newfoundland of Canada. It involves in the
acquisition, exploration, and development of resource properties.
The company owns a 2% net smelter royalty interest on gold
produced from the Dufferin gold property near Port Dufferin in
Nova Scotia; and a 100% interest in a claim block located
approximately 1.5 kilometers northeast of the Dufferin property.
The company also owns a 9.96% shareholder interest in a
corporation that owns a 70% interest in the Pine Cove gold
property near Baie Verte; an option to acquire Nugget Pond
Property near Baie Verte; a 100% interest in the prospective
Glover Island PGE and base metal property in western Newfoundland;
and a 100% interest in the Deer Lake marble property. Newfoundland
Goldbar Resources is based in St. John's, Canada.
NOBLE INTERNATIONAL: Board Appoints Craig Parsons as President
--------------------------------------------------------------
On May 26, 2009, David Fallon informed Noble International, Ltd.
that, effective June 2, 2009, he is resigning as Chief Financial
Officer of the Company to take another position of employment.
On May 27, 2009, the Board of Directors of the Company appointed
Craig Parsons, 38, to serve as President of the Company, effective
immediately. Mr. Parsons will receive an annual salary of
$325,000. Since 2007, Mr. Parsons? responsibilities have included
coordinating Noble?s Global Sales activities between the European
and North American operating divisions as well as all Business
Development initiatives in Asia. From 2004 to 2007, Mr. Parsons
served as Noble?s Vice President of Sales and Product Management.
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 International 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 three 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.
NORVERGENCE INC: Chapter 7 Trustee Can Pursue Fraud Claims
----------------------------------------------------------
WestLaw reports that a Chapter 7 trustee alleged the circumstances
of fraud with sufficient particularity under the relaxed standard
for the fraud pleading rule applied to bankruptcy trustees
pleading fraudulent transfer claims. In asserting these claims
against the leasing companies that bought the debtor's customer
contracts for telecommunications services and equipment, the
trustee identified the parties, provided a detailed account of the
debtor's business operations and the role played by the leasing
companies, and provided aggregated amounts of payments received,
though no specific dates for the challenged transfers were given.
The trustee was required, however, to amend the complaint to bring
it into greater compliance with the fraud pleading rule to the
extent that additional documents and information had become
available since the filing of the complaint and enabled the
trustee to plead the claims with greater specificity. In re
Norvergence, Inc., --- B.R. ----, 2009 WL 1346049 (Bankr. D.
N.J.).
Headquartered in Newark, New Jersey, NorVergence, Inc., is a
reseller of wireless telecommunications services. The Company
filed a Chapter 11 petition on June 30, 2004 (Bankr. D. N.J.
04-32079). The Court converted the Debtor's chapter 11 case to a
chapter 7 proceeding at the behest of the Company's creditors.
Popular Leasing USA, Inc., OFC Capital, a division of ALFA
Financial Corp., and Partners Equity Capital Company, LLC,
asserting claims totalling $1.3 million. Inez M. Markovich, Esq.,
and Peter J. Deeb, Esq., at Frey, Petrakis, Deeb, Blum, Briggs et
al., represents the Petitioners in their restructuring efforts.
NorVergence closed its stores located at 550 and 570 Broad St. and
laid off all of its employees. This followed 1,300 firings
earlier in July 2004.
NOVA CHEMICALS: S&P Keeps 'CCC+' Long-Term Corporate Credit Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services said it kept the ratings,
including the 'CCC+' long-term corporate credit rating, on
commodity chemicals and plastics producer NOVA Chemicals Corp. on
CreditWatch with positive implications, where they were placed
Feb. 24, 2009. S&P expects International Petroleum Investment Co.
(IPIC; AA/Stable/A-1+), which is wholly owned by the government of
the Emirate of Abu Dhabi (AA/Stable/A-1+), to complete the
acquisition of NOVA in the coming months.
"Standard & Poor's will likely resolve the CreditWatch on NOVA
once the IPIC transaction is complete and S&P has a better
understanding of the new capital structure and what type of
financial support the parent company will provide," said Standard
& Poor's credit analyst Jatinder Mall.
NOVA HOLDING: Veolia ES Resigns From Creditors Committee
--------------------------------------------------------
Roberta A. DeAngelis, the U.S. Trustee for Region 3, entered an
amended notice of appointment of the committee of unsecured
creditors in the Chapter 11 cases of Nova Holding Clinton County,
LLC, and its debtor-affiliates.
The Committee originally had five members. Veolia ES Industrial
Services, Inc., resigned from the Committee effective May 5, 2009.
The present members of the Committee are:
a) Highbridge International LLC
Attn: Eric Colandrea
c/o Highbridge Capital Management, LLC
9 West 57th St., 27th Floor
New York, NY 10019
Tel: (212) 287-4735
Fax: (212) 757-0755
b) DePue Mechanical, Inc.
Attn: James C.M. Jacobsen, Jr.
113 S. Ridge Rd., PO Box 857
Minooka, IL 60447
Tel: (815) 642-3436
Fax: (815) 521-8471
c) The Bank of New York Mellon Trust Company, N.A.
Attn: J. Chris Matthews
601 Travis, 16th Floor
Houston, TX 77002
Tel: (713) 483-6267
Fax: (713) 483-6979
d) Lipid Logistics, LLC
Attn: William A. Kaluzny
151 Springfield Ave., Suite 2B
Joliet, IL 60435
Tel: (815) 741-9300
Fax: (815) 741-9344
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.
Based in Seneca, Illinois, Nova Holding Clinton County, LLC, makes
industrial organic chemicals and biological products. Nova
Holding and certain affiliates filed for Chapter 11 protection on
March 30, 2009 (Bankr. D. Del. Lead Case No. 09-11081). Michael
B. Schaedle, Esq., Melissa S. Vongtama, Esq., and Josef W. Mintz,
Esq., at Blank rome LLP, in Philadelphia, represent the Debtors as
counsel. David W. Carickhoff, Esq., at Blank Rome LLP, in
Wilmington, represents the Debtors as Delaware counsel. The
Debtors listed assets and debts of $10 million to $50 million.
NOVA HOLDING: Can Use WestLB Cash Collateral Until June 19
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
extended until June 19, 2009, Nova Biofuels Seneca, LLC, Nova
Biosource Fuels, Inc., Biosource America, Inc., Nova Biosource
Technologies, LLC, and Nova Biofuels Trade Group, LLC's interim
authority to use cash collateral securing their obligations to
WestLB, AG (New York Branch).
Each of the Debtors may use cash collateral to fund its general
corporate and working capital requirements and capital
expenditures, solely in accordance with the revised Seneca Budget
and the revised Non-Seneca Budget.
The Debtors' authorization to use cash collateral will terminate
on the earliest to occur of:
i) June 19, 2009;
ii) the dismissal of the Debtors' Chapter 11 cases or the
conversion of any of their Chapter 11 cases to a case under
Chapter 7 of the Bankruptcy Code;
iii) the appointment of a trustee or examiner with expanded
powers in the Debtors' Chapter 11 cases;
iv) the entry of an order reversing, staying, vacating or
otherwise modifying in any material respect the first
interim cash collateral order or this second interim cash
collateral order;
v) failure by the Debtors to comply with an material provision
of the first interim cash collateral order, the second
cash collateral order and this third interim order;
vi) the sale after the petition date of any material portion of
the Debtors' assets outside the ordinary course of
business; without the prior written consent of WestLB; and
vii) the failure of any of the Debtors to comply with sections
of the Credit Agreement specified in Paragraph 12 of the
first interim cash collateral order.
The final hearing on the motion is continued to June 18, 2009, at
2:00 p.m. (prevailing Eastern Time).
A full-text copy of the Second revised Seneca Budget is available
for free at:
http://bankrupt.com/misc/Nova2ndRevisedSenecaBudget.pdf
A full-text copy of the Second revised Non-Seneca Budget is
available for free at:
http://bankrupt.com/misc/Nova2ndRevisedNon-SenecaBudget.pdf
A full-text copy of the first interim cash collateral order is
available for free at:
http://bankrupt.com/misc/Nova.1stInterimCCOrder.pdf
Based in Seneca, Illinois, Nova Holding Clinton County, LLC, makes
industrial organic chemicals and biological products. Nova
Holding and certain affiliates filed for Chapter 11 protection on
March 30, 2009 (Bankr. D. Del. Lead Case No. 09-11081). Michael
B. Schaedle, Esq., Melissa S. Vongtama, Esq., and Josef W. Mintz,
Esq., at Blank rome LLP, in Philadelphia, represent the Debtors as
counsel. David W. Carickhoff, Esq., at Blank Rome LLP, in
Wilmington, represents the Debtors as Delaware counsel. The
Debtors listed assets and debts of $10 million to $50 million.
ODYSSEY PETROLEUM: 2008 Financial Statements Nears Completion
-------------------------------------------------------------
Odyssey Petroleum Corp. related that it is nearing completion of
its annual audited financial statements for the year ended
December 31, 2008, which should have been filed by April 30, 2009,
as required by National Instrument 51-102 Continuous Disclosure
Obligations. The Company anticipated filing the Annual Financial
Statements last May 22, 2009. The Notice of Default as set out in
the May 4, 2009 News Release currently remains unchanged.
The Company intends to satisfy the provisions of 12-203 by filing
a bi-weekly Default Status Report containing the information
prescribed by 12-203, as long as the Company remains in default of
the financial statement filing requirement.
The Company is not currently subject to any insolvency
proceedings. If the Company provides any information to any of
its creditors during the period in which it is in default of
filing the Annual Financial Statements, the Company confirms that
it will also file material change reports on SEDAR containing such
information.
Headquartered in Vancouver, Canada, Odyssey Petroleum Corp. --
http://www.odysseypetroleum.com/-- engages in the acquisition,
exploration, development, and production of oil and gas properties
in Texas, Mississippi, and Louisiana. The Company owns interests
in Iowa Field in Jefferson County, Louisiana; Puckett Fields in
Rankin and Smith Counties, Mississippi; Pelahatchie Field in
Rankin County, Mississippi; the Verba Field in Jasper County,
Mississippi; and Barber Creek Field in Scott County, Mississippi.
It also holds interests in unproven properties in PaloPinto and
Jack Counties, Texas. Odyssey Petroleum, formerly Consolidated
Odyssey Exploration, Inc.
ORE PHARMA: Gets NASDAQ Delisting Notice
----------------------------------------
Ore Pharmaceuticals Inc. received a notification letter from the
NASDAQ Stock Market on May 21, 2009, indicating that the Company's
stockholders' equity as reported on the Ore Pharmaceuticals Inc.
Quarterly Report on Form 10-Q for the period ending March 31,
2009, no longer meets the minimum amount of $10,000,000 required
for continued inclusion on The NASDAQ Global Market pursuant to
NASDAQ Listing Rule 5450(b)(1)(A).
In accordance with this NASDAQ rule, the Company is provided with
fifteen (15) calendar days, or until June 5, 2009, to submit a
specific plan and timeline to NASDAQ to attempt to achieve and
regain compliance with the minimum stockholders' equity
requirement. The Company plans to submit such a plan to NASDAQ.
There is no assurance that NASDAQ will accept the Company's plan
to satisfy the stockholders' equity requirement. If the plan is
accepted, NASDAQ can grant an exception of up to one-hundred and
five (105) calendar days from the date of notification for the
Company to show compliance.
If, after the completion of its review, NASDAQ determines that the
Company has not presented a plan that adequately addresses the
stockholders' equity issue, NASDAQ will provide written notice
that the Company's securities will be subject to delisting from
The NASDAQ Global Market. In that event, the Company may either
apply for listing on The NASDAQ Capital Market, provided it meets
the listing requirements for that market, or appeal the decision
to a NASDAQ Listing Qualifications Panel. In the event of an
appeal, the Company's securities would remain listed on The NASDAQ
Global Market pending a decision by the Panel following the
hearing.
Although the Company plans to submit a compliance plan with NASDAQ
and, if accepted, will seek to demonstrate compliance within the
required time period, there is no assurance that NASDAQ will
accept the Company's compliance plan, nor that the Company could
achieve compliance with its proposed plan in the required time.
Ore Pharmaceuticals Inc.
Ore Pharmaceuticals Inc. is a drug asset development company with
a focus on acquiring and developing clinical-stage drug candidates
that have already undergone substantial safety testing in humans.
The Company currently has three compounds in its development
pipeline: ORE1001, the lead compound, ORE5002 (tiapamil) and
ORE5007 (romazarit). New therapeutic uses for each of these
compounds were identified through the Company's now discontinued
drug repositioning program. In the fourth quarter of 2008, the
Company completed a multiple ascending dose human tolerability
Phase I clinical trial of ORE1001 under an Investigative New Drug
Application filed with the FDA and expects to advance the compound
into additional clinical trials as a potential treatment for
inflammatory bowel disease.
PACIFICNET INC: Changes Management, Appoints William Chan as CEO
----------------------------------------------------------------
Pacificnet Inc. disclosed in a filing with the Securities and
Exchange Commission certain changes to the composition of its
management on May 26, 2009. The Company approved the appointment
of:
-- Chan Chi Hung or William Chan as new chief executive
officer;
-- Zhan Jin Hong as new chief financial officer;
-- Chen Ling Yun as new company secretary; and
-- David Wong as a new independent director on the board of
directors of the Company.
Pacificnet also related that on April 27, 2009:
-- Victor Tong resigned as the chief executive officer and
president of the Company;
-- Mr. Tong, Sean Wang, Jin Tao and Geremy Goodwin resigned as
the directors of board of PacificNet Inc.;
-- Mike Fei resigned as the secretary of the board of directors
and China legal counsel of PacificNet Inc.; and
-- Wong Tze-To or Phillip Wong resigned as the chief financial
officer of PacificNet Inc.
The Company added that there is no disagreement between these
persons, the directors, the board and the management.
About PacificNet
Headquartered in Beijing, China, PacificNet Inc., (NasdaqGM:
PACT) -- http://www.pacificnet.com-- provides gaming and mobile
game technology worldwide. The company, through its
subsidiaries, offers solutions in casino equipment supply; and
the development, installation, and support of systems and game
content for the casino, lottery, and amusement with prizes (AWP)
markets. The company was founded in 1987 and has additional
offices in Hong Kong, Shanghai, Shenzhen, Guangzhou, Macau, and
Zhuhai, China; the United States; and the Philippines.
Iroquois Master Fund Ltd., Whalehaven Capital Fund Ltd., and Alpha
Capital AG filed for involuntary Chapter 11 petition against the
Debtor on March 22, 2008 (Bank. D. Del. Case No. 08-10528). Adam
Friedman, Esq., at Olshan Grundman, et al. and Robert S. Brady,
Esq., and Ian S. Fredericks, Esq., at Young Conaway, et al.
represent the petitioners in this case.
As reported in the Troubled Company Reporter on October 3, 2008,
the U.S. Bankruptcy Court for the District of Delaware granted the
request of PacificNet, Inc., and bondholders that filed an
involuntary Chapter 11 bankruptcy case against the Debtor, to
dismiss the case after the parties reached a settlement.
Going Concern
The Company incurred accumulated losses of $69 million in
September 30, 2008, and $65 million in December 31, 2007.
Negative cash flows used in the operations were $2.72 million for
the nine months ended September 30, 2008. These matters raise
substantial doubt about the Company's ability to continue as a
going concern.
The company's consolidated balance sheets' posted total assets of
$19,583,000 and total liabilities of $16,661,000 and stockholders'
equity of $1,999,000, for the quarterly period ended September 30,
2008.
PARTICLE DRILLING: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Particle Drilling Technologies, Inc.
fdba MEDXLINK Corporation
fdba PDT Holdings, Inc.
fdba Particle Drilling, Inc.
fdba ProDril Acquisition Corp.
5611 Baird Court
Houston, TX 77041
Bankruptcy Case No.: 09-33744
Chapter 11 Petition Date: May 30, 2009
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Marvin Isgur
Debtor's Counsel: Edward L. Rothberg, Esq.
Weycer Kaplan Pulaski & Zuber
11 Greenway Plz
Ste 1400
Houston, TX 77046
Tel: (713) 961-9045
Fax: (713) 961-5341
Email: erothberg@wkpz.com
Total Assets: $2,884,606
Total Debts: $1,418,514
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/txsb09-33744.pdf
The petition was signed by James B. Terry, president and chief
executive officer of the Company.
PHYSICIANS CHOICE: Case Summary & 9 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Physicians Choice, LLC
4003 Outlook Drive
Hurricane, WV 25526
Bankruptcy Case No.: 09-30414
Chapter 11 Petition Date: May 21, 2009
Court: United States Bankruptcy Court
Southern District of West Virginia (Huntington)
Judge: Ronald G. Pearson
Debtor's Counsel: Joseph W. Caldwell, Esq.
Caldwell & Riffee
P. O. Box 4427
Charleston, WV 25364-4427
Tel: (304) 925-2100
Fax: (304) 925-2193
Email: joecaldwell@verizon.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
9 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/wvsb09-30414.pdf
The petition was signed by Travis Hough, member of the Company.
PPLACE ONE: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: PPlace One, LLC
2470 El Camino Real #210
Palo Alto, CA 94306
Bankruptcy Case No.: 09-54185
Debtor-affiliates filing separate Chapter 11 petition:
Entity Case No.
------ --------
PPlace Two, LLC 09-54188
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
Northern District of California (San Jose)
Judge: Roger L. Efremsky
Debtor's Counsel: Riordan J. Zavala, Esq.
Law Offices of Riordan J. Zavala
700 Moonbeam St.
Placentia, CA 92670
Tel: (714) 996-5168
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/canb09-54185.pdf
The petition was signed by Jitender Makkar, manager of the
Company.
PRIMUS TELECOM: Files Exhibits Related to Plan Solicitation
-----------------------------------------------------------
Primus Telecommunications Group, Inc., disclosed in a regulatory
filing with the Securities and Exchange Commission that on May 25,
2009, the company and its debtor-affiliates filed exhibits and
schedules in accordance with the Solicitation Order entered by the
United States Bankruptcy Court for the District of Delaware.
On April 27, 2009, the Bankruptcy Court entered an order that
approved the Disclosure Statement explaining the Debtors' Joint
Plan of Reorganization; set a record of April 27, 2009, for
determining claims and interests entitled to vote on the Plan; set
June 5, 2009, as the voting deadline for the Plan; and scheduled a
hearing to consider confirmation of the Plan for June 12, 2009.
Among the exhibits and schedules the Debtors filed were:
* Form of Primus Telecommunications IHC, Inc. Second Lien
Supplemental Indenture
* Form of Primus Telecommunications Holding, Inc. First Lien
Secured Term Loan Amendment
* Form of Primus Telecommunications Group, Incorporated
Contingent Value Rights Distribution Agreement
* Form of Second Amended and Restated Certificate of
Incorporation of Primus Telecommunications Group,
Incorporated
* Form of Amended and Restated By-laws of Primus
Telecommunications Group, Incorporated
* Form of Class A Warrant Agreement by and between Primus
Telecommunications Group, Incorporated and StockTrans, Inc.
* Form of Class B Warrant Agreement by and between Primus
Telecommunications Group, Incorporated and StockTrans, Inc.
* Form of Primus Telecommunications Group, Incorporated 2009
Management Compensation Plan
About Primus Telecom
PRIMUS Telecommunications Group, Incorporated (OTCBB: PRTL) --
http://www.primustel.com-- is an integrated communications
services provider offering international and domestic voice,
voice-over-Internet protocol (VOIP), Internet, wireless, data and
hosting services to business and residential retail customers and
other carriers located primarily in the United States, Canada,
Australia, the United Kingdom and Western Europe. PRIMUS provides
services over its global network of owned and leased transmission
facilities, including approximately 500 points-of-presence (POPs)
throughout the world, ownership interests in undersea fiber optic
cable systems, 18 carrier-grade international gateway and domestic
switches, and a variety of operating relationships that allow it
to deliver traffic worldwide. Founded in 1994, PRIMUS is based in
McLean, Virginia.
The Company and four its affiliates filed for Chapter 11
protection on March 16, 2009 (Bankr. D. Del. Lead Case No. 09-
10867). George N. Panagakis, Esq., and T Kellan Grant, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, are the
Debtors' proposed counsel. Davis L. Wright, Esq., Eric M. Davis,
Esq., and Anthony Clark, Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in Wilmington, Delaware, are the Debtors' proposed local
counsel. The Debtor proposed CRT Investment Banking LLC as
financial adviser and investment banker. When the Debtors filed
for protection from their creditors, they listed assets between
$100 million and $500 million, and debts between $500 million and
$1 billion.
QUEBECOR WORLD: Moody's Assigns 'B1' Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service assigned a B1 corporate family rating
and probability of default rating to Quebecor World Inc. and Ba3
ratings to the company's new senior secured credit facilities.
The new credit facilities are comprised of a $350 million 3-year
ABL revolving credit facility (that will be partially drawn at
closing) and a $325 million 3-year term loan. QWI's ratings
account for the company's participation in the very difficult
commercial printing sector and the sector's correlation with
general economic conditions, which are quite weak at this
juncture. This results in generally weak margins and extremely
poor earnings visibility. Even though QWI remains one of North
America's largest commercial printing companies, given poor
general economic conditions, market fragmentation and generally
poor industry fundamentals, and a business platform that continues
to evolve even as the company emerges from creditor protection,
there is considerable uncertainty related to the sustainability of
the company's revenue and cash flow. However, QWI appears to have
adequate liquidity, and with what appears to be a modest debt load
in comparison to potential cash flow, leverage is not excessive.
Moody's ratings assessment is based on an expected capital
structure and preliminary documentation. Should the final
structure and related terms and conditions differ from current
expectations, the ratings may be subject to revision. The rating
assessment also assumes that financial covenants are set at levels
that do not restrict QWI's access to the $350 million 3-year ABL
revolving credit facility over the near-to-mid term. With the
credit facility having been structured to allow QWI to emerge from
creditor protection, it is anticipated that the parties will
ensure this is the case. Accordingly, QWI's liquidity is
anticipated to be adequate and supportive of the B1 CFR.
Confirmation that financial covenants provide the requisite
flexibility will be a key component of Moody's confirmatory review
of the transaction structure and related terms.
Rating and Outlook Actions:
Issuer: Quebecor World, Inc.
-- Probability of Default Rating, Assigned B1
-- Corporate Family Rating, Assigned B1
-- Senior Secured Bank Credit Facility, Assigned Ba3 (LGD3, 31%)
-- Senior Secured Bank Credit Facility, Assigned Ba3 (LGD3, 31%)
-- Outlook, Assigned Stable
QWI'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 QWI's core industry and QWI's ratings are believed to
be comparable to those of other issuers of similar credit risk.
Headquartered in Montreal, Quebec, Canada, Quebecor World Inc. is
one of the world's largest commercial printers.
QIMONDA NA: Seeks Approval of Incentive Plan for Key Employees
--------------------------------------------------------------
Qimonda Richmond, LLC, and its affiliates ask the U.S. Bankruptcy
Court for the District of Delaware for approval of a performance-
based Incentive Plan for 46 of its remaining employees. The
remaining employees can be divided into two categories, 35
tehnical/engineering employees and 11 reporting/support employees.
The Debtors want to implement the Incentive Plan primarily to
motivate the participants to remain with the Debtors.
The Debtors anticipate that the total cost of the Incentive Plan
will total approximately $1.24 million. Incentive rates will vary
depending on the relative importance of each participant's job
function. Incentive rates range from 15% to 60%.
All participants will be graded based on performance metrics
designed for each participant's job function.
About Qimonda NA
Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- is a leading
global memory supplier with a diversified DRAM product portfolio.
The company generated net sales of EUR1.79 billion in financial
year 2008 and had -- prior to its announcement of a repositioning
of its business -- approximately 12,200 employees worldwide, of
which 1,400 were in Munich, 3,200 in Dresden and 2,800 in Richmond
(Virginia, USA). The company provides DRAM products with a focus
on infrastructure and graphics applications, using its power
saving technologies and designs. Qimonda is an active innovator
and brings high performance, low power consumption and small chip
sizes to the market based on its breakthrough Buried Wordline
technology.
Qimonda AG filed an application with the local court in Munich,
Germany, on January 23, 2009, to open insolvency proceedings.
QAG's U.S. units, Qimonda North America Corp. and Qimonda Richmond
LLC, filed for Chapter 11 before the Delaware bankruptcy court on
February 20 (Bankr. D. Del., Lead Case No. 09-10589). Mark D.
Collins, Esq., at Richards Layton & Finger PA, has been tapped as
counsel. Roberta A. DeAngelis, the United States Trustee for
Region 3, appointed seven creditors to serve on an official
committee of unsecured creditors. Jones Day and Ashby & Geddes
represent the Committee. In its bankruptcy petition, Qimonda
estimated assets and debts of more than $1 billion.
RAILPOWER TECHNOLOGIES: Gets Additional Extension of Stay Period
----------------------------------------------------------------
The Quebec Superior Court issued an order providing Railpower
Technologies Corp. with an additional period of protection under
the Companies' Creditors Arrangement Act (Canada). The initial
order, which was first granted under the CCAA in favor of
Railpower on February 4, 2009, and subsequently extended on
March 4, 2009, April 7, 2009 and April 20, 2009, has now been
further extended through May 26, 2009, during which time creditors
and other third parties will continue to be stayed from taking
steps against Railpower. The purpose of the stay of the
proceedings is to provide Railpower with an opportunity to develop
a comprehensive plan of arrangement for consideration by its
creditors and the courts.
As previously stated, Railpower and R.J. Corman Railroad Group,
LLC, entered into a binding agreement for the sale of all of the
assets of Railpower and its U.S. subsidiary, except cash on hand
and on deposit in financial institutions, the land and property
located in St-Jean-sur-Richelieu (Quebec), and two road switching
locomotives, to R.J. Corman. Closing of the transaction, which is
conditional on obtaining Court approval in both Canada and the
United States, is expected to occur no later than May 29, 2009.
Railpower has been advised that the Memorandum of Understanding
dated April 24, 2009, entered into between R.J. Corman and certain
current members of management of Railpower has been terminated by
mutual agreement of the parties. R.J. Corman has advised
Railpower that it is its intention to fulfill all obligations of
management under that Agreement, including making employment
offers to certain Canadian employees.
While under CCAA protection, Railpower's board of directors
maintains its usual role and its management remains responsible
for the day-to-day operations of Railpower, under the supervision
of the Court-appointed monitor, Ernst & Young Inc.
Railpower Technologies Corp. (TSX: P) -- http://www.railpower.com/
-- is engaged in the development, construction, marketing and
sales of high performance, clean locomotives and power plants for
the transportation and related industries. Railpower has designed
and is marketing a range of locomotives for the North American low
and medium horsepower locomotive market. It has also designed and
is marketing hybrid power plants for rubber tyred gantry cranes
(Eco-Cranes(R)). Its technologies have broader potential and
applications in other markets and industries.
Railpower Technologies Corp. and its U.S. subsidiary, Railpower
Hybrid Technologies Corp., have obtained court protection under
the Companies' Creditors Arrangement Act in Canada pursuant to the
initial order granted by the Quebec Superior Court (No. 500-11-
035434-097). Lawyers at McCarthy Tetrault LLP represent Railpower
in the CCAA proceedings, and Martin P. Rosenthal at Ernst & Young,
Inc., serves as the Canadian Monitor. Mr. Rosenthal filed a
Chapter 15 petition (Bankr. W.D. Pa. Case No. 09-10198) to protect
Railpower Hybrid Technologies Corp.'s assets from U.S. creditors
on February 5, 2009, and ask the U.S. Court to recognize the CCAA
proceeding as the foreign main proceeding.
REVLON INC: Implements Worldwide Organizational Restructuring
--------------------------------------------------------------
Revlon Inc. disclosed a worldwide organizational restructuring,
rightsizing the organization to reflect the more efficient
workflows and processes that the Company has implemented over the
last two years. In addition, given the ongoing uncertain economic
environment and the potential effect that it could have on net
sales, this action will provide the Company with additional
flexibility.
Revlon president and chief executive officer, Alan T. Ennis,
stated, "This announcement represents an important, necessary, and
logical next step forward for Revlon. Over the past two years, we
have built improved and more efficient processes and workflows,
which now allow us to take this step to reduce annualized costs by
approximately $30 million. This action, which we are implementing
immediately, will enable us to become a stronger, more financially
sound organization while staying true to our vision of providing
glamour, excitement and innovation to consumers through high-
quality products at affordable prices. Revlon has incredible
talent and capabilities, broad geographic reach, and strong global
brands. We will continue the execution of our successful business
strategy, namely:
(i) building and leveraging our strong brands;
(ii) improving the execution of our strategies and plans, and
providing for continued improvement in our organizational
capability through enabling and developing its employees;
(iii) continuing to strengthen our international business;
(iv) improving its operating profit margins and cash flow; and
(v) improving its capital structure."
Organizational Restructuring
The primary components of the organizational restructuring involve
consolidating certain functions; reducing layers of management,
where appropriate, to increase accountability and effectiveness;
streamlining support functions to reflect the new organizational
structure; and further consolidating the Company's office
facilities in New Jersey. The organizational restructuring will
result in the elimination of approximately 400 positions
worldwide, including approximately 325 current employees and
approximately 75 open positions.
Annualized cost reductions from this organizational restructuring
are expected to be approximately $30 million, of which
approximately $15 million will benefit 2009 results.
Restructuring and related charges are expected to be $20 million
comprised of $17 million of employee-related costs, including
severance and other termination benefits, and $3 million related
to the consolidation of the Company's office facilities in New
Jersey. Approximately $17 million of the charges are expected to
be recognized in the second quarter of 2009 with the remaining
$3 million expected to be recognized in the second half of 2009.
All of the charges are expected to be paid out over the 2009 to
2012 period, including $11 million in 2009, $6 million in 2010,
and the balance of $3 million to be paid thereafter.
Second Quarter 2009 Outlook
Commenting on the outlook for the second quarter 2009, Mr. Ennis
continued, "While the mass color cosmetics category in the U.S.,
according to ACNielsen, continues to grow, the rate of growth has
started to slow, and retailers are carefully examining and
optimizing inventory levels. Additionally, as communicated in our
first quarter earnings release call, first quarter 2009 net sales
benefited from higher pipeline shipments of new color cosmetics
products, as a result of the timing of shipments and our more
extensive new product lineup. As a result of these factors,
combined with the unfavorable impact of foreign currency
fluctuations and pension expense, not including charges related to
our organizational restructuring actions, we anticipate
significant negative impact on net sales and profitability in our
second quarter 2009 results as compared to the second quarter
2008."
As part of the worldwide organizational, effective June 4, 2009,
Gina Mastantuono, the Company's senior vice president,
international finance, will assume the position of senior vice
president, corporate controller and chief accounting officer,
replacing Ed Mammone, who has resigned the position effective as
of the date and who will leave the Company on Aug. 15, 2009.
Mr. Mammone's resignation is not the result of any issue or
concern with the Company's accounting, financial reporting or
internal control over financial reporting, but rather is part of
the Company's worldwide organizational restructuring announced in
the Press Release. Ms. Mastantuono and Mr. Mammone will work
together to ensure a smooth transition of the Company's accounting
responsibilities.
Prior to her appointment as the Company's senior vice president,
corporate controller and chief accounting officer, Ms. Mastantuono
served as the Company's senior vice president, international
finance since June 2007. From March 2003 through December 2006,
Ms. Mastantuono held several senior financial positions with
IAC/InterActive Corp., a NASDAQ-listed company, including last
serving as vice president and assistant controller prior to
joining Revlon. Ms. Mastantuono began her career at Ernst & Young
LLP in 1992. Ms. Mastantuono is a Certified Public Accountant.
Ms. Mastantuono does not have any family relationships with any of
the Company's directors or executive officers and is not a party
to any transactions listed in Item 404(a) of Regulation S-K.
About Revlon Inc.
Headquartered in New York City, Revlon Inc. (NYSE: REV) --
http://www.revloninc.com/-- is a worldwide cosmetics, hair color,
beauty tools, fragrances, skincare, anti-perspirants/deodorants
and personal care products company. The Company's brands, which
are sold worldwide, include Revlon(R), Almay(R), Mitchum(R),
Charlie(R), Gatineau(R), and Ultima II(R).
* * *
Revlon Inc., the parent company of Revlon Consumer Products Corp.
(B-/Stable/--) has received a proposal from MacAndrews & Forbes
Holdings Inc. to convert Revlon Inc.'s Class A common stock,
currently not held by M&F, to voting preferred stock.
According to the Troubled Company Reporter on April 23, 2009,
Standard & Poor's Ratings Services said the proposal, which was
sent to the independent members of Revlon Inc.'s Board of
Directors, will not immediately affect the RCPC ratings or
outlook. M&F effectively controls about 75% of Revlon Inc.'s
voting rights. The preferred stock would pay an annual dividend
of 12.5% and would be redeemed four years from the date of
issuance at the liquidation preference, which is about
$75 million. Along with this transaction, M&F proposed to
contribute $75 million of its $107 million subordinated loan to
Revlon Inc. (payable by RCPC), extend the loan maturity to 2013,
and increase the interest rate on this loan to 12.5%. As a result
of the M&F loan maturity extension, RCPC would not have any
scheduled debt maturities until 2011. S&P expects that if Revlon
Inc.'s board accepts the M&F proposal, there would be no
significant effect on the company's cash flow or credit metrics.
REVLON INC: Operating Affiliate Amends U.S. Benefit Pension Plan
-----------------------------------------------------------------
Revlon Inc. disclosed in a filing with the Securities and Exchange
Commission that on May 28, 2009, and effective December 31, 2009,
Revlon Consumer Products Corporation, the operating subsidiary of
the Company, amended its U.S. qualified defined benefit pension
plan. The Revlon Employees' Retirement Plan, which covers a
substantial portion of the Company's employees in the U.S., will
cease future benefit accruals under the plan after December 31,
2009. RCPC also amended its non-qualified pension plan to
similarly cease future benefit accruals under the plan after
December 31, 2009.
In connection with the amendments, all benefits accrued under the
plans through December 31, 2009, will remain and no additional
benefits will accrue after December 31, 2009, other than interest
credits on participant account balances under the cash balance
program of the Company's U.S. pension plans. Also, service
credits for vesting and early retirement eligibility will continue
to accrue in accordance with the terms of the respective plans.
On May 28, 2009, RCPC also amended its qualified and non-qualified
defined contribution savings plans for its U.S.-based employees so
that effective December 31, 2009, a new discretionary profit
sharing component under the plans will be created that will enable
the Company, if it elects to do so, to make discretionary profit
sharing contributions. The Company will determine in the fourth
quarter of each year whether and if so, to what extent profit
sharing contributions would be made for the following year. The
Company intends to continue its current match under its qualified
401(k) plan.
In connection with these amendments to RCPC's U.S. pension plans,
the Company expects its pension benefit obligation for the U.S.
pension plans to decrease by approximately $50 million from the
level at December 31, 2008, due to increases in the discount rate.
Additionally, the Company expects its pension expense for the
remainder of 2009 to be reduced by approximately $4 million, that
pension expense is expected to be $25 million to $30 million for
all of 2009, rather than the previous expectation of $30 million
to $35 million. In addition, these actions are not expected to
impact the Company's planned cash contributions to its U.S.
pension plans or savings plans for 2009.
About Revlon Inc.
Headquartered in New York City, Revlon Inc. (NYSE: REV) --
http://www.revloninc.com/-- is a worldwide cosmetics, hair color,
beauty tools, fragrances, skincare, anti-perspirants/deodorants
and personal care products company. The Company's brands, which
are sold worldwide, include Revlon(R), Almay(R), Mitchum(R),
Charlie(R), Gatineau(R), and Ultima II(R).
* * *
Revlon Inc., the parent company of Revlon Consumer Products Corp.
(B-/Stable/--) has received a proposal from MacAndrews & Forbes
Holdings Inc. to convert Revlon Inc.'s Class A common stock,
currently not held by M&F, to voting preferred stock.
According to the Troubled Company Reporter on April 23, 2009,
Standard & Poor's Ratings Services said the proposal, which was
sent to the independent members of Revlon Inc.'s Board of
Directors, will not immediately affect the RCPC ratings or
outlook. M&F effectively controls about 75% of Revlon Inc.'s
voting rights. The preferred stock would pay an annual dividend
of 12.5% and would be redeemed four years from the date of
issuance at the liquidation preference, which is about
$75 million. Along with this transaction, M&F proposed to
contribute $75 million of its $107 million subordinated loan to
Revlon Inc. (payable by RCPC), extend the loan maturity to 2013,
and increase the interest rate on this loan to 12.5%. As a result
of the M&F loan maturity extension, RCPC would not have any
scheduled debt maturities until 2011. S&P expects that if Revlon
Inc.'s board accepts the M&F proposal, there would be no
significant effect on the company's cash flow or credit metrics.
RH DONNELLEY: Chapter 11 Filing Prompts S&P's Rating Cut to 'D'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating for R.H. Donnelley Corp. subsidiary Dex Media East LLC to
'D' from 'CC'. S&P also lowered all issue-level ratings for R.H.
Donnelley-related entities (that had not already been lowered to
'D') to 'D'. All of S&P's outstanding recovery ratings remain
unchanged.
S&P had previously lowered several of S&P's R.H. Donnelley-related
ratings to 'D' due to the company's failure to make interest
payments on several notes issues. (See Standard & Poor's research
reports on R.H. Donnelley published April 16, 2009 and May 15,
2009.
The ratings downgrade follows R.H. Donnelley's announcement that
it and its domestic subsidiaries have filed voluntary petitions
for reorganization under Chapter 11 of the U.S. Bankruptcy Code in
the district of Delaware.
RH DONNELLEY: Fitch Downgrades Issuer Default Rating to 'D'
-----------------------------------------------------------
Fitch Ratings has taken these rating actions on R.H. Donnelley
Corp. and subsidiaries:
RHD (Holding Company)
-- Issuer Default Rating downgraded to 'D' from 'C';
-- Senior unsecured notes affirmed at 'C/RR6'.
R.H. Donnelley, Inc. (Operating Company; Subsidiary of RHD)
-- IDR downgraded to 'D' from 'C';
-- Bank facility affirmed at 'CC/RR3';
-- Senior unsecured notes affirmed at 'C/RR6'.
Dex Media, Inc. (Subsidiary of RHD)
-- IDR downgraded to 'D' from 'C';
-- Senior unsecured notes affirmed at 'C/RR6'.
Dex Media West (Operating Company; Subsidiary of DXI)
-- IDR downgraded to 'D' from 'C';
-- Bank facility affirmed at 'B-/RR1';
-- Senior unsecured downgraded to 'C/RR4' from 'CC/RR3';
-- Senior subordinated affirmed at 'C/RR6'.
Dex Media East (Operating Company; Subsidiary of DXI)
-- IDR downgraded to 'D' from 'CC';
-- Bank facility downgraded to 'CC/RR3' from 'CCC/RR3'.
By definition, issuers with 'D' ratings have defaulted on all of
their obligations. The 'B-/RR1' rating on DXW's secured bank
facility reflects prospects of 91%-100% recovery. The 'CC/RR3'
rating on the RHDI and DXE secured bank facilities reflects 51%-
70% recovery prospects. The 'C' rating represents the lowest
possible issue rating for a defaulted security with below average
or poor recovery prospects.
These rating actions affect approximately $10 billion in total
debt as of March 31, 2009.
The downgrade reflects the announcement that RHD has initiated
voluntary Chapter 11 proceedings to restructure its debt
obligations. RHD stated that it had reached agreement in
principle with key creditors. The terms of the agreement include:
-- Reduction of $6.4 billion in debt, including $700 million in
secured debt repaid by cash at 100% principal recovery.
-- Approximately $6 billion of unsecured notes would be
exchanged for 100% of the equity in the restructured company
and $300 million of unsecured notes.
-- In addition to increased pricing, enhanced collateral and
guarantee package, the secured lenders will benefit from cash
sweeps of 65% for DXE and DXW and 60% for RHDI.
The filing has been made in the U.S. Bankruptcy Court for the
District of Delaware. The company will continue to operate its
businesses during the restructuring and has stated it has
sufficient cash to do so. The company has fully drawn from its
OpCo bank credit facilities and stated that cash on hand as of the
bankruptcy filing was over $300 million (March 31, 2009, cash
balances were reported at $533 million). RHD generated
approximately $550 million in free cash flow in 2008.
RHD expects to have $3.1 billion in secured debt and $3.4 billion
in consolidated debt after emerging from bankruptcy.
RH DONNELLEY: Moody's Cuts Probability of Default Rating to 'D'
---------------------------------------------------------------
Moody's Investors Service downgraded R.H. Donnelley Corporation's
Probability of Default rating to D from Ca/LD, the Corporate
Family rating to Ca from Caa2, and associated debt ratings. The
downgrade follows Donnelley's announcement on May 29, 2009, that
it filed a voluntary petition for reorganization under chapter 11
of the U.S. Bankruptcy code. Under Donnelley's agreement in
principle with key creditor constituencies, the company's total
debt will be reduced from approximately $10 billion to a pro forma
level of $3.1 billion of secured debt and $300 million of
unsecured debt.
The rating outlook is stable, although Moody's plans to withdraw
all ratings of the company over the near-term.
Details of the rating action are:
Ratings downgraded:
R.H. Donnelley Corporation
* CFR -- to Ca from Caa2
* PDR -- to D from Ca/LD
* 6.875% senior notes due 2013 -- to C, LGD5, 87% from Ca, LGD4,
54%
* 6.875% Series A-1 senior discount notes due 2013 -- to C, LGD5,
87% from Ca, LGD4, 54%
* 6.875% Series A-2 senior discount notes due 2013 -- to C, LGD5,
87% from Ca, LGD4, 54%
* 8.875% Series A-3 senior notes due 2016 -- to C, LGD5, 87% from
Ca, LGD4, 54%
* 8.875% series A-4 senior notes due 2017 -- to C, LGD5, 87% from
Ca, LGD4, 54%
R.H. Donnelley Inc.
* Senior secured revolving credit facility due 2009 -- to B3,
LGD2, 15% from B1, LGD1, 4%
* Senior secured revolving credit facility due 2011 -- to B3,
LGD2, 15% from B1, LGD1, 4%
* Senior secured term loan D due 2011 -- to B3, LGD2, 15% from B1,
LGD1, 4%
* 11.75% senior unsecured notes due 2015 -- to Ca, LGD3, 44% from
B3, LGD2, 14%
Dex Media Inc.
* 8% senior unsecured global notes due 2013 -- to Ca, LGD4, 67%
from Caa3, LGD3, 30%
* 9% senior discount global notes due 2013 -- to Ca, LGD4, 67%
from Caa3, LGD3, 30%
Dex Media East LLC
* Senior secured revolving credit facility due 2013 -- to B3,
LGD2, 15% from B1, LGD1, 4%
* Senior secured term loan A due 2013 -- to B3, LGD2, 15% from B1,
LGD1, 4%
* Senior secured term loan B due 2014 - to B3, LGD2, 15% from B1,
LGD1, 4%
Dex Media West LLC
* Senior secured revolving credit facility due 2013 -- to B3,
LGD2, 15% from B1, LGD1, 4%
* Senior secured term loan A due 2013 -- to B3, LGD2, 15% from B1,
LGD1, 4%
* Senior secured term loan B due 2014 -- to B3, LGD2, 15% from B1,
LGD1, 4%
* 8.5% senior unsecured notes due 2010 -- to Ca, LGD3, 44% from
B3, LGD2, 14%
* 5.875% senior unsecured notes due 2011 -- to Ca, LGD3, 44% from
B3, LGD2, 14%
* 9.875% senior subordinated notes due 2013 -- to Ca, LGD4, 55%
from Caa2, LGD2, 21%
* Outlook -- changed to stable from negative
Donnelley's SGL rating is unaffected by this rating action.
Moody's last rating on Donnelley occurred on May 18, 2009, when it
lowered the company's PDR to Ca/LD from 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.
RHD: Fitch Downgrades Issuer Default Rating to 'D'
--------------------------------------------------
Fitch Ratings has taken these rating actions on R.H. Donnelley
Corp. and subsidiaries:
RHD (Holding Company)
-- Issuer Default Rating downgraded to 'D' from 'C';
-- Senior unsecured notes affirmed at 'C/RR6'.
R.H. Donnelley, Inc. (Operating Company; Subsidiary of RHD)
-- IDR downgraded to 'D' from 'C';
-- Bank facility affirmed at 'CC/RR3';
-- Senior unsecured notes affirmed at 'C/RR6'.
Dex Media, Inc. (Subsidiary of RHD)
-- IDR downgraded to 'D' from 'C';
-- Senior unsecured notes affirmed at 'C/RR6'.
Dex Media West (Operating Company; Subsidiary of DXI)
-- IDR downgraded to 'D' from 'C';
-- Bank facility affirmed at 'B-/RR1';
-- Senior unsecured downgraded to 'C/RR4' from 'CC/RR3';
-- Senior subordinated affirmed at 'C/RR6'.
Dex Media East (Operating Company; Subsidiary of DXI)
-- IDR downgraded to 'D' from 'CC';
-- Bank facility downgraded to 'CC/RR3' from 'CCC/RR3'.
By definition, issuers with 'D' ratings have defaulted on all of
their obligations. The 'B-/RR1' rating on DXW's secured bank
facility reflects prospects of 91%-100% recovery. The 'CC/RR3'
rating on the RHDI and DXE secured bank facilities reflects 51%-
70% recovery prospects. The 'C' rating represents the lowest
possible issue rating for a defaulted security with below average
or poor recovery prospects.
These rating actions affect approximately $10 billion in total
debt as of March 31, 2009.
The downgrade reflects the announcement that RHD has initiated
voluntary Chapter 11 proceedings to restructure its debt
obligations. RHD stated that it had reached agreement in
principle with key creditors. The terms of the agreement include:
-- Reduction of $6.4 billion in debt, including $700 million in
secured debt repaid by cash at 100% principal recovery.
-- Approximately $6 billion of unsecured notes would be
exchanged for 100% of the equity in the restructured company
and $300 million of unsecured notes.
-- In addition to increased pricing, enhanced collateral and
guarantee package, the secured lenders will benefit from cash
sweeps of 65% for DXE and DXW and 60% for RHDI.
The filing has been made in the U.S. Bankruptcy Court for the
District of Delaware. The company will continue to operate its
businesses during the restructuring and has stated it has
sufficient cash to do so. The company has fully drawn from its
OpCo bank credit facilities and stated that cash on hand as of the
bankruptcy filing was over $300 million (March 31, 2009 cash
balances were reported at $533 million). RHD generated
approximately $550 million in free cash flow in 2008.
RHD expects to have $3.1 billion in secured debt and $3.4 billion
in consolidated debt after emerging from bankruptcy.
RICHARD W. MANN: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Richard W. Mann, Jr.
dba RCR Investments
dba MC Company
dba Heritage Properties
dba Freedom Ventures II
dba Masterpiece
dba Freedom Ventures
dba Milo Arts
dba MCS Investments
dba MPM Investments
dba Freedom Ventures III
dba OG Investments
dba Management Resources
dba Freedom Ventures I
dba Milo Arts Center
617 East Third Avenue
Columbus, OH 43201
Bankruptcy Case No.: 09-56114
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
Southern District of Ohio (Columbus)
Judge: C. Kathryn Preston
Debtor's Counsel: Robert E. Bardwell, Esq.
995 South High Street
Columbus, OH 43206
Tel: (614) 445-6757
Fax: (614) 224-4870
Email: rbardwell@ohiobankruptlaw.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/ohsb09-56114.pdf
The petition was signed by Richard W. Mann, Jr.
RITE AID: Moody's Assigns 'B3' Rating on $400 Mil. 2015 Loan
------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Rite Aid
Corporation's proposed $400 million term loan due 2015. All other
ratings, including the company's Caa2 Corporate Family Rating,
Caa2 Probability of Default Rating, and SGL-4 Speculative Grade
Liquidity rating, were affirmed. The rating outlook remains
negative.
The proceeds from the proposed $400 million term loan will be used
to repay Rite Aid's $145 million term loan which matures in
September 2010 and to repay and reduce the amount of commitments
under its $1.75 billion assets based revolving credit facility.
This is the first step of a comprehensive refinancing plan.
The Caa2 Corporate Family Rating reflects Rite Aid's highly
leveraged capital structure -- debt/EBITDA is currently about 9.6
times -- which Moody's believe is unsustainable over the medium
term at the company's current level of operating performance. The
ratings also acknowledge that Rite Aid only generates a small
amount of free cash flow which will make it challenging for the
company to reduce its significant debt burden. Positive ratings
consideration is given to the company's recent working capital
improvements, solid fundamentals of the prescription drug
industry, and large revenue base.
The negative outlook considers that Rite Aid's operating results
remain weak. It also acknowledges the risk that the proposed
refinancing plan will not be successful. The company has a stated
a plan to refinance its September 2010 debt maturities through a
combination of the proposed $400 million term loan, a new
revolving credit facility, the issuance of high yield notes, or
the entry into a new securitization program. In order to be able
to close on the proposed term loan and pursue the other
refinancing activity, Rite Aid needs to obtain amendments to its
existing senior secured credit facility. Should this refinancing
plan be successful it would be a positive step for the company as
it would address a key constraint to its liquidity.
Rating assigned:
-- $400 million senior secured term loan due 2015 at B3 (LGD 2,
27%)
Ratings affirmed:
-- Corporate Family Rating at Caa2
-- Probability of Default Rating at Caa2
-- First-lien bank facilities at B3 (LGD 2, 27%)
-- Second-lien secured notes at Caa2 (LGD 4, 55%)
-- Guaranteed senior notes to Caa3 (LGD 5, 79%)
-- Senior notes and debentures to Ca (LGD 6, 95%)
-- Speculative Grade Liquidity rating at SGL-4
The last rating action on Rite Aid was on January 23, 2009 when
the company's Corporate Family Rating was downgraded to Caa2 from
Caa1.
Rite Aid Corporation is the third largest domestic drug store
chain with about 4,900 stores in 31 states and the District of
Columbia. Annual revenues are about $26 billion.
RITE AID: S&P Assigns 'B+' Rating on $400 Million Tranche 4 Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B+'
issue rating and '1' recovery rating to Rite Aid's proposed
$400 million tranche 4 term loan due 2015, indicating expectation
for very high recovery in the event of a payment default. S&P has
affirmed the 'B-' corporate credit rating, and the outlook remains
negative. Proceeds from the term loan will be used to repay
the$145 million tranche-one term loan maturing September 2010 and
reduce borrowings outstanding under its revolver credit facility.
"The ratings reflect the challenges Harrisburg, Pennsylvania-based
Rite Aid Corp. faces in improving both the operating performance
of the 1,800 acquired Eckerd stores and overall operations amid
intense industry competition," said Standard & Poor's credit
analyst Ana Lai. They also reflect the company's significant debt
burden and thin cash flow protection.
Progress in turning around the operating performance at the
acquired Eckerd stores has been slower than expected. In
addition, a weakening U.S. economy is dampening demand for
prescriptions and front-end merchandise at the core Rite Aid
stores. Comparable-store sales increased 0.8% in the fiscal year
ended Feb. 28, 2009, from 1.3% last year. Pharmacy comparables
increased 0.7% while front-end comparables increased 0.9% for the
year ended March 1, 2008, compared with pharmacy comparables of
1.7% and 0.7% (front-end comparables) last year. Rite Aid
reported fourth-quarter and fiscal year 2009 results that were in
line with S&P's expectations. EBITDA reached $231 million in the
fourth quarter ended Feb. 28, 2009, compared with $245 million
last year. S&P believes EBITDA should remain relatively stable in
2009 despite slowing sales, as new management implements cost-
saving and merchandising initiatives. Margins declined modestly,
reflecting weak sales and lower gross profit from lower
promotional funding on the front end and lower drug reimbursement
rates, partly offset by lower operating expenses related to labor
costs, advertising, and distribution costs. Although sales trends
have improved sequentially quarter over quarter at the acquired
Eckerd stores, pharmacy sales remain negative. In addition, Rite
Aid's debt levels are very high because of the largely debt-funded
acquisition of Eckerd in June 2007, and cash flow protection
measures will remain thin in the current operating environment.
Reduced capital spending and working capital contributed to
improvement in cash flow generation. Rite Aid generated about
$260 million of free cash in the fourth quarter ended Feb. 28,
2009, following negative free cash flow of about $363 million
through the first nine months of 2008. S&P expects Rite Aid's
initiatives to lower capital spending, reduce working capital, and
cut costs to partially offset potential negative effects of a
slowdown in sales growth in 2009, resulting in positive free cash
flow.
RITZ CAMERA: Seeks to Establish Aug. 3 as Claims Bar Date
---------------------------------------------------------
Ritz Camera Centers, Inc., asks the U.S. Bankruptcy Court for the
District of Delaware to establish:
-- August 3, 2009, at 5:00 p.m. (prevailing Pacific Time) as
the deadline for creditors to file proofs of claim in its
bankruptcy case arising from the prepetition period;
-- August 21, 2009, at 5:00 p.m. (prevailing Pacific Time) as
the bar date for governmental units to file proofs of claims
against the Debtor; and
-- August 3, 2009, at 5:00 p.m. (prevailing Pacific Time) as
the deadline for entities who wish to file an administrative
expense request for postpetition administrative claims
allowable under Sections 503(b)(1) through (8) and 507(a)(2)
of the Bankruptcy Code.
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.
ROBERT MANUFACTURING: Case Summary & 20 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: Robert Manufacturing Co
10667 Jersey Blvd.
Rancho Cucamonga, CA 91730
Bankruptcy Case No.: 09-21395
Chapter 11 Petition Date: May 27, 2009
Court: United States Bankruptcy Court
Central District of California (Riverside)
Judge: Meredith A. Jury
Debtor's Counsel: Franklin C. Adams, Esq.
Best Best & Krieger LLP
3750 University Ave, Ste 400
Riverside, CA 92502
Tel: (951) 686-1450
Fax : (951) 686-3083
Email: franklin.adams@bbklaw.com
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The Debtor's Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
American Express $388,676
4315 South 2700 West, Rm. 280
Salt Lake City, UT 84184
Bolton Metals $84,000
266 Summit Avenue
Hackensack, N.J. 07601
American Lighting $57,502
6861-C Nancy Ridge Dr.
San Diego, CA 92121
Atkinson Andelson $39,906
Precision Specialty Metals $37,681
Greenfield Hardy $27,873
Venus Wire Industries $25,824
Kaiser Foundation Health Plan $25,150
Blue Cross of California $24,423
Jinyuan Orient $23,498
Bowman & Brooke LLP $22,266
HCI Environmental $21,406
Ulbrich Stainless Steel $19,291
Net Shapes $17,118
Naugatuck Manufacturing $13,758
West Coast Casualty $8,391
Culberth Schroeder LLP $8,390
Swenson $8,330
Grunsky, Ebey, Farrar $7,500
Wells Fargo Insurance Services $6,110
The petition was signed by Josh DeSisto, vice president.
ROMARINO G. ZERI: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Romarino G. Zeri
aka Intrepid Marine
aka Intrepid Marine Yacht Service
aka Yacht Center and Zeri Properties
1640 Old Topanga Cyn Blvd
Topanga, CA 90290
Bankruptcy Case No.: 09-16455
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
Central District of California (San Fernando Valley)
Judge: Geraldine Mund
Debtor's Counsel: David K. Dorenfeld, Esq.
5010 Cheebro Rd
Agoura Hills, CA 91301
Tel: (818) 865-4000
Total Assets: $9,189,378
Total Debts: $6,278,213
A full-text copy of Mr. Zeri's petition, including a list of his
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/canb09-16455.pdf
The petition was signed by Mr. Zeri.
ROMULO A. CREDO: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Joint Debtors: Romulo A. Credo
dba Five Palms Care Home
dba Chanate Care Home
dba Valley View Care Home
Elena R. Credo
3615 Chanate Road
Santa Rosa, CA 95404
Bankruptcy Case No.: 09-11600
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
Northern District of California (Santa Rosa)
Judge: Alan Jaroslovsky
Debtors' Counsel: Michael C. Fallon, Esq.
Law Offices of Michael C. Fallon
100 E St. #219
Santa Rosa, CA 95404
Tel: (707) 546-6770
Email: mcfallon@fallonlaw.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtors' petition, including a list of
their 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/canb09-11600.pdf
The petition was signed by the Joint Debtors.
SEDONA VICTORVILLE: Case Summary & 3 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Sedona Victorville 34, LLC
a Delaware limited liability company
2392 Morse Avenue
Irvine, CA 92614
Bankruptcy Case No.: 09-15095
Chapter 11 Petition Date: May 28, 2009
Court: United States Bankruptcy Court
Central District of California (Santa Ana)
Judge: Erithe A. Smith
Debtor's Counsel: Paul J. Couchot, Esq.
Winthrop Couchot PC
660 Newport Ctr Dri
Ste 400
Newport Beach, CA 92660
Tel: (949) 720-4100
Fax: (949) 720-4111
Email: pcouchot@winthropcouchot.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
3 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/canb09-15095.pdf
The petition was signed by Bruce V. Cook.
SEMGROUP ENERGY: Completes Execution of Asphalt Storage Pacts
-------------------------------------------------------------
SemGroup Energy Partners, L.P., recently completed the execution
of asphalt storage contracts or leases relating to 39 of its 46
owned asphalt facilities with various counterparties.
?We are very pleased to announce that we have entered into storage
or lease agreements with 11 various counterparties for our asphalt
facilities. We believe our ability to get these facilities quickly
under contract highlights the strategic location and strong
industry demand for our asphalt and residual fuel oil assets,?
stated Jerry Parsons, Executive Vice President ? Asphalt
Operations.
SGLP will operate the facilities under the storage agreements and
the contract counterparties will operate the facilities under the
lease agreements. SGLP will receive storage fees or lease payments
as appropriate from the new counterparties and the agreements are
effective between May 1st and June 1st with terms extending
primarily through December 31, 2011. The revenues that SGLP will
receive pursuant to these leases and storage agreements will be
less than the revenues received under the Terminalling and Storage
Agreement with SemGroup, L.P.
Mr. Parsons further said, ?We look forward to working with our new
counterparties in these terminal facilities and are also pleased
that the majority of the operational employees at the terminals
will continue to be employed by either SGLP or by the new third-
party counterparties. We continue to be in discussions with
additional counterparties on the remaining facilities not yet
under contract and are hopeful we can execute similar contracts on
those locations in the near term.?
Kevin Foxx, Chief Executive Officer and President of SGLP?s
general partner added, ?The asphalt contracts, in connection with
our existing crude oil storage, transportation and terminalling
business further stabilize our revenues, which we expect on a go-
forward basis to be more than 95% from third parties. We also wish
to express our gratitude to our new asphalt counterparties,
existing crude oil customers and approximately 400 employees for
their continued support.?
About SemGroup Energy Partners
SemGroup Energy Partners -- http://www.SGLP.com/-- owns and
operates a diversified portfolio of complementary midstream energy
assets. SemGroup Energy Partners provides crude oil and liquid
asphalt cement terminalling and storage services and crude oil
gathering and transportation services. SemGroup Energy Partners
is based in Tulsa, Oklahoma. SGLP's common units are currently
traded on the Pink Sheets, which is an over-the-counter securities
market, under the symbol SGLP.PK. The general partner of SemGroup
Energy Partners is a subsidiary of SemGroup, L.P.
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
November 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)s
SEMGROUP ENERGY: Posts $11.8MM Net Loss in Quarter Ended Sept. 30
-----------------------------------------------------------------
SemGroup Energy Partners, L.P., filed on May 27, 2009, its
Quarterly Report on Form 10-Q for the quarter ended September 30,
2008. As previously disclosed, SGLP?s common units were delisted
from the Nasdaq Global Market effective at the opening of business
on February 20, 2009, due to SGLP?s failure to timely file its
Quarterly Reports on Form 10-Q for the quarters ended June 30,
2008, and September 30, 2008. SGLP?s common units are currently
traded on the Pink Sheets, which is an over-the-counter securities
market, under the symbol SGLP.PK. SGLP continues to work to
become compliant with its SEC reporting obligations and intends to
promptly seek the relisting of its common units on Nasdaq as soon
as practicable after it has become compliant with the reporting
obligations. However, there can be no assurances that SGLP will be
able to relist its common units on Nasdaq or any other national
securities exchange and SGLP may face a lengthy process to relist
its common units if it is able to relist them at all.
SemGroup Energy Partners posted an $11.85 million net loss for the
three months ended September 30, 2008, compared to a net income of
$4.3 million for the same period a year earlier.
SemGroup Energy Partners' consolidated balance sheet as of
September 30, 2008, showed $349.11 million in total assets, $25.59
million in total current liabilities, $448.10 million in long-term
debt, $418,000 in long-term capital lease obligations, and $124.99
million total partners' deficit.
A full-text copy of the Form 10-Q filing is available for free at:
http://ResearchArchives.com/t/s?3d6c
About SemGroup Energy Partners
SemGroup Energy Partners -- http://www.SGLP.com/-- owns and
operates a diversified portfolio of complementary midstream energy
assets. SemGroup Energy Partners provides crude oil and liquid
asphalt cement terminalling and storage services and crude oil
gathering and transportation services. SemGroup Energy Partners
is based in Tulsa, Oklahoma. SGLP's common units are currently
traded on the Pink Sheets, which is an over-the-counter securities
market, under the symbol SGLP.PK. The general partner of SemGroup
Energy Partners is a subsidiary of SemGroup, L.P.
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
November 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: Creditors' Committee Seeks to Amend Quinn Retention
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of SemGroup L.P.,
SemCrude L.P., and their debtor-affiliates seek the U.S.
Bankruptcy Court for the District of Delaware's authority to
amend, nunc pro tunc to March 29, 2009, the terms of the retention
of its counsel, Quinn, Emanuel, Oliver & Hedges, LLP, to a
contingency fee basis, in connection with the firm's continued
investigation of certain claims on behalf of the Creditors'
Committee.
Under Quinn Emanuel's retention application approved by the Court
in September 2008, Quinn Emanuel will be paid on an hourly basis,
plus reimbursement of actual and necessary out-of-pocket costs,
says Bonnie Glantz Fatell, Esq., at Blank Rome LLP, in Wilmington,
Delaware. The Creditors' Committee has reserved its right to
amend Quinn Emanuel's retention in that application.
As of March 29, 2009, Quinn Emanuel began preparing to take
certain actions on the Creditors' Committee's behalf, including
preparations to assert certain claims against the DIP Lenders.
Ms. Fatell notes, however, that pursuant to the Final DIP Order,
no loans or collateral under the DIP Agreement or the Carve-out
may be used for professional fees and expenses incurred for any
litigation or threatened litigation against the DIP Agent, the
DIP lenders, or any prepetition secured parties. Since the
challenge fees cannot be paid from DIP Loan proceeds or the
Lenders' collateral, the Creditors' Committee proposes that Quinn
Emanuel be compensated on a contingency fee basis for the
challenge fees it incurred and will incur in connection with the
challenge litigation.
The Creditors' Committee proposes that:
(a) the contingency fee will mean 300% of the fees and 100% of
the expenses constituting challenge fees, and the
challenge fees will not be submitted in connection with
Quinn Emanuel's monthly fee applications, but will be
recorded separately;
(b) the contingency fee will be paid upon a successful
resolution of the challenge litigation, defined as the
entry of a Court order as:
* resolving all or part of the challenge litigation in a
manner favorable to the Creditors' Committee;
* approving a settlement of all or part of the challenge
litigation; or
* confirming a Chapter 11 plan of reorganization that is
supported by the Creditors' Committee and contains a
resolution of all or part of the challenge litigation;
and
(c) the contingency fee will be paid pursuant to Section
328(a) of the Bankruptcy Code, which provides that a
different compensation than that approved should only be
allowed if, at the conclusion of a debtor's case, certain
terms and conditions prove to have been improvident in
light of developments not capable of being anticipated at
the time of the fixing of those terms and conditions.
Section 328(a), not Section 327(a), which applies to debtors,
provides the enabling statute for the compensation of
committee-selected professionals, Ms. Fatell asserts.
The Court will consider the proposed amendment at a hearing on
June 25, 2009. Objections are due by June 18.
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
November 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: ConocoPhillips Still Negotiating $11.6MM Payment
-------------------------------------------------------------
ConocoPhillips Company filed reports to apprise the U.S.
Bankruptcy Court for the District of Delaware of the progress made
by the company and Debtor SemCrude, L.P., towards resolving issues
material to Conoco's motion to tender more than $11 million to the
Debtors.
In April 2009, ConocoPhillips Company sought the Court's authority
to tender $11,655,356 to the estate of Debtor SemCrude, L.P.
Based on mutual agreement between ConocoPhillips and SemCrude to
terminate Crude Purchase Agreements between them, ConocoPhillips
believes that it owes SemCrude $11,655,356 after all the Crude
Purchase Agreements and other relative crude oil contracts between
ConocoPhillips and SemCrude are settled. According to its
counsel, Omer F. Kuebel III, Esq., at Locke Lord Bissell & Liddell
LLP, in New Orleans, Louisiana, ConocoPhillips filed the Motion to
insure that it is not subject to repeated exposure for tender of
sums due to SemCrude from multiple claimants and that its rights
are preserved to the fullest extent.
In its recent reports, ConocoPhillips related that SemCrude has
agreed that the amount which ConocoPhillips owes SemCrude pursuant
to the crude transactions entered into in connection with the
Crude Purchase Agreements is $11,655,356, and that they are
presently negotiating stipulations to reflect their agreements.
ConocoPhillips maintained that there are no significant issues of
fact with respect to the Crude Contracts and the final accounting
under the Contracts' payment provisions.
Conoco further related that the Official Producers' Committee and
Samson Resources Company have sought certain documentation in
connection with the forward contracts, which ConocoPhillips has
offered to provide under a confidentiality agreement. The OPC
notified the Court that it has served its first set of discovery
requests to Conoco. The OPC asked the Court to compel Conoco to
respond to its discovery requests. Conoco also notified the Court
that it has caused a copy of its responses and objections to the
first set of discovery requests of Samson Resources.
In April 2009, Samson Resources Company and its affiliates told
the Court that ConocoPhillips' payment is "certainly welcome" but
comes "with many strings attached," including a finding that
ConocoPhillips has no further obligations to the Debtors or third
parties as well as a determination that ConocoPhillips'
calculation of its obligations to the Debtors is proper under the
various contracts entered into between the Debtors. If the
request is granted, the Samson Entities note that it would
effectively give judicial approval of a setoff involving crude oil
proceeds that producers like Samson assert are subject to purchase
money security interests and constructive rights in pursuant to
applicable state law. Titan Energy, Inc., complained that the
request is improper and improperly primes its rights and status as
a purchase money secured creditor, reclamation creditor, and a
holder of 20-Day claims pursuant to Section 503(b)(9) of the
Bankruptcy Code. The OPC, after an investigation, found and
concluded that:
-- the statutory liens and constructive trust claims held by
the Producers are in direct conflict with Conoco's request
to set-off against the Producers' proceeds that it possess
and its stated intent to extinguish those liens and claims
by virtue of the Court's order;
-- the Producers' statutory liens and constructive trust
claims take precedence over Conoco's set-off claims; and
-- the request would cut off rights that third party Producers
have against Conoco, a non-debtor.
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
November 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)
SIMMOND BEDDING: Forbearance Pact With Lenders Extended to Jun 30
-----------------------------------------------------------------
Simmons Bedding Company, a subsidiary of Simmons Company, has
reached agreements with majority of both its senior bank lenders
and holders of its $200 million 7.875% senior subordinated notes,
as required, to amend the current forbearance agreements to extend
the forbearance periods from May 31, 2009, to June 30, 2009.
Both agreements still include an option to further extend their
respective forbearance periods through July 31, 2009, under
certain conditions. Furthermore, the amendment to the forbearance
agreement with Simmons Bedding's senior bank lenders is subject to
the Company meeting certain conditions by June 8, 2009, including
continued progress in its restructuring efforts.
Simmons Bedding said it is working with key stakeholders to
implement a restructuring in a manner that maximizes value,
preserves its relationships with customers and protects suppliers
and other constituents.
About Simmons Company
Atlanta-based Simmons Company -- http://www.simmons.com/--
through its indirect subsidiary Simmons Bedding Company, is one of
the world's largest mattress manufacturers, manufacturing and
marketing a broad range of products including Beautyrest,
Beautyrest Black, Beautyrest Studio, ComforPedic by Simmons,
Natural Care, Beautyrest Beginnings and Deep Sleep. Simmons
Bedding operates 19 conventional bedding manufacturing facilities
and two juvenile bedding manufacturing facilities across the
United States, Canada, and Puerto Rico. Simmons Bedding also
serves as a key supplier of beds to many of the world's leading
hotel groups and resort properties. Simmons Bedding is committed
to developing superior mattresses and promoting a higher quality
sleep for consumers around the world.
As reported by the Troubled Company Reporter on March 2, 2009,
Moody's Investors Service assigned a limited default rating to
Simmons following the expiration of the 30 day grace period of a
missed interest payment on its $200 million subordinated notes.
The limited default rating is assigned to Simmons' Ca probability
of default rating. All other ratings are affirmed. The outlook
is developing.
SKINNER ENGINE: Asbestos-Related Chapter 11 Plan Fails
------------------------------------------------------
Under Pennsylvania law, WestLaw reports, a debtor-insured could
not settle the asbestos liability claims against it without its
insurers' consent, notwithstanding its insurers' rights to control
the litigation of claims arising under the debtor-insured's
policies, so long as the settlement was reasonable and entered
into in good faith when the insurers had undertaken to defend, and
were defending, the debtor-insured with respect to such claims,
and the insurers did not act in bad faith or unreasonably in
refusing to settle the claims via the proposed settlement or on
terms similar to that settlement. Thus, a proposed Chapter 11
plan which incorporated the settlement could not be confirmed.
Furthermore, the proposed plan, incorporating a settlement that
was entered into in bad faith, was likewise proposed in bad faith,
precluding its confirmation. In re American Capital Equipment,
Inc., --- B.R. ----, 2009 WL 1458229 (Bankr. W.D. Pa.).
About Skinner
Skinner Engine Company, Inc., one of Erie, Pa.'s oldest industrial
companies, and American Capital Equipment, Inc., filed for chapter
11 protection (Bankr. W.D. Pa. Case Nos. 01-23987 and 01-23988) in
2001. The Bankruptcy Court denied confirmation of the Companies'
Fifth Amended Plan on May 26, 2009, and the cases will be
converted to Chapter 7 liquidation proceedings.
SONIC AUTOMOTIVE: Expects Involuntary Chapter 11 Filing
-------------------------------------------------------
Sonic Automotive Inc. said that it is evaluating restructuring
options for the $160 million principal amount outstanding of its
4.25% convertible notes that it may be required to repurchase at
the option of the holders on November 30, 2010, and its 2006
credit facility due February 17, 2010.
The Company said although it will attempt to restructure those
debt obligations to avoid any events of default under the related
arrangements, it cannot assure investors that it will succeed in
those efforts. A default under one or more of the Company's debt
arrangements, including the 2006 credit facility, could cause
cross defaults of other debt, lease facilities and operating
agreements, any of which could have a material adverse effect on
the Company's business, financial condition, liquidity and
operations and raise substantial doubt about the Company's ability
to continue as a going concern.
The Company disclosed that it may be unable to avoid filing for
bankruptcy protection and have an involuntary bankruptcy case if
it fails to restructure the upcoming debt obligations.
About Sonic Automotive
Sonic Automotive, Inc., headquartered in Charlotte, North Carolina
is a leading auto retailer with 122 franchises, and generates
annual revenues of around $7 billion.
* * *
According to the Troubled Company Reporter on May 25, 2009,
Moody's Investors Service downgraded to Caa1 from B2 the Corporate
Family rating of Sonic Automotive Holdings, Inc., and upgraded the
probability of default rating to Caa1 from Caa3. The outlook is
negative.
SOURCE INTERLINK: Gets NASDAQ Delisting Notice
----------------------------------------------
The NASDAQ Stock Market said it will delist the common stock of
Source Interlink Companies, Inc. The Company's stock was
suspended on May 14, 2009, and has not traded on NASDAQ since that
time. NASDAQ will file a Form 25 with the Securities and Exchange
Commission to complete the delisting. The delisting becomes
effective ten days after the Form 25 is filed.
Bonita Springs, Florida-based Source Interlink Companies, Inc., --
http://www.sourceinterlink.com/-- is a U.S. distributor of home
entertainment products and services and one of the largest
publishers of magazines and online content for enthusiast
audiences. Source Interlink Media, LLC, publishes more than 75
magazines and 90 related Web sites.
Source Interlink and 17 affiliates filed for bankruptcy on April
27, 2009 (Bankr. D. Del. Case No. 09-11424). Judge Kevin Gross
presides over the case. David Eaton, Esq., and David Agay, Esq.,
at Kirkland & Ellis LLP; and Laura Davis Jones, Esq., Mark M.
Billion, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang
Ziehl Young Jones in Wilmington, Delaware, serve as bankruptcy
counsel. Meolis & Company LLC serves as the Debtors' financial
advisors, while Kurtzman Carson Consultants LLC is the Debtors'
claims and notice agent. As of April 24, 2009, the Debtors had
$2,436,005,000 in total assets and $1,995,504,000 in total debts.
SPANISH SPRINGS: Case Summary & 7 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Spanish Springs II, LLC
285 Bridge Street
San Luis Obispo, CA 93401
Bankruptcy Case No.: 09-12006
Chapter 11 Petition Date: May 28, 2009
Court: Central District Of California (Santa Barbara)
Judge: Robin Riblet
Debtor's Counsel: Joseph M. Sholder, Esq.
sholder@g-tlaw.com
Griffith & Thornburgh, LLP
8 E. Figuerora St., 3rd Floor
Santa Barbara, CA 93101
Tel: (805) 965-5131
Fax: (805) 965-6751
Estimated Assets: $10 million to $50 million
Estimated Debts: $1 million to $10 million
The Debtor's Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Central Coast Fabricators Inc. $845,000
1390 Walker
San Luis Obispo, CA 93401
Planning Consultants $660,000
246 Encanto Avenue
Pismo Beach, CA 93449
Drake Farms Excavating $628,633
PO Box 5410
San Luis Obispo, CA 93403
Design Haus AIA $237,300
EDA $216,110
Frederick K. Glick, Esq. $94,880
Geo Solution $60,005
The petition was signed by John E. King.
STEPHEN C. DOWNING: Case Summary & 1 Largest Unsecured Creditor
---------------------------------------------------------------
Joint Debtors: Stephen C. Downing
Peggy Downing
P.O. Box 99
Verdi, NV 89439
Bankruptcy Case No.: 09-51698
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
District of Nevada (Reno)
Judge: Gregg W. Zive
Debtors' Counsel: Stephen R. Harris, Esq.
Belding, Harris & Petroni, Ltd
417 W Plumb Ln
Reno, NV 89509
Tel: (775) 786-7600
Fax: (775) 786-7764
Email: steve@renolaw.biz
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 the identity
of their largest unsecured creditor, is available for free at:
http://bankrupt.com/misc/nvb09-51698.pdf
The petition was signed by the Joint Debtors.
STERLING MINING: Gets Right to Assume, Cure Sunshine Lease & Mine
-----------------------------------------------------------------
Minco Silver Corporation reported that on May 15, 2009, the U.S.
Bankruptcy Court for the District of Idaho released its Memorandum
of Decision on Sterling Mining Company's motion to assume and cure
the lease of the Sunshine Mine of June 6, 2003, between Sterling
and Sunshine Precious Metals, Inc., and a motion to approve a
postpetition financing proposed by Minco Silver.
The Court ruled in favor of Sterling that the Sunshine Lease was
not terminated pre-bankruptcy, and thus granted Sterling the right
to assume and cure the Sunshine Lease and to reacquire the
Sunshine Mine.
The Court approved the Company's proposal to provide Sterling with
up to US$1,000,000 secured postpetition financing under a credit
facility to cure any defaults of the Sunshine Lease as ordered by
the Court and to meet administration expenses and expenses
associated with the continued care and maintenance of the Sunshine
Mine.
Minco Silver's Chairman and CEO, Dr. Ken Cai, said, "It has been a
long road, we are very happy with the Court's decision. The
Sunshine Lease is a major and valuable asset of Sterling and is
Minco Silver's main security for the US$5 million Loan provided to
Sterling. We are committed to protecting our investment in
Sterling and our shareholder value."
About Minco Silver
Minco Silver Corporation is a TSX listed company focusing on the
acquisition and development of silver dominant projects. The
Company owns 90% interest in the world class Fuwan Silver Deposit,
situated along the northeast margin of the highly prospective
Fuwan Silver Belt.
About Sterling Mining
Based in Coeur d'Alene, Idaho, Sterling Mining Company (OTCBB:SRLM
and FSE:SMX) -- http://www.SterlingMining.com/-- is a mineral
resource development and exploration company. The company has a
long term lease on the Sunshine Mine in North Idaho's Coeur
d'Alene Mining District. The Sunshine Mine is comprised of 5,930
patented and unpatented acres, and historically produced over
360 million ounces of silver from 1884 until its closure in early
2001. Sterling Mining leased the Sunshine Mine in June 2003,
along with a mill, extensive mining infrastructure and equipment,
a large land package, and a database encompassing a long history
of exploration, development and production.
As of September 30, 2008, Sterling Mining had $31.9 million in
total assets, and $13.2 million in total current liabilities and
$1.6 million in total long-term liabilities. In its schedules,
the Debtor listed total assets of $11,706,761 and total debts of
$14,159,010.
Sterling Mining filed for bankruptcy protection on March 3, 2009
(Bankr. D. Idaho Case No. 09-20178). Bruce A. Anderson, Esq., at
Elsaesser Jarzabek Anderson Marks Elliott & McHugh, Chartered
represents the Debtor as counsel.
TENET HEALTHCARE: Tender Offer Won't Affect Moody's 'B3' Rating
---------------------------------------------------------------
Moody's Investors Service commented that Tenet Healthcare
Corporation's announcement that it has launched a tender offer for
its 9.875% senior notes due 2014 has no immediate impact on the
long term ratings of the company, including the B3 Corporate
Family Rating. However, the increase in the proportion of secured
debt within the capital structure associated with the earlier
exchange of notes and the current tender offer is expected to
result in considerable downward pressure on the ratings of Tenet's
senior secured and senior unsecured notes.
Moody's last rating action was on March 25, 2009, when a rating
was assigned to the company's senior secured note offering and the
B3 CFR was affirmed.
Tenet is headquartered in Dallas, Texas, and is expected to
continue to operate 50 hospitals in 12 states (excluding one
hospital not yet divested and included in discontinued operations
at March 31, 2009). Tenet generated revenue from continuing
hospital operations of approximately $8.8 billion for the twelve
months ended March 31, 2009.
TEREX CORP: S&P Assigns 'BB-' Rating on $300 Mil. Senior Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'BB-' issue-level
rating to Terex Corp.'s (BB-/Negative/--) new $300 million senior
unsecured notes due 2016, the same as the corporate credit rating
on Terex. The recovery rating on this debt is '3', indicating
S&P's expectation of meaningful (50%-70%) recovery in the event of
a default. S&P also assigned a 'B' issue-level rating to the
company's proposed $150 million convertible senior subordinated
notes due 2015, two notches below the corporate credit rating on
the company, and a recovery rating of '6', indicating S&P's
expectation of negligible (0%-10%) recovery in the event of a
default.
At the same time, S&P revised the recovery rating on the company's
$300 million 7.375% senior subordinated notes to '4', indicating
S&P's expectation of average (30%-50%) recovery in the event of a
default, from '3'. The issue-level rating on these notes remains
'BB-'. The 7.375% senior subordinated notes benefit from
guarantees of domestic subsidiaries but rank below the new senior
notes in regard to foreign subsidiaries, which provide a
meaningful amount of Terex's profitability. The foreign
subsidiaries do not provide guarantees to the senior subordinated
notes. S&P expects the company to use proceeds from the new notes
to pay borrowings under its revolver, to prepay certain term loan
amounts, and for general corporate purposes.
"The ratings on Westport, Connecticut-based Terex reflect the
company's participation in the highly cyclical and competitive
construction equipment industry and its aggressive financial
profile," said Standard & Poor's credit analyst Dan Picciotto.
These factors are mitigated by the company's satisfactory business
position as a major provider of construction equipment and by its
good geographic and product diversity.
Terex manufactures a broad range of equipment for the
construction, infrastructure, and mining industries. Its business
strengths include well-known brands, low-cost products, and good
aftermarket parts sales. It has geographic diversity, with more
than half of its sales coming from outside the U.S. Through a
number of acquisitions, Terex has grown to become a sizable global
construction equipment company. Terex has funded acquisitions
with a combination of debt and equity to temper leverage.
The negative rating outlook indicates that S&P could lower the
ratings if headroom under covenants is limited and the company is
delayed in obtaining adequate relief. In addition, if Terex's
operating performance continues to deteriorate or if credit
measures did not appear likely to rebound in 2010, S&P could lower
the ratings. If, for instance, funds from operations were likely
to become negative and there were not significant excess cash
balances, S&P could lower the ratings.
Rating List
Terex Corp.
Corporate Credit Rating BB-/Negative/--
New Rating
$300 Mil Sr Unsec Notes
Due 2016 (Proposed) BB-
Recovery Rating 3
$150 Mil Conv Sr Sub Notes
Due 2015 (Proposed) B
Recovery Rating 6
Recovery Rating Revised
To From
-- ----
$300 Mil 7.375% Sr Sub Notes BB- BB-
Recovery Rating 4 3
UNIFRAX HOLDING: S&P Gives Negative Outlook & Affirms 'B' Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services revised the outlook on Unifrax
Holding Co. to negative from stable. All ratings are affirmed,
including S&P's 'B' long-term corporate credit rating.
"The outlook revision reflects the significant decline in sales
volumes in the first quarter of 2009 because of the global
industrial recession and our expectations that Unifrax's leverage
will likely increase over the next several quarters, approaching
the upper end of our expectations," said Standard & Poor's credit
analyst John R. Sico.
The ratings on Unifrax reflect the company's highly leveraged
financial risk profile, its small scale of operations, and the
limited visibility on prospects in its core industrial and
automotive application markets. Partly offsetting these
limitations is the company's position as a niche producer, its
historically sound margins, and up to now, its good cash flow
generation.
Niagara Falls, New York-based Unifrax is a global producer of
ceramic fiber products used by a wide variety of industries for
high-temperature applications including metal and ceramic/glass
processing, auto, and fire protection. The company has a solid
No. 2 share in the global refractory ceramic fiber market, and
holds leading positions in North America and Europe.
Ceramic fiber is a heat-resistant material offering stability at
high temperatures and lightweight, low-heat-transmission
properties. Although it is considered a cost-effective
alternative to traditional bricks, ceramic fiber represents only
about 5% of total refractory shipments; however, the company
expects to increase penetration over time. The company's end
markets are cyclical, fragmented, and highly competitive.
However, Unifrax's customer base is relatively diverse, and a
significant proportion of the revenue it derives from maintenance
and replacement helps reduce volatility in its earnings and cash
flow. Additionally, the company is seeking to expand its
operations in higher-growth emerging markets, especially China,
where it currently has a limited presence.
The company's good niche market positions and sound operating
margins have allowed it to sustain credit measures appropriate for
the rating. However, S&P expects credit measures to weaken. S&P
could lower the rating if performance weakens more than expected
for any protracted time stemming from the industrial recession,
resulting in more significant deterioration in credit measures.
Specifically, if adjusted leverage extends beyond the 6x area, or
if the company is unable to comply with covenants, a downgrade may
be warranted. Upside rating potential in the near term appears to
be unlikely, although S&P could revise the outlook to stable if
market conditions and headroom on covenants improve.
VALEANT PHARMACEUTICALS: Moody's Assigns 'Ba3' Rating on Offering
-----------------------------------------------------------------
Moody's Investor's Service assigned a rating of Ba3 (LGD3, 47%) to
the new senior unsecured note offering of Valeant Pharmaceuticals
International to be issued under Rule 144A. At the same time
Moody's assigned a B1 Corporate Family Rating, Ba3 Probability of
Default Rating and SGL-2 Speculative Grade Liquidity Rating. The
rating outlook is stable.
Proceeds of the offering are expected to be used for general
corporate purposes including repurchases of shares and convertible
notes.
Valeant's B1 Corporate Family Rating reflects the company's
position as a small specialty pharmaceutical company, with
somewhat mixed product sales trends and a lack of critical mass in
any key therapeutic categories. The rating reflects success thus
far in the company's major 2008 restructuring, which is providing
enhanced strategic focus on dermatology and neurology and
resulting in good cost controls.
Debt levels currently appear reasonable, with solid CFO/Debt and
FCF/Debt metrics. The company has made modest sized acquisitions
that should bring new growth. However, significant growth is
dependent upon successful execution of products in the pipeline,
which include retigabine and taribavirin. Disappointments with
these products would represent a key strategic setback, and would
likely cause the company to accelerate its search for external
growth.
The rating outlook is stable, which assumes that Valeant is
unlikely to add additional debt to its capital structure in the
near term, and that its business development activities will be
funded with existing cash.
Over time, positive pressure could result from a long track record
of good operating results following the 2008 restructuring, and if
there are positive steps in the clinical development of retigabine
or taribavirin.
Conversely, downward rating pressure could result under these
scenarios: (1) a decline in CFO/Debt below 15%; (2) a significant
negative development in the retigabine clinical development
program; or (3) a sizeable cash-financed acquisition that
pressures the company's cash coverage of debt and cash flow to
debt ratios.
Ratings assigned to Valeant Pharmaceuticals International:
-- B1 Corporate Family Rating
-- Ba3 Probability of Default Rating
-- Ba3 (LGD3, 47%) rating on $300 million senior unsecured notes
due 2016
-- SGL-2 Speculative Grade Liquidity Rating
Moody's does not rate Valeant's 3% convertible subordinated notes
due 2010 or its 4% convertible subordinated notes due 2013.
Moody's last rating action on Valeant took place on July 30, 2008,
when Moody's withdrew Valeant's ratings after the company retired
its 2011 senior notes early.
Headquartered in Aliso Viejo, California, Valeant Pharmaceuticals
International is a global specialty pharmaceutical company.
Valeant reported approximately $657 million of total revenues
during 2008.
VAQUERO ROBLES: Case Summary & 7 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Vaquero de Los Robles, LLC
285 Bridge Street
San Luis Obispo, CA 93401
Bankruptcy Case No.: 09-12004
Debtor-affiliate filing separate Chapter 11 petition:
Entity Case No.
------ --------
Spanish Springs II, LLC 09-12006
Type of Business: The Debtor is a single-asset, real estate
company.
Chapter 11 Petition Date: May 28, 2009
Court: United States Bankruptcy Court
Central District of California (Santa Barbara)
Judge: Robin Riblet
Debtor's Counsel: William C. Beall, Esq.
Beall and Burkhardt
1114 State St Ste 200
Santa Barbara, CA 93101
Tel: (805) 966-6774
Fax : (805) 963-5988
Email: artyc@aol.com
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The Debtor's Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Planning Consultants $490,300
246 Encanto Avenue
Pismo Beach, CA 93449
Drake Farms Excavating $432,600
P.O. Box 5410
San Luis Obispo, CA 93403
Design Haus AIA $322,090
Central Coast Fabricators, Inc. $257,036
EDA $204,621
Frederick K. Glick, Esq. $62,430
Geo Solutions $32,010
The petition was signed by John E. King, manager.
WASHINGTON MUTUAL: Fitch Puts Low-B Ratings on Notes on Pos. Watch
------------------------------------------------------------------
Fitch Ratings has placed 14 classes of notes issued out of the
Washington Mutual Master Note Trust totaling $6.8 billion on
Rating Watch Positive. These notes are now entirely backed by
credit card receivables originated by Chase Bank USA, N.A.
On May 19, Chase removed all Washington Mutual-originated credit
card accounts and receivables from the Washington Mutual Master
Trust. Prior to the removal, a significant number of accounts
belonged to those originated by Washington Mutual Bank. Following
the removal, the trust is comprised entirely of receivables
originated by Chase, which have different performance metrics than
the legacy Washington Mutual receivables; specifically, chargeoffs
are significantly lower and the monthly payment rate is higher
than the pre-removal performance.
These classes of Washington Mutual Master Note Trust were placed
on Rating Watch Positive:
-- $750,000,000 Class 2006-A2: 'AA-';
-- $1,250,000,000 Class 2006-A3: 'AA-';
-- $500,000,000 Class 2006-A4: 'AA-';
-- $1,100,000,000 Class 2007-A1: 'AA-';
-- $875,000,000 Class 2007-A2 'AA-';
-- $425,000,000 Class 2007-A4 'AA-';
-- $200,000,000 Class 2007-A5 'AA-';
-- $300,000,000 Class 2006-M1 'A-';
-- $150,000,000 Class 2007-B1 'BBB';
-- $200,000,000 Class 2006-C1 'BB+';
-- $150,000,000 Class 2006-C2 'BB+';
-- $200,000,000 Class 2006-C3 'BB+';
-- $125,000,000 Class 2007-C1 'BB+';
-- $606,000,000 Class 2005-D2 'B-'.
WC WOOD: Voluntary Chapter 15 Case Summary
------------------------------------------
Chapter 15 Debtor: W.C. Wood Corporation, Ltd.
5 Arthur St. South
Guelph, ON N1H 6L9
Canada
Chapter 15 Case No.: 09-11893
Debtor-affiliates filing subject to Chapter 11 petitions:
Entity Case No.
------ --------
W.C. Wood Holdings, Inc. 09-11895
W.C. Wood Corporation, Inc. 09-11896
Chapter 15 Petition Date: May 29, 2009
Court: District of Delaware (Delaware)
Judge: Kevin Gross
Chapter 15 Debtors' Counsel: L. Katherine Good, Esq.
good@rlf.com
Russell C. Silberglied, Esq.
silberglied@rlf.com
Richards, Layton & Finger
One Rodney Square
920 North King Street
Wilmington, DE 19801
Tel: (302) 651-7700
Fax: (302) 651-7701
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
WEIRTON MUNICIPAL: Fitch Cuts Ratings on $7.5 Mil. Bonds to 'BB+'
-----------------------------------------------------------------
Fitch Ratings has downgraded to 'BB+' from 'BBB-' the rating on
approximately $7.5 million of Weirton Municipal Hospital Building
Commission hospital revenue bonds (Weirton Medical Center, Inc.),
series 2001A. Fitch does not rate approximately $13.9 million of
Weirton Municipal Hospital Building Commission adjustable-rate
demand hospital revenue bonds (Weirton Medical Center, Inc.),
series 2001B, which are supported by a PNC Bank letter of credit.
The Rating Outlook is Stable.
The downgrade is based on Weirton Medical Center's continued
operating losses combined with reduced liquidity. In fiscal 2008,
WMC's operating income was negative $1.27 million (negative 1.3%
operating margin), marking the seventh consecutive year that WMC
has reported negative income from operations. Income from
operations through the nine-month interim ended March 31, 2009,
was a negative $1.5 million (negative 1.9% operating margin) as
compared to a $0.96 million loss from operations (negative 1.3%
operating margin) in the year-earlier period. The weaker results
have occurred in spite of continued expense and wage reductions.
Further, Weirton's liquidity position has declined reflecting the
impact of negative investment returns on its equity investments.
Currently, WMC's asset allocation is 46% fixed income and cash,
and 54% equities, which is considered somewhat aggressive in light
of WMC's weak operating results. While WMC's liquidity position
has historically been considered a credit strength, unrestricted
cash and investments declined to $29.3 million (at March 31, 2009)
from $38.0 million at fiscal year end 2008. As result, WMC's days
cash on hand declined to 117 from 162, cushion ratio declined to
10.8 times (x) from 14.0x, and cash to debt declined to 112.2%
from 143.6%. Fitch believes WMC's historical liquidity indicators
have been maintained as a result of deferred capital spending.
Over the last five years and through the interim Weirton's capital
expenditure as a percentage of depreciation has averaged only 58%.
As a result, WMC's average age of plant is a very high 25.5 years.
Additional concerns include flat to declining utilization,
unfavorable service area characteristics, and WMC's variable-rate
debt exposure (approximately 52% of total debt outstanding).
Inpatient admissions declined for the second straight year to
7,899 in fiscal 2008 from 8,109 in fiscal 2006, a 2.6% decline.
On an annualized basis, fiscal 2009 is on pace to finish below the
previous year as well. Outpatient surgeries and clinic visits
also declined from fiscal 2007 to fiscal 2008. WMC's service area
presents significant challenges from a reimbursement standpoint as
self-pay and governmental payors represent 9.4% and 57.3% of gross
revenues, respectively. WMC also saw bad debt as a percentage of
revenue spike up to 12% in fiscal 2008 from an already high 8.7%
in fiscal 2007. Through the interim, this percentage has tapered
off some to 9.8%.
WMC's variable-rate debt is backed by an LOC from PNC Bank, which
exposes WMC to renewal risk and put risk. The LOC expires in
January 2010, but has a yearly renewal option. However, should
the bank decide not to renew, WMC does have adequate liquidity to
cover the put. In addition, the series 2001B loan agreements
impose more stringent operating covenants including a rolling 12-
month debt service coverage requirement of 1.5x (tested quarterly)
and a minimum days cash on hand covenant of 100 (tested monthly).
The Stable Rating Outlook reflects the fact that management has
taken various revenue cycle initiatives in an effort to stem
further operating losses. Most recently, management partnered
with Premier to evaluate the organization, identifying $3 million
in annual savings ($2 million approved thus far), created a
director of revenue cycle position, and has reduced staffing by 42
FTEs since January.
WMC is a 238-bed acute care hospital located in Weirton, WV,
approximately 35 miles west of downtown Pittsburgh. The hospital
had total revenues of $100 million in fiscal 2008. WMC covenants
to provide annual and quarterly disclosure to bondholders;
however, quarterly disclosure is not done through the NRMSIRS.
Weirton is not party to any swap transactions.
WOO LLC: Case Summary & 4 Largest Unsecured Creditors
-----------------------------------------------------
Debtor: WOO, LLC
145 Route 17
Upper Saddle river, NJ 07458
Bankruptcy Case No.: 09-23944
Chapter 11 Petition Date: May 29, 2009
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Judge: Novalyn L. Winfield
Debtor's Counsel: Richard D. Trenk, Esq.
Trenk, DiPasquale, Webster,
Della Fera & Sodono, P.C.
347 Mt. Pleasant Avenue
Suite 300
West Orange, NJ 07052
Tel: (973) 243-8600
Email: rtrenk@trenklawfirm.com
Total Assets: $131
Total Debts: $4,145,000
A full-text copy of the Debtor's petition, including a list of its
4 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/njb09-23944.pdf
The petition was signed by Leigh Rzasa Ormes, managing partner of
the Company.
WSB FINANCIAL: Gets NASDAQ Delisting Notice
-------------------------------------------
The NASDAQ Stock Market said it will delist the common stock of
WSB Financial Group, Inc. WSB Financial Group, Inc.'s stock was
suspended on May 21, 2009, and has not traded on NASDAQ since that
time. NASDAQ will file a Form 25 with the Securities and Exchange
Commission to complete the delisting. The delisting becomes
effective ten days after the Form 25 is filed.
Based out of Bremerton, Washington, WSB Financial Group (NASDAQ:
WSFG) -- http://www.westsoundbank.com/-- is the holding company
for Westsound Bank and Mortgage. The Company was founded in 1999,
and currently operates nine full service offices located within
five contiguous counties within Western Washington.
WYLE HOLDINGS: Moody's Reviews 'B2' Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service has placed the B2 corporate family and
probability of default ratings of Wyle Holdings, Inc., under
review for possible downgrade following the company's announcement
that it has entered into a definitive merger agreement to be
acquired by Court Square Capital Partners. The company has stated
that the transaction is subject to obtaining consent of first lien
lenders and certain regulatory approvals. The review will assess
capital structure, borrowing terms and liquidity profile.
These ratings have been placed under review for possible
downgrade:
Wyle Holdings, Inc.
-- Corporate family rating, B2
-- Probability of default rating, B2
Wyle Laboratories, Inc.
-- $30 million first lien revolver due 2013, Ba3, LGD 3, 31%
-- $200 million first lien term loan due 2013, Ba3, LGD 3, 31%
Moody's last rating action on Wyle occurred December 13, 2007,
when the B2 corporate family rating was assigned.
Wyle Holdings, Inc., is a leading provider of engineering and
information technology services to the federal government. About
two-thirds of the company's revenues are derived from the U.S.
Navy, NASA, and the U.S. Air Force. The company generated 2008
revenue of approximately $750 million.
WYLE LABORATORIES: Moody's Reviews Ba3 Ratings on Two Loans
-----------------------------------------------------------
Moody's Investors Service has placed the B2 corporate family and
probability of default ratings of Wyle Holdings, Inc., under
review for possible downgrade following the company's announcement
that it has entered into a definitive merger agreement to be
acquired by Court Square Capital Partners. The company has stated
that the transaction is subject to obtaining consent of first lien
lenders and certain regulatory approvals. The review will assess
capital structure, borrowing terms and liquidity profile.
These ratings have been placed under review for possible
downgrade:
Wyle Holdings, Inc.
-- Corporate family rating, B2
-- Probability of default rating, B2
Wyle Laboratories, Inc.
-- $30 million first lien revolver due 2013, Ba3, LGD 3, 31%
-- $200 million first lien term loan due 2013, Ba3, LGD 3, 31%
Moody's last rating action on Wyle occurred December 13, 2007,
when the B2 corporate family rating was assigned.
Wyle Holdings, Inc., is a leading provider of engineering and
information technology services to the federal government. About
two-thirds of the company's revenues are derived from the U.S.
Navy, NASA, and the U.S. Air Force. The company generated 2008
revenue of approximately $750 million.
* Large Companies With Insolvent Balance Sheets
-----------------------------------------------
Total
Share- Total
Total holders Working
Assets Equity Capital
Company Ticker ($MM) ($MM) ($MM)
ABSOLUTE SOFTWRE ABT CN 107 (7) 24.00
AFC ENTERPRISES AFCE US 131 (33) 2.00
AMR CORP AMR US 24518 (3108) (3545.00)
ARBITRON INC ARB US 189 (3) (22.00)
BLOUNT INTL BLT US 499 (43) 175.00
BOARDWALK REAL E BEI-U CN 2318 (5) N.A.
BOARDWALK REAL E BOWFF US 2318 (5) N.A.
BOEING CO BA US 55339 (509) (2160.00)
BOEING CO BAB BB 55339 (509) (2160.00)
BOEING CO-CED BA AR 55339 (509) (2160.00)
CABLEVISION SYS CVC US 9551 (5349) (367.00)
CENTENNIAL COMM CYCL US 1413 (992) 148.00
CENVEO INC CVO US 1501 (221) 163.00
CHENIERE ENERGY CQP US 1975 (408) 79.00
CHENIERE ENERGY LNG US 2892 (444) 278.00
CHOICE HOTELS CHH US 333 (146) (10.00)
CLOROX CO CLX US 4464 (309) (866.00)
DELTEK INC PROJ US 191 (48) 42.00
DISH NETWORK-A DISH US 7063 (1666) (422.00)
DOMINO'S PIZZA DPZ US 473 (1396) 99.00
DUN & BRADSTREET DNB US 1614 (785) (176.00)
EMBARQ CORP EQ US 8050 (527) (163.00)
ENERGY SAV INCOM SIF-U CN 551 (423) (162.00)
EPICEPT CORP EPCT SS 12 (5) (2.00)
EXELIXIS INC EXEL US 355 (88) 53.00
EXTENDICARE REAL EXE-U CN 1833 (51) 98.00
FORD MOTOR CO F US 207270 (16476) 12631.00
FORD MOTOR CO F BB 207270 (16476) 12631.00
GENTEK INC GETI US 425 (21) 88.00
GLG PARTNERS INC GLG US 345 (382) 101.00
GLG PARTNERS-UTS GLG/U US 345 (382) 101.00
HEALTHSOUTH CORP HLS US 1921 (656) (53.00)
HOLLY ENERGY PAR HEP US 469 0 (6.00)
IMAX CORP IMX CN 226 (98) 19.00
IMAX CORP IMAX US 226 (98) 19.00
INCYTE CORP INCY US 189 (256) 123.00
INTERMUNE INC ITMN US 193 (82) 121.00
IPCS INC IPCS US 545 (41) 62.00
JOHN BEAN TECH JBT US 559 (6) 78.00
KNOLOGY INC KNOL US 635 (52) 25.00
LINEAR TECH CORP LLTC US 1491 (288) 995.00
MEAD JOHNSON-A MJN US 1707 (897) 380.00
MEDIACOM COMM-A MCCC US 3700 (463) (281.00)
MOODY'S CORP MCO US 1802 (919) (482.00)
NATIONAL CINEMED NCMI US 604 (514) 89.00
NAVISTAR INTL NAV US 9623 (1492) 1367.00
NPS PHARM INC NPSP US 200 (225) 87.00
OCH-ZIFF CAPIT-A OZM US 1821 (177) N.A.
OVERSTOCK.COM OSTK US 136 (4) 33.00
PALM INC PALM US 656 (84) 30.00
PDL BIOPHARMA IN PDLI US 219 (422) 79.00
QWEST COMMUNICAT Q US 19711 (1164) (344.00)
REGAL ENTERTAI-A RGC US 2563 (246) (78.00)
RENAISSANCE LEA RLRN US 52 (3) (11.00)
REVLON INC-A REV US 784 (1095) 103.00
SALLY BEAUTY HOL SBH US 1433 (702) 389.00
SANDRIDGE ENERGY SD US 2670 (114) 118.00
SEMGROUP ENERGY SGLP US 314 (130) (431.00)
SOLARWINDS INC SWI US 91 (40) 23.00
SONIC CORP SONC US 821 (43) 26.00
STANDARD PARKING STAN US 231 0 (15.00)
SUCCESSFACTORS I SFSF US 162 (7) 0.00
SUN COMMUNITIES SUI US 1197 (68) N.A.
TALBOTS INC TLB US 971 (183) (13.00)
TAUBMAN CENTERS TCO US 2922 (276) N.A.
TENNECO INC TEN US 2742 (304) 272.00
THERAVANCE THRX US 214 (144) 152.00
UAL CORP UAUA US 19100 (2655) (2348.00)
UNITED RENTALS URI US 3976 (56) 266.00
VENOCO INC VQ US 730 (107) 33.00
VERIFONE HOLDING PAY IT 840 (38) 308.00
VERIFONE HOLDING PAY US 840 (38) 308.00
VERIFONE HOLDING VF2 GR 840 (38) 308.00
VIRGIN MOBILE-A VM US 323 (281) (141.00)
WALTER INVESTMEN WAC US 12 (44) N.A.
WARNER MUSIC GRO WMG US 4256 (110) (394.00)
WEIGHT WATCHERS WTW US 1087 (848) (313.00)
WR GRACE & CO GRA US 3726 (374) 892.00
*********
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.
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