/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090626.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, June 26, 2009, Vol. 13, No. 175 Headlines ALPHA NATURAL: S&P Retains Positive Watch on 'BB-' Corp. Rating ALSET OWNERS: Court OKs BMC Group as Claims & Notice Agent ALSET OWNERS: Proposes August 11 Auction for Rally's Stores ALSET OWNERS: Seeks to Employ Blank Rome as Bankr. Counsel AMBAC ASSURANCE: S&P Cuts Preferred Stock Rating to 'B' AMERICAN INT'L: Extends $7.2-Bil. Notes Exchange Offer to July 2 AMERICAN INT'L: Fees Represent 3% of Weil's Last 12 Mos. Revenues AMERICAN INT'L: Gov't Gets $25-Bil. Stake in Life Insurance Units AMF BOWLING: Moody's Changes Probability of Default Rating to 'B3' AMR CORP: American Increases Boeing Orders to 31 Jets From 29 AMR CORP: Expects to End Q2 With $3.3 Billion Cash ARMANA HOLDINGS: Voluntary Chapter 11 Case Summary ARVINMERITOR INC: Sells Stake in LVS Chassis Businesses ASARCO LLC: Disclosure Statement Hearing Adjourned to June 30 ASARCO LLC: Parent Offers $3.1 Billion for Operating Assets ASPEN PEAK: Case Summary & 20 Largest Unsecured Creditors AURORA OIL & GAS: Lenders Extend Forbearance Until July 15 AURORA OIL & GAS: Taps Huron's Edlein as Restructuring Officer AVIZA TECHNOLOGY: U.S. Trustee Names 3 Members to Creditors Panel BANK OF AMERICA: Fed Tried to Hide Involvement in Merrill Buy BILL BARRETT: Moody's Assigns 'Ba3' Corporate Family Rating BILL BARRETT: S&P Assigns 'BB-' Long-Term Corporate Credit Rating BNYCP: S&P Cuts Ratings on $307 Mil. Tax-Exempt Bonds to 'BB' BOEGER LAND: Proposes Paul Jamond as Chapter 11 Counsel BROWN STEEL: Files for Chapter 11 Bankruptcy Protection BUCKSHIRE LLC: Involuntary Chapter 11 Case Summary BUTLER SERVICES: Gets Interim Approval to Access GECC Loans BUTLER SERVICES: Proposes Bayard P.A. as Co-Counsel BUTLER SERVICES: Proposes Moses & Singer as Counsel BUTLER SERVICES: Pursues Prompt Going-Concern Sale; Bids Due Today CAL-RIO LLC: Case Summary & 7 Largest Unsecured Creditors CARITAS HEALTH: Can Sell Equipment Assets for $3,125,000 CARITAS HEALTH: Plan Filing Period Extended to October 4 CARAUSTAR INDUSTRIES: Wins Permission to Use Lenders' Collateral CASELLA WASTE: Moody's Assigns 'Ba2' Rating on Restated Facility CATHOLIC CHURCH: Court Issues Final Decree Closing Tucson Case CATHOLIC CHURCH: Davenport Reports Progress on Undertakings CEDAR PROFESSIONAL: Case Summary & 5 Largest Unsecured Creditors CHEMTURA CORP: AFC, et al., Seek Shareholders' Committee CHEMTURA CORP: Committee Seeks to Retain FTI as Accountant CHEMTURA CORP: Court Allows Set-Off of Dow, Croda Obligations CHEMTURA CORP: Great Lakes Sues VanDeMark to Perform Under Deal CHEMTURA CORP: Has Deal with Entergy on Deposits; Docs Under Seal CHEMTURA CORP: Seeks to Settle U.S. & Canada Anti-Trust Fines CHEMTURA CORP: Taps Biggins Lacy to Evaluate Headquarter Lease CITIGROUP INC: Raising Salaries of Many Workers by As Much as 50% CITIZENS REPUBLIC: "Exploring" Substantial Debt-to-Equity Swap CITY OF MINNEAPOLIS: Moody's Cuts Rating on Revenue Bonds to 'Ba2' CONSECO INC: Enters Into Reinsurance Transaction to Build Capital CONSOLIDATED RESORTS: Files for Bankruptcy Protection CROWN COURT PARTNERSHIP: Case Summary & 5 Largest Unsec. Creditors CRUSADER ENERGY: Creditors Committee Has 7 Members CRUSADER ENERGY: Can Use Lenders' Cash Collateral Until July 21 CRUSADER ENERGY: Wants Incentive Program for Management DEBT RELIEF: Files for Chapter 11 Bankruptcy Protection DECRANE AEROSPACE: Moody's Confirms 'Caa1' Corporate Family Rating DISCOVER FINANCIAL: Fitch Affirms 'BB+' Preferred Stock Rating E*TRADE FINANCIAL: To Meet With Shareholders re Exchange Offers EASTWIND MARITIME: Voluntary Chapter 7 Case Summary EDDIE BAUER: Section 341(a) Meeting Scheduled for July 15 EDDIE BAUER: Wants to Sell Assets to CCMP Affiliate for $202MM ENTERGY GULF: Moody's Upgrades Preferred Stock Rating to 'Ba2' EXTENDED STAY: Allowed to Maintain Insurance Programs EXTENDED STAY: Asks Court to Approve Weil Gotshal Engagement EXTENDED STAY: Court Extends Schedules Deadline to July 30 EXTENDED STAY: Court OKs Payment of Prepetition Sales & Use Taxes EXTENDED STAY: May Employ Kurtzman Carson as Claims Agent EXTENDED STAY: May Maintain Prepetition Customer Programs FLEETWOOD ENTERPRISES: May Sell Motor Home to AIP for $53,000,000 G & S METAL: Case Summary & 20 Largest Unsecured Creditors GENERAL ENVIRONMENTAL: CVC Discloses 48% Equity Stake GENERAL MARITIME: S&P Assigns 'B' Senior Unsecured Debt Rating GENERAL MOTORS: Retirees Turn to Congress to Protect Benefits GHOST TOWN: Wants to Borrow $250,000 from Alaska Pressley GOODY'S LLC: Landlords Wants Federal Court to Determine Stub Rent GOTTSCHALKS INC: Court Establishes August 24 General Bar Date GRANT FOREST: S&P Withdraws 'CCC+' Corporate Credit Rating GRANT FOREST: Seeks Bankruptcy Protection in Ontario HAIGHTS CROSS: Inks Pact With Lenders on Debt Restructuring HARTMARX CORP: Sale to Emerisque Okayed Amid Committee Objections HAWAII SUPERFERRY: Seeks to Abandon Two Catamarans HAWAIIAN TELCOM: Considered, But Rejected, Sandwich Plan HAWAIIAN TELCOM: Hawaii State Retains Chanin as Fin'l Advisors HAWAIIAN TELCOM: May Use Cash Collateral Through August 31 HAYES LEMMERZ: Committee Taps Bifferato as Delaware Counsel HAYES LEMMERZ: Committee Taps Chanin Capital as Financial Advisor HAYES LEMMERZ: Committee Taps Lowenstein Sandler as Counsel HOLLYWOOD THEATERS: Moody's Assigns 'B3' Rating on Senior Notes HUNTSMAN CORP: Lawsuit Settlement Cues S&P to Keep Negative Watch IED PINNACLE/MILLER: Lender Wants Case Converted to Chapter 7 IMF INVESTMENT: Case Summary & 3 Largest Unsecured Creditors INC. CATHEXIS: Case Summary & 20 Largest Unsecured Creditors JOURNAL REGISTER: Court Defers Ruling on Chapter 11 Plan KABUTO ARIZONA: U.S. Trustee Unable to Appoint Creditors Committee KIRBY PETERSON: Involuntary Chapter 11 Case Summary LAKE LAS VEGAS: Will Abandon Reflection Bay Golf LAKE AT LAS VEGAS: Use of Cash Collateral Extended until June 30 LAKE AT LAS VEGAS: Seeks to Extend Plan Filing Deadline to June 30 LEAR CORP: May Seek Bankruptcy Protection By July 1 LENOX HILL: Moody's Affirms 'Ba1'; Changes Outlook to Negative LYNDON CREAGER: Case Summary & 10 Largest Unsecured Creditors MAGNACHIP SEMICONDUCTOR: U.S. Trustee Appoints Creditors Committee MAHALO ENERGY: Can Hire Kline Kline as General Bankruptcy Counsel MAHALO ENERGY: U.S. Trustee Appoints 6-Member Creditors Committee MARK IV: Court Sets Disclosure Statement Hearing on July 28 MAXXAM INC: Sells Stake in RMCAL Joint Venture for Nominal Amount MERCER INT'L: Refinancing Risks Cue Moody's to Junk Ratings METALDYNE CORP: Receives Final Approval to Borrow $20 Million MIDWAY GAMES: Threshold Sues to Block Mortal Kombat Sale MILACRON INC: To Pursue Avenue Capital Deal; No Rival Bids Filed MODERN CONTINENTAL: Files Liquidating Plan; Jalbert as Trustee MOOG INC: S&P Downgrades Corporate Credit Rating to 'BB' MXENERGY INC: Societe Generale Directs Exchange Offer for Notes PROTEIN SCIENCES: To Contest Involuntary Ch. 7 Petition QUIGLEY CO: Reaches $16.5-Mil. Settlement with OneBeacon RADIO ONE: S&P Junks Corporate Credit Rating From 'B-' ROCKY MOUNTAIN: Case Summary & 20 Largest Unsecured Creditors SARA DELUCIO: Case Summary & 5 Largest Unsecured Creditors SEA LAUNCH: Boeing Co. Takes $35-Million Charge SEALY CORP: Expects to Post $30MM Q2 2009 Income from Operations SENSUS METERING: Refinancing Plans Won't Move Moody's 'B2' Rating SIX FLAGS: Gets Court Allows Firm to Tap Cash Collateral SPECTRUM BRANDS: Court Confirms Plan; to Emerge in August SPEEDEMISSIONS INC: Stockholders Re-elect 5 Members to Board SPRINGBROOK HILL: Case Summary & 11 Largest Unsecured Creditors STUDIO THEATRE: U.S. Trustee Wants Case Converted to Chapter 7 SUNRISE SENIOR: To Receive $9.8MM in Settlement of Trinity Suit SYNCORA GUARANTEE: BCP Offer for RMBS Classes Moved Until Friday SYNOVUS FINANCIAL: Fitch Cuts Issuer Default Rating to 'BB-' TERRA CONVERSIONS: Case Summary & 19 Largest Unsecured Creditors TEUFEL NURSERY: Voluntary Chapter 11 Case Summary TICKETMASTER ENTERTAINMENT: S&P Keeps Negative Watch on BB Rating TITAN ENERGY: Closes Acquisition of RBG's Industrial Division TPF II: S&P Changes Outlook to Negative; Affirms 'BB-' Rating TRONOX INC: Court Sets August 12 as Claims Bar Date TRONOX INC: Seeks to Employ ATL as Tax Consultants TRONOX INC: To Execute Stalking Horse Deal by July 31 TVI CORPORATION: Nasdaq to Delist Common Stock on July 6 UNI-MARTS LLC: Wants Plan Filing Deadline Moved to July 22 UNITED SUBCONTRACTORS: Plan Confirmed; Expects to Emerge June 30 UNIVISION COMMUNICATIONS: Fitch Assigns 'B+/RR3' Rating on Notes UNIVISION COMMUNICATIONS: Moody's Puts 'B2' Rating on $500MM Notes UNIVISION COMMUNICATIONS: S&P Give Negative Outlook on 'B-' Rating VIGO SNACK: Involuntary Chapter 11 Case Summary VONAGE HOLDINGS: Settles Shareholder Litigation Over 2006 IPO WHITE ENERGY: Gets Final Approval to Use Cash Collateral YRC WORLDWIDE: Obtains Amendment to JPMorgan Credit Agreement YRC WORLDWIDE: Units Defer $83MM in Pension Contributions * Business Credit Less Available Than Last Year, TMA Says * Citizens Advice Bureau Says Jersey's Bankruptcy Laws Need Change * Hughes Watters Paralegal Turea Simpson Forms Peer Group * Lehman, AIG, Citi Fees Comprise 10.7% of Weil's Revenues * Leonard Goldberger Appointed to INSOL Committee * NasTrac Says Tool Repossessions Rising Dramatically in Q1 2009 * New Home Sales Unexpectedly Decline 0.6% in May * Paying Preference Settlement Revives Released Guarantee * BOOK REVIEW: Instincts of the Herd in Peace and War ********* ALPHA NATURAL: S&P Retains Positive Watch on 'BB-' Corp. Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said its ratings on Alpha Natural Resources Inc. and Foundation Coal Corp., including the 'BB-' corporate credit ratings, remain on CreditWatch with positive implications, where they were placed on May 12, 2009. The continued CreditWatch listing reflects the pending merger between Alpha and Foundation under which they will merge in an all-stock transaction valued at approximately $2 billion. Under the terms of the transaction, Foundation will be the surviving corporation and be renamed Alpha Natural Resources Inc. Foundation's shareholders will receive 1.084 shares of the new company, for each share of Foundation, and each share of Alpha will automatically become one share of the combined company. Based on S&P's initial analysis, S&P has determined that if the merger is completed as currently proposed, and market conditions remain in line with S&P's expectations, S&P would likely assign a 'BB' rating to the combined company. S&P would also assign a stable outlook. "The anticipated higher rating on the combined entity reflects S&P's belief that the merger between Alpha Natural and Foundation Coal would modestly strengthen Alpha's business risk profile," said Standard & Poor's credit analyst Maurice Austin. As a result, the company will be the third-largest U.S. coal producer and should benefit from expanded geographic and product diversity. The combination of the two companies would create an entity with improved operating diversity and the fourth-largest reserve base in the U.S., concentrated in three major operating basins, Central Appalachia, the Powder River Basin, and Northern Appalachia. Pro forma for the merger, the company will have 2008 pro forma revenues of $4 billion and EBITDA of nearly $740 million, adjusted for postretirement obligations, asset retirement obligations, and operating leases. S&P estimate 2008 pro forma adjusted total debt to EBITDA to be about 2.4x. The companies expect to complete the merger by the third quarter of 2009, subject to shareholder approvals. Upon closing, Alpha shareholders will own about 59% of the combined entity and Foundation about 41%. In resolving the CreditWatch, S&P will monitor the progress the parties make toward closing the transaction and assess any potential changes to the proposed capital structure and operating environment that could affect the ratings. ALSET OWNERS: Court OKs BMC Group as Claims & Notice Agent ---------------------------------------------------------- Alset Owners, LLC, and its affiliates obtained approval from the U.S. Bankruptcy Court for the District of Delaware to hire BMC Group Inc. as their claims, noticing and solicitation agent. The Debtors have identified 900 creditors, potential creditors and other parties-in-interest to whom certain notices. The Debtors wish to engage BMC to sent out certain designated notices, receive and maintain claims and prepare the claims register, and act as voting agent in the Chapter 11 caes. BMC's consulting service hourly rates per person include: Data Entry/ Administrative Support $25 to $45 Analysts $80 to $110 Consultants $110 to $140 Project Managers $175 to $225 Principal /Director $250 BMC will also seek reimbursement for reasonable direct expenses. The Debtors are authorized to indemnify BMC for any claim arising from, related to, or in connection with BMC's performance of services. The Debtors paid BMC an initial advance payment of $5,000. BMC and its employees are "disinterested persons" as that term is defined in 11 U.S.C. Sec. 101(14). About Alset Owners Alset Owners LLC is a franchisee of Rally's and Checkers' Restaurants. The Company and certain affiliates filed for Chapter 11 on June 5, 2009 (Bankr. D. Del. Case No. 09-11960). The Company, in its petition, listed assets of $19.7 million and debt totaling $17.4 million. Attorneys at Blank Rome LLP represent the Debtor. BMC Group is the claims and noticing agent. ALSET OWNERS: Proposes August 11 Auction for Rally's Stores ----------------------------------------------------------- Alset Owners, LLC, and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware of proposed auction procedures under which an affiliate of the franchisor of its Rally's and Checkers' restaurants will be the stalking horse bidder. The Debtors are the largest franchisee of Checkers Drive-In Restaurants, Inc., the national franchisor of the Rally's and Checkers' restaurant chains. Alset's wholly owned subsidiary Altes LLC, a franchisee of the Rally's restaurant chain, operates several restaurants in various states, while another unit Setla, LLC, also a franchisee of the Rally's restaurant chain, operates several restaurants in Ohio. The Rally's/Checkers brand is the nation's largest chain of double drive-thru restaurants in the United States. At their peak, in 2007, the Debtors collectively operated approximately 120 restaurants with the Rally's or Checkers brand in six states, and had over 2,500 employees. The competitive atmosphere, as well as the rise in food and labor costs, among other things, led the Debtors to restructure their operations starting in late 2007. As of the Petition Date, the Debtors operated 77 restaurants, down from their peak of about 120 restaurants in 2007. An additional restaurant is still owned by the Debtors but is currently being operated by Alan Balan. After failing to obtain financing, the Debtors engaged in discussions with Checkers Drive-In in which the Franchisor initially was to assist the Debtors in restructuring the operations at the various restaurants in which the Debtors were franchisees. Several months later, after extensive negotiations, Checkerco, Inc., an affiliate of the Franchisor, entered into the Purchase Agreement to purchase substantially all of the Debtors' assets. The Purchase Agreement contemplates the sale of substantially all of the Debtors' assets, subject to higher or better bids, on terms that include: * Assets to be Sold. The assets being sold under the Purchase Agreement include substantially all of the Debtors' assets and restaurants, including (a) all owned restaurant equipment, supplies, and certain leased equipment,; (b) all of the Debtors' rights in contracts in which the Debtors are party relating to the Acquired Assets or Restaurants that Buyer elects to have assumed and assigned to it; (c) merchandise inventory; (d) real property leases; and (e) franchise agreements with the Franchisor. * Excluded assets. Assets not included in the sale include any rights, claims, or causes of action of the Debtors against third parties and any avoidance actions under the Bankruptcy Code, including preference actions, fraudulent conveyance actions and merchandise credits. * Purchase Price. The Purchase Price for the Acquired Assets comprises: (a) $300,000 for certain assets subject to liens in favor of Textron Financial Corporation, (b) $1,200,000 for all of the other acquired assets, (c) $3,800,000 payable to the Franchisor for outstanding royalties and other payment obligations under the Franchise Agreements that are to be assumed and assigned to the Buyer, (d) up to $500,000 for restructuring costs of estate professionals payable by the Buyer. * Break-Up Fee. $200,000, which is equal to approximately 3% of the estimated Purchase Price (exclusive of the Cure Amounts) to be received under the Purchase Agreement. * Optional Restaurants. The Buyer will have until June 30, 2009, to determine whether to purchase certain of the other Restaurants not included in the APA. * Employees. The Buyer intends to hire substantially all of the Debtors' employees at the Restaurants that will be acquired. A full-text copy of the APA, which includes a list of the stores included or excluded from the sale, is available for free at: http://bankrupt.com/misc/Alset_Checkers_APA.pdf Competing Bids The Debtors propose that the Checkers APA be further "tested' in the market place to make sure that they will realize the maximum value for their assets. The Debtors continue to market their assets for sale as a going concern. An electronic data room will soon be established and made available to potential buyers who have executed confidentiality agreements. The Debtors have retained Praetorian Group, Inc., as sales advisor. Praetorian will utilize their extensive resources to contact strategic and financial entities to determine potential interest in the Debtors' assets. The Debtors request that interested parties be required to submit bids by August 7, 2009 at 4:00 p.m. (EDT). Competing bids must exceed Checkerco's offer by $250,000. If bids are received, an auction will be held August 11, 2009, at 12:00 p.m. (EDT). The Debtors will seek approval of the results of the auction at the sale hearing on August 13, 2009, at or about 12:00 p.m. (EDT). The Court is scheduled to convene a hearing on the proposed auction procedures on July 7, 2009. Objections are due June 30, 2009. Checkerco is represented by: Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019-6064 Attn: Kelley A. Cornish, Esq. Seven J. Williams, Esq. Tel: (212) 373-3000 Fax: (212) 757-3900 About Alset Owners Alset Owners LLC is a franchisee of Rally's and Checkers' Restaurants. The Company and certain affiliates filed for Chapter 11 on June 5, 2009 (Bankr. D. Del. Case No. 09-11960). The Company, in its petition, listed assets of $19.7 million and debt totaling $17.4 million. Attorneys at Blank Rome LLP represent the Debtor. BMC Group is the claims and noticing agent. ALSET OWNERS: Seeks to Employ Blank Rome as Bankr. Counsel ---------------------------------------------------------- Alset Owners, LLC, and its affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to hire Blank Rome LLP as general bankruptcy counsel. Blank Rome will, among other things, (i) advise the Debtors as debtors and debtors-in-possession in the continued management of their business and properties, (ii) assist the Debtors regarding the administration and prosecution of their Chapter 11 cases, and (iii) prepare and prosecute all pleadings or papers to be filed with the Bankruptcy Court, and (iv) appear before the Bankruptcy Court or any other courts to represent and protect the interests of the Debtors and their estates. The attorneys and paraprofessionals presently designated to represent the Debtors and their current standard hourly rates are: Michael Z. Brownstein $700 per hour George N. Abrahams $650 per hour Bonnie Glantz Fatell $650 per hour David W. Carickhoff $430 per hour Rocco A. Cavalerie $470 per hour Other professionals may render work for the Debtors. Their customary hourly rates are $425 to $785 for partners, $245 to $485 for associates and counsel, and $105 to $280 for paraprofessionals. Blank Rome attests that it represents no interest adverse to the Debtors or their estates in the matters upon which the firm is to be engaged. Blank Rome received an aggregate of $450,000 in retainer payments from the Debtors prepetition, for services to be rendered in contemplation of and during the Debtors' Chapter 11 cases. About $248,919 remains in the retainer as of the Petition Date. The asset purchase agreement reached by the Debtors regarding the sale of their assets to Checkero Inc. and Checkers Drive-In- Restaurants Inc. require Checkero to satisfy certain of the Debtors' restructuring costs up to $500,000 under certain circumstances. Blank Rome may be contacted at: Bonnie Glantz Fatell (No. 3809) David W. Carickhoff (No.3715) 1201 North Market Street, Suite 800 Wilmington, DE 19801 Telephone: (302) 425-6400 Facsimile: (302) 425-6464 About Alset Owners Alset Owners LLC is a franchisee of Rally's and Checkers' Restaurants. The Company and certain affiliates filed for Chapter 11 on June 5, 2009 (Bankr. D. Del. Case No. 09-11960). The Company, in its petition, listed assets of $19.7 million and debt totaling $17.4 million. Attorneys at Blank Rome LLP represent the Debtor. BMC Group is the claims and noticing agent. AMBAC ASSURANCE: S&P Cuts Preferred Stock Rating to 'B' ------------------------------------------------------- On June 24, 2009, Standard & Poor's Ratings Services lowered its counterparty credit, financial strength, and financial enhancement ratings on Ambac Assurance Corp. to 'BBB' from 'A'. At the same time, Standard & Poor's also lowered the ratings on related entities and placed all of the ratings on CreditWatch with negative implications. The downgrade stems from S&P's view that Ambac is effectively in runoff. S&P also lowered the ratings because of S&P's belief that the likelihood of the company continuing as an operating entity capable of writing new business has decreased significantly. As the company's book of business runs off, it could become concentrated and lack sufficient sector diversity. In addition, the company's 2005-2007 vintage direct RMBS and CDO of ABS exposures are subject to continued adverse loss development that could erode capital adequacy. Supporting the holding company's debt-service needs might also place pressure on capital adequacy. As a runoff company, the ratings on Ambac would be no higher than in the 'BBB' category. S&P could lower the ratings again if, upon review of the insured portfolio, S&P determine that Ambac's capital position has weakened. Downgraded; CreditWatch/Outlook Action To From Ambac Assurance Corp. Connie Lee Insurance Co. Ambac Assurance U.K. Ltd. Counterparty Credit Rating Local Currency BBB/Watch Neg/-- A/Negative/-- Financial Strength Rating Local Currency BBB/Watch Neg/-- A/Negative/-- Ambac Assurance Corp. Ambac Assurance U.K. Ltd. Financial Enhancement Rating Local Currency BBB/Watch Neg/-- A/--/-- Ambac Financial Group, Inc. Counterparty Credit Rating Local Currency BB/Watch Neg/-- BBB/Negative/-- Ambac Assurance Corp. Preferred Stock B/Watch Neg BBB Ambac Financial Group, Inc. Senior Unsecured BB/Watch Neg BBB Subordinated B/Watch Neg BB+ AMERICAN INT'L: Extends $7.2-Bil. Notes Exchange Offer to July 2 ---------------------------------------------------------------- American International Group, Inc., has extended until July 2, 2009: -- its offer to exchange up to $4.0 billion principal amount of its 8.175% Series A-6 Junior Subordinated Debentures which have been registered under the Securities Act of 1933 for all of its outstanding unregistered 8.175% Series A-6 Junior Subordinated Debentures, and -- its offer to exchange up to $3.25 billion principal amount of its 8.250% Notes Due 2018 which have been registered under the Securities Act of 1933 for all of its outstanding unregistered 8.250% Notes Due 2018. Both of the exchange offers, which were previously scheduled to expire at 5:00 p.m., New York City time, on June 24, 2009, will now expire at 5:00 p.m., New York City time, on July 2, 2009, unless further extended. AIG has filed registration statements to register the New Junior Subordinated Debentures and the New Notes under the Securities Act of 1933. AIG will not accept for exchange any Old Junior Subordinated Debentures or Old Notes until the registration statements have become effective under the Securities Act of 1933. Each exchange offer is being made upon the terms and subject to the conditions set forth in a prospectus dated May 19, 2009, for that exchange offer. As of 5:00 p.m., New York City time, on June 23, 2009, $2,605,503,000 principal amount of Old Junior Subordinated Debentures and $2,936,997,000 principal amount of Old Notes had been tendered and not withdrawn. The Exchange Agent for the exchange offers is The Bank of New York Mellon. About AIG Based in New York, American International Group, Inc., is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received, and continues to seek buyers of its assets. At March 31, 2009, AIG had $819.75 billion in total assets and $765.53 billion in total liabilities. At September 30, 2008, AIG had $1.022 trillion in total assets and $950.9 billion in total debts. The Troubled Company Reporter reported on March 4, 2009, that Moody's Investors Service confirmed the A3 senior unsecured debt and Prime-1 short-term debt ratings of American International Group, Inc. AIG's subordinated debt rating has been downgraded to Ba2 from Baa1. The rating outlook for AIG is negative. This rating action follows AIG's announcement of net losses of $62 billion for the fourth quarter and $99 billion for the full year of 2008, along with a revised restructuring plan supported by the U.S. Treasury and the Federal Reserve. This concludes a review for possible downgrade that was initiated on September 15, 2008. AMERICAN INT'L: Fees Represent 3% of Weil's Last 12 Mos. Revenues ----------------------------------------------------------------- Stephen Karotkin, Esq., a member of Weil, Gotshal & Manges LLP, said fees for services to Lehman Brothers, American International Group and Citigroup represent a combined 10.7% of the firm's annual gross revenues for the last 12 months (LTM). Mr. Karotkin made the disclosure in a Supplemental Affidavit and Disclosure Statement filed on his firm's behalf in the bankruptcy cases of General Motors Corporation, pending before the U.S. Bankruptcy Court for the Southern District of New York. General Motors is seeking Court approval to hire Weil as its general counsel. According to the signed affidavit, Weil's major clients are: Percentage of Revenues for LTM ---------------- Lehman Brothers 6.6% General Electric 3.2% Thomas H. Lee Partners 2.7% AIG 3.0% Microsoft Corporation 0.9% Citigroup 1.1% Nate Raymond at The American Lawyer says Weil may collect more than $25,000,000 in fees from AIG. Weil is representing AIG in connection with the company's global divestiture and restructuring program. Since early 2008, Weil has worked with AIG to develop legal strategies addressing litigation, financial auditing, reporting, and regulatory compliance issues concerning the company's write-downs of hard-to-value, illiquid credit default swaps of mortgage- and asset-backed securities. "Exactly what dollar amount that equals is unclear. But back-of- the-envelope math suggests the fees are at least $25 million to $36 million, if not more," Mr. Raymond says. "Weil's filing says Lehman Brothers made up 6.6 percent of its revenue in the last year. Weil has already submitted a $55 million bill for its work on the Lehman case between September 15 to January 31. A little cross multiplication, then, would put its AIG fees easily in excess of $25 million. "And that's erring on the low side since our calculation doesn't factor in what Weil earned in the months before Lehman melted down or its work since February. "It also ignores Weil's 2008 revenues. Last year, it earned $1.23 billion, up 4.75 percent. Quick multiplication puts AIG fees at more than $36 million. "But again, that too likely undervalues the bill, since Weil's bankruptcy work is booming and the firm will probably close the year with higher revenue. In a March memo obtained by The American Lawyer, Weil said its "overall level of business has remained strong and is expected to remain strong when the economy 'normalizes.'" AIG in its quarterly report filed in May 2009 disclosed incurring $274,000,000 in exit expenses which include consulting and other professional fees related to (i) asset disposition activities, (ii) AIG's debt and capital restructuring program with the Federal Reserve Bank of New York and the U.S. Department of the Treasury and (iii) unwinding most of AIGFP's businesses and portfolios. AIG expects exit costs to total $700,000,000. Senior members of the Weil Gotshal team include partners Michael Aiello, Matthew Gilroy, Marcia Goldstein, Joseph Allerhand, Robert Carangelo and Jason Smith. Mr. Raymond says AIG also has engaged Sullivan & Cromwell, Simpson Thacher & Bartlett and Sidley Austin, among others. None of their fees are known, he adds. Weil earned $54,000,000 from GM before the bankruptcy filing. Mr. Karotkin filed the affidavit to disclose potential conflicts of interest in connection with the GM engagement, as required pursuant to Sections 327, 328(A), 329 and 504 of the Bankruptcy Code, and Rules 2014(A) and 2016(b) of the Federal Rules of Bankruptcy Procedure. About AIG Based in New York, American International Group, Inc., is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received, and continues to seek buyers of its assets. At March 31, 2009, AIG had $819.75 billion in total assets and $765.53 billion in total liabilities. At September 30, 2008, AIG had $1.022 trillion in total assets and $950.9 billion in total debts. The Troubled Company Reporter reported on March 4, 2009, that Moody's Investors Service confirmed the A3 senior unsecured debt and Prime-1 short-term debt ratings of American International Group, Inc. AIG's subordinated debt rating has been downgraded to Ba2 from Baa1. The rating outlook for AIG is negative. This rating action follows AIG's announcement of net losses of $62 billion for the fourth quarter and $99 billion for the full year of 2008, along with a revised restructuring plan supported by the U.S. Treasury and the Federal Reserve. This concludes a review for possible downgrade that was initiated on September 15, 2008. AMERICAN INT'L: Gov't Gets $25-Bil. Stake in Life Insurance Units ----------------------------------------------------------------- Liam Pleven and Joann S. Lublin at The Wall Street Journal report that American International Group reached a deal on Thursday to give the Federal Reserve Bank of New York stakes valued at $25 billion in two of AIG's foreign life-insurance units, wiping about $18 billion of the Company's government debt. WSJ relates that the deal involves foreign life-insurance units that are moving toward public offerings beginning 2010, and the Fed will get the first dollars from those sales, although it could take months or years of selling off shares on the open market before the Fed gets fully paid for its investment. WSJ states that another deal is pending to hand over to the Fed bonds valued at up to $8.5 billion backed by life-insurance policies, which could cut the government debt further to $9 to $10 billion, if AIG's Fed borrowing doesn't rise or decrease. According to WSJ, AIG will hold its annual meeting on Tuesday, the Company's first with the U.S. government as the controlling shareholder. WSJ relates that three trustees who supervise the almost 80% government ownership of AIG will be at the meeting, and six handpicked director candidates, who will form the majority on the new 11-member board, will be elected. WSJ, citing people familiar with the mater, states that some of the six have joined with some current board members on an informal CEO search committee that is identifying possible candidates. The report says that AIG Chairman and CEO Edward Liddy has indicated that he wants to leave. A source said that directors would like to see new leadership in place as soon as possible, according to the report. The report states that before finding a CEO, the new board may pick an independent chairman. AIG Names Alain Karaoglan Sr. VP-Divestiture AIG has named Alain Karaoglan Senior Vice President-Divestiture. As head of the Divestiture Office team, Mr. Karaoglan will be responsible for bringing to market AIG's divesting assets and managing the resulting complex transactions around the world. He will report to Paula Rosput Reynolds, AIG Vice Chairman and Chief Restructuring Officer, and will assume his new duties on June 29, 2009. Mr. Karaoglan succeeds Philip Jacobs, formerly AIG's Global Tax Director before becoming Senior Vice President-Divestiture. Mr. Jacobs has accepted a senior tax-related position with another company. "Alain Karaoglan has distinguished himself in both investment banking and equity research covering the insurance industry," Ms. Reynolds said. "His equity research coverage of the property- casualty business is widely respected as first-rate. Skilled in corporate finance, Alain has broad experience in both public market and private market transactions across all asset classes. He is joining AIG's restructuring team at a critical time, and we are confident that his leadership and experience will benefit our company's multiple stakeholders, including American taxpayers." Prior to joining AIG, Mr. Karaoglan served as Managing Director- Equity Research at Banc of America Securities LLC, leading the financial services equity research team that covered insurance, banks, investment banks, asset managers, consumer finance, exchanges, and REITs. Prior to that, he served as Managing Director-North American Equity Research for Deutsche Bank Securities Inc., covering the Property-Casualty Insurance Industry. His 20-year Wall Street career also included positions of increasing responsibility at Donaldson, Lufkin, and Jenrette Securities Inc., Bear Stearns; and The First Boston Corporation. Mr. Karaoglan earned his master's degree in Business Administration at the Amos Tuck School at Dartmouth College and both a bachelor's degree in Economics and a bachelor's degree in Business Administration from Pepperdine University. AIG Moving Forward with Accelerated Separation of ALICO AIG has entered into an agreement with the Federal Reserve Bank of New York positioning the American Life Insurance Company (ALICO), a leading international life insurance franchise, for an initial public offering, depending on market conditions. Under the agreement, AIG will contribute the equity of ALICO to a special purpose vehicle (SPV) in exchange for preferred and common interests in the SPV. The FRBNY will receive preferred interests in the ALICO SPV of $9 billion, which will reduce the debt owed by AIG to the FRBNY under the FRBNY credit facility by an equivalent amount. The face value of the preferred interests represents a percentage of the estimated fair market value of ALICO. AIG will hold the common interests in the ALICO SPV and will benefit from the fair market value of ALICO in excess of the preferred interests as the SPV monetizes its stake in the company in the future. AIG expects this transaction to close in the second half of 2009 subject to customary closing conditions, including regulatory approvals. "This action accelerates the move of ALICO toward greater independence and helps maintain the value of the franchise," said Rodney O. Martin, Jr., ALICO Chairman and Chief Executive Officer. "Securing the value of this well-capitalized global insurer is in the best interests of policyholders, distribution partners, and the American taxpayer. We are very excited to begin this new chapter in the life of one of the world's leading international life insurance companies." FRBNY said, "The agreements further the goals of enabling AIG to fully repay the assistance that it has received from U.S. taxpayers and advancing the company's global restructuring process. The exchange of senior secured debt for preferred equity interests reduces AIG's financial leverage and facilitates the independence of key subsidiaries." AIG Extends Exchange Offers for Notes Until July 2 AIG has extended until July 2, 2009: -- its offer to exchange up to $4.0 billion principal amount of its 8.175% Series A-6 Junior Subordinated Debentures which have been registered under the Securities Act of 1933 (New Junior Subordinated Debentures) for all of its outstanding unregistered 8.175% Series A-6 Junior Subordinated Debentures (Old Junior Subordinated Debentures), and -- its offer to exchange up to $3.250 billion principal amount of its 8.250% Notes Due 2018 which have been registered under the Securities Act of 1933 (New Notes) for all of its outstanding unregistered 8.250% Notes Due 2018 (Old Notes). Both of the exchange offers, which were previously scheduled to expire at 5:00 p.m., New York City time, on June 24, 2009, will now expire at 5:00 p.m., New York City time, on July 2, 2009 unless further extended. AIG has filed registration statements to register the New Junior Subordinated Debentures and the New Notes under the Securities Act of 1933. AIG will not accept for exchange any Old Junior Subordinated Debentures or Old Notes until the registration statements have become effective under the Securities Act of 1933. Each exchange offer is being made upon the terms and subject to the conditions set forth in a prospectus dated May 19, 2009 for that exchange offer. As of 5:00 p.m., New York City time, on June 23, 2009, $2,605,503,000 principal amount of Old Junior Subordinated Debentures and $2,936,997 000 principal amount of Old Notes had been tendered and not withdrawn. The Exchange Agent for the exchange offers is The Bank of New York Mellon. AIG to Sell Consumer Finance Operations in Mexico AIG has entered into an agreement to sell 100 percent of its shares in its consumer finance operations in Mexico, consisting of AIG Universal, S.A. de C.V. SOFOM E.N.R., and Markcenter Services, S. de R.L. de C.V, to Desarrollo de Negocios Integrados, S.A. de C.V., and Inversiones DNI, S.A. de C.V., companies related to Afirme Grupo Financiero and Consorcio Villacero. The transaction is subject to the satisfaction of certain conditions, including approval by the Mexican Federal Competition Commission. Terms of the transaction were not disclosed. Launched in 2005, AIG Universal has a network of 50 branches serving approximately 50,000 clients in twelve states in the central and northern regions of Mexico, and offers its clients personal loans and third party insurance. UBS Investment Bank acted as financial advisor and Kramer Levin Naftalis & Frankel served as legal counsel to AIG on this transaction. About AIG Based in New York, American International Group, Inc., is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. During the third quarter of 2008, requirements to post collateral in connection with AIG Financial Products Corp.'s credit default swap portfolio and other AIGFP transactions and to fund returns of securities lending collateral placed stress on AIG's liquidity. AIG's stock price declined from $22.76 on September 8, 2008, to $4.76 on September 15, 2008. On that date, AIG's long-term debt ratings were downgraded by Standard & Poor's, a division of The McGraw-Hill Companies, Inc., Moody's Investors Service and Fitch Ratings, which triggered additional requirements for liquidity. These factors and other events severely limited AIG's access to debt and equity markets. On September 22, 2008, AIG entered into an $85 billion revolving credit agreement with the Federal Reserve Bank of New York and pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000 shares of Series C Perpetual, Convertible, Participating Preferred Stock to a trust for the benefit of the United States Treasury. At September 30, 2008, amounts owed under the facility created pursuant to the Fed Credit Agreement totaled $63 billion, including accrued fees and interest. Since September 30, 2008, AIG has borrowed additional amounts under the Fed Facility and has announced plans to sell assets and businesses to repay amounts owed in connection with the Fed Credit Agreement. Certain of AIG's domestic life insurance subsidiaries subsequently entered into an agreement with the NY Fed pursuant to which the NY Fed has borrowed, in return for cash collateral, investment grade fixed maturity securities from the insurance subsidiaries. On November 10, 2008, the U.S. Treasury agreed to purchase, through its Troubled Asset Relief Program, $40 billion of newly issued AIG perpetual preferred shares and warrants to purchase a number of shares of common stock of AIG equal to 2% of the issued and outstanding shares as of the purchase date. All of the proceeds will be used to pay down a portion of the Federal Reserve Bank of New York credit facility. The perpetual preferred shares will carry a 10% coupon with cumulative dividends. AIG and the Fed also agreed to revise the existing FRBNY credit facility. The loan terms were extended from two to five years to give AIG more time to complete its planned asset sales in an orderly manner. The equity interest that taxpayers will hold in AIG, coupled with the warrants, will total 79.9%. At September 30, 2008, AIG had $1.022 trillion in total consolidated assets and $950.9 billion in total debts. Shareholders' equity was $71.18 billion, including the addition of $23 billion of consideration received for preferred stock not yet issued. The Troubled Company Reporter reported on March 4, 2009, that Moody's Investors Service confirmed the A3 senior unsecured debt and Prime-1 short-term debt ratings of American International Group, Inc. AIG's subordinated debt rating has been downgraded to Ba2 from Baa1. The rating outlook for AIG is negative. This rating action follows AIG's announcement of net losses of $62 billion for the fourth quarter and $99 billion for the full year of 2008, along with a revised restructuring plan supported by the U.S. Treasury and the Federal Reserve. This concludes a review for possible downgrade that was initiated on September 15, 2008. AMF BOWLING: Moody's Changes Probability of Default Rating to 'B3' ------------------------------------------------------------------ Moody's Investors Service changed the probability-of-default rating for AMF Bowling Worldwide, Inc., to B3 from Caa3. The revision of the PDR reflects the fact that AMF's ability to prepay first and second lien bank debt in the open market, pursuant to an amendment, expired unutilized on June 20. The Caa3 PDR had reflected Moody's view that, if executed, these prepayments would have been a distressed exchange due to expectations of significant loss to lenders relative to the original obligation. However, since the prepayment period expired unutilized, Moody's has restored the PDR to B3. In the event that AMF pursues a similar transaction, Moody's will reassess the ratings at that time. The affirmation of the B3 corporate family rating continues to reflect AMF's high financial leverage, but also incorporates Moody's view that the company's liquidity position is adequate. The negative outlook reflects concerns over the impact of weak consumer spending on the company's sales and profitability levels. This rating was changed: -- Probability-of-Default Rating to B3 from Caa3. These ratings were affirmed: -- Corporate Family Rating at B3; -- $40 million first lien revolver due 2012 at B1 (LGD3, 31%); -- $245 million first lien term loan due 2013 at B1 (LGD3, 31%); -- $80 million second lien term loan due 2013 at Caa2 (LGD5, 80%). The last rating action was on May 12, 2009, when Moody's affirmed AMF's B3 corporate family rating and lowered the probability-of- default rating to Caa3 from B3. The ratings outlook was revised to negative from stable. Headquartered in Richmond, Virginia, AMF Bowling Worldwide, Inc. is the largest operator of bowling centers in the world with approximately 322 centers in operation, including nine centers outside the U.S. AMF had revenues of $452 million for the twelve months ended March 29, 2009. AMR CORP: American Increases Boeing Orders to 31 Jets From 29 ------------------------------------------------------------- American Airlines, Inc., a wholly-owned subsidiary of AMR, amended on June 9, 2009, its Purchase Agreement No. 1977 with The Boeing Company. As of March 31, 2009, American had commitments to purchase a total of 29 Boeing 737-800 aircraft in 2009, two of which had been delivered as of that date. Accordingly, American had commitments to acquire 27 737-800 aircraft in the remainder of 2009. Also, American had commitments to acquire 39 737-800 aircraft in 2010 and eight 737-800 aircraft in 2011. Pursuant to the amendment, American exercised rights to purchase an additional eight 737-800 aircraft and the delivery dates of certain aircraft were rescheduled. As a result, American's total 737-800 purchase commitments for 2009 -- including six aircraft that have been delivered to date -- have increased from 29 as of March 31, 2009, to 31 as of this date, and American's 737-800 purchase commitments for 2010 have increased from 39 as of March 31, 2009 to 45 as of June 11. American's 737-800 purchase commitments remain at eight in 2011. In addition to the aircraft, American has firm commitments for 11 737-800 aircraft and seven Boeing 777 aircraft scheduled to be delivered in 2013-2016. Payments for American's 737-800 and 777 aircraft purchase commitments will approximate $768 million for the remainder of 2009, $1.3 billion in 2010, $354 million in 2011, $217 million in 2012, $399 million in 2013, and $556 million for 2014 and beyond. These amounts are net of purchase deposits currently held by the manufacturer. American previously arranged backstop financing which, together with other previously arranged financing, covered a significant portion of its 2009-2011 Boeing 737-800 aircraft deliveries, subject to certain terms and conditions. This backstop financing arrangement was recently amended. Taking into account that amendment, all of American's 737-800 aircraft purchase commitments for 2009 - 2011 are, subject to certain terms and conditions, covered by the backstop financing arrangement and other committed financing arrangements except for approximately $308 million, all of which is due in the fourth quarter of 2010 and beyond. About AMR Corporation Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. At March 31, 2009, AMR had $24,518,000,000 in total assets; $8,908,000,000 in current liabilities, $8,314,000,000 in long-term debt, less current maturities, $528,000,000 in obligations under capital leases, less current obligations, $6,739,000,000 in pension and postretirement benefits, and $3,138,000,000 in other liabilities, deferred gains and deferred credits; resulting in $3,109,000,000 in stockholders' deficit. AMR CORP: Expects to End Q2 With $3.3 Billion Cash -------------------------------------------------- AMR Corporation expects second quarter mainline unit revenue to decrease between 16.0% and 17.0% year-over-year while second quarter consolidated unit revenue is expected to decrease between 16.2% and 17.2%. In total, Cargo and Other Revenue is anticipated to decrease between 7.8% and 8.8% relative to second quarter 2008. AMR expects to end the second quarter with a cash and short-term investment balance of roughly $3.3 billion, including roughly $460 million in restricted cash and short-term investments. The Company's expected cash balance includes the impact of nearly $400 million in principal payments on long term debt made during the second quarter. AMR expects to end the second quarter with roughly $50 million of hedge collateral posted with counterparties; this amount is not included in its cash balance expectations. A full-text copy of AMR's Eagle Eye communication to investors is available at no charge at http://ResearchArchives.com/t/s?3e23 The Eagle Eye provides updated guidance for the second quarter and the full year 2009, and includes (a) actual unit cost, fuel price, capacity and traffic information for April and May and (b) forecasts of unit cost, revenue performance, fuel prices and fuel hedging, capacity and traffic estimates, liquidity expectations, other income/expense estimates and share count. AMR recorded a net loss of $375 million in the first quarter of 2009 compared to a net loss of $341 million in the same period last year, due primarily to a decrease in passenger revenue. AMR experienced a significant weakening of demand, especially in international markets, due to the worldwide economic recession creating a very challenging environment. This factor coupled with the recent severe disruptions in the capital markets, according to AMR, has negatively impacted the Company and significantly impacted its results of operations and cash flows for the three months ended March 31, 2009. Consequently, the Company's liquidity has been negatively affected as unrestricted cash and short-term investments decreased from $3.1 billion as of December 31, 2008 to $2.9 billion at March 31, 2009. AMR had said it may not be able to improve its liquidity position for the remainder of 2009 if lower demand for air travel and a weak global economy were to persist and if the Company is unable to obtain financing on reasonable terms. AMR said in its quarterly report filed with the Securities and Exchange Commission that it remains heavily indebted and has significant obligations. However, the Company believes it can access sufficient liquidity to fund its operations and obligations for the remainder of 2009, including repayment of debt and capital leases, capital expenditures and other contractual obligations. To date during 2009, the Company secured roughly $148 million of financing that was previously uncommitted through loans on certain aircraft. The transactions are in addition to previously arranged financing and backstop financing which could be used for a significant portion of the Company's remaining 2009 - 2011 Boeing 737-800 aircraft deliveries. Exclusive of these transactions, the Company estimated that it has at least $3.6 billion in unencumbered assets and other sources of liquidity and the Company continues to evaluate the most cost-effective alternatives to raise additional capital. AMR had said its possible financing sources primarily include: (i) a limited amount of additional secured aircraft debt or sale leaseback transactions involving owned aircraft; (ii) leases of or debt secured by new aircraft deliveries; (iii) debt secured by other assets; (iv) securitization of future operating receipts; (v) the sale or monetization of certain assets; (vi) unsecured debt; and (vii) issuance of equity /or equity-like securities. Besides unencumbered aircraft, some of the Company's particular assets and other sources of liquidity that could be sold or otherwise used as sources of financing include AAdvantage program miles, takeoff and landing slots, and certain of the Company's business units and subsidiaries, such as AMR Eagle. About AMR Corporation Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. At March 31, 2009, AMR had $24,518,000,000 in total assets; $8,908,000,000 in current liabilities, $8,314,000,000 in long-term debt, less current maturities, $528,000,000 in obligations under capital leases, less current obligations, $6,739,000,000 in pension and postretirement benefits, and $3,138,000,000 in other liabilities, deferred gains and deferred credits; resulting in $3,109,000,000 in stockholders' deficit. ARMANA HOLDINGS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: The Armana Holdings Limited Liability Partnership 2021 San Mateo NE Albuquerque, NM 87110 Bankruptcy Case No.: 09-14246 Chapter 11 Petition Date: June 24, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: Dennis J. Wortman, Esq. 202 East Earll Drive, Ste 490 Phoenix, AZ 85012 Tel: (602) 257-0101 Fax: (602) 279-5650 Email: djwortman@azbar.org 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 Diana Horner, general partner of the Company. ARVINMERITOR INC: Sells Stake in LVS Chassis Businesses ------------------------------------------------------- ArvinMeritor, Inc. has reached agreements to divest its entire ownership stakes in two joint ventures in its light vehicle Chassis business. Together, these transactions will result in the divestiture of 45% of the Chassis Systems business -- as measured by 2008 sales. The Company entered into a binding letter of intent to sell its 57% stake in Meritor Suspension Systems Company, a joint venture that manufactures and sells automotive coil springs, torsion bars and stabilizer bars in North America, to its joint venture partner, a subsidiary of Mitsubishi Steel Mfg. Co., LTD. The transaction is expected to close in the coming months, after receiving necessary regulatory clearances. ArvinMeritor also announced that, earlier this month, it completed the sale of its 51% stake in Gabriel de Venezuela, which manufactures shock absorbers, struts, exhaust systems and suspension modules for countries including Venezuela, Colombia, Chile, Bolivia, Peru and Ecuador. "We are pleased to announce these two divestitures, which represent important steps toward achieving our long-term strategic objective to focus on supplying the commercial vehicle on- and off-highway markets for both original equipment manufacturers and aftermarket customers," said Chip McClure, chairman, CEO and president. "Our joint venture partners are strong companies and I am confident that they will focus on growing these businesses. We continue to concentrate on divesting the light vehicle Chassis business, and we are pleased with the high level of interest we are continuing to see from potential buyers in the remaining segments of that business." About ArvinMeritor ArvinMeritor, Inc. -- http://www.arvinmeritor.com/-- is a premier global supplier of a broad range of integrated systems, modules and components to the motor vehicle industry. The company marks its centennial anniversary in 2009. ArvinMeritor serves commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets, and light vehicle manufacturers. ArvinMeritor common stock is traded on the New York Stock Exchange under the ticker symbol ARM. ArvinMeritor posted a net loss of $47 million for the three months ended March 31, 2009, on sales of $1.11 billion. The Company had $2.87 billion in total assets; $1.29 billion in current liabilities, $1.37 billion in long-term debt, $654 million in retirement benefit obligations, $272 million in other liabilities, and $50 million in minority interests, resulting in $769 million in shareowners' equity. As reported by the Troubled Company Reporter on May 14, 2009, ArvinMeritor Inc. said in a regulatory filing with the Securities and Exchange Commission that it is possible the company may be required to obtain an amendment to the senior secured credit facility and its U.S. securitization facility by the end of its third fiscal quarter to allow additional flexibility under the senior secured debt to EBITDA covenant contained therein and, in the absence of a waiver, to prevent a default under such facilities. If amendments or waivers are not necessary before the end of the third quarter, it is increasingly likely that the company will require them prior to the end of the fiscal year. As reported by the TCR on June 11, 2009, Fitch Ratings kept ArvinMeritor's ratings on Watch Negative (IDR 'CCC'); (Secured 'B') and (Senior unsecured 'CC') as a result of Chrysler's and General Motors' bankruptcies. ASARCO LLC: Disclosure Statement Hearing Adjourned to June 30 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas further reset to June 30, 2009, the hearing to consider the adequacy of the disclosure statements accompanying the three competing plans filed in the cases of ASARCO LLC and its debtor affiliates. �The three plans were filed by the Debtors supporting the offer by Sterlite (USA), Inc.; Americas Mining Corporation and ASARCO Incorporated; and Harbinger Capital Partners Master Fund I, Ltd., and Citigroup Global Markets, Inc. The Disclosure Statement Hearing was previously set for June 23, 2009. Judge Richard Schmidt also set a status conference on the Disclosure Statements on June 23. 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: Parent Offers $3.1 Billion for Operating Assets ----------------------------------------------------------- Asarco Incorporated and Americas Mining Corporation delivered to the U.S. Bankruptcy Court for the Southern District of Texas a Fifth Amended Plan of Reorganization and Disclosure Statement for ASARCO LLC, Southern Peru Holdings, LLC, AR Sacaton, LLC, and ASARCO Master, Inc., on June 23, 2009. ASARCO Inc. and AMC, affiliates of Grupo Mexico SAB de C.V., are the parent company of ASARCO LLC. The Parent has made further revisions to its Plan that seeks to address and resolve certain concerns and informal comments lodged by various parties and improve the proposed treatment of creditor claims. �Clean and blacklined copies of the Parent 4th Amended Plan, including the Uniform Glossary of Defined Terms for Plan Documents, are available for free at: � http://bankrupt.com/misc/ASARCOInc_5th_AmendedPlan.pdf � http://bankrupt.com/misc/ASARCOInc_5thPlan_Redlined.pdf The Fifth Amended Plan provides that the cash portion of the Parent's contribution has been increased from $1.3031 billion to $1.4625 billion. �The ASARCO Asbestos Note has also been increased from $250 million to $280 million. �In addition, the ASARCO Note is now guaranteed by AMC, as well as being supported by a pledge of 51% of equity of Reorganized ASARCO. In addition to the cash ASARCO currently holds, the Parent's offer totals approximately $3.1 billion in cash plus other considerations. �The Parent previously offered $2.9 billion through its Fourth Amended Plan. Together with cash on hand and certain tax refunds, the Parent's increased cash contribution will provide a 95% cash recovery to unsecured creditors on or very close to the Plan's effective date, using the Debtors' "preferred" claims estimates. �The Tax Refund refers to the overpayment of $40,479,421 allowed by the Notice of Partial Allowance and Partial Disallowance of the Refund Claim issued by the Internal Revenue Service, together with statutory accrued interest. � � � � � � � � � � � �Treatment of Claims Pursuant to Section 1122 of the Bankruptcy Code, claims and interests, other than Administrative Claims and Priority Tax Claims, are designated into these classes under the Fifth Amended Parent Plan: � * Class 1 Priority Claims � * Class 2 Secured Claims � * Class 3 General Unsecured Claims � * Class 4 Asbestos Personal Injury Claims � * Class 5 Convenience Claims � * Class 6 Late-Filed Claims � * Class 7 Subordinated Claims � * Class 8 Environmental Reinstated Claims � * Class 9 Interests in ASARCO Under the Fifth Amended Plan, holders of Claims in Class 3 General Unsecured Claims, including Bondholder Claims, Toxic Tort Claims and Environmental Unsecured Claims, will receive a Pro Rata share of the Available Parent's Plan Funds, plus a Pro Rata share of 100% of the net proceeds of the Litigation Trust to be funded with, among other things, the Debtors' claims against Sterlite (USA), Inc. �Creditor recoveries are capped at 100% of the principal Allowed amount of each Claim determined without postpetition interest. The section on Disputed Claim Reserve under the Parent Plan is amended to cater to the changes in the assignment of claims under the revised Classes. � � � � � � � � � � �$125 Million Deposit Upon confirmation of its Plan, the Parent will post with the Court a $125 million good faith cash deposit to demonstrate and support its intention and ability to fully and timely consummate its Plan. �The Deposit is forfeitable if the Parent's Plan fails to be consummated by the earlier of: � �(i) 30 days after the confirmation order becomes a final � � � �order; or � (ii) October 31, 2009, as long as the Confirmation Order is � � � �not subject to a stay. The Parent tells Judge Schmidt that it continues to work with the Debtors on a joint disclosure statement that, among other things, describes the expected recoveries to creditors under the Fifth Amended Plan, and compares and contrasts that recovery to anticipated recoveries under the Debtors' Plan and the Harbinger Plan. � � � � � � � � � � � � �Other Provisions Solely for tax purposes, the Fifth Amended Parent Plan provides that it is intended that the Litigation Trust be classified as a liquidating trust under Section 301.7701-4(d) of the Treasury Regulations, and the Litigation Trust Beneficiaries will be treated as the owners of their proportionate share of the assets of the Litigation Trust. �Accordingly, for federal income tax purposes, the Parent intends that all parties, including the Litigation Trustee, the Litigation Trust Beneficiaries, and the transferors, for tax purposes, of any assets transferred to the Litigation Trust, will take the position, subject to definitive guidance from the IRS or a court, that the transfer of assets to the Litigation Trust is a deemed transfer to the Litigation Trustee for the benefit of the Litigation Trust Beneficiaries, and all income and gain of the Litigation Trust which is earned after the deemed transfer will be taxed to the Litigation Trust Beneficiaries on a current basis. The Environmental Custodial Trusts are intended to be treated as qualified settlement funds within the meaning of Section 1.468B-1 of the Treasury Regulation and hence, as taxable entities for federal income tax purposes. �Each Custodial Trustee will be the "administrator" of its Environmental Custodial Trust pursuant to Section 1.468B-2(k)(3) of the Treasury Regulation. 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) ASPEN PEAK: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Aspen Peak LLC, a Nevada Corporation 313 N Birch St Santa Ana, CA 92701 Bankruptcy Case No.: 09-16199 Chapter 11 Petition Date: June 23, 2009 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: T. Edward Malpass, Esq. Law Offices of T. Edward Malpass 4931 Birch St. Newport Beach, CA 92660 Tel: (949) 474-9944 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-16199.pdf The petition was signed by James Meehan. AURORA OIL & GAS: Lenders Extend Forbearance Until July 15 ---------------------------------------------------------- Aurora Oil & Gas Corporation reports that on May 8, 2009 -- but as of May 1, 2009 -- the Company and certain subsidiaries, as guarantors, entered into a forbearance and tolling agreement with BNP Paribas and the lenders under the Senior Secured Credit Facility and D.E. Shaw Laminar Portfolios, LLC and the lenders under the Second Lien Term Loan. On June 12, 2009, the Company entered into a First Amendment to the Forbearance and Tolling Agreement. In accordance with the First Amendment Agreement, the expiration date of the Forbearance and Tolling Agreement was extended to July 15, 2009 from June 15, 2009. In addition, the First Amendment Agreement added an agreement by the Company that the lenders may consult with Opportune LLP subject to certain terms and conditions regarding the timing and scope of such consultation. The First Amendment Agreement also granted the Company the ability to add the second quarter 2009 interest payment due under the Second Lien Term Loan to the debt balance as opposed to submitting a cash payment. As part of a February 12, 2009 Forbearance Agreement, the Company executed additional mortgages and other security instruments which gave the lenders liens on 100% of all oil and gas properties, promissory notes, all significant overriding royalties, and all significant farmout agreements. The First Amendment Agreement extended the period of time that the Company can assert that the Additional Collateral Transfers were preferential transfers under Section 547 of the United States Bankruptcy Code until and including July 15, 2009. The First Amendment Agreement also added additional events that would terminate the Forbearance and Tolling Agreement which are: (i) the failure by the Company to agree to a finalized term sheet with BNP, Laminar and the lenders under the Senior Secured Credit Facility and the Second Lien Term Loan on or before the later of the day that is 13 calendar days after the Company has received the initial draft of the term sheet, and June 30, 2009, wherein the terms and conditions of the proposed restructuring of the Company or the Company's assets are in form and substance satisfactory to BNP, Laminar and at least two-thirds in amount of outstanding principal of each of the Senior Secured Credit Facility lenders and the Second Lien Term Loan lenders, and (ii) the failure by the Company to grant BNP and Laminar access to Opportune LLP subject to certain terms and conditions. The First Lien lending consortium consists of: * BNP Paribas, as First Lien Agent and Lender; * Comerica Bank, as Lender; * KeyBank National Association, as Lender; and * CIT Capital USA Inc., as Lender The Second Lien lending consortium consists of: * D.E. Shaw Laminar Portfolios, L.L.C., as Second Lien Agent and Lender; * BNP Paribas, as Lender; * CIT Capital USA Inc., as Lender; * Energy Components SPC UP-and Midstream Segregated Portfolio, as Lender About Aurora Oil & Gas Based in Traverse City, Michigan, Aurora Oil & Gas Corporation (NYSE Alternext US: AOG) is an independent energy company focused on unconventional natural gas exploration, acquisition, development and production, with its primary operations in the Antrim Shale of Michigan, the New Albany Shale of Indiana and Kentucky. AURORA OIL & GAS: Taps Huron's Edlein as Restructuring Officer -------------------------------------------------------------- Aurora Oil & Gas Corporation reports that on June 12, 2009, it entered into an agreement with Huron Consulting Group in Dallas, Texas, appointing Sanford Edlein to serve as the Company's Chief Restructuring Officer. Mr. Edlein has served as a Managing Director of Huron since January 2007. In January 2007 Huron acquired Glass & Associates, Inc., a turnaround and restructuring firm, which Mr. Edlein served as a Principal since 1999. Mr. Edlein has over 35 years of related experience serving in various capacities for both public and privately owned companies. The agreement with Huron established an hourly rate of $525 for Mr. Edlein. Additional consultants from Huron may be required and will be charged at various hourly rates depending on their level of expertise and position within Huron. The Company was required to pay Huron a $100,000 retainer as part of the agreement. The Company terminated the employment of Gilbert A. Smith, its President and Vice President of Business Development, on June 8, 2009. About Aurora Oil & Gas Based in Traverse City, Michigan, Aurora Oil & Gas Corporation (NYSE Alternext US: AOG) is an independent energy company focused on unconventional natural gas exploration, acquisition, development and production, with its primary operations in the Antrim Shale of Michigan, the New Albany Shale of Indiana and Kentucky. AVIZA TECHNOLOGY: U.S. Trustee Names 3 Members to Creditors Panel ----------------------------------------------------------------- The United States Trustee for the U.S. Bankruptcy Court for the Northern District of California appointed three parties to the official committee of unsecured creditors in the bankruptcy cases of Aviza Technology, Inc. The Committee members are ASML, Armanino McKenna LLP and Genmark Automation. Headquartered in Scotts Valley, California, Aviza Technology Inc. (NASDAQ GM:AVZA) -- http://www.aviza.com/-- designs, manufactures, sells and supports semiconductor capital equipment and process technologies for the global semiconductor industry and related markets. The Company's systems are used in a variety of segments of the semiconductor market for advanced silicon for memory devices, 3-D packaging and power integrated circuits for communications. The Company's manufacturing, R&D, sales and customer support facilities are located in the United Kingdom, Germany, France, Taiwan, China, Japan, Korea, Singapore and Malaysia. The Company and two of its subsidiaries, Aviza Inc. and Trikon Technologies Inc., filed for Chapter 11 bankruptcy protection on June 9, 2009 (Bankr. N.D. Calif. Case No. 09-54511). Judge Roger L. Efremsky presides over the Chapter 11 case. Attorneys at the Law Offices of Murray and Murray represent the Debtors. At the time of the filing, Aviza Technology estimated assets and debts of $10 million to $50 million. BANK OF AMERICA: Fed Tried to Hide Involvement in Merrill Buy ------------------------------------------------------------- Times Online reports that lawmakers have claimed to have uncovered evidence on the Federal Reserve's attempt to hide from other financial regulators its involvement in Bank of America's Merrill Lynch & Co acquisition. Reuters, citing people familiar with the matter, relates that the Fed withheld information on its dealings with BofA from the U.S. Securities and Exchange Commission and the Office of the Comptroller of the Currency. According to Times Online, lawmakers claimed that the Fed made inappropriate threats to fire BofA management unless they proceed with the Merrill deal. "The [Congressional] committee has already learned that Ben Bernanke and the Federal Reserve made inappropriate threats to fire Bank of America management unless they went ahead with the shotgun wedding that was the Merrill Lynch acquisition . . . The Federal Reserve also engaged in a cover-up and deliberately hid concerns and pertinent details about the merger from other federal regulatory agencies," Reuters quoted Darrell Issa, the senior Republican on the committee, as saying. Michael R. Crittenden and Dan Fitzpatrick at The Wall Street Journal report that documents show that federal regulators disagreed strongly over the rescue of BofA. Citing people familiar with the matter, WSJ relates that in the months after the bailout, regulators tightened their grip on the bank's operations, placing BofA under a supervisory action requiring it to: -- take steps to improve its governance, -- reassess management, and -- improve risk management. WSJ states that documents unearthed by congressional investigators show that Federal Deposit Insurance Corp. Chairman Sheila Bair wrote to Mr. Bernanke before the aid was unveiled, saying that there was "strong discomfort with this deal at the FDIC." According to the report, Ms. Bair was referring to a plan to have the FDIC provide guarantees against losses on BofA assets. The report states that that the FDIC then decided to help provide protection from losses on $118 billion of BofA assets, as part of a $20 billion package designed to help BofA close its deal for Merrill. According to WSJ, the documents also show that top Fed officials were communicating with Treasury Secretary Timothy Geithner during the Merrill acquisition talks in December 2008. WSJ relates that the documents suggest that negotiations weren't discussed with top SEC officials until close to the deal's announcement. Mr. Bernanke will be appearing at a hearing of the House Oversight and Government Reform Committee, Times Online states. Citing a congressional committee spokesperson Hugh Son, Bloomberg News reports that former Treasury Secretary Henry Paulson will also appear before the panel in July. According to the report, Mr. Paulson's appearance was confirmed by Jenny Rosenberg, an aide to Edolphus Towns, a New York Democrat and chairman of the House Oversight and Government Reform Committee, although a date hasn't been disclosed yet. Common Stock Average Price for Exchange Offer BofA reported the common stock average price of $12.7048 for its offers to exchange up to 200 million shares of common stock for outstanding depositary shares for each series of preferred stock. The exchange offer consists of separate offers for depositary shares representing each series of the preferred stock. The common stock average price represents the simple arithmetic average of the daily per share volume-weighted average price of BofA common stock for each of the five consecutive trading days ending on and including June 22, 2009 (the second business day prior to the scheduled expiration date of the exchange offer). The number of shares of common stock issuable for each exchanged depositary share was determined by dividing the applicable consideration per depositary share by $12.7048, the common stock average price, and rounded to four decimal places. Prio- CUSIP No. Series of Preferred NYSE Consideration Number Rity of Stock Represented by Ticker for Deposit- of Level Depositary Depositary Shares Symbol ary Share Shares Shares of Commo n Stoc k per Depo - sit - ary shar e 1 060505815 Floating Rate BAC PrE $16.25 1.2790 Non- Cumulativ e Preferred Stock, Series E 2 060505583 Floating Rate BML PrL $16.25 1.2790 Non- Cumulativ e Preferred Stock , Series 5 3 060505633 Floating Rate BML PrG $15.00 1.1807 Non- Cumulative Preferred Stock, Series 1 4 060505625 Floating Rate BML PrH $15.00 1.1807 Non- Cumulative Preferred Stock, Series 2 5 060505617 6.375% Non-Cumulative BML PrI $17.00 1.3381 Preferred Stock, Series 3 6 060505740 6.625% Non-Cumulative BAC PrI $17.50 1.3774 Preferred Stock, Series I 7 060505724 7.25% Non-Cumulative BAC PrJ $18.75 1.4758 Preferred Stock, Series J 8 060505765 8.20% Non-Cumulative BAC PrH $20.50 1.6136 Preferred Stock, Series H 9 060505559 8.625% Non-Cumulative BML PrQ $21.00 1.6529 Preferred Stock, Series 8 The exchange offer will expire at midnight, New York City time, on June 24, 2009, unless extended or earlier terminated by Bank of America. Holders of the depositary shares eligible for exchange will be able to tender their depositary shares, or withdraw their previously tendered depositary shares, at any time prior to the expiration of the exchange offer. The exchange offer would increase BofA's Tier 1 common capital by an amount equal to the aggregate liquidation preference of the depositary shares exchanged. The shares issuable in the exchange offer are part of Bank of America's previously-announced plan to exchange common stock for non-government perpetual preferred stock. BofA believes that these actions will assist in meeting the $33.9 billion indicated Supervisory Capital Assessment Program (SCAP) buffer set by the Federal Reserve. The exchange offer is subject to the terms and conditions described in the Offer to Exchange dated May 28, 2009, as amended, and the related Letter of Transmittal, previously filed with the Securities and Exchange Commission. The terms of the exchange offer and procedures for validly tendering and withdrawing depositary shares are described in detail in the Offer to Exchange and related materials, copies of which may be obtained without charge from the information agent for the exchange offer, D.F. King & Co., Inc., by calling (800) 829-6551 (toll free) or (212) 269-5550 (collect). The exchange offer is being made to holders of depositary shares in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended, provided by Section 3(a)(9) of the Securities Act. This press release is not an offer to purchase or an offer to exchange or a solicitation of acceptance of an offer to exchange any securities, and the exchange offer is being made only pursuant to the terms of the Offer to Exchange and the related materials. About Bank of America Based in Charlotte, North Carolina, Bank of America -- http://www.bankofamerica.com/-- is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The Company serves more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers support to more than 4 million small business owners. The Company serves clients in more than 150 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. The bank needed the government's financial help in completing its acquisition of Merrill Lynch. Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth management, capital markets and advisory companies with offices in 40 countries and territories. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world's largest publicly traded investment management companies with more than $1 trillion in assets under management. Merrill Lynch's operations are organized into two business segments: Global Markets and Investment Banking (GMI) and Global Wealth Management (GWM). As reported by the Troubled Company Reporter on March 27, 2009, Moody's Investors Service lowered the senior debt rating of Bank of America Corporation to A2 from A1, the senior subordinated debt rating to A3 from A2, and the junior subordinated debt rating to Baa3 from A2. The preferred stock rating was downgraded to B3 from Baa1. The holding company's short-term rating was affirmed at Prime-1. BILL BARRETT: Moody's Assigns 'Ba3' Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service assigned a Ba3 Corporate Family Rating and Probability of Default Rating to Bill Barrett Corporation. Moody's also assigned a B1, LGD5 (75%) rating to the company's proposed $200 million senior notes due 2016 and a Speculative Grade Liquidity Rating of SGL-2. The outlook is stable. "Bill Barrett's Ba3 rating is supported by management's extensive experience and successful operational track record in the Rocky Mountain region, including their previous history with Barrett Resources," commented Pete Speer, Moody's Vice-President/Senior Analyst. "The rating is restrained by the company's lack of geographic diversification and exposure to volatile Rocky Mountain natural gas price differentials." Bill Barrett began active operations in March 2002 and has focused on acquiring primarily undeveloped acreage in the Rocky Mountain region. The company has grown its total proved reserves to 136 million boe at the end of 2008 and average daily production to 40,800 boe in the first quarter of 2009 primarily through organic means. These gains in reserves and production were achieved at competitive costs while maintaining a conservative leverage profile relative to Ba3 rated peers. Three year-average finding and development costs were approximately $13/boe through the end of 2008, full-cycle costs were approximately $25/boe in the 1st Quarter of 2009 and leverage as measured against proved developed reserves was under $7/boe pro forma for a recent acreage acquisition. The rating is tempered by Bill Barrett's reserves and production concentration, with approximately 86% of reserves and 80% of production concentrated in the Uinta and Piceance Basins in Utah and Colorado. Nearly all the reserves and production are natural gas, leaving the company exposed to the volatile Rocky Mountain natural gas pricing differentials. To mitigate this exposure, the company hedges a high proportion of its forward twelve month production at regional sales point indices and also uses basis only swaps to lock in price differentials. Bill Barrett has hedged approximately 72% of remaining 2009 production and 58% of 2010 production. Based on the proposed offering of $200 million of senior unsecured notes, the company's existing senior secured bank revolver borrowing base would be reduced to approximately $550 million. Under Moody's Loss Given Default methodology, the pro forma size of the borrowing base relative to the senior unsecured notes and the company's existing convertible senior notes resulted in a notching down of the proposed notes to B1, one notch below the Ba3 CFR. The SGL-2 rating reflects Bill Barrett's good liquidity over the next twelve months following the bond offering. The company expects to largely fund capital expenditures with operating cash flows and will have over $440 million of availability on its senior secured revolver to fund the modest amount of forecasted negative free cash flow. This provides substantial liquidity for working capital needs and the potential effects of weakening commodity prices on the company's unhedged production, while also leaving room for potential reductions in the borrowing base in future redeterminations. Bill Barrett currently has ample debt covenant headroom which should continue due to its high proportion of hedged production over the coming year. The stable outlook is based on an expectation that Bill Barrett continues to restrain its capital expenditures to levels largely in line with its operating cash flows while achieving its production targets. The outlook could be changed to negative if production were to fall significantly in response to this reduced pace of capital investment. The outlook could also be pressured or the ratings downgraded if the company were to significantly increase debt through further property acquisitions and/or outspending its operating cash flows and raise leverage on PD reserves above $8/boe. This is the first rating action on Bill Barrett. Bill Barrett Corporation is an independent exploration and production company headquartered in Denver, Colorado. BILL BARRETT: S&P Assigns 'BB-' Long-Term Corporate Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' long-term corporate credit rating to oil and gas exploration and production company Bill Barrett Corp. The outlook is stable. At the same time, S&P assigned a 'B+' to the company's proposed $200 million of senior unsecured notes. The recovery rating on this debt is '5', indicating expectations for modest (10% to 30%) recovery of payment in a default. S&P also assigned a 'B+' rating to BBG's $172.5 million 5% convertible senior notes due 2028. The recovery rating on this debt is '5' indicating expectations for modest (10% to 30%) recovery in the event of a payment default. "The ratings on BBG reflect the E&P industry's highly capital intensive and cyclical nature; limited scale with significant concentration in the Rocky Mountain region, which generally results in lower price realizations, and S&P's view that U.S. natural gas prices are likely to remain weak in the near term," said Standard & Poor's credit analyst Amy Eddy. The ratings also reflect BBG's relatively moderate financial leverage and strong inventory of drilling prospects. As of Dec. 31, 2008, BBG had 818 billion cubic feet equivalent of total proved reserves, of which a low 53% were developed. First- quarter 2009 daily production averaged 245 million cubic feet equivalent, 95% of which was natural gas, resulting in a reserve to production ratio of slightly more than nine years on a total proved basis and about five years on a proved developed basis. Relative to peers in the 'BB' category, BBG's reserve base is small and among the most levered to natural gas. Given the weak industry fundamentals and the company's limited scale, any positive ratings action is unlikely. S&P would consider a negative ratings action if credit measures worsen materially relative to S&P's current expectations, whether due to the company incurring debt to finance capital expenditures or acquisitions or due to S&P's lowering S&P's natural gas pricing assumptions. Specifically, S&P would consider a negative ratings action if debt to EBITDAX approaches 4x. BNYCP: S&P Cuts Ratings on $307 Mil. Tax-Exempt Bonds to 'BB' ------------------------------------------------------------- Standard & Poor's Rating Services lowered to 'BB' from 'BB+' its rating on BNYCP's $307 million 1997 tax-exempt industrial development bonds due 2022-2036 ($307.0 million outstanding as of Dec. 31, 2008) and $100 million 1997 taxable senior secured bonds due 2020 ($98.7 million outstanding as of Dec. 31, 2008). At the same time, S&P placed the rating on CreditWatch with negative implications. The downgrade reflects the project's low historic and budgeted debt service coverage levels, combined with concerns regarding the financial effects of a long-term steam turbine outage that began in mid-January 2009. The rating will remain on CreditWatch until concerns regarding the outage have been resolved. S&P left unchanged the '3' recovery rating on the bonds, which indicates meaningful (50%-70%) recovery in the event of a payment default. BOEGER LAND: Proposes Paul Jamond as Chapter 11 Counsel ------------------------------------------------------- Boeger Land Investments LLC seeks permission from the U.S. Bankruptcy Court for the Northern District of California to employ Paul M. Jamond, Esq., as its counsel. The Debtor is not sufficiently familiar with the rights and duties of chapter 11 as to be able to participate in the bankruptcy proceeding without the aid of experienced counsel. Mr. Jamond will charge the Debtor $250 per hour for chapter 11 representation. He has received a $15,000 retainer from the Debtor. Mr. Jamond says he has no connection with the Debtor, its creditors, or any other party-in-interest, or their attorneys or the U.S. Trustee's office in this matter. Mr. Jamond may be contacted at: PAUL M. JAMOND, Esq. State Bar: 61613 Attorney at Law 200 Fourth Street #300 Santa Rosa, CA 95401 Tel: (707) 526-4550 Gridley, California-based Boeger Land Investments LLC filed for Chapter 11 on June 8, 2009, (Bankr. N.D. Calif. Case No. 09-11706). The Law Offices of Paul M. Jamond represents the Debtor in its restructuring efforts. The Debtor listed $10 million to $50 million in assets and $1 million to $10 million in debts. BROWN STEEL: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------- Brown Steel, LLC, has filed for Chapter 11 bankruptcy protection, in the U.S. Bankruptcy Court for the Northern District of Georgia, and has hired G. Frank Nason IV of Lamberth, Cifelli, Stokes, Ellis & Nason to assist it in its restructuring efforts, Janet Conley posted on the Deal Watch blog. According to Deal Watch, Brown Steel listed $1 million to $10 million in assets and debts. Deal Watch relates that Colonial Bank of Alabama, represented by Kevin B. Getzendanner of Arnall Golden & Gregory, filed a lawsuit against Brown Steel in Coweta Superior Court on June 11, claiming that the Company defaulted on more than $5.6 million in loans. The lawsuit sought a receiver and injunctive relief, court documents say. The Newnan Times-Herald relates that other lawsuits against Brown Steel include claims that the Company owes: -- $103,000 to AIM Steel Inc.; -- more than $47,000 to Georgia Powder Coating; -- in excess of $27,000 to The Fastenal Company; and -- almost $24,000 to Southland Manufacturing. Deal Watch, citing Mr. Nason, reports that Brown Steel didn't dispute the debt to Colonial, and that the Company listed Fastenal and Southland among its 20 largest unsecured creditors. According to the report, Mr. Nason said that Brown Steel disputes the AIM Steel and Georgia Power Coating claims, saying, "We think they owe [Brown Steel] money." Mr. Nason said that Colonial was one of the factors that pushed Brown Steel into Chapter 11 bankruptcy, Deal Watch relates. Mr. Nason, Deal Watch states, said that Colonial is seeking to have Brown Steel's receivables assigned to the bank. Newnan, Georgia-based Brown Steel manufactures and fabricates structural and plate steel for commercial and industrial customers. BUCKSHIRE LLC: Involuntary Chapter 11 Case Summary -------------------------------------------------- Alleged Debtor: Buckshire, LLC c/o Richard D. Sparkman, Trustee for Landcraft Management, LLC PO Box 1687 Angier, NC 27501-1687 Case Number: 09-04997 Involuntary Petition Date: June 17, 2009 Court: Eastern District of North Carolina (Wilson) Petitioners' Counsel: John A. Northen, Esq. Northen Blue LLP 1414 Raleigh Road, Suite 435 Chapel Hill, NC 27515-2208 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Lillian D. Snow note $12,000 2406 Market Street Wilmington, NC 28403 Louise D. Thompson note $12,000 2406 Market Street Wilmington, NC 28403 Margaret D. Bryant note $12,000 1501 Sterling Road Charlotte, NC 28209 BUTLER SERVICES: Gets Interim Approval to Access GECC Loans ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware entered an interim order authorizing Butler Services International Inc. and its affiliates to (i) obtain debtor-in-possession in the amount of up to $13 million, inclusive of all letters of credit, and (ii) access cash collateral in accordance with a budget. The Debtors sought permission to obtain DIP financing of up to $30 million from certain prepetition lenders led by General Electric Capital Corp. The Debtors owe $20,155,000, including $1,970,000 under letters of credit, to first lien lenders, led by General Electric Capital Corp. as agent. The Debtors also owe $22 million, inclusive of interest, in term loans to second lien lenders, led by Monroe Capital Management Advisors LLC as lender and agent. The Debtors' obligations under the GECC facility are senior to liens on the Debtors' assets securing the Monroe facility. The Debtors say they need postpetition financing from GECC. They say that they won't be able to continue to operate their business without the proposed DIP financing. The Debtors have no unencumbered assets and do not have sufficient cash collateral to pay all postpetition expenses, including payroll obligation to 1,500 employees. The Debtors will use the proceeds of the borrowing under the DIP Financing to (i) pay its prepetition debt to First Lien Lenders, (ii) fund ongoing working capital and general corporate needs during the Chapter 11 cases, (iii) pay fees of professionals, (iv) pay other bankruptcy-related costs, and (v) pay fees and expenses owed to GECC. The salient terms of the DIP financing are: Borrowers: Butler Service Group Inc. Guarantors: Butler Services International, Inc., Butler International Inc. and other affiliates Agent and Bank: General Electric Capital Corporation Commitment: $30 million revolving credit facility Interest: Interest on advances to accrue at a rate per annum equal to: (1) Index Rate plus 7.75%; (2) Libor Rate plus 8%; or (3) Commercial Rate plus 8%, computed on the basis of a 360-day year Security The obligations under the DIP Facility will have priority over any and all administrative expenses, and will be deemed immediately secured by valid, binding, continuing, enforceable, fully perfected and unavoidable first priority senior priming security interests and liens in and on all property and assets of the Debtors. Default Rate: Applicable interest rate plus 2% Commitment Fee: $250,000 payable to Agent The Debtors are authorized to use cash collateral within the meaning of 11 U.S.C. Sec. 363(a). The Debtors will provide adequate protection to Monroe in the form of replacement liens in the Collateral to the extent there is diminution in value, and an allowed administrative claim against the Debtors' estates under Section 507(b) of the Bankruptcy Code to the extent the replacement liens are insufficient. The official committee of unsecured creditors to be appointed in the case will have until the earlier of (i) the hearing to consider approval of the sale of all assets of the Debtors, (ii) 75 days from the Petition Date, to investigate the facility and validity of the liens of the first lien lenders. The Court will convene a hearing to consider final approval of the financing on June 29. The DIP Agent is represented by: Rick Denhup, Esq. Kristine M. Shryock, Esq. Paul Hastings Janofsky & Walker, LLP 75 E. 55th St., New York, NY 10022 -- and -- Mark D. Collins, Esq. Paul N. Heath, Esq. Richards Layton & Finger, P.A. 920 North King Street, Wilmington, Delaware 19801 Monroe is represented by: Damon DiCastri, Esq. Winston & Strawn LLP 35 W. Wacker Drive, Chicago, Illinois About Butler Services Butler Services International Inc. has been in the business of providing outsourcing, project management and technical augmentation services for over 60 years. The Debtors also provide (i) fleet services, primarily to certain key telecommunications services clients, and (ii) ideas, strategies and tactics to executive leaders for building more effective organizations through the publication of Chief Executive Magazine. Its worldwide corporate headquarters are located in Fort Lauderdale, Florida. A non-debtor affiliate maintains an office in Hyderabad, India, from which the Debtors provide offshore service delivery. Butler International Inc. is a publicly owned entity whose common stock is traded on the Pink Sheets. Butler Services, together with publicly traded unit Butler International Inc. and other affiliates, filed for Chapter 11 bankruptcy protection on June 1, 2009 (Bankr. D. Del. Case No. 09-11914). The Debtors have tapped Moses & Singer LLP as bankruptcy attorneys and Bayard, P.A., as co-counsel. The Debtors are also employing RAS Management Advisors, LLC as chief restructuring advisor, Venturi & Company LLC, as investment banker, J.H. Cohn LLP, as interim accounts, and Donlin Recano & Company Inc. as claims and noticing agent. The Creditors Committee is represented by Potter Anderson & Corroon LLP. BUTLER SERVICES: Proposes Bayard P.A. as Co-Counsel --------------------------------------------------- Butler Services International Inc. and its affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to hire Bayard, P.A., as co-counsel. Given that their cases are complex, they require an expeditious sale process to retain value for the estates, the Debtors need an efficient legal services through out their Chapter 11 cases. Bayard will work with co-counsel Moses & Singer to insure that there is no duplication of services. Bayard will, among other things, (a) provide legal advice with respect to the Debtors' powers and duties as debtors-in-possession in the continued operation of their business and management of their properties, (b) prepare the necessary pleadings, and (iii) appear in Court to protect the interests of the Debtors. Bayard will charge the Debtors based on its regular hourly rates: Directors $485 to $765 Associates and Counsel $210 to $485 Legal Assistants $155 to $230 Bayard will also seek reimbursement for all costs and expenses incurred, including telephone and telecopier charges, travel expenses, and expenses for "working meals." Bayard received a $22,000 retainer prepetition. Bayard does not hold or represent any interest materially adverse to the interests of the Debtors' estates or any class of creditors or equity security holders. Bayard may be contacted at: Charlene D. Davis, Esq. Bayard, P.A. 222 Delaware Avenue, Suite 900 Wilmington, Delaware 19801 Phone: (302) 655-5000 Fax: (302) 658-6395 About Butler Services Butler Services International Inc. has been in the business of providing outsourcing, project management and technical augmentation services for over 60 years. The Debtors also provide (i) fleet services, primarily to certain key telecommunications services clients, and (ii) ideas, strategies and tactics to executive leaders for building more effective organizations through the publication of Chief Executive Magazine. Its worldwide corporate headquarters are located in Fort Lauderdale, Florida. A non-debtor affiliate maintains an office in Hyderabad, India, from which the Debtors provide offshore service delivery. Butler International Inc. is a publicly owned entity whose common stock is traded on the Pink Sheets. Butler Services, together with publicly traded unit Butler International Inc. and other affiliates, filed for Chapter 11 bankruptcy protection on June 1, 2009 (Bankr. D. Del. Case No. 09- 11914). The Debtors have tapped Moses & Singer LLP as bankruptcy attorneys and Bayard, P.A., as co-counsel. The Debtors are also employing RAS Management Advisors, LLC as chief restructuring advisor, Venturi & Company LLC, as investment banker, J.H. Cohn LLP, as interim accounts, and Donlin Recano & Company Inc. as claims and noticing agent. The Creditors Committee is represented by Potter Anderson & Corroon LLP. BUTLER SERVICES: Proposes Moses & Singer as Counsel --------------------------------------------------- Butler Services International Inc. and its affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to hire Moses & Singer LLP as their attorneys in their Chapter 11 cases. Given that their cases are complex, they require an expeditious sale process to retain value for the estates, the Debtors need an efficient legal services through out their Chapter 11 cases. Moses & Singer will work with co-counsel Bayard, P.A., to insure that there is no duplication of services. M&S will, among other things, (a) provide legal advice with respect to the Debtors' powers and duties as debtors-in-possession in the continued operation of their business and management of their properties, (b) prepare the necessary pleadings, and (iii) appear in Court to protect the interests of the Debtors. M&S has become familiar with the Debtors' business, financial affairs, and capital structure after representing the Debtors in connection with, among other things, potential transactions since March 11, 2009. M&S received $1,229,776 in payments since its engagement. M&S intends to charge the Debtors for services rendered at its normal hourly rates, which are $455 to $790 for members and counsel, $225 to $455 for associates, and $220 for paraprofessionals. M&S will also seek reimbursement for all costs and expenses incurred, including toll calls, overtime, cost of food at meetings, and overtime meals. Jeffrey Davis, Esq., a member of M&S, says his firm does not hold or represent any interest materially adverse to the interests of the Debtors' estates or any class of creditors or equity security holders. It is a "disinterested person" as that term is defined in 11 Sec. 101(14). Moses & Singer may be contacted at: Alan E. Gamza, Esq. Andrew P. Lederman, Esq. Moses & Singer LLP The Chrysler Building 405 Lexington Avenue New York, NY 10174 Tel: (212) 554-7800 Fax: (212) 554-7700 About Butler Services Butler Services International Inc. has been in the business of providing outsourcing, project management and technical augmentation services for over 60 years. The Debtors also provide (i) fleet services, primarily to certain key telecommunications services clients, and (ii) ideas, strategies and tactics to executive leaders for building more effective organizations through the publication of Chief Executive Magazine. Its worldwide corporate headquarters are located in Fort Lauderdale, Florida. A non-debtor affiliate maintains an office in Hyderabad, India, from which the Debtors provide offshore service delivery. Butler International Inc. is a publicly owned entity whose common stock is traded on the Pink Sheets. Butler Services, together with publicly traded unit Butler International Inc. and other affiliates, filed for Chapter 11 bankruptcy protection on June 1, 2009 (Bankr. D. Del. Case No. 09-11914). The Debtors have tapped Moses & Singer LLP as bankruptcy attorneys and Bayard, P.A., as co-counsel. The Debtors are also employing RAS Management Advisors, LLC as chief restructuring advisor, Venturi & Company LLC, as investment banker, J.H. Cohn LLP, as interim accounts, and Donlin Recano & Company Inc. as claims and noticing agent. The Creditors Comittee is represented by Potter Anderson & Corroon LLP. BUTLER SERVICES: Pursues Prompt Going-Concern Sale; Bids Due Today ------------------------------------------------------------------ Butler Services International Inc. and its affiliates received approval from the U.S. Bankruptcy Court for the District of Delaware for a prompt sale process of their business as a going concern. The Debtors have a stalking horse deal with Butler America LLC, which offered $26,875,000 for the assets, subject to adjustment. The Court approved procedures allowed parties to rival Butler America's offer. Competing bids must have a minimum overbid of $250,000 and are due June 26, 2009. The Debtors will conduct an auction on June 27, 2009 at 10:00 a.m. Easter time. The Debtors will seek approval of the sale to Butler America or to the winning bidder on June 29. The Court also approved a break-up fee, which will be paid to Butler America in the event the Debtors close a sale with other parties. In 2008, the Debtors restructured their business from a branch footprint structure to vertical chains by industry. This process resulted in significant internal discontent, which, in turn resulted in the loss of many of the Debtors' valued employees and business with them. The Debtors also entered into a "not to exceed" contract with one of their customers that ultimately resulted in a significant loss due to performance issues. The combination of these events over the course of the past year resulted in the Debtors experiencing severe cash shortfalls, which lead to payroll shortfalls to its employees over a two-month period in the third quarter of 2008. The Debtors have lost major customers, are losing money and are in a substantial over-advance position with their senior lender, General Electric Capital Corporation. Absent a prompt sale, the Debtors expect to be required to liquidate. The Debtors believe that a sale of their assets as a going concern is the only viable alternative. The Debtors have met with numerous parties over the course of many months and recently entered into an asset purchase agreement with Butler America. Butler America has required a July 1 entry of an order approving the sale. The salient terms of the APA are: Purchased Assets. Includes leases, customer contracts, customer information, all of the Debtors' personal property and intangible property, receivables, certain insurance policies, all causes of action relating to intellectual property, and all of the Debtors' ownership rights and equity interest in Butler Technical Services India Private Limited and other non-debtor subsidiaries. Purchased Assets. Includes leases, customer contracts, customer information, all of the Debtors' Break-Up Fee. Butler America is entitled to receive a $838,000 break-up fee, equal to 3% of the purchase price. Closing Date. Closing will be held upon the earlier to occur of (i) the second business day after entry of the sale order, and (ii) July 10, 2009. Termination. Butler America may terminate the APA if an approval order is not entered by the Court on or before July 1, 2009. Despite objections by the Official Committee of Unsecured creditors formed in the Chapter 11 cases, the Court approved a quick sale process for the Debtors' business. The Creditors Committee had claimed that additional time is necessary in order to ensure that the rights of all of the Debtors' constituencies are preserved in the sale process. The Committee is also complained that the abbreviated schedule does not provide an adequate opportunity for interested buyers to participate in the sale process. About Butler Services Butler Services International Inc. has been in the business of providing outsourcing, project management and technical augmentation services for over 60 years. The Debtors also provide (i) fleet services, primarily to certain key telecommunications services clients, and (ii) ideas, strategies and tactics to executive leaders for building more effective organizations through the publication of Chief Executive Magazine. Its worldwide corporate headquarters are located in Fort Lauderdale, Florida. A non-debtor affiliate maintains an office in Hyderabad, India, from which the Debtors provide offshore service delivery. Butler International Inc. is a publicly owned entity whose common stock is traded on the Pink Sheets. Butler Services, together with publicly traded unit Butler International Inc. and other affiliates, filed for Chapter 11 bankruptcy protection on June 1, 2009 (Bankr. D. Del. Case No. 09-11914). The Debtors have tapped Moses & Singer LLP as bankruptcy attorneys and Bayard, P.A., as co-counsel. The Debtors are also employing RAS Management Advisors, LLC as chief restructuring advisor, Venturi & Company LLC, as investment banker, J.H. Cohn LLP, as interim accounts, and Donlin Recano & Company Inc. as claims and noticing agent. The Creditors Committee is represented by Potter Anderson & Corroon LLP. CAL-RIO LLC: Case Summary & 7 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Cal-Rio, LLC 1845 Chicago Ave. Bldg C Riverside, CA 92507 Bankruptcy Case No.: 09-24087 Chapter 11 Petition Date: June 24, 2009 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Thomas B. Donovan Debtor's Counsel: Todd L. Turoci, Esq. The Turoci Firm 3237 Twelfth Street Riverside, CA 92501 Tel: (888) 332-8362 Fax: (866) 762-0618 Email: tturoci@aol.com Total Assets: $335,000 Total Debts: $1,071,556 A full-text copy of the Debtor's petition, including a list of its 7 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-24087.pdf The petition was signed by Ivano Stamegna. CARITAS HEALTH: Can Sell Equipment Assets for $3,125,000 -------------------------------------------------------- The U.S. Bankruptcy court for the Eastern District of New York has approved (i) the sale of certain of Caritas Health Care, Inc., et al.'s equipment assets to Centurion Service Group, LLC and Perfection Plan Liquidations, LLC, and (ii) the retention of the purchasers as liquidation agents regarding sales of the medical supplies. The Debtors, in consultation with the official committee of unsecured creditors, have agreed to an adjusted purchase price with respect to the sale of the medical equipment from $3.4 million to $3.125 million. As reported in the Troubled Company Reporter on May 28, 2009, the Court approved on May 20, 2009, procedures for the sale of the medical equipment and related assets of Caritas Health Care, Inc., et al., and the engagement of a disposition agent with respect to the sale of the medical supplies in an auction process. Centurion and Perfection, which have been designated as stalking horse bidder, offered to pay Caritas $3,400,000 for the medical equipment. As reported in the Troubled Company Reporter on May 11, 2009, with respect to the medical supplies, for a period of 90 days from the closing date of the sale of the medical equipment, the stalking horse bidder will conduct auctions at the Debtors' facilities and online, charging a buyer's premium of 10% in respect of sales occurring at the Debtors' facilities and 17% in respect of sales occurring online, but charging no additional commission to the Debtors. The net proceeds, after subtraction of the Buyer's Premium and any sales and similar taxes, will be remitted to Caritas on the next business day following said sales. A full-text copy of the proposed bid procedures and the agreement with the Stalking Horse Bidder dated April 30, 2009, is available at http://bankrupt.com/misc/Caritas.EquipmentProtocol.pdf About Caritas Health Care Inc. Caritas Health Care, Inc., is the owner of Mary Immaculate Hospital and St. John's Queens Hospital. Caritas, created by Wyckoff Heights Medical Center, purchased the two hospitals in a bankruptcy sale in early 2007 from St. Vincent Catholic Medical Centers of New York. St. John's has 227 generate acute-care beds while Mary Immaculate has 189. Caritas Health Care and eight of its affiliates filed for Chapter 11 on February 6, 2009 (Bankr. E.D.N.Y. Lead Case No. 09- 40901). Jeffrey W. Levitan, Esq., and Adam T. Berkowitz, Esq., at Proskauer Rose, LLP, represent the Debtors as counsel. JL Consulting LLC, is the Debtors' restructuring consultant. Montclair Partners, LLC, is the financial advisor to the Debtors. Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alson & Bird LLP, represent the official committee of unsecured creditors as counsel. SilvermanAcampora LLP is the Committee's conflicts counsel. In its bankruptcy petition, Caritas listed assets of $50 million to $100 million, and debts of $100 million to $500 million. CARITAS HEALTH: Plan Filing Period Extended to October 4 -------------------------------------------------------- The U.S. Bankruptcy court for the Eastern District of New York has extended Caritas Health Care, Inc., et al.'s exclusive period to propose a plan until October 4, 2009, and their exclusive period to solicit acceptances thereof until December 3, 2009. This is the first extension of the Debtors' exclusive periods. As reported in the Troubled Company Reporter on May 28, 2009, the Debtors said they anticipated completing the sale of their equipment and medical supplies by the end of August, and have retained a brokerage firm to assist them with efforts to monetize their real estate assets. The Debtors related that until they have completed the process of monetizing their main assets, they would not be able to ascertain whether they will have sufficient funds to propose and confirm a plan of liquidation. About Caritas Health Care Inc. Caritas Health Care, Inc., is the owner of Mary Immaculate Hospital and St. John's Queens Hospital. Caritas, created by Wyckoff Heights Medical Center, purchased the two hospitals in a bankruptcy sale in early 2007 from St. Vincent Catholic Medical Centers of New York. St. John's has 227 generate acute-care beds while Mary Immaculate has 189. Caritas Health Care and eight of its affiliates filed for Chapter 11 on February 6, 2009 (Bankr. E.D.N.Y. Lead Case No. 09- 40901). Jeffrey W. Levitan, Esq., and Adam T. Berkowitz, Esq., at Proskauer Rose, LLP, represent the Debtors as counsel. JL Consulting LLC, is the Debtors' restructuring consultant. Montclair Partners, LLC, is the financial advisor to the Debtors. Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alson & Bird LLP, represent the official committee of unsecured creditors as counsel. SilvermanAcampora LLP is the Committee's conflicts counsel. In its bankruptcy petition, Caritas listed assets of $50 million to $100 million, and debts of $100 million to $500 million. CARAUSTAR INDUSTRIES: Wins Permission to Use Lenders' Collateral ---------------------------------------------------------------- Caraustar Industries, Inc., and its affiliates won final approval from Judge Mary Grace Diehl of the U.S. Bankruptcy Court for the Northern District of Georgia, in Atlanta, to access cash subject to the interest of their prepetition lenders. The Debtors owe Bank of America, N.A., as agent to certain secured lenders $16,000,000 on account of outstanding letters of credit and $2,500,000 to Banc of America Leasing & Capital, LLC. BofA and BALC were granted liens and security interests on and in substantially all of the DEbtors' assets other than real property. As adequate protection for the use of cash collateral, the Debtors will pay, out of the first advances under the DIP facility, the outstanding liquidated balance of the Prepetition Indebtedness and will further provide BofA cash collateral in an amount equal to 105% of the outstanding balance. They Debtors may also provide replacement liens. BofA is represented by: Rufus T. Dorsey, Esq. Parker, Hudson, Rainer & Dobbs LLP 1500 Marquis Two Tower 285 Peachtree Center Avenue, N.E. Atlanta, Georgia 30303 About Caraustar Industries Headquartered in Austell, Georgia, Caraustar Industries, Inc. -- http://www.caraustar.com/-- is 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. The Company and its affiliates filed for Chapter 11 on May 31, 2009 (Bankr. N.D. Ga. Lead Case No. 09-73830). James A. Pardo, Jr., Esq., and Mark M. Maloney, Esq., at King & Spalding, represent the Debtors on their restructuring efforts. The Debtors listed $50 million to $100 million in assets and $100 million to $500 million in debts. CASELLA WASTE: Moody's Assigns 'Ba2' Rating on Restated Facility ---------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to the planned restated credit facility and a B2 rating to the planned new issue of $205 million of senior secured second lien notes due 2014 of Casella Waste Systems, Inc. Moody's is maintaining the B2 Corporate Family and Probability of Default ratings and the Caa1 rating of the $195 million senior subordinated notes due February 2013. The outlook is negative. Proceeds of the Notes and new credit facility, including a $100 million term loan and a draw on the new $180 million revolver, will fund the refinancing of Casella's existing credit facility (not rated), which matures on April 28, 2010. The refinancing will resolve the cause of the going concern opinion Casella received from its auditor in the audit opinion for Casella's April 30, 2009 financial statements. "The successful completion of the planned refinancing will alleviate the downwards rating pressure related to uncertainty about Casella's liquidity position, driven by the currency of the existing debt structure and the potential to fall, or remain, out of compliance with one or more financial covenants of the existing credit facility," said Moody's analyst, Jonathan Root. However, "it does not address the potential pressure on earnings and operating cash flow of the continuing weak demand environment, which Moody's expects could linger well into 2010." The negative outlook considers the potential for credit metrics to further weaken because of continuing weak demand that would outweigh management's pricing and cost initiatives. Casella's ability to grow margins and cash flow will be important rating factors, as the anticipated increased debt service requirements could pressure funds from operations. The B2 corporate family rating reflects the expectation that Casella's operations should produce a level of funds from operations that covers debt service obligations with modest cushion. Leading positions in many of its markets, the increased focus on cost reductions and the intent to enhance yield should help to mitigate pressure on earnings and cash flows that could occur over the near term as solid waste volumes and recycling earnings remain under pressure. These more disciplined management practices should also help to mitigate pressure on the credit profile that Moody's anticipates will result from the higher interest burden of the refinanced credit agreement. The B2 rating also considers that free cash flow is likely to remain modest, which could limit flexibility to de-lever the capital structure. The ratings could be downgraded, potentially more than one notch, if Casella does not complete the planned refinancing by July 31, 2009, the current expiration date of the current covenant waiver from the bank group, at pricing levels that allow it to adequately service the cost of the new debt structure. FFO + Interest to Interest that approaches 2.0 times and/or Debt to EBITDA above 6.0 times could result in a downgrade of the ratings. The outlook could be stabilized if FFO + Interest to Interest is sustained at about 3.0 times or Retained Cash Flow to Net Debt is sustained above 12 percent. Sustained free cash flow to debt above 5.0 percent could also result in the stabilization of the outlook. The last rating action was on March 9, 2009, when the CFR was changed to B2 from B1 and the subordinated note rating was lowered to Caa1 from B3. Assignments: Issuer: Casella Waste Systems, Inc. -- Senior Secured Bank Credit Facility, Assigned Ba2, 15 - LGD2 -- Senior Secured Regular Bond/Debenture, Assigned B2, 51 - LGD4 Casella Waste Systems, Inc., based in Rutland, Vermont, is a vertically-integrated regional solid waste services company that provides collection, transfer, disposal and recycling services to residential, industrial and commercial customers, primarily in the eastern United States. CATHOLIC CHURCH: Court Issues Final Decree Closing Tucson Case -------------------------------------------------------------- Judge James M. Marlar of the U.S. Bankruptcy Court for the District of Arizona issued a final decree on March 30, 2009, closing the bankruptcy case of the Diocese of Tucson. Tucson's Third Amended Plan of Reorganization was confirmed on July 11, 2005, and was declared effective September 20, 2005. The Roman Catholic Church of the Diocese of Tucson filed for chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on September 20, 2004, and delivered a plan of reorganization to the Court on the same day. Susan G. Boswell, Esq., Kasey C. Nye, Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson Diocese. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq. and William N. Stiles, Esq. of Sussman Shank LLP represent the Portland Archdiocese in its restructuring efforts. Portland's Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) CATHOLIC CHURCH: Davenport Reports Progress on Undertakings ----------------------------------------------------------- In compliance with its confirmed Plan of Reorganization, the Diocese of Davenport issued a progress report on its non-monetary undertakings on June 5, 2009. The Report shows that the Diocese has completed all ongoing investigations concerning allegations of abuse and the names of credibly accused perpetrators have been released and published on the diocesan Web site. In a statement dated May 21, 2009, the Diocese announced that it added to its list of credibly accused clergy three names: Daniel Emrich, William Kerrigan and James Lawrence. Among other things, the Report states that Bishop Martin Amos (i) had conducted 47 atonement services at parishes where abuse occurred or where a perpetrator had served, (ii) publicly supports the elimination of all criminal statutes of limitation for child sexual abuse committed by clergy or others in positions of authority, and (iii) has personally sent two letters of apology to tort claimants as requested. No additional letters of apology are currently pending. Copies of the report and its supplement are available for free at: http://bankrupt.com/misc/Davenport_NonMonetaryReport_060509.pdf http://bankrupt.com/misc/Davenport_Supp_Report_060509.pdf About Diocese of Davenport The Diocese of Davenport in Iowa filed for chapter 11 protection (Bankr. S.D. Ia. Case No. 06-02229) on Oct. 10, 2006. Richard A. Davidson, Esq., at Lane & Waterman LLP, represents the Davenport Diocese in its restructuring efforts. Hamid R. Rafatjoo, Esq., and Gillian M. Brown, Esq., at Pachulski Stang Zhiel Young Jones & Weintraub LLP represent the Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Davenport Diocese reported $4,492,809 in assets and $1,650,439 in liabilities. The Court approved on April 3, 2008, the Diocese of Davenport's second amended disclosure statement explaining its joint plan of reorganization. The Committee is a proponent to the plan, which was confirmed on April 30, 2008. (Catholic Church Bankruptcy News, Issue No. 129; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). CEDAR PROFESSIONAL: Case Summary & 5 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Cedar Professional Center LLC dba Cedar Professional Plaza 23413 39th Avenue SE Bothell, WA 98021 Bankruptcy Case No.: 09-16158 Chapter 11 Petition Date: June 23, 2009 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Philip H. Brandt Debtor's Counsel: Dallas W. Jolley Jr., Esq. Attorney at Law 4707 S Junett St., Ste B Tacoma, WA 98409 Tel: (253) 761-8970 Email: t_steenson@yahoo.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A full-text copy of the Debtor's petition, including a list of its 5 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/wawb09-16158.pdf The petition was signed by Craig Edward Bernhart, member of the Company. CHEMTURA CORP: AFC, et al., Seek Shareholders' Committee -------------------------------------------------------- Allied Financial Corp., William M. Flynn, Larry C. Floyd, Jr., Michael Flynn, and Venu Ganga, all shareholders of Chemtura Corporation, ask Judge Robert Gerber, in separate letters filed with the Court, to appoint a stockholders' committee in the Debtors' Chapter 11 cases to protect the interest of all related shareholders. The Shareholders assert that they are entitled to receive a fair price for their holdings of Chemtura stock. 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: Committee Seeks to Retain FTI as Accountant ---------------------------------------------------------- The Official Committee of Unsecured Creditors in Chemtura Corp.'s Chapter 11 cases seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to retain FTI Consulting, Inc., as its forensic accountant, nunc pro tunc to May 5, 2009. As the Committee's forensic accountant, FTI will: (a) assist in the evaluation and analysis of certain causes of actions, including fraudulent conveyances and preferential transfers; (b) assist with the review and analysis of historical and current intercompany relationships between the Debtors and their non-Debtor affiliates and their related claims; (c) assist in the analysis of consolidation considerations, including preparation of substantive consolidation or deconsolidation analysis, as necessary; and (d) render other general business consulting or assistance as the Committee or its counsel may deem necessary that are consistent with the role of a forensic accountant. FTI will be paid for its services based on its customary rates: Professional Hourly Rates ------------- ------------- Senior Managing Directors $710 to $825 Directors, Managing Directors $520 to $685 Associates, Consultants $255 to $480 Paraprofessionals $105 to $210 FTI will also be reimbursed for actual and necessary expenses incurred in connection with the engagement. The Committee also asks the Court to approve indemnification provisions for the benefit of FTI, whereby the Debtors will indemnify FTI for any claims related to its engagement by the Committee. Michael Eisenband, a senior managing director at FTI Consulting, Inc., disclosed that his firm has had engagements involving the Debtors and non-Debtor affiliates in matters unrelated to the Debtors' Chapter 11 cases. He assures the Court that his firm does not represent any other entity having an adverse interest in connection with the Debtors' cases. FTI will conduct an ongoing review of its files to ensure that no conflicts or other disqualifying circumstances exist or arise, and will supplement its disclosure in the event any new material facts are discovered, Mr. Eisenband tells the Court. 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: Court Allows Set-Off of Dow, Croda Obligations ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York modified the automatic stay to allow Dow Chemical Company to exercise set off rights to mutual debts with Debtors Chemtura Corporation and Great Lakes Chemical Corporation pursuant to a revised stipulation. Dow Chemical, Chemtura and Great Lakes revised their stipulation to reflect concerns raised by the Official Committee of Unsecured Creditors. As part of the Committee's review of Dow Chemical's bid to set off its mutual debt and of the joint stipulation, the Committee identified six invoices and a credit memo representing prepetition amounts owed between Dow Chemical and Great Lakes that were mistakenly included as prepetition amounts owed between them. After proper allocation of the prepetition amounts, the parties revised their stipulation to reflect that: -- the net amount owed by Dow Chemical to Chemtura is $54,580, and -- the net amount owed by Dow Chemical to Great Lakes is $402,310. The parties also agree that the net payment of $456,891 remains unchanged. The Court also modified the automatic stay pursuant to a consent order between Chemtura and Croda, Inc., to allow Croda to set off mutual obligations with Chemtura. 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: Great Lakes Sues VanDeMark to Perform Under Deal --------------------------------------------------------------- Chemtura Corp. unit Great Lakes Chemical Corporation commenced an adversary complaint against VanDeMark Chemical, Inc., on June 1, 2009, seeking declaratory judgment that VanDeMark violated the automatic stay by attempting to refuse performance of a contract postpetition. Before the Petition Date, Great Lakes and VanDeMark were parties to a contract, whereby Great Lakes agreed to purchase from VanDeMark, and VanDeMark agreed to supply to Great Lakes, all of Great Lakes' requirement for phosgene, a certain chemical the Debtors use in their business operations. In May 2009, after it agreed that the Debtors may place an order for phosgene, VanDeMark informed the Debtors that it would not perform under the contract unless the Debtors agreed to assume the contract. VanDeMark thereafter filed a motion to compel the Debtors to assume or reject the contract, and several times has informed the Debtors that it would not ship the order unless the contract is assumed. Great Lakes asks the Court to enjoin VanDeMark from refusing to perform under their contract. Great Lakes also urges the Court to award it damages on account of VanDemark's breach of the contract. 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: Has Deal with Entergy on Deposits; Docs Under Seal ----------------------------------------------------------------- Chemtura Corp. and its affiliates have entered into a stipulation with the Entergy Gulf States Louisiana, L.L.C., Entergy Louisiana, LLC, and Entergy Arkansas, Inc., regarding the Debtors' adequate assurance deposit to Entergy. The Debtors have sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to file the stipulation under seal. "If the terms of the Debtors' agreement with Entergy were to become public, it may be detrimental to the Debtors' efforts to resolve disputes with other utility providers as to what constitutes adequate assurance," says Richard M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York. Entergy, Ms. Labovitz says, has required as part of the terms of the agreement that the Debtors keep the agreement confidential, as the stipulation contains information regarding the monthly amounts that Entergy charges the Debtors for its utility services. 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: Seeks to Settle U.S. & Canada Anti-Trust Fines ------------------------------------------------------------- Chemtura Corporation has certain payables remaining on certain anti-trust fines as of the Petition Date. In March 2004, Chemtura entered into a plea agreement with the United States government, pleading guilty to a one-count information charge of participating in a conspiracy to suppress and eliminate competition by maintaining and increasing the price of certain rubber chemicals sold in the United States and elsewhere from July 1995 to December 2001 in violation of the Sherman Antitrust Act. In May 2004, the United States District Court for the Northern District of California imposed a $50 million fine on Chemtura, payable in six annual installments beginning in 2004, without interest. As of the Petition Date, Chemtura has paid the first five installment of the U.S. Antitrust Fine or an aggregate of $34 million. The remaining $16 million on the Fine was due May 27, 2009. In May 2004, Chemtura also pleaded guilty to one count of conspiring to prevent or lessen competition unduly in the production, manufacture and supply of certain rubber chemicals in Canada in violation of federal Canadian law. The Canadian federal court in Ottawa thereafter imposed a sentence requiring Chemtura to pay a fine of C$9 million, payable in six annual installments, without interest, beginning in 2004. As of the Petition Date, Chemtura has paid the first five installments of the Canadian Antitrust Fine or an aggregate of C$6.2 million. The remaining payment of approximately C$2.8 million was due and payable on May 28, 2009. In May 2009, Chemtura and the U.S government have reached an agreement to reduce and defer the U.S. Antitrust Fine on the condition that: (a) Chemtura will pay the Government $10 million in four installments of $2.5 million each, in full satisfaction of the remaining $16 million installment of the U.S. Antitrust Fine. The four installments will be due June 30, 2009, December 31, 2009, June 30, 2010 and December 31, 2010. (b) If Chemtura confirms a Chapter 11 plan of reorganization that becomes effective and provides that general unsecured creditors of Chemtura will receive more than 62.5% of their allowed claims, then Chemtura will pay to the Government an additional payment equal to the amount to which the Government would have been entitled under that Chapter 11 plan, less any payments already made; and (c) If Chemtura's Chapter 11 case converts to a Chapter 7 case, then the United States will be entitled to assert a claim for the original amount of the final installment of $16 million less any payments already made. The District Court for the Northern District of California has already approved the U.S. Settlement. The Debtors now seek permission from the U.S. Bankruptcy Court for the District of Southern New York to enter into their settlement with the U.S. Government. Chemtura and Canada have also reached an agreement, providing that: (a) Chemtura will pay Canada C$1.8 million in four equal installments of C$450,000 in full satisfaction of the final installment of the Canadian Antitrust Fine. The four installment payments will be due June 30, 2009, December 30, 2009, June 30, 2010 and December 30, 2010; and (b) If the unsecured creditors of Chemtura receive a greater proportion of their claims than 62.5% pursuant to a confirmed Chapter 11 plan that becomes effective in Chemtura's Chapter 11 case, then Canada will receive payments proportionally varied to reflect the overall enhanced portion of the original outstanding amount of C$2.88 million. Chemtura also seeks the Bankruptcy Court's permission to enter into the agreement with Canada. M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, points out that if Chemtura does not enter the Settlement Agreements, it could be required to pay the full amount of the Antitrust Fines notwithstanding the bankruptcy discharge. "Entry into the Settlement Agreements will increase recoveries for creditors to the extent that the final installments of the Antitrust Fines could have been non-dischargeable and paid during the Chapter 11 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: Taps Biggins Lacy to Evaluate Headquarter Lease -------------------------------------------------------------- Chemtura Corp. and its affiliates currently hold headquarters in Middlebury, Connecticut, pursuant to a lease, which runs through 2017. The Lease costs the Debtors more than $11 million per year for rent, taxes and utilities. Section 365(d)(4) of the Bankruptcy Code, provides that absent landlord consent, the Debtors will have at most through October 15, 2009, to decide whether to assume or reject their leases. The Debtors tell the U.S. Bankruptcy Court for the Southern District of New York that in connection with their review of the Lease, they are examining whether to (i) remain at the headquarters; (ii) move the headquarters locally, or (iii) relocate the headquarters to one or more different locations. Certain of the redeployment scenarios will require upfront investment and one-time costs, which may be offset significantly by incentives provided by the candidate jurisdictions. In this light, the Debtors ask the Court, pursuant to Section 363(b) of the Bankruptcy Code, to approve a consulting agreement they entered into with Biggins Lacy Shapiro & Company, LLC, to help them in the evaluation process with respect to the Lease. Pursuant to the parties' Consulting Agreement, Biggins Lacy will, among others: (a) assist the Debtors by supporting their location decision- making with an accelerated and integrated project management plan; (b) quantify the magnitude of the Debtors' potential costs and savings, including potential economic development incentives, as well as the organizational and operational risks and benefits associated with relocation or redeployment scenarios; and (c) manage a competitive incentives process designed to satisfy state and local statutory requirements, while achieving approvals for the highest values among incentives programs offered by various states. The Debtors will pay Biggins Lacy based on these rates: Professional Hourly Rate ------------ ----------- Engagement Manager $600 Public Sector Financing Specialist $450 Financial Modelling & Decision Analyst $375 Project Analyst $250 Project Administrator $175 The Debtors will also reimburse the Firm's necessary and reasonable out-of-pocket expenses incurred in connection with the engagement. They estimate that total fees for Biggins Lacy under the Agreement will be $330,000. The Agreement provides for a maximum payment of $500,000 in fees and $50,000 in reimbursed expenses. The Debtors inform the Court that they may seek similar services from Biggins Lacy in the future with respect to a smaller relocation evaluation processes. 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) CITIGROUP INC: Raising Salaries of Many Workers by As Much as 50% ----------------------------------------------------------------- Stephen Bernard at The Associated Press reports that Citigroup Inc. is raising the base salaries of many of its employees, reportedly by as much as 50% for some workers. The AP, citing a person familiar with the matter, says that the higher salaries aren't the equivalent of annual raises because bonuses are being lowered. The AP notes that the changes could let Citigroup pay most workers as much as they received in 2008 while adhering to bonus caps. Employees who would get the raise include traders -- who tend to be compensated more heavily with bonuses -- and middle- and lower- level managers whose compensation is more heavily weighted toward salaries, The AP relates, citing a person familiar with the matter. According to The AP, those who receive a base salary and bonus could see an adjustment, based on an employee's position and current breakdown of pay between base salary and bonus. The AP states that the 100 highest paid Citigroup employees will be excluded from the bank's revised compensation program due to the government's additional review over that group's pay. Citigroup said in a statement that it "continues to examine ways to ensure its employee compensation practices are competitive in this very challenging market environment. Any salary adjustments are not intended to increase total annual compensation, rather to adjust the balance between fixed and variable compensation." The AP states that the government has named lawyer Kenneth Feinberg as "special master" to supervise compensation packages awarded to seven companies that have received the most government support. Mr. Feinberg, says The AP, can reject pay plans that he deems excessive and review compensation for the top 100 salaried employees at those companies. Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com/-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. Citigroup had $2.0 trillion in total assets on $1.9 trillion in total liabilities as of September 30, 2008. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. As part of the agreement, the U.S. Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CITIZENS REPUBLIC: "Exploring" Substantial Debt-to-Equity Swap -------------------------------------------------------------- "Due to recent and ongoing deteriorating economic conditions across the United States in general, and in Michigan and the Upper Midwest specifically," Citizens Republic Bancorp, Inc., exploring several initiatives to bolster capital and strengthen its balance sheet. "The company's intention is to develop and have ready multiple capital raising alternatives that will ensure Citizens continues to exceed the regulatory designation of well-capitalized as further economic developments and implications dictate," the company said in a news release distributed this week. Like many financial institutions across the United States, Citizens has been impacted by deteriorating economic conditions. Recent events such as bankruptcy filings by significant automotive manufacturers and suppliers, as well as announced automotive plant and dealer closings, affect the national economy in general and the Michigan economy in particular. As a result, Citizens believes that additional capital may be necessary to maintain and strengthen its balance sheet to withstand the effects of increased economic stress and uncertainty over the coming months and years. However, Citizens currently has an insufficient number of authorized but unissued shares available to proactively raise capital, if deemed necessary. Therefore, Citizens believes it is necessary to take steps now to authorize additional shares in order to have sufficient shares to meet future well-capitalized levels in a further stressed environment. Citizens is considering these capital raising initiatives: (A) An offer to holders of 5.75% subordinated debentures due in 2013 to exchange shares of common stock for such debt. If such an offer is made and it is fully successful, this exchange would convert up to $125 million of outstanding debt to common stock. (B) An offer to exchange shares of common stock for outstanding trust preferred securities that are traded on the New York Stock Exchange (CTZ-PA). There is currently $150 million aggregate liquidation amount of these securities outstanding. Distributions on these securities are payable quarterly in arrears at an annual rate of 7.5%. (C) One or more offerings of common stock or convertible preferred stock for cash. (D) An investment by the U.S. Treasury of up to $190 million pursuant to its Capital Assistance Program and up to an additional $100 million under the Capital Assistance Program that would be used to redeem a portion of the outstanding preferred stock issued to the U.S. Treasury under its Capital Purchase Program in 2008. Citizens has called a special meeting of shareholders to be held on August 20, 2009, at 8:30 a.m., at the Genesys Conference and Banquet Center located at 805 Health Park Blvd. in Grand Blanc, Michigan, for shareholders of record on June 30, 2009. The purposes of this meeting are to: (1) seek approval of an increase in the number of authorized shares of common stock from 150,000,000 to 1,050,000,000 shares, (2) seek approval of a proposal to issue additional shares of common stock in exchange for up to $125 million principal amount of the outstanding subordinated debentures (for which shareholder approval is required by Nasdaq rules), and (3) grant the board of directors authority to adjourn, postpone or continue the special meeting. A copy of the Citizens Republic's Proxy Statement is available at http://is.gd/1dqYEat no charge. As a result of ongoing volatility in the financial industry, the challenging economic conditions in Michigan and the Upper Midwest, the impact of continued deterioration in the credit quality of Citizens' loan portfolios, and the uncertain trickle-down effect of recent bankruptcy filings by several major companies in the U.S automotive industry, Citizens determined it was necessary to perform an interim goodwill impairment test. As a result, Citizens performed an interim goodwill impairment test during the second quarter of 2009 which included discounted cash flow and portfolio pricing analyses that reflected management's outlook for the current business environment. Based on these analyses, Citizens believes that the goodwill allocated to its Regional Banking reporting unit is impaired due to the continued deterioration in the credit quality of Citizens' loan portfolios and lower earnings due to the challenging economic conditions. Accordingly, on June 25, 2009, Citizens estimated the non-cash goodwill impairment charge will be approximately $270 million during the second quarter of 2009. The goodwill impairment charge is not tax deductible, does not impact Citizens' tangible equity or regulatory capital ratios, and does not require future cash expenditures or adversely affect Citizens' overall liquidity position. As required under SFAS 142, "Goodwill and Other Intangible Assets," Citizens is concluding its interim impairment test and expects to complete this process prior to releasing its second quarter 2009 results. While the aforementioned goodwill impairment charge is an estimate, Citizens does not anticipate the final analysis to be materially different. This interim goodwill assessment will not change the timing of Citizens' annual goodwill impairment test. Citizens Republic Bancorp (Nasdaq: CRBC) -- http://www.citizensbanking.com/-- is a diversified financial services company providing a wide range of commercial, consumer, mortgage banking, trust and financial planning services to a broad client base. Citizens serves communities in Michigan, Ohio, Wisconsin, and Indiana as Citizens Bank and in Iowa as F&M Bank, with 231 offices and 267 ATMs. Citizens Republic Bancorp is the largest bank holding company headquartered in Michigan with roots dating back to 1871. Citizens Republic Bancorp is the 43rd largest bank holding company headquartered in the United States. CITY OF MINNEAPOLIS: Moody's Cuts Rating on Revenue Bonds to 'Ba2' ------------------------------------------------------------------ Moody's has downgraded the rating of Minneapolis (City of) Minnesota, Multifamily Housing Revenue Bonds, 1998 A (GNMA Collateralized Mortgage Loan \'97 University Village) to Ba2 from Aaa and removed the bonds from Watchlist for Possible Downgrade. The bonds were placed on Watchlist on September 18, 2008, as a result of rating actions on American International Group, Inc., which was subsequently downgraded to A3/P1. AIG had provided the guaranteed investment contract for the revenue account in the transaction. The downgrade and removal from Watchlist for Possible Downgrade of the bonds is based on the termination of the GIC by the Trustee and the investment of the revenue account in money market funds earning substantially less than the GIC, as well as a review of the probability that money market rates for the revenue fund of the bonds will go above a rate of approximately 4.5% over the near term and the levels of shortfall that the program would experience in the event that these investment rates are not achieved. The 4.5% rate is the investment rate that is necessary to provide the program with sufficient earnings to continue to pay debt service on the bonds in the long run. Security and Basis for the Rating The bonds are secured by a mortgage-backed security guaranteed as to full and timely payment of principal and interest by the Government National Mortgage Association. GNMA guarantees to maintain payments of principal at the maturity date of and regularly scheduled interest on the MBS regardless of the actual performance of the underlying mortgage loan. The full faith and credit of the United States back the GNMA guarantee. A sound legal structure provides additional security for bondholders. Furthermore, Moody's reviewed various cash flow scenarios demonstrating that revenue from the MBS, together with interest earnings on funds invested in an AIG GIC, which acted as revenue fund for the bonds, would have been sufficient to guaranty sufficiency of debt service payment on the bonds. Recent Developments The AIG GIC was an integral support to the bond structure. Mortgage payments were deposited monthly to the GIC and interest earnings on these funds were added to the balance in the revenue fund. The interest earnings were sufficiently high enough to ensure that the revenue balance would not fall below the level necessary to pay debt service. Prior to AIG's downgrade to A3/P1 on September 18, 2008, the Issuer directed the Trustee to liquidate the AIG GIC, the balance of which is being invested at rates significantly lower than the original GIC rate. Currently, the Trustee is investing the revenue account in a money market fund earning approximately 0.0006% which is substantially below the rate that the program was projected to receive from the GIC when the bonds were structured. At this very low interest rate, cash flow projections show that there will be insufficient funds available to pay debt service on the bonds beginning in approximately 5 years from now. However, cash flow projections also demonstrate that an effective weighted average interest rate for the revenue fund of approximately 4.5% needs to be achieved for sum-sufficiency. The Issuer has been in conversation with HUD concerning a possible current refinancing this summer. However, at this time Moody's has not seen any documentation or notice of refinancing. Should a refinancing occur the rating would be revisited Analysis In determining the rating, Moody's evaluated three factors: the Probability of Default, which is the risk that interest rates will remain below an effective weighted average interest rate of 4.5% for the life of the transaction; the Loss Given Default, which is the possible loss to bondholders from rates remaining below 4.5%; and, the Expected Loss Rate, which is the product of the PD and LGD. Moody's believes that the transaction is exposed to high default risk, based on Moody's review of interest rate behavior, specifically the three-month Federal Funds Rate, in both recessionary and non-recessionary environments and the likelihood of interest rates remaining below certain levels for different periods of time. Moody's also considered interest rate forecasts from a variety of other sources and incorporated these forecasts into the cash flow projections for the bonds. Moody's also considered a range of LGDs, with the most extreme scenario envisioning interest rates remaining at effectively 0% for the foreseeable future. Under the scenarios studied, the analysis suggests ELs consistent with a Ba-category rating. Moody's will continue to monitor interest rate movements for money market funds and take action as appropriate. Outlook The Developing outlook is based on Moody's expectation that if rates do not rise to the required 4.5% level in an appropriate timeframe, default will occur in five years in combination with the possibility of a current refinancing with the assistance of HUD that would change the structure of the deal and require a review of the credit. What could shift the rating -- UP: -- Increase in interest rates to above 4.5% -- Purchase of a GIC that guarantees an investment rate of 4.5% What could shift the rating -- DOWN: -- Rates continue to remain at very low levels The last rating action with respect to the bonds was on September 18, 2008, when its ratings were placed under review for possible downgrade. CONSECO INC: Enters Into Reinsurance Transaction to Build Capital ----------------------------------------------------------------- Conseco, Inc., entered into an agreement under which two insurance companies in its Conseco Insurance Group unit will co-insure, with an effective date of January 1, 2009, about 104,000 non-core life insurance policies with Wilton Reassurance Company, a Minnesota reinsurance company. "Completing this step is expected to increase Conseco's consolidated risk-based capital ratio by 8 percentage points, along with increasing statutory capital," said Conseco CEO Jim Prieur. "In addition, this transaction will further simplify our administrative operations as we focus on our core insurance businesses." In the transaction, Wilton Re will pay a ceding commission of approximately $57.5 million and 100% coinsure and administer these policies. The Conseco companies will transfer to Wilton Re approximately $409 million in cash and policy loans and $466 million of statutory policy and other reserves. The transaction, which is subject to the approval of insurance regulators in Illinois and Wisconsin, is expected to be completed in the third quarter of 2009. Most of the policies involved in the transaction were issued by companies that were later acquired by Conseco. Approximately 70% of the policies being coinsured are from Washington National Insurance Company; the remainder is from Conseco Insurance Company. As a result of the transaction, Conseco expects to record an increase to its deferred tax valuation allowance of approximately $18 million in the third quarter of 2009. Conseco also expects to record a deferred gain of approximately $25 million. In accordance with generally accepted accounting principles, this gain will be recognized over the remaining life of the block. In the first quarter of 2009, the block being coinsured generated GAAP after-tax earnings before overhead of approximately $2.5 million. About Conseco Inc. Headquartered in Carmel, Indiana, Conseco Inc. (NYSE: CNO) -- http://www.conseco.com/-- is the holding company for a group of insurance companies operating throughout the United States that develop, market and administer supplemental health insurance, annuity, individual life insurance and other insurance products. The company became the successor to Conseco Inc. (Old Conseco), in connection with its bankruptcy reorganization. CNO focuses on serving the senior and middle-income markets. The company sells its products through three distribution channels: career agents, professional independent producers and direct marketing. CNO operates through its segments, which includes Bankers Life, Conseco Insurance Group, Colonial Penn, other business in run-off and corporate operations. * * * As reported in the Troubled Company Reporter on January 6, 2009, Fitch Ratings has downgraded the ratings assigned to Conseco Inc. The rating outlook on Conseco Inc. and its subsidiaries remains negative. Fitch downgraded these ratings: (i) issuer default rating to 'BB-' from 'BB'; (ii) senior secured bank credit facility to 'BB-' from 'BB+'; and (iii) senior unsecured debt to 'B' from 'BB-'. On March 4, 2009, A.M. Best downgraded the financial strength ratings of Conseco's primary insurance subsidiaries to "B" from "B+" and such ratings have been placed under review with negative implications. Conseco reported a first quarter 2009 net income of $24.5 million compared to a net loss of $7.2 million in the year-earlier quarter. Conseco had $28.5 billion in total assets, $26.9 billion in total liabilities, and $1.59 billion in stockholders' equity as of March 31, 2009. Conseco said it has significant indebtedness which will require over $165 million in cash to service in the next 12 months (including the additional interest expense required after the modification to its Second Amended Credit Facility. Pursuant to Conseco's Second Amended Credit Facility, Conseco must maintain certain financial ratios. The levels of margin between the financial covenant requirements and the Company's financial status, both at March 31, 2009, and the projected levels for the next 12 months, are relatively small and a failure to satisfy any of the financial covenants at the end of a fiscal quarter would trigger a default under the Second Amended Credit Facility. Achievement of the Company's operating plans is a critical factor in having sufficient income and liquidity to meet debt service requirements for the next 12 months and other holding company obligations and failure to do so would have material adverse consequences for the Company. CONSOLIDATED RESORTS: Files for Bankruptcy Protection ----------------------------------------------------- Consolidated Resorts, a vacation ownership company, filed for bankruptcy on Tuesday, Pacific Business News reported. The Wall Street Journal earlier reported that Consolidated Resorts said it was seeking bankruptcy protection after Goldman Sachs Group's Whitehall real-estate fund abandoned its $372 million investment. Consolidated Resorts operates 14 resorts in Hawaii, Las Vegas and Orlando. Its Hawaii resorts include the Imperial Hawaii in Waikiki and the Kona Islander on the Big Island and seven Maui resorts: Sands of Kahana Vacation Club, Kahana Beach Resort, Hono Koa, The Gardens at West Maui, Kahana Villa Resort, Maui Beach Vacation Club and Maui Banyan Vacation Club, according to its Web site. CROWN COURT PARTNERSHIP: Case Summary & 5 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Crown Court Partnership, Debtor 249 N. Peters Road, Suite 101 Knoxville, TN 37923 Bankruptcy Case No.: 09-33428 Chapter 11 Petition Date: June 24, 2009 Court: United States Bankruptcy Court Eastern District of Tennessee (Knoxville) Debtor's Counsel: Thomas Lynn Tarpy, Esq. Hagood, Tarpy & Cox PLLC Suite 2100, Riverview Tower 900 South Gay Street Knoxville, TN 37902-1537 Tel: (865) 525-7313 Email: ltarpy@htandc.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 5 largest unsecured creditors is available for free at: http://bankrupt.com/misc/tneb09-33428.pdf The petition was signed by Ray Lacy. CRUSADER ENERGY: Creditors Committee Has 7 Members -------------------------------------------------- William T. Neary, the United States Trustee for Region 6, has appointed seven members to committee of unsecured creditors in the Chapter 11 cases of Crusader Energy Group Inc. and its debtor- affiliates. The members of the Committee, as amended, are: 1.John Estes john.estes@halliburton.com Halliburton Energy Services, Inc. 10200 Bellaire Blvd. 3NE - 17H Houston, TX 77072 Tel: (281) 575-5609 Fax: (281) 575-4754 2. Steve Abney sabney@trinidaddrilling.com Trinidad Drilling 3728 West Jones Avenue Garden City, KS 67846 Tel: (713) 439-1677 3. Mehgan Merman Global Geophysical Services, Inc. 3535 Briarpark Drive Suite 200 Houston, TX 77042 Tel: (713) 808-7367 4. Mardi de Verges mardi.deverges@gooberdrilling.com Goober Drilling LLC P.O. Box 549 Stillwater, OK 74076 Tel: (405) 743-2132 5. Don J. Guedry Jr. dguedry@gwdrilling.com Grey Wolf, Inc. 10370 Richmond Avenue, Suite 600 Houston, TX 77042-4136 Tel: (713) 435-6118 6. Ron Hess kay@w-bsupply.com WB Supply Co. P.O. Box 2479 Pampa, TX 79066 Tel: (806) 669-1103 Fax: (806) 669-0369 7. Gregory M. Attrep gattrep@smith.com Smith International, Inc. 16740 Hardy Street P.O. Box 60068 Houston, TX 77205-3059 Tel: (832) 601-3059 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' 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 Oklahoma City, Oklahoma, Crusader Energy Group Inc. -- http://www.ir.crusaderenergy.com/-- explores, develops and acquires oil and gas properties, primarily in the Anadarko Basin, Williston Basin, Permian Basin, and Fort Worth Basin in the United States. Crusader Energy and its affiliates filed for Chapter 11 protection on March 30, 2009 (Bankr. N.D. Tex. Lead Case No. 09- 31797). The Debtors' financial condition as of September 30, 2008, showed total assets of $749,978,331 and total debts of $325,839,980. Beth Lloyd, Esq., Richard H. London, Esq., and William Louis Wallander, Esq., at Vinson & Elkins, L.L.P., represent the Debtors as counsel. Holland N. Oneil, Esq., Michael S. Haynes, Esq., and Richard McCoy Roberson, Esq., at Gardere, Wynne & Sewell, represent the official committee of unsecured creditors as counsel. CRUSADER ENERGY: Can Use Lenders' Cash Collateral Until July 21 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas has granted Crusader Energy Group Inc., et al., permission to use the prepetition lenders' cash collateral until July 21, 2009, solely to pay the expenses in accordance and in the amounts as set forth in a budget. The U.S. Bankruptcy Court for the Northern District of Texas will hold a final hearing on the further use of cash collateral on July 21, 2009, at 9:15 a.m. prevailing Central Time. The Debtors' authorization to use cash collateral will terminate on July 21, 2009, or the occurrence of certain "termination" events. As of the Petition Date, Crusader Energy Group is indebted to Union Bank of California, N.A., as administrative agent for the lenders, in the principal amount of $30,000,000 plus unpaid interest, fees, and other charges, secured by first priority liens on the property of Crusader and its subsidiaries. Crusader is also indebted to JPMorgan Chase Bank, N.A., as administrative agent for certain lenders, in the principal amount of $249,750,000, plus unpaid interest, fees, and other charges, secured by second priority liens on the property of Crusader. As adequate protection for any diminution in the value of their respective interests in the prepetition collateral, the prepetition lenders are granted additional and replacement liens in all prepetition collateral and all of the Debtors' now owned and after-acquired real property, assets and rights, and the proceeds thereof. As additional adequate protection, the prepetition lenders will have an allowed superpriority administrative claim as provided and to the full extent allowed by section 503(b) and 507(b) of the Bankruptcy Code. The Debtors also owe money to creditors holding trade liens. As adequate protection, each trade lien creditor will have valid and perfected adequate protection liens in (i) all assets in which the respective Trade Lien Creditor has a valid perfected security interest as of the petition date or is entitled to perfect a valid security interest after the petition date; and (ii) all of the Debtors' now owned and after-acquired real and personal property and assets and rights, and the proceeds thereof. Other secured creditors will be granted replacement, same priority security interests in, and liens upon, all assets of the applicable Debtors against whom said secured creditor held validly perfected unavoidable liens as of the Petition Date. Based in Oklahoma City, Oklahoma, Crusader Energy Group Inc. -- http://www.ir.crusaderenergy.com/-- explores, develops and acquires oil and gas properties, primarily in the Anadarko Basin, Williston Basin, Permian Basin, and Fort Worth Basin in the United States. Crusader Energy and its affiliates filed for Chapter 11 protection on March 30, 2009 (Bankr. N.D. Tex. Lead Case No. 09- 31797). The Debtors' financial condition as of September 30, 2008, showed total assets of $749,978,331 and total debts of $325,839,980. Beth Lloyd, Esq., Richard H. London, Esq., and William Louis Wallander, Esq., at Vinson & Elkins, L.L.P., represent the Debtors as counsel. Holland N. Oneil, Esq., Michael S. Haynes, Esq., and Richard McCoy Roberson, Esq., at Gardere, Wynne & Sewell, represent the official committee of unsecured creditors as counsel. CRUSADER ENERGY: Wants Incentive Program for Management ------------------------------------------------------- Crusader Energy Group Inc., et al., ask the U.S. Bankruptcy Court for the Northern District of Texas for authority to implement an incentive program for the Debtors' management to maximize the value of the Debtors' estates and to preserve the Debtors' businesses. The Debtors tell the Court that the Management Incentive Program is necessary to provide appropriate compensation to management given the additional responsibilities associated with the Chapter 11 cases, and to ensure that the participants are adequately motivated and incentivized to perform important tasks necessary to ensure an effective and orderly sale and reorganization of the Debtors' businesses. The principal features of the MIP are: a. Each of the MIP participants will be eligible to participate in a MIP pool, to be funded from the proceeds of any sale of the Debtors' assets, in an amount equal to 1% of (i) the aggregate value of any sales, minus (ii) $150,000,000, whether the sale occurs through a plan of reorganization or otherwise. b. Promptly after the closing of a sale, subject to the value payout levels, each MIP participant will be paid these percentages of the Incentive Payout that has not previously been paid to them: (i) David D. Le Norman -- 40%; (ii) Charles L. Mullens -- 20%; (iii) Roy A. Fletcher -- 20%; and Charles A. Paulson -- 20%. c. Under no circumstances will any MIP Participant be entitled to receive more than 130% of the MIP participant's respective annual salary as of the date of the filing of the motion. A copy of the document illustrating the Management Incentive Program is available at: http://bankrupt.com/misc/crusader.MIPillustration.pdf Based in Oklahoma City, Oklahoma, Crusader Energy Group Inc. -- http://www.ir.crusaderenergy.com/-- explores, develops and acquires oil and gas properties, primarily in the Anadarko Basin, Williston Basin, Permian Basin, and Fort Worth Basin in the United States. Crusader Energy and its affiliates filed for Chapter 11 protection on March 30, 2009 (Bankr. N.D. Tex. Lead Case No. 09- 31797). The Debtors' financial condition as of September 30, 2008, showed total assets of $749,978,331 and total debts of $325,839,980. Beth Lloyd, Esq., Richard H. London, Esq., and William Louis Wallander, Esq., at Vinson & Elkins, L.L.P., represent the Debtors as counsel. Holland N. Oneil, Esq., Michael S. Haynes, Esq., and Richard McCoy Roberson, Esq., at Gardere, Wynne & Sewell, represent the official committee of unsecured creditors as counsel. DEBT RELIEF: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------- Pamela Yip at The Dallas Morning News reports that Debt Relief USA Inc. has filed for Chapter 11 bankruptcy protection, listing $4.65 million in assets and $5 million in liabilities. According to Morning News, Debt Relief has stopped operations. Debt Relief said in a statement, "Debt Relief USA anticipates sending written instructions to its customers, most former customers, creditors and known potential creditors with instructions on any steps you need to take to protect your interests." Debt Relief said in court documents that it is being investigated by state attorneys general and federal authorities. Debt Relief's lawyer, Gary A. Armstrong, said that the Company won't negotiate individual settlements and won't remove money from individual accounts pending the bankruptcy proceedings, Morning News relates. Citing Mr. Armstrong, Morning News states that Debt Relief's bankruptcy won't affect any debt settlements it has reached with a client's creditors. Mr. Armstrong said that Debt Relief will refund client deposits as much as possible, pending court approval, Morning News reports. Debt Relief USA Inc. -- http://www.drusabankruptcy.com -- is an Addison debt settlement Company. DECRANE AEROSPACE: Moody's Confirms 'Caa1' Corporate Family Rating ------------------------------------------------------------------ Moody's Investors Service confirmed the debt ratings of DeCrane Aerospace, Inc. -- corporate family and probability of default ratings of Caa1. The rating outlook was changed to negative. This concludes the review opened on March 4, 2009. The ratings confirmation reflects DeCrane's actions to manage the business operations in the face of the sharp decline in demand for business jets. Management has taken specific initiatives to better match ongoing variable costs with prospective demand for business jets, as well as to heighten strategic focus on the core operations; programs that may enable sustained profitability and cash flow under more normal market conditions. For example, DeCrane is progressing toward the exit of the unprofitable PATS aircraft completions business and has successfully re-negotiated a challenging multi-aircraft project with a large jet producer. Nonetheless, DeCrane's efforts have been challenged by the speed of the decline in business jet demand and outlook. Further, ongoing efforts will remain challenged by DeCrane's high financial leverage in the face of anticipated further declines in business jet deliveries through 2010. By amending the financial ratios under its bank credit agreement to loosen the requirement and with modest scheduled debt maturities for the near term, DeCrane does has some flexibility to continue to manage in the face of a weakening core market. Eliminating unprofitable business lines to focus on the core Cabin and auxiliary fuel tank business reduces the company's size and heightens exposure to business jets during a period of declining deliveries. However, should performance stabilize (especially during a down business jet market) the prospects for negotiating extension of the recently loosened financial ratio covenants could hold promise, and could be the basis for value over the cycle. The negative outlook reflects the horizon of about another year to stabilize operations before there is a step-up in financial covenants (the amendment), and the potential that achieving the earnings and cash flow goals could prove challenging unless the outlook for business jet production stabilizes. The potential for additional write-offs to reduce operating costs or to prematurely exit remaining completions work will likely remain elevated, as well. Ratings stabilization will depend on an adequate liquidity profile, an expectation of sustained, though not necessarily robust, profits and FFO interest coverage of greater than 1.0 time. The ratings could be lowered if efforts to stabilize the business prove unsuccessful, or if total leverage approaches the mid 6.0 times level (was 5.6 times over last twelve months ended March 31, 2009, Moody's adjusted basis), or if the liquidity profile weakens. These ratings were confirmed: -- Corporate family, probability of default ratings Caa1 -- $30 million guaranteed first lien revolving credit facility due 2013 . . . B2 LGD2, 29% -- $195 million guaranteed first lien term loan due 2013 . . . B2 LGD2, 29% -- $150 million guaranteed second lien term loan due 2014 . . . Caa2 LGD5, to 81% from 82% Moody's last rating action on DeCrane occurred March 4, 2009, when the ratings were placed under review for possible downgrade. DeCrane Aerospace, Inc., headquartered in Wichita, Kansas, is a leading provider of aircraft cabin interior systems and components (including cabin interior furnishings, veneer, cabin management systems, seating and composite components), mostly for business jets. DISCOVER FINANCIAL: Fitch Affirms 'BB+' Preferred Stock Rating -------------------------------------------------------------- Fitch Ratings has affirmed the long-term Issuer Default Rating of Discover Financial Services and Discover Bank at 'BBB'. Concurrently, Fitch has downgraded the entities' Individual ratings to 'C' from 'B/C'. The Rating Watch Negative has been removed and the Rating Outlook is Negative. Approximately $31.1 billion of deposits, debt, and preferred stock is affected by these actions. The affirmation reflects the sound credit and debit card franchises, solid liquidity, and strong capital levels for the assigned ratings, offset by a lack of revenue diversity, limited funding flexibility, intense industry competition, and recent legislative change impacting the credit card industry. The downgrade of the Individual ratings reflect the expectation that core operating earnings will remain under pressure into 2010 as reserve levels continue to build in response to the rising unemployment rate. The Individual rating attempts to assess a bank's intrinsic creditworthiness absent any external support. The Negative Outlook reflects Fitch's expectation that credit metrics will continue to deteriorate from current levels over the remainder of 2009 and into 2010 and that core operating profits will not be recorded until the latter part of 2010, at the earliest. Fitch recognizes that Discover's asset quality performance has performed relatively better than other large credit card issuers, given its slower growth in 2005 through 2007, its lower exposure to California and Florida, and its longer average customer relationships, but current unemployment expectations point to continued deterioration in credit card losses across the industry into 2010. As a result, Fitch expects provision expenses to be elevated for some time, and portfolio contraction and operating cost reductions may not be enough to offset a negative impact on capital ratios. Negative rating action will result from material reductions in capitalization, a deteriorating liquidity profile, and/or an inability to economically tap the ABS markets, given a significant amount of structured debt maturities in 2010. Rating stability will be driven by an improvement in credit metrics, a return to positive and sustainable earnings performance, an ability to reduce reliance on the brokered deposits markets, and an ability to access the ABS markets within and outside the Federal Reserve's Term Asset-Backed Securities Loan Facility. Fitch has affirmed these with a Negative Outlook: Discover Financial Services -- Long-term Issuer Default Rating at 'BBB'; -- Short-term IDR at 'F2'; -- Senior debt at 'BBB'; -- Preferred stock at 'BB+' -- Support at '5'. Discover Bank -- Long-term IDR at 'BBB'; -- Short-term IDR at 'F2'; -- Short-term Deposits at 'F2'; -- Long-term Deposits at 'BBB+'; -- Support at '5'. Fitch has downgraded these with a Negative Outlook: Discover Financial Services -- Individual to 'C' from 'B/C'. Discover Bank -- Individual to 'C' from 'B/C'. Fitch has assigned these: Discover Financial Services -- Support Floor 'NF'. Discover Bank -- Support Floor 'NF'. E*TRADE FINANCIAL: To Meet With Shareholders re Exchange Offers --------------------------------------------------------------- E*TRADE FINANCIAL Corporation filed with the Securities and Exchange Commission a Schedule 14A to announce that it's going to hold a special meeting of stockholders to vote on a series of proposals. No date or time has been set for the meeting. E*TRADE is calling the Special Meeting to ask stockholders to vote upon a series of proposals which will permit the Company to: (1) complete a debt exchange for up to approximately $1.7 billion of its outstanding debt securities which is key to its plan to strengthen the Company's capital structure by increasing equity and reducing its debt burden, and (2) engage in additional transactions, as needed, to further strengthen the Company's capital structure in the future. E*TRADE believes that the transactions are not only in the best interest of all stockholders, and but also critical to the immediate future of the Company. The Company has adopted and is implementing a plan to strengthen its capital structure by raising cash equity primarily to support E*TRADE Bank and to reduce the Company's debt burden. E*TRADE completed the first step of the plan on June 24, 2009, when it closed a public offering of its common stock and raised nearly $600 million. If the proposals to complete the Debt Exchange are not approved and the proposed transactions are not completed, E*TRADE said it may be unable to strengthen the Company's capital structure and could face negative regulatory consequences, such as a public supervisory action by its primary regulator. These consequences could have a material negative effect on its business and financial condition and the value of its common stock. E*TRADE on June 22 commenced the Debt Exchange in which it is offering to exchange up to approximately $1.7 billion of its outstanding debt securities for an equivalent amount of newly- issued zero coupon convertible debentures due 2019. The Debt Exchange will significantly reduce its debt burden by materially reducing interest costs, lengthening the weighted-average maturities of its indebtedness and potentially reducing repayment obligations to the extent that holders of the Debentures convert rather than hold to maturity. Citadel Investment Group L.L.C, E*TRADE's largest stock and bond holder, has agreed to tender at least $800 million, and may tender up to approximately $1.2 billion aggregate principal amount of the notes owned by it in the Debt Exchange and to vote in favor of Proposals. On June 22, E*TRADE and Citadel Equity Fund Ltd. entered into Amendment No. 1 to the parties' Exchange Agreement, dated June 17, 2009. The Amendment, among other things, provides that if the Company has received the requisite consents with respect to a series of Notes, and the Exchange Offer has not been consummated on or prior to October 31, 2009, or the Exchange Agreement has been earlier terminated in accordance with its terms, the Company will nonetheless pay to each holder of validly tendered Notes in the Exchange Offer, including CEFL, a consent fee. The Amendment also provides that the Company will commence its Exchange Offer on June 22, 2009, that the Early Tender Period will expire at midnight, New York City time on July 1, 2009, and that the Company will announce preliminary results of the Early Tender Period at approximately 6:00 p.m. New York City time on July 1, 2009. As consent fee, the Company will pay to each holder of 2011 Notes or Springing Lien Notes who validly delivers and does not revoke a consent to the amendments prior to the expiration of the Early Tender Period, a cash payment equal to $5.00 for each $1,000 in principal amount of 2011 Notes or Springing Lien Notes in respect of which the consent has been validly delivered. At the Special Meeting, holders of the Company's common stock will be asked to consider and vote on proposals to: -- amend E*TRADE's Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 1,200,000,000 to 4,000,000,000; -- approve the issuance of Debentures in the Debt Exchange and the issuance of common stock issuable upon conversion of the Debentures under the applicable provisions of NASDAQ Marketplace Rule 5635; -- approve the potential issuance of common stock, or securities convertible into or exchangeable or exercisable for common stock, in connection with future debt exchange transactions in an amount up to 365 million shares; and -- grant management the authority to adjourn, postpone or continue the Special Meeting. The Board recommends approval of the Proposals. At the Special Meeting, holders of the Company's common stock also will be asked to consider and vote on a non-binding resolution concerning whether E*TRADE should retain or terminate its Stockholder Rights Plan until its scheduled expiration on July 9, 2011. The Board makes no recommendation regarding this proposal. About E*TRADE FINANCIAL The E*TRADE FINANCIAL family of companies provides financial services including trading, investing and related banking products and services to retail investors. Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Bank products and services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries. * * * According to the Troubled Company Reporter on June 23, 2009, Standard & Poor's Ratings Services lowered its long-term counterparty credit rating on E*TRADE Financial Corp., as well as the senior debt ratings on the 8.0% notes due 2011 and the 12.5% springing lien notes due 2017, to 'CC' from 'CCC-'. At the same time, S&P affirmed the 'CCC-' senior debt rating on the 7.375% notes due 2013 and the 7.875% notes due 2015. S&P also affirmed the 'CCC+' counterparty credit and certificate of deposit ratings on E*TRADE Bank. S&P remove the ratings from CreditWatch- Negative, where they were placed May 21, 2009. The outlook is negative. As reported by the Troubled Company Reporter on May 18, 2009, Moody's Investors Service downgraded to Caa3 from B2 the ratings on the senior unsecured bonds of E*TRADE. Moody's also lowered to B3 from B2 E*TRADE's long-term issuer rating. All long-term ratings including those of E*TRADE's thrift subsidiary, E*TRADE Bank (BFSR at D-, Deposit Rating at Ba3), remain on review for possible downgrade, originally commenced on April 29, 2009. E*TRADE Bank's short-term rating remains Not-Prime. The downgrade of the bond ratings to Caa3 reflects the increased probability of material credit losses for E*TRADE's senior bondholders as a result of the company's stated strategy to employ debt-for-equity exchanges as the primary tool in reducing leverage and improving the company's precarious financial condition. E*TRADE said in a regulatory filing that it "anticipate[d] that the primary method for reducing [its] debt will involve debt-for- equity exchanges." EASTWIND MARITIME: Voluntary Chapter 7 Case Summary --------------------------------------------------- Debtor: Eastwind Maritime Inc. 444 Madison Avenue, Suite 200 New York, NY 10022 Bankruptcy Case No.: 09-14047 Debtor-affiliates filing subject to Chapter 7 petitions: Entity Case No. ------ -------- Aral Wind Ltd 09-14015 Azov Wind Ltd. 09-14016 Yucatan Marine Ltd. 09-14017 Sibuyan Wind LLC 09-14018 Caribbean Wind Ltd. 09-14019 Silver Wind LLC 09-14020 Tiblisi Property Holdings Ltd. 09-14021 Sunriver Investment S.A. 09-14022 Georgian Tankers Ltd. 09-14023 Yamaska LLC 09-14024 Hitorio Shipping S.A. 09-14025 Europe Ltd. 09-14026 Italian Reefer Ltd. 09-14027 Lepton Ltd. 09-14028 Yang Ltd. 09-14029 Yosemite Marine Ltd. 09-14030 Northlake Marine Ltd. 09-14031 Adriatic Wind Ltd. 09-14032 Quark Ltd. 09-14033 Eurus Management LLC 09-14034 Amundsen Wind Ltd. 09-14035 Asia Ltd. 09-14036 Eurus Paris LLC 09-14037 Apollo Shipping Properties S.A. 09-14038 Arabian Wind Ltd. 09-14039 Eurus Oslo LLC 09-14040 EW Harting Ltd. 09-14041 Arafura Wind Ltd. 09-14042 AW Ltd. 09-14043 Eurus Stockholm Ltd. 09-14044 Calm Shipping Co. S.A. 09-14045 EW Jackson LLC 09-14046 Eastwind Maritime Inc. 09-14047 Kura Shipping Ltd. 09-14048 Capewind Corporation 09-14049 EW Snowdon LLC 09-14050 Eastwind Development S.A. 09-14051 Eurus Container Carriers Ltd. 09-14052 Eastlake Marine Ltd. 09-14053 Eastwind Rubicon Ltd. 09-14054 Eastwind Ruhr Ltd. 09-14055 Eurus London LLC 09-14056 Eastwind Transport Bunkers Ltd. 09-14057 Eastwind Rhine Ltd. 09-14058 Iberian Ltd. 09-14059 Eastwind Transport Ltd. 09-14060 Eratira Navigation Company Ltd. 09-14061 Indian Reefer Ltd. 09-14062 Eurus Lisbon LLC 09-14063 Kaon Ltd. 09-14064 Eurus Lima LLC 09-14065 Northlake Marine (Hong Kong) Limited 09-14066 Seram Wind LLC 09-14067 Eurus Singapore Ltd. 09-14068 Eurus Ottawa LLC 09-14069 Ocean Crewing Company Limited 09-14070 Type of Business: The Debtors operate a shipping company. See http://www.eastwindgroup.com/ Chapter 7 Petition Date: June 24, 2009 Court: Southern District of New York (Manhattan) Judge: Allan L. Gropper Debtor's Counsel: Richard L. Epling, Esq. richard.epling@pillsburylaw.com Robyn J. Schneider, Esq. robyn.schneider@pillsburylaw.com Pillsbury Winthrop Shaw Pittman LLP 1540 Broadway New York, NY 10036-4039 Tel: (212) 858-1262 Fax: (212) 858-1500 Estimated Assets: $500 million to $1 billion Estimated Debts: $500 million to $1 billion The Debtors did not file a list of 20 largest unsecured creditors. The petition was signed by Donald M. Simmons. EDDIE BAUER: Section 341(a) Meeting Scheduled for July 15 --------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, will convene a meeting of creditors of Eddie Bauer Holdings Inc. and its debtor-affiliates on July 15, 2009, J. Caleb Boggs Federal Building, 2nd Floor, Room 2112, in Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Eddie Bauer Established in 1920 in Seattle, Washington, Eddie Bauer is a specialty retailer that sells outerwear, apparel and accessories for the active outdoor lifestyle. The Eddie Bauer brand is a nationally recognized brand that stands for high quality, innovation, style and customer service. Eddie Bauer products are available at 371 stores throughout the United States and Canada, through catalog sales and online at http://www.eddiebauer.com/ Eddie Bauer participates in a joint venture in Japan and has licensing agreements across a variety of product categories. Eddie Bauer, Inc., was a subsidiary of Spiegel, Inc. Eddie Bauer Inc. emerged from Spiegel's 2003 chapter 11 case as a separate, reorganized entity under the control and ownership of Eddie Bauer Holdings, Inc. Eddie Bauer Holdings, Inc., and eight affiliates filed for bankruptcy on June 17, 2009 (Bankr. D. Del. Lead Case No. 09-12099). Judge Mary F. Walrath presides over the case. David S. Heller, Esq., Josef S. Athanas, Esq., and Heather L. Fowler, Esq., at Latham & Watkins LLP, serve as the Debtors' general counsel. Kara Hammond Coyle, Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor LLP, serve as local counsel. The Debtors' restructuring advisors are Alvarez and Marsal North America LLC. Their financial advisors are Peter J. Solomon Company. Kurtzman Carson Consultants LLC acts as claims and notice agent. As of April 4, 2009, Eddie Bauer had $525,224,000 in total assets and $448,907,000 in total liabilities. EDDIE BAUER: Wants to Sell Assets to CCMP Affiliate for $202MM -------------------------------------------------------------- New Brunswick Business Journal reports that Eddie Bauer Holdings, Inc., wants to sell its brand and assets to a CCMP Capital Advisors, LLC, affiliate for $202 million. According to Business Journal, the deal is subject to an auction and court approval. Business Journal quoted Eddie Bauer spokesperson Wendi Kopsick as saying, "If successful in their bid they intend to retain the majority of employees." The Journal of Commerce Online relates that Eddie Bauer owes Expeditors International of Washington $700,000. Court documents say that Eddie Bauer also listed $2.5 million owed to U.S. Customs, while the Company owes $75 million to Bank of New York. Eddie Bauer, according to The Journal of Commerce, owed $200,000 to parcel shipping technology specialist Newgistics. Eddie Bauer said that it also has a $131,000 outstanding debt to FedEx and owes $100,000 to TranzAct Technologies, The Journal of Commerce reports. Established in 1920 in Seattle, Washington, Eddie Bauer is a specialty retailer that sells outerwear, apparel and accessories for the active outdoor lifestyle. The Eddie Bauer brand is a nationally recognized brand that stands for high quality, innovation, style and customer service. Eddie Bauer products are available at 371 stores throughout the United States and Canada, through catalog sales and online at http://www.eddiebauer.com/ Eddie Bauer participates in a joint venture in Japan and has licensing agreements across a variety of product categories. Eddie Bauer, Inc., was a subsidiary of Spiegel, Inc. Eddie Bauer Inc. emerged from Spiegel's 2003 chapter 11 case as a separate, reorganized entity under the control and ownership of Eddie Bauer Holdings, Inc. Eddie Bauer Holdings, Inc., and eight affiliates filed for bankruptcy on June 17, 2009 (Bankr. D. Del. Lead Case No. 09-12099). Judge Mary F. Walrath presides over the case. David S. Heller, Esq., Josef S. Athanas, Esq., and Heather L. Fowler, Esq., at Latham & Watkins LLP, serve as the Debtors' general counsel. Kara Hammond Coyle, Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor LLP, serve as local counsel. The Debtors' restructuring advisors are Alvarez and Marsal North America LLC. Their financial advisors are Peter J. Solomon Company. Kurtzman Carson Consultants LLC acts as claims and notice agent. As of April 4, 2009, Eddie Bauer had $525,224,000 in total assets and $448,907,000 in total liabilities. Upon filing for bankruptcy, the Company entered into a "stalking horse" agreement with an affiliate of CCMP Capital Advisors LLC, under which CCMP Capital proposes to buy the Eddie Bauer business, subject to an auction and Bankruptcy Court approval, for $202 million in cash, with working capital and similar adjustments. CCMP Capital is a global private equity firm. CCMP Capital's legal advisor is Weil, Gotshal & Manges LLP. ENTERGY GULF: Moody's Upgrades Preferred Stock Rating to 'Ba2' -------------------------------------------------------------- Moody's Investors Service upgraded the ratings of Entergy Gulf States Louisiana, L.L.C., including its senior secured debt to Baa2 from Baa3, senior unsecured debt to Baa3 from Ba1, and preferred stock to Ba2 from Ba3 and maintained a positive outlook. Moody's also assigned a Baa3 Issuer Rating to EGSL with a positive outlook. The upgrade follows last year's jurisdictional separation of EGSL from Entergy Texas, Inc., effective January 1, 2008, and the success Entergy Texas has had in accessing the debt markets and paying off part of the EGSL debt it assumed following the separation. As part of the agreement to divide the former Entergy Gulf States into two separate utilities, the newly spun off Entergy Texas assumed and became obligated for a prorated share (originally $1.1 billion or 46%) of Entergy Gulf States' debt securities under a debt assumption agreement with EGSL. Since the separation, Entergy Texas has successfully issued $650 million of first mortgage bonds on its own, using part of the proceeds to pay off some of this assumed debt, which now stands at $699 million. Entergy Texas has until December 31, 2010 to repay the balance of the assumed debt and Moody's expects the company to issue additional first mortgage bonds over the next 18 months to meet this deadline. The positive outlook reflects Moody's expectation that EGSL will exhibit a stronger financial profile than both the former Entergy Gulf States and the newly spun-off Entergy Texas and considers the more predictable regulatory environment in Louisiana, which remains fully regulated with an extension of EGSL's formula rate plan currently under discussion with the Louisiana Public Service Commission. The positive outlook also considers Moody's expectation that Entergy Texas will continue to issue sufficient first mortgage bonds over the next 18 months to pay off the remainder of the assumed debt. A further upgrade could be considered when all or a significant portion of the $699 million of assumed debt remaining at EGSL is paid off by Entergy Texas. Ratings upgraded with a positive outlook include: -- EGSL's senior secured debt to Baa2 from Baa3; senior unsecured debt to Baa3 from Ba1; and preferred stock to Ba2 from Ba3. The last rating action on EGSL was on December 14, 2007, when its rating was affirmed and its rating outlook changed to positive from stable. Entergy Gulf States Louisiana, L.L.C., is a public utility headquartered in Baton Rouge, Louisiana and Entergy Texas, Inc, is a public utility headquartered in Beaumont, Texas. Both are subsidiaries of Entergy Corporation, an integrated energy company headquartered in New Orleans, Louisiana. EXTENDED STAY: Allowed to Maintain Insurance Programs ----------------------------------------------------- Extended Stay Inc. and its debtor-affiliates sought and obtained interim approval from the U.S. Bankruptcy Court for the Southern District of New York to continue to honor their insurance programs. The Debtors are authorized to pay claims under the Insurance Programs that become due and payable from June 15, 2009 to the date the Court issues its final approval. The Debtors maintain a workers' compensation program, general liability program and various other insurance policies as part of their business operations. The nature of their business requires the Debtors to carry insurance policies to maintain their properties and ensure the safety of their employees and customers. Workers' Compensation Programs The Debtors, together with their managing company, HVM L.L.C., maintain a Workers' Compensation Program through (i) a fully- insured, third-party insurance program provided by Zurich North American Insurance Company, (ii) statutorily required insurance programs in Ohio and Washington, and (iii) a federally mandated program in Newfoundland and Ontario, Canada. The insurance program provided by Zurich is maintained by the Debtors and HVM, and covers all of HVM's domestic employees who are not covered by the Debtors' insurance programs in Ohio and Washington. Under the program, the Debtors pay an annual premium but incur no other costs. Zurich is responsible for the payment of all claims and benefits up to the applicable statutory limit for all employees covered by the insurance program without the requirement for the Debtors to pay any deductible. Currently, the Zurich Insurance Program covers the period from Oct. 1, 2008 through Oct. 1, 2009. The annual premium of $6,800,158 is due in monthly installments of about $505,000, after an initial down payment was made in October 2008. Because HVM and the Debtors share the cost of maintaining the Zurich Program, the Debtors pay only a portion of the monthly installment. As of the Petition Date, the Debtors are obliged to make further payments under the Zurich Program. Meanwhile, under their statutorily required insurance programs, the Debtors purchase workers' compensation insurance through a mandatory state-sponsored and managed workers' compensation system. For the State Programs, HVM pays the full annual premium in advance. The Debtors have no obligation to pay any deductibles under the State Programs, and no cap on coverage exists for claims arising in Ohio or Washington. In addition to the State Programs and the Zurich Programs, the Debtors are also required to maintain compensation insurance for employees working in the Debtors' hotels located in Newfoundland and Ontario, Canada. All Canadian-based employees are covered under the federally mandated programs. Premium and other payments with respect to those programs are made by HVM Canada Hotel Management U.L.C., the Debtors' management company for their Canadian operations. Other Insurance Policies Aside from the Workers' Compensation Program, the Debtors also maintain various other insurance programs, including general liability programs, and liability and property insurance programs. A. General Liability Program. The Debtors' primary general liability insurance coverage is provided by Zurich and covers the period October 1, 2008 to October 1, 2009. The annual $654,289 premium under the General Liability Program is due to the Debtors' insurance broker, Willis HRH, in equal monthly installments of around $44,000 after an initial down payment was made in October 2008. Because HVM and the Debtors share the cost of maintaining the General Liability Program, the Debtors pay only a portion of the monthly installment. Because not all claims expenses are covered under the General Liability Program and covered expenses are subject to a $250,000 deductible, the Debtors maintain a loss reserve fund in conjunction with the General Liability Program to fund the cost of anticipated future and unpaid expenses related to claims. The Debtors pay directly to Zurich a $3.8 million annual premium from the escrow account to maintain the loss reserve fund. Monthly premium payments equal about $304,000 after an initial down payment was made. In addition, the Debtors are obligated to make payments to Zurich for claims associated with their previous general liability insurance coverage with the company, which expired on October 1, 2007. Although the Debtors are no longer obligated to pay premiums under the expired program, they are required to reimburse Zurich for any related claims and expenses. Zurich bills the Debtors on a monthly basis and those bills typically average $175,000. The Debtors estimate that as of the Petition Date, about $3,600,000 in reimbursement claims related to the prepetition period will remain. B. Liability and Property Insurance Programs. The Debtors maintain various liability and property-related insurance programs, which provide the Debtors with insurance coverage for liabilities relating to, among other things, commercial automotive claims, commercial property damage, flood damage, terrorism, commercial crime, premises pollution, and umbrella and excess liability claims. Continuation of these policies is essential to the ongoing operation of the Debtors' business. The Debtors are required to pay premiums under the Liability and Property Insurance Programs based on fixed rates established by the insurance carrier. In most instances, the Debtors paid the premiums due under the various Liability and Property Insurance Programs in advance to the Insurance Broker. However, premiums under the automobile insurance policy the Debtors maintain with Zurich are due on a monthly installment basis in the amount of approximately $15,0000 after an initial down payment in October 2008. As of their bankruptcy filing, the Debtors are obliged to make further payments under the automobile insurance policy. C. Insurance Programs Maintained by HVM and HVM Canada. HVM maintains, on behalf of the Debtors' U.S. operations, multiple layers of risk protection against director and officers' liability, as well as risk protection against employment practices liability, employed lawyers professional liability, excess executive liability and crime and special circumstances. HVM is responsible for paying all premiums and associated costs with maintaining these policies. Similarly, HVM Canada maintains, on behalf of the Debtors' Canadian operations, general liability and automobile insurance programs. All premiums and costs associated with maintaining these programs are paid by HVM Canada. Thus, the Debtors do not owe any amounts relating to the prepetition period for any of these policies. The hearing to consider final approval of the Debtors' request is scheduled for July 13, 2009. Creditors and other concerned parties have until July 10 to file their objections. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. For the year ending December 31, 2008, Extended Stay's audited financial statements show consolidated assets (including nondebtor affiliates) totaling approximately $7.1 billion and consolidated liabilities totaling approximately $7.6 billion. Consolidated revenues for the 12 months ending December 31, 2008 were approximately $1 billion. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: Asks Court to Approve Weil Gotshal Engagement ------------------------------------------------------------ Extended Stay Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Weil Gotshal & Manges LLP as their legal counsel, effective June 15, 2009. The Debtors selected Weil Gotshal because of the firm's expertise in business reorganizations under Chapter 11 of the Bankruptcy Code, according to Joseph Teichman, Extended Stay's secretary and general counsel. He says that Weil Gotshal has also represented the Debtors in their restructuring efforts since last year and thus, has become familiar with the Debtors' businesses, financial affairs and capital structure. As legal counsel, Weil Gotshal is tasked to: (1) prepare legal papers on behalf of the Debtors in connection with the administration of their estates; (2) take all necessary action to protect and preserve the estates, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the estates; (3) take all necessary actions in connection with the Debtors' plan or plans of reorganization and related disclosure statement; and (4) perform all other necessary legal services in connection with the prosecution of the Debtors' bankruptcy cases. Weil Gotshal will be paid of its services on an hourly basis and will be reimbursed of actual and necessary expenses incurred in connection with its employment. The firm's hourly rates are: Members/Counsel $655 - $950 Associates $355 - $640 Paraprofessionals $155 - $290 Jacqueline Marcus, Esq., at Weil Gotshal, assures the Court that her firm does not hold or represent interest adverse to the Debtors' estates. She also maintains that Weil Gotshal is a "disinterested person" under section 101(14) of the Bankruptcy Code. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. For the year ending December 31, 2008, Extended Stay's audited financial statements show consolidated assets (including nondebtor affiliates) totaling approximately $7.1 billion and consolidated liabilities totaling approximately $7.6 billion. Consolidated revenues for the 12 months ending December 31, 2008 were approximately $1 billion. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: Court Extends Schedules Deadline to July 30 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York permits Extended Stay Inc. and its affiliates to file their schedules of assets and liabilities and statement of financial affairs until July 30, 2009. Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. For the year ending December 31, 2008, Extended Stay's audited financial statements show consolidated assets (including nondebtor affiliates) totaling approximately $7.1 billion and consolidated liabilities totaling approximately $7.6 billion. Consolidated revenues for the 12 months ending December 31, 2008 were approximately $1 billion. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: Court OKs Payment of Prepetition Sales & Use Taxes ----------------------------------------------------------------- Extended Stay Inc. and its debtor-affiliates sought and obtained interim authorization from the U.S. Bankruptcy Court for the Southern District of New York to pay their prepetition taxes. The Debtors owe as much as $75,417,000 in pre-bankruptcy taxes, which consist of: Taxes Amount ----------- ----------- Real Property Taxes $63,315,000 Occupancy Taxes 9,200,000 Personal Property Taxes 2,182,000 Franchise Taxes 500,000 Sales Taxes 100,000 Use Taxes 100,000 License & Permit Fees 10,000 Annual Report Fees 10,000 Jacqueline Marcus, Esq., at Weil Gotshal & Manges LLP, in New York, maintains that the Debtors need to pay their taxes to avoid distraction in the reorganization efforts of their officers and directors who might be exposed to criminal liabilities in case they would not pay their taxes. "Failure to pay prepetition property taxes may increase the scope of secured and priority claims held by the taxing authorities against the Debtors' estates," she says. Ms. Marcus adds that the taxes must be remitted to the taxing authorities since they are not property of the Debtors' estates. The hearing to consider final approval of the Debtors' request is scheduled for July 13, 2009. Creditors and other concerned parties have until July 10 to file their objections. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. For the year ending December 31, 2008, Extended Stay's audited financial statements show consolidated assets (including nondebtor affiliates) totaling approximately $7.1 billion and consolidated liabilities totaling approximately $7.6 billion. Consolidated revenues for the 12 months ending December 31, 2008 were approximately $1 billion. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: May Employ Kurtzman Carson as Claims Agent --------------------------------------------------------- Extended Stay Inc. and its debtor affiliates sought and obtained the Court's permission to employ Kurtzman Carson Consultants LLC, as their official notice and claims agent effective June 15, 2009. Joseph Teichman, Extended Stay's secretary and general counsel, says the employment of Kurtzman is necessary given the complexity of the Debtors' business, and the large number of creditors and parties involved in their bankruptcy cases. "By appointing [Kurtzman] as claims agent, the distribution of notices and the processing of claims will be expedited, and the Office of the Clerk of the Court will be relieved of the administrative burden of processing what may be an overwhelming number of claims," Mr. Teichman avers. As notice and claims agent to the Debtors, Kurtzman is tasked to: (a) notify all potential creditors of the filing of the Debtors' bankruptcy petitions and of the setting of the first meeting of creditors; (b) prepare and serve required notices in the Debtors' cases, including notice of the filing of the cases and the initial meeting of creditors; notices of objections to claims; notices of any hearings on a disclosure statement and confirmation of a plan or plans of reorganization; and other notices which the Debtors, Clerk of the Court or the Court may deem necessary and appropriate for an orderly administration of the cases; (c) maintain an official copy of the Debtors' schedules, listing the Debtors' known creditors and the amounts owed; (d) provide access to the public for examination of copies of the proofs of claim or interest filed without charge during regular business hours; (e) furnish a notice of the last date and the form for the filing of proofs of claims after Court approval of such notice and form; (f) file with the Clerk of the Court an affidavit or certificate of service for each pleading filed which includes a copy of the notice, a list of persons to whom it was mailed and the date mailed, within 10 days of service; (g) docket all claims received by the Clerk's office, maintain the official claims registers for each Debtor on behalf of the Clerk, and provide the Clerk with certified duplicate, unofficial claims registers on a monthly basis, unless otherwise directed; (h) record all transfers of claims and provide notices of the transfers; (i) specify in the claims register the claim number assigned, the date it receives the claim, the name and address of the claimant and agent who filed the claim, and the classification of the claim, for each claim docketed; and (j) relocate, by messenger, all of the actual proofs of claim filed with the Court to Kurtzman, not less than on a weekly basis; (k) upon completion of the docketing process for all claims received to date by the Clerk's office for each case, turn over to the Clerk copies of the claims register for review; (l) make changes in the claims registers pursuant to court order; (m) maintain the official mailing list for each Debtor of all entities that have filed a proof of claim, which should be available upon request by a party-in-interest or the Clerk; (n) assist in the solicitation and calculation of votes and distribution required in furtherance of confirmation of plans of reorganization; (o) provide other claims processing, noticing, and administrative services upon request by the Debtors; (p) thirty days before the bankruptcy cases are closed, an order dismissing Kurtzman as claims agent should be submitted terminating the services upon completion of its duties and responsibilities and upon the closing of the cases; (q) file in Court the final version of the claims register immediately before the closing of the bankruptcy cases; and (r) at the close of the bankruptcy cases, box and transport all original documents, in proper format, as provided by the Clerk's Office, to the Federal Archives Record Administration, located at Central Plains Region, 200 Space Center Drive, Lee's Summit, in Missouri. Kurtzman will also assist the Debtors in maintaining and updating the master mailing lists of creditors, gathering data for the preparation of the Debtors' schedules, and tracking and administering claims. The Debtors agree to pay Kurtzman for its services, expenses and supplies at the rates or prices set by the firm. The Debtors also agree to indemnify Kurtzman under certain circumstances. Prior to their bankruptcy, the Debtors paid the firm a retainer of $100,000. Michael Frishberg, Vice-President of Corporate Restructuring Services of Kurtzman, assures the Court that his firm does not hold or represent interest adverse to the Debtors' estates and that his firm is a "disinterested person" under section 101(14) of the Bankruptcy Code. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. For the year ending December 31, 2008, Extended Stay's audited financial statements show consolidated assets (including nondebtor affiliates) totaling approximately $7.1 billion and consolidated liabilities totaling approximately $7.6 billion. Consolidated revenues for the 12 months ending December 31, 2008, were approximately $1 billion. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: May Maintain Prepetition Customer Programs --------------------------------------------------------- Extended Stay Inc. and its debtor-affiliates sought and obtained interim authorization from the U.S. Bankruptcy Court for the Southern District of New York to maintain their customer programs. "It is essential that the [Debtors] be permitted to honor their customer programs in accordance with their prepetition practices and customers' expectations in order to ensure continuing customer loyalty and to maintain the public's confidence in the Debtors' commitment to their customers," said Jacqueline Marcus, Esq., at Weil Gotshal & Manges LLP, in New York. "The Debtors' customers have come to expect a certain level of satisfaction and service from the Extended Stay servicemark and the Customer Programs ensure that this reputation can be upheld," Ms. Marcus said. The Debtors' customer programs include promotions, barter arrangements, gift certificates and customer deposits. A. Promotion. The Debtors are involved in a number of promotions, including (i) online promotional codes that customers can utilize when booking hotel reservations on the Debtors' Web site; and exclusive promotional codes provided to customers who sign up for the "Suite Offers" email program; among others. B. Barter Arrangements. Under the barter arrangements, the Debtors grant the media and marketing institutions a certain dollar amount of credits towards stays in the Debtors' hotels in exchange for advertising. These credits are applicable towards stays in the Debtors' hotels and are valid through June 30, 2011. C. Gift Certificates. The Debtors distribute "Be Our Guest Gift Certificates" as promotions to certain individuals and also to address any customer service issues that may have occurred at a hotel during a customer's stay. The gift certificates provide a free night's stay at the Debtors' hotel. D. Customer Deposits. In the ordinary course of business, some of the hotel properties collect a security deposit or an advance deposit to hold a block of rooms for a special event. The deposits are collected when the customer checks into the hotel, or for larger events, prior to check-in, and the customer is refunded the deposit amount at check out, less any outstanding charges or damages to the hotel room. The deposits are considered an integral part of the Debtors' business as well as a staple in the hotel industry. The hearing to consider final approval of the Debtors' request is scheduled for July 13, 2009. Creditors and other concerned parties have until July 10 to file their objections. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. For the year ending December 31, 2008, Extended Stay's audited financial statements show consolidated assets (including nondebtor affiliates) totaling approximately $7.1 billion and consolidated liabilities totaling approximately $7.6 billion. Consolidated revenues for the 12 months ending December 31, 2008 were approximately $1 billion. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). FLEETWOOD ENTERPRISES: May Sell Motor Home to AIP for $53,000,000 ----------------------------------------------------------------- American Industrial Partners Capital Fund IV, L.P. of New York and Fleetwood Enterprises, Inc., report that the U.S. Bankruptcy Court has approved the sale of Fleetwood's motor home assets to AIP for $53 million, subject to pre-closing conditions and post-closing adjustments. Fleetwood did not conduct an auction because no other qualified bids were received. The sale includes two motor home manufacturing facilities, two motor home service facilities, and Fleetwood's Gold Shield supply subsidiary, all presently located in Decatur, Indiana. It also includes the intellectual property for Fleetwood's existing motor home brands and certain machinery and equipment in Riverside, California. AIP may operate the Riverside facility for an undetermined period of time going forward. AIP has agreed to assume certain liabilities, including warranty obligations on Fleetwood motorized products. The companies expect the deal to close within a matter of weeks. "Fleetwood's motor home brands are highly respected, and we are confident that this market will recover with the broader economy," said Dino Cusumano, Partner of AIP. "We look forward to continuing to manufacture Fleetwood motor homes. Fleetwood's dealers and customers should see no change in Fleetwood motor homes' commitment to high quality industry-leading product. We greatly value the relationships that Fleetwood has with its dealers, customers and suppliers and very much look forward to continuing and improving those relationships going forward." Elden L. Smith, Fleetwood's president and chief executive officer, stated that management, "is pleased to see that the Fleetwood name will be preserved in the RV market place with this sale to AIP. The Fleetwood motor home group will benefit greatly from having ownership that is well capitalized, experienced, and committed to growth in the RV industry. We are now focused on making this a smooth transition for our dealers, Fleetwood motor home owners, and associates." About American Industrial Partners Founded in 1989, American Industrial Partners -- http://www.aipartners.com/-- is a U.S.-based private equity firm that makes control equity investments, in partnership with management, in U.S. headquartered industrial companies with leading market shares that can benefit from the firm's systematic approach to implementing strategic and operational improvements. It is investing its fourth fund which recently closed with $405.5 million of committed capital. AIP can be reached at 212-627-2360. About Fleetwood Enterprises Founded in 1950, Fleetwood Enterprises, Inc. and its various subsidiaries produce, distribute, and service recreational vehicles and manufactured housing. Fleetwood continues to employ approximately 2,100 people in 14 plants located in 10 states. Fleetwood's products are primarily marketed through extensive dealer networks throughout the United States and Canada. The company is headquartered in Riverside, Calif. 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. G & S METAL: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: G & S Metal Consultants, Inc. 50 Dimension Avenue Wabash, IN 46992-4127 Bankruptcy Case No.: 09-32979 Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. ------ -------- G & S Transport, Inc. 09-32980 Type of Business: The Debtors buy, process, convert and sell aluminum. See http://www.gsmetalinc.com/ Chapter 11 Petition Date: June 24, 2009 Court: Northern District of Indiana (South Bend Division) Judge: Harry C. Dees, Jr. Debtors' Counsel: Jay Jaffe, Esq. jay.jaffe@bakerd.com Baker & Daniels LLP 600 E. 96th Street Suite 600 Indianapolis, IN 46204 Tel: (317) 569-9600 Fax: (317) 569-4800 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 ------ --------------- ------------ Star Leasing Company $550,000 4080 Business Park Drive Columbus, OH 43204 Intrametco $425,482 PO Box 663862 Indianapolis, IN 46266 Mcnichols Scrap Iron & Metal $386,655 PO Box 09387 Detroit, MI 48209 Kelsey-Hayes/Fowlerville $368,869 Metaldyne/Edon $309,302 Kelsey-Hayes/Fenton $235,097 Cmc Recycling $232,425 Schupan & Sons, Inc. $230,235 Indiana Refractories, Inc. $208,887 Alcoa Wheel Products $186,907 Duffy Electric & Automation $160,564 Kormet Enterprises, Inc. $152,617 Louis Padnos Iron & Metal Co $151,585 Wimco metals, inc. $150,544 David J. Joseph company $148,260 Lorbec Metals $123,261 Omnisource $120,551 Trw Canada Ltd $117,715 Duke Energy $114,445 Mintz Scrap & Metal Co. Inc. $89,456 The petition was signed by R. Scott Galley II, president. GENERAL ENVIRONMENTAL: CVC Discloses 48% Equity Stake ----------------------------------------------------- The ComVest Group (CVC California, LLC) disclosed in a regulatory filing with the Securities and Exchange Commission that it owns 11,786,111 shares, or 48.2%, of the outstanding common stock of General Environmental Management, Inc. CVC directly beneficially owns the securities in the form of direct ownership of 600,000 shares of Common Stock, a Convertible Term Note exercisable into 8,486,111 shares of Common Stock, and warrants to purchase 1,350,000 shares of Common Stock at $0.60 per share and 1,350,000 shares of Common Stock at $0.70 per share. ComVest Capital LLC indirectly beneficially owns the securities by virtue of the fact that Capital is the sole member and the managing member of CVC. ComVest Capital Management LLC indirectly beneficially owns the securities by virtue of the fact that Management is the managing member of Capital. In their capacity as Managing Members of Management, Michael Falk and Robert Priddy share indirect voting and dispositive power with respect to the securities indirectly beneficially owned by Management and may be deemed to be the beneficial owner of such securities, although Messrs. Falk and Priddy disclaim beneficial interest in such securities other than that portion which corresponds with their membership interest in Management. On June 1, General Environmental Management entered into an agreement with its CVC, its senior lender, to amend the parties' loan agreements. Pursuant to the Amendment, CVC waived all previous Events of Default, revised terms of certain Covenants of the Revolving Credit and Term Loan Agreement and cancelled certain warrants. Among other things, the original loan agreement requires that EBITDA of the Company not be less than (a) $1,000,000 for the fiscal quarter ending September 30, 2008, (b) $2,000,000 for the two consecutive fiscal quarters ending December 31, 2008, (c) $3,000,000 for the three (3) consecutive fiscal quarters ending March 31, 2009, or (d) $4,000,000 in any four consecutive fiscal quarters ending on or after June 30, 2009; provided, however, that it shall not be an Event of Default if actual EBITDA in any measuring period is within 10% of the required minimum EBITDA for such measuring period, so long as actual EBITDA for the next succeeding measuring period hereunder is equal to or greater than the required EBITDA for such. For the fiscal quarter ending September 30, 2008, the Company had EBITDA that was within 10% of the required minimum EBITDA for such measuring period but was not able to achieve the EBITDA required in the next succeeding measuring period. In consideration GEM paid fees consisting of common stock and a promissory note and agreed to amend the Convertible Term Note and the terms of certain warrants to purchase shares of the Company's common stock. The Company issued 600,000 shares of its common stock having an agreed value of $0.74 per share. A full-text copy of the Amendment to Revolving Credit and Term Loan Agreement dated as at June 1, 2009 between General Environmental Management, Inc. and CVC California LLC, is available at no charge at http://ResearchArchives.com/t/s?3e21 About General Environmental Management General Environmental Management, Inc. -- http://www.go-gem.com/ -- is a full-service hazardous waste management and environmental services firm providing integrated environmental solutions managed through its proprietary web-based enterprise software, GEMWare, including the following service offering: management and transportation of waste; design and management of on-site waste treatment systems; management of large remediation projects; response to environmental incidents and spills; and environmental, health and safety compliance. Headquartered in Pomona, California, GEM operates eight field service locations and one Treatment, Storage, Disposal facility, servicing all markets in the Western U.S. GENERAL MARITIME: S&P Assigns 'B' Senior Unsecured Debt Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its preliminary 'B' senior unsecured debt and preliminary 'B' subordinated debt ratings under General Maritime Corp.'s Rule 415 universal shelf registration for debt securities filed on Feb. 10, 2009. The 'B' preliminary rating on the senior unsecured debt is two notches below the 'BB-' corporate credit rating, the same as the subordinated debt rating, because of the substantial portion of secured debt relative to the company's assets. As of March 31, 2009, secured debt was about 60% of the company's total assets on a lease-adjusted basis. Standard & Poor's 'BB-' long-term corporate credit rating on New York, New York-based General Maritime reflects the company's aggressively leveraged financial profile, reduced financial flexibility, shareholder-friendly policies, and participation in the capital-intensive, highly fragmented, volatile, and competitive shipping industry. Positive credit factors include the company's established market position in the ocean transportation of crude oil and its strong customer base with long-standing relationships with oil majors. The negative outlook reflects S&P's view that there could be a more meaningful deterioration in the company's cash generation and financial risk profile if tanker rates continue to decline over the next year. The negative outlook also reflects S&P's concerns regarding the limited cushion under the company's financial covenant requirements. General Maritime provides international shipping of crude oil. Ratings List General Maritime Corp. Corp. credit rating BB-/Negative/-- Ratings Assigned Rule 415 universal shelf registration Senior unsecured debt B (prelim) Subordinated debt B (prelim) GENERAL MOTORS: Retirees Turn to Congress to Protect Benefits ------------------------------------------------------------- Following denial by the federal bankruptcy court of the General Motors Retirees Association's application for a benefits committee to protect GM salaried retirees, GMRA is now asking the U.S. Congress to act immediately in defense of the benefits these GM retirees earned through decades of labor and loyalty to GM. "We at GMRA are deeply disappointed by the failure of the bankruptcy court to allow us to take reasonable steps under Section 1114 of the Bankruptcy Code to protect the health and security of all GM retirees," said John Christie, GMRA President. "The court, in our opinion, did not do what was necessary to permit all parties to be treated fairly." "While the GMRA leadership will consider all the legal options available to us, we now look squarely to the Obama administration and to the U.S. Congress to make certain there is a fair process and outcome for all GM retirees," said Mr. Christie. "GM retirees always expected to sacrifice as part of GM's restructuring, but one group of retirees shouldn't bear the bulk of that burden. Surely our elected officials can intervene to protect the sick and elderly from poverty when these people worked hard and played by the rules." The majority of all General Motors retirees have been represented by the United Auto Workers in negotiations with the GM leadership and bondholders on pension, healthcare, and other benefits. However, over 122,000 salaried retirees and their surviving spouses were not part of the UAW agreement and have had no representation in discussions about the new GM. The non-union, salaried retirees were engineers, project managers, clerks, and other employees. Many earned annual salaries equal to or less than the wages earned by union employees. For the non-UAW retirees, who live throughout the United States, the current GM proposal would reduce certain benefits by two- thirds, including the outright elimination of dental, vision, and long-term disability coverage. The retirees would see significant increases in premiums, co-payments and deductibles for health care. The non-UAW retirees also would face an immediate reduction of life insurance benefits following the emergence of the new GM from bankruptcy. In some cases retirees would lose $70,000 or more in life insurance benefits. "For people living on a fixed income, the benefit losses proposed by GM are breathtaking," said Karen DeOrnellas, Director of Communications for GMRA. "These retirees are old. Many are sick or disabled. In almost all cases they cannot make this money back or return to work." GM retirees have written GMRA to say the latest proposals for benefit losses will make them choose between paying for prescription drugs and paying for food, electricity, and housing. Many will be unable to replace lost life insurance, jeopardizing the ability of their spouses to remain in their homes. "We want a reorganized GM to succeed, but bankruptcy shouldn't push tens of thousands of retirees and their families into poverty or endanger their health when those people did nothing wrong," said Ms. DeOrnellas. GMRA is represented before the federal bankruptcy court by Farella Braun & Martel LLP. The General Motors Retirees Association -- http://www.gmret.org/ -- is a national advocacy organization devoted to the preservation of pension, health care, and other benefits earned by GM retirees through their years of labor and loyalty to GM. GMRA stands for the fair treatment of all GM retirees, including the salaried retirees not already represented by the United Auto Workers. GMRA collaborates with the National Retirees Legislative Network. 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 US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$US$172.8 billion in total liabilities, resulting in US$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. GHOST TOWN: Wants to Borrow $250,000 from Alaska Pressley --------------------------------------------------------- Ghowst Town Partners, LLC, asks the U.S. Bankruptcy Court for the Western District of North Carolina for authority to borrow up to $250,000 from an individual, Alaska Pressley, to finish the uplifting of the mechanical mechanisms in the Park and, more particularly, the funicular incline railway and chair lift. The Debtor says it has obtained other credit but not for those items. The Debtor has agreed, as part of the consideration for the credit line, that the funicular incline railway be named The Alaska Pressley Railway. The loan will be repaid over a 5 year period by payment of $1 per customer for 2009 and $2 per customer for the next 4 years as part of the use of the incline railway. Interest will accrue at 4.25%. Based in Waynesville, North Carolina, Ghost Town Partners, LLC, operates an amusement park. The Debtor filed for Chapter 11 protection on March 11, 2009 (Bankr. W.D.N.C. Case No. 09-10271). David G. Gray, Esq., at Westall, Gray, Connolly & Davis, P.A., and William E. Cannon, Jr., at Brown, Ward & Haynes P.A., represent the Debtor in its restructuring efforts. In its bankruptcy petition, the Debtor listed total assets of $13,035,300 and total debts of $12,305,672. GOODY'S LLC: Landlords Wants Federal Court to Determine Stub Rent ----------------------------------------------------------------- Law360 reports that a group of landlords -- including Diversified Realty Corp., PICOA Inc. and E&A Acquisition Two LP -- holding leases on Goody's LLC outlets wants a federal appeals court to determine whether their claims for stub rent should be dealt with as administrative or unsecured claims by the bankruptcy court overseeing the liquidation. Headquartered in Wilmington, Delaware, Goody's LLC, successor to Goody's Family Clothing Inc., operates a chain of clothing stores. Goody's Family Clothing Inc., 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 on October 20, 2008, after closing more than 70 stores. The reorganized entity was named Goody's LLC. Goody's subsequently announced plans to liquidate in January 2009 when it was unable to restructure terms with creditors. 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 has closed its 282 stores and liquidated its inventory and other assets. In its schedules, Goody's LLC listed assets of $542,231,601 and liabilities of $510,471,005. * * * Troubled Company Reporter said on June 19, 2009, that the Court extended the Debtors' exclusive period to file a plan until August 11, 2009, and their exclusive period to solicit acceptances thereof until October 12. This is the first extension of the Debtors' exclusive periods. GOTTSCHALKS INC: Court Establishes August 24 General Bar Date ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has set August 24, 2009, at 5:00 p.m. (Pacific Daylight Time), as the general bar date for the filing of proofs of claim in Gottschalks Inc.'s bankruptcy case. In the event the Debtor amends its schedules of assets and liabilities, the Court fixes the later of: (i) the general bar date, and (ii) 30 days after the date that notice of the applicable amendment to the schedules is served on the claimant as the amended schedules bar date in this case. The bar date order requires all entities who disagree with an amendment to the schedules to file a proof of claim on or before the Schedules Bar Date. Proofs of claim must be filed so as to be actually received on or before the general bar date to: Gottschaks Claims Processing Center c/o Kurtzman Carson Consultants, LLC 2335 Alaska Avenue El Segundo, CA 90245 Headquartered in Fresno, California, Gottschalks Inc. (Pink Sheets: GOTTQ.PK) -- http://www.gottschalks.com/-- is a regional department store chain, operating 58 department stores and three specialty apparel stores in six western states. Gottschalks offers better to moderate brand-name fashion apparel, cosmetics, shoes, accessories and home merchandise. The Company filed for Chapter 11 protection on January 14, 2009 (Bankr. D. Del. Case No. 09-10157). O'Melveny & Myers LLP represents the Debtor in its Chapter 11 case. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serves as the Debtors' co-counsel. The Debtor selected Kurtzman Carson Consultants LLC as its claims agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an official committee of unsecured creditors. When the Debtor filed for protection from its creditors, it listed $288,438,000 in total assets and $197,072,000 in total debts. GRANT FOREST: S&P Withdraws 'CCC+' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'CCC+' long-term corporate credit rating on Toronto-based oriented strandboard manufacturer Grant Forest Products Inc. due to a lack of financial information. The Company has no rated debt. GRANT FOREST: Seeks Bankruptcy Protection in Ontario ---------------------------------------------------- Grant Forest Products Inc. and three affiliates have sought protection from creditors in Ontario, Canada, after a General Electric Co. unit tried to force the company into bankruptcy. According to Joe Schneider at Bloomberg News, Judge Frank Newbould of the Ontario Superior Court of Justice granted Grant's request for bankruptcy protection pursuant to the Companies' Creditors Arrangement Act in Canada following a closed-door hearing in Toronto. Grant's filing was precipitated by the collapse in the U.S. housing markets, which hurt sales. The Company has about C$600 million in secured debt. Ernst & Young Inc. is the court-appointed monitor. Grant Forest Products Inc. is a closely held Canadian maker of oriented strand board used in residential construction. HAIGHTS CROSS: Inks Pact With Lenders on Debt Restructuring ----------------------------------------------------------- Haights Cross Communications Inc. and its subsidiary Haights Cross Operating Company executed a commitment letter with the administrative agent and the lenders under the parties' senior secured term loan on June 17, 2009. Pursuant to the Commitment Letter, certain of the Lenders have made commitments to effectuate a Credit Agreement restructuring. The Company, however, warned it would explore all other restructuring alternatives in the event it is unsuccessful in completing a restructuring. Options include an out-of-court restructuring or the commencement of a Chapter 11 plan of reorganization under the U.S. Bankruptcy Code, with or without a pre-arranged plan of reorganization. The Company cannot assure that any alternative restructuring arrangement or plan could be accomplished. Haights Cross has been in default under the Indentures for its Senior Notes and Senior Discount Notes and under the Credit Agreement after it failed to file audited financial statements on time. Ernst & Young LLP in New York City, its independent registered public accounting firm also has raised substantial doubt about its ability to continue as a going concern. The adverse opinion caused the Company to violate a separate covenant of the Credit Agreement. Last week, Haights Cross filed with the Securities and Exchange Commission its quarterly report on Form 10-Q for the three months ended March 31, 2009. The Company said net losses for the three- month period ended March 31, 2009, was $7.3 million and $9.9 million for the three month period ended March 31, 2008. At March 31, 2009, the Company had $228,965,000 in total assets; $408,679,000 in total current liabilities and $14,238,000 in total long-term liabilities, resulting in $193,952,000 in stockholders' deficit. As of March 31, 2009, the Company had an available cash balance of $34.5 million. Haights Cross does not expect that its cash on hand and cash generated from operations will be sufficient to fund the repayment of its senior secured term loan under the Credit Agreement should it be declared due. In addition, an acceleration of the senior secured term loan would cause defaults under the Senior Notes and Senior Discount Notes. As of May 31, 2009, the outstanding principal balances excluding any premiums or discounts under the Credit Agreement, the Senior Notes and Senior Discount Notes (at maturity) were $108.3 million, $138.8 million and $135.0 million, respectively. On April 15, 2009, Haights Cross entered into a short-term forbearance agreement with the Lenders under the Credit Agreement relating to the financial reporting defaults, and since that time have entered into further forbearance agreements to extend the applicable forbearance period, including a Fourth Forbearance Agreement and Amendment No. 1 to Credit Agreement on May 7, 2009, as extended on June 12, 2009. The Forbearance Agreement and Amendment also provides for a forbearance relating to defaults, if any, resulting from its failure to satisfy the financial covenants under its Credit Agreement for the periods ended December 31, 2008 and March 31, 2009. Pursuant to the Forbearance Agreement and Amendment, the Lenders have agreed to forbear exercising any rights and remedies under the Credit Agreement until the earliest of (i) July 16, 2009; (ii) June 17, 2009, unless the Company enters into a binding commitment letter on substantially the terms of the proposed amendment to the Credit Agreement; (iii) its failure to pay a commitment fee to the Lenders when due; (iv) the occurrence of an event of default under the Credit Agreement other than those events covered by the Forbearance Agreement and Amendment; or (v) the occurrence or existence of any event of default under either of the Indentures for the Senior Notes or the Senior Discount Notes. Upon expiration of the forbearance period, the forbearance will be immediately and automatically terminated and be of no further force or effect, which would permit the Lenders to exercise their rights and remedies under the Credit Agreement and related security documents. Under the forbearance arrangements, commencing April 15, 2009, Haights Cross agreed to pay the Lenders the default rate of interest under the Credit Agreement, an increase of 2% over the stated variable rate. Effective, May 7, 2009, the Credit Agreement was amended to increase the base interest rate by 4% over the stated variable rate (an increase of 2% over the previous default rate), such that the applicable interest rate under the Credit Agreement is now, at Haights Cross' election, either: -- the three month LIBOR rate (with a floor of 3.00%) plus 12.25% per annum, payable monthly (LIBOR rate loans had previously been payable quarterly); or -- the prime rate (with a floor of 5.25%) plus 11.0% per annum, payable monthly. In consideration of this increase and a forbearance fee of $541,000, the Lenders have agreed to waive any default interest during the current forbearance period. As of May 31, 2009, Haights Cross' base rate of interest under the Credit Agreement was 15.25%. Under certain circumstances, Haights Cross is allowed to make an election to have a portion of the interest, not to exceed 2% per annum, paid-in-kind through an increase in the outstanding principal amount of the term loans. On June 8, 2009, the Company announced a plan to restructure its indebtedness, including a voluntary exchange of the Company's Senior Discount Notes that are held by Eligible Holders for shares of Common Stock of the Company, subject to the terms and conditions of an exchange offer to be presented to such Eligible Holders. Under the restructuring, the Company offers to issue 120.21 shares of its Common Stock for each $1,000 in principal amount at maturity of Senior Discount Notes exchanged, or an aggregate of 16,228,350 shares of Common Stock (subject to adjustment to eliminate fractional shares) if all $135 million aggregate principal amount at maturity of Senior Discount Notes are exchanged. These shares would represent at least 89% (subject to adjustment for rounding of fractional shares) of the outstanding shares of Common Stock of the Company immediately after the closing of the Exchange Offer. Immediately prior to the closing of the Exchange Offer, the Company would effect a one-for-five reverse stock split that would convert holdings of currently outstanding shares, and warrants to purchase shares, of Common Stock into approximately 2,005,682 shares (including warrant rights thereto), or 11% of the outstanding shares immediately after the closing of the Exchange Offer (assuming 100% of Senior Discount Notes are exchanged). Affiliates of Monarch Alternative Capital, LP, which are stockholders of the Company and holders of approximately 33% of the aggregate principal amount at maturity of the outstanding Senior Discount Notes, have agreed to support this restructuring. Concurrently with the Exchange Offer, the Company also is soliciting consents from the Eligible Holders for certain amendments to the Indenture pursuant to which the Senior Discount Notes were issued, to eliminate or substantially amend all of the restrictive covenants and modify certain of the events of default and various other provisions contained in such Indenture. Eligible Holders that tender Senior Discount Notes pursuant to the Exchange Offer must also consent to the Proposed Amendment in respect of such tendered Senior Discount Notes. The Proposed Amendment will not become operative unless and until the Exchange Offer is consummated. The Exchange Offer and Consent Solicitation will expire at 11:59 p.m., New York City time, on July 6, 2009, unless extended or earlier terminated. The Company also proposes to issue to its existing stockholders, as part of the overall restructuring, warrants with a five year term to purchase up to an aggregate of approximately 1,478,390 shares of its Common Stock (assuming all Senior Discount Notes are exchanged) at an exercise price of approximately $7.40 per share (assuming all Senior Discount Notes are exchanged). The shares reserved for issuance upon the exercise of the New Warrants would represent approximately 7.5% of HCC's outstanding shares and warrants (calculated on a fully diluted basis after giving effect to the issuance of the shares represented by the New Warrants) if all the Senior Discount Notes are exchanged. The number of shares to be covered by the New Warrants and the exercise price of the New Warrants will be subject to proportionate adjustment if all Senior Discount Notes are not exchanged in the Exchange Offer. The consummation of the Exchange Offer will be conditioned upon the satisfaction or waiver of a number of conditions including, among others: (i) at least 95% of the aggregate principal amount of the Senior Discount Notes being validly tendered for exchange and not revoked, and Eligible Holders representing such Senior Discount Notes delivering their consents to the Proposed Amendments; (ii) the execution of a satisfactory amendment to the Credit Agreement; and (iii) holders of a majority of the outstanding shares of Common Stock consenting to an amendment to the Company's Certificate of Incorporation to effect, among other things, the adoption of a one-for-five reverse stock split, an increase in the Company's authorized shares of Common Stock, the adoption of cumulative voting for the election of directors, and certain other amendments to the Company's Certificate of Incorporation. Beneficial holders of a majority of the Company's outstanding Common Stock have agreed to effect the amendment to its Certificate of Incorporation and have also agreed to terminate the operative provisions of the existing stockholders agreement, such that there will be no further agreements regarding the election of the Company's directors or participation in future offerings following the closing of the Exchange Offer. The terms of the proposed Credit Agreement Restructuring: (i) The Company will make a $17,500,000 cash principal payment in respect of the existing secured term loan facility; thereby reducing the aggregate principal balance of the existing term loans from $108,200,000 to $90,700,000. The Term Loan Paydown shall be allocated among certain of the existing Lenders. (ii) The Company shall repurchase 100% of the $27,475,000 principal amount of the Company's Senior Notes held by certain of the existing Lenders constituting funds or accounts managed and/or advised by DDJ Capital Management, LLC, at a 20% discount, for aggregate consideration consisting of interests in $21,980,000 principal amount of the new Term B Loans. (iii) After giving effect to the Term Loan Paydown, (x) the $55,862,000 of aggregate principal amount of existing term loans that are held by certain Lenders (including certain of the existing term-loans held by the DDJ Noteholder Lenders) shall be converted into new first-out term A loans in the aggregate principal amount of $55,862,000, and (y) the $34,838,000 aggregate principal amount of existing term loans that are held by the DDJ Noteholder Lenders, together with the $21,980,000 of Repurchase Consideration owed to the DDJ Noteholder Lenders, shall be converted into new last-out term B loans in the aggregate principal amount of $56,818,000, on terms and conditions satisfactory to the Lenders (including without limitation with respect to voting rights, payments and prepayments, application of proceeds, purchase options and bankruptcy rights). (iv) The aggregate principal amount of Restructured Term Loans outstanding after giving effect to the transactions described in clauses (i)-(iii) shall equal $112,680,000. Such amount does not include the aggregate amount of payment in kind interest, if any, added to the principal amount of the secured term loan facility under the Credit Agreement during the period commencing on the First Amendment Effective Date (i.e., May 7, 2009) and ending on the effective date of the closing of the transactions contemplated by the proposed debt restructuring. (v) It is currently anticipated that the Applicable Margin on the Term A Loans shall be equal to (a) 10.75% per annum with respect to LIBOR Loans (8.75% per annum cash pay and 2.00% per annum payment in kind) and (b) 9.50% per annum with respect to Base Rate Loans (7.50% per annum cash pay and 2.00% per annum payment in kind). It is also currently anticipate that the Applicable Margin on the Term B Loans shall be equal to (a) 15.75% per annum with respect to LIBOR Loans (13.75% per annum cash pay and 2.00% per annum payment in kind) and (b) 14.50% per annum with respect to Base Rate Loans (12.50% per annum cash pay and 2.00% per annum payment in kind). It is currently anticipated that the LIBOR rate on all Restructured Term Loans shall have a 3.00% floor and the Base Rate on all Restructured Term Loans shall have a 5.25% floor, consistent with the existing Credit Agreement. (vi) The Company will pay a commitment fee to the Lenders, which commitment fee shall be earned upon the execution of a binding commitment letter with respect to the Credit Agreement Restructuring and shall be due and payable on the earliest to occur of (a) the date on which at least 90% of the Senior Discount Notes have been tendered for exchange pursuant to the Exchange Offer, (b) the date on which the Company, the Agent and the Lenders have reached substantial agreement on the documentation for the Credit Agreement Restructuring or (c) the date on which (1) at least 60% of the Senior Discount Notes have been tendered for exchange pursuant to the Exchange Offer, and (2) the Company has consummated the Exchange Offer and effected the Credit Agreement Restructuring either (i) with the consent of the Agent and the Lenders in their discretion or (ii) with alternative financing. With limited exceptions, once paid no part of the Commitment Fee shall be refundable for any reason. (vii) A default under the Restructured Term Loans will trigger an additional 2.00% of interest above the stated rates. After giving effect to the Credit Agreement Restructuring, the Credit Agreement (i) will require the Company to pay customary fees to Agent and Lenders, including, without limitation, the commitment fee and a closing fee and (ii) will furnish Agent and Lenders with rights and remedies that are typical for a transaction of this kind. Among other remedies, upon the occurrence of an event of default, the Agent and Lenders shall be entitled to charge a default interest rate and to declare the Restructured Term Loans outstanding to be due and payable, either in whole or in part, immediately. The Lenders' commitment is subject to the satisfaction or waiver of certain conditions, including the negotiation, execution and delivery of definitive documents. Subject to the satisfaction of the conditions precedent set forth in the Commitment Letter, the funding of the Facility will occur on a date on or before July 16, 2009. Pursuant to the Commitment Letter, the Company agreed to (i) pay or reimburse the Lenders and the Agent for certain reasonable and documented out-of-pocket costs and expenses and (ii) the Lenders earned a commitment fee. About Haights Cross Communications Founded in 1997 and based in White Plains, New York, Haights Cross Communications -- http://www.haightscross.com/-- is an educational and library publisher of books, audio products, software and online services, serving these markets: K-12 supplemental education, public library and school publishing and audio books. Haights Cross companies include: Triumph Learning (New York, NY), Buckle Down Publishing (Iowa City, IA), Options Publishing (Iowa City, IA), and Recorded Books (Prince Frederick, MD). HARTMARX CORP: Sale to Emerisque Okayed Amid Committee Objections ----------------------------------------------------------------- Erik Larson at Bloomberg News, citing U.S. Representative Phil Hare, reports that the sale of Hartmarx Corp. to Emerisque Brands U.K. has been approved by the U.S. Bankruptcy Court of the Northern District of Illinois. According to Bill Rochelle at Bloomberg, Hartmarx faced opposition from the official committee of unsecured creditors appointed in its Chapter 11 case in connection with the sale of its assets to Emerisque Brands U.K. Ltd. and SKNL North America Ltd. The Creditors Committee objects to how the contract and a related agreement were modified to provide that all of the $80 million in sale proceeds will be turned over to the bank lenders when the sale is completed. The Committee asserts that the sale will only benefit the lenders and will leave the estates "administratively insolvent". As reported in the Troubled Company Reporter on June 4, 2009, the Bankruptcy Court approved Hartmarx's proposal to name Emerisque Brands U.K. Limited and its partner SKNL North America, B.V. as stalking horse bidder. As a result of last minute negotiations, Emerisque/SKNL and the Company, supported by its lenders, agreed to a total transaction value of $128.4 million for the acquisition of substantially all of the assets of Hartmarx Corporation and the assumption of certain liabilities. A copy of the amended and restated asset purchase agreement between Hartmarx Corp. and Emerisque and SKNL, dated as of June 1, 2009, is available at: http://bankrupt.com/misc/Hartmarx.AmendedAPA.pdf Early this month, the Creditors Committee sued the Debtors' secured lenders, asking the Bankruptcy Court to declare that the $12 million resulting from termination of a store lease isn't part of their collateral. About Hartmarx Corporation Based in Chicago, Illinois, Hartmarx Corporation -- http://www.hartmarx.com/-- produces and markets business, casual and golf apparel under its own brands, including Hart Schaffner Marx, Hickey-Freeman, Palm Beach, Coppley, Monarchy, Manchester Escapes, Society Brand, Racquet Club, Naturalife, Pusser's of the West Indies, Brannoch, Sansabelt, Exclusively Misook, Barrie Pace, Eye, Christopher Blue, Worn, One Girl Who . . . and b.chyll. In addition, the company has certain exclusive rights under licensing agreements to market selected products under a number of premier brands such as Austin Reed, Burberry men's tailored clothing, Ted Baker, Bobby Jones, Jack Nicklaus, Claiborne, Pierre Cardin, Lyle & Scott, Golden Bear, Jag and Dr. Martens. The Company's broad range of distribution channels includes fine specialty and leading department stores, value-oriented retailers and direct mail catalogs. Hartmarx and certain affiliates filed for bankruptcy protection on January 23, 2009 (Bankr. N.D. Ill. Lead Case No. 09-02046). George N. Panagakis, Esq., Felicia Gerber Perlman, Esq., and Eric J. Howe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed $483,108,000 in total assets and $261,220,000 in total debts as of August 31, 2008. HAWAII SUPERFERRY: Seeks to Abandon Two Catamarans -------------------------------------------------- Derrick DePledge at The Honolulu Advertiser reports that Hawaii Superferry, Inc., has sought the permission of the U.S. Bankruptcy Court for the District of Delaware to abandon its two high-speed catamarans to creditors due to the significant cost of maintaining the vessels. According to The Honolulu Advertiser, Hawaii Superferry told the Court that it can't find financing to maintain operations while searching for charter opportunities. The Honolulu Advertiser relates that Hawaii Superferry has no current source of revenue, but has to cover the cost of insurance, maintenance, security, storage, and a skeleton crew for the catamarans at main private investor J.F. Lehman & Co.'s shipyard. The Honolulu Advertiser states that the Maritime Administration, which guaranteed construction loans for the catamarans, would likely take possession of the catamarans. The report says that Maritime Administration holds first priority on the mortgages and is owed $135.7 million by Hawaii Superferry. The Court will hold a hearing on Hawaii Superferry's request on July 1, The Honolulu Advertiser reports. Wilmington, Delaware-based 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. The Company and its affiliate filed for Chapter 11 on May 30, 2009 (Bankr. D. Del. Case Nos. 09-11901 and 09-11902). David B. Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamilton LLP represent the Debtors in their restructuring efforts. When the Debtors sought protection from their creditors, they listed both assets and debts between $100 million and $500 million. HAWAIIAN TELCOM: Considered, But Rejected, Sandwich Plan -------------------------------------------------------- Hawaiian Telcom Communications, Inc., and its debtor-affiliates inform the U.S. Bankruptcy Court for the District of Hawaii that they did not refuse Sandwich Isles Communications, Inc.'s proposal to acquire their assets for $450 million. Theodore D.C. Young, Esq., at Cades Schutte LLP, in Honolulu, Hawaii, relates that Sandwich Isles orally presented its offer to the Debtors on April 20, 2009, wherein it proposed to purchase substantially all of Hawaiian Telcom's assets for $250 million in cash and $150 million in a Hawaiian Telcom-financed note, subject to purchase price adjustments and due diligence. On April 24, 2009, Sandwich Isles entered into discussions with the Debtors' financial advisor, Lazard Freres & Co. LLP, who in turn sought additional information from Sandwich Isles relating to the financing of the proposal. According to Mr. Young, Sandwich Isles has not provided any of the financial information sought by Lazard Freres. Despite Sandwich Isles' failure to provide any financial diligence, the Debtors entertained another telephone conference with Sandwich Isles on May 1, 2009, to discuss the Buyout Proposal. At the conference call, Sandwich Isles conceded that it had no committed financing, and that while it proposed to submit an application to the federal government for financing to acquire the Debtors' assets, the application for financing would take months with no guarantee of success. Sandwich Isles also mentioned that its purchase of the Debtors' assets is contingent on the termination of the Debtors' pension plan for union employees for the elimination of benefits. The Debtors subsequently discussed Sandwich Isles' Proposal with their secured lenders and the International Brotherhood of Electrical Workers, Local 1357, who both agreed with the Debtors that the Buyout Proposal would not maximize value for the Debtors' estates or lead to a successful transaction. The Debtors also discussed the Proposal with the Official Committee of Unsecured Creditors, who also do not support the Proposal. The special committee of the Debtors' Board of Directors also held a meeting on May 13, 2009, regarding the Proposal and expressed concern on the lack of committed financing of the transaction. In light of the progress made in negotiations with the Secured Lenders regarding the Debtors' Joint Plan of Reorganization dated June 3, 2009, the Special Committee has also determined not to pursue the Proposal. Mr. Young cites the reasons why the Debtors did not pursue the Proposal: 1. Sandwich Isles relies on government aid and grants to operate its business and does not have any committed financing to fund its proposed acquisition of the Debtors' assets. 2. Sandwich Isles' proposed financing plan is sheer speculation and consists of pursuing government acquisition financing -- a form of financing for which there is known precedent, plus seller financing from the creditors, who do not support the proposal. 3. Sandwich Isles lack the necessary federal and state licenses to operate in urban areas. 4. Sandwich Isles has provided no facts or evidence that it has the financial wherewithal to operate the Debtors' businesses or provide the adequate assurance necessary for it to take assignment of the contracts and leases that are critical to operating the businesses or to make the ongoing payments that would be required under the $150 million note it proposed. 5. Sandwich Isles does not operate a full-service communications company let alone a telecom network serving an entire state. Sandwich Isles could not demonstrate to the Debtors that it has the experience and ability to ensure the continued operation of this critical infrastructure. 6. Sandwich Isles failed to provide any details regarding its plan or ability to obtain the necessary regulatory approvals from state and federal agencies, including obtaining FCC expansion of its existing service area to include all of the neighbor islands, which it admits is "critical to Sandwich Isles' plan to acquire the Debtors' assets." 7. Sandwich Isles conceded that its proposal would leave the businesses highly levered - a problem that brought the Debtors in bankruptcy and which the Debtors believe that Hawaii Public Utilities Commission would not permit to happen again. 8. Sandwich Isles' Proposal contains an undefined diligence period and assuming, it could even obtain financing and regulatory approvals necessary, the diligence, financing and approval could extend the Debtors' Chapter 11 cases by months at significant additional cost to the Debtors' estates. Mr. Young tells the Court that since the filing of the Exclusivity Motion and the Plan, the Debtors have continued to press forward towards their emergence from Chapter 11. Indeed, in consultation with the Committee, the Debtors rescheduled a hearing to approve the Disclosure Statement accompanying the Plan from July 23, 2009, to August 11, 2009, and is working diligently to resolve the Committee's objections to the Plan. The rescheduled Disclosure Statement hearing is also to ensure its connection with the summary judgment hearing in the lien dispute commenced by Lehman Commercial Paper, Inc., as administrative agent to the Secured Lenders against the Committee. The Debtors have also been working with and addressing the questions of the HPUC to initiate the required regulatory approvals for the Plan, he adds. "Sandwich Isles' Motion to Modify Exclusive Periods is replete with accusations and speculation but lacks any support," Mr. Young contends. He maintains that the Debtors have at all times acted in good faith and in the best interests of their estates. He reiterates that the Debtors thoroughly analyzed the Proposal before concluding that the transaction is limited and speculative at best, which conclusion was seconded by the Debtors' constituencies. Rejecting an unqualified purchase offer is patently not bad faith, he asserts. The Debtors have considered all restructuring alternatives and are now pursuing a plan that maximizes value, he avers. Mr. Young tells the Court that the Debtors previously made substantial progress with one purchaser towards a sale but after two months, that purchaser abandoned the transaction. At all times, the Debtors remained open to serious proposals that could benefit their estates and engaged their equity sponsor regarding a standalone reorganization and, separately discussed standalone restructuring options with their bondholders and Secured Lenders, Mr. Young insists. Moreover, the Debtors have filed a viable Chapter 11 Plan on June 3, 2009. While Sandwich Isles questioned the confirmability of the Plan, this will be adjudicated at the confirmation hearing, Mr. Young notes. Thus, Sandwich Isles' speculation about whether the Plan can be confirmed, while completely unsupported, is irrelevant in the context of determining cause to extend or modify exclusivity, Mr. Young asserts. He also clarifies that the Debtors have not sought any extension to the Exclusive Periods due to any ongoing litigation, including the Lien Dispute, which will be resolved or settled in connection with confirmation. For those reasons, the Debtors ask the Court to grant their Exclusivity Motion and deny Sandwich Isles' Cross-Motion. In support of the Debtors' Reply, (i) Kevin Nystrom, chief operating officer of the Debtors, (ii) Nick Melton, managing director at Lazard Freres, and (iii) Alan M. Oshima, member of the Special Committee of the Debtors' Board of Directors, have filed declarations, affirming the information set forth in the Reply. Secured Lenders Side with Debtors In support of the Debtors, the Secured Lenders affirm that the Debtors' Plan is the result of months of good faith, arm's-length negotiations they entered into with the Debtors. The Secured Lenders also comment that Sandwich Isles' Motion to Modify Exclusivity inappropriately tries to roadblock progress in the Debtors' Chapter 11 cases by asserting that its proposed offer to the Debtors would provide better recoveries to creditors than that of the Debtors' Plan. The Secured Lenders tells the Court that Sandwich Isles' Proposal does not have the support of the Debtors' stakeholders. The Secured Lenders clarify that they have considered every offer of a third party bidder brought to them by the Debtors, but none of those offers have been viable because of a lack of committed financing, including that of Sandwich Isles' Proposal. Accordingly, the Secured Lenders ask the Court to grant the Debtors' Exclusivity Motion and deny Sandwich Isles' Motion to Modify Exclusivity. Sandwich Isles Says Debtors' Attacks on Proposal are Misplaced Lex R. Smith, Esq., at Kobayashi, Sugita & Goda, in Honolulu, Hawaii, clarifies that after the conference call, the Debtors made no further effort to consider the Sandwich Isles Proposal and would not even respond to its request for access to their diligence room. Contrary to the Debtors' assertion, Sandwich Isles has responded to Lazard Freres' request for financial information, he continues. More importantly, Mr. Smith asserts that the Debtors' allegations regarding Sandwich Isles' Proposal are simply wrong for these reasons: 1. Sandwich Isles is a strategic buyer and not a bank, however, it has received initial financial commitments and if granted access to the diligence room, it would promptly be able to confirm financing. 2. The Debtors have ignored that Sandwich Isles is a proven, successful, and profitable locally owned company operating on Hawaii for more than 10 years. 3. Any of the Debtors' assets will have to obtain the regulatory approval and Sandwich Isles, being already regulated by the HPUC and a Hawaii-owned business, will not face the regulatory hurdles posed by the ownership structure contemplated in the Plan. 4. The Debtors are incorrect in stating that Sandwich Isles lacks the necessary federal and state licenses to operate in urban areas because Waiman Enteprises, its wholly owned subsidiary, has a separate subsidiary that is fully licensed to operate anywhere on Hawaii. 5. While the Debtors contend that Sandwich Isles' Proposal undervalues their assets, they did not complain to Sandwich Isles about the $450 million purchase price and have not given Sandwich Isles access to the information necessary to value their estates and assets. 6. Sandwich Isles never denied that the Proposal would leave the Debtors' business highly leveraged. It even believes that a leveraged business model with borrowings from a mix of public and private sources is the best approach to the unique challenge of operating a telecommunication business on Hawaii. 7. Sandwich Isles received telephone calls from representatives of several Secured Lenders who indicated that they had never heard of Sandwich Isles' proposal and only learned of it through the news. Notably, the Secured Lenders' Joinder does not state that all of the Secured Lenders have been advised of the Sandwich Isles Proposal, or were asked to determine their interest. Mr. Smith insists that the Debtors have not established cause to further extend the Exclusive Periods. He contends that the Debtors are attempting to distract the Court from their inability to move their Chapter 11 cases forward by raising those attacks on Sandwich Isles' Proposal, which issues are simply not relevant before the Court. More importantly, the Debtors' filing of their Plan does not demonstrate their prospects for filing a viable Chapter 11 plan, Mr. Smith says. He points out that the proposed ownership under the Plan remains the central issue on the Debtors' request to extend exclusivity. According to Mr. Smith, certain of the Debtors' stakeholders have informed Sandwich Isles that the true plan is to sell the Debtors again within three years after exiting from Chapter 11 protection. He also comments that the Debtors did not even explain (i) what the questions that were asked by HPUC are, and (ii) how they will deal with HPUC's strict restriction on foreign ownership. Moreover, Mr. Smith stresses, the Debtors' deteriorating business is directly relevant to their Exclusivity Motion because the longer they wait to open this process to real buyers, the less likely that a real buyer will be found who is willing to go through the regulatory process necessary to acquire a telecommunications company. Sandwich Isles contends that the Debtors' Plan fails to embody any compromise among creditors and key stakeholders; and contains insurmountable regulatory obstacles. The Debtors' Plan simply has no hope of confirmation and will ultimately need to be renegotiated, Mr. Smith emphasizes. In the meantime, the business of the Debtors and the people of Hawaii will suffer as expenses and service failures mount and customer losses increase, he stresses. In contrast, the Sandwich Isles Proposal is a viable alternative plan being delayed by exclusivity and constitutes a serious attempt to achieve a confirmable plan of reorganization within a relatively short timeframe, Mr. Smith maintains. "Denial of the Debtors' Exclusivity Motion will thus not prejudice the Debtors' confirmation efforts, but would further the prospects for reorganization in the Debtors' Chapter 11 cases," Mr. Smith says. Accordingly, Sandwich Isles asks the Court to grant its Motion to Modify and deny the Debtors' Exclusivity Motion. * * * In an amended bridge order, Judge Lloyd King extends by one day the Debtors' exclusive period to file a reorganization plan from June 30, 2009, to and including July 1, 2009; and the Debtors' exclusive period to solicit acceptances for that plan from August 31, 2009, to and including September 1, 2009. No party other than the Debtors may file any Chapter 11 plan in the Debtors' cases through July 1, 2009. Judge King will consider the Debtors' Exclusivity Motion on a final basis, on July 1, 2009. About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telcom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection on December 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). As reported by the TCR on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of September 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc., and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HAWAIIAN TELCOM: Hawaii State Retains Chanin as Fin'l Advisors -------------------------------------------------------------- The State of Hawaii asks the Court to approve the retention of Chanin Capital Partners, LLC, as financial advisors and consultants to the Hawaii Public Utilities Commission effective July 1, 2009. The Debtors' Joint Plan of Reorganization and Disclosure Statement dated June 3, 2009, requires the regulatory approval from the HPUC, which approval could take six to nine months to obtain. In furtherance of HPUC's role, Chanin Capital is contemplated to assist the HPUC: (1) in its review of the Debtors' Plan and Disclosure Statement; and (2) in its administrative and regulatory review of the Plan pursuant to Chapter 269 of the Hawaii Revised Statutes. Specifically, Chanin Capital will: (a) assist the HPUC in the review of financial related disclosures required by the Court, including the Schedules of Assets and Liabilities, the Statement of Financial Affairs and Monthly Operating Reports of the Debtors; (b) assist in the review of the Debtors' short-term cash management procedures and cash flows; (c) assist and advise the HPUC with respect to the Debtors' identification of core business assets and the disposition of assets or liquidation of unprofitable operations; (d) assist with a review of the Debtors' performance of cost-benefit evaluations with respect to the affirmation or rejection of several executory contracts and leases; (e) provide assistance regarding the evaluation of operations and identification of areas of potential cost savings, including overhead and operating expense reductions and efficiency improvements; (f) assist in the review of financial information distributed by the Debtors to creditors and others, including cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts, and analysis of proposed transactions for which Court approval is sought; (g) attend meetings and assist in discussions with the Debtors, potential investors, banks, other secured lenders, the HPUC and any other official committees organized in these Chapter 11 proceedings, the U.S. Trustee, other parties-in-interest and professionals hired by the same, as sought; (h) assist in the review or preparation of information and analysis necessary for the confirmation of a plan in these Chapter 11 proceedings; (i) assist in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; (j) provide litigation advisory services with respect to accounting and tax matters, along with expert witness testimony on case related issues as required by the HPUC; (k) render other general business consulting or other assistance as the HPUC or its counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals in this proceeding. The Debtors are a monopoly landline provider for telecommunication services. As a monopoly provider, the Debtors, as reorganized, must continue to provide those monopoly services. If the Debtors or the Reorganized Debtors cannot provide those services, the Court will have to inquire as to any contingency plans by the HPUC to provide for those monopoly services. HPUC will thus work with Chanin Capital and other governmental entities and agencies to prepare contingency plans if the Debtors' reorganization is unsuccessful and a new entity has to be established to operate the monopoly landlines network. Only the HPUC in conjunction with other state agencies, working with Chanin Capital, will be in a position to draft and prepare contingency plans for a successor entity, the State of Hawaii maintains. HPUC proposes to pay Chanin Capital a fixed monthly fee of $150,000 and reimburse the actual and necessary expenses incurred by the firm as of July 1, 2009. Moreover, HPUC seeks to retain Chanin Capital pursuant to Section 328(a) of the Bankruptcy Code, which provides that Chanin Capital's employment, including its fees, are not subject for further review. Brian J. Cullen, managing director at Chanin Capital, filed with the Court a list of entities his firm has represented, currently represents, and may represent, a copy of which is available for free at: http://bankrupt.com/misc/HawTel_ChaninCapitalDisclosures.pdf Mr. Cullen adds that Chanin Capital also represents several entities, including those listed that buy and sell distressed debt of Chapter 11 debtors. However, since distressed bank and note debt is actively traded in commercial markets, Chanin Capital may be unaware of the actual holder of the debt at any given moment. Despite these disclosures, he assures the Court that Chanin Capital is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code, and does not hold or represent an interest adverse to the Debtors' estates with respect to the matters for it is being employed pursuant to Section 328(c). About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telcom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection on December 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). As reported by the TCR on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of September 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc., and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HAWAIIAN TELCOM: May Use Cash Collateral Through August 31 ---------------------------------------------------------- Pursuant to the minutes of the hearing held on June 18, 2009, Judge Lloyd King authorized Hawaiian Telcom Communications Inc.'s continued use of cash collateral of their Prepetition Lenders, on a consensual basis, through and including August 31, 2009. Judge King directed the Debtors' counsel to submit an order for approval. About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telcom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection on December 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). As reported by the TCR on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of September 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc., and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HAYES LEMMERZ: Committee Taps Bifferato as Delaware Counsel ----------------------------------------------------------- The Official Committee of Unsecured Creditors of Hayes Lemmerz International Inc. and its debtor-affiliates asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ Bifferato Gentilotti LLC as its Delaware counsel. The firm will, among other things: a) provide legal advice as necessary with respect to the Committee's powers; b) assist the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' businesses, potential claims, and any other matters relevant to the cases or to the formulation of a plan of reorganization; c) participate in the formulation of a Plan; d) provide legal advice as necessary with respect to any disclosure statement and Plan filed in these cases and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation of a Plan; and e) prepare on behalf of the Committee, as necessary, applications, motions, complaints, answers, orders, agreements and other legal papers. The firm's hourly rates are: Designation Hourly Rate ----------- ----------- Members/Associates $250-$345 Paralegals/Legal Assistants $145-$185 Garvan F. McDaniel, Esq., a member of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Hayes Lemmerz 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. Roberta A. DeAngelis, the United States Trustee for Region 3, appointed three creditors to serve on the Official Committee of Unsecured Creditors of Hayes Lemmerz International Inc. and its debtor-affiliates. 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. HAYES LEMMERZ: Committee Taps Chanin Capital as Financial Advisor ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of Hayes Lemmerz International Inc. and its debtor-affiliates asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ Chanin Capital Partners as its financial advisor. The firm will: a) review and analyze the Debtors' operations, financial condition, business plan, strategy, and operating forecasts; b) analyze any merger, divestiture, joint-venture, or investment transaction; c) assist in the determination of an appropriate go-forward capital structure for the Debtors; d) assist the Committee in developing, evaluating, structuring and negotiating the terms and conditions of a restructuring or Plan of Reorganization including the value of the securities, if any, that may be issued to the Committee under any such restructuring or Plan; e) provide testimony, as necessary, before the bankruptcy court; and f) provide the Committee with other appropriate general restructuring advice The firm's hourly rates are: The firm will be paid $175,000 per month for this engagement. Brent C. William, managing member of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Hayes Lemmerz 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. Roberta A. DeAngelis, the United States Trustee for Region 3, appointed three creditors to serve on the Official Committee of Unsecured Creditors of Hayes Lemmerz International Inc. and its debtor-affiliates. 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. HAYES LEMMERZ: Committee Taps Lowenstein Sandler as Counsel ----------------------------------------------------------- The Official Committee of Unsecured Creditors of Hayes Lemmerz International Inc. and its debtor-affiliates asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ Lowenstein Sandler PC as its counsel. The firm will, among other things: a) provide legal advice as necessary with respect to the Committee's powers; b) assist the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' businesses, potential claims, and any other matters relevant to the cases or to the formulation of a plan of reorganization; c) participate in the formulation of a Plan; d) provide legal advice as necessary with respect to any disclosure statement and Plan filed in these cases and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation of a Plan; and e) prepare on behalf of the Committee, as necessary, applications, motions, complaints, answers, orders, agreements and other legal papers. The firm's hourly rates are: Designation Hourly Rate ----------- ----------- Partners $410-$765 Counsel $320-$520 Associates $220-$380 Legal Assistants $120-$215 Mary E. Seymour, Esq., a member of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Hayes Lemmerz 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. Roberta A. DeAngelis, the United States Trustee for Region 3, appointed three creditors to serve on the Official Committee of Unsecured Creditors of Hayes Lemmerz International Inc. and its debtor-affiliates. 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. HOLLYWOOD THEATERS: Moody's Assigns 'B3' Rating on Senior Notes --------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to the senior secured note issuance of Hollywood Theaters, Inc. The company applied proceeds from the $157 million issuance primarily to repay existing bank debt. Moody's also upgraded the corporate family and probability of default ratings, each to B3, from Caa2 and Caa3, respectively, and withdrew ratings on the former senior secured bank debt. The transaction occurred largely in line with Moody's expectations as communicated in the June 4, 2009, press release on Hollywood. The face value of the bonds increased to $157 million from the proposed $150 million due to the larger original issue discount, but Moody's believes liquidity, incorporating the $10 million revolving credit facility expected to be in place shortly after the close of the transaction, will remain adequate. Hollywood Theaters, Inc. -- Probability of Default Rating, Upgraded to B3 from Caa3 -- Corporate Family Rating, Upgraded to B3 from Caa2 -- Assigned B3 rating to Senior Secured Regular Bonds -- Outlook, Changed To Stable From Rating Under Review -- Senior Secured First Lien Bank Credit Facility, Withdrawn, previously rated Caa1, LGD2, 25% -- Senior Secured Second Lien Bank Credit Facility, Withdrawn, previously rated Ca, LGD5, 73% The weakly positioned B3 corporate family rating incorporates the company's ongoing significant financial risk. Hollywood's attendance lagged the industry in 2008, which elevated leverage to the mid-6x debt-to-EBITDA from below 6x in 2007. High capital expenditures contributed to negative free cash flow and weak fixed charge coverage in 2008, and Moody's anticipates continued cash consumption in 2009, exacerbated by increased interest expense. Lack of scale also constrains the rating, although Hollywood benefits somewhat from reasonable geographic diversification. The company's modern theater circuit, which contributes to its strong EBITDA margin and allows for fairly modest maintenance capital requirements, as well as expectations that a reduction in expansionary capital expenditures after 2009 will yield improving free cash flow, lend support to the ratings. The most recent rating action for Hollywood Theaters, Inc., was on June 4, 2009, when Moody's assigned a (P)B3 to Hollywood's proposed notes issuance. Hollywood Theaters, Inc.'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 and tolerance for risk. These attributes were compared against other issuers both within and outside of Hollywood's core industry and Hollywood's ratings are believed to be comparable to those of other issuers of similar credit risk. Hollywood Theaters, Inc., headquartered in Portland, Oregon, operates approximately 50 theaters and 536 screens primarily located in the Southwest and West Coast. Revenue for the last twelve months ending March 31, 2009, was approximately $131 million. HUNTSMAN CORP: Lawsuit Settlement Cues S&P to Keep Negative Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Salt Lake City-based Huntsman Corp. remain on CreditWatch with negative implications, following Huntsman's announcement of its agreement with Credit Suisse and Deutsche Bank to settle claims over Huntsman's lawsuit related to the failed $6.5 billion acquisition of Huntsman by Apollo Management-owned Hexion Specialty Chemicals Inc. S&P said in March that it lowered its ratings on Huntsman, including its corporate credit rating to 'B' from 'BB-'. The ratings remain on CreditWatch with negative implications. At the same time, S&P assigned its '5' recovery rating, indicating the expectation of modest recovery (10%-30%) in the event of a default, to Huntsman International LLC's existing $300 million senior unsecured notes. S&P also assigned a '6' recovery rating, indicating the expectation of negligible recovery (0%-10%) in the event of a default, to Huntsman International LLC's existing subordinated notes aggregating $1.285 billion. Global chemical manufacturer and marketer Huntsman announced that the settlement consists of $620 million in cash and $1.1 billion in loans to be provided by the two banks. Huntsman also received $12 million in reimbursement of litigation costs. Huntsman announced it would utilize a portion of the settlement's approximately $1.7 billion in cash proceeds to reduce and refinance debt. "The settlement and planned use of proceeds to improve the balance sheet addresses S&P's immediate credit concerns related to near- term debt maturity requirements and liquidity," said Standard & Poor's credit analyst Paul Kurias. The company's near-term debt maturities included a $575 million accounts receivable securitization facility that matures in November 2009, $295 million in senior secured notes, and a $650 million revolving credit facility that matures in the second half of 2010 -- nearly 30% of the $4.9 billion of total adjusted debt outstanding as of March 31, 2009. "We nevertheless remain concerned that 2009 operations and earnings will remain depressed because of the ongoing global recession, which has driven down stifled overall demand for the company's products in key businesses. While the settlement announcement is expected to address immediate liquidity concerns, S&P expects credit metrics to remain relatively weak for the current ratings," said Mr. Kurias. S&P plans to resolve the CreditWatch once more details on the Huntsman's prospective capital structure become available. IED PINNACLE/MILLER: Lender Wants Case Converted to Chapter 7 ------------------------------------------------------------- SunBank, N.A., the lender of IED Pinnacle/Miller, LLC, asks the U.S. Bankruptcy Court District of Arizona to convert the Debtor's Chapter 11 case to a case under Chapter 7. The lender relates that on Aug. 2, 2007, it made a loan to the Debtor in the maximum principal amount of $27.6 million for the construction of a certain Pinnacle property. The lender adds that the Debtor's indebtedness secured by the Pinnacle Property far exceeds the Property's value. SunBank asserts conversion is warranted, citing that the Pinnacle Property cannot generate revenue and the Debtor cannot pay the expenses that are necessary to preserve and protect the Pinnacle Property, including insurance premium payments. About IED Pinnacle/Miller, LLC Las Vegas, Nevada-based IED Pinnacle/Miller, LLC, filed for Chapter 11 on May 22, 2009 (Bankr. Case No. 09-11222). IED is represented by attorneys at Eric Slocum Sparks PC. At the time of the filing, the Debtor disclosed assets of $30,000,000 against debts of $27,600,000. IMF INVESTMENT: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: IMF Investment, LLC PO Box 26583 Tampa, FL 33623 Bankruptcy Case No.: 09-13392 Chapter 11 Petition Date: June 24, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Sheila D. Norman, Esq. Norman and Bullington, P.A. 1905 West Kennedy Blvd Tampa, FL 33606 Tel: (813) 251-6666 Fax: (813) 254-0800 Email:�sheila@normanandbullington.com Total Assets: $2,504,400 Total Debts: $1,673,200 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/flmb09-13392.pdf The petition was signed by Syed Raza, manager and member of the Company. INC. CATHEXIS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Inc. Cathexis 10421 South Jordan Gateway, St. #550 South Jordan, UT 84095 Bankruptcy Case No.: 09-26549 Chapter 11 Petition Date: June 24, 2009 Court: United States Bankruptcy Court District of Utah (Salt Lake City) Debtor's Counsel: Steven C. Tycksen, Esq. Tycksen & Shattuck, LC Pioneer Business Park 12401 South 450 East, Unit E-1 Draper, UT 84020 Tel: (801) 748-4081 Fax: (801) 748-4087 Email: steve@tyshlaw.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/utb09-26549.pdf The petition was signed by Shane Glover, president of the Company. JOURNAL REGISTER: Court Defers Ruling on Chapter 11 Plan -------------------------------------------------------- Judge Allan Gropper of the U.S. Bankruptcy Court for the Southern District of New York said he will "reserve" his decision on the confirmation of Journal Register Company's Chapter 11 plan for next week. At the June 25 confirmation hearing, Journal Register CEO Robert Conway said that without a $6.6 million "gift" that secured lenders agreed to give trade partners, the Company won't be able to keep operating. The Plan was supported by holders of 96% of secured debt and 97% of the unsecured claims. As reported by the Troubled Company Reporter on May 1, JRC revised its plan to "placate unsecured creditors." While the original version of the Plan didn't offer any recovery to unsecured creditors who didn't provide goods and services, the revised plan offers unsecured creditors with some $27.1 million in claims a recovery of 9.2% of their claims. The revised plan would give all of the new stock and $225 million in new term loans to the pre-bankruptcy secured lenders owed $695 million. Existing stock would be canceled. The disclosure statement says the Plan represents a 42% recovery for the lenders. Overview of the Plan The overall purpose of the Plan is to provide for the restructuring of the Debtors liabilities in a manner designed to maximize recovery to stakeholders and to enhance the financial viability of the reorganized Debtors. Generally, the Plan provides for a balance sheet restructuring that exchanges the Debtors' current debt obligations under the existing credit agreement for new term loans and equity in reorganized Debtors. The reorganized Debtors' existing common stock has no value and will be cancelled. Upon emergence, all of reorganized Debtors' new common stock will be owned by the lenders, and will be subject to dilution only by: a) the options to purchase the new common stock that may be issued to the reorganized Debtors' post-Effective date directors, officers and employees; and b) the warrant shares issued upon exercise of the revolving facility warrants. Neither the new common stock nor the revolving facility warrants will be registered with the SEC or any state securities regulatory authority and will not trade on any public exchange. Other secured creditors will receive cash, their collateral or retain their liens, as applicable, in satisfaction of their Claims. Unsecured creditors will receive their pro rata share of the unsecured claim distribution on account of their allowed claims under the Plan. In addition to their distribution under the plan, holders of trade unsecured claims that (i) do not object to confirmation of the Plan and (ii) have granted the releases provided in the Plan will be eligible to receive payment of the remaining balance of the allowed amount of their claims in full in cash from an account established by the Lenders. The Debtors currently estimate that the allowed trade unsecured claims will total approximately $5.4 million. The resulting debt structure of the reorganized Debtors will substantially de-lever the company and provide liquidity needed to support its future operations. The Debtors believe that the Plan provides for appropriate treatment of all classes of claims and interests, taking into account the valuation of the company and the differing natures and priorities of the claims and interests. In connection with preparing the estimation of recoveries, these assumptions were made: -- The ongoing enterprise value of the reorganized Debtors for purposes of the Plan, based on the valuation prepared by Lazard Freres & Co., LLC, the Debtors' financial advisors, is approximately $300 million. -- The aggregate allowed amount of administrative expense claims unpaid as of the effective date will be approximately $4.2 million. -- The aggregate allowed amount of U.S. Trustee fees unpaid as of the effective date will be approximately $38,000. -- The aggregate Allowed amount of fee claims will be approximately $6.7 million. -- The aggregate Allowed amount of unpaid priority tax claims will not exceed approximately $21.6 million. -- The aggregate Allowed amount of priority non-tax claims unpaid as of the effective Date will be approximately $0.5 million -- The aggregate allowed amount of other secured claims will be approximately $2.6 million. -- The aggregate allowed amount of unsecured claims will be approximately $27.1 million, which is comprised of approximately $5.4 million of trade unsecured claims and $21.7 million of other unsecured claims. In addition, holders of secured lender claims, totaling $695 million, are expected to recover 42% and holders of unsecured creditors, totaling $27.1 million, are expected to recover 9.2% under the Plan. All holders of existing securities laws claims and common stock interest will not receive any distribution. A full-text copy of the Debtors' disclosure statement is available for free at: http://ResearchArchives.com/t/s?3c8d A full-text copy of the Debtors' amended joint Chapter 11 plan or reorganization is available for free at: http://ResearchArchives.com/t/s?3c8c About Journal Register Yardley, Pennsylvania-based Journal Register Company (PINKSHEETS: JRCO) -- http://www.JournalRegister.com-- owns 20 daily newspapers, more than 180 non-daily publications and operates over 200 individual Web sites that are affiliated with the Company's daily newspapers, non-daily publications and its network of employment Web sites. All of the company's operations are strategically clustered in six geographic areas: Greater Philadelphia; Michigan; Connecticut; Greater Cleveland; and the Capital-Saratoga and Mid-Hudson regions of New York. The company also owns JobsInTheUS, a network of 20 employment Web sites. The company, along with its affiliates, filed for Chapter 11 bankruptcy protection on February 21, 2009 (Bankr. S.D. N.Y. Case No. 09-10769). Marc Abrams, Esq., Rachel C. Strickland, Esq., Shaunna D. Jones, Esq., and Jennifer J. Hardy, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors as counsel. William M. Silverman, Esq., Scott L. Hazan, Esq., and Jeanette A. Barrow- Bosshart, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represent the Official Committee of Unsecured Creditors as counsel. Conway, Del Genio, Gries & Co., LLC, provides restructuring management services to the Debtors. Robert P. Conway is the company's chief restructuring officer. The company listed $100 million to $500 million in total assets and $500 million to $1 billion in total debts. KABUTO ARIZONA: U.S. Trustee Unable to Appoint Creditors Committee ------------------------------------------------------------------ Ilene J. Lashinsky, the U.S. Trustee for Region 14, tells the U.S. Bankruptcy Court for the District of Arizona that she will not be able to appoint an official committee of unsecured creditors in Kabuto Arizona Properties, LLC's Chapter 11 cases. Ms. Lashinsky adds that there has not been a creditor showing interest to be appointed in the committee, despite efforts to contact the 20 largest unsecured creditors. Litchfield Park, Arizona-based Kabuto Arizona Properties, LLC, filed for Chapter 11 on May 22, 2009 (Bankr. D. Ariz. Case No. 09- 11282). David W.M. Engelman, Esq., at Engelman Berger, P.C., represents the Debtor in its restructuring efforts. The Debtor has assets and debts both ranging from $50 million to $100 million. KIRBY PETERSON: Involuntary Chapter 11 Case Summary --------------------------------------------------- Alleged Debtor: Kirby D. Peterson aka Timberline Lodge, Inc. aka Timberline Construction aka Timberline Trips.com aka Timberline Lodge & Big Country Outfitters aka Timberline Homes aka Valley Springs Ranch HA PO Box 454 Daniel, WY 83115 Case Number: 09-20566 Debtor-affiliate subject to Chapter 11 petition: Entity Case No. ------ -------- Melanie M Peterson 09-20567 Involuntary Petition Date: June 17, 2009 Court: District of Wyoming (Cheyenne) Judge: Peter J. McNiff Petitioner's Counsel: Vance Countryman, Esq. Vance T. Countryman, P.C. 233 Garfield Lander, WY 82520 Tel: (307) 335-7075 Petitioner Nature of Claim Claim Amount ----------- --------------- ------------ Wyo. Country Builders, LLC contract $73,428 24 Valley Springs Dr. Lander, WY 82520 LAKE LAS VEGAS: Will Abandon Reflection Bay Golf ------------------------------------------------ Lake at Las Vegas Joint Venture, LLC, said in court documents that it will close Reflection Bay Golf Club and lay off that club's employees on June 30. Reflection Bay, designed by Jack Nicklaus, will revert to senior lender Carmel Land & Cattle Co., Patrick Fitzgerald posted on The Wall Street Journal's blog, Bankruptcy Beat. According to Bankruptcy Beat, Carmel Land will hold a foreclosure sale on the property July 9. Lake at Las Vegas, Bankruptcy Beat relates, said that it is abandoning Reflection Bay because the golf course is worth significantly less than the $29 million it owes to Carmel Land, which already took control of the Debtor's The Falls Golf Club. Headquartered in Henderson, Nevada, Lake at Las Vegas Joint Venture, LLC and 14 of its debtor-affiliates -- http://www.lakelasvegas.com/-- are owners and developers of 3,592-acre residential and resort destination Lake Las Vegas Resort in Las Vegas, Nevada. Centered around a 320-acre man-made lake, Lake Las Vegas contains more than 9,000 residential units, and also includes two luxury resort hotels (a Loews and a Ritz- Carlton), a casino, a specialty retail village shopping area, marinas, three signature golf courses and related clubhouses, and other real property. The Debtors filed separate petitions for Chapter 11 relief on July 17, 2008 (Bankr. D. Nev. Lead Case No. 08-17814). When Lake at Las Vegas Joint Venture, LLC, filed for protection from its creditors, it listed assets of $100 million to $500 million, and debts of $500 million to $1.0 billion. Courtney E. Pozmantier, Esq., Martin R. Barash, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, Jason D. Smith, Esq., at Santoro, Driggs, Walch, Kearney, Holley & Thompson, Jeanette E. McPherson, Esq., Lenard E. Schwartzer, Esq., at Schwartzer & McPherson Law Firm, represent the Debtors as counsel. Kaaran E. Thomas, Esq., Ryan J. Works, Esq., at McDonald Carano Wilson LLP, represent the Official Committee of Unsecured Creditors as counsel. LAKE AT LAS VEGAS: Use of Cash Collateral Extended until June 30 ---------------------------------------------------------------- Lake at Las Vegas Joint Venture, LLC, Northshore Golf Club, L.L.C., Carmel Land & Cattle Company and the agent to the prepetition lenders in respect of the operations and maintenance of the Reflection Bay GC, have agreed to further extend LLVJV's and Northshore's use of Carmel's and the prepetition agent's cash collateral until June 30, 2009. This is the 5th extension of the aforementioned Debtors' use of Carmel's and the p[repetition agent's cash collateral since the November 25, 2008 approval by the Court, on a final basis, of the Reflection Bay stipulation authorizing the use of cash collateral through January 5, 2009. Same was previously extended through and including February 4, 2008, February 23, 2009, April 10, 2009, and May 26, 2009, respectively. About Lake at Las Vegas Headquartered in Henderson, Nevada, Lake at Las Vegas Joint Venture, LLC and 14 of its debtor-affiliates -- http://www.lakelasvegas.com/-- are owners and developers of 3,592-acre residential and resort destination Lake Las Vegas Resort in Las Vegas, Nevada. Centered around a 320-acre man-made lake, Lake Las Vegas contains more than 9,000 residential units, and also includes two luxury resort hotels (a Loews and a Ritz- Carlton), a casino, a specialty retail village shopping area, marinas, three signature golf courses and related clubhouses, and other real property. The Debtors filed separate petitions for Chapter 11 relief on July 17, 2008 (Bankr. D. Nev. Lead Case No. 08-17814). When Lake at Las Vegas Joint Venture, LLC filed for protection from its creditors, it listed assets of $100 million to $500 million, and debts of $500 million to $1.0 billion. Courtney E. Pozmantier, Esq., Martin R. Barash, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, Jason D. Smith, Esq., at Santoro, Driggs, Walch, Kearney, Holley & Thompson, Jeanette E. McPherson, Esq., Lenard E. Schwartzer, Esq., at Schwartzer & McPherson Law Firm, represent the Debtors as counsel. Kaaran E. Thomas, Esq., and Ryan J. Works, Esq., at McDonald Carano Wilson LLP, represent the official committee of unsecured creditors as counsel. LAKE AT LAS VEGAS: Seeks to Extend Plan Filing Deadline to June 30 ------------------------------------------------------------------ Lake at Las Vegas Joint Venture, LLC, and its affiliated debtors ask the U.S. Bankruptcy Court for the District of Nevada to extend their exclusive periods to propose a plan and solicit acceptances thereof to June 30, 2009, and August 28, 2009, respectively. The Debtors relate that absent extraordinary circumstances, they expect this to be their final request for an extension of their plan filing exclusivity period. This is the Debtors' 5th motion for extension of their exclusive periods. The Debtors relate that they have achieved broad consensus regarding most aspects of a draft Chapter 11 plan of reorganization, but a "handful of material issues" still needs to be resolved before a fully consensual plan can be filed with the Court. The Debtors add that the requested extension is supported by the official committee of unsecured creditors, Credit Suisse, Cayman Islands Branch, as agent under the Debtors' primary DIP facility, the lenders under the Debtors' primary DIP Facility and Dorfinco Corporation, the lender under SouthShore Golf Club, L.L.C.'s separate DIP facility. A hearing on the motion is scheduled for June 29, 2009, at 10:00 a.m. About Lake at Las Vegas Headquartered in Henderson, Nevada, Lake at Las Vegas Joint Venture, LLC and 14 of its debtor-affiliates -- http://www.lakelasvegas.com/-- are owners and developers of 3,592-acre residential and resort destination Lake Las Vegas Resort in Las Vegas, Nevada. Centered around a 320-acre man-made lake, Lake Las Vegas contains more than 9,000 residential units, and also includes two luxury resort hotels (a Loews and a Ritz- Carlton), a casino, a specialty retail village shopping area, marinas, three signature golf courses and related clubhouses, and other real property. The Debtors filed separate petitions for Chapter 11 relief on July 17, 2008 (Bankr. D. Nev. Lead Case No. 08-17814). When Lake at Las Vegas Joint Venture, LLC filed for protection from its creditors, it listed assets of $100 million to $500 million, and debts of $500 million to $1.0 billion. Courtney E. Pozmantier, Esq., Martin R. Barash, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, Jason D. Smith, Esq., at Santoro, Driggs, Walch, Kearney, Holley & Thompson, Jeanette E. McPherson, Esq., Lenard E. Schwartzer, Esq., at Schwartzer & McPherson Law Firm, represent the Debtors as counsel. Kaaran E. Thomas, Esq., and Ryan J. Works, Esq., at McDonald Carano Wilson LLP, represent the official committee of unsecured creditors as counsel. LEAR CORP: May Seek Bankruptcy Protection By July 1 --------------------------------------------------- Lear Corp. may file for bankruptcy protection as early as June 29 and no later than July 1, Craig Trudell and Lauren Coleman at Bloomberg News report, citing a person familiar with the matter. Current lenders JPMorgan Chase & CO. will provide debtor-in- possession financing, the person said, according to the report. Bloomberg relates that Stroock & Stroock & Lavan LLP will represent the bondholders; and Simpson Tchacher & Bartlett LLP will represent creditors. Investment bank Miller Buckfire & Co. is giving Lear Corp. advice. As reported by the Troubled Company Reporter on June 3, 2009, Lear did not make the $38 million semi-annual interest payments due on June 1, 2009, with respect to its 8.50% senior notes due 2013, and 8.75% senior notes due 2016. The Company utilized the 30-day grace period applicable to the interest payments, while it continues discussions of a possible capital restructuring with its lenders and certain other parties, according to Matthew J. Simoncini, senior vice president and chief financial officer of the company. Under the applicable indentures relating to the senior notes, the use of the 30-day grace period does not constitute a default that permits acceleration of the senior notes or any other indebtedness, Mr. Simoncini said. On May 13, 2009, the Company entered into an amendment and waiver under its primary credit facility, wherein the waiver of covenant defaults under the primary credit facility would terminate if the Company were to make any payments with respect to the senior notes. A full-text copy of the second amendment and waiver is available for free at http://ResearchArchives.com/t/s?3a6e About Lear Corporation Based in Southfield, Michigan, Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear is traded on the New York Stock Exchange under the symbol [LEA]. * * * Lear had approximately $1.2 billion in cash and cash equivalents as of April 4, 2009, as compared to approximately $1.6 billion as of December 31, 2008. The decline reflects negative free cash flow in the first quarter, as well as the termination of an accounts receivable factoring facility in Europe. Lear had total assets of $6.4 billion, current liabilities of $4.4 billion and long-term liabilities of $2.0 billion, resulting in $41.4 million in stockholders' deficit at April 4, 2009. LENOX HILL: Moody's Affirms 'Ba1'; Changes Outlook to Negative -------------------------------------------------------------- Moody's Investors Service has affirmed the Ba1 rating assigned to Lenox Hill Hospital. The outlook has been revised to negative from stable and reflects the recent halt of its improving financial trend and expectations for an operating deficit for the year, contrary to Moody's 2008 expectations for break-even performance by 2010. The outlook revision applies to $130.4 million of rated debt. This review follows Moody's review of audited fiscal year 2008 financial statements and performance through April 30, 2009. Stellar transparency and information dissemination continues to be a very favorable factor. Legal Security: Gross revenue pledge of Lenox Hill Hospital. 1.25 rolling twelve-month debt service covenant test and 50 day cash on hand requirement. Moody's analysis has historically incorporated the consolidated financial performance of Lenox Hill Hospital and Manhattan Eye Ear and Throat Hospital who is not obligated on the debt but who is an important component of Lenox Hill Hospital's overall strategic plan for competing in the difficult New York City healthcare market. A full legal merger with MEETH in 2007 solidifies that relationship and its incorporation with LHH's mission and Moody's credit analysis. Interest Rate Derivatives: none Challenges * Combination of global economics and inability to achieve volume expectations for various reasons have more than offset the volume being generated from a new cardiology group relationship. Volume growth is critical to meeting break-even financial goals. * Increased operating deficit expected for FY2009 from 2008 deficit, which would reverse the multi-year financial improvement that had decreased annual operating losses and increased operating cashflow since FY2005. * Balance sheet has declined with market losses and recent performance; days cash on hand at 69 days as of April 30, 2009. Sale of unencumbered asset (122 East 76th Street) did not occur during 2008. * Little leverage with payers to get rates comparable to peer hospitals in the city who are larger or part of a network; rates remain below market despite high acuity and services provided at LHH. * Debt creep from leases over the last year to fund some capital projects. Capital spending has been held to modest levels for the last two years and capital spending will continue to be monitored in light of of year to date performance. * Long and short term investment pools remain in alternative investments, with lock-up periods averaging 90 days. * Need for new types of physician relationships, including employment, changes the dynamic of the voluntary medical staff and management will need to integrate these new relationships without disrupting the existing staff. * Stand-alone facility in a consolidated market of much larger providers, results in decreased leverage with payers and emphasizes the competitive challenge to grow volume. Strengths * Large tertiary provider ($651 million revenue base) located on the affluent Upper East Side of Manhattan that has carved a niche for itself by remaining an independent organization within a consolidating market and concentrating on its designated centers of excellence in orthopedics, cardiovascular surgery, maternal child health and surgical services. High Medicare case mix index of 1.87 year-to-date through April 30, 2009). * LHH has differentiated itself from its local competitors by being a teaching hospital without the added expense inherent in academic medical centers affiliated with medical schools. Its low cost structure, favorable payer mix and low length of stay are also key strengths. * Improved contracting terms received from its largest payers to generate significantly improved revenue over immediate term. * New volume being generated as expected from new (2008) relationship with large cardiology group. * Debt is all fixed rate; no derivatives or swaps outstanding. * Portfolio allocation produced better than market returns during 2008 and through first four months of 2009. Recent Developments/Results Year-to-date performance is particularly disappointing because much progress was made over a multi-year period to stabilize financial performance at LHH, improve its balance sheet and reduce its annual operating losses. The operating deficit in FY2008 was reduced to $11.1 million from $16.0 million in 2007 and marked the fourth year of operating improvement for the hospital, which seemed to position LHH to meet its break-even performance from operations goal in FY2010. Through four months of 2009, however, LHH is posting an $8.2 million operating loss, which compares unfavorably to the $5 million operating loss through four months 2008. Expectations are for a year ending deficit of $20 million which includes the residual impact of $41 million of corrective action plan initiatives that includes reduction in force and improved rates. Recent financial performance is largely tied to volume that has not met budgeted goals and is particularly impacted by the unanticipated loss of admissions from three key admitters who have left the staff for differing reasons. Reaching break-even was predicated on improved rates received from payers and volume increases, and so the full benefit of improved rates has not been realized because of the volume losses. Discussions continue with several multi-specialty groups for varying types of affiliation relationships to solidify referral patterns, since LHH lacks the primary care clinics and physician relationships enjoyed by its competitor academic medical centers. Currently, LHH's medical staff is mostly voluntary with many physicians not participating in managed care networks or even accepting Medicare. To date, management has entered into an arrangement with Cardiovascular Associates of NY, a 16-physician group of cardiologists, located in Queens, who is on target to bring significant incremental admissions to LHH. Payer contracts have been renegotiated and are now based on case rates, with decreased denials expected and incremental revenue expected if volume meets targeted levels. After improving in 2008 with the monetization of some non-core assets and receipt of NY State HEAL monies, LHH's cash increased to $141 million from $130.7 million but days of cash on hand remained stable around 82 days. Cash-to-debt improved to an historical high 79.3% with the retirement of some debt with HEAL funds. Some additional HEAL monies may be available if LHH reduces its bed size. However, through April 30, 2009, cash has declined to $122.8 million (69.2 days). A three-year capital budget is being evaluated (the capital spending ratio has been less than 1.0 times for the last three years) but capital spending cannot be deferred much longer. Management has used $20 million of capital leases in the last six months to fund its short-term needs, and expects cash to increase by $4 million shortly when LHH is reimbursed for monies already spent. Cash continues to be invested in alternative investments with lock up periods that range from 30-90 days. Moody's excludes approximately $20 million from LHH's cash due management's distinction of these funds as long term endowment funds which are not readily available. Portfolio returns have outperformed the market in 2008 and in the current interim period. However, Moody's believe the investment risk of its liquidity position due to an above average allocation in alternative investments in its overall portfolio needs to be carefully monitored and is overly aggressive for a below investment grade credits with modest liquid assets. Outlook The negative outlook is based on Moody's belief that the recent downturn in Lenox Hill's operating performance and balance sheet metrics pressure the current rating unless plans to stabilize operations do not generate tangible results over the immediate term. What could change the rating -- UP Reduction of operating losses and sustainable results from the corrective action plan without one time benefits, demonstrated benefits of new physician relationships, increase in cash What could change the rating -- DOWN Increased operating losses, decline in existing cash, unfavorable changes in operating indicators or market position Key Indicators * Assumptions & Adjustments: -- Based on financial statements for LHH and Subsidiaries -- First number reflects audit year ended December 31, 2007 -- Second number reflects audit year ended December 31, 2008 -- Investment returns smoothed at 6% unless otherwise noted * Admissions: 30,164 admissions; 29,014 admissions * Total operating revenue: $583.1 million; $651.3 million * Net revenue available for debt service: $46.7 million; $62.0 million * Total debt outstanding: $184.4 million; $178 million * Operating margin: (2.8%); (1.7%) * Operating cashflow margin: 5.6%; 5.5% * Cash-to-debt: 70.8%; 79.3% * Debt-to-cashflow: 5.3 times; 3.38 times * Days cash on hand: 84.9 days; 82.5 days * Maximum annual debt service: $18.653 million (includes lines of credit and mortgage) * MADS coverage with actual investment income as reported: 2.4 times; 2.0 times * MADS coverage with investment income normalized at 6%: 2.51 times; 3.33 times Rated Debt: * Series 2001, $130.4 million The last rating action with respect to Lenox Hill Hospital was on August 14, 2008, when its rating was upgraded to Ba1 with a stable outlook. LYNDON CREAGER: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------- Joint Debtors: Lyndon F. Creager, Jr. Linda L. Creager 11916 Shadow Run Blvd. Riverview, FL 33569 Bankruptcy Case No.: 09-13423 Chapter 11 Petition Date: June 24, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtors' Counsel: Pierce J. Guard Jr., Esq. 4200 S Florida Avenue Lakeland, FL 33813 Tel: (863) 619-7331 Fax: (863) 619-7992 Email:�jguardjr@aol.com Total Assets: $3,174,468 Total Debts: $2,719,066 A full-text copy of the Debtors' petition, including a list of their 10 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flmb09-13423.pdf The petition was signed by the Joint Debtors. MAGNACHIP SEMICONDUCTOR: U.S. Trustee Appoints Creditors Committee ------------------------------------------------------------------ Pursuant to Section 1102(a)(1) of the Bankruptcy Code, Roberta A. DeAngelis Acting United States Trustee, Region 3, appoints these persons to the Committee of Unsecured Creditors in connection with the Chapter 11 cases of MagnaChip Semiconductor Finance Company and its affiliates: 1. Avenue Special Situations Fund V, L.P., c/o Avenue Capital Management II, L.P., Attn: Randal Klein, 535 Madison Avenue, 14th Floor, New York, NY 10022, Phone: 212-850-7553, Fax: 212-486-1891 2. Bank of New York Mellon, Indenture Trustee, Attn: David M. Kerr, 101 Barclay Street, New York, NY 10286, Phone: 212-815-5650, Fax: 732-667-9322 3. Law Debenture Corporation, Indenture Trustee, Attn: Robert Bice, 400 Madison Avenue, 4th Floor, New York, NY 10017, Phone: 646-747-1254, Fax: 212-750-1361 About MagnaChip Semiconductor MagnaChip Semiconductor -- http://www.magnachip.com/-- designs, develops, and manufactures mixed-signal and digital multimedia semiconductors addressing the convergence of consumer electronics and communications devices. MagnaChip also provides wafer foundry services utilizing CMOS high voltage, embedded memory, and analog and power process technologies for the manufacture of IC's for customer-owned designs. As of Dec. 31, 2009, MagnaChip had assets of $425 million against debts of $1.04 billion as of Dec. 31, 2008. MagnaChip Semiconductor LLC and its affiliates filed for Chapter 11 on June 12, 2009 (Bankr. D. Del. Case NO. 09-12009). Judge Peter J. Walsh handles the case. James E. O'Neill, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, are bankruptcy counsel to the Debtors. Omni Management Group LLC is the Debtors' claims agent. MAHALO ENERGY: Can Hire Kline Kline as General Bankruptcy Counsel ----------------------------------------------------------------- The Hon. Terrence L. Michael of the U.S. Bankruptcy Court for the Eastern District of Oklahoma authorized Mahalo Energy (USA) Inc. to employ Kline, Kline, Elliott & Bryant, P.C., as general bankruptcy counsel. The firm is expected to assist the Debtors in connection with exercising its rights and performing its duties as debtor-in- possession. The firm will also perform all legal services necessary in the Chapter 11 case. G. David Bryant, an employee at the firm, told the Court that the hourly rates of the firm's personnel range from $70 to $290. Mr. Bryant assured the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Bryant can be reached at: Kline, Kline, Elliott & Bryant, P.C. 720 N.E. 63rd Street Oklahoma City, OK 73105 Tel: (405) 848-4448 About Mahalo Energy (USA) Inc. Mahalo Energy (USA) Inc. has 300 producing wells in Oklahoma and 60,000 acres of gas-bearing shale formations. Tulsa, Oklahoma- based Mahalo Energy filed for Chapter 11 on May 21, 2009 (Bankr. E.D. Okla. Case No. 09-80795). Stephen W. Elliott, Esq., at Kline, Kline, Elliot & Bryant, PC, represents the Debtor in its restructuring efforts. The Debtor listed $10 million to $50 million in assets and $100 million to $500 million in debts. MAHALO ENERGY: U.S. Trustee Appoints 6-Member Creditors Committee ----------------------------------------------------------------- Richard A. Wieland, the U.S. Trustee for Region 20, appointed six creditors to serve on the official committee of unsecured creditors in Mahalo Energy (USA) Inc.'s Chapter 11 cases: The Committee members are: 1. Rose Resources Oil & Gas, Inc. Attn: Timothy J. Stanley, president P. O. Box 330258 Tulsa, OK 74133 Tel: (918) 289-0460 Fax: (918) 289-0463 2. Mustang Fuel Corporation Attn: Kurt Rupert, attorney 201 Robert S. Kerr Ave., Ste. 1600 Oklahoma City, OK 73102 Tel: (405) 235-7000 Fax: (405) 996-3403 3. West Rock Energy Consultants Ltd. Attn: Ryan Ganske, vice president 910 7th Ave. SW, Ste. 1110 Calgary, AB Canada T2P 3N8 Tel: (403) 969-9900 Fax: (403) 262-9576 4. Scientific Drilling International, Inc. Attn: Joshua D. Wells, attorney Peggy Miller 10205 N. Pennsylvania Oklahoma City, OK 73120 Tel: (405) 235-1560 Fax: (405) 239-2112 5. Baker Hughes Oilfield Operations, Inc. Attn: Christopher J. Ryan, manager of collections 2929 Allen Parkway, Ste. 2100 Houston, TX 77019 Tel: (713) 439-8771 Fax: (713) 439-8778 6. River Valley Oilfield Enterprises Attn: Matt Place/Jeff Cooper, partners P. O. Box 91 Poteau, OK 74953 Tel: (918) 658-2424 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Mahalo Energy (USA) Inc. Mahalo Energy (USA) Inc. has 300 producing wells in Oklahoma and 60,000 acres of gas-bearing shale formations. Tulsa, Oklahoma- based Mahalo Energy filed for Chapter 11 on May 21, 2009 (Bankr. E.D. Okla. Case No. 09-80795). Stephen W. Elliott, Esq., at Kline, Kline, Elliot & Bryant, PC, represents the Debtor in its restructuring efforts. The Debtor listed $10 million to $50 million in assets and $100 million to $500 million in debts. MARK IV: Court Sets Disclosure Statement Hearing on July 28 ----------------------------------------------------------- The U.S.Bankruptcy Court for the Southern District of New York has set a hearing on July 28, 2009, at 2:00 p.m. (Eastern time) to consider approval of the proposed disclosure statement with respect to the Joint Plan of Reorganization of Mark IV Industries, Inc., and its affiliated debtors, dated June 17, 2009. Responses, objection, and proposed modification, if any , to the Disclosure Statement must be filed with the Court, so as to be actually received on or before 4:00 p.m. (Eastern Time) on July 21, 2009. As reported in the Troubled Company Reporter on June 18, 2009, the Debtors submitted to the Court a proposed Plan of Reorganization and accompanying Disclosure Statement on June 17, 2009. Mark IV seeks to emerge from chapter 11 as a privately held company. Pursuant to the Plan, the lenders under Mark IV's prepetition $865 million first lien credit facility would receive 92% of the equity in the reorganized Mark IV. General unsecured creditors would get the remaining 8% of the new common stock. The Plan classifies all claims of Mark IV's second lien lenders as general unsecured claims. Holders of equity interests in Mark IV are out of the money. According to the Plan, the new common stock issued to the lenders and the unsecured creditors would be subject to dilution from the exercise of options and grants of restricted stock to employees pursuant to a new Management Equity Incentive Plan. The Plan documents do not indicate the percentage of equity that may be issued pursuant to the proposed incentive plan. A full-text copy of Mark IV's plan of reorganization filed June 17, 2009, is available at no charge at: http://bankrupt.com/misc/MarIVPlan.PDF A full-text copy of Mark IV's disclosure statement filed June 17, 2009, is available at no charge at: http://bankrupt.com/misc/MarIVDS.PDF About Mark IV Industries Headquartered in Amherst, New York, Mark IV Industries, Inc. -- http://www.mark-iv.com/-- is a privately held leading global diversified manufacturer of highly engineered systems and components for vehicles, transportation infrastructure and equipment. The company's systems and components are designed to promote a cleaner and safer environment and include power transmission, air admission and cooling, advanced radio frequency, and information display, technologies. The company has a geographically diverse innovation, marketing and manufacturing footprint. Mark IV Industries, Inc. and 17 affiliates filed for chapter 11 on April 30, 209 (Bankr. S.D.N.Y. Lead Case No. 09-12795). Judge Stuart M. Bernstein presides over the case. Jay M. Goffman, Esq., J. Eric Ivester, Esq., and Matthew M. Murphy, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as the Debtors' counsel. David Orlofsky, Managing Director; Tadd Crane, Director; Jose Alvarez; and Jeffrey Genova at Zolfo Cooper serve as Restructuring Advisors. David Hilty and Saul Burian, Managing Directors at Houlihan Lokey, serve as Investment Bankers and Financial Advisors. Sitrick and Company acts as Public Relations Advisor. Steven M. Fuhrman, Esq., at Simpson Thacher & Bartlett LLP, represents JPMorgan Chase Bank, N.A., the First Lien Agent and the DIP Agent. Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Creditors' Committee. The Debtors disclosed $100 million to $500 million in estimated assets and more than $1 billion in debts when they filed for bankruptcy. MAXXAM INC: Sells Stake in RMCAL Joint Venture for Nominal Amount ----------------------------------------------------------------- M. Emily Madison, MAXXAM Inc.'s Vice President for Finance, relates that in 2004, a subsidiary of the Company and a third party real estate development company formed a joint venture, RMCAL Development LP, to develop a residential parcel in the Company's real estate development in Rancho Mirage, California. In connection with the formation of RMCAL, the Company sold a 50% interest in the parcel and contributed the remainder of the parcel to the joint venture in return for a 50% non-controlling interest in RMCAL. The Company accounts for its investment in RMCAL under the equity method of accounting. RMCAL's development loan matured in March 2009 and RMCAL's managing partner, which had certain guaranty obligations with respect to the development loan, was engaged in discussions with the lender to renew the facility. During the second quarter of 2009, it became evident the venture would require substantial additional capital to continue its business and in June 2009, the Company agreed to sell its entire interest in RMCAL for a nominal amount, in accordance with a provision in the limited partnership agreement. Once the transaction closes, the Company will no longer have any ownership interest in the venture. As a result of the developments, the Company will record a $4.2 million impairment charge in the second quarter of 2009 related to this investment. Going Concern Doubt As reported by the Troubled Company Reporter on April 7, 2009, Grant Thornton LLP said the uncertainty surrounding the real estate industry and the ultimate outcome of proceedings involving MAXXAM Inc.'s former unit, Pacific Lumber Company, and their effect on the Company, as well as the Company's operating losses raise substantial doubt about the ability of the Company to continue as a going concern. A full-text copy of MAXXAM's quarterly report is available at no charge at http://ResearchArchives.com/t/s?3cd4 About MAXXAM Inc. Headquartered in Houston, MAXXAM Inc. is a publicly-traded company, with business interests in forest products, real estate investment and development and racing operations. MERCER INT'L: Refinancing Risks Cue Moody's to Junk Ratings ----------------------------------------------------------- Moody's Investors Service downgraded the credit ratings of the Restricted Group of Mercer International Inc., while concurrently placing the ratings on review for possible further downgrade. The Corporate Family Rating and Probability of Default Rating were lowered to Caa1 from B2, the rating on the senior unsecured notes was lowered to Caa2 from B2 and the Speculative Grade Liquidity Rating was lowered to SGL-4 from SGL-3. These rating actions incorporate the refinancing risk associated with upcoming debt maturities and the considerable deterioration in Mercer's revenue, margins and liquidity profile. A steep decline in the selling price of Northern Bleached Softwood Kraft (NBSK) pulp, compounded by the recent deterioration in the US dollar against both the euro and the Canadian dollar, has led to net price realizations that Moody's views as unsustainable. While global pulp demand and pricing appear to have stabilized in recent weeks (at depressed levels), Moody's does not project a material rebound in NBSK selling prices until supply is further curtailed. Meanwhile, the alternative fuels tax credit in the U.S. -- and the recently announced program in Canada -- may be incentivizing otherwise unprofitable kraft pulp producers to continue production. Hence, Moody's believes Mercer's operating results will continue to be challenged over the intermediate term. The downgrade in the liquidity rating to SGL-4 reflects the near- term maturity of both of Mercer's revolvers (due in February and May 2010), a modest cash balance (EUR28 million at March 31, 2009) and Moody's expectation of negative free cash flow over the next four quarters, despite likely working capital and input cost improvements. Additionally, refinancing risk on the US$67 million senior subordinated convertible notes due October 15, 2010 (unrated by Moody's) is becoming increasingly higher as this maturity date approaches. The review for possible downgrade will focus on Mercer's medium- term liquidity and the viability of its capital structure, including the potential impact of the Canadian Pulp and Paper Green Transformation Program, whether financing is obtained for Celgar's green energy project, and Mercer's refinancing plan for the upcoming debt maturities of its Celgar and Rosenthal revolving credit facilities and the senior subordinated convertible notes. Moody's downgraded these ratings: -- $310 million 9.25% senior unsecured notes due February 2013, to Caa2 (LGD4, 58%) from B2 (LGD4, 51%) -- Speculative Grade Liquidity Rating, to SGL-4 from SGL-3 -- Corporate Family Rating, to Caa1 from B2 -- Probability of Default Rating, to Caa1 from B2 The last rating action occurred on August 21, 2006 when Moody's affirmed Mercer's existing ratings. Mercer International Inc., a Washington-based corporation with corporate offices in Vancouver, British Columbia, is a global producer of NBSK pulp. Moody's ratings cover the Restricted Group, which includes the Celgar and Rosenthal pulp mills but excludes the Stendal mill. Annual production capacity of the Restricted Group is approximately 820,000 ADMTs (air-dried metric tones) and revenue for the twelve months ended March 31, 2009, was EUR391 million. METALDYNE CORP: Receives Final Approval to Borrow $20 Million ------------------------------------------------------------- According to Bill Rochelle at Bloomberg, the U.S. Bankruptcy Court for the Southern District of New York, in Manhattan, granted Metaldyne Corp. final approval to borrow $19.9 million for 60 days pending the sale of its businesses. The report relates that the bankruptcy judge wrote a 12-page opinion overruling objections from the official committee of unsecured creditors formed in the chapter 11 case. The Creditors Committee argued that the case and the financing only benefited the secured lenders. Metaldyne is seeking approval of procedures to govern the sale of its business to Brussels-based RHJ International, the lead bidder. The offer, valued at $100 million, includes $25 million cash, a $50 million note, the rollover of $20 million note owed by a German subsidiary and debt assumption. RHJ is the majority owner of Metaldyne's Japan-based parent Asahi Tec Corp. Metaldyne is also seeking approval of auction procedures under which Carlyle group will be lead bidder for some of its chassis business in the U.S., Mexico and Spain. About Metaldyne Corporation Headquartered in Plymouth, Michigan, Metaldyne Corporation -- http://www.metaldyne.com/-- is a wholly owned subsidiary of Asahi Tec, a Shizuoka, Japan-based 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 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. 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). The filing did not include the company's non-U.S. entities or operations. Richard H. Engman, Esq., at Jones Day represents the Debtors in their restructuring efforts. Judy A. O'Neill, Esq., at Foley & Lardner LLP serves as conflicts counsel; Lazard Freres & Co. LLC and AlixPartners LLP as financial advisors; and BMC Group Inc. as claims agent. For the fiscal year ended March 29, 2009, the company recorded annual revenues of approximately US$1.32 billion. As of March 29, 2009, utilizing book values, the company had assets of approximately US$977 million and liabilities of US$927 million. MIDWAY GAMES: Threshold Sues to Block Mortal Kombat Sale -------------------------------------------------------- According to Michael Bathon at Bloomberg News, Threshold Entertainment Inc. sued Midway Games Inc. before the U.S. Bankruptcy Court for the District of Delaware to stop a Bankruptcy Court-sanctioned sale of the Mortal Kombat franchise. Threshold says that it has an exclusive license to produce derivative works such as films and television shows based on the video game. As reported by the Troubled Company Reporter on May 25, Midway Games signed a deal to sell its U.S. assets to Warner Bros. Entertainment Inc., a subsidiary of Time Warner, Inc. (NYSE:TWX) for $33 million, subject to higher and better offers at an auction. Pursuant to the asset purchase agreement signed by the parties, Warner Bros. Entertainment would acquire substantially all of the Company's U.S. assets including its Mortal Kombat franchise and its development studios in Chicago and Seattle for a purchase price of $33,000,000, subject to adjustment as of the closing for changes in inventory, plus the agreed value of the Company's U.S. account receivables. The agreement does not include the Company's development studio in San Diego and the TNA franchise games, nor does it include the Company's development studio in Newcastle which had developed the Company's recently released Wheelman game. The salient terms of the APA reached by Midway and Warner Bros. are: -- Warner Bros. will pay $33 million cash at closing, subject to adjustments based on inventory valuation, and exclusive of Warner's payment of cure amounts and the accounts receivable amount. -- Assets to be sold include (i) all previously released titles, all video games based on the Mortal Kombat universe and This is Vegas universe, all Game Party video games, all Touchmaster video games, all Area 51 video games, all Spy unter video games, all Wheelman video games, and all of Midway's arcade and coin-operated games including, but not limited to, Gauntlet, Rampage, Joust, and Rampart, and all "back catalog" and "classic intellectual property" library video games (ii) all assigned contracts, including all leasehold interests in and to the real property located at the acquired studios in: (a) 3131 Elliot Avenue, Seattle, Washington, USA 98121; (b) 2633 W. Roscoe St., Chicago, Illinois, USA 60618; and (c) 2727 W. Roscoe St., Chicago, Illinois, USA 60618 (iii) any rights, claims or causes of action of Midway against Warner Bros. relating to the assets, properties, business or operations of Midway arising out of events occurring on or prior to the closing date, including, but not limited to, causes of action under Chapter 5 of the Bankruptcy Code. -- Excluded assets include: * all shares of capital stock, limited liability company membership interests and other equity interests, of Midway and all its subsidiaries; * assets of any foreign subsidiary, unless otherwise specified; * all cash and cash equivalents of Midway; * all causes of actions of Midway against third parties other than Warner Bros. relating to assets of Midway arising out of events occurring on or prior to the closing date, including causes of action in connection with the complaint brought by the Creditors Committee against National Amusements, Inc., et al. * all TNA Wrestling, NBA/NHL/MLB, Lord of the Rings, and Mechanic Master video games. * the Wheelman Distribution Agreement between Ubisoft Entertainment and Midway Home Entertainment Inc.; platform agreements; an agreement of Purchase and sale dated July 7, 2008, between Midway, as seller, and Lexington Homes LLC, as buyer, relating to property located at 2633 W. Roscoe St., Chicago, Illinois, USA 60618, and a related redevelopment agreement between the City of Chicago and Midway; and (i) any contracts that relate to properties located at: (i) the New Castle Studio, (ii) Heimaranstrasse 35, Munich, Germany 80339; (iii) 13 Rue Vivienne, Paris, France 75002; (iv) 43 Worship Street, London, EC21 2DX United Kingdom; and (v) any other property located outside the United States. -- Warner Bros. will hire certain of Midway's employees, including key designers and employees on design teams for certain of Midway's games that are included in the sale. -- The cure amounts for certain of Midway's games are: Game Cure Amount ---- ----------- Happy Feet $359,218 Ant Bully $166,126 Mortal Kombat vs. DC Universe $7,342,476 -- Closing conditions include: * With respect to the Unreal Engine 3 License Agreement dated January 14, 2005, between Midway Home Entertainment Inc. and Epic Games, inc., Warner Bros. will receive all Midway's rights and benefits under the Unreal Engine License. * Sony Computer Entertainment America Inc. and Sony Computer Entertainment Europe Ltd., (with respect to the PlayStation platforms) and Microsoft Licensing GP (with respect to the Xbox platforms) will each approve Warner Bros. as the "publisher of record" with respect to all the games included in the APA. -- Either party may terminate the agreement if closing has not occurred by July 15, 2009. Warner Bros. has claims against Midway pursuant to prepetition agreements pertaining to the games Mortal Kombat v. DC Universe, Happy Feet and Ant Bully. Midway owes Warner Bros. an aggregate of $7,867,820 on a prepetition basis in connection with these games. The claim will be waived Copies of the Asset Purchase Agreement and related exhibits are available at; http://bankrupt.com/misc/Midway_WarnerExhB.1.pdf http://bankrupt.com/misc/Midway_WarnerExhB.2.pdf http://bankrupt.com/misc/Midway_WarnerExhB.3.pdf About Midway Games Midway Games Inc. (OTC Pink Sheets: MWYGQ), headquartered in Chicago, Illinois, with offices throughout the world, is a leading developer and publisher of interactive entertainment software for major videogame systems and personal computers. More information about Midway and its products can be found at http://www.midway.com/ The Company and nine of its affiliates filed for Chapter 11 protection on February 12, 2009 (Bankr. D. Del. Lead Case No. 09- 10465). David W. Carickhoff, Jr., Esq., Michael David Debaecke, Esq., and Victoria A. Guilfoyle, Esq., at Blank Rome LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard as their investment banker, Dewey & LeBoeuf LLP as special counsel, and Epiq Bankruptcy Solutions LLC as claims agent. MILACRON INC: To Pursue Avenue Capital Deal; No Rival Bids Filed ---------------------------------------------------------------- Milacron Inc. reports that, as of the June 24 bid deadline established by the Bankruptcy Court in its Chapter 11 proceeding, it had not received an offer for its assets higher than the one made in the definitive agreement reached last month with a group of existing investors. At a hearing later today, June 26, Milacron will ask the Court to approve the sale of its assets pursuant to the definitive agreement. If approval is granted, the company would expect to complete the sale within the next month. As reported by the Troubled Company Reporter on May 7, 2009, Milacron signed a definitive agreement to sell substantially all of its assets to a company formed by certain affiliates of Avenue Capital Group, certain funds or accounts managed by DDJ Capital Management LLC and certain other entities that together hold approximately 93% of the company's 11-1/2% Senior Secured Notes for total consideration estimated at approximately $175 million. The definitive agreement was subject to higher offers from other parties, which were solicited in accordance with Court-approved bid procedures. Although substantial interest was expressed, it did not result in the submission of a higher offer by the bid deadline. About Milacron Inc. Headquartered in Batavia, Ohio, Milacron Inc. (Pink Sheets: MZIAQ) supplies plastics-processing technologies and industrial fluids, with major manufacturing facilities in North America, Europe and Asia. First incorporated in 1884, Milacron also manufactures synthetic water-based industrial fluids used in metalworking applications. The Company and six of its affiliates filed for protection on March 10, 2009 (Bankr. S.D. Ohio Lead Case No. 09-11235). On the same day, the Company filed an ancillary proceeding for reorganization of its Canadian subsidiary under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. The petitions include the Company and its U.S. and Canadian subsidiaries and its non-operating Dutch holding company subsidiary only, and do not include any of the Company's operating subsidiaries outside the U.S. and Canada. Kim Martin Lewis, Esq., Tim J. Robinson, Esq., and Patrick D. Burns, Esq., at Dinsmore & Shohl LLP, represent the Debtors in their restructuring efforts. Conway, Del Genio, Gries Co., LLC, is the Debtors' financial advisor. Rothschild Inc. is the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC is the noticing, balloting and disbursing agent for the Debtors. Paul, Hastings, Janofsky & Walker LLP, represents DIP Lender General Electric Capital Corp. Taft Stettinius & Hollister LLP is counsel for the Official Committee of Unsecured Creditors. At April 30, 2009, the Company had $527,497,000 in total assets and $809,732,000 in total liabilities. MODERN CONTINENTAL: Files Liquidating Plan; Jalbert as Trustee -------------------------------------------------------------- Modern Continental Construction Co., Inc., has filed with the U.S. Bankruptcy Court for the District of Massachusetts a proposed bankruptcy exit plan that provides for the liquidation of the company's remaining assets in an orderly manner. The Debtor will use the liquidation proceeds to pay creditors in this order: 1. holders of secured claims against a particular asset sold, 2. holders of priority claims, 3. holders of general unsecured claims Under the Plan, Craig Jalbert will be appointed as Liquidating Supervisor to oversee the liquidation upon confirmation of the Plan. Modern Continental Construction Co. -- http://www.moderncontinental.com/-- of Cambridge, Massachusetts was established in 1967 when its founders, Lelio "Les" Marino and Kenneth Anderson, earned a small contract for the construction of a sidewalk in the town of Peabody. Since then, the company has blossomed into a multi-faceted organization which is highly respected throughout the construction industry, and is ranked among the top contractors in the country. The company filed for Chapter protection on June 23, 2008 (Bankr. D. Mass. Case No. 08-14558). Harold B. Murphy, Esq., at Hanify & King P.C., represents the Debtor in its restructuring efforts. An Official Committee of Unsecured Creditors has been appointed in the Debtor's bankruptcy case. When the debtor filed for protection from its creditors, it listed assets of $100 million to $500 million, and debts of $500 million to $1 billion. MOOG INC: S&P Downgrades Corporate Credit Rating to 'BB' -------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its ratings, including the corporate credit rating, on East Aurora, New York-based Moog Inc. to 'BB' from 'BB+'. S&P also removed the ratings from CreditWatch, where S&P placed them with negative implications on April 10, 2009. The outlook is stable. The downgrade reflects S&P's expectations of deteriorating credit protection measures in 2009, due to the effect of the global recession on key market segments, especially industrial and commercial aerospace, as well as higher debt levels to fund acquisitions. Demand has deteriorated significantly for most industrial markets, while the company reduced sales expectations for the commercial aerospace market because of a slower production ramp-up on Boeing Co.'s new 787 jetliner and expected lower production of other Boeing and Airbus SAS jetliners and business jets. Along with the earnings decline, debt has increased as a result of several small to midsize acquisitions, resulting in the deterioration of credit protection measures. The 'BB' corporate credit rating reflects Moog's participation in the cyclical and competitive commercial aerospace and industrial markets, the likelihood of the company using debt to finance acquisitions, and associated integration risk. The ratings benefit somewhat from leading positions in niche markets. S&P expects credit protection measures to deteriorate in 2009, but be appropriate for the lower rating level. Stabilization in key markets over the next year and fewer acquisitions could result in some modest improvement in 2010. "We could revise the outlook to negative if Moog increases leverage significantly to fund an acquisition or greater-than- expected weakness in the industrial and commercial aerospace markets results in sustained debt to EBITDA above 4x," said Standard & Poor's credit analyst Christopher DeNicolo. "It is unlikely that S&P would revise the outlook to positive in the near term, following the recent downgrade and challenging conditions in key markets," he continued. MXENERGY INC: Societe Generale Directs Exchange Offer for Notes --------------------------------------------------------------- MXenergy Inc. and MXenergy Electric Inc., subsidiaries of MXenergy Holdings Inc., entered into a Fifth Amendment, dated and effective as of June 15, 2009, to the Third Amended and Restated Credit Agreement dated as of November 17, 2008 with the Company and certain of its subsidiaries, as guarantors, the lenders party thereto and Societe Generale, as administrative agent. The Company entered a Fourth Amendment and Waiver, dated and effective as of June 8, 2009, to Credit Agreement. Pursuant to the terms of the Credit Agreement, the Company was required to achieve specified milestones related to the consummation of a Liquidity Event. Pursuant to the Credit Agreement Amendment, these milestones were revised by amending and restating in its entirety the definition of "Trigger Event" contained therein, which now requires: (1) the Company to initiate the commencement of an exchange offer (or similar offer) to holders of the Senior Notes, or to enter into one or more exchange agreements with holders of at least 70% of the outstanding principal amount of the Senior Notes, in each case on or before June 26, 2009 and on terms necessary to meet the conditions specified in the financing proposal the lenders have received from the borrowers; (2) the Company to deliver (in the case of a Senior Notes Exchange Offer) evidence that the holders of at least 70% of the outstanding principal amount of the Senior Notes have agreed to accept the Senior Notes Exchange Offer on or before June 26, 2009; (3) the Company to deliver to the administrative agent and the lenders on or before July 8, 2009, a letter that is addressed to the administrative agent and the lenders and from a finance party acceptable to the administrative agent in its sole discretion confirming to the effect that such finance party actively continues to conduct due diligence and negotiate documentation in good faith with the borrowers on a refinancing of all of the obligations under the Credit Agreement and anticipates closing the refinancing on or before July 31, 2009; (4) that the Senior Notes Exchange Offer shall not have (i) expired on or before, or be extended to expire after, July 27, 2009 without holders of a sufficient amount of the Senior Notes to make the Senior Notes Exchange Offer effective having accepted the Senior Notes Offer, or (ii) terminated on or before July 27, 2009, and that any Senior Notes Exchange Agreement shall not have terminated or expired or the exchange thereunder not be consummated on or before July 27, 2009; (5) the Company to deliver to the administrative agent and the lenders on or before July 17, 2009 a commitment letter providing for the refinancing in full of the obligations under the Credit Agreement on or before July 31, 2009; and (6) that neither the Company nor the borrowers shall have received a notice of or have become aware of a termination or abandonment of a refinance party, or of a significant change in structure that could reasonably be expected to delay the closing to after July 31, 2009 of, the refinancing in full of the obligations under the Credit Agreement contemplated as of the effective date of the Credit Agreement Amendment, and that neither the Company nor any borrower or any of its subsidiaries shall have sent notice of the termination or abandonment of such refinancing, in each case without having identified another acceptable refinance party at the sole discretion of the Administrative Agent and the Majority Lenders. Pursuant to the terms of the Credit Agreement Amendment, the revolving commitments of the lenders were reduced to $115.0 million as of the effective date of the Credit Agreement Amendment. Additionally, the Company is required to maintain a minimum of $75.0 million in cash with the administrative agent as security for all obligations under the Credit Agreement until the termination thereof, the repayment in full of all obligations thereunder, the termination of all letters of credit issued thereunder and the termination of all revolving commitments of the lenders thereunder. Prior to the Credit Agreement Amendment, the Company was required to post $65.0 million in cash as collateral, which was held on deposit with the administrative agent. Effective June 15, 2009, the Credit Agreement Amendment prohibits the Company from issuing, increasing or extending any letter of credit that would be for the benefit of a counterparty providing natural gas related hedging to any borrower under the Credit Agreement. Members of the lending syndicate are: * Wachovia Bank, N.A. * CoBank, ACB * Morgan Stanley Bank, N.A. * Bank of America, N.A. * Allied Irish Banks p.l.c. * RZB Finance LLC About MXenergy Holdings MXenergy is a retail natural gas and electricity supplier in North America, serving approximately 500,000 customers in 39 utility territories in the United States and Canada. Founded in 1999 to provide natural gas and electricity to consumers in deregulated energy markets, MXenergy helps residential customers and small business owners control their energy bills by providing both fixed and variable rate plans. At March 31, 2009, the Company's balance sheet showed total assets of $316.4 million and total liabilities of $362.4 million, resulting in a stockholders' deficit of about $46.0 million. PROTEIN SCIENCES: To Contest Involuntary Ch. 7 Petition -------------------------------------------------------- Protein Sciences Corp., said it intends to fight against being put into Chapter 7 bankruptcy. Its CEO said the Company will pursue its legal remedies. As reported by the Troubled Company Reporter on June 23, 2009, creditors of Protein Sciences Corp. filed an involuntary Chapter 7 petition against the company before the U.S. Bankruptcy Court for the District of Delaware (Case No. 09-12151). The Creditors want the company liquidated to satisfy claims. A unit of Emergent BioSolutions Inc. holds the bulk of the debt listed on the petition at $11.5 million. According to Bloomberg, Emergent, last May, agreed to acquire "substantially all of the assets" of Protein Sciences after the company was granted "fast-track" status by the Food and Drug Administration for its FluBlok vaccine, according to a statement. As part of the deal, Emergent would pay $28 million in cash and take on Protein Science's debt, a 5-year note worth $20 million that could be converted to Emergent stock at a price of $12.50 a share, and as much $30 million more if FluBlok sales met certain milestones. Protein Sciences Corp. is a biopharmaceutical company that started making a vaccine to protect humans against the H1N1 influenza virus last week. Protein Sciences said in a June 15 statement it has started manufacturing "the first and only" vaccine, PanBlok, that would be able to combat the virus. The company said it would be able to produce at least 100,000 doses of the vaccine a week. QUIGLEY CO: Reaches $16.5-Mil. Settlement with OneBeacon -------------------------------------------------------- OneBeacon Insurance Group Ltd. agreed to pay about $6 million into Quigley Co.'s asbestos personal injury trust, as well as $10.5 million to Quigley's parent, Pfizer Inc., to settle a coverage dispute involving liability policies. According to Bill Rochelle at Bloomberg News, OneBeacon will pay the $16 million in installments over 12 years to fulfill obligations to pay asbestos claims under insurance policies. Quigley's plan, which was accepted by the required majorities of creditors, creates trusts to take over asbestos liability and in the process shield New-York-based Pfizer from claims. The plan confirmation process is under way. The plan proposes to distribute $757 million, which include contributions from Pfizer. About Quigley Company Quigley Company, Inc., a division of Pfizer Inc., sold asbestos- containing insulation products until the early 1970s. Quigley filed for protection under chapter 11 on September 3, 2004 (Bankr. S.D.N.Y. Case No. 04-15739) in order to implement a proposed global resolution of all pending and future asbestos-related personal injury liabilities. Asbestos victims and Pfizer have been negotiating a settlement deal which calls for Pfizer to pay $430 million to 80% of existing plaintiffs. It will also place an additional $535 million into an asbestos settlement trust that will compensate future plaintiffs as well as the remaining 20% of current plaintiffs with claims against Pfizer and Quigley. The compensation deal is worth $965 million all up. Of that $535 million, $405 million is in a 40-year note from Pfizer, while $100 million will come from insurance policies. Lawrence V. Gelber, Esq., and Michael L. Cook, Esq., at Schulte Roth & Zabel LLP, represent the Debtor in its restructuring efforts. Elihu Inselbuchm Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $155,187,000 in total assets and $141,933,000 in total debts. RADIO ONE: S&P Junks Corporate Credit Rating From 'B-' ------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on Lanham, Maryland-based radio broadcaster Radio One Inc. S&P lowered the corporate credit rating to 'CCC+' from 'B-'. The rating outlook is negative. In addition, S&P lowered the issue-level rating on Radio One's $800 million senior secured credit facility to 'CCC+' (at the same level as the 'CCC+' corporate credit rating on the company) from 'B-'. The recovery rating on this debt remains unchanged at '3', indicating S&P's expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default. "Although visibility into the second half of 2009 is very limited, the ratings downgrade reflects S&P's belief that Radio One could be in danger of violating its financial covenants in the fourth quarter of 2009 if operating trends don't meaningfully improve," said Standard & Poor's credit analyst Michael Altberg. The company had a thin margin of compliance with its senior and total leverage covenants as of March 31, 2009, and S&P expects operating performance in the second quarter to be relatively in line with the first three months of the year. In the second quarter of 2008, the company had a one-time expense related to CEO compensation of $10.4 million, which will benefit year-over-year EBITDA comparisons, providing it with a modest cushion of compliance. Still, S&P is concerned that if trends don't meaningfully improve in the second half of the year, the company could violate covenants in the fourth quarter. The downgrade also incorporates S&P's view that Radio One may not be able to absorb a potentially significant increase in interest rates, as well as fees, which could accompany an amendment under current credit market conditions. The company had limited liquidity as of March 31, 2009 (with modest discretionary cash flow, which S&P believes could turn negative this year), $20.3 million of cash, and $13 million of borrowing availability under its revolving credit facility due to its thin margin of compliance with financial covenants. Radio One is primarily a radio broadcaster (80% of revenue) targeting the African-American audience, with a portfolio of about 53 radio stations in 16 of the top 50 African-American markets. The company also has a 51% ownership interest in Reach Media Inc., a programming syndication business, and a 36% interest in TV One LLC, an African-American targeted cable television network. ROCKY MOUNTAIN: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Rocky Mountain Instrument Co. 106 Laser Dr. Building 1 Lafayette, CO 80026 Bankruptcy Case No.: 09-22368 Chapter 11 Petition Date: June 23, 2009 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Howard R. Tallman Debtor's Counsel: Christian C. Onsager, Esq. 1873 S. Bellaire St., Ste. 1401 Denver, CO 80222 Tel: (303) 512-1123 Email: consager@comcast.net Estimated Assets: $0 to $50,000 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/cob09-22368.pdf The petition was signed by Dr. Yubong Hahn, president of the Company. SARA DELUCIO: Case Summary & 5 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Sara R. DeLucio 24228 S. River Trail Channahon, IL 60410 Bankruptcy Case No.: 09-22828 Chapter 11 Petition Date: June 23, 2009 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Susan Pierson Sonderby Debtor's Counsel: Michael J. Davis, Esq. Springer, Brown, Covey, Gaertner, &Davis 400 S. County Farm Road, Suite 330 Wheaton, IL 60187 Tel: (630) 510-0000 Ext. 29 Fax: (630) 510-0004 Email: mdavis@springerbrown.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of Ms. DeLucio's petition, including a list of her 5 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ilnb09-22828.pdf The petition was signed by Ms. DeLucio. SEA LAUNCH: Boeing Co. Takes $35-Million Charge ----------------------------------------------- Boeing Co., said it will record a pretax charge of about $35 million this quarter as a result of the bankruptcy filing by Sea Launch Co., in which it owns a 40% stake. Boeing Co. and another Sea Launch partner are obligated to make payments to certain creditors if Sea Launch doesn't make its payments. Boeing has a right to reimbursement from Sea Launch and its partners so that the percentage of guaranteed debt Boeing pays is no larger than that of its stake in Sea Launch. If Boeing is unable to receive reimbursement, it could record further pretax charges of up to $478 million. Sea Launch Company, L.L.C., filed for Chapter 11 on June 22, 2009 (Bankr. D. Del. Case No. 09-12153). Joel A. Waite, Esq., and Kenneth J. Enos, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtor's counsel. At the time of the filing, the Company said its assets range from $100 million to $500 million and debts are at least $1 billion. SEALY CORP: Expects to Post $30MM Q2 2009 Income from Operations ---------------------------------------------------------------- Sealy Corporation expects to issue a press release containing its fiscal second quarter 2009 results after the market close on Tuesday, June 30, 2009, to be followed by a conference call at 5:00 p.m. Eastern Time. On June 18, 2009, Sealy announced selected preliminary information relating to results for the fiscal quarter ended May 31, 2009: Q2 2009 Range Q2 2008 Actual ------------- -------------- Total Net Sales: $294 - $301 million $375.4 million Gross Profit: $119 - $123 million $148.4 million Gross Profit Margin: 40.1% - 41.1% 39.50% Income from Operations: $28 - $30 million $35.3 million Adjusted EBITDA: $40 - $42 million $49.8 million Adjusted EBITDA Margin: 13.3% - 14.2% 13.30% During the second quarter of fiscal 2008, Gross Profit benefited from a change in accounting estimate related to the Company's warrantable and other product return reserves, which resulted in an increase to Sales of approximately $3.7 million, a reduction of Cost of Sales of approximately $4.5 million, and an increase in Income from Operations and Adjusted EBITDA of $8.2 million. "During the second quarter, we were able to strengthen our competitive position, consistently execute on our strategic initiatives, and improve our operating performance compared to the first quarter of fiscal 2009. We believe that our Company has never been in a stronger strategic position to gain profitable market share on a global basis," stated Larry Rogers, Sealy's President and Chief Executive Officer. About Sealy Corp. Trinity, North Carolina-based Sealy Corp. (NYSE: ZZ) -- http://www.sealy.com/-- is the largest bedding manufacturer in the world with sales of $1.5 billion in fiscal 2008. The Company manufactures and markets a broad range of mattresses and foundations under the Sealy(R), Sealy Posturepedic(R), including SpringFree(TM), PurEmbrace(TM) and TrueForm(R); Stearns & Foster(R), and Bassett(R) brands. Sealy operates 25 plants in North America, and has the largest market share and highest consumer awareness of any bedding brand on the continent. In the United States, Sealy sells its products to approximately 3,000 customers with more than 7,000 retail outlets. As of March 31, 2009, Sealy had $889,214,000 in total assets; $237,295,000 in total current liabilities, $726,976,000 in long- term obligations, net of current portion, $72,858,000 in other noncurrent liabilities, $5,889,000 in deferred income taxes, and $8,638,000 in Common stock and options subject to redemption; resulting in $162,442,000 in stockholders' deficit. * * * As reported by the Troubled Company Reporter on May 19, 2009, Standard & Poor's Ratings Services lowered its corporate credit rating on Sealy Corp. to 'B' from 'B+'. At the same time, S&P lowered the issue-level ratings on the company's senior secured credit facilities to 'BB-', from 'BB', while maintaining the '1' recovery rating. S&P also lowered the issue-level rating on the company's senior subordinated notes to 'CCC+' from 'B+', and revised the recovery rating on these notes to '6' (indicating the likelihood of negligible [0%-10%] recovery in a payment default) from '4'. At the same time, Standard & Poor's assigned its 'BB-' issue-level rating with a recovery rating of '1' (indicating the likelihood of very high [90%-100%] recovery) to Sealy Mattress' proposed seven-year $350 million senior secured notes due 2016, and a 'B' issue-level rating with a recovery rating of '4' (indicating the likelihood of average [30%-50%] recovery) to its proposed $177 million senior secured convertible pay-in-kind notes due 2016. Sealy's proposed $100 million asset-based revolving credit facility maturing in 2013 is not rated. On May 18, the TCR said Moody's Investors Service assigned a Ba3 rating to Sealy's proposed senior secured notes. At the same time, Sealy's B2 corporate family rating and probability-of- default rating was affirmed as was the Caa1 rating on the senior subordinated notes and SGL 3 liquidity rating. The ratings outlook remains negative. SENSUS METERING: Refinancing Plans Won't Move Moody's 'B2' Rating ----------------------------------------------------------------- Moody's Investors Service said that the successful completion of the refinancing plans currently proposed by Sensus Metering Systems Inc. would likely not result in a change in the company's debt rating (Corporate Family Rating at B2), but that the beneficial effects on the company's capital structure could warrant a revision in the rating outlook to stable from negative. Sensus' refinancing plans intend to address the near term maturity of its $70 million revolving bank facility and $159 million term loan, currently due December 2009 and December 2010 respectively. Under the proposal, Sensus would extend the revolver maturity date until December 2012, while the maturity date of $125 million of its term loan would extend until June 2013 (the remaining $34 million term debt would remain ultimately due December 2010). Additionally, the proposal seeks to obtain covenant relief to provide the company with additional flexibility through the next couple of years. The company's $275 million senior subordinated notes, due December 2013, are not part of its refinancing plans. Sensus' B2 Corporate Family rating reflects Moody's view that Sensus' results are likely to remain relatively favorable through the challenging economic environment. Despite the evidence of some pressures from municipal budget constraints in recent quarters, Moody's expects sales of Sensus' water meters to remain resilient, supported by replacement cycle sales across various geographies globally. Moreover, Moody's believes the continued deployment of its existing advanced metering infrastructure contracts should enable Sensus to record modest overall growth in revenues and profitability through at least the next couple of years. Prospects for additional AMI contract wins that could ultimately support ratings improvement appear favorable given Sensus' early signs of success in this market and industry momentum towards the deployment of smart meters generally. Nonetheless, the rating is currently constrained by several of Sensus' key credit metrics, including leverage of roughly 5x and EBITA interest coverage of approximately 1.5x. While Moody's expects Sensus to generate free cash flow through the near term, Moody's believes that much of these funds will be consumed by earn-out payments related to the company's previous purchase of its AMI technology. Consequently, the improvement to Sensus' key credit metrics from levels cited above is expected to be modest through much of the ratings horizon. Moody's last rating action on Sensus was March 25, 2009, when the company's rating outlook was changed to negative to reflect refinancing risks associated with its bank facilities. Headquartered in Raleigh, North Carolina, Sensus Metering Systems, Inc., is a leading provider of metering and related communication systems to electric, gas and water utilities. SIX FLAGS: Gets Court Allows Firm to Tap Cash Collateral -------------------------------------------------------- Bloomberg News reports that the Hon. Christopher S. Sontchi of U.S. Bankruptcy Court for the District of Delaware has allowed Six Flags Inc. to spend the cash held as collateral for its lenders. According to Bloomberg, Avenue Capital Management II had objected Six Flag's motion. Bloomberg News relates that Six Flags owed Avenue Capital about $100 million. Judge Sontchi ruled that Avenue Capital didn't have a right as a minority lender to stop Six Flags from using the cash it generates to keep operating, Bloomberg relates. Steven T. Catlett, Six Flags' lawyer, said that the Company last estimated that it has about $7 million in cash, Bloomberg reports. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SPECTRUM BRANDS: Court Confirms Plan; to Emerge in August --------------------------------------------------------- The Honorable Judge King of the U.S. Bankruptcy Court for the Western District of Texas, San Antonio Division, has approved Spectrum Brands Inc.'s Plan of Reorganization and will enter a confirmation order upon submission. Spectrum Brands said following entry of the confirmation order, the plan will become effective --- and the company will exit bankruptcy protection --- as soon as all closing conditions to the Plan, including the closing of the company's exit financing, have been met. Spectrum Brands expects to emerge from Chapter 11 in August. On Wednesday, Spectrum Brands reached an agreement with the agent acting for the senior term lenders as to the terms of a settlement that would revise the terms of its senior term credit facility and resolve the senior term lenders' objection to Spectrum Brands' Plan. As reported by the Troubled Company Reporter, the key terms of the amendment to the senior term credit facility include: -- a floor on LIBOR rate of 150 basis points; -- an increase of 250 basis points in the applicable rate to apply to each tranche of the facility; -- increased required senior leverage ratios to allow a maximum senior leverage ratio of 5.75 through October 2010, 5.50 from October 2010 through October 2011; and 5.00 thereafter; and -- a change in the maturity of the senior term loans from March 2013 to June 2012. Kent Hussey, Chief Executive Officer of Spectrum Brands, said: "We are pleased that our Plan of Reorganization has been approved by the Court, a key milestone in our financial restructuring process, and one that sets the stage for our exit from bankruptcy in August. When we emerge, we will have reduced our subordinated debt by $840 million and eliminated approximately $60 million of annual cash interest expenses for at least each of the next two years. We will emerge with a stronger balance sheet that will better position us to maintain and strengthen our current platform and to pursue opportunities to grow our company." About Spectrum Brands Based in Cibolo, Texas, Spectrum Brands, Inc. -- http://www.spectrumbrands.com/-- supplies consumer batteries, lawn and garden care products, specialty pet supplies, shaving and grooming products, household insect control products, personal care products, and portable lighting. Spectrum Brands' business is operated in three reportable segments: (a) Global Batteries and Personal Car; (b) Global Pet Supplies; and (c) Home and Garden. Spectrum Brands has roughly 5,960 employees worldwide, with about 2,700 of those employees working within the United States. In addition, Spectrum Brands holds a 50% interest in a domestic entity; minority interests (less than 25% each) in a domestic entity and a foreign entity; a limited partnership interest in a foreign entity; and a 100% interest in a foreign trust. Spectrum Brands, Inc., and 13 subsidiaries filed separate Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No. 09-50455). The Hon. Ronald B. King presides over the cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman, Esq., in San Antonio, serve as the Debtors' counsel. Sutherland Asbill & Brennan LLP acts as special counsel; Perella Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as tax consultant; and Logan & Company Inc. as claims and noticing agent. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. An official committee of equity security holders -- composed of Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and the Peter and Karen Locke Living Trust -- was appointed by the U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009. The Equity Committee has tapped Alston & Bird LLP as its bankruptcy counsel. The U.S. Trustee was unable to appoint an Official Committee of Unsecured Creditors as too few creditors expressed an interest in being appointed to the Committee. Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spectrum Brands Inc. and its various subsidiaries. (http://bankrupt.com/newsstand/or 215/945-7000) SPEEDEMISSIONS INC: Stockholders Re-elect 5 Members to Board ------------------------------------------------------------ At the 2009 Annual Meeting of Stockholders of Speedemissions, Inc., which was held on June 15, 2009, the Company's stockholders re-elected these members to the Company's Board of Directors: -- Richard A. Parlontieri, -- Bradley A. Thompson, -- Ernest A. Childs, Ph.D., -- Michael E. Guirlinger, and -- Gerald Amato. Each Director's term will expire at the annual meeting of stockholders to be held in 2010. The Board concurrently approved a $1,000 monthly cash retainer for each member of the Board. On June 15, 2009, the Board appointed the Company's Chief Financial Officer, Michael S. Shanahan, as Secretary of the Company. In connection with his service as Secretary, the Compensation Committee of the Board approved an increase to Mr. Shanahan's annual base salary to $145,000, effective June 1, 2009. On June 15, the Compensation Committee of the Board approved an increase to the annual base salary of the Company's President and Chief Executive Officer, Richard A. Parlontieri tto $225,000, effective June 1, 2009. The Compensation Committee took into consideration length of service, quality of work, time commitment to the responsibilities, and market rates for each position. Speedemissions, Inc., operates vehicle emissions testing and safety inspection centers in four separate markets, greater Atlanta, Georgia; Houston, Texas; St. Louis, Missouri and Salt Lake City, Utah. The Company manages its operations based on these four regions and has one reportable segment. As of May 4, 2009, the Company operated 39 vehicle emissions testing and safety inspection centers in these regions and four mobile units in the Atlanta, Georgia area. Going Concern Doubt As reported in the Troubled Company Reporter on May 19, 2008, Tauber & Balser, P.C., in Atlanta, expressed substantial doubt about Speedemissions Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring losses from operations and limited capital resources. SPRINGBROOK HILL: Case Summary & 11 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Springbrook Hill, LLC 2110 Maryland Avenue Baltimore, MD 21218 Bankruptcy Case No.: 09-10844 Chapter 11 Petition Date: June 24, 2009 Court: United States Bankruptcy Court Maine (Bangor) Debtor's Counsel: Benjamin E. Marcus, Esq. Drummond Woodsum & MacMahon 84 Marginal Way, Suite 600 Portland, ME 04101-2480 Tel: (207) 772-1941 Fax: (207) 772-3627 Email: bmarcusecf@dwmlaw.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 11 largest unsecured creditors is available for free at: http://bankrupt.com/misc/meb09-10844.pdf The petition was signed by Walter J. Skayhan III, manager of the Company. STUDIO THEATRE: U.S. Trustee Wants Case Converted to Chapter 7 -------------------------------------------------------------- Diana G. Adams, U.S. Trustee for Region 2, asks the U.S. Bankruptcy Court for the Western District of New York to convert Studio Theatre School's bankruptcy case to Chapter 7 of the Bankruptcy Code or, in the alternative, dismiss the Debtor's case for "cause". The U.S. Trustee says that the Debtor has failed to file monthly financial reports since the inception of its case and has also failed to pay the quarterly fees due to the United States Trustee for the quarter ended March 31, 2009. The U.S. Trustee adds the Debtor has no current business operations to reorganize and has demonstrated an absence of a reasonable likelihood of rehabilitation warranting dismissal or conversion of its case pursuant to section 1112(b)(4)(A) of the Bankruptcy Code. Based in Buffalo, NY, Studio Theatre School is a not-for-profit theater school and production company. It filed for bankruptcy on June 18, 2008 (Bankr. W.D.N.Y., Case No. 08-12680). Garry M. Graber, Esq., at Hodgson Russ LLP, represents the Debtor as counsel. When the Debtor filed for bankruptcy, it listed between $1 million and $50 million each in assets and debts. SUNRISE SENIOR: To Receive $9.8MM in Settlement of Trinity Suit --------------------------------------------------------------- Sunrise Senior Living, Inc., acquired in September 2006 all of the outstanding stock of Trinity Hospice, Inc., from its stockholders pursuant to an agreement and plan of merger. In connection with the Merger Agreement, the parties had raised certain claims against each other. To resolve and settle the claims among them, on June 15, 2009, Sunrise and its wholly owned subsidiary, Trinity, entered into a Settlement Agreement with the former majority stockholders of Trinity, which, among other matters, provides for the release and discharge of all claims and causes of action between the parties to the Agreement. In consideration of the Agreement, the Selling Parties agree to pay Sunrise an aggregate amount of $9,835,951 within 2 business days after the effective date of the Agreement, consisting of: -- $6,749,999.44 from the Selling Parties; and -- $3,085,951.56 (together with any other interest accrued thereunder through and as of the date of release) to be released to Sunrise by the United Bank as escrow agent under the Merger Agreement. The parties to the Agreement also agree to cooperate to achieve voluntary dismissal of certain litigation matters. In exchange for the consideration provided in the Agreement and effective upon receipt by Sunrise of the payment, the Sunrise Parties and the Selling Parties will reciprocally release each other from any and all claims that each such parties have against other such parties relating to any matters through the date of the Agreement (other than any claim the Sunrise Parties or the Selling Parties may assert as a result of any alleged failure of performance by the other parties under the Agreement). About Sunrise Senior Living McLean, Virginia-based Sunrise Senior Living, Inc. -- http://www.sunriseseniorliving.com-- employs roughly 40,000 people. As of December 31, 2008, Sunrise operated 435 communities in the United States, Canada, Germany and the United Kingdom, with a combined capacity for approximately 54,000 residents. Sunrise offers a full range of personalized senior living services, including independent living, assisted living, care for individuals with Alzheimer's and other forms of memory loss, as well as nursing, rehabilitative and hospice care. The Company had $1,247,759,000 in total assets and $1,123,412,000 in total liabilities at March 31, 2009. The Company has debt of $622.5 million including scheduled debt maturities of $196.6 million in 2009 and long-term debt that is in default of $265.8 million, including $202.2 million that is in default as a result of its failure to pay principal and interest on debt related to its German communities and $63.6 million which results from its failure to meet financial covenants. In its May 2009 regulatory filing with the Securities and Exchange Commission, the Company said it is working with its lenders to either re-schedule certain of the obligations or obtain waivers. SYNCORA GUARANTEE: BCP Offer for RMBS Classes Moved Until Friday ---------------------------------------------------------------- The BCP Voyager Master Funds SPC, Ltd., acting on behalf of and for the account of the Distressed Opportunities Master Segregated Portfolio, extended the expiration date of the Fund's offer for 55 classes of residential mortgage backed securities insured by Syncora Guarantee Inc. to 11:59 p.m., New York City time, on Friday, June 26, 2009. The offer will expire at that time, unless extended. An agreement has been reached by the Fund and Syncora Guarantee and one RMBS holder to remediate RMBS exposures totaling 1.7 remediation points, in the event certain conditions are met. The Fund and Syncora Guarantee are in continuing discussions with numerous other holders of RMBS as the offer continues. The Fund unveiled results of the offer and the status of certain discussions with holders of RMBS as of June 24, 2009. As of June 24, tenders have been received in the offer and binding, non- binding and other agreements have been reached by the Fund or Syncora Guarantee and holders of RMBS to remediate RMBS exposures totaling 54.7 remediation points. RMBS representing 38.4 remediation points have been tendered into the offer, binding agreements have been reached by the Fund or Syncora Guarantee and RMBS holders to remediate RMBS exposures totaling 10.7 remediation points, subject to certain conditions, and non-binding agreements have been reached by the Fund or Syncora Guarantee and RMBS holders to remediate RMBS exposures totaling 5.5 remediation points. The aggregate principal amounts of RMBS securities that have been tendered into the offer are: Aggregat e Principal Balance in US$ Tendered as CUSIP No. Security Description of June 24, 2009 --------- -------------------- ---------------- 39539BAA1 Greenpoint Mortgage Funding Trust 2006-HE1 86,452,326 126685DT0 Countrywide Home Equity Loan Trust 2006D 137,928,505 39539JAA4 GreenPoint Mortgage Funding Trust 2007-HE1 55,690,854 45664UAA3 Indymac Home Equity Mortgage Loan Asset Backed Trust Series 2006-H3 75,460,819 126685DS2 Countrywide Home Equity Loan Trust 2006D 226,354,373 41161MAB6 Harborview Mortgage Pass-Through Certificates Series 2006-5 74,098,902 126685AT3 CWABS, Home Equity Revolving Loan 110,046,593 Trust 2005-K 1248MKAA3 C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-SL1 66,977,590 75114GAB5 RALI 2006-QO4 Trust 51,404,290 41161PE41 Harborview Mortgage Pass-Through Certificates 2006-CB1 39,701,573 456612AB6 Indymac Indx Mortgage Loan Trust 2006-AR6 84,772,320 41161PG64 Harborview Mortgage Loan Trust 2006-BU1 34,339,366 68402SAA7 Option One Mortgage Loan Trust 2007-HL1 205,830,564 12668VAB5 Countrywide Home Equity Loan Trust 2006-S7 23,900,595 86801CAA1 STICS 2007-1 83,210,970 65538BAA7 Nomura NAAC 2007-S2 - 41161PL35 Harborview Mortgage Pass-Through Certificates 2006-4 93,977,192 41161PP72 Harborview Mortgage Pass-Through Certificates 2006-4 - 41161PQ22 Harborview Mortgage Pass-Through Certificates 2006-4 41,768,612 12668VAC3 Countrywide Home Equity Loan Trust 2006-S7 38,551,660 1248MKAB1 C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-SL1 62,150,773 785778QA2 SACO I Trust 2006-1 10,941,134 41161PXG3 Harborview Mortgage Loan Trust 2005-15 14,575,372 41161PUJ0 Harborview Mortgage Pass-Through Certificates 2005-11 12,686,329 12587PEM8 BSSP 2007-R5 (Bear Stearns) - 12668VAD1 Countrywide Home Equity Loan Trust 2006-S7 - 12668VAA7 Countrywide Home Equity Loan Trust 2006-S7 13,523,180 23332UGP3 Downey Savings and Loan Mortgage Trust Series 2006-AR1 - 23332UGL2 Downey Savings and Loan Mortgage Trust Series 2006-AR1 426,155 12668VAF6 Countrywide Home Equity Loan Trust 2006-S7 - 52524PBT8 Lehman XS Trust, Series 2007-6 3,097,240 12668VAE9 Countrywide Home Equity Loan Trust 2006-S7 12,025,983 126685AU0 CWABS, Home Equity Revolving Loan 10,542,964 Trust 2005-K 456612AE0 Indymac Indx Mortgage Loan Trust 2006-AR6 42,044,903 07401UAB9 Bear Stearns Second Lien Trust 2007-SV1 162,192,000 126673QB1 Countrywide Home Equity Loan Trust 2004R 38,060,530 52524TAS3 Lehman XS Trust, Series 2007-8H - 41161PL68 Harborview Mortgage Pass-Through Certificates 2006-4 - 30248EAA6 First Franklin Mortgage Loan Trust Series 2007-FFB-SS 89,928,498 525248BL3 Lehman XS Trust, Series 2007-5H 25,219,400 75114GAE9 RALI 2006-QO4 Trust 40,478,820 126685AX4 CWABS, Home Equity Revolving Loan 39,787,632 Trust 2005-K 525248BK5 Lehman XS Trust, Series 2007-5H 28,593,744 126673QA3 Countrywide Home Equity Loan Trust 2004R - 126673MY5 Countrywide Home Equity Loan Trust 2004Q 49,857,273 126685AW6 CWABS, Home Equity Revolving Loan 12,978,770 Trust 2005-K 07401UAU7 Bear Stearns Second Lien Trust 2007-SV1 25,529,277 86363GBS2 Structured Adjustable Rate Mortgage Loan Trust, Series 2007-3 28,745,884 126673MX7 Countrywide Home Equity Loan Trust 2004Q - 41161PUM3 Harborview Mortgage Pass-Through Certificates 2005-11 - 525245CP9 Lehman XS Trust, Series 2007-3 17,241,072 41161PG98 Harborview Mortgage Loan Trust 2006-BU1 14,911,945 68402SAD1 Option One Mortgage Loan Trust 2007-HL1 - 68402SAC3 Option One Mortgage Loan Trust 2007-HL1 22,220,000 68402SAB5 Option One Mortgage Loan Trust 2007-HL1 22,161,593 The offer and related financing are also conditioned on the consummation of an agreement entered into between Syncora Guarantee and certain counterparties to Syncora Guarantee's credit default swap transactions and financial guarantee insurance policies, the tender of a minimum amount of RMBS, approval of the New York Department of Insurance and certain other conditions. Holders of RMBS that have tendered or will tender their RMBS into the offer are no longer able to withdraw their tendered RMBS. The offer by the Fund and any transactions with Syncora Guarantee are being conducted only with qualified institutional buyers and are exempt from registration under Section 4(2) of the Securities Act of 1933, as amended. Any securities that may be issued pursuant to such transactions have not been and, at the time of the closing of the transaction, will not be registered under the Securities Act or any state securities laws. The securities may not be offered or sold in the United States absent registration under, or an applicable exemption from, the registration requirements of the Securities Act and applicable state securities laws. About Syncora Guarantee Inc. Syncora Guarantee Inc. -- http://www.syncora.com/-- is a wholly owned subsidiary of Syncora Holdings Ltd. Syncora Holdings Ltd. is a Bermuda-domiciled holding company. In April 2009, Standard & Poor's Ratings Services revised its financial strength and financial enhancement ratings on Syncora Guarantee Inc. to 'R' from 'CC'. Standard & Poor's also revised its counterparty credit rating on Syncora to 'D' from 'CC'. An insurer rated 'R' is under regulatory supervision because of its financial condition. The 'CC' counterparty credit, financial strength, and financial enhancement ratings on Syncora Guarantee U.K. Ltd. are unchanged because at this time, that company is not subject to any regulatory orders that mandate the suspension of claims payments. SYNOVUS FINANCIAL: Fitch Cuts Issuer Default Rating to 'BB-' ------------------------------------------------------------ Fitch Ratings has downgraded Synovus Financial Corporation and its subsidiary banks' long- and short-term Issuer Default Ratings, as well as their Individual ratings. The Rating Outlook is Negative. A full ratings list follows at the end of this release. The rating actions reflects Fitch's revised loss expectations for SNV's portfolio, given the company's significant exposure to troubled regions of the Southeast. Fitch believes prolonged credit stress will continue to weigh heavily on the company's financial condition. Credit concerns continue to stem from SNV's residential construction, development, and land loan portfolios; the majority of which reside in the greater Atlanta area, as well as the west coast of Florida. Although SNV's management has remained focused on its disposition strategy of problem assets through both the utilization of auctions and the formation of its special asset management group, Fitch believes the impact of heightened credit costs will continue to hamper SNV's performance and will threaten its capital position. The Negative Outlook reflects both the possibility of credit deterioration becoming more pronounced and the weakening of some of SNV's other fundamental strengths, such as its core funding base. SNV's ratings continue to be supported by its current capital position, which is viewed as necessary given its credit exposure. The company's liquidity position, sound funding base, and augmented reserve levels, provide additional ratings support. However, these fundamental strengths could be pressured as the company endures increased credit stress. Fitch has taken these rating actions on SNV and its subsidiaries with a Negative Outlook: Synovus Financial Corp. -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Subordinated Debt downgraded to 'B' from 'BBB-'; -- Preferred Stock downgraded to 'B-' from 'BB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed 'NF'. Columbus Bank & Trust -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Short-term Deposits downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Athens First Bank & Trust Co. -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Bank of Coweta -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Short-term Deposits downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Bank of Nashville -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Bank of North Georgia -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Bank of Pensacola -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Bank of Tuscaloosa -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. CB&T Bank of Middle Georgia -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Citizens Bank & Trust of West Georgia -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Citizens First Bank -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Coastal Bank of Georgia -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Short-term Deposits downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Cohutta Banking Company -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Short-term Deposits downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Commercial Bank -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Short-term Deposits downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Commercial Bank & Trust Co. -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Short-term Deposits downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Community Bank & Trust of Southeast Alabama -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. First Commercial Bank -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Short-term Deposits downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. First Commercial Bank of Huntsville -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. First Community Bank of Tifton -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. First National Bank of Jasper -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Short-term Deposits downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. First State Bank and Trust Company of Valdosta -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Georgia Bank & Trust -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. National Bank of South Carolina -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Short-term Deposits downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. National Bank of Walton County -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Sea Island Bank -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Short-term Deposits downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Security Bank & Trust Company of Albany -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Sterling Bank -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Short-term Deposits downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Sumter Bank & Trust Company -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Synovus Bank of Tampa -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Tallahassee State Bank -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Trust One Bank -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Vanguard Bank & Trust Company -- Long-term IDR downgraded to 'BB-' from 'BBB'; -- Long-term Deposits downgraded to 'BB' from 'BBB+'; -- Short-term IDR downgraded to 'B' from 'F2'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. TERRA CONVERSIONS: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Terra Conversions Group, LLC 1395 Brickell Avenue, Suite 1020 Miami, FL 33131 Bankruptcy Case No.: 09-22721 Chapter 11 Petition Date: June 24, 2009 Court: United States Bankruptcy Court Southern District of Florida (Miami) Judge: Robert A. Mark Debtor's Counsel: Lydia C. Quesada, Esq. 2600 Douglas Rd #506 Coral Gables, FL 33134 Tel: (305) 447-0392 Email: lquesada@sqlaw.com Total Assets: $1,328,673 Total Debts: $2,714,005 A full-text copy of the Debtor's petition, including a list of its 19 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flsb09-22721.pdf The petition was signed by Juan Arcila, managing member of the Company. TEUFEL NURSERY: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Teufel Nursery, Inc. aka Teufel Landscape 100 SW Miller Rd. Portland, OR 97225-6130 Bankruptcy Case No.: 09-34880 Type of Business: The Debtor offers lawn and gardening services. See http://www.teufel.com Chapter 11 Petition Date: June 24, 2009 Court: District of Oregon Judge: Elizabeth L Perris Debtor's Counsel: Robert J. Vanden Bos, Esq. vbcservice@yahoo.com Vanden Bos & Chapman 319 SW Washington #520 Portland, OR 97204 Tel: (503) 241-4869 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 Lawrence A. Teufel. TICKETMASTER ENTERTAINMENT: S&P Keeps Negative Watch on BB Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Ticketmaster Entertainment Inc., including its 'BB' corporate credit rating, will remain on CreditWatch with negative implications, where they were placed on Feb. 11, 2009, following the company's announcement of an all-stock merger agreement with Live Nation Inc. The ratings on Live Nation, including its 'B' corporate credit rating, remain on CreditWatch with positive implications, where they also were placed on Feb. 11, 2009. If the transaction is completed, Ticketmaster would become a wholly owned subsidiary of Live Nation, which would continue as the public company parent of the combined companies under the name Live Nation Entertainment Inc. Standard & Poor's plans to maintain separate corporate credit ratings for both companies as both companies expect to maintain separate capital structures and because of likely limits, in S&P's view, on Ticketmaster's capacity to provide credit support to Live Nation. If the merger is completed with a different capital structure than currently envisioned, with the companies refinanced as one entity, S&P would analyze the company on a consolidated basis. Currently, under the proposed scenario of separate capital structures, Ticketmaster's credit agreement and its other financial resources, limit its ability to provide credit support to Live Nation. The transaction is subject to approval by both companies' shareholders, and regulatory review and approvals, which are not expected to be completed until late in the fourth quarter of 2009, at the earliest. The merger is largely complementary, and would combine the leading ticketing company and artist management agency with the largest concert promoter. The management teams anticipate that the combined company could realize about $40 million of operating synergies through the combination of their ticketing, marketing, data centers, and back-office functions. Live Nation would benefit from having access to more artists, Ticketmaster's customer data base, and reduced costs as S&P would expect Live Nation to eventually close its own ticketing business. In resolving the CreditWatch, S&P will review the companies' business and financial strategies. S&P expects that if the transaction proceeds as planned, S&P could lower the corporate credit rating on Ticketmaster to as low as 'B+', reflecting in part the business and strategic link that S&P would ascribe to the companies' relationship, and to a lesser extent, the potential loss of its contract with AEG. If the transaction is not completed, the rating on Ticketmaster could also be lowered to as low as 'B+' if operating performance, debt leverage, and the margin of covenant compliance continue to deteriorate. On the other hand, S&P could raise the corporate credit rating on Live Nation to as high as 'B+' if the merger is completed. Key considerations for a one-notch upgrade, beyond feasibility of revenue and costs synergies, and prospects for leverage reduction, will be in S&P's view of the extent to which Ticketmaster will have the ability and means to support Live Nation, despite debt terms and restrictions, and the extent to which Live Nation's credit profile, in S&P's view, suggests such needs. If the merger is not completed, S&P would most likely affirm Live Nation's 'B' corporate credit rating. TITAN ENERGY: Closes Acquisition of RBG's Industrial Division ------------------------------------------------------------- Titan Energy Worldwide, Inc., through its wholly owned subsidiary, Grove Power, Inc., entered into an asset purchase agreement on June 11, 2009, with R.B. Grove, Inc., a Florida corporation engaged in the marketing, selling, distribution and servicing of backup and emergency power equipment in the state of Florida and certain other territories, and Tom Piper, the sole shareholder of RBG. Titan, through its wholly owned subsidiary, Grove Power, acquired certain assets and liabilities of RBG's Industrial Division and Service Division for this consideration: 1) a $50,000 deposit, which amount was paid prior to the Closing Date; 2) $521,510, which Grove Power will pay to MTU/Katolight on RBG's behalf in satisfaction of all amounts owed to MTU/Katolight as set forth in the Asset Purchase Agreement; 3) $144,827, which amount was paid to RBG on the Closing Date; 4) $86,612 in the form of a secured promissory note that is due 18 months after the Closing Date and accrues interest at the rate of 8% per year; 5) the issuance of a five-year warrant to purchase 200,000 shares of common stock of Titan at a price of $0.01 per share; and 6) $20,000 for legal fees, which amount was paid on the Closing Date. The Asset Purchase Agreement contains customary terms and conditions for a transaction of this type, including representations, warranties and covenants, as well as provisions describing the consideration and the process of exchanging the consideration. The Asset Purchase Agreement also contains reciprocal indemnification provisions that provide for indemnification in the event of a breach of a representation or warranty. In connection with the issuance of the Note, as partial consideration for the Business, Grove Power and RBC entered into a security agreement, dated June 11, 2009, pursuant to which Grove Power granted to RBG a junior subordinated security interest in Grove Power's interest in the Business. In connection with the Asset Purchase Transaction, RBG entered into a sublease agreement with Grove Power, dated June 1, 2009, pursuant to which RBG agreed to sublease to Grove Power certain office and warehouse space in Miami, Florida, for a period of eighteen months commencing on June 1, 2009, and terminating on November 30, 2010, for a monthly rent of $5,157 plus 50% of utilities and phone and copier charges. The sublease obligations were guaranteed by Titan. There were no material relationships between Titan, Grove Power or its respective affiliates and any of the parties to the Asset Purchase Agreement, other than in respect of the Asset Purchase Agreement. "This purchase gives Titan Energy entrance into Florida's $150 million emergency power market," stated Thomas Black, President of Titan Energy Worldwide, Inc. "Florida represents one of the top markets in the United States for emergency power generation equipment sales and service. The region has tremendous need for back up power generation due to hurricanes and storms. Additionally, many companies and institutions in Florida are required by legislation to install back up power in case of emergency." About Titan Energy Worldwide Titan Energy Worldwide, Inc. -- http://www.titanenergy.com/-- manufactures, markets and services energy generation products and services, including development and support for new energy-related technology. Founded in 2005, Titan serves disaster recovery first responders, relief agencies, homeland security, the department of defense and municipalities. The Company incurred a net loss for the three months ended March 31, 2009, of $336,916 and at March 31, 2009, had an accumulated deficit of $23,700,397. The accumulated deficit includes a charge of $9,767,847 for the early extinguishment of the Series A, B and C Preferred Stock and issuance of Common Stock in 2007. In addition, the Company issued Series D Convertible Preferred Stock with a beneficial conversion feature which resulted in recording a preferred stock dividend of $4,076,646. The accumulated deficit without these transactions would have been $9,855,904. However, these conditions raise substantial doubt as to the Company's ability to continue as a going concern. At March 31, 2009, the Company had $4,914,606 in total assets and $1,610,305 in total liabilities. TPF II: S&P Changes Outlook to Negative; Affirms 'BB-' Rating ------------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook on TPF II LC LLC to negative from stable. At the same time, S&P affirmed the 'BB-' rating on TPF's $205 million in first-lien facilities consisting of a $165 million seven-year term loan ($142.7 million outstanding) and a $40 million revolving facility. The ratings action is driven by the low clearing price realized in the most recent base residual auction in the RTO (unconstrained) area of PJM Interconnect's RPM capacity market for the delivery year May 2012-June 2013. Due in part to market rule revisions that encourage demand-side resources to participate in the auctions, total supply bids increased 5.5% to 145,373 megawatts; demand-side bids increased nearly 500% to comprise 9,848 MW of this total. Previously, demand-side resources sold the Interruptible Load for Reliability product, which was discontinued as of the 2012-2013 delivery year. TRONOX INC: Court Sets August 12 as Claims Bar Date --------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has set August 12, 2009 at 5:00 p.m. (Pacific Time) by which claimants holding claims against the Debtors that arose before the Petition Date, including claims pursuant to Section 503(b)(9) of the Bankruptcy Code, may file their proofs of claim. The Debtors' standard form of Proof of Claim, Bar Date Notice, General Publication Notice and the Site-Specific Publication Notices are approved. Pursuant to Rule 3003(c)(2) of the Federal Rules of Bankruptcy Procedure, all creditors that fail to timely file a proof of claim in appropriate form will not be treated as a creditor with respect to the claim for purposes of voting on a Chapter 11 plan and distribution on account of the claim. Pursuant to Bankruptcy Rule 2002(f), the Debtors will give notice of the Bar Dates by publishing the Bar Date Notice in The Wall Street Journal on one occasion on or before July 10, 2009. The Debtors will also give notice of the Bar Dates by publishing certain Site-Specific Publication Notices on one occasion on or before July 10, 2009. In the event the Debtors amend or supplement their schedules of assets and liabilities, the Debtors must give notice of any amendment or supplement to the holders of any Claim affected thereby, and the holders will be afforded 30 days from the date on which the notice is given or until the Bar Date, if the Bar Date is later, to file a proof of claim with respect to their claim or be forever barred from doing so. The Debtors are further directed to include these information on every Proof of Claim Form that they supply to a creditor whose Claim is listed on the Debtors' Schedules: (a) the amount of the creditor's Claim against the applicable Debtor, as reflected in the Schedules; (b) the type of Claim held by the creditor, as reflected in the Schedules; and (c) whether the Claim is contingent, unliquidated or disputed as reflected in the Schedules. The holder of any Claim that arises from the Debtors' rejection of any executory contract or unexpired lease after the date of entry of the Order must file a Proof of Claim based on that rejection by the later of (a) the Bar Date, (b) a date provided in an order authorizing the Debtors to reject an executory contract or unexpired lease or (c) if no date is provided, 30 days after the date of any order authorizing the rejection or notice of the rejection is entered. The Debtors are authorized to mail the Bar Date Notice to counsels of record for Tort Claimants for whom the Debtors lack personal information. The Debtors are authorized to provide supplemental mailings of the Bar Date Package as may be necessary. The mailings made at any time up to 30 days in advance of the Bar Date are deemed timely. The Debtors will not be required to provide any additional notice to any creditor to whom the Debtors mailed the Bar Date Package in accordance with the terms of the Order and the notice was returned to the Debtors as undeliverable without a forwarding address. The Debtors are authorized to establish without further notice to file with the Court one or more orders establishing additional Bar Dates, as necessary. In the event the Debtors establish a Supplemental Bar Date, the Debtors will mail a Bar Date Package, modified to include the Supplemental Bar Date, to Claimants who are subject to the Supplemental Bar Date within 30 days of any Supplemental Bar Date. About Tronox Inc. Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets: TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer of titanium dioxide pigment, with an annual production capacity of 535,000 tonnes. Titanium dioxide pigment is an inorganic white pigment used in paint, coatings, plastics, paper and many other everyday products. The Company's four pigment plants, which are located in the United States, Australia and the Netherlands, supply high-performance products to approximately 1,100 customers in 100 countries. In addition, Tronox produces electrolytic products, including sodium chlorate, electrolytic manganese dioxide, boron trichloride, elemental boron and lithium manganese oxide. Tronox has $1.6 billion in total assets, including $646.9 million in current assets, as at September 30, 2008. The Company has $881.6 million in current debts and $355.9 million in total noncurrent debts. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D. N.Y. Case No. 09-10156). The case is before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represent the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants serves as notice and claims agent. An official committee of unsecured creditors and an official committee of equity security holders have been appointed in the cases. The Creditors Committee has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel. Until September 30, 2008, Tronox Inc. was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox Inc. has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tronox Inc. and its 14 affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRONOX INC: Seeks to Employ ATL as Tax Consultants -------------------------------------------------- Tronox Inc. and its affiliates seek the U.S. Bankruptcy Court for the Southern District of New York's authority to employ Assessment Technologies, Ltd. as their property tax consultants, nunc pro tunc to February 3, 2009, in accordance with the terms and conditions set forth in that certain service agreement dated May 13, 2009. Gary Barton, the Debtors' Chief Restructuring Officer, relates that since the outset of the Chapter 11 Cases, the Debtors have sought to institute cost savings and otherwise locate sources of value in their business operations for the benefit of their stakeholders. The Debtors believe that one source of value is tax savings that may result from a detailed review of the asset valuations of the taxed properties pursuant to the statutory valuation standards from the tax office compared with market derived valuations of the assets of the properties using various market indexes, comparable sales data and third-party valuation work. The Debtors estimate that the resulting tax savings could be in the range of $1 million to $3 million annually. However, Mr. Barton says, given the Debtors' financial constraints as a chapter 11 debtor, the Debtors do not presently have the capacity to review the property tax assessments of these properties and prosecute any adjustments with the taxing authorities. Accordingly, the Debtors seek to employ ATL on a contingency basis to evaluate the property tax assessments for certain properties and, if appropriate, prosecute adjustments with the relevant taxing authorities. Pursuant to the terms of the Service Agreement, ATL is expected to provide these property tax consulting services: (a) Review targeted tax assessments on certain property owned or leased by the Debtors including supporting data, calculations and assumptions produced by the appropriate appraisal/assessing authority, together with information provided by the Debtors; (b) Analyze economic feasibility of attaining a reduced assessment/tax; (c) Represent the Debtors' estates before the appropriate tax assessing/collecting and/or court authorities using all reasonable, appropriate and available means provided by statute or within the Bankruptcy Code to adjust the assessment, unclaimed tax or claimed tax amount; and (d) Utilize any local, state or federal remedies ATL deems necessary and appropriate to achieve tax savings, in ATL's discretion, subject to any required approval of the Court. Mr. Barton says that the services to be performed by ATL will not duplicate or overlap with the service being performed by the Debtors' other retained consultants or advisors, and the Debtors will use its reasonable efforts to ensure that there is no duplication of the services that ATL is begin retained to perform. The Debtors will pay ATL on a contingency basis only, and no payment will be due to ATL unless ATL achieves tax savings for the Debtors on any Targeted Property. Specifically, the Debtors will pay ATL 30% or 35%, in accordance with the Expense Level, defined in the Service Agreement, of: (i) all of the tax savings received by the Debtors less (ii) reimbursement of ATL's expenses, each as a result of ATL's efforts for each Targeted Property for each tax year. Reimbursable expenses include all special property tax counsel legal fees, third party appraisal fees and any other reasonable fees incurred by ATL in pursuing tax savings for the Debtors under the Service Agreement. The reimbursable expenses will be fronted by ATL, and ATL will be reimbursed these expenses, at cost, out of the tax savings that ATL achieves for the Targeted Property, as long as the expenses are reasonable and approved by the Court. James Hausman, president of ATL, assures the Court that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code and as required by Section 327(a) and referenced by Section 328(a), and holds no interest adverse to the Debtors for the matters for which ATL is to be employed. Mr. Hausman says that ATL has no connection to the Debtors, their creditors or its related parties. A full-text copy of the Service Agreement is available for free at http://bankrupt.com/misc/Tronox_ATLServiceAgreement.pdf * * * The Court authorized the Debtors to employ ATL as property tax consultants in accordance with the terms set forth in the Service Agreement, nunc pro tunc as of February 3, 2009. ATL will not be required in its invoices to report the billing rates, aggregate hours spent, or the time incurred by ATL's professionals in tenths of an hour increments. ATL will be compensated pursuant to the terms of the Service Agreement, without the necessity of ATL filing formal interim or final fee applications. About Tronox Inc. Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets: TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer of titanium dioxide pigment, with an annual production capacity of 535,000 tonnes. Titanium dioxide pigment is an inorganic white pigment used in paint, coatings, plastics, paper and many other everyday products. The Company's four pigment plants, which are located in the United States, Australia and the Netherlands, supply high-performance products to approximately 1,100 customers in 100 countries. In addition, Tronox produces electrolytic products, including sodium chlorate, electrolytic manganese dioxide, boron trichloride, elemental boron and lithium manganese oxide. Tronox has $1.6 billion in total assets, including $646.9 million in current assets, as at September 30, 2008. The Company has $881.6 million in current debts and $355.9 million in total noncurrent debts. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represent the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants serves as notice and claims agent. An official committee of unsecured creditors and an official committee of equity security holders have been appointed in the cases. The Creditors Committee has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel. Until September 30, 2008, Tronox Inc. was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox Inc. has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tronox Inc. and its 14 affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRONOX INC: To Execute Stalking Horse Deal by July 31 ----------------------------------------------------- The Official Committee of Unsecured Creditors and the Official Equity Security Holders Committee of Tronox Inc. filed objections to the Debtors' proposal to amend their $125 million DIP credit facility on the basis that the costs of the First Amendment -- particularly the acceleration of the sale process -- outweighed the benefits that the Debtors would receive under the First Amendment. To resolve the Objections, the Debtors, Credit Suisse, as Administrative Agent and JPMorgan Chase Bank, N.A., as Collateral Agent, the DIP Lenders, and the official committees engaged in arm's-length, good faith negotiations regarding the terms of the First Amendment. The negotiations resulted in a consensual agreement modifying certain the terms of the First Amendment. As agreed to by the parties, the terms of the First Amendment as submitted to the Court on May 11, 2009 are preserved, with these modifications: (a) the deadline by which the Debtors are required to execute an asset purchase agreement with a "stalking horse" bidder is now July 31, 2009, which date may be extended at the discretion of the DIP Agent for an additional 30 days -- this deadline is 60 days later than the deadline set forth in the First Amendment as previously filed with the Court; and (b) the deadline by which the Debtors are required to submit audited financial statements for their fiscal year ended December 31, 2008 to the DIP Lenders is now September 10, 2009 -- this deadline is 30 days later than the deadline set forth in the First Amendment as previously filed with the Court. In exchange for these modifications, the Debtors agreed to pay an incremental waiver fee of 0.5% of the outstanding commitment of each DIP Lender who consented to the modified First Amendment, for a total waiver fee of 1.0% to each consenting DIP Lender, equal to $1.25 million. The First Amendment, as modified, has been accepted by the requisite number of DIP Lenders. In addition, both the Creditors' Committee and the Equity Committee have agreed to withdraw their Objections. Accordingly, the Debtors' entry into the First Amendment is unopposed. The Parties also provided a blacklined copy that reflects the modifications to the First Amendment filed on May 11, 2009. The blacklined copy is available for free at: http://ResearchArchives.com/t/s?3de6 Court Approves DIP Amendment Accordingly, the Court approved the First Waiver and Amendment. The Debtors are authorized to enter into the First Waiver and Amendment and to perform all acts, to make, execute and deliver all instruments and documents that may be reasonably required for the performance of their obligations under the First Waiver and Amendment and to pay the Amendment Fees. About Tronox Inc. Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets: TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer of titanium dioxide pigment, with an annual production capacity of 535,000 tonnes. Titanium dioxide pigment is an inorganic white pigment used in paint, coatings, plastics, paper and many other everyday products. The Company's four pigment plants, which are located in the United States, Australia and the Netherlands, supply high-performance products to approximately 1,100 customers in 100 countries. In addition, Tronox produces electrolytic products, including sodium chlorate, electrolytic manganese dioxide, boron trichloride, elemental boron and lithium manganese oxide. Tronox has $1.6 billion in total assets, including $646.9 million in current assets, as at September 30, 2008. The Company has $881.6 million in current debts and $355.9 million in total noncurrent debts. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D. N.Y. Case No. 09-10156). The case is before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represent the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants serves as notice and claims agent. An official committee of unsecured creditors and an official committee of equity security holders have been appointed in the cases. The Creditors Committee has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel. Until September 30, 2008, Tronox Inc. was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox Inc. has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tronox Inc. and its 14 affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TVI CORPORATION: Nasdaq to Delist Common Stock on July 6 -------------------------------------------------------- The Nasdaq Stock Market will delist the common stock of TVI Corporation effective at the opening of the trading session on July 6, 2009. The Nasdaq Staff determined that the Company is no longer qualified for listing on the Exchange pursuant to Listing Rule 5450(a)(2) or the bid price rule. TVI Corporation's stock was suspended on April 13, 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. Headquartered in Glenn Dale, Maryland, TVI Corporation -- http://www.tvicorp.com/-- supplies military and civilian emergency first responder and first receiver products, personal protection products and quick-erect shelter systems. The products include powered air-purifying respirators, respiratory filters and quick-erect shelter systems used for decontamination, hospital surge systems and command and control. The users of these products include military and homeland defense/homeland security customers. The Company and two of its affiliates filed for Chapter 11 protection on April 1, 2009 (Bankr. D. Md. Lead Case No. 09-15677). Christopher William Mahoney, Esq., at Duane Morris LLP, represents the Debtors in their restructuring efforts. The Debtors tapped Buccino & Associates, Inc., as their financial advisors and consultants. UNI-MARTS LLC: Wants Plan Filing Deadline Moved to July 22 ---------------------------------------------------------- Uni-Marts LLC, for the fifth time, is seeking an extension of its exclusive period to file a Chapter 11 plan. The Debtor wants the current plan deadline moved to July 22. Uni-Marts has received approval from the U.S. Bankruptcy Court for the District of Delaware to conduct an auction on August 18 for its assets. Bids are due August 13. About Uni-Marts Headquartered in State College, Pennsylvania, Uni-Marts LLC owned 283 convenience stores and gasoline stations in Pennsylvania, New York and Ohio, but later reduced the store count during its bankruptcy case, which is still pending. It was taken private in 2004 by the Sahakian family and private-equity investors. The Company and six of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. D. Del. Lead Case No.08-11037). Michael Gregory Wilson, Esq., at Hunton & Williams LLP, represents the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as their claims, notice and balloting agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Blank Rome LLP as its counsel. UNITED SUBCONTRACTORS: Plan Confirmed; Expects to Emerge June 30 ---------------------------------------------------------------- United Subcontractors, Inc., said the United States Bankruptcy Court for the District of Delaware confirmed the Company's Amended Joint Chapter 11 Plan of Reorganization, dated May 18, 2009. USI currently expects to emerge from Chapter 11 on June 30, 2009. The Company and holders of its first-lien loans due in 2012 and holders of the Company's second-lien loans due in 2013 have agreed on the terms of a financial restructuring, which reduces the Company's funded indebtedness by $314 million, via a conversion of debt to equity. Additionally, the Company noted that it has cash on hand in excess of $30 million which, combined with the cash generated from ongoing operations, will be more than sufficient to run the business and fund normal business obligations. USI does not anticipate the need for any financing facilities in the near term. First-lien lenders will receive approximately 96% of the New USI Holdings Common Stock; second-lien lenders will receive approximately 4% of the New USI Holdings Common Stock. The Plan was approved by an overwhelming margin of the first-lien lenders and the second-lien lenders. Additionally, under the terms of the Plan, General Unsecured Claims are unimpaired. "As a result of our achievements during our reorganization, we look forward to emerging as a financially stronger company with, in essence, a debt free balance sheet," said Paul Lustig, Chief Executive Officer, USI. "Our progress through the restructuring process demonstrates the strength of our business and our creditors' confidence in the future of USI. We appreciate the unwavering support from our customers and suppliers and for our employees' continued hard work and dedication to the Company." About United Subcontractors United Subcontractors, Inc., is a privately owned company with approximately 35 branches and 1,500 employees across the country. Founded in 1998 and based in Edina, Minnesota, United Subcontractors is a market leader in the installation of a wide range of residential and commercial products within the construction industry. About United Subcontractors United Subcontractors, Inc. -- http://www.unitedsub.com/-- is a privately owned company with approximately 40 branches and 1,600 employees across the country. Founded in 1998 and based in Edina, Minnesota, USI is a market leader in the installation of a wide range of residential and commercial products within the construction industry. The Company and its affiliates filed for Chapter 11 bankruptcy protection on March 31, 2009 (Bankr. D. Delaware Case No. 09-11152). Mark K. Thomas, Esq., Paul V. Possinger, Esq., and Peter J. Young, Esq., at Proskauer Rose LLP assist the Debtors in their restructuring efforts. The Debtors propose to hire Steven M. Yoder, Esq., and Gabriel R. MacConaill, Esq., at Potter Anderson & Corroon LLP as co-counsel. The Debtors listed $50 million to $100 million in assets and $100 million to $500 million in debts. UNIVISION COMMUNICATIONS: Fitch Assigns 'B+/RR3' Rating on Notes ---------------------------------------------------------------- Fitch Ratings has assigned a 'B+/RR3' rating to Univision Communications, Inc.'s senior secured note offering. The proceeds are expected to be used to tender the company's 7.85% notes due 2011. Univision's Issuer Default Rating is rated 'B'. The Rating Outlook is Stable. Univision's ratings and Outlook are at the low end of their categories. The ratings are constrained by a highly leveraged capital structure, which leaves creditors with a very limited margin of safety. Fitch maintains a conservative view of the prospects for economic weakness, but acknowledges that the rating is susceptible if advertising underperforms Fitch's grim outlook. Over the latest 12 months, Fitch has commented that Univision faced several obstacles over the intermediate term. Importantly, two of those obstacles ? payment of the second-lien loan and the Grupo Televisa S.A. litigation ? have largely been resolved. Fitch believes the company's remaining major obstacle over the intermediate term concerns the impact the existing economic downturn will have on Univision's ability to make interest and principal amortization payments and meet covenant step-downs. In Fitch's view, Univision should have the ability to meet these obligations. While 2009 should be extremely difficult for advertising revenues, Fitch believes retransmission revenues, paid-in-kind interest, and the maturation of $7 billion of higher-than-market interest rate swaps should provide the additional liquidity needed for debt compliance over the short term. Fitch's current expectations are for advertising revenue to be down in the 10% range, comprised of national advertising likely down in the low single digits and local advertising down more than 15%. However, Fitch expects Univision's net first-lien leverage to remain below the covenant limit of 11.25 times (x) by year-end 2009 and that the company should be able to handle future covenant step-downs. The ratings are supported by Univision's underlying portfolio of assets, which include duopoly television and radio stations in most of the top Hispanic markets, with a national overlay of broadcast and cable networks. Liquidity is supported by approximately $473 million of cash on hand on March 31, 2009. The company had approximately $43 million of cash remaining in the Reserve Fund at that same time and received a distribution of $17 million in April 2009. Additionally, the company used $150 million to permanently reduce its revolver borrowings on June 19, 2009. The company's remaining maturity schedule includes principal amortization on its term loans of approximately $150 million in 2010 and $200 million in 2011. Univision's $500 million 7.85% senior notes mature in July 2011, potentially bringing total 2011 maturities above $700 million. Principal amortization is reduced to less than $90 million per year thereafter. Fitch's expectations are for the company to generate positive cash flow in 2010 and 2011 and to be able to handle these maturities organically. Remaining bullet maturities begin in 2014 and are substantial. The Recovery Ratings and notching reflect Fitch's recovery expectations under a distressed scenario. Univision's recovery ratings reflect Fitch's expectation that the enterprise value of the company, and hence, recovery rates for its creditors, will be maximized in a restructuring scenario (going concern), rather than a liquidation. Fitch has recently reduced its market multiple to 7x from 9x, reflecting the existing difficult economic environment. The 7x market multiple reflects the company's FCC licenses in top U.S. markets, the elimination of the Televisa litigation and long-term growth prospects, among other things. Fitch estimates the adjusted distressed enterprise valuation in restructuring to be approximately $4.4 billion. The 'B+/RR3' rating for the secured debt reflects Fitch's expectations for recovery at the low end of the 51%-70% range under a bankruptcy scenario. UNIVISION COMMUNICATIONS: Moody's Puts 'B2' Rating on $500MM Notes ------------------------------------------------------------------ Moody's Investors Service assigned a B2 rating to Univision Communications Inc.'s proposed $500 million senior secured notes due 2014. The company will use proceeds from the proposed offering to fund the repurchase of its 7.85% $500 million senior secured notes due 7/15/2011. A tender offer for the 2011 note repurchase expires on July 8, 2009 and is contingent upon the sale of the proposed notes. Holders of approximately $491.4 million of the 2011 notes have tendered as of June 23, 2009. The offering will increase interest expense by approximately $30 million annually but beneficially pushes out the maturity by three years to 2014 from 2011, which Moody's believes provides additional flexibility to manage in the current advertising downturn without the impending pressure of a maturity. The proposed notes are secured by a first lien on substantially all of the assets of Univision and its subsidiaries that secure the company's $8.05 billion senior secured credit facility, and will be guaranteed by its material domestic operating subsidiaries. LGD point estimates were updated to reflect the current debt mix. Univision's B3 Corporate Family Rating, B3 Probability of Default Rating, SGL-3 speculative-grade liquidity rating and negative rating outlook are not affected. Following is a summary of the rating action: Assignments: Issuer: Univision Communications, Inc. -- $500 million Senior Secured Bonds due 2014, assigned B2, LGD3 - 42% LGD Updates: Issuer: Univision Communications, Inc. -- Senior Secured Bank Credit Facility and Senior Secured Bonds, changed to LGD3 - 42% from LGD3 - 40% (no change to B2 rating) The last rating action was on December 10, 2008, when Moody's downgraded Univision's CFR and Probability of Default Rating to B3 from B2, the senior secured debt to B2 from B1, and the senior unsecured notes to Caa2 from Caa1, with a negative rating outlook. Univision, headquartered in New York, is the leading Spanish- language media company in the United States. Annual revenue is approximately $2 billion. UNIVISION COMMUNICATIONS: S&P Give Negative Outlook on 'B-' Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on Los Angeles, California-based Spanish language television and radio broadcaster Univision Communications Corp. to stable from negative. "The outlook revision is predicated on the successful tender of the company's $500 million 7.85% senior secured notes due 2011 and refunding with the proposed offer proceeds," noted Standard & Poor's credit analyst Michael Altberg. At the same time, S&P has assigned its 'B-' issue-level rating (at the same level as the 'B-' corporate credit rating) to the company's new $500 million senior secured notes due 2014. S&P also assigned this debt a recovery rating of '3', indicating S&P's expectation of meaningful (50% to 70%) recovery for noteholders in the event of a payment default. Despite local advertising weakness across the radio and TV station groups, the company's recent credit amendment alleviates S&P's previous concerns about covenant compliance in 2009 and 2010. In addition, Univision has recently addressed upcoming maturities with a tender offer at par for its $500 million 8.75% senior notes due 2011, which S&P expects will be repaid with proceeds from its new senior secured debt issuance. The 'B-' corporate credit rating reflects Univision's highly leveraged capital structure and weak credit metrics since its 2007 LBO, failure to accomplish planned asset sales in a timely manner, advertising pricing that is not commensurate with its audience share, and weak trends in TV and radio advertising, which remain under economic pressure. Univision's position as the dominant U.S.-based Spanish-language TV and radio broadcaster, favorable long-term contracts to purchase popular TV programming, and positive trends in Spanish-language population and viewing are modestly positive factors that do not offset these risks. VIGO SNACK: Involuntary Chapter 11 Case Summary ----------------------------------------------- Alleged Debtor: Vigo Snack Distributing, Inc. 2748 E. Northwood Ave. Terre Haute, IN 47805 Case Number: 09-81091 Type of Business: Involuntary Petition Date: June 24, 2009 Court: Southern District of Indiana (Terre Haute) Judge: Frank J. Otte Petitioner's Counsel: Robert D. McMahan, Esq. tiffany@mcmahanlaw.net McMahan Law Firm P.O. Box 3105 Terre Haute, IN 47803 Tel: (812) 235-2800 Fax: (812) 238-9486 Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ Alfred L Morge unstated unstated 241 Francis Ave. Ct. Terre Haute, IN 47804 VONAGE HOLDINGS: Settles Shareholder Litigation Over 2006 IPO ------------------------------------------------------------- Vonage Holdings Corp. last week reached an agreement in principle to settle litigation against the Company brought on behalf of a class of shareholders relating to the Company's initial public offering, In re Vonage Initial Public Offering Securities Litigation, Civ. A. No. 07-cv-177 (D.N.J.). The settlement includes a release and dismissal of all stockholder claims against the Company and its individual directors and officers who were named as defendants. It is still subject to final documentation and approval by the U.S. District Court for the District of New Jersey. According to the CLASS ACTION REPORTER, the settlement will be funded by Vonage's liability insurance under the Company's D&O policy. As a result, the Company will incur no additional litigation settlement costs other than nominal administrative fees and expenses. In the 2006 IPO, investors bought the shares for $17 each, then saw the value fall 13% when they opened for trading on May 24, The Associated Press. The stock traded at 0.42 at the close of business on June 24. Motley Rice LLC filed suit on behalf of shareholders a week after the IPO. According to AP, the suit alleged Vonage erred when it reserved 13.5% of the IPO shares for customers of phone service. These were not serious investors, the suit alleged, and the failure of some of them to pay for the shares exacerbated the decline in share value. About Vonage Holdings Headquartered in Holmdel, New Jersey, Vonage Holdings Corp. (NYSE:VG) -- http://www.vonage.com/-- provides broadband telephone services with more than 2.6 million subscriber lines. Its technology enables anyone to make and receive phone calls with a touch tone telephone almost anywhere a broadband Internet connection is available. Vonage's service is sold on the web and through national retailers including Best Buy, Wal-Mart Stores Inc. and Target and is available to customers in the U.S., Canada and the United Kingdom. * * * BDO Seidman, LLP, in Woodbridge, New Jersey, raised substantial doubt as to Vonage Holdings Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years Dec. 31, 2007, and 2006. Vonage's balance sheet at March 31, 2009, showed total assets of $330.2 million, total liabilities of $443.9 million, resulting in a stockholders' deficit of $113.6 million. The Company posted a net income of $5.27 million for the quarter ended March 31, 2009, compared to a net loss of $8.96 million. WHITE ENERGY: Gets Final Approval to Use Cash Collateral -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted final approval of White Energy Holding Co. and its affiliates' request to use cash subject to interest of their lenders, Bill Rochelle at Bloomberg News reports. According to the report, the cash collateral arrangement requires paying 80 percent of a $1.4 million tax refund to the lenders, with the remaining 20% available for operations. As reported on May 25, 2009, the U.S. Bankruptcy Court for the District of Delaware authorized, on an interim basis, White Energy, Inc., and its debtor-affiliates to use cash securing repayment of loan from West LB AG until July 3, 2009. The Court also granted adequate protection to the Debtors' prepetition secured parties. As of White Energy's petition date, the Debtors owed $300 million to West LB AG, New York Branch, as administrative agent, and the prepetition lenders under the amended and restated credit agreement dated as of July 31, 2006, as amended, in respect to loans made and letters of credit issued and other financial accommodations made. About White Energy, Inc. Headquartered in Dallas, Texas, White Energy, Inc. -- http://www.white-energy.com/-- builds and acquires ethanol production projects. White Energy's plants have a combined capacity of producing 240 million gallons of ethanol a year, making it one of the 10 largest ethanol producers in the U.S. and the second-largest gluten maker. Two plants are in Texas with the third in Kansas. White spent $323 million building the plants in Texas. The Company and its debtor-affiliates filed for Chapter 11 on May 7, 2009 (Bankr. D. Del. Lead Case No. 09-11601). Michael R. Lastowski, Esq., at Duane Morris LLP, represents the Debtors in their restructuring efforts. The Debtors tapped The Garden City Group Inc. as claims agent. On the petition date, the Debtors disclosed assets and debts ranging from $100 million to $500 million. YRC WORLDWIDE: Obtains Amendment to JPMorgan Credit Agreement ------------------------------------------------------------- YRC Worldwide Inc. and certain of its subsidiaries on June 17, 2009, entered into Amendment No. 7 to their Credit Agreement dated as of August 17, 2007, with JPMorgan Chase Bank, National Association, as agent, and the other lenders. The Credit Agreement continues to provide the Company with a $950 million senior revolving credit facility, including sublimits available for borrowings under certain foreign currencies and for letters of credit, subject to restrictions on access to a so-called Revolver Reserve Amount, and a senior term loan in an aggregate outstanding principal amount of approximately $111.5 million. Escrow Termination, Prepayments and Borrowings Prior to the Credit Agreement Amendment, the Company and its subsidiaries had deposited approximately $73 million of net cash proceeds from real estate assets sales into an escrow account. On June 17, 2009, (i) all funds in the Escrow Account -- except for $3,571,405 that was released to the Company to prepay the Obligations under the Contribution Deferral Agreement on or before June 30, 2009 -- were released to the Administrative Agent to prepay the revolving loans under the Credit Agreement without a corresponding permanent reduction of the revolving commitments and (ii) the agreement governing the Escrow Account was terminated. Prior to the Credit Agreement Amendment, for any real estate asset sale other than the sale and lease back transaction with NATMI Truck Terminals, LLC, the net cash proceeds of which, together with the aggregate amount of net cash proceeds from all asset sales occurring on or after January 1, 2009, but on or before July 15, 2009, were less than or equal to $300 million, 50% of such proceeds was used to prepay outstanding revolving loans under the Credit Agreement -- without a corresponding permanent reduction of the revolving commitments -- and the remaining 50% was deposited into the Escrow Account. Due to the release of funds from, and the termination of, the Escrow Account, for any real estate asset sale that closes on or after June 17, 2009, the net cash proceeds -- after deduction for prepayments of a portion of the Obligations pursuant to the Contribution Deferral Agreement -- of which, together with the aggregate amount of net cash proceeds from all asset sales occurring on or after January 1, 2009, and on or prior to July 15, 2009, is less than or equal to $300 million, 100% of such proceeds will be used to prepay outstanding revolving loans under the Credit Agreement (without a corresponding permanent reduction of the revolving commitments) with 50% of the proceeds added to the Revolver Reserve Amount. At 12:00am on July 16, 2009, the revolving commitments under the Credit Agreement will be permanently reduced by an amount equal to the Revolver Reserve Amount. In addition, prior to July 16, 2009, the Company may only borrow funds or request the issuance of letters of credit from the Revolver Reserve Amount under the Credit Agreement with the approval of lenders with at least two- thirds of the aggregate revolving loan and term loan exposure and unused commitments. If the Company, its domestic subsidiaries -- other than Yellow Roadway Receivables Funding Corporation -- and YRC Assurance Co. Ltd, collectively, have more than $150 million in Permitted Investments as of any business day, then the Company must prepay the outstanding revolving loans under the Credit Agreement in an amount equal to such excess (without a corresponding permanent reduction of the revolving commitments) the next business day. In addition, the Company may only borrow funds or request the issuance of letters of credit under the Credit Agreement to the extent that the Allowable Permitted Investments are less than $150 million. Collateral In addition to the first priority liens on identified owned real property that the lenders under the Credit Agreement previously authorized the Company and its subsidiaries to grant to the Funds to secure the Obligations under the Contribution Deferral Agreement, the Credit Agreement Amendment permits the Company and its subsidiaries to grant to the Funds second priority liens on additional identified owned real property to secure the Obligations subject to the terms and conditions of an intercreditor agreement among the parties. Event of Default The Credit Agreement Amendment provides that it will be an event of default under the Credit Agreement if an event or condition occurs that enables or permits the holder or holders of Obligations under the Contribution Deferral Agreement -- or any trustee or agent on a holder's behalf -- to cause such Obligations to become due or require prepayment, repurchase, redemption or defeasance of such Obligations prior to its scheduled maturity (after giving effect to any cure or grace period, amendment or waiver). The Company clarified the Amendment does give it immediate access to the escrow funds of $73 million by means of revolver capacity that can be borrowed at any time without approval from the lenders so long as the company's cash is below $150 million. The $150 million is a new maximum of cash and cash equivalents that was mutually agreed to by the Company and the lender group and set well above the company's average daily cash usage. The Company's total liquidity includes its cash balance in addition to the availability under its credit facilities, which in total was $242 million at May 31, 2009. The Company did not pay any fees to the lender group associated with the amendment. About YRC Worldwide Overland Park, Kansas-based YRC Worldwide Inc. (NASDAQ: YRCW) is a holding company that through wholly owned operating subsidiaries offers its customers a wide range of transportation services. The services include global, national and regional transportation as well as logistics. Its operating subsidiaries include YRC National Transportation; YRC Regional Transportation; YRC Logistics; and YRC Truckload. At March 31, 2009, about 70% of the Company's labor force is subject to collective bargaining agreements, which predominantly expire in 2013. At March 31, 2009, the Company had $3,674,725,000 in total assets and $3,467,190,000 in total liabilities. As reported by the Troubled Company Reporter on May 20, 2009, Standard & Poor's Ratings Services maintained its 'CCC' long-term corporate credit rating on YRC Worldwide Inc. on CreditWatch with negative implications. S&P had revised the CreditWatch implications to negative from positive on April 24, 2009, reflecting concerns that the company may not be able to meet its amended bank covenants. YRC WORLDWIDE: Units Defer $83MM in Pension Contributions --------------------------------------------------------- YRC Worldwide subsidiaries YRC Inc., USF Holland Inc., USF Reddaway Inc., and New Penn Motor Express, Inc., on June 17, 2009, entered into a Contribution Deferral Agreement with the Central States, Southeast and Southwest Areas Pension Fund and Wilmington Trust Company, as agent. The Central States Pension Fund is the largest of the Company's International Brotherhood of Teamsters multiemployer defined benefit pension funds, representing roughly 58% of the company's pension funding obligations. Other IBT pension funds may execute a joinder agreement to become a party to the Contribution Deferral Agreement. Deferred Pension Payments The Central States Pension Fund agreed that the Primary Obligors could defer the payment to it of roughly $83 million of contributions (that were originally due on or before June 15, 2009. The Company is working to finalize discussions with other Funds to defer roughly $50 million of contributions owed to such Funds and have such Funds agree to the terms of the Contribution Deferral Agreement. As other Funds become a party to the Contribution Deferral Agreement, the amount of Deferred Pension Payments would increase by the second quarter 2009 contributions due to those Funds. The Funds also agreed that the deferral of Obligations would not be used in any determination that any Obligor or any ERISA affiliate has incurred complete or partial withdrawal from any such Funds or is otherwise subject to withdrawal liability. Interest will accrue on the Deferred Pension Payments owed to each Fund at the applicable interest rate set forth in the trust documentation that governs the Fund. The interest rate for the Central States Pension Fund is equal to prime plus 2%. Interest from the original due date of the Deferred Pension Payments owed to each Fund through the date a Fund becomes a party to the Contribution Deferral Agreement with respect to any such Deferred Pension Payment will be capitalized, compounded and added to the applicable Deferred Pension Payments. Interest on the Obligations will accrue monthly, and commencing on July 15, 2009, will be payable in arrears on the 15th day of each calendar month. The Primary Obligors will pay the Obligations in (i) payment of $3,571,405 on or before June 30, 2009, and thereafter (ii) the balance in 36 equal monthly installments payable on the 15th day of each calendar month commencing on January 15, 2010 (or such later dates as the applicable Fund may agree). Collateral In exchange for the deferral of the Obligations, certain of the Companies subsidiaries as Obligors will pledge identified real property to the Funds so that the Funds have a first priority security interest in certain of the identified real property and a second priority security interest in other identified real property located throughout the United States and Mexico. The Company's lenders under the Credit Agreement will continue to have a first priority security interest in the Second Priority Collateral and a second priority security interest on substantially all of the First Priority Collateral, which in each case is subject to the terms and conditions of an intercreditor agreement among the parties. Prepayments The Primary Obligors must prepay the Obligations on a ratable basis to the Funds (i) with the net cash proceeds from the sale of First Priority Collateral or (ii) to the extent that Liquidity of the Company is greater than $250 million, an amount equal to such excess; provided, that, Liquidity will be equal to $250,000,000 after giving effect to such payment and no payment shall be required until the Excess Amount is equal to or greater than $1 million at any time. The Primary Obligors may voluntarily prepay the Obligations at any time without premium or penalty. However, pursuant to the terms of the Credit Agreement, the Company and its subsidiaries may not voluntarily prepay the Obligations until August 15, 2009, and any prepayment must be with (i) the net cash proceeds from the issuance of common stock or other equity interests of the Company or (ii) the issuance of common stock or other equity interests of the Company. Subsidiary Guarantors The Obligors that are not the Primary Obligors will guarantee or provide collateral to secure the Obligations. Recourse by the Funds under the guarantee with respect to any guarantor is limited to the guarantor's owned real property subject to a mortgage for the benefit of the Funds. Covenants The Contribution Deferral Agreement includes a limited number of affirmative and negative covenants. The Obligors cannot sell First Priority Collateral without the consent of the Funds representing a majority of the outstanding Deferred Pension Payments (such consent not to be unreasonably withheld, delayed or conditioned) unless the cash consideration received for such collateral is equal to or greater than 100% of the gross book value of such First Priority Collateral. The Obligors shall not (i) provide collateral (other than the collateral granted pursuant to the Contribution Deferral Agreement) securing obligations owed by any Obligor to any IBT pension fund similarly situated to the Funds (including IBT pensions funds not a party to the Contribution Deferral Agreement) or (ii) make payments in respect of pension contributions owed to any IBT pension fund similarly situated to the Funds to the extent such IBT pension fund does not become a party to the Contribution Deferral Agreement (other than payments approved by the Funds that are owed a majority of the Deferred Pension Payments -- such approval not to be unreasonably withheld, delayed or conditioned). Events of Default The Contribution Deferral Agreement includes customary events of default, including nonpayment of the Deferred Pension Payments, materially incorrect representations and warranties, breaches of the covenants and bankruptcy related events. Upon and during the continuance of an Event of Default, the Funds that are owed a majority of the Deferred Pension Payments may direct the Agent to pursue remedies with respect to the collateral, including foreclosure, subject to the terms of the intercreditor agreement. Any Fund may declare its Deferred Pension Payments due and payable upon the occurrence and during the continuance of an Event of Default and pursue remedies (other than remedies with respect to the Collateral). About YRC Worldwide Overland Park, Kansas-based YRC Worldwide Inc. (NASDAQ: YRCW) is a holding company that through wholly owned operating subsidiaries offers its customers a wide range of transportation services. The services include global, national and regional transportation as well as logistics. Its operating subsidiaries include YRC National Transportation; YRC Regional Transportation; YRC Logistics; and YRC Truckload. At March 31, 2009, about 70% of the Company's labor force is subject to collective bargaining agreements, which predominantly expire in 2013. At March 31, 2009, the Company had $3,674,725,000 in total assets and $3,467,190,000 in total liabilities. As reported by the Troubled Company Reporter on May 20, 2009, Standard & Poor's Ratings Services maintained its 'CCC' long-term corporate credit rating on YRC Worldwide Inc. on CreditWatch with negative implications. S&P had revised the CreditWatch implications to negative from positive on April 24, 2009, reflecting concerns that the company may not be able to meet its amended bank covenants. * Business Credit Less Available Than Last Year, TMA Says --------------------------------------------------------- Bill Rochelle of Bloomberg reported that, according to 98 percent of 395 respondents in a survey taken by the Turnaround Management Association, business credit is less available now than it was this time last year. According to the TMA survey, 70% of respondents said credit is less available from lenders who provide loans to distressed borrowers, the study found. * Citizens Advice Bureau Says Jersey's Bankruptcy Laws Need Change ------------------------------------------------------------------ The Citizens Advice Bureau said that Jersey's bankruptcy laws need modification, to bring vital relief to debt-ridden Islanders, Jersey Evening Post reports. According to Jersey Evening Post, CAB manager Francis Le Gresley said that many of his clients were suffering because it was almost impossible to be declared bankrupt in the state. Citing Mr. Le Gresley, the report states that the current laws were leaving debt-ridden Islanders who, despite failing to repay their debts, were constantly being harassed by creditors. * Hughes Watters Paralegal Turea Simpson Forms Peer Group --------------------------------------------------------- Turea Simpson, a senior paralegal with Houston-based law firm Hughes Watters Askanase L.L.P., has formed the Houston Association of Bankruptcy Paralegals. The HABP is the first association of its kind in Texas and just the second of its kind in the nation. Ms. Simpson explained that she established the HABP because she saw a strong need and desire among Houston bankruptcy paralegals for continuing education and for face-to-face communication. "Hughes Watters Askanase often sent me to bankruptcy seminars geared toward attorneys, but not paralegals. It came to me during one of these seminars that bankruptcy paralegals do not have our own events or workshops that help us continue our education which in turn enables us to be more successful at our jobs. Because bankruptcy paralegals work with paralegals at other firms on a daily basis, the opportunity to meet colleagues face-to-face is especially important." Ms. Simpson said that response to the new organization has been excellent. The group hosted its first social event in May, and many attendees commented to Simpson that they were delighted to meet colleagues with whom they had worked with for years, but had never met in person. The HABP governing board includes paralegals and an attorney from several leading Houston law firms. Board members include: President and Chairman Turea Simpson, HWA; Vice President Kinni Saldana, The Law Office of Pamela L. Stewart; Secretary Tina Pavlock, HWA; Treasurer Sandra Olivarez, HWA; Assistant Treasurer Karen Dockens, HWA; Parliamentarian Casey Mucha, Fulbright & Jaworski L.L.P.; Mentorship Committee Chair Yola Galvin, Jackson Walker, L.L.P.; Membership Committee Chair Mary Shiloh, Butler & Hailey, P.C.; Newsletter Editor Dru Graves, Adair & Myers, P.L.L.C.; and Board Advisor Marjorie Britt of Britt and Catrett, P.C. The HABP has attracted more than 40 members since Ms. Simpson introduced the organization in April. The HABP offers several levels of membership, including voting and non-voting levels, with annual dues of $50. All membership dues have been waived for 2009 applications. Additionally, the HABP has received significant sponsorship. Businesses that currently support the group include: Waldron & Schneider, L.L.P., Robert Half Legal, Hughes Watters Askanase L.L.P., Britt & Catrett, P.C., and Mach 5 Couriers Inc. Apart from banner and representative recognition at HABP events, sponsors will enjoy Web site recognition and advertising space when the HABP publishes its official Web site. According to Ms. Simpson, the HABP plans to maintain an active schedule of events and programs. Plans include monthly Continuing Legal Education events with guest speakers, an annual conference, pro bono opportunities, a peer-to-peer training and mentorship program, and an online job bank. HWA partner Dominique Varner spoke at the group's first CLE event on June 12, during which she discussed "Proofs of Claim: How to Protect Creditors' Rights." Other guest speakers scheduled for this year include: Diane Livingstone, assistant U.S. Trustee; Hugh M. Ray, partner at Andrews & Kurth, L.L.P.; and The Honorable Judge Jeff Bohm, United States Bankruptcy Judge. Ms. Simpson said the HABP board has been actively seeking several accreditations and affiliations that will connect the organization to both state and national resources. Ms. Simpson is petitioning the Texas Board of Legal Specialization to begin the process that would allow paralegals to become certified as bankruptcy paralegals. She has also applied for a National Association of Legal Assistants Affiliation that will give the HABP a vote within NALA, access to national continuing education conferences, and the opportunity to promote the HABP on the NALA Web site. Ms. Simpson plans to expand the HABP statewide and nationally within coming years. "This organization is being a model for other organizations," Ms. Simpson said. "I set the bar high for everything I do." A Houston native, Ms. Simpson has been a bankruptcy paralegal for Janet Northrup, Of Counsel with Hughes Watters Askanase L.L.P., for the past eight years and has been in the bankruptcy field for over 10 years. Ms. Simpson has been a certified bankruptcy assistant since 2007 and is an active member of the American Bankruptcy Judicial Assistants. On the Net: http://www.hwa.com/ About Houston Association of Bankruptcy Paralegals Established in April 2009, The Houston Association of Bankruptcy Paralegals offers members monthly CLE events, an annual conference, opportunities for pro bono work, a mentorship program and an online job bank. For further information on the HABP, please contact Simpson at tsimpson@hwa.com or phone 713-328-2833. * Lehman, AIG, Citi Fees Comprise 10.7% of Weil's Revenues ---------------------------------------------------------- Stephen Karotkin, Esq., a member of Weil, Gotshal & Manges LLP, said fees for services to Lehman Brothers, American International Group and Citigroup represent a combined 10.7% of the firm's annual gross revenues for the last 12 months (LTM). Mr. Karotkin made the disclosure in a Supplemental Affidavit and Disclosure Statement filed on his firm's behalf in the bankruptcy cases of General Motors Corporation, pending before the U.S. Bankruptcy Court for the Southern District of New York. General Motors is seeking Court approval to hire Weil as its general counsel. According to the signed affidavit, Weil's major clients are: Percentage of Revenues for LTM ---------------- Lehman Brothers 6.6% General Electric 3.2% Thomas H. Lee Partners 2.7% AIG 3.0% Microsoft Corporation 0.9% Citigroup 1.1% Nate Raymond at The American Lawyer says Weil may collect more than $25,000,000 in fees from AIG. Weil is representing AIG in connection with the company's global divestiture and restructuring program. Since early 2008, Weil has worked with AIG to develop legal strategies addressing litigation, financial auditing, reporting, and regulatory compliance issues concerning the company's write-downs of hard-to-value, illiquid credit default swaps of mortgage- and asset-backed securities. "Exactly what dollar amount that equals is unclear. But back-of- the-envelope math suggests the fees are at least $25 million to $36 million, if not more," Mr. Raymond says. "Weil's filing says Lehman Brothers made up 6.6 percent of its revenue in the last year. Weil has already submitted a $55 million bill for its work on the Lehman case between September 15 to January 31. A little cross multiplication, then, would put its AIG fees easily in excess of $25 million. "And that's erring on the low side since our calculation doesn't factor in what Weil earned in the months before Lehman melted down or its work since February. "It also ignores Weil's 2008 revenues. Last year, it earned $1.23 billion, up 4.75 percent. Quick multiplication puts AIG fees at more than $36 million. "But again, that too likely undervalues the bill, since Weil's bankruptcy work is booming and the firm will probably close the year with higher revenue. In a March memo obtained by The American Lawyer, Weil said its "overall level of business has remained strong and is expected to remain strong when the economy 'normalizes.'" AIG in its quarterly report filed in May 2009 disclosed incurring $274,000,000 in exit expenses which include consulting and other professional fees related to (i) asset disposition activities, (ii) AIG's debt and capital restructuring program with the Federal Reserve Bank of New York and the U.S. Department of the Treasury and (iii) unwinding most of AIGFP's businesses and portfolios. AIG expects exit costs to total $700,000,000. Senior members of the Weil Gotshal team includes partners Michael Aiello, Matthew Gilroy, Marcia Goldstein, Joseph Allerhand, Robert Carangelo and Jason Smith. Mr. Raymond says AIG also has engaged Sullivan & Cromwell, Simpson Thacher & Bartlett and Sidley Austin, among others. None of their fees are known, he adds. Weil earned $54,000,000 from GM before the bankruptcy filing. Mr. Karotkin filed the affidavit to disclose potential conflicts of interest in connection with the GM engagement, as required pursuant to Sections 327, 328(A), 329 and 504 of the Bankruptcy Code, and Rules 2014(A) and 2016(b) of the Federal Rules of Bankruptcy Procedure. * Leonard Goldberger Appointed to INSOL Committee ------------------------------------------------- Leonard P. Goldberger, Esq., a Stevens & Lee shareholder, has been appointed to the INSOL International Technical Programme Committee, a group of only 16 insolvency practitioners worldwide. The group will plan the program for the 2010 INSOL International Europe/Africa/Middle East Regional Conference in Dubai. In December 2008, Mr. Goldberger successfully completed INSOL International's inaugural Global Insolvency Practice Course, with honors, and became an INSOL fellow. INSOL International is a world-wide federation of national associations for accountants and lawyers who focus their practices on turnaround and insolvency. There are currently 40 member associations world-wide with over 10,000 professionals participating as members of INSOL International. Mr. Goldberger has over 32 years of experience practicing business bankruptcy law. He represents insurers in asbestos, mass tort and environmental bankruptcy cases and works with domestic and foreign investors in the acquisition and financing of financially- distressed businesses. A former Vice President, Director and Executive Committee member of the American Bankruptcy Institute, Mr. Goldberger was also the Chair of the American Bar Association's Committee on Insurance Coverage Subcommittee on Insolvency, and a member of the ABA's Litigation Section and its Tort Trial and Insurance Practice Section. Mr. Goldberger has lectured and written extensively on bankruptcy law topics and currently serves on the editorial board of the American Bankruptcy Institute Journal. He has appeared as a guest commentator on CourtTV. Mr. Goldberger received a J.D. from Villanova University School of Law and a B.A., summa cum laude, from Temple University. About Stevens & Lee Among the 200 largest law firms in the nation, Stevens & Lee -- http://www.stevenslee.com-- is part of a multidisciplinary professional services platform which also consists of a FINRA- licensed investment bank, a D&O and E&O insurance risk consulting business, a swap and derivative advisory business, federal and state lobbying units, a health care risk consulting business and a government incentives and sales and use tax consulting business. The firm's 240 multidisciplinary professionals represent clients throughout the Mid-Atlantic region and across the country from 15 offices in: Philadelphia, Reading, Harrisburg, Valley Forge, Lancaster, the Lehigh Valley, Scranton and Wilkes-Barre, Pennsylvania; Princeton and Cherry Hill, New Jersey; Wilmington, Delaware; New York City and Charleston, South Carolina. * NasTrac Says Tool Repossessions Rising Dramatically in Q1 2009 ---------------------------------------------------------------- Repossessions and liquidations of construction equipment nearly tripled in the first quarter of 2009, as did machine tool repossessions, as compared to the same quarter of 2008, according to Nassau Asset Management's NasTrac Quarterly Index. The figures, culled from the company's activity reports for both repossessions and orderly liquidations, show the dramatic effect of the economy on the construction, manufacturing and transportation industries, even as signs surface of a possible economic turnaround. Machine tool repossessions have undergone a steady and continuous increase since the third quarter of 2007, according to Nassau's records. Truck repossessions processed by Nassau increased slightly, by approximately two percent in Q1 2009, as compared to the same period in 2008. "We have said in the past that a spike in the machine tool sector reflects the true economic condition," said Ed Castagna, president of Nassau Asset Management. "That may no longer be true, because the bankruptcy proceedings for Chrysler and GM have clouded the picture for the machine tool sector. With so many machine tools in use by these reorganizing businesses, it is less clear if the spike we saw in the first quarter of 2009 is caused by the failing automakers and their subcontractors, or by the overall underlying economy." Mr. Castagna continued, "It is Nassau's opinion that, since the spike is so drastic, the burst of the automotive bubble is the reason. If that is true, the increase in activity is more of a result of a single industry facing problems and not a sign of overall negativity in the economy." "What the automotive industry is to machine tools, the homebuilding sector is to construction equipment," Mr. Castagna added. "Clearly, the current rise in construction activity shows the continued problems faced by the homebuilding industry. The housing decline first deeply affected the truck sector and it is now reaching into the construction equipment category. "We have stated in the past that the funding of new projects by moneys in the stimulus package would take some time to have an effect. Nassau believes the increase in repossession activity indicates that these funds have yet to reach their targeted audiences with the speed and impact that was planned. Obviously, our statistics indicate there is a buyer's market in the trucking, construction and machine tool sectors and the good news is that people continue to buy on the secondary market." Trucking Repossessions and Liquidations Repossession figures for trucks and tractor trailers increased slightly by two percent in the first quarter of 2009, as compared to the same period in 2008, remaining at a very high level of activity. This appears to mirror the continued steady struggles in the economy, as stated in the Beige Book report issued by the Federal Reserve in April. In that report, several districts within the Federal Reserve reported that the low demand for trucking meant that companies continued to trim their fleets and their workforces. In a report from the U.S. Department of Transportation, its freight transportation services index for March 2009 fell 3.3 percent from its February level, to its lowest level in more than six years. That decrease was the largest monthly drop for any month since March 2000. It still appears that fuel prices are not affecting freight transportation. Even as gas and diesel prices increase, they are still far below last year's highs and the Energy Department predicts that diesel will average $2.26 a gallon in 2009, down from the $3.80 average of last year. Other Repo Trends Nassau's latest NQI compares the company's internal repossession and orderly liquidation activity in the first quarter of 2009 with the same period of 2008. In addition to reporting on truck volume, the latest NQI revealed these trends: Construction Repos Increased Significantly -- Construction equipment repossessions in Q1 2009 nearly tripled from the totals for Q1 2008. This sector continued to be hit hard in the first part of the year by the struggles in the housing industry and the decline in nonresidential construction. While some experts believe the housing market is beginning to exhibit a slight turnaround, thanks to low prices sparking interest among buyers, the glut of homes currently on the market is reducing the need for additional construction. Meanwhile, the Architecture Billings Index, a leading indicator of U.S. nonresidential construction, has begun to exhibit signs of renewed interest in building projects in the past two months. However, contrary to that data, in a poll of the members of the American Institute of Architects, which issues the Billing Index, respondents reported continued pessimism for their own future outlook. This suggests that any signs of positive activity are restricted to specific areas or larger companies, and have not produced enough momentum to improve conditions in the construction equipment sector as a whole. Machine Tool Repos Increased Dramatically -- Repossessions of machine tool equipment in Q1 2009 increased by threefold over the same quarter of 2008, reflecting the ongoing struggles in the sector. According to a report by AMT (The Association for Manufacturing Technology) and AMTDA (the American Machine Tool Distributors' Association), U.S. manufacturing technology consumption in February 2009 declined 62.4% from the total for February 2008, and the year-to-date total for 2009 was down 66.2% compared to 2008. This data reflects the significant impact on the economy of the problems faced by Chrysler and GM in the last two quarters. While other economic sectors may be showing signs of life, that was not enough to overcome the damage done by the auto industry. It remains to be seen if the various actions taken by Chrysler and GM as part of their reorganization plans will provide any relief to this category. Medical Equipment Repos Decreased From Q1 08 -- Data in the NQI showed repossessions of medical equipment in 2009 declined by approximately 33% from the same quarter of 2008. About NQI NQI reports on Nassau's internal repossession and orderly liquidation activity in a given quarter compared to the same quarter the previous year or to previous quarters in the same year. The results must be viewed over several quarters to establish trends. About Nassau Nassau Asset Management of Westbury, New York, has been providing full-service asset management, including asset recovery, collections, remarketing, plant liquidations, and appraisals for more than 25 years to the equipment finance industry. On the Net: http://www.nasset.com/or call 1-800-4.NASSAU * New Home Sales Unexpectedly Decline 0.6% in May ------------------------------------------------- Sales of new homes unexpectedly fell 0.6 percent in May to an annual rate of 342,000, compared with a revised 344,000 for April, the U.S. Commerce Department reported June 24. The median price for a new home was 3.4 percent lower than last year, the report said. * Paying Preference Settlement Revives Released Guarantee --------------------------------------------------------- According to Bill Rochelle at Bloomberg, the U.S. Court of Appeals in San Francisco ruled June 23 that if a creditor settles a preference claim, the payment revives a previously released guarantee, Courts and commentators previously said that a judgment for a preference revives a guarantee. The 9th Circuit in San Francisco disagreed with a treatise and followed a ruling from a sister court of appeals to say that a settlement likewise revives a guarantee, just like a judgment. The Court of Appeals ruling in SNTL Corp. v. Centre Insurance Co. (In re SNTL Corp.), Case No. 08-60001, also answered a question left open by a 2007 decision from the U.S. Supreme Court. The San Francisco appeals court held that an unsecured creditor has a valid claim for post-bankruptcy attorneys' fees if the underlying contract provides. Mr. Rochelle relates that in Travelers Casualty & Surety Co. of America v. Pacific Gas & Electric Co., the Supreme Court held that an unsecured creditor's pre-bankruptcy counsel fees are valid claims if the contract says so. Bill Rochelle said the 9th Circuit didn't write its own opinion; instead, it adopted the opinion that U.S. Bankruptcy Judge Dennis Montali wrote as an appellate judge on the Bankruptcy Appellate Panel for the 9th Circuit. * BOOK REVIEW: Instincts of the Herd in Peace and War ----------------------------------------------------- Author: Wilfred Trotter Publisher: Beard Books Softcover: 264 pages List Price: $34.95 by Henry Berry Instincts of the Herd in Peace and War examines how individuals become involved in social groups and how this affects their involvement in a nation, the ultimate social group. According to Trotter, human beings are, by nature, "gregarious," and their gregariousness is instinctive. Consequently, individuals are compelled to attach themselves to a primary social group and assume a role within it. Individuals may form attachments to other groups and take different or modified roles within them, but it is their attachment to, identification with, and role within a primary group that lends them their personal identity, sense of purpose, and sense of self-worth and fulfillment. Although a nation is the ultimate group, it becomes the primary social group only in the case of war. To Trotter, war and peace are not mutually exclusive social states. They form a continuum of historical social states that comprise the entirety of all possible social states. There can be no utopias, nor can there be eternal wars. The flow of events brings periods of peace and war. The events in Europe preceding World War I -- the period during which Trotter wrote the first edition of his book -- were a test case for the author's observations and conclusions. The people of England, France, Germany, and other European nations became focused on defending their nations against external enemies. Societies (i. e., nations) underwent upheaval as their people turned from limited involvement with smaller social groups to large-scale involvement in national defense. Trotter's book is recognized as a classic in the field of sociology, a relatively new science in the latter 1800s and early 1900s. Trotter and others sought to understand the group dynamics of democratic societies, which were replacing the class structure of aristocratic, hierarchal societies. Trotter also sought to counter the misleading effects of psychology, especially the influence of Freudian psychology, which saw individuals as influenced mostly by inner, largely subconscious feelings and experiences. Trotter argues that psychology is not an independent field. Says the author, "The two fields -- the social and the individual -- are absolutely continuous; all human psychology, it is contended, must be the psychology of associated man, since man as a solitary animal is unknown to us . . . ." Even a hermit is born in society; and society has an interest in hermits for what they may reflect about conditions of society. This reprint is the second edition of Trotter's classic work. The second edition includes the author's 45-page "Postscript of 1919," assaying the conditions of peace after World War I had ended. "With the cessation of war this great stream of moral power [in defending the nation] began rapidly to dry up at its source," observes Trotter. He proffers that the aim of statecraft is keeping this "great stream of moral power" in times of peace. He believes that the progressive evolution of society can be accomplished by a "scientific statecraft [applying] the intellect as an active factor in the direction of society." While basically a work of sociology, Trotter's book can be a picture of individual and group behavior for leaders in any organization where motivation, unity, and progress are important. This includes business leaders, especially leaders of larger companies with multiple business sites and different employee segments. Business leaders will immediately grasp the truth and relevance of the author's view of society and glean from it essential lessons and leadership principles, practices, and goals. Wilfred Trotter (1872-1939) was an English surgeon as well as an influential sociologist. ��********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Ma. Theresa Amor J. Tan Singco, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***