/raid1/www/Hosts/bankrupt/TCR_Public/090710.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, July 10, 2009, Vol. 13, No. 189
Headlines
AGRIPROCESSORS: Charges vs. Former Execs. to Be Heard Sept. 15
AIRTRAN HOLDINGS: S&P Assigns 'CCC-' Rating on Senior Debt
AMERICAN INT'L: May Have No Value Left, Says Citigroup
ASARCO LLC: Allowed to Move Forward With Suit Vs. Fireman's Fund
ASARCO LLC: Files Disclosure Statement for Competing Plans
ASARCO LLC: Modified Plan Says Asbestos PI Claimants May Get 100%
ASARCO LLC: Parent Plan Assures 97% Recovery in Cash for Creditors
ASARCO LLC: Parties That Purchased Claims in June
BENCHMARK ELECTRONICS: Fin'l Results Won't Affect Moody's Rtng.
BERNARD MADOFF: Picard Has Recovered $1.08 Billion as of June 30
BH S&B HOLDINGS: Committee Seeks to Recover $1.2MM From 45220
BIG 10 TIRE: SSG Capital Advised Co. Sun Capital Repurchase
BOMBARDIER RECREATIONAL: S&P Raises Corp. Credit Rating to CCC
CATALYST PAPER: Moody's Cuts Corporate Family Rating to 'B3'
CCS MEDICAL: Files for Chapter 11 With Pre-Arranged Plan
CCS MEDICAL: Case Summary & 50 Largest Unsecured Creditors
CCS MEDICAL: Wants to Access $10-Mil. of Financing from Imperial
CCS MEDICAL: Proposes A&M Healthcare as Restructuring Advisors
CCS MEDICAL: Hires Epiq Bankruptcy as Claims Agent
CCS MEDICAL: Intends to File Schedules & Statements by Sept. 8
CCS MEDICAL: Proposes Willkie Farr & Gallagher as Co-Counsel
CCS MEDICAL: Chapter 11 Filing Cues S&P's Rating Cut to 'D'
CEMEX SAB: Net Income Dropped to US$169 Million in 2008
CENTENNIAL COMMUNICATIONS: S&P Keeps Positive Watch on B Rating
CHARLES A. ROBINSON: Case Summary & 20 Largest Unsec. Creditors
CHRYSLER FINANCIAL: Fitch Affirms Junk Issuer Default Ratings
CIT GROUP: Fitch Downgrades Issuer Default Ratings to 'BB-'
CITIGROUP INC: Makes Senior Management Changes
CITY OF VALLEJO: 9th Cir. BAP Affirms Chapter 9 Eligibility
COMMUNITY HEALTH: Fitch Affirms 'B' Issuer Default Ratings
COYOTES HOCKEY: Goldwater Wants to Look at Jerry Reinsdorf Bid
CRUCIBLE MATERIALS: Files Lists of Assets and Debt
DEGAULE TRUST: Case Summary & Largest Unsecured Creditor
DOUGHBOY LLC: Case Summary & 20 Largest Unsecured Creditors
DRIVETIME AUTOMOTIVE: Moody's Withdraws 'Caa2' Sr. Debt Rating
DRUG FAIR: Asks Court to Establish September 7 Claims Bar Date
DRUG FAIR: Can Sell Inventory at 4 New Jersey Stores
DRUG FAIR: Wants Plan Filing Period Extended to November 18
ECJ INVESTMENTS: Voluntary Chapter 11 Case Summary
EDDIE BAUER: Wins Final Approval of $100-Mil. Financing from BofA
EDUARDO ALMODOVAR: Case Summary & 20 Largest Unsec. Creditors
EXPRESS ENERGY: Moody's Cuts Corporate Family Rating to 'Ca'
FAIRCHILD CORP: Asks Court to Establish Aug. 31 Claims Bar Date
FAIRCHILD CORP: Wants Plan Filing Period Extended to October 13
FINLAY FINE: Moody's Downgrades Corporate Family Rating to 'Ca'
FIRSTSITE STAFFING: Case Summary & 20 Largest Unsec. Creditors
FONTAINEBLEAU: May Need $1.5 Billion to Complete Project
FONTAINEBLEAU: Court Approves Buchanan Ingersoll As Counsel
FONTAINEBLEAU: Term Lenders Object to Terms of Moelis Engagement
FONTAINEBLEAU: Term Lenders say Citadel Duplicative to Moelis
FORBES OFFICE FURNITURE: Voluntary Chapter 11 Case Summary
FORD MOTOR: Gaining Ground to Surpass GM as Largest U.S. Automaker
FOREST SPRINGS: Voluntary Chapter 11 Case Summary
FREEDOM GROUP: Moody's Assigns 'B1' Rating on $200 Mil. Notes
GENERAL MOTORS: Seeks to Terminate Contract With Stillwater
GENERAL MOTORS: Says Beijing Auto a "Formidable Bidder" for Opel
GEORGE MAIER: Has $940,000 Offer for Freeport Rd. Property
GREENBRIER COS: Posts $50.5MM Net Loss in Third Quarter 2009
GRUPO TMM: Add'l Loans Needed to Continue as Going Concern
H & S FISH FARM: Case Summary & 10 Largest Unsecured Creditors
HERBST GAMING: Lenders Allowed to Opt Out from Pre-Arranged Plan
HERBST GAMING: Files New Schedules of Assets & Liabilities
HYDROGENICS CORP: Posts $14.2-Million Net Loss for 2008
IDEARC INC: MatlinPatterson Says Lenders' Liens Not Wholly Valid
INDALEX HOLDINGS: To Sell Auction All Assets; Sapa Is Lead Bidder
INDALEX HOLDINGS: S&P Withdraws 'D' Corporate Credit Rating
INFINEON AG: Sells Wireline Unit to Golden Gate for EUR250 Million
JOHN SATTLER: Case Summary & 1 Largest Unsecured Creditor
JWM PARTNERS: Closed; Meriwether Returns Money to Clients
LEHMAN BROTHERS: Buyback of Office Equipment From Barclays Okayed
LEHMAN BROTHERS: Can Sell De Minimis Assets in Ordinary Course
LEHMAN BROTHERS: Court Allows LBSF to Assume Swap Agreements
LEHMAN BROTHERS: Liquidators Secure $200MM From China Real Estate
LEHMAN BROTHERS: Obtains Approval for Pachulski as Special Counsel
LEHMAN BROTHERS: Simpson Thacher to Help Form Asset Mgt. Biz
LEHMAN BROTHERS: Wins Approval to Sell 2 Units to Former Employees
LEHMAN BROTHERS: Wins Nod to Pay LB Carillon Debt to Fortress
LENNY DYKSTRA: Former MLB Star Seeks Protection from Creditors
LEONARD WOOD: Moody's Cuts Rating on Military Revenue Bonds
METARAM INC: Stops Operations; Is Shutting Down
MICHAEL VICK: New Plan Gives Up Future Income
MONTGOMERY REALTY: Case Summary & 20 Largest Unsec. Creditors
MORTGAGES LTD: Universal Equity Led to Close on $20MM Loan
NANOGEN INC: Completes Asset Sale to Financiere Elitech
NOBLE INT'L: Affiliate Completes $1.5MM Sale of MI Facility
NORTHEAST BIOFUELS: S&P Withdraws 'D' Rating on $140 Mil. Loan
NRG ENERGY: Revised Exelon Offer 'A Step in the Right Direction'
NUVEEN INVESTMENTS: Moody's Affirms 'Caa1' Corp. Family Rating
PARK AVENUE BSD: Case Summary & 4 Largest Unsecured Creditors
PORTRUSH PETROLEUM: Posts C$410,000 Net Loss in 2008
PRESTIGE MERCURY: Case Summary & 20 Largest Unsecured Creditors
QUALITY STORE: LBO Payouts Cannot Be Recovered, Court Rules
QUANTUM CORP: S&P Raises Subordinated Rating to 'CCC' From 'C'
RDJR HOLDINGS: Case Summary & 7 Largest Unsecured Creditors
REFCO INC: Plan Admin. Makes 7th Distribution to Creditors
REX C-STORE LLC: Case Summary & 3 Largest Unsecured Creditors
RISKMETRICS GROUP: S&P Raises Corporate Credit Rating to 'BB-'
RITZ CAMERA: May Seek to Liquidate & Close by July 24
RIVIERA HOLDINGS: S&P Retains 'D' Rating on Senior Facilities
ROGER SPINELLI: Case Summary & 11 Largest Unsecured Creditors
ROUGE INDUSTRIES: Implements Joint Plan of Liquidation
SEA LAUNCH: Section 341(a) Meeting Slated for July 31
SEA LAUNCH: Proposes Young Conaway as Bankruptcy Counsel
SEA LAUNCH: Files Application to Hire Alston & Bird as Co-Counsel
SEA LAUNCH: U.S. Trustee Forms Five-Member Creditors' Committee
SEA LAUNCH: Wants Until Aug. 11 to File Schedules & Statements
SENCORP: Court Establishes August 11 General Claims Bar Date
SIMMONS COMPANY: March 28 Balance Sheet Upside-Down by $367MM
SKILLED HEALTHCARE: S&P Affirms 'B+' Corporate Credit Rating
STANFORD GROUP: "Fantasy Island" Resort May Bring Higher Recovery
STANFORD GROUP: Libyan Government Invested US$500 Million
STANFORD GROUP: Owner Seeks to Access Funds to Pay Legal Fees
STANFORD GROUP: SFG Employee Says He Didn't Destroy Documents
STILLWATER MINING: Loses Supply Contract With General Motors
STOCK BUILDING: Fired 81 Workers Before Emerging From Bankruptcy
SUPERVALU INC: Fitch Affirms Issuer Default Rating at 'BB-'
THOMAS NICKEL: Case Summ. & 20 Largest Unsecured Creditors
TRIBUNE CO: Incapital to Buy Cubs, Ballpark Sold for $900 Million
TROPICANA ENT: LandCo Debtors Exit from Chapter 11 Bankruptcy
TROPICANA ENT: NJ Debtors Employ Fox Rothschild as Labor Counsel
TROPICANA ENT: NJ Debtors Employ J.H. Cohn as Financial Advisors
TROPICANA ENT: NJ Debtors Hire Cooper Levenson as Special Counsel
TROPICANA ENT: Seeks to Assume & Assign Starbucks Pact
UBS AG: Swiss Gov't May Seize Data Sought by U.S. in Tax Probe
USI HOLDINGS: S&P Withdraws 'B-' Senior Secured Debt Rating
VISTEON CORP: Court Approves Kirkland & Ellis as Counsel
VISTEON CORP: K&S Wiring, et al., Wants to Reclaim Goods Delivered
VISTEON CORP: Mazda & Panasonic Joint Venture Expands to China
VISTEON CORP: Wins Consent to Hire Pachulski Stang as Co-Counsel
WCI COMMUNITIES: Can Sell Maryland/Virginia Properties to NVR
WCI COMMUNITIES: Sale of Hotel and Condo Units to Elevation Okayed
WCI COMMUNITIES: Wants to Sell Florida Property to EOLA Capital
WEST SPEEDWAY: Voluntary Chapter 11 Case Summary
WINE LOFT PITTSBURGH: Case Summary & 4 Largest Unsec. Creditors
WL HOMES: May Auction Brio Property, Consultant Says
YOUNG BROADCASTING: Three Firms Interested in Acquiring Assets
YRC WORLDWIDE: Bankruptcy Likely, Morgan Keegan & Co. Says
* Pace of Bankruptcy Filings Moderates From Early 2009
* BOOK REVIEW: Bankruptcy and Distressed Restructurings --
Analytical
*********
AGRIPROCESSORS: Charges vs. Former Execs. to Be Heard Sept. 15
--------------------------------------------------------------
The Associated Press reports that the U.S. District Court Judge
Linda Reade will hold on September 15 a trial on financial charges
against Agriprocessors Inc. and former top managers.
According to The AP, Guy Cook -- an attorney for former
Agriprocessors manager Sholom Rubashkin -- said that the financial
trial could include testimony from Mr. Rubashkin that could be
held against him in an immigration trial. Mr. Cook is protesting
Judge Reade's decision to hold a trial on financial charges before
a trial on immigration charges, The AP relates.
Rod Smith at Feedstuffs states that the financial charges involve
67 of the 142 counts that the U.S. government has brought against
Agriprocessors and Mr. Rubashkin. Feedstuffs says that former
plant manager Brent Beebe will face prosecution in the second
trial, and Judge Reade said her decision was based on providing
Mr. Beebe more time to prepare for that trial.
The financial hearing should take about four weeks, while the
immigration hearing would start a week after the first trial,
Feestuffs relates, citing Judge Reade.
Headquartered in Postville, Iowa, Agriprocessors Inc. --
http://www.agriprocessor.com/-- operates a kosher meat and
poultry packing processors located at 220 North West Street. The
Company maintains an executive office with 50 employees at 5600
First Avenue in Brooklyn, New York. The Company filed for Chapter
11 protection on November 4, 2008 (Bankr. E.D.N.Y. Case No. 08-
47472). The case, according to McClatchy-Tribune, has been
transferred to Iowa. Kevin J. Nash, Esq., at Finkel Goldstein
Rosenbloom & Nash represents the Company in its restructuring
effort. In its petition, the Company listed assets of $100
million to $500 million and debts of $50 million to $100 million.
AIRTRAN HOLDINGS: S&P Assigns 'CCC-' Rating on Senior Debt
----------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'CCC-
' preliminary rating to senior unsecured and subordinated debt
filed under Atlanta, Georgia-based AirTran Holdings Inc.'s
$250 million Rule 415 shelf registration filed July 2, 2009. The
preliminary ratings are the same for senior unsecured and
subordinated debt, because S&P's recovery rating on AirTran
Holdings' existing senior unsecured debt is a '6', indicating
minimal (0%-10%) recovery in the event of a payment default.
"The corporate credit rating on AirTran Holdings, parent of
AirTran Airways Inc., reflects a modest competitive position in
the competitive U.S. airline industry, a highly leveraged
financial profile, and constrained liquidity," said Standard &
Poor's credit analyst Philip Baggaley. Standard & Poor's ratings
on AirTran Holdings also incorporate the company's low operating
costs. AirTran Holdings reported a modest profit in first-quarter
2009, one of only a few U.S. airlines to do so, and management
said recently that they expect a full-year 2009 profit, despite
weak traffic and pricing conditions for U.S. airlines.
S&P bases its stable outlook on AirTran Holdings' corporate credit
rating on S&P's expectation that current liquidity should be
adequate for the company to sustain itself through a difficult
operating environment.
Ratings List
AirTran Holdings Inc.
Corp. credit rating CCC+/Stable/--
New Ratings Assigned
$250 million Rule 415 shelf registration
Senior unsecured CCC- (prelim)
Subordinated debt CCC- (prelim)
AMERICAN INT'L: May Have No Value Left, Says Citigroup
------------------------------------------------------
According to Erik Holm and Hugh Son at Bloomberg News, Citigroup
Inc. said American International Group Inc., may have no value
left for shareholders after repaying the U.S. government, which
has bailed the insurer four times. "Our valuation includes a
70 percent chance that the equity at AIG is zero," said Joshua
Shanker, an analyst at Citigroup, in a note to investors cutting
his price target on the New York-based insurer by more than half.
AIG on July 9 fell $3.62, or 28%, to $9.48 at 4:15 p.m. in New
York Stock Exchange composite trading, the biggest drop since
September 2008 as a result of Citigroup's note to investors,
Bloomberg said. AIG, according to the report, has lost more than
half its value after implementing a 1-for-20 reverse stock split
when trading closed June 30.
Bloomberg relates Chief Executive Officer Edward Liddy is under
pressure from lawmakers to sell assets to help repay the
$182.5 billion rescue package that was required to prop up the
insurer after losses on credit-default swaps tied to U.S. home
loans.
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. 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.
ASARCO LLC: Allowed to Move Forward With Suit Vs. Fireman's Fund
----------------------------------------------------------------
Judge J. Manuel Banales of the 105th Judicial District Court of
Nueces County, Texas, has allowed ASARCO LLC to advance in its
lawsuit to recover millions of dollars' worth of legal expenses
against Fireman's Fund Insurance Company, IFAwebnews reported.
According to a statement by Kill & Olick, the Texas court has
denied a motion for partial summary judgment in an asbestos
insurance recovery dispute to Fireman's Fund Insurance Company
(FFIC), enabling ASARCO LLC to pursue a claim for recovery of
millions of dollars in legal expenses stemming from asbestos
claims. ASARCO LLC, et al. v. Fireman's Fund Ins. Co., et al.,
No. 01-2680-D (105th Jud. Dist. Ct. Nueces County Tex., June 20,
2009).
Kill & Olick said the FFIC's motion argued that the policy
language "unambiguously" gave it sole discretion to decide if it
wished to pay any legal expenses at all. According to FFIC, legal
expenses "incurred by the policyholder will be borne by FFIC only
if they are incurred with FFIC's consent." Judge J. Manuel
Baales of the 105th Judicial District Court of Nueces County,
Texas, ruling from the bench, denied the motion.
The ruling preserves for trial the important issue of FFIC's
obligation to pay ASARCO's legal expenses, enabling ASARCO to
pursue its claim for recovery of legal expenses in excess of
policy limits. It may mean the recovery for ASARCO of millions
of dollars of insurance coverage in addition to the $60 million
combined limits of the insurance policies that FFIC sold to
ASARCO.
The ruling follows a March 11, 2009 ruling from the same
court granting partial summary judgment to ASARCO. In that
motion, ASARCO had taken the position that an "asbestosis"
exclusion in FFIC's policies bars coverage only for asbestosis
claims and does not bar coverage for claims involving
mesothelioma, lung cancer, pleural plaques or any other asbestos-
related disease.
Rhonda D. Orin, managing partner in the Washington, D.C. office of
Anderson Kill & Olick and lead insurance counsel to ASARCO, said,
"In March, the District Court ruled that the asbestosis exclusion
is unambiguous. Now the Court has indicated that the "payment of
expenses" provision is ambiguous. Both rulings reflect the
fundamental principle that policy language should be enforced as
written."
At issue in the coverage action is a determination of insurance
coverage for past, present and future asbestos liabilities.
About Anderson Kill & Olick, P.C.
Anderson Kill & Olick, P.C. practices law in the areas of
Insurance Recovery, Anti-Counterfeiting, Bankruptcy, Commercial
Litigation, Corporate & Securities, Employment & Labor Law, Real
Estate & Construction, Tax, and Trusts & Estates. Best-known for
its work in insurance recovery, the firm represents policyholders
only in insurance coverage disputes, with no ties to insurance
companies and no conflicts of interest Clients include Fortune
1000 companies, small and medium-sized businesses, governmental
entities, and nonprofits as well as personal estates. Based in
New York City, the firm also has offices in Greenwich, CT,
Newark, NJ, Philadelphia, PA, Ventura, CA and Washington, DC.
For companies seeking to do business internationally, Anderson
Kill, through its membership in Interleges, a consortium of
similar law firms in some 20 countries, assures the same high
quality of service throughout the world that it provides itself
here in the United States.
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: Files Disclosure Statement for Competing Plans
----------------------------------------------------------
ASARCO LLC delivered to the U.S. Bankruptcy Court for the
Southern District of Texas on July 6, 2009, a Joint Disclosure
Statement explaining the three competing plans filed in their
bankruptcy cases. They consist of:
(1) the Debtors' Sixth Amended Plan of Reorganization;
(2) Asarco Incorporated and Americas Mining Corporation's
Modified Fifth Amended Plan of Reorganization; and
(3) Harbinger Capital Partners Master Fund I, Ltd.'s Second
Amended Chapter 11 Plan of Reorganization.
The Bankruptcy Court approved the Joint Disclosure Statement on
July 2, 2009.
Copies of the Joint Disclosure Statement, as divided into five
parts, are available for free at:
http://bankrupt.com/misc/ASARCO_Joint_DS_070609_01.pdf
http://bankrupt.com/misc/ASARCO_Joint_DS_070609_02.pdf
http://bankrupt.com/misc/ASARCO_Joint_DS_070609_03.pdf
http://bankrupt.com/misc/ASARCO_Joint_DS_070609_04.pdf
http://bankrupt.com/misc/ASARCO_Joint_DS_070609_05.pdf
A blacklined copy of the Joint Disclosure Statement compared with
the Debtors' Court-approved Disclosure Statement can be obtained
for free at:
http://bankrupt.com/misc/ASARCO_JointDS_Blacklined.pdf
The Plan Sponsors have proposed and are currently soliciting
acceptance for their respective Plans. The solicitation is
conducted to obtain sufficient acceptances to enable one of the
Plans to be confirmed by the Court pursuant to the provisions of
Section 1129 of the Bankruptcy Code.
Classes of Claims that are entitled to vote on the Plans will
vote separately with respect to each Plan, and may vote to accept
all Plans, reject all Plans, accept one or more of the Plans
while rejecting the other Plans, or not vote on any Plan.
However, the Court can only confirm one plan. If two or more
Plans are confirmable under Section 1129, the Court will consider
the preferences of holders of Claims in determining which of the
Plans to confirm. Accordingly, preferences are being solicited
from all holders of Claims.
ASARCO notes that the purpose of the Joint Disclosure Statement
is to set forth:
(a) the history of the Debtors, their businesses, and their
reorganization cases;
(b) information concerning the three competing Chapter 11
Plans and alternatives to the Plans;
(c) information for the holders of Claims regarding their
rights under each of the Plans;
(d) information to assist the holders of Claims in impaired
Classes in making an informed judgment regarding whether
they should vote to accept or reject any or all of the
Plans; and
(e) information to assist the Court in determining whether any
or all of the Plans comply with the provisions of the
Bankruptcy Code and whether one of the Plans should be
confirmed.
Pursuant to the Disclosure Statement Order, the Court approved
the Joint Disclosure Statement as containing "adequate
information," pursuant to Section 1125 of the Bankruptcy Code, to
enable a hypothetical, reasonable investor typical of holders of
Claims against and interests in the Debtors to make an informed
judgment as to whether to vote to accept or reject any or all of
the Plans. The Court has also authorized the use of the Joint
Disclosure Statement in connection with the solicitation of votes
with respect to the Plans.
Approval of the Joint Disclosure Statement, however, does not
constitute a determination by the Court as to the fairness or
merits of any of the Plans.
The Joint Disclosure Statement presents certain statements that
are forward-looking projections and forecasts based upon certain
estimates and assumptions, which statements may prove to be wrong
or materially different from actual future results.
The Joint Disclosure Statement also provides summary of each of
the Plans and the risks of each of the Plans. The statements and
information about the Debtors, including financial information,
financial projections, and information regarding Claims or
Interests contained in the Joint Disclosure Statement, have been
prepared from information provided by the Debtors, the Parent and
Harbinger with respect to each of their proposed Plans.
Holders of Claims that are entitled to vote under the Plans must
have their Ballots received by the Balloting Agent no later than
August 5, 2009. The Court has established July 2, 2009, as the
record date for purposes of determining which holders of Claims
are entitled to vote to accept or reject the Plans.
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: Modified Plan Says Asbestos PI Claimants May Get 100%
-----------------------------------------------------------------
ASARCO LLC delivered to the U.S. Bankruptcy Court for the
Southern District of Texas its Modified Sixth Amended Joint Plan
of Reorganization on July 6, 2009.
A full-text copy of the Modified Sixth ASARCO LLC Amended Plan
and related exhibits are available for free at:
http://bankrupt.com/misc/ASARCO_Modified_6thPlan.pdf
A blacklined copy of the Modified Sixth ASARCO LLC Amended Plan
compared with the ASARCO LLC Sixth Amended Plan can be obtained
for free at:
http://bankrupt.com/misc/ASARCO_Modified6thPlan_Blacklined.pdf
As previously reported, the Debtors' Sixth Amended Plan provides
that the ASARCO LLC operating assets will be sold to Sterlite
(USA), Inc., a subsidiary of Vedanta Resources plc, for
$1.1 billion in cash plus the $770 million Purchaser Promissory
Note payable over nine years. Aside from the Cash Consideration
and the Promissory Note, Sterlite will also assume certain
liabilities as part of its consideration of the ASARCO LLC
assets.
The Debtors' Modified Sixth Amended Plan proposes significant
Cash returns to claimants on the Plan Effective Date, with the
possibility that Class 3 General Unsecured Claims and Class 4
Unsecured Asbestos Personal Injury Claims will ultimately receive
payment of 100% of the Allowed Amount of their Claims, plus
payment of postpetition interest and attorneys' fees as permitted
under applicable law if recoveries are obtained from certain
litigation. The Debtors estimate that Postpetition Interest
alone for Class 3 and Class 4 Claims would total between $514.7
million and $546.8 million, depending on the claims estimate one
uses for the computation.
SCC Litigation Trust Interests
On the Initial Distribution Date, Southern Copper Corporation
Litigation Trust Interests will be issued to the purchasers
pursuant to any auction of interests in the SCC Litigation Trust,
the Non-Environmental Unsecured Claimants, the Governmental
Environmental Claimants, and the Asbestos Trust. The litigation
currently pending in the U.S. District Court for the Southern
District of Texas, Brownsville Division, regarding the adversary
complaint commenced by ASARCO LLC against Americas Mining
Corporation on a transfer dispute of certain stocks of Southern
Peru Copper Company, now known as Southern Copper Corporation, to
AMC will be vested upon the SCC Litigation Trust.
ASARCO LLC estimates that the final judgment against AMC in the
SCC Litigation is valued at $7.48 billion as of June 2, 2009.
Although the SCC Final Judgment is currently being appealed by
AMC and the possibility exists that the SCC Final Judgment will
be reversed or modified on appeal, the Debtors believe that the
grounds asserted by AMC for reversal or modification of the SCC
Final Judgment lack legal and factual merit.
All SCC Litigation Trust Interests issued to SCC Purchasers will
be designated "Class D SCC Litigation Trust Interests." All
remaining SCC Litigation Trust Interests will be issued to Non-
Environmental Unsecured Claimants, Governmental Environmental
Claimants, and the Asbestos Trust based on (i) the Class 3
Ratable Portion and (ii) the Asbestos Ratable Portion.
All SCC Litigation Trust Interests issued to Non-Environmental
Unsecured Claimants will be designated "Class A SCC Litigation
Trust Interests;" all SCC Litigation Trust Interests issued to
the Governmental Environmental Claimants will be designated
"Class B SCC Litigation Trust Interests;" and all SCC Litigation
Trust Interests issued to the Asbestos Trust will be designated
"Class C SCC Litigation Trust Interests."
The SCC Litigation Trust Interests that would have been issued to
the holders of Class 3 Disputed Claims if the Disputed Claims are
allowed as of the Effective Date will be issued to, and held by,
the Plan Administrator pending resolution of those Disputed
Claims.
Allocation to Other Classes of
SCC Litigation Trust Interests
The Modified Sixth Amended Plan provides a possibility of an
allocation of a percentage of interests in the SCC Litigation
Trust to other Classes of Claims.
If the Bankruptcy Court determines that the distribution of the
Plan Consideration on account of Class 3 and Class 4 Claims will
not result in those Claims being paid more than an amount
necessary to be paid in full, then 100% of the interests in the
Liquidation Trust and 100% of the interests in the SCC Litigation
Trust will be distributed to Class 3 Claimants and for the
benefit of Class 4 Claimants.
If the Bankruptcy Court determines that the value of the Plan
Consideration, as of the Confirmation Date, exceeds the amount
necessary for Claims in Class 3 and Class 4 to be paid in full,
then the Bankruptcy Court will determine the percentage of
interests in the SCC Litigation Trust necessary to be distributed
on the Effective Date for the aggregate value of the Plan
Consideration to be in an amount necessary for Claims in Class 3
and Class 4 to be paid in full, but no more.
After the distribution to Class 3 and Class 4 Claims, the
remaining interests in the SCC Litigation Trust will be
distributed until the value of the interests, based on the
Bankruptcy Court's valuation, is fully exhausted, in this order
on account of:
(1) the Allowed Amounts of any Class 6 Claims, on a pro rata
basis, until those Claims are paid in full, provided that
the SCC Litigation Trust Interests, if any, distributed to
the Class 6 Claimants will at all times be a subordinated
interest that is not entitled to receive distributions
from the SCC Litigation Trust unless and until Claimants
in Class 3 and Class 4 are paid in full;
(2) on account of Class 7 Claims, on a pro rata basis, until
those Claims are paid in full, provided that the SCC
Litigation Trust Interests, if any, distributed to the
Class 7 Claimants will at all times be a subordinated
interest that is not entitled to receive distributions
from the SCC Litigation Trust unless and until Claimants
in Class 3, Class 4, and Class 6 are paid in full; and
(3) on account of Class 8 Interests, on a pro rata basis,
provided that the SCC Litigation Trust Interests, if any,
distributed to the holders of Class 8 Interests will at
all times be a subordinated interest that is not entitled
to receive distributions from the SCC Litigation Trust
unless and until the aggregate distributions from the SCC
Litigation Trust to Claims in Classes 3, 4, 6, and 7 are
paid in full.
In any event, the Plan Consideration, including the interests in
the Liquidation Trust and in the SCC Litigation Trust, will pass
without limitation or restriction to the recipients under the
Plan and the recipients will be entitled to retain all Cash or
other property ultimately realized from the Plan Consideration
even if the amount ultimately realized in the future exceeds the
amount necessary for the Claimants to have been paid in full
under the Plan or the amounts paid in connection with the
Auction.
For avoidance of doubt, the Bankruptcy Court's determination will
constitute a finding that the damages recoverable by the SCC
Litigation Trust on account of the SCC Final Judgment will not be
subject to any limitation, reduction, or cap attributable to the
aggregate claims owed by the Debtors or that are to be paid or
otherwise satisfied under the Modified Sixth Amended Plan.
Another section of the Modified Sixth Amended Plan provides that
in the event of a transfer of a portion of the SCC Litigation
Trust Claims to the SCC Litigation Trust pursuant to the Auction,
the proposed terms of the SCC Litigation Trust and the SCC
Litigation Trust Interests set forth in the SCC Litigation Trust
Agreement will be subject to change based on negotiations with
the SCC Purchasers and on consultations with the Official
Committee of Unsecured Creditors of ASARCO, the Department of
Justice, the Official Committee of Asbestos Claimants, and the
Future Claims Representative.
Plan Distribution
Distributions to holders of Allowed Claims will be made at the
holder's address in the claims register, which will be maintained
by the Claims Agent prior to the Plan Effective Date. After the
Effective Date, the Plan Administrator will be responsible for
maintaining the claims register. Hence, Claimants must provide
the Plan Administrator with written notice of any change of
address or any transfer of, or sale of any participation in, any
Allowed Claim at least 30 days prior to any distribution,
provided that with respect to Bondholders' Claims, further
distributions on account of those Claims by the Indenture
Trustees to the record holders of the Bondholders' Claims will be
accomplished in accordance with a duly executed letter of
transmittal.
Objections to Claims
After the Effective Date, the Plan Administrator will have the
right to file objections to claims, other than objections to
Unsecured Asbestos Personal Injury Claims and Demands and
objections to Claims that have been Allowed; and litigate to
judgment, settle, or withdraw objections to Disputed Claims.
The Debtors' outstanding objections to certain Indenture
Trustees' proofs of claim will be litigated, if not settled, on a
schedule to be agreed upon by the Debtors and the Indenture
Trustees. The Indenture Trustees' rights to seek allowance and
payment of the amounts set forth in their proofs of claim are
expressly preserved under the Modified Sixth Amended Plan.
Other Provisions
The Modified Sixth Amended Plan also provides for any Claimant's
entitlement to postpetition interest at a rate other than the
Plan Rate and reimbursement of attorneys' fees and other costs
and expenses. The Claimant must file a request seeking that
relief within 30 days after the Effective Date.
Asbestos Insurance Actions and Asbestos Insurance Recoveries will
be preserved pursuant to the Modified Sixth Amended Plan for
pursuit by the Asbestos Trust for the benefit of Asbestos Trust
Beneficiaries, provided that ASARCO reserves the right to retain
the Asbestos Insurance Recoveries and pay the net proceeds of the
recoveries to the Asbestos Trust if it is determined that the
retention better preserves the assets.
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 Plan Assures 97% Recovery in Cash for Creditors
------------------------------------------------------------------
Asarco Incorporated and Americas Mining Corporation delivered to
the U.S. Bankruptcy Court for the Southern District of Texas a
modified version of their Fifth Amended Plan of Reorganization
for ASARCO LLC, Southern Peru Holdings, LLC, AR Sacaton, LLC, and
ASARCO Master, Inc., on July 2, 2009.
ASARCO Inc. and AMC, affiliates of Grupo Mexico SAB de C.V., are
the parent companies of ASARCO LLC.
In response to questions and concerns raised by various parties
with respect to the Parent's Fifth Amended Plan, the Parent has
made certain modifications and revisions to that Plan. Clean and
blacklined copies of the Parent's Modified Fifth Amended Plan are
available for free at:
http://bankrupt.com/misc/ASARCOInc_Modified5thPlan.pdf
http://bankrupt.com/misc/ASARCOInc_Modified5thPlan_Redlined.pdf
The Parent's Fifth Amended Plan provides that the cash portion of
the Parent's contribution amounts to $1.4625 billion, while the
note amounts to $280 million. In addition, the ASARCO Note will
be guaranteed by AMC, as well as being supported by a pledge of
51% of equity of Reorganized ASARCO.
"Not only does our plan provide the assurance of paying creditors
US$0.97 on the dollar in cash at closing, we are prepared to
close without a labor accord and are offering a higher payout on
the asbestos claims," Grupo Mexico said in a statement dated
July 8, 2009.
Litigation Trust
The Litigation Trustee will remove Claimants with claims under
Class 3 General Unsecured Claims, Class 6 Late-Filed Claims and
Class 7 Subordinated Claims from the Trust Register upon the
payment in full of the Allowed Claims of those Claimants. The
Litigation Trustee will then redistribute the Distributed
Litigation Trust Interests, on a pro rata basis, to the holders
of Allowed Class 6 and 7 Claims and to the Reorganized ASARCO.
The Litigation Trustee will have full power, authority, and
discretion to determine whether ownership of any Litigation Trust
Interest will be represented by physical certificates, by book
entries in lieu of physical certificates, or in any other form or
manner. Regardless of the determination, the record holders of
the Litigation Trust Interests will be recorded and set forth in
the Trust Register.
Reorganized ASARCO reserves the right to retain the Asbestos
Insurance Recoveries and pay the net proceeds of those
recoveries, after the deduction of the reasonable and necessary
unreimbursed costs and expenses associated with obtaining the
proceeds, to the trust under Section 524(g) of the Bankruptcy
Code if it is determined that the retention better preserves the
assets.
Plan Effectiveness
Additional conditions are provided under the Modified Fifth
Amended Plan to deem it effective. Among others, the order
confirming the Plan entered or affirmed by the District Court
must be acceptable to the Parent, and the Confirmation Order
should have become a final order.
For the avoidance of doubt, the Parent clarifies that it is not a
condition to confirmation or consummation of the Parent's Plan
that the Parent and Reorganized ASARCO will have entered into a
collective bargaining agreement for the period following the
Effective Date.
Plan Implementation
The Parent will forfeit its $125 million deposit to the Debtors'
bankruptcy estate if (i) before any plan of reorganization for
the Debtors is confirmed or any time from and after the
Confirmation Date, the Parent withdraws its Plan without the
written consent of the Official Committee of Unsecured Creditors
of ASARCO; or (ii) the Parent's Plan is not consummated 30 days
after the Confirmation Order becomes a Final Order, unless the
failure to consummate is not primarily due to the failure by the
Parent to fulfill any obligation under the Plan.
However, the failure of the Parent to reach agreement with the
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy,
Allied Industrial and Service Workers International Union on a
consensual CBA will not constitute cause for the Parent to fail
to consummate the Plan.
Moreover, the Parent's Deposit will be released to the Parent and
will not be forfeited if the Parent terminates and withdraws the
Plan:
-- with the consent of the ASARCO Creditors Committee;
-- after the Bankruptcy Court enters an order confirming a
plan of reorganization other than the Parent's Plan; or
-- the Effective Date does not occur by November 30, 2009.
Upon the Effective Date, at the election of the Parent, the
Deposit will either be turned over to the Parent's Plan
Administrator as part of the Parent Contribution, or returned to
the Parent upon deposit with the Plan Administrator of the Parent
Contribution from other sources.
To the extent there are any excess funds in the Parent's Plan
Administration Account or any Miscellaneous Plan Administration
Account, the Plan Administrator will distribute the funds, on a
pro rata basis, to holders of these Claims in this order:
(i) Claims in Class 3 until the Claims are paid in full;
(ii) Claims in Class 6 until the Claims are paid in full;
(iii) Claims in Class 7 until the Claims are paid in full; and
(iv) Reorganized ASARCO to fund its working capital needs.
Other Provisions
All cash distributions on account of Allowed Bondholder Claims
will be made to the appropriate Indenture Trustee and further
distributions on account of those Claims by the Indenture Trustee
to the record holders of Bondholder Claims will be accomplished
in accordance with the Indentures and the policies and procedures
of the Depository Trust Company. A whole new subsection is added
under the Modified Fifth Amended Plan dedicated on discussions
regarding Indenture Trustee Fee Claims.
On and after the Effective Date, Judge Robert C. Pate will serve
as the Future Claims Representative, if he is willing to continue
serving under that position. If not, the Bankruptcy Court will
appoint his replacement. Judge Pate currently acts as the FCR in
relation to the Debtors' bankruptcy cases.
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: Parties That Purchased Claims in June
-------------------------------------------------
The Bankruptcy Clerk recorded claims against Asarco LLC and its
affiliates that changed hands in June 2009, which include:
Transferor Transferee Claim No. Claim Amt.
---------- ---------- ------- ----------
PA-PDC Perth Amboy ASM Capital III 2862 $2,000,000
LLC L.P.
Deutsche Bank Mariner LDC 10742 1,635,000
Securities, Inc.
Deutsche Bank Mariner 10742 1,635,000
Securities, Inc. Opportunities
Fund, LP
Deutsche Bank Mariner Voyager 10742 95,000
Securities, Inc. Master Fund Ltd.
Deutsche Bank Caspian Capital 10742 1,635,000
Securities, Inc. Partners, L.P.
Ryerson Tull ASM Capital III -- 48,365
L.L.P.
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)
BENCHMARK ELECTRONICS: Fin'l Results Won't Affect Moody's Rtng.
---------------------------------------------------------------
Moody's Investors Service commented that Benchmark's financial
results over the past two quarters, though subdued, will not
affect its Ba3 corporate family rating and stable outlook.
The most recent communication on Benchmark was via an issuer
comment on December 11, 2008, when Moody's commented that the
company's Ba3 CFR was not impacted by its earnings results for the
third quarter ended September 2008. The last rating action was on
January 17, 2008, when Moody's affirmed Benchmark's Ba3 CFR and
stable outlook and assigned a rating of Ba2 (LGD-3, 39%) to its
$100 million senior secured revolving credit facility due 2012.
Benchmark Electronics, Inc., headquartered in Angleton, Texas,
provides electronic manufacturing services to OEMs of
telecommunication equipment, computers and related products for
business enterprises, video/auto/entertainment products,
industrial control equipment, testing and instrumentation
products, and medical devices. Benchmark's revenue and EBITDA
(Moody's adjusted) for the twelve months ended March 31, 2009,
were $2.4 billion and $131 million, respectively.
BERNARD MADOFF: Picard Has Recovered $1.08 Billion as of June 30
----------------------------------------------------------------
According to Erik Larson at Bloomberg News, Irving H. Picard, the
trustee liquidating Bernard L. Madoff Investment Securities LLC,
told the U.S. Bankruptcy Court for the Southern District of New
York that he has made "significant headway" in recovering assets,
including $1.08 billion found as of June 30.
Mr. Picard also said eight lawsuits against Madoff's biggest
"feeder funds" and other investors seek a total of $13.7 billion
in damages to be used to repay victims of his $65 billion Ponzi
scheme.
Mr. Picard said that the liquidation, which is being overseen by
the Securities Investor Protection Corp., a government-chartered
agency that charges fees to brokerages, has cost $45.9 million in
administrative expenses. SIPC has paid the full amount.
Mr. Picard said he does not expect that there will be sufficient
funds in the general estate for SIPC to recoup its advances for
administrative expenses.
About Bernard Madoff
Bernard L. Madoff Investment Securities LLC was a market maker in
U.S. stocks, including all of the S&P 500 and more than 350 Nasdaq
stocks. The firm moved large blocks of stock for institutional
clients by splitting up orders or arranging off-exchange
transactions between parties. It also performed clearing and
settlement services. Clients included brokerages, banks, and
other financial institutions. In addition, Madoff Securities
managed assets for high-net-worth individuals, hedge funds, and
other institutional investors.
The firm is being liquidated in the aftermath of a fraud scandal
involving founder Bernard L. Madoff.
As reported by the Troubled Company Reporter on December 15, 2008,
the Securities and Exchange Commission charged Mr. Madoff and his
investment firm with securities fraud for a multi-billion dollar
Ponzi scheme that he perpetrated on advisory clients of his firm.
The estimated losses from Mr. Madoff's fraud were allegedly at
least $50 billion.
Also on December 15, 2008, the Honorable Louis A. Stanton of the
U.S. District Court for the Southern District of New York granted
the application of the Securities Investor Protection Corporation
for a decree adjudicating that the customers of BLMIS are in need
of the protection afforded by the Securities Investor Protection
Act of 1970. Irving H. Picard, Esq., was appointed as trustee for
the liquidation of BLMIS, and Baker & Hostetler LLP was appointed
as counsel.
As reported by the TCR, Judge Denny Chin of the U.S. District
Court for the Southern District of New York on June 29, 2009,
sentenced Mr. Madoff to 150 years of life imprisonment for
defrauding investors.
BH S&B HOLDINGS: Committee Seeks to Recover $1.2MM From 45220
-------------------------------------------------------------
The Committee of Unsecured Creditors of BH S&B Holdings LLC, owner
of Steve & Barry's discount clothing chain, sued 45220 Inc.
seeking to recover about $4 million from the company associated
with actress Sarah Jessica Parker's Bitten clothing line and about
$1.2 million from two former company officers.
BH S&B Holdings LLC filed for bankruptcy protection together with
seven other affiliates on November 19, 2008 (Bankr. S.D. N.Y. Lead
Case No. 08-14604). The seven debtor-affiliates are BH S&B
Distribution LLC, BH S&B Lico LLC, BH S&B Retail LLC, BHY S&B
Intermediate Holdco LLC, Cubicle Licensing LLC, Fashion Plate
Licensing LLC, and Heritage Licensing LLC.
BH S&B was formed by investment firms Bay Harbour Management and
York Capital Management in August 2008 to acquire the business
operations and assets of bankrupt retailer Steve & Barry's for
$163 million in August 2008. Steve and Barry's, based in Port
Washington, New York, was a specialty retailer of apparel and
accessories, selling, among other things, university apparel and
lifestyle brands, private-label casual clothing, and exclusive
celebrity endorsed apparel.
Steve & Barry's had 240 locations when it was bought and the new
owners had planned to cut that down to 173 stores. BH S&B had
intended to operate certain Steve & Barry's stores as going
concerns and to liquidate inventory at other locations. Since the
sale closing, however, for various reasons, including the general
health of the American economy and the state of the retail market
in particular, sales at all stores have been disappointing, and BH
S&B's revenue has suffered. As a result, BH S&B was not in
compliance with certain covenants under their senior secured
credit facility and had no prospects for continued financing of
their business as a going concern. In consultation with its
lenders, BH S&B decided that the appropriate course of action to
maximize value for the benefit of all of its stakeholders was an
orderly liquidation in Chapter 11.
Bay Harbour Management is an SEC registered investment advisor
with significant experience in purchasing distressed companies
and effectuating their turnaround. The firm's holdings have
included the retailer Barneys New York, the facilities based CLEC
Telcove, and the former Aladdin Casino, now operating on the Las
Vegas strip as the Planet Hollywood Resort and Casino following
its rebranding and turnaround.
York Capital Management is an SEC registered investment advisor
with offices in New York, London, and Hong Kong with more than $15
billion in assets under management. York Capital was founded in
1991 and specializes in value oriented and event driven equity and
credit investments.
BH S&B is 100% owned by BHY S&B Intermediate Holdco LLC.
BH S&B and its affiliates' chapter 11 cases are presided over by
the Honorable Martin Glenn. Joel H. Levitin, Esq., and Richard A.
Stieglitz, Jr., Esq., at Cahill Gordon & Reindel LLP, in New York,
serve as bankruptcy counsel to BH S&B and its affiliates. RAS
Management Advisors LLC acts as restructuring advisors, and
Kurtzman Carson Consultants LLC as claims and notice agent.
BIG 10 TIRE: SSG Capital Advised Co. Sun Capital Repurchase
-----------------------------------------------------------
SSG Capital Advisors, LLC, acted as the exclusive investment
banker to Big "10" Tire Stores, Inc., in its sale to an affiliate
of Sun Capital Partners, Inc., under Section 363 of the Bankruptcy
Code in the U.S. Bankruptcy Court for the District of Delaware.
The transaction closed in June 2009.
Big 10 Tires is one of the largest independent tire dealers in the
Southeastern portion of the United States. Headquartered in
Mobile, Alabama, the Company specializes in offering its recurring
customer base with the broadest selection of tire products and
competitive pricing. Over Big 10's 54-year history, the Company
has built a portfolio of retail stores defined by their strategic
location in major metropolitan areas. Big 10's stores are free
standing and are often in high traffic areas or in close proximity
to shopping centers, highways and well-known roads. As a result
of their broad product suite and deep market penetration, Big 10
has become the "tire dealer of choice" through its stores in
Alabama, Florida and Georgia.
About SSG Capital Advisors
SSG is an investment bank dedicated to representing middle market
clients in restructuring situations, both in and out of bankruptcy
proceedings. SSG provides its clients with comprehensive advisory
services in the areas of mergers and acquisitions, financing,
financial restructuring and valuation. SSG's professionals are
well versed in all areas of restructuring and include former
bankruptcy attorneys, senior credit officers, M&A professionals
and commercial lenders.
About Big 10 Tires
Headquartered in Mobile, Alabama, Big 10 Tires Stores Inc. --
http://www.big10tires.com/-- offers an array of tire products
consists of performance, light truck and sport utility and all-
season touring tires in Alabama, Georgia and Florida. The Company
and three of its affiliates filed for protection on April 2, 2009
(Bankr. D. Del. Lead Case No. 09-11173). Chad A. Fights, Esq.,
and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell,
represent the Debtors. When the Debtors filed for protection from
their creditors, they listed assets and debts between $10 million
and $50 million in their filing.
BOMBARDIER RECREATIONAL: S&P Raises Corp. Credit Rating to CCC
--------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its long-term
corporate credit rating on Valcourt, Quebec-based recreational
products manufacturer Bombardier Recreational Products Inc. to
'CCC' from 'SD' (selective default). The outlook is negative.
At the same time, S&P lowered its rating on the company's
C$250 million senior secured revolving credit facility to 'B-'
from 'B'. The recovery rating on BRP's revolving credit facility
is unchanged at '1', indicating an expectation of very high (90%-
100%) recovery in a default scenario. Furthermore, the 'D'
(default) rating on the US$790 million senior secured term loan
rating is unchanged, and S&P expects to keep the 'D' rating in
place until April 2010, or upon completion of BRP's US$250 million
debt buyback. The '4' recovery rating on the senior secured debt
is also unchanged, indicating S&P's expectation of an average
(30%-50%) recovery in the event of a payment default.
"The upgrade reflects the application of S&P's revised criteria
regarding distressed exchange offers," said Standard & Poor's
credit analyst Lori Harris. "The revised criteria indicates that
the corporate credit rating should be raised to reflect BRP's
credit risk after completion of the first material debt buyback
below par, despite the fact that the company has approval from its
bank group through an amendment to the credit agreement to buy
back debt below par until April 30, 2010," Ms. Harris added. This
is in contrast to S&P's previous criteria, which indicated that
the corporate credit rating would remain at 'SD' until completion
of the debt buyback program.
The debt repurchases are being funded by the injection of
additional capital from shareholders and outside sources. BRP
completed its first material debt buyback on July 2, repurchasing
US$50 million (face value) of debt below par, which Standard &
Poor's viewed as tantamount to default. Should the company
complete the full US$250 million exchange offer, S&P believes the
revised capital structure could substantially reduce BRP's cash
interest expense and meaningfully lower its debt outstanding.
The ratings on BRP reflect the company's weak financial
performance, including significant declines in revenue and EBITDA,
negative free cash flow, limited financial flexibility, and the
need for an equity cure to comply with the financial covenants at
April 30, 2009. In addition, competition remains intense within
the industry.
The negative outlook reflects Standard & Poor's view of BRP's
challenges, including limited financial flexibility and the
expectation of continued declining revenue and EBITDA, resulting
from the material drop in consumer demand for recreational
vehicles. S&P could consider lowering its ratings on BRP if the
company suffers a worse-than-expected decline in EBITDA this
fiscal year, which could pose a renewed possibility of a covenant
breach. On the other hand, S&P could revise the outlook to stable
if there is a material increase in covenant headroom as BRP
reduces debt leverage.
CATALYST PAPER: Moody's Cuts Corporate Family Rating to 'B3'
------------------------------------------------------------
Moody's Investors Service lowered the corporate family rating of
Catalyst Paper Corporation to B3 from B1 and at the same time,
downgraded the company's senior unsecured debt ratings to Caa1
from B2. Catalyst's SGL-3 speculative grade liquidity rating was
affirmed and the long term ratings outlook is negative.
The rating action reflects Moody's expectation that the rapid
deterioration in industry conditions will cause Catalyst's
financial performance to weaken materially over the next 12 to 18
months. The weak demand and the significant drop in pricing
across the paper grades that Catalyst produces, in combination
with the volatile Canadian dollar will put pressure on the
company's operating earnings and cash flow. The company's
profitability will also be impacted by the absorption of costly
production curtailments as the effort to match production with
declining demand will continue for an extended period of time.
The B3 corporate family rating of Catalyst reflects the company's
limited financial flexibility due to its significant debt load,
its exposure to newsprint and coated paper -- two paper grades
that have been the most impacted by the current economic downturn,
the company's lack of product and geographic diversification, and
the company's exposure to volatile foreign exchange movements and
input costs. Catalyst's rating is supported by the company's
position as one of the leading producers of telephone directory
paper in the world and specialty papers and newsprint in Western
North America, and its ownership of Western Canada's largest
recycling facility. The company also has a proactive and
experienced senior management team that is very focused on supply
management and cost control.
The SGL-3 liquidity rating indicates that Catalyst has an adequate
liquidity profile supported by the availability under its credit
facility, expectations that financial covenant compliance will not
be problematic for the next four quarters, and Moody's expectation
of no free cash flow generation over the next four quarters.
The negative outlook reflects the challenging conditions in both
the newsprint and coated paper markets and the possibility that
Catalyst's ratings could be downgraded further should operating
and financial performance deteriorate more than anticipated and
the company's liquidity position weaken materially.
Downgrades:
Issuer: Catalyst Paper Corporation
-- Probability of Default Rating, Downgraded to B3 from B1
-- Corporate Family Rating, Downgraded to B3 from B1
-- Senior Unsecured Regular Bond/Debenture, Downgraded to
Caa1 from B2
Upgrades:
Issuer: Catalyst Paper Corporation
-- Senior Unsecured Regular Bond/Debenture, Upgraded to LGD4,
66% from LGD4, 67%
Moody's last rating action was on December 2, 2008, when the
ratings and negative outlook of Catalyst were affirmed and an SGL-
3 speculative liquidity rating was assigned.
Headquartered in Richmond, British Columbia, Catalyst is the
largest producer of mechanical coated and uncoated specialty
papers and newsprint, and the only producer of lightweight coated
paper, on the west coast of North America and is also one of the
largest producers of lightweight uncoated groundwood (directory)
paper in the world. The company also produces market pulp and
operates the largest paper recycling operation in Western Canada.
CCS MEDICAL: Files for Chapter 11 With Pre-Arranged Plan
--------------------------------------------------------
CCS Medical, Inc., has reached an agreement with certain holders
of its first lien loan to significantly reduce the Company's debt
and improve its capital structure.
To facilitate this financial restructuring, CCS Medical elected to
file petitions for relief under Chapter 11 of the United States
Bankruptcy Code in the U.S. Bankruptcy Court for the District of
Delaware. The Company expects the filing to have no impact on its
operations, which will continue as usual during the restructuring
process.
The filing was made with the support of holders of the majority of
the Company's obligations under the first lien loan for the
proposed terms of a prearranged plan of reorganization. As a
result, the Company expects that it will be able to complete its
restructuring process on an accelerated basis.
"We are pleased to have reached an agreement with our lenders that
will enable us to quickly restructure our debt and emerge better
positioned for continued growth and success," said CCS Medial CEO
John Miclot. "The agreement and the ongoing support from our
lenders is an important and positive step forward for our company
and underscore our lenders' confidence in our business. Through
this process, we will secure a better future for CCS Medical by
better aligning our debt structure with our operations while
ensuring that business will continue as usual."
Mr. Miclot stated, "The fundamentals of our business remain solid.
CCS Medical's operations are strong and demand for our quality
products, services and single source convenience continue to grow.
The Company remains dedicated to enhancing patient satisfaction
and maintaining our relationships with our suppliers and valued
customers throughout this process. We appreciate the support of
our lenders, customers, suppliers and employees, and we look
forward to creating an even brighter future for our company
through this process."
As stated in the Company's filing, CCS Medical and certain of its
lenders have reached an agreement in principle to support the Pre-
Arranged Plan, which agreement has been filed with the Court. The
Pre-Arranged Plan, among other things, will reduce the Company's
debt, if confirmed, from approximately $522 million to
approximately $200 million.
The Company believes it has ample cash on hand, in addition to
cash generated from ongoing operations, to support the business
during the restructuring process. However, the Company has
received a commitment for $10 million in debtor-in-possession
financing from a group of existing first lien lenders that can be
used by the Company to support the business as necessary.
In conjunction with the bankruptcy filing, the Company also filed
a number of customary motions to continue to support its
employees, customers and suppliers during the financial
restructuring process. As part of these motions, the Company has
asked the Court for additional authorizations, including
permission to continue paying employee wages and salaries and to
provide employee benefits without interruption. The Company has
also asked for authority to continue honoring certain customer
policies and programs to ensure that the restructuring process
will have minimal effect on its customers and to continue to pay
its critical vendors in the ordinary course. During the Chapter
11 process, it is expected that among others, suppliers will be
paid in full for all goods and services provided after the filing
date as required by the Bankruptcy Code, and the Company
anticipates that, pursuant to the proposed terms of the "pre-
arranged" restructuring, the majority of the Company's suppliers
will remain unaffected by the Chapter 11 process. CCS Medical has
taken steps to ensure continued supply of goods and services to
its customers.
The implementation of the Pre-Arranged Plan is dependent upon a
number of factors, including final documentation, the approval of
a disclosure statement and confirmation and consummation of the
Pre-Arranged Plan in accordance with the provisions of the
Bankruptcy Code. While the Company believes that the terms of the
current proposed plan provide the best available alternative for
its creditors, customers and employees, the Company will continue
to consider additional enhancements or alternatives to its current
plan.
About CCS Medical
Founded in 1994, CCS Medical -- http://www.ccsmed.com/-- has
become a leading provider of medical supplies. CCS Medical
assists patients that need diabetes test strips, insulin pumps,
urological supplies, ostomy supplies, advanced wound care
dressings and prescription drugs. Clear Water, Florida-based CCS
Medical specializes in providing a convenient way for patients to
receive supplies for their chronic illnesses in a manner that
saves them time and money.
CCS Medical, along with its affiliates, filed for Chapter 11 on
July 8, 2009 (Bankr. D. Del. Case No. 09-12390). At the time of
the filing, CCS Medical said that it had assets of $100 million to
$500 million against debts of $500 million to $1 billion.
Attorneys at Young Conaway Stargatt & Taylor, LLP, represents the
Debtors. Willkie Farr & Gallagher LLP serves as co-counsel to the
Debtors. Goldman, Sachs & Co., serves as investment banker and
Alvarez & Marsal Healthcare Industry Group, LLC, as restructuring
advisor. Epiq Bankruptcy Solutions LLC is claims agent.
CCS MEDICAL: Case Summary & 50 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: CCS Medical, Inc.
14255 49th Street, Suite 301
Clearwater, FL 33762
Case No.: 09-12390
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
CCS Medical, Inc. 09-12390
CCS Acquisition-Sub Corporation 09-12391
CCS Medical Holdings, Inc. 09-12392
MPTC Holdings, Inc. 09-12393
MP TotalCare, Inc. 09-12394
MP TotalCare Services, Inc. 09-12395
Medical Holdings, Inc. 09-12396
MP TotalCare Supply, Inc. 09-12397
TotalCare Wholesale, Inc. 09-12398
MP TotalCare Medical, Inc. 09-12399
Medship Direct, Inc. 09-12400
Chronic Care Solutions, Inc. 09-12401
Sanvita, Inc. 09-12402
DEGC Enterprises (U.S.), Inc. 09-12403
Secure Care Medical, Inc. 09-12404
Medical Express Depot, Inc. 09-12405
KeyMed, Inc. 09-12406
MedStar Diabetic Supply, LP 09-12407
CCS Star, LLC 09-12408
Type of Business: Founded in 1994, CCS Medical --
http://www.ccsmed.com/-- claims to be a leading
provider of medical supplies. CCS Medical
assists patients that need diabetes test strips,
insulin pumps, urological supplies, ostomy
supplies, advanced wound care dressings and
prescription drugs. Clear Water, Florida-based
CCS Medical specializes in providing a
convenient way for patients to receive supplies
for their chronic illnesses in a manner that
saves them time and money.
Chapter 11 Petition Date: July 8, 2009
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Judge: Christopher S. Sontchi
Debtors' Counsel: Matthew Barry Lunn, Esq.
Young, Conaway, Stargatt & Taylor
The Brandywine Building, 17th Floor
1000 West Street PO Box 391
Wilmington, DE 19899
Tel: (302) 571-6600
Email: bankfilings@ycst.com
Robert S. Brady, Esq.
Young, Conaway, Stargatt & Taylor
The Brandywine Bldg.
1000 West Street, 17th Floor
PO Box 391
Wilmington, DE 19899-0391
Tel: (302) 571-6600
Fax: (302) 571-1253
Email: bankfilings@ycst.com
Debtors'
Co-Counsel: Willkie Farr & Gallagher LLP
Debtors'
Investment
Banker: Goldman, Sachs & Co.
Debtors'
Restructuring
Advisor: Alvarez & Marsal Healthcare Industry Group, LLC
Debtors'
Claims Agent: Epiq Bankruptcy Solutions LLC
Estimated Assets: $100,000,001 to $500,000,000
Estimated Debts: $500,000,001 to $1,000,000,000
The petition was signed by Stephen M. Saft, the company's chief
financial officer.
A. CCS Medical's List of 50 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Wachovia Bank, Bank Loan $110,000,000
National Association as
Administrative Agent
One Wachovia Center
301 South College Street
Charlotte, NC 28288
Bank of America as Bank Loan $82,170,323
Administrative Agent
100 N. Tryon Street
NC 1-007-14-24
Charlotte, NC 28255
Minimed Distribution Trade Debt $7,508,731
Corporation
13015 Collections Center
Drive
Chicago, IL 60693
Lifescan, Inc. Trade Debt $3,408,409
1000 Gibraltar Drive
Milpitas, CA 95035
Animas Diabetes Care LLC Contract/Trade Debt $2,965,752
P.O. Box 2049
West Chester, PA 19380
Ropes & Gray LLP Trade Debt $1,300,000
1211 Avenue of
the Americas
New York, NY 10036
Becton Dickinson Contract/Trade Debt $1,113,525
1 Becton Drive
Franklin Lakes, NJ 07471
Nova Biomedical Trade Debt $947,817
Amerisource Bergen Trade Debt $870,092
Drug Corp.
P.O. Box 100708
Pasadena, CA 91189
Roche Diagnostics Trade Debt $843,603
Corporation
9115 Hague Road
Indianapolis, IN 46250
Medline Industries Inc. Trade Debt $480,661
One Medline Place
Mundelein, IL 60060
Bayer Corporation Trade Debt $446,912
P.O. Box 751384
Diagnostics Division
Charlotte, NC 28275
Abbott Laboratories Trade Debt $337,360
P.O. Box 100997
Atlanta, GA 30384
Hollister Inc. Trade Debt $268,279
72035 Eagle Way
Chicago, IL 60678
J&J Health Care Trade Debt $257,951
Systems Inc.
5972 Collections
Center Drive
Chicago, IL 60693
Home Diagnostics Inc. Trade Debt $229,780
Accudata Integrated Trade Debt $186,735
Marketing
Dey LP Trade Debt $176,929
Independence Medical Trade Debt $162,277
UPS Trade Debt $161,011
Astra Tech Trade Debt $133,917
Coloplast Corp. Trade Debt $133,331
Verizon Business Trade Debt $123,119
DDP Medical Supply Trade Debt $98,964
Bard Inc. Trade Debt $83,000
Letco Medical Inc. Trade Debt $76,670
Disetronic Medical Trade Debt $74,302
Systems
Smiths Medical MD Inc. Trade Debt $71,413
Specialty Medical Trade Debt $70,794
Supplies
Stephen Gould Corporation Trade Debt $64,996
Teleflex Medical Trade Debt $61,258
Bio Compression Systems Trade Debt $51,370
Supreme Medical Trade Debt $48,436
Fulfillment
Bioderm Trade Debt $43,654
Kendall Trade Debt $41,971
Smith and Nephew, Inc. Trade Debt $41,864
Medical Innovations Trade Debt $36,664
Lesco Medisearch Trade Debt $36,559
Molnlycke Healthcare Trade Debt $28,756
CDW Direct LLC Trade Debt $25,819
Energizer Battery, Inc. Trade Debt $25,240
Insulet Corp. Trade Debt $24,000
Owen Mumford Inc. Trade Debt $22,694
Instep Services LLC Trade Debt $20,000
Convatec, Inc. Trade Debt $19,923
Precision Litho Trade Debt $19,535
Service, Inc.
Invacare Supply Trade Debt $16,263
Group Inc.
Dexcom, Inc. Trade Debt $14,840
Rochester Medical Corp. Trade Debt $14,769
Corporate Express Inc. Trade Debt $13,406
CCS MEDICAL: Wants to Access $10-Mil. of Financing from Imperial
----------------------------------------------------------------
CCS Medical Inc. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware for authority to access
$10 million of postpetition financing from Imperial Capital LLC as
administrative agent to a group of lenders that include Highland
Capital Management LLC.
The Debtors tell the Court that they intend to access $5 million
upon interim approval of the DIP financing.
The proceeds of the DIP Facility will be used for:
i) working capital and other general corporate purposes of
the Debtors in accordance with the budget, including for
the purpose of collateralizing postpetition letters of
credit and surety bonds;
ii) payment of chapter 11 expenses, including professional
fees, in accordance with the terms of the DIP Facility
and the DIP Orders; and
iii) payment of the fees and expenses of the DIP agent and the
DIP lenders in connection with the DIP facility.
The loans will bear interest at a rate equal to LIBOR plus 8.0%,
subject to a 3.0% LIBOR floor. Interest will be payable monthly,
in cash, in arrears, calculated on the basis of the actual number
of days elapsed in a 360-day year. Default interest is interest
rate plus 2.0% per annum.
To secure their obligations, the Debtors will grant to the lenders
superpriority administrative expense claim status in these cases,
having priority over all other administrative expenses.
The DIP facility contains customary and appropriate events of
default.
A full-text copy of the Debtors' DIP budget is available for free
at http://ResearchArchives.com/t/s?3ed6
A full-text copy of the Debtors' DIP agreement is available for
free at http://ResearchArchives.com/t/s?3ed7
About CCS Medical
Founded in 1994, CCS Medical -- http://www.ccsmed.com/-- has
become a leading provider of medical supplies. CCS Medical
assists patients that need diabetes test strips, insulin pumps,
urological supplies, ostomy supplies, advanced wound care
dressings and prescription drugs. CCS Medical specializes in
providing a convenient way for patients to receive supplies for
their chronic illnesses in a manner that saves them time and
money.
As a leader in the medical supply community, Clear Water, Florida-
based CCS Medical has a commitment to the mission statement of
being the leading provider of products and services to the home
chronic care marketplace.
CCS Medical, along with its affiliates, filed for Chapter 11 on
July 8, 2009 (Bankr. D. Del. Case No. 09-12390). At the time of
the filing, CCS Medical said that it had assets of $100 million to
$500 million against debts of $500 million to $1 billion.
Attorneys at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors. Willkie Farr & Gallagher LLP serves as co-counsel to the
Debtors. Goldman, Sachs & Co., serves as investment banker and
Alvarez & Marsal Healthcare Industry Group, LLC, as restructuring
advisor. Epiq Bankruptcy Solutions LLC is claims agent.
CCS MEDICAL: Proposes A&M Healthcare as Restructuring Advisors
--------------------------------------------------------------
CCS Medical Inc. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the U.S. Bankruptcy Court for the District of Delaware
for permission to employ Alvarez & Marsal Healthcare Industry
Group LLC as their restructuring advisors.
The firm will, among other things:
a) assist in a financial review of the Debtors, including
but not limited to a review and assessment of financial
information that has been, and that will be, provided by
the Debtors to their creditors, including without
limitation its short and long-term projected cash flows;
b) assist in the identification of cost reduction and
operations improvement opportunities, particularly those
costs which could be mitigated through a restructure;
c) assist the chief executive officer of the Debtors in
developing for the Board's review possible restructuring
plans or strategic alternatives for maximizing the
enterprise value of the Debtors' various business lines;
d) liaise with the Debtors' creditors with respect to the
Debtors' financial and operational matters; and
e) assist the Debtors in the preparation of disclosures
required by the Court, including the Debtors' schedules of
assets and liabilities, statements of financial affairs and
monthly operating reports.
Guy Sansone, managing director of the firm, will bill $750 per
hour for this engagement. The firm will charge the Debtors for
work performed by other professionals at these rates:
Designation Hourly Rate
----------- -----------
Senior Directors $500-$575
Directors $425-$500
Senior Associates $325-$375
Associates $250-$325
Analysts $150-$225
The Debtors assure the Court that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
About CCS Medical
Founded in 1994, CCS Medical -- http://www.ccsmed.com/-- has
become a leading provider of medical supplies. CCS Medical
assists patients that need diabetes test strips, insulin pumps,
urological supplies, ostomy supplies, advanced wound care
dressings and prescription drugs. Clear Water, Florida-based CCS
Medical specializes in providing a convenient way for patients to
receive supplies for their chronic illnesses in a manner that
saves them time and money.
CCS Medical, along with its affiliates, filed for Chapter 11 on
July 8, 2009 (Bankr. D. Del. Case No. 09-12390). At the time of
the filing, CCS Medical said that it had assets of $100 million to
$500 million against debts of $500 million to $1 billion.
Attorneys at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors. Willkie Farr & Gallagher LLP serves as co-counsel to the
Debtors. Goldman, Sachs & Co., serves as investment banker and
Alvarez & Marsal Healthcare Industry Group, LLC, as restructuring
advisor. Epiq Bankruptcy Solutions LLC is claims agent.
CCS MEDICAL: Hires Epiq Bankruptcy as Claims Agent
--------------------------------------------------
CCS Medical Inc. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the U.S. Bankruptcy Court for the District of Delaware
for permission to employ Epiq Bankruptcy Solutions LLC as claims
agent.
The firm will:
i) perform certain noticing functions;
ii) assist the Debtors in analyzing and reconcile proofs of
claim filed against the Debtors' estates; and
iii) assist the Debtors with balloting in connection with any
proposed Chapter 11 plan.
The firm will charge the Debtors based on the hourly rates of its
professionals:
Designation Hourly Rate
----------- -----------
Senior Consultant $295
Senior Case Manager $225-$275
Case Manager (Level 2) $185-$220
IT Programming Consultant $140-$190
Case Manager (Level 1) $125-$175
Clerk $40-$60
The Debtors assure the Court that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
About CCS Medical
Founded in 1994, CCS Medical -- http://www.ccsmed.com/-- has
become a leading provider of medical supplies. CCS Medical
assists patients that need diabetes test strips, insulin pumps,
urological supplies, ostomy supplies, advanced wound care
dressings and prescription drugs. Clear Water, Florida-based CCS
Medical specializes in providing a convenient way for patients to
receive supplies for their chronic illnesses in a manner that
saves them time and money.
CCS Medical, along with its affiliates, filed for Chapter 11 on
July 8, 2009 (Bankr. D. Del. Case No. 09-12390). At the time of
the filing, CCS Medical said that it had assets of $100 million to
$500 million against debts of $500 million to $1 billion.
Attorneys at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors. Willkie Farr & Gallagher LLP serves as co-counsel to the
Debtors. Goldman, Sachs & Co., serves as investment banker and
Alvarez & Marsal Healthcare Industry Group, LLC, as restructuring
advisor. Epiq Bankruptcy Solutions LLC is claims agent.
CCS MEDICAL: Intends to File Schedules & Statements by Sept. 8
--------------------------------------------------------------
CCS Medical Inc. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the U.S. Bankruptcy Court for the District of Delaware
to extend until September 8, 2009, the deadline to file their
schedules of assets and liabilities, and statements of financial
affairs.
The Debtors tell the Court that they will be unable to complete
their schedules and statements by the initial deadline due to the
complexity and large number of affiliated debtors in their Chapter
11 cases.
About CCS Medical
Founded in 1994, CCS Medical -- http://www.ccsmed.com/-- has
become a leading provider of medical supplies. CCS Medical
assists patients that need diabetes test strips, insulin pumps,
urological supplies, ostomy supplies, advanced wound care
dressings and prescription drugs. Clear Water, Florida-based CCS
Medical specializes in providing a convenient way for patients to
receive supplies for their chronic illnesses in a manner that
saves them time and money.
CCS Medical, along with its affiliates, filed for Chapter 11 on
July 8, 2009 (Bankr. D. Del. Case No. 09-12390). At the time of
the filing, CCS Medical said that it had assets of $100 million to
$500 million against debts of $500 million to $1 billion.
Attorneys at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors. Willkie Farr & Gallagher LLP serves as co-counsel to the
Debtors. Goldman, Sachs & Co., serves as investment banker and
Alvarez & Marsal Healthcare Industry Group, LLC, as restructuring
advisor. Epiq Bankruptcy Solutions LLC is claims agent.
CCS MEDICAL: Proposes Willkie Farr & Gallagher as Co-Counsel
------------------------------------------------------------
CCS Medical Inc. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the U.S. Bankruptcy Court for the District of Delaware
for permission to employ Willkie Farr & Gallagher LLP as their co-
counsel.
The firm will:
a) provide the Debtors with advice, representing the
Debtors, and preparing all necessary documents on behalf
of the Debtors, in the areas of bankruptcy law, corporate
finance, employee benefits, and tax, as well as with
regard to commercial litigation, debt restructuring and
asset dispositions;
b) take all necessary actions to protect and preserve each
of the Debtors' estates, including the prosecution of
actions by the Debtors, the defense of actions commenced
against the Debtors, negotiations concerning litigation in
which the Debtors are involved and the objection to claims
filed against the estates;
c) prepare, on behalf of the Debtors, as debtors-in-
possession, all necessary motions, applications, answers,
orders, reports and papers in connection with the
administration of the Chapter 11 cases;
d) counsel the Debtors with regard to their rights and
obligations as debtors in possession; and
e) perform all other necessary or requested legal services.
The firm's attorney will charge between $290 and $995 per hour and
paralegals will bill between $105 and $260 per hour for this
engagement.
The Debtors assure the Court that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
About CCS Medical
Founded in 1994, CCS Medical -- http://www.ccsmed.com/-- has
become a leading provider of medical supplies. CCS Medical
assists patients that need diabetes test strips, insulin pumps,
urological supplies, ostomy supplies, advanced wound care
dressings and prescription drugs. Clear Water, Florida-based CCS
Medical specializes in providing a convenient way for patients to
receive supplies for their chronic illnesses in a manner that
saves them time and money.
CCS Medical, along with its affiliates, filed for Chapter 11 on
July 8, 2009 (Bankr. D. Del. Case No. 09-12390). At the time of
the filing, CCS Medical said that it had assets of $100 million to
$500 million against debts of $500 million to $1 billion.
Attorneys at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors. Willkie Farr & Gallagher LLP serves as co-counsel to the
Debtors. Goldman, Sachs & Co., serves as investment banker and
Alvarez & Marsal Healthcare Industry Group, LLC, as restructuring
advisor. Epiq Bankruptcy Solutions LLC is claims agent.
CCS MEDICAL: Chapter 11 Filing Cues S&P's Rating Cut to 'D'
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
corporate credit rating on Clearwater, Florida-based CCS Medical,
Inc. to 'D' from 'CCC'. S&P also lowered the issue-level ratings
on the company's senior secured facilities to 'D' from 'CCC+', and
on its second-lien term loan to 'D' from 'CC'.
The rating actions follow the company's election to file petitions
for relief under Chapter 11 of the U.S. Bankruptcy Code, in the
U.S. Bankruptcy Court for the District of Delaware, through a
prearranged plan. The company's first-lien and second-lien
recovery ratings remain '2' and '6', respectively.
The prearranged plan filed by CCS Medical on July 8, 2009,
required approval from at least two-thirds of its first-lien
lenders (only). By filing a prearranged plan, the company hopes
to quickly complete a restructuring by reducing debt and
subsequently improving its capital structure, and does not expect
any disruption to its business.
Under the proposed terms of the prearranged plan, the company's
debt will be reduced to approximately $200 million from
approximately $522 million. The first-lien holders will hold the
$200 million of remaining debt and will also hold the majority of
the company's equity; second-lien holders will receive equity
warrants. CCS also received a commitment for $10 million debtor-
in-possession (DIP) financing from a group of existing first-lien
lenders.
Standard & Poor's expects to assign new ratings upon CCS'
emergence from bankruptcy.
CEMEX SAB: Net Income Dropped to US$169 Million in 2008
-------------------------------------------------------
Cemex S.A.B. de C.V. reported in a 20-F filing with the U.S.
Securities and Exchange Commission that it posted a net income of
Ps2.323 billion (US$169 million) for the year ended Dec. 31, 2008,
compared with a net income of Ps26.945 billion (US$1.96 billion)
for the same period in the previous year.
At December 31, 2009, on a group basis, Cemex' balance sheet
showed total assets of Ps623.6 billion (US$45.38 billion), total
liabilities of Ps386.3 billion (US$28.11 billion) and
stockholders' equity of about Ps237.3 billion (US$17.27 billion).
Based on geographic segments, Ps65.698 billion of the Company's
assets are in Mexico, Ps277.772 billion are in the U.S., while the
remaining assets are spread across various areas around the globe.
Cemex said that it is currently in debt refinancing discussions
with lenders. During the first quarter of 2009, Cemex entered
into a Conditional Waiver and Extension Agreement with a group of
our bank lenders. The lenders party to the Conditional Waiver and
Extension Agreement have agreed to extend to July 31, 2009
scheduled principal payment obligations which were originally due
between March 24, 2009 and July 31, 2009. Cemex entered into the
Conditional Waiver and Extension Agreement to have more time to
negotiate a broader debt refinancing. As of June 26, 2009,
principal payments in an aggregate principal amount of
approximately US$1.166 billion have been extended under the
Conditional Waiver and Extension Agreement.
Going Concern Doubt
KPMG Cardenas Dosal, S.C. raised substantial doubt concerning
Cemex S.A.B. de C.V.'s ability to continue as a going concern
after auditing the Company's financial results for the years ended
December 31, 2008, 2007, and 2006. As of the end of 2008, CEMEX
had approximately Ps95.2 billion of debt due in the next 12 months
in accordance with the terms of the debt instruments. In
addition, CEMEX had an excess of current liabilities over current
assets of approximately Ps84.5 billion.
KPMG said the Company's ability to fulfill its short and long-term
debt obligations that mature in 2009 is dependent on successfully
completing their refinancing, which raises substantial doubt about
its ability to continue as a going concern.
A full-text copy of the FORM 20-F is available for free at:
http://ResearchArchives.com/t/s?3ed1
About Cemex, S.A.B.
CEMEX, S.A.B. de C.V. is a Mexican corporation, a holding company
of entities which main activities are oriented to the construction
industry, through the production, marketing, distribution and sale
of cement, ready-mix concrete, aggregates and other construction
materials. CEMEX is a public stock corporation with variable
capital (S.A.B. de C.V.) organized under the laws of the United
Mexican States, or Mexico.
Based in Mexico, Cemex -- http://www.cemex.com/-- is a growing
global building solutions company that provides high quality
products and reliable service to customers and communities in more
than 50 countries throughout the world, including Argentina,
Colombia and Venezuela.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 17, 2009, Fitch Ratings placed on 'Rating Watch Evolving',
Cemex's ratings, including its 'B' Foreign currency Issuer Default
Rating, and 'B' Local currency IDR.
CENTENNIAL COMMUNICATIONS: S&P Keeps Positive Watch on B Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services said that affected ratings,
including the 'B' corporate credit rating, on Wall, New Jersey-
based wireless services provider Centennial Communications Corp.
remain on CreditWatch with positive implications, where they were
placed on Nov. 10, 2008, pending the company's acquisition by AT&T
Inc. (A/Negative/A-1).
The 'BB-' rating on subsidiary Centennial Cellular Operating Co.
LLC's secured credit facility is not on CreditWatch. It contains
mandatory change of control provisions which will be triggered at
closing and therefore require repayment at that time.
This update follows the July 8 announcement that the anticipated
closing date is now during the third quarter of calendar year
2009. Centennial's shareholders have approved the acquisition,
but approval by the Department of Justice and the FCC is still
pending. As of March 31, 2009, Centennial had about $1.9 billion
of debt outstanding, of which about
$1.4 billion are affected by the CreditWatch action.
CHARLES A. ROBINSON: Case Summary & 20 Largest Unsec. Creditors
---------------------------------------------------------------
Debtor: Charles A. Robinson
aka Robinson Antiques
927 Toulouse Street
New Orleans, LA 70112
Bankruptcy Case No.: 09-12041
Chapter 11 Petition Date: July 8, 2009
Court: United States Bankruptcy Court
Eastern District of Louisiana (New Orleans)
Judge: Elizabeth W. Magner
Debtor's Counsel: Christopher T. Caplinger, Esq.
601 Poydras Street, Suite 2775
New Orleans, LA 70130
Tel: (504) 568-1990
Fax: (504) 529-7418
Email: ccaplinger@lawla.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/laeb09-12041.pdf
The petition was signed by Mr. Robinson.
CHRYSLER FINANCIAL: Fitch Affirms Junk Issuer Default Ratings
-------------------------------------------------------------
Fitch Ratings has affirmed and removed from Rating Watch Negative
Chrysler Financial Services Americas LLC's Issuer Default Ratings:
-- Long-term IDR at 'CC';
-- Short-term IDR at 'C'.
At the same time, CFS' senior debt ratings have been revised
following changes in Fitch's rating definitions published in March
2009. A complete list of ratings is provided at the end of this
release.
CFS' removal from Rating Watch Negative resulted from
clarification of CFS' status following Chrysler LLC's bankruptcy,
whereby the legal separation between Chrysler and CFS was not
questioned by the Bankruptcy Court, and CFS' debt obligations were
not restructured or subordinated to obligations purchased by the
U.S. Treasury. A Rating Outlook has not been assigned at this
time.
The ratings reflect the considerable constraints placed on CFS'
future cash flow generation following the transfer of wholesale
and retail financing services to GMAC LLC from Chrysler. CFS is
currently in wind-down mode, which remains the only viable option
unless new business opportunities surface.
The Recovery Ratings on the first-lien term loan and second-lien
revolver are 'RR1' and 'RR3', respectively, and are based on the
respective collateral coverage for these instruments. 'RR1'
implies recovery between 90%-100%, while 'RR3' implies recovery
between 51%-70%.
Fitch takes these actions on Chrysler Financial Services Americas
LLC's ratings:
-- Long-term IDR affirmed at 'CC';
-- Short-term IDR affirmed at 'C';
-- Senior secured revised to 'B' from 'CCC+';
-- Senior debt revised to 'CCC' from 'CCC-'.
CIT GROUP: Fitch Downgrades Issuer Default Ratings to 'BB-'
-----------------------------------------------------------
Fitch Ratings has downgraded the Long-term Issuer Default Ratings
of CIT Group Inc. and subsidiaries to 'BB- ' from 'BB+'.
Concurrent with this action, Fitch has upgraded CIT's Support
Rating to '3' from '5', reflecting Fitch's view that there is a
moderate probability of support from the U.S. government. In
addition, Fitch lowered the Individual Rating to 'E' from 'D',
which indicates CIT either requires or is likely to require
external support. In Fitch's rating criteria, a bank's standalone
risk is reflected in Fitch's Individual Ratings while the prospect
of external support is reflected in Fitch's Support Rating.
Collectively these ratings drive Fitch's long- and short-term
IDRs. All ratings remain on Rating Watch Negative. A complete
list of issuer and issue ratings is included at the end of this
release; approximately $35 billion of debt is affected by the
action.
CIT recently converted to a bank holding company and much of its
efforts to date in 2009 have been focused on shifting its business
from the holding company to its bank subsidiary, largely to
broaden available funding options to include insured deposits.
That said, CIT remains heavily reliant on wholesale funding amidst
challenging market conditions. CIT's application for funding
under the FDIC's Temporary Liquidity Guarantee Program remains
active, but has not yet received approval. Fitch is maintaining
CIT on Watch Negative pending resolution of CIT's TLGP
application. If CIT's application is not approved over the very
short term, Fitch would likely lower CIT's ratings to levels that
would indicate that default is a real possibility. Conversely, if
the company's TLGP application is approved and CIT is able to
issue FDIC guaranteed debt, Fitch believes the near-term liquidity
pressures could be addressed, allowing CIT to execute on its
ongoing business plan. In addition to TLGP, Fitch expects that
CIT will look to complete remaining 23A transfers (asset sales
from CIT Group to CIT Bank, requiring regulatory approval) and
write future financing business out of its bank subsidiary.
CIT's funding profile is its most immediate challenge, however, it
is also suffering to a lesser extent from the weakened economic
environment and consequent asset quality deterioration, including
higher credit losses. Assuming the funding profile is addressed,
longer-term, potential improvements to the company's ratings will
depend on a moderation of credit losses, further strengthening of
the company's capital base, accessibility to non-government
guaranteed funding, and generation of sustained profitability.
The rating action reflects that, absent external support, CIT's
franchise value and client confidence could quickly erode and
jeopardize CIT's long-term viability. The upgrade of the Support
Rating to a '3' reflects Fitch's view that the probability that
support will be forthcoming is considered moderate (not certain).
The downgrade of the company's Individual Rating to 'E ' denotes a
bank with very serious problems, which either requires or is
likely to require external support. Taken together, Fitch's
actions on CIT's Support and Individual Ratings results in the
company's Long-term IDR set at the minimum rating 'BB- ', which is
Fitch's Support Floor, or the minimum rating for an entity of a
Support Rating of '3' and indicates the rating is reliant on
government support.
CIT, a bank holding company with $75.7 billion in assets and
$4.3 billion in equity, provides financing to a variety of
industries such as transportation, aerospace, rail, and a broad
range of manufacturing and retailing sectors. CIT Bank, CIT's
primary bank subsidiary and state chartered bank, primarily
originates middle market, commercial loans to the wholesaling,
healthcare, communications, media and entertainment and various
service-related industries.
Fitch has downgraded these ratings, which remain on Watch
Negative:
CIT Group Inc.
-- Long-term IDR to 'BB-' from 'BB+';
-- Senior debt to 'B+/RR4' from 'BB';
-- Individual to 'E' from 'D';
-- Subordinated/Jr. Subordinated debt to 'CC/RR6' from 'BB-';
-- Preferred to 'CC/RR6' from 'B'.
CIT Bank
-- Long-term IDR to 'BB-' from 'BB+';
-- Long-term deposits to 'BB' from 'BBB-';
-- Short-term IDR to 'B' from 'F3';
-- Short-term deposits to 'B' from 'F3';
-- Individual to 'D' from 'C/D'.
CIT Funding Group of Canada, Inc.
-- Long-term IDR to 'BB-' from 'BB+';
-- Senior debt to 'B+/RR4' from 'BB'.
CIT Group (Australia) Inc.
-- Long-term IDR to 'BB-' from 'BB+';
-- Senior debt to 'B+/RR4' from 'BB'.
Fitch has upgraded these ratings:
CIT Group Inc.
-- Support Rating to '3' from '5';
-- Support Floor to 'BB-' from 'NF'.
CIT Bank
-- Support Rating to '3' from '4';
-- Support Floor to 'BB-' from 'B'.
These remain on Watch Negative:
CIT Group Inc.
CIT Group (Australia) Inc.
-- Short-term IDR 'B';
-- Short-term 'B'.
CIT Funding Group of Canada, Inc.
-- Short-term IDR 'B'.
CITIGROUP INC: Makes Senior Management Changes
----------------------------------------------
Vikram Pandit, Chief Executive Officer of Citigroup Inc., reported
several senior management changes to support the company's
business and strategic priorities and to ensure that proper
management is secured to lead these efforts.
"Our relentless focus on executing against our strategic
priorities at Citi continues as we remain focused on rationalizing
Citi Holdings, and on Citicorp as our core operating business,"
Mr. Pandit said. "We are making consistent and substantial
progress towards these goals. The senior management changes I am
making today will further help in positioning our company for the
future."
Edward Kelly, previously Chief Financial Officer, will take on
broader responsibilities for strategy and M&A and will become Vice
Chairman of Citigroup. Mr. Kelly will work closely with Mr.
Pandit in order to drive the execution of Citi's strategic and
operational priorities. John Gerspach, previously the Controller
and Chief Accounting Officer of Citi, will assume the role of
Chief Financial Officer.
Eugene M. McQuade will join Citi as Chief Executive Officer for
Citibank N.A. Mr. McQuade most recently served as Vice Chairman
of Merrill Lynch and President of Merrill Lynch Banks (U.S.).
Previously, he was the President and Chief Operating Officer of
Freddie Mac and served as President of Bank of America
Corporation.
In addition, Bill Rhodes has informed the company of his desire to
reduce his level of operating responsibility in order to focus
more of his time on Citi's international franchise. He will
continue as Senior Vice Chairman of Citigroup and Citibank and
will step down as Chairman and CEO of Citibank, N.A. Over the
last 50 years, Mr. Rhodes has built invaluable international
experience and relationships on behalf of the Citi franchise.
Gary Crittenden, Chairman of Citi Holdings, has decided to leave
Citi to relocate to Utah to devote more time to his family and
other business interests. "We appreciate Gary's contributions in
his various roles and wish him and his family all of the best in
the next phase of their lives, "Mr. Pandit said.
Background Information
Mr. Kelly has served as Chief Financial Officer of Citi since
March 2009. Prior to being named CFO, he was Head of Global
Banking, Citi Private Bank and President and Chief Executive
Officer of Citi Alternative Investments in Citi's Global
Institutional Bank. Mr. Kelly joined Citi in February 2008 from
The Carlyle Group, a private investment firm, where he was a
Managing Director. Prior to joining Carlyle in July 2007, he was
a Vice Chairman at The PNC Financial Services Group following
PNC's acquisition of Mercantile Bankshares Corporation in March
2007. He was Chairman, Chief Executive and President of
Mercantile from March 2003 through March 2007 and Chief Executive
and President from March 2001 to March 2003.
Before Mercantile, Mr. Kelly was at J.P. Morgan Chase & Co. where
he was Managing Director and head of Global Financial Institutions
and co-head of Investment Banking Client Management. He joined
J.P. Morgan in 1994 as its General Counsel and Secretary. In
1996, he became a Managing Director and subsequently ran various
parts of J.P. Morgan's investment banking business, including
Global Financial Institutions and Latin America. Prior to joining
J.P. Morgan, Mr. Kelly was a partner at the law firm of Davis Polk
& Wardwell, where he specialized in matters related to financial
institutions. Early in his career, Mr. Kelly served as a law
clerk to Supreme Court Justice William J. Brennan, Jr., and U.S.
Court of Appeals Judge Clement F. Haynsworth, Jr.
Mr. Gerspach was previously the Controller and Chief Accounting
Officer of Citi. He has been with Citi since 1990 and has held
various CFO and Chief Administrative Officer positions throughout
the company. He has experience in both the Global Consumer Group
and Citi Markets & Banking, and has worked closely with all of the
regions including serving as the CFO/CAO of Latin America. Before
joining Citi in 1990, Mr. Gerspach was CFO at Penn Central
Industry Group. Previous to that he was Comptroller for the
Defense Contracting Group at ITT Corporation. His professional
career began at Arthur Andersen & Company.
Mr. McQuade was Vice Chairman of Merrill Lynch and President of
Merrill Lynch Banks (U.S.) from February 2008 until February 2009.
Previously, he was the President and Chief Operating Officer of
Freddie Mac for three years. Prior to joining Freddie Mac in
2004, Mr. McQuade served as President of Bank of America
Corporation. He had been President and Chief Operating Officer at
FleetBoston Financial Corporation before helping to bring about
the April 2004 merger between FleetBoston and Bank of America. He
joined Fleet in 1992 and became Chief Financial Officer in 1993,
Vice Chairman in 1997 and President and Chief Operating Officer in
2002. Before working at FleetBoston, Mr. McQuade served as the
Executive Vice President and Controller at Manufacturers Hanover
Corp., a predecessor of JPMorgan Chase. He began his career at
KPMG Peat Marwick in New York.
Mr. Rhodes is the Senior International Officer for Citi. He has
specific responsibilities for client relationships worldwide, as
well as for relationships with governments and other official
institutions.
Mr. Rhodes gained a reputation for international financial
diplomacy in the 1980s as a result of his leadership in helping
manage the external-debt crisis that involved developing nations
and their creditors worldwide. During that period and in the
1990s, he headed the advisory committees of international banks
that negotiated debt-restructuring agreements for Argentina,
Brazil, Jamaica, Mexico, Peru, and Uruguay. In 1998, when the
Republic of Korea experienced liquidity problems, he chaired the
international bank group that negotiated the extension of short-
term debt of the Korean banking system. In early 1999, at the
request of the government of Brazil, he acted as worldwide
coordinator to help implement the maintenance of trade and inter-
bank lines by foreign commercial banks to Brazil.
Mr. Rhodes is a Director of Banamex; a Director of the Private
Export Funding Corporation; First Vice Chairman of the Institute
of International Finance; Chairman of the Americas Society and
Council of the Americas; Chairman of the U.S.-Korea Business
Council; a Director of the U.S.-Russia Business Council; a
Director of the U.S.-Hong Kong Business Council; Vice Chairman of
the National Committee on U.S. - China Relations; a Director of
the U.S./China Business Council; a member of South African
President Thabo Mbeki's International Advisory Board; a member of
the Inter-American Development Bank's Private Sector Advisory
Board; a member of the International Policy Committee of the U.S.
Chamber of Commerce; and a member of the Board at the Foreign
Policy Association. He is also a member of the US-Brazil CEO
Forum, a member of the Advisory Council of the Brazilian American
Chamber of Commerce, the Council on Foreign Relations, The Group
of Thirty, and The Economic Club of New York.
New Regional Leaders in Asia pacific & EMEA
Citi has reaffirmed its commitment to the company's global
franchise with the appointment of new regional leaders in Asia
Pacific and EMEA (Europe, Middle East and Africa). The following
appointments are effective immediately:
-- Shengman Zhang as Chairman of Asia Pacific,
-- Stephen Bird and Shirish Apte as Chief Executive Officers
of Asia Pacific,
-- Bill Mills and Alberto Verme as Chief Executive Officers
of EMEA
"In each of the 104 countries where we operate and the dozens more
where we do business, our clients and customers deeply value our
unique capabilities and global perspectives," said Citi Chief
Executive Officer Vikram Pandit. "In appointing these talented
executives to drive our business in Asia and EMEA, I am
reaffirming Citi's commitment to these markets and to helping our
clients and customers execute on growth opportunities around the
world."
In Asia Pacific, Mr. Zhang will be responsible for forging and
expanding relationships with clients, regulators, government
officials and employees across the region. As CEOs, Mr. Bird will
be responsible for Northern Asia and Mr. Apte for Southern Asia.
The two will have joint responsibilities for Asia Pacific's
overall performance, strategy and execution.
In EMEA, Mr. Mills will continue to be responsible for our
business in Western Europe and Africa and Mr. Verme for our
business in Central and Eastern Europe and the Middle East. Mr.
Mills and Mr. Verme will be jointly responsible for performance,
strategy, and execution across EMEA.
Background Information
Mr. Zhang, 52, had previously served as Vice Chairman of Global
Banking and President of Asia Pacific after joining Citi in
February 2006 as Vice Chairman of Global Banking and Chairman of
the Public Sector Group. He possesses extensive experience in the
industry, including 10 years with the World Bank, with four as the
Managing Director from 2001 to 2005. In that role, he led the
Bank's day-to-day worldwide operations. Mr. Zhang chaired the
Bank's Operations Committee, the Sanctions Committee, and the
Corporate Committee on Fraud and Corruption Policy, and was the
Chairman of the Bank Group's Crisis Management Committee.
Mr. Bird, 42, was most recently Chief Executive Officer for North
Asia and Head of Consumer Banking and Global Cards for Asia
Pacific. He joined Citi in 1998 and has previously served in
Japan as CEO for Credit Cards and Consumer Finance, and as Head of
Operations and Technology for the entire Latin America franchise
having moved there from Asia Pacific in 2001. Prior to joining
Citi, Mr. Bird held senior management positions in GE Capital and
British Steel in the United Kingdom.
Mr. Apte, 56, moves to Asia Pacific after guiding Citi in some of
the fastest-growing emerging markets as Chief Executive Officer of
Citi's Central & Eastern European Region. Mr. Apte has served in
several senior management roles in more than 26 years with Citi,
including as CEO of Central & Eastern Europe, Middle East & Africa
(CEEMEA) Citi Markets & Banking. He began his career with Citi as
a Relationship Banker for Citibank India, and later held various
assignments in Corporate Banking, Risk Management and Corporate
Finance Investment Banking.
Mr. Mills, 53, was most recently CEO for Western Europe, Middle
East and Africa. He previously held the position of Chairman and
Chief Executive Officer of Citi Markets & Banking for Europe,
Middle East and Africa (EMEA). Prior to that, he was Chief
Executive Officer of Salomon Smith Barney Asia Pacific and a
member of the Salomon Smith Barney Management Committee. In this
role, he was responsible for the Firm's Investment Banking,
Equity, Fixed Income, Private Client services, and other
operations conducted in Asia, Australia, New Zealand, and the Sub-
Continent for the Firm. Mr. Mills has been with Citi for 27
years.
Mr. Verme, 51, was most recently Co-Head of Global Investment
Banking, based in Dubai. Prior to that appointment in 2008, he
was Head of Global Energy, Power and Chemicals Investment Banking
from 2001. During his tenure, the franchise achieved world
leadership and executed a number of marquee transactions including
the Conoco-Phillips merger, the Sibneft-Yukos merger and several
key restructurings. Mr. Verme joined Salomon Brothers in 1994 and
worked as Head and later Chairman of Citi's Latin America
Investment Banking Group through May 2001.
Citi Named as Depositary for Chemspec's ADR Program
Citi's Global Transaction Services business, acting through
Citibank N.A., today announced that it has been appointed by
Chemspec International Limited, a leading China-based contract
manufacturer of highly engineered specialty chemicals, as the
depositary bank for its NYSE-listed American Depositary Receipt
program.
Chemspec's ADR program was established through a $72.7 million
offering, originally priced at $9 per ADR, representing the third
IPO of 2009 conducted in ADR form. The ADRs are listed on NYSE
under the symbol "CPC". Each ADR represents 60 ordinary shares;
however, as a single-listed ADR program, the underlying ordinary
shares are not publicly traded in the issuer's home market.
About Citigroup
Based in New York, Citigroup Inc. (NYSE: C) --
http://www.citigroup.com/-- is organized into four major segments
-- Consumer Banking, Global Cards, Institutional Clients Group,
and Global Wealth Management. 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.
CITY OF VALLEJO: 9th Cir. BAP Affirms Chapter 9 Eligibility
-----------------------------------------------------------
WestLaw reports that to satisfy the second alternative eligibility
requirement for Chapter 9 relief under 11 U.S.C. Sec.
109(c)(5)(B), that it must have "negotiated in good faith with
creditors," it was not enough that a municipality, prior to filing
its Chapter 9 petition, had engaged in good faith negotiations
with labor unions that represented municipal employees regarding
the alteration of its collective bargaining agreements. Rather,
these negotiations had to concern the terms of a possible plan of
adjustment. It will be difficult for a municipality to prove that
it has "negotiated in good faith with creditors," as required by
this second alternative eligibility requirement, unless the
municipality has a plan of adjustment drawn or at least outlined
when it negotiates with creditors. In re City of Vallejo, ---
B.R.----, 2009 WL 1841693, 09 Cal. Daily Op. Serv. 8308,
http://is.gd/1sjGD(9th Cir. BAP).
Vallejo is currently undergoing reorganization under Chapter 9 of
Bankruptcy Code. The U.S. Bankruptcy Court for the Eastern
District of California ruled in March that the city has the right
to terminate contracts with labor unions. The bankruptcy judge
also ruled that the more cumbersome provisions for terminating
labor contracts applicable to companies in Chapter 11 don't apply
to municipalities reorganizing in Chapter 9. The judge has
directed parties to engage in talks to resolve their contract
disputes.
Vallejo -- http://www.ci.vallejo.ca.us/GovSite-- is a city in
Solano County, in California. As of the 2000 census, the city had
a total population of 116,760. It is located in the San Francisco
Bay Area on the northern shore of San Pablo Bay. The City is a
charter city organized and exercising governmental functions under
its charter and the laws and constitution of the state. Its
governing body is its City Council.
The City filed for protection under Chapter 9 of the U.S.
Bankruptcy Code on May 23, 2008 (Bankr. E.D. Calif. Case No.
08-26813). Marc A. Levinson, Esq., and Norman C. Hile, Esq., at
Orrick, Herrington & Sutcliffe LLP in Sacramento, California,
represent the City.
COMMUNITY HEALTH: Fitch Affirms 'B' Issuer Default Ratings
----------------------------------------------------------
Fitch Ratings has affirmed Community Health Systems, Inc.'s
ratings:
-- Issuer Default Rating at 'B'.
In addition, Fitch has upgraded these ratings based on improved
recovery prospects:
-- Secured Bank Credit Facility to 'BB/RR1' from 'BB-/RR2';
-- Senior Unsecured Notes to 'B-/RR5' from 'CCC+/RR6'.
The Rating Outlook is Stable. The ratings apply to approximately
$9.1 billion in debt outstanding as of March 31, 2009.
Fitch's Recovery Ratings reflect the expected recovery in a
default scenario for the various outstanding debt issues. Full
(100%) recovery on the secured bank facility is expected,
corresponding to a recovery rating of 1. Below average recovery
(11-30%) is projected on the senior unsecured notes, resulting in
a recovery rating of 5. The improved recovery expectations
reflect an increase in enterprise value as a result of increased
EBITDA as well as a smaller discount rate being applied due to
tightening covenants under the credit facility.
Community's ratings reflect the company's significant leverage,
uncertain operating environment and industry-leading cash flow.
Community's debt levels remain elevated nearly two years after the
acquisition of Triad Hospitals for approximately
$7 billion. At March 31, 2009, total debt outstanding was
$9.1 billion, down slightly from the $9.2 billion in debt
outstanding as of Sept. 31, 2007, after the acquisition of Triad.
Leverage reduction since 2007 has been accomplished primarily
through EBITDA expansion, with leverage (total debt/operating
EBITDA) for the last 12-months period ended March 31, 2009, at
5.85 times (x). Going forward, Fitch expects leverage to decline
as a result of both EBITDA growth and debt reduction, including
the more than $130 million of debt Community has paid off since
the end of the first quarter.
Although Community's debt and leverage levels are high, its
liquidity is strong for the rating category. Liquidity is provided
by cash on hand ($532 million at March 31, 2009), availability on
the $750 million revolver ($656 million available at March 31),
and free cash flow ($575 million for the LTM ended March 31).
Community's free cash flow is the highest in the industry, and its
5% free cash flow margin compares favorably with similarly-rated
peers. There are also no significant near-term maturities that
could pose a threat to the company's credit profile. However,
Community does have more than $6 billion in term loans that will
ultimately need to be refinanced, although Fitch notes the company
has until 2014 to address the maturities. In addition, Fitch
expects free cash flow will decline from current levels as certain
unusual items do not recur and as the company funds certain
capital commitments over the next few years.
Community's ratings also reflect the company's uncertain operating
environment. Community's operational performance in 2008 was
strong, with organic revenue and volume growth above the industry
average, although organic volumes weakened considerably in the
first quarter. Going forward, Fitch believes the weak economy
could lead to further pressure on bad debt expense and volumes.
Reimbursement could also be negatively affected by declining state
Medicaid funding and potentially less favorable fiscal year 2010
(beginning Oct. 1, 2009) inpatient payment rates for Medicare.
However, Fitch believes that Community is better positioned than
some of its peers to face these challenges given its strong
physician recruiting and cost management efforts as well as its
geographically diverse operations and focus on sole provider
markets.
Healthcare reform presents an additional source of uncertainty for
Community and the hospital industry in general. In theory, reform
should be positive for the industry as increases in the insured
population translate into improvements in volumes and bad debt.
However, reform could also lead to profound changes in
reimbursement or in hospital practices that could negatively
affect the sector. Given the uncertainty surrounding the nature
and likelihood of any reform, it is extremely difficult to
ascertain the potential effect on the for-profit hospital
industry, although it could be significant.
COYOTES HOCKEY: Goldwater Wants to Look at Jerry Reinsdorf Bid
---------------------------------------------------------------
Mike Sunnucks at Phoenix Business Journal reports that the
Goldwater Institute watchdog group is seeking to get a look at the
city of Glendale's negotiations with Jerry Reinsdorf regarding his
bid for Phoenix Coyotes.
According to Business Journal, Goldwater Institute wants to see
what Glendale has been talking to Mr. Reinsdorf about including
any possible incentives, subsidies or lease changes.
Business Journal relates that Glendale refused a public records
request by Goldwater Institute, which then sued the city in June
2009, asking the court to make Glendale turn over the records.
According to the report, Glendale said that Goldwater Institute's
request doesn't fit into the state's public records law.
As reported by the Troubled Company Reporter on July 8, 2009,
Phoenix Coyotes owner Jerry Moyes' lawyers are asking the U.S.
Bankruptcy Court for the District of Arizona to require more
information on Jerry Reinsdorf's $148 million bid for the team.
Mr. Moyes is also seeking information from Mr. Reinsdorf's
business partners and the National Hockey League regarding the
bid. The Reinsdorf ownership team includes Phoenix attorney John
Kaites and sports executive Tony Tavares. The NHL is supporting
Mr. Reinsdorf's bid. Mr. Reinsdorf offered
$148 million to keep the Phoenix Coyotes team in Glendale,
Arizona. Mr. Reinsdorf's bid would challenge one from Jim
Balsillie, co-chief executive officer of Blackberry-maker Research
In Motion Ltd., who has offered $212.5 million on the condition
he's allowed to move the team to Canada.
The NHL said in court documents, "The League has been informed
that this bidder will submit an application for transfer of
ownership, but does not know whether the prospective purchaser
will submit a definitive bid by July 24."
Business Journal states that the Hon. Edward Burke of the Maricopa
County Superior Court will receive written arguments from Glendale
and Goldwater Institute next week. According to Business Journal,
Judge Burke will likely decide on July 20 whether to grant
Goldwater Institute's request.
Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes
Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of
the Phoenix Coyotes National Hockey League team -- filed for
Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on
May 5, 2009. The Debtors are represented by Thomas J. Salerno,
Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate
their assets and liabilities are between $100 million and $500
million.
Jim Balsillie, Research in Motion Ltd.'s co-chief executive
officer, offered to buy the Phoenix Coyotes for $212 million and
move the NHL team to Hamilton, Ontario, and the League balked at
the relocation proposal. Mr. Balsillie was unsuccessful in 2007
when he attempted to buy and relocate the Nashville Predators, and
lost a similar bid in 2006 to buy and relocate the Pittsburgh
Penguins.
CRUCIBLE MATERIALS: Files Lists of Assets and Debt
--------------------------------------------------
According to Bloomberg's Bill Rochelle, Crucible Materials Corp.,
filed formal lists of assets and debt showing creditors being owed
$130 million and property on the books for $165 million.
Affiliate Crucible Development Corp.'s schedules filed with the
U.S. Bankruptcy Court for the District of Delaware, show assets at
$17 million against debt totaling $70 million.
Crucible, according to Bloomberg, initially said assets and debt
each exceeded $100 million, with $64.5 million owed to the
secured lenders.
Based in Syracuse, New York, Crucible Materials Corporation --
http://www.crucible.com/-- aka Crucible Specialty Metals,
Crucible Service Centers, Crucible Compaction Metals, Crucible
Research and Trent Tube makes stainless and alloy steel for use in
the aircraft, automotive, petrochemical, and other industries.
The Company sold its trent tubes unit to Plymouth Tube in 2007.
The Company and its affiliate, Crucible Development Corporation,
filed for Chapter 11 protection on May 6, 2009 (Bankr. D. Del.
Lead Case No. 09-11582). Mark Minuti, Esq., at Saul Ewing LLP
represents the Debtors in their restructuring efforts. The
Debtors propose to employ Duff & Phelps Securities LLP as
investment banker; RAS Management Advisors LLC as business
advisor; and Epiq Bankruptcy Solutions LLC as claims agent.
Roberta A. DeAngelis, United States Trustee for Region 3,
appointed five creditors to serve on the Official Committee of
Unsecured Creditors. The Debtors listed assets and debts both
ranging from $100 million to $500 million.
DEGAULE TRUST: Case Summary & Largest Unsecured Creditor
--------------------------------------------------------
Debtor: DeGaule Trust
Suite A, 1109 Goldsmith Road
Stone Mountain, GA 30083
Bankruptcy Case No.: 09-77751
Chapter 11 Petition Date: July 7, 2009
Court: United States Bankruptcy Court
Northern District of Georgia (Atlanta)
Judge: Margaret Murphy
Debtor's Counsel: T. Ade Adeboye, Esq.
T. Ade Adeboye & Associates, PC
PO Box 4358
Atlanta, GA 30302
Tel: (678) 354-3554
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor identified Fonsecca Financial Services Inc. with
unsecured loan for $51,000 as its largest unsecured creditor. A
full-text copy of the Debtor's petition, including a list of its
largest unsecured creditor, is available for free at:
http://bankrupt.com/misc/ganb09-77751.pdf
The petition was signed by Jacque DeGaule, trustee of the Company.
DOUGHBOY LLC: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Doughboy, LLC
dba Uno Chicago Grill
aka Pizzaria Uno Chicago Bar & Grill
aka Pizzeria Uno
9913 W 121st Terr
Overland Park, KS 66213
Bankruptcy Case No.: 09-12151
Chapter 11 Petition Date: July 8, 2009
Court: United States Bankruptcy Court
District of Kansas (Wichita)
Judge: Chief Judge Robert E. Nugent
Debtor's Counsel: Edward J. Nazar, Esq.
245 North Waco, Ste 402
Wichita, KS 67202
Tel: (316) 262-8361
Fax: (316) 263-0610
Email: ebn1@redmondnazar.com
Total Assets: $3,438,274
Total Debts: $5,480,701
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/ksb09-12151.pdf
The petition was signed by Chris Werth.
DRIVETIME AUTOMOTIVE: Moody's Withdraws 'Caa2' Sr. Debt Rating
--------------------------------------------------------------
Moody's Investors Service has withdrawn its rating for DriveTime
Automotive Group and DT Acceptance Corp. (senior unsecured debt
Caa2).
Moody's has withdrawn this rating for business reasons.
The last rating action on DriveTime was on March 26, 2009, when
Moody's downgraded the company's rating and placed the rating on
review for possible downgrade.
DriveTime is headquartered in Phoenix, Arizona.
DRUG FAIR: Asks Court to Establish September 7 Claims Bar Date
--------------------------------------------------------------
Drug Fair Group, Inc., and CDI Group, Inc., ask the U.S.
Bankruptcy Court for the District of Delaware to establish:
a) September 7, 2009, at 5:00 p.m. (prevailing Eastern Time)
as the deadline by which all entities, other than
governmental units, must file proofs of claim in their
bankruptcy cases;
b) September 18, 2009, at 5:00 p.m. (prevailing Eastern Time)
as the claims bar date for all governmental units; and
c) September 7, 2009, at 5:00 p.m. (prevailing Eastern Time)
as the deadline for the filing of proofs of claim relating
to the Debtors' rejection of executory contracts or unexpired
leases.
The Debtors also ask the Court to establish September 7, 2009, at
5:00 p.m. (prevailing Eastern Time) as the deadline for filing
requests for allowance of postpetition administrative claims under
Sections 503(b)(1) through (8) and 507(a)(2) of the Bankruptcy
Code to the extent incurred prior to July 31, 2009.
About Drug Fair Group
Headquartered in Somerset, New Jersey, Drug Fair Group, Inc. --
http://www.drugfair.com/or http://www.costcuttersonline.com/--
fka Community Distributors, Inc., operates pharmacies and general
merchandise stores in northern and central New Jersey. The
Company, with stores in central and northern New Jersey, is
indirectly owned by Sun Capital Partners Inc., a private-equity
investor based in Boca Raton, Florida.
Drug Fair and CDI Group, Inc., filed for Chapter 11 protection on
March 18, 2009 (Bankr. D. Del. Lead Case No. 09-10897). Domenic
E. Pacitti, Esq., and Michael W. Yurkewicz, Esq., at Klehr
Harrison Harvey Branzburg & Ellers, represent the Debtors in their
restructuring efforts. Epiq Bankruptcy Solutions, LLC, is the
Debtors' notice and claims agent. The petition says that Drug
Fair had assets of $50 million to $100 million and debts of $100
million to $500 million.
The official committee formed in the Chapter 11 case retained
Warren J. Martin, Jr., Esq., and Brett S. Moore, Esq., at Porzio
Bromberg & Newman, P.C., as general counsel and Norman L. Pernick,
Esq., and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel,
Forman & Leonard, P.A., as Delaware counsel. The Committee also
tapped J.H. Cohn LLP as financial advisors and forensic
accountants.
DRUG FAIR: Can Sell Inventory at 4 New Jersey Stores
----------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has granted
Drug Fair Group, Inc. authorization to sell inventory, records,
and files at four store locations in New Jersey to TR Foodtown
Pharmacy Inc., WT Foodtown Pharmay Inc., RB Foodtown Pharmacy
Inc., and OC Foodtown Pharmacy Inc.
As reported in the Troubled Company Reporter on June 22, 2009, in
consideration for the assets, the assignment of the concession
agreements, access to the computer systems and the temporary
operation under the Debtors' licenses, purchasers agree to pay
Bank of America, N.A., on behalf of the Debtors, an amount equal
to 100% of the inventory amount, as defined and determined in
section 8(c) of the asset purchase agreement, in full payment for
all right, title and interest of the Debtors in the assets.
The assets to be sold do not include prescriptions, prescription
files and records, customer lists, patient files, accounts,
payment intangibles or other general intangibles. A full-text
copy of the asset purchase agreement is available for free at:
http://bankrupt.com/misc/drugfair.assetpurchaseagreement.pdf
After commencing the Chapter 11 cases, the Debtors began going out
of business sales at approximately 24 locations. On April 27,
2009, the Court approved the sale of 31 remaining stores to
Walgreen Co. for about $54 million. The Debtors are winding down
assets not included in those transactions.
About Drug Fair Group
Headquartered in Somerset, New Jersey, Drug Fair Group, Inc. --
http://www.drugfair.com/or http://www.costcuttersonline.com/--
fka Community Distributors, Inc., operates pharmacies and general
merchandise stores in northern and central New Jersey. The
Company, with stores in central and northern New Jersey, is
indirectly owned by Sun Capital Partners Inc., a private-equity
investor based in Boca Raton, Florida.
Drug Fair and CDI Group, Inc., filed for Chapter 11 protection on
March 18, 2009 (Bankr. D. Del. Lead Case No. 09-10897). Domenic
E. Pacitti, Esq., and Michael W. Yurkewicz, Esq., at Klehr
Harrison Harvey Branzburg & Ellers, represent the Debtors in their
restructuring efforts. Epiq Bankruptcy Solutions, LLC, is the
Debtors' notice and claims agent. The petition says that Drug
Fair had assets of $50 million to $100 million and debts of $100
million to $500 million.
The official committee formed in the Chapter 11 case retained
Warren J. Martin, Jr., Esq., and Brett S. Moore, Esq., at Porzio
Bromberg & Newman, P.C., as general counsel and Norman L. Pernick,
Esq., and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel,
Forman & Leonard, P.A., as Delaware counsel. The Committee also
tapped J.H. Cohn LLP as financial advisors and forensic
accountants.
DRUG FAIR: Wants Plan Filing Period Extended to November 18
-----------------------------------------------------------
Drug Fair Group, Inc., and CDI Group, Inc., ask the U.S.
Bankruptcy Court for the District of Delaware to extend their
exclusive period to file a Chapter 11 plan until November 18,
2009, and their exclusive period to solicit acceptances thereof
until January 18, 2010.
The Debtors tell the Court that their efforts had been focused on
winding down their estates, which had resulted in the successful
liquidation of substantially all of their assets, and thus, had
not had sufficient time to formulate and propose a plan.
After commencing the Chapter 11 cases, the Debtors began going out
of business sales at approximately 24 locations. On April 27,
2009, the Court approved the sale of 31 remaining stores to
Walgreen Co. for about $54 million. The Debtors are winding down
assets not included in those transactions.
About Drug Fair Group
Headquartered in Somerset, New Jersey, Drug Fair Group, Inc. --
http://www.drugfair.com/or http://www.costcuttersonline.com/--
fka Community Distributors, Inc., operates pharmacies and general
merchandise stores in northern and central New Jersey. The
Company, with stores in central and northern New Jersey, is
indirectly owned by Sun Capital Partners Inc., a private-equity
investor based in Boca Raton, Florida.
Drug Fair and CDI Group, Inc., filed for Chapter 11 protection on
March 18, 2009 (Bankr. D. Del. Lead Case No. 09-10897). Domenic
E. Pacitti, Esq., and Michael W. Yurkewicz, Esq., at Klehr
Harrison Harvey Branzburg & Ellers, represent the Debtors in their
restructuring efforts. Epiq Bankruptcy Solutions, LLC, is the
Debtors' notice and claims agent. The petition says that Drug
Fair had assets of $50 million to $100 million and debts of $100
million to $500 million.
The official committee formed in the Chapter 11 case retained
Warren J. Martin, Jr., Esq., and Brett S. Moore, Esq., at Porzio
Bromberg & Newman, P.C., as general counsel and Norman L. Pernick,
Esq., and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel,
Forman & Leonard, P.A., as Delaware counsel. The Committee also
tapped J.H. Cohn LLP as financial advisors and forensic
accountants.
ECJ INVESTMENTS: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: E. C. J. Investments, Inc.
1602 Alton Rd Suite 429
Miami Beach, Fl 33139
Bankruptcy Case No.: 09-23852
Chapter 11 Petition Date: July 7, 2009
Court: United States Bankruptcy Court
Southern District of Florida (Miami)
Judge: A. Jay Cristol
Debtor's Counsel: Pedro R. Carrillo, Esq.
3676 SW 2 St
Miami, FL 33135
Tel: (305) 460-6001
Fax: (305) 460-6002
Email: pcarrillo@carrillolawyers.com
Total Assets: $1,790,000
Total Debts: $1,548,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Haim Yeffet, president of the Company.
EDDIE BAUER: Wins Final Approval of $100-Mil. Financing from BofA
-----------------------------------------------------------------
The Hon. Mary F. Walrath in the U.S. Bankruptcy Court for the
District of Delaware authorized Eddie Bauer Holdings Inc. and its
affiliates to access, on a final basis, $100 million of debtor-in-
possession financing from their existing revolving lenders.
The prepetition lenders providing for the DIP financing include
Bank of America N.A., GE Capital Corporation, and CIT
Group/Business Credit Inc.
Judge Walrath also authorized the Debtors to use their prepetition
lenders' cash collateral.
The DIP facility is expected to provide the Company with ample
liquidity to meet its ongoing obligations during the sale process,
according to the Troubled Company Reporter on June 19, 2009.
"With the Court's rulings, we continue on track to conduct
business as usual as we proceed with our sale process,"
BankruptcyData.com quoted Neil Fiske, president and chief
executive officer, as saying. "The new DIP financing provides
liquidity to meet our ongoing obligations, and we appreciate the
strong support we have seen from our employees, customers and
suppliers. We remain confident that we are on the right path to
put Eddie Bauer in a stronger financial position for the future."
The Debtors also received final court approval to continue to pay
their employees in the usual manner, including prepetition wages
and salaries, and to pay independent contractor fees and expenses,
BankruptcyData.com reports.
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.
EDUARDO ALMODOVAR: Case Summary & 20 Largest Unsec. Creditors
-------------------------------------------------------------
Joint Debtors: Eduardo Orense Almodovar
Sibyl Marietta Mejia Almodovar
5024 Southport Ct.
Antioch, CA 94531
Bankruptcy Case No.: 09-46072
Chapter 11 Petition Date: July 8, 2009
Court: United States Bankruptcy Court
Northern District of California (Oakland)
Debtors' Counsel: Kenneth R. Graham, Esq.
Law Office of Kenneth R. Graham
171 Mayhew Way #208
Pleasant Hill, CA 94523
Tel: (925) 932-0170
Email: ken@1031focus.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/canb09-46072.pdf
The petition was signed by the Joint Debtors.
EXPRESS ENERGY: Moody's Cuts Corporate Family Rating to 'Ca'
------------------------------------------------------------
Moody's Investors Service downgraded Express Energy Services
Operating, LP's Corporate Family Rating to Ca from Caa2, its
Probability of Default Rating to D from Caa3, and its first lien
senior secured term loan and first lien senior secured revolver to
Ca (LGD 4, 69%) from Caa2 (LGD 3, 35%). The outlook remains
negative.
The downgrade was driven by Express' failure to make its June 30th
principal and interest payment and a corresponding interest rate
swap payment. There is no grace period related to the company's
principal repayment and only a three-day grace period related to
the company's required interest payment. Express has not entered
into a forbearance agreement with its lenders. The company and
its lenders are trying to restructure its senior secured credit
facility outside of the protection of the bankruptcy code.
Currently, Express has approximately
$28 million of cash which its believes is sufficient to service
customers and pay vendors and employees during the negotiating
period.
Moody's said that the negative outlook anticipates continued
sector weakness and uncertainty over the outcome of further
company negotiations with its lenders and sponsor for debt relief.
On June 8, 2008, a consortium consisting of Macquarie Capital
Group, Ltd., Wachovia Capital Partners, and management acquired
Express for a total transaction value of $627 million. Proceeds
from the $325 million term loan, along with a substantial cash
equity contribution from Macquarie, were used to fund the
acquisition and refinance existing debt. Formed in 2000, Express
has grown both through acquisitions as well as organically and has
evolved from a niche rental support business in the coiled tubing
market to a position as a more significant player that provides
production and drilling support services in many of the major
North American producing basins.
Moody's last rating action on Express was on April 22, 2009, when
Moody's downgraded the company's CFR and first lien senior secured
term loan and first lien senior secured revolver to Caa2, and the
company's PDR to Caa3.
Express Energy Services Operating, LP, is headquartered in
Houston, Texas.
FAIRCHILD CORP: Asks Court to Establish Aug. 31 Claims Bar Date
---------------------------------------------------------------
The Fairchild Corporation, et al., ask the U.S. Bankruptcy Court
for the District of Delaware to establish:
a) August 31, 2009, at 5:00 p.m. (prevailing Eastern Time) as
the deadline for holders of prepetition claims, including
claims pursuant to Section 503(b)(9) of the Bankruptcy Code,
to file proofs of claim; and
b) September 14, 2009, at 5:00 p.m. (prevailing Eastern Time)
as the bar date for all governmental units.
Based in McLean, Virginia, The Fairchild Corporation
(OTC:FCHD.PK) -- http://www.fairchild.com/-- (i) distributes
aircraft parts and services, (ii) owns and develops commercial
real estate, and (iii) designs and produces motorcycle apparel for
Harley Davidson and other parties. It owns a 49% interest in
PoloExpress, a motorcycle protective apparel and accessories
business, operating 96 retail shops in Switzerland and Germany.
Fairchild and 60 of its affiliates filed for Chapter 11 protection
on March 18, 2009 (Bankr. D. Del Lead Case No. 09-10899). Steven
J. Reisman, Esq., Timothy A. Barnes, Esq., and Veronique A.
Hodeau, Esq., at Curtis, Mallet-Prevost, Cold & Mosle LLP, are
bankruptcy counsel to the Debtors. Jason M. Madron, Esq., Michael
J. Merchant, Esq., and Mark D. Collins, Esq., at Richards, Layton
& Finger, P.A., serve as the Debtors' co-counsel. On April 6,
2009, Roberta A. DeAngelis, the Acting U.S. Trustee for Region 3,
appointed three creditors to serve on the official committee of
unsecured creditors of the Debtors.
At Jan. 31, 2009, Fairchild had $89,433,000 in assets against
$228,095,000 in debts.
FAIRCHILD CORP: Wants Plan Filing Period Extended to October 13
---------------------------------------------------------------
The Fairchild Corporation and its affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to extend their
exclusive period to propose a Chapter 11 plan through and
including October 13, 2009, and their exclusive period to solicit
acceptances thereof through and including December 11, 2009.
The Debtors tell the Court that they had expended "tremendous
efforts" over the past 120 days in closing the sale of
subtantially all of their major aerospace assets to Greenwich
AeroGroup Acquisition Corp. and in stabilizing their remaining
businesses, and had not had time to "formulate, promulgate and
build consensus regarding a plan".
Based in McLean, Virginia, The Fairchild Corporation
(OTC:FCHD.PK) -- http://www.fairchild.com/-- (i) distributes
aircraft parts and services, (ii) owns and develops commercial
real estate, and (iii) designs and produces motorcycle apparel for
Harley Davidson and other parties. It owns a 49% interest in
PoloExpress, a motorcycle protective apparel and accessories
business, operating 96 retail shops in Switzerland and Germany.
Fairchild and 60 of its affiliates filed for Chapter 11 protection
on March 18, 2009 (Bankr. D. Del Lead Case No. 09-10899). Steven
J. Reisman, Esq., Timothy A. Barnes, Esq., and Veronique A.
Hodeau, Esq., at Curtis, Mallet-Prevost, Cold & Mosle LLP, are
bankruptcy counsel to the Debtors. Jason M. Madron, Esq., Michael
J. Merchant, Esq., and Mark D. Collins, Esq., at Richards, Layton
& Finger, P.A., serve as the Debtors' co-counsel. On April 6,
2009, Roberta A. DeAngelis, the Acting U.S. Trustee for Region 3,
appointed three creditors to serve on the official committee of
unsecured creditors of the Debtors.
At Jan. 31, 2009, Fairchild had $89,433,000 in assets against
$228,095,000 in debts.
FINLAY FINE: Moody's Downgrades Corporate Family Rating to 'Ca'
---------------------------------------------------------------
Moody's Investors Service lowered Finlay Fine Jewelry
Corporation's corporate family rating to Ca from Caa3 and
probability of default rating to Ca/LD from Caa3, as the company
failed to make the $1.7 million interest payment to the holders of
the $40.6 million 8.375% senior unsecured notes due June 2012,
prior to July 1, 2009, which was the expiration of the 30-day
grace period provided in the indenture. Moody's also downgraded
the rating of the 8.375% senior unsecured notes to C from Ca. The
rating outlook remains negative.
The Ca/LD probability of default rating recognizes the payment
default for the senior unsecured notes. Failure to make the
interest payment within the grace period also constituted an event
of default under the unrated senior secured revolver. To date,
Finlay's obligations under its senior unsecured notes and senior
secured revolver have not been accelerated, although Moody's
understand that no forbearance agreement has been executed yet.
Ratings lowered:
-- Corporate family rating to Ca from Caa3
-- Probability of default rating to Ca/LD from Caa3
-- 8.375% senior unsecured notes rating to C (LGD6, 92%) from
Ca (LGD6, 91%)
Moody's last rating action for Finlay occurred on December 4,
2008, when the company's corporate family rating was downgraded to
Caa3 from Caa2.
Finlay Fine Jewelry, headquartered in New York City, is a retailer
of fine jewelry operating stand-alone specialty jewelry stores and
licensed jewelry departments in department stores throughout the
United States. The company achieved sales of approximately $754
million in fiscal 2008.
FIRSTSITE STAFFING: Case Summary & 20 Largest Unsec. Creditors
--------------------------------------------------------------
Debtor: FirstSite Staffing, Inc.
2365 McKnight Road
St. Paul, MN 55109
Bankruptcy Case No.: 09-34667
Chapter 11 Petition Date: July 8, 2009
Court: United States Bankruptcy Court
District of Minnesota (St Paul)
Judge: Dennis D O'Brien
Debtor's Counsel: Steven B. Nosek, Esq.
2855 Anthony Ln S, Suite 201
St Anthony, MN 55418
Tel: (612) 335-9171
Fax: (612) 789-2109
Email: snosek@visi.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/mnb09-34667.pdf
The petition was signed by Mark Howard, president of the Company.
FONTAINEBLEAU: May Need $1.5 Billion to Complete Project
--------------------------------------------------------
Bank of America and other lenders said in court documents that it
may take $1.5 billion to complete the Fontainebleau Las Vegas
Holdings, LLC project.
Fontainebleau had been "insolvent" since March, well before the
Company's bankruptcy filing, Elaine Walker at Miami Herald
reports, citing Bank of America Senior Vice President Henry Yu, a
specialist in corporate work-outs.
Fontainebleau Resorts said in a statement, "The banks improperly
terminated their contractual obligation to lend the money for this
project. Nothing they say -- all of which is distorted and wrong
-- relieves them of that obligation."
According to court documents, Fontainebleau disclosed to the banks
during meetings in April that:
-- The project will only generate enough cash flow to
support $1.4 billion in debt, less than half the
projected financing of about $3.2 billion.
-- The project needs to restructure its financing. The
proposal called for wiping out the $675 million of
second mortgages and having the banks convert a
"substantial portion" of debt into an ownership stake
in the resort.
-- It considered building a pared-down resort to cut
costs. There were discussions of a "base plan" and
"enhanced plan" for the Fontainebleau Vegas. If the
resort was built without restaurants, retail,
nightclubs, pool deck gaming, and bar area it would
save $203 million.
Miami Herald states that according to Bank of America's appraisal
of Fontainebleau Las Vegas, the project would be worth $1.764
billion if completed by May 2010.
Bank of America Senior Vice President Henry Yu said in court
documents that he believes that Fontainebleau's financial
disclosures before the March 2 request for funding were
"materially inaccurate because they failed to accurately present
Fontainebleau's financial conditions, including the fact that
remaining construction costs exceeded available funds."
Fontainebleau had been insolvent since March 2009, Miami Herald
says, citing Mr. Yu.
Fontainebleau Las Vegas Holdings, LLC --
http://www.fontainebleau.com/-- is constructing a luxury resort,
Fontainebleu Las Vegas, on the northern end of the Las Vegas
Strip.
Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas,
LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11
protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No.
09-21481). Judge A. Jay Cristol presides over the Debtors' cases.
Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP,
represents the Debtors in their restructuring efforts. The
Debtors' Financial Advisor are Moelis & Company LLC and Citadel
Derivatives Group LLC. The Debtors' Special Litigation Counsel is
David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman
LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and
Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors'
Claims Agent is Kurtzman Carson Consulting LLC. An official
committee of unsecured creditors has been appointed in the Chapter
11 cases.
As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than
$1 billion in debt and a similar amount in assets, while each of
Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas
Holdings, LLC listed less than $50,000 in assets and more than $1
billion in debts.
Bankruptcy Creditors' Service, Inc., publishes Fontainebleau
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Fontainebleau Las Vegas Holdings, LLC, and its debtor-
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
FONTAINEBLEAU: Court Approves Buchanan Ingersoll As Counsel
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida has
authorized the Debtors to employ Buchanan Ingersoll Rooney PC as
their special counsel, , in accordance with the terms set forth in
an amended application.
The Debtors proposed to pay Buchanan for the contemplated services
a monthly retainer of $25,000, plus reimbursement of related
actual and necessary out-of-pocket expenses incurred. According
to the Debtors, Buchanan has requested payment of its fees on a
fixed-rate basis, as is customary in the governmental relations
service industry. The Debtors relate that they have paid Buchanan
a $458,563 retainer with the understanding that the firm will hold
the amount pending completion of the matters for which it will be
employed.
Prior to the Court's entry of its order, Buchanan advised the
Debtors that it has amended its Employment Application to
withdraw its request for approval of its retainer as "evergreen,"
without prejudice to reassert the request at a later time. No
objections to the Amended Application were filed.
The Debtors will pay Buchanan for its professional services
rendered and reimbursement of expenses incurred with respect to
the Government Relations Matters under Section 328(a) of the
Bankruptcy Code, and not the reasonableness standard set forth
under Section 330.
The Final Order will constitute pre-approval under Section 328(a)
of the terms of the Debtors' employment and retention of
Buchanan, with respect to the Government Relations Matters,
including the Monthly Fee, pursuant to the Amended Application.
The Court finds the fees to be reasonable.
Scott L. Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod
LLP, in Miami, Florida, the Debtors' proposed counsel, relates
that since the inception of the Debtors in 2005, Buchanan has
provided legal services to certain of the Debtors and non-debtor
affiliates on various matters, including general advice and legal
services in the practice of corporate, financing, tax, real
estate, intellectual property, litigation, employment,
construction and government relations.
About Fontainebleau Las Vegas
Fontainebleau Las Vegas Holdings, LLC --
http://www.fontainebleau.com/-- is constructing a luxury resort,
Fontainebleu Las Vegas, on the northern end of the Las Vegas
Strip.
Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas,
LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11
protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No.
09-21481). Judge A. Jay Cristol presides over the Debtors' cases.
Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP,
represents the Debtors in their restructuring efforts. The
Debtors' Financial Advisor are Moelis & Company LLC and Citadel
Derivatives Group LLC. The Debtors' Special Litigation Counsel is
David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman
LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and
Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors'
Claims Agent is Kurtzman Carson Consulting LLC. An official
committee of unsecured creditors has been appointed in the Chapter
11 cases.
As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than
$1 billion in debt and a similar amount in assets, while each of
Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas
Holdings, LLC listed less than $50,000 in assets and more than
$1 billion in debts.
Bankruptcy Creditors' Service, Inc., publishes Fontainebleau
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Fontainebleau Las Vegas Holdings, LLC, and its debtor-
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
FONTAINEBLEAU: Term Lenders Object to Terms of Moelis Engagement
----------------------------------------------------------------
Fontainebleau Las Vegas Holdings LLC and its affiliates sought the
U.S. Bankruptcy Court for the Southern District of Florida's
authority to employ Moelis & Company LLC as their financial
advisor and investment banker, nunc pro tunc to the Petition Date,
pursuant to the terms of an engagement letter dated June 8, 2009.
Moelis, as the Debtors propose, will assist the Debtors in the
restructure of outstanding debt obligations, raising additional
capital and consummating a sale transaction, in a short timeframe,
to help the Debtors reorganize and emergence from Chapter 11.
The Term Lender Steering Group says it does not object to the
Debtors' employment of Moelis & Company LLC. However, the
Steering Group notes that the proposed agreement with Moelis is
defective in numerous material respects, each of which compel
denial of its Employment Application.
The Term Lender Steering Group says it objects to the Debtors'
retention of both Moelis and Citadel Derivatives Group LLC to
perform services that, according to the description provided in
the Employment Applications, are identical. There is no reason
that one firm cannot perform those services for a fee no greater
than the amount to which one or the other has agreed to accept,
counsel for the Steering Group, Michael I. Goldberg, Esq., at,
Akerman Senterfitt, in Miami, Florida, asserts.
Mr. Goldberg notes that any fees to be paid to an investment
banker at the conclusion of the case should be premised on
achieving meaningful benchmarks that are tied specifically to:
(i) the ultimate recovery by Term Lenders; and (ii) the amount of
any increased recovery that is primarily attributable to the
efforts of the investment bankers. The Steering Group says, the
investment bankers should not be compensated for any financing
provided by the Revolving Lenders or even other existing Lenders,
nor should fees be paid as a result of a credit bid or
foreclosure sale by the Term Lenders. In addition, no fee should
be paid for financing that is granted a priming lien over the
senior liens of the Term Lenders.
According to Mr. Goldberg, the Moelis and Citadel Agreements are
conditioned upon the Court's approval of their terms under
Section 328 of the Bankruptcy Code. He says pre-approval of fees
for investment bankers or financial advisors at the outset of a
bankruptcy case is unwarranted under any circumstances, but
particularly inappropriate in the Debtors' Cases. Under the
Agreements, the "success" fees that the Debtors propose to pay
Moelis and Citadel could reach $25 million in the aggregate.
Yet, despite their magnitude, the fees are not sufficiently
linked to the success of the Cases or the recoveries by Term
Lenders and other creditors, notes Mr. Goldberg. Rather, under
the Agreements, Moelis and Citadel will together be entitled to
receive no less than $15 million in fees simply upon confirmation
of a plan or a "restructuring, reorganization, rescheduling or
recapitalization" of any kind. The Steering Group relates that
the fees are not linked to higher recoveries and are not premised
upon the benefit provided to the Term Lenders and other
creditors. Moreover, pre-approval of the fees will create a
substantial administrative claim for which no unencumbered assets
of the estate are available to pay, the Steering Group maintains.
Debtors' Application
Specifically, Moelis is expected to:
(a) undertake, in consultation with members of management of
the Debtors, a comprehensive business and financial
analysis of the Debtors;
(b) review and analyze the Debtors' assets and their
operating and financial strategies;
(c) review and analyze the business plans and financial
projections prepared by the Debtors, including testing
assumptions and comparing those assumptions to historical
and industry trends of the Debtors;
(d) evaluate the Debtors' debt capacity and assist in the
determination of an appropriate capital structure for the
Debtors;
(e) identify, initiate, review, negotiate, and evaluate any
restructuring transaction, sale transaction or capital
transaction, or any combination, and develop and evaluate
alternative proposals for a restructuring transaction,
sale transaction or capital transaction, or their
combination;
(f) solicit and evaluate indications of interest and proposals
regarding any Restructuring Transaction, Sale Transaction
or Capital Transaction from current or potential lenders,
equity investors, acquirors or strategic partners;
(g) assist the Debtors in developing strategies to effectuate
any Restructuring Transaction, Sale Transaction or Capital
Transaction, including financing alternatives;
(h) advise and assist the Debtors in the course of their
negotiation of any Restructuring Transaction, Sale
Transaction or Capital Transaction and participate in
those negotiations, as requested;
(i) determine and evaluate the risks and benefits of
considering, initiating and consummating any Restructuring
Transaction, Sale Transaction or Capital Transaction;
(j) determine values or ranges of values for the Debtors and
any securities that the Debtors offer or propose to offer
in connection with a Capital Transaction;
(k) in coordination with the Debtors, prepare and implement a
marketing plan and prepare one or more memoranda, called
selling memos, which describe assets, properties or
businesses to be sold in any Sale Transaction;
(l) working with the Debtors' management in preparing one or
more memoranda, called information memeo, describing the
Debtors and their businesses for use in any potential
Capital Transaction;
(m) contact potential acquirors or investors that Moelis and
the Debtors have agreed may be appropriate, and in
rendering the services, Moelis may meet with
representatives of those acquirors or investors and
provide the representatives with the selling memo or
information memo and additional information about the
Debtors' assets, properties or businesses as may be
appropriate and acceptable to the Debtors, subject to
customary business confidentiality agreements in form and
substance approved by the Debtors;
(n) assist the Debtors in the development, preparation and
distribution of selected information, documents and other
materials to create interest in and to consummate any
Restructuring Transaction, Sale Transaction or Capital
Transaction;
(o) assist the Debtors in valuing their assets or business,
provided that any real estate or fixed asset appraisals
will be undertaken by outside appraisers, separately
retained and compensated by the Debtors;
(p) be available at the Debtors' request to meet with Debtors'
management, board of directors or board of managers,
creditor groups, equity holders, any official committees
appointed in these Chapter 11 cases, or other parties, to
discuss any Restructuring Transaction, Sale Transaction or
Capital Transaction;
(q) if requested by the Debtors, participate in hearings
before the Bankruptcy Court and provide relevant
testimony; and
(r) provide other financial advisory and investment banking
services as may be agreed upon by Moelis and the Debtors.
The Debtors relate that Moelis will provide services concurrently
with the Citadel Derivatives Group LLC. The Debtors believe that
it is in the best interests of their estates to retain both
Moelis and CDRG as financial advisors and investment bankers, and
have determined that each possess complementary, but distinct,
expertise necessary to assist them in effectuating a
Restructuring Transaction, Capital Transaction or Sales
Transaction.
The Debtors propose to pay Moelis based on this fee structure:
(A) Monthly Fee of $150,000 whether or not a Restructuring
Transaction, Sale Transaction or Capital Transaction has
taken place or will take place, from the Petition Date until
the end of the term of the Engagement Letter.
All Monthly Fees paid by the Debtors to Moelis will be
credited against any Restructuring Fee, Capital
Transaction Fee or Sale Transaction Fee payable under the
Engagement Letter, provided, however, that credit will not
apply to the extent that, and in the amount that, any
Restructuring Fee, Capital Transaction Fee or Sale
Transaction Fee is not entirely approved by the Bankruptcy
Court.
(B) Restructuring Fee of $9,000,000 in cash, if a
Restructuring Transaction is consummated, to be paid
immediately upon any closing of a Restructuring
Transaction. A separate Restructuring Fee will be payable
in respect of each Restructuring Transaction in the event
more than one Restructuring Transaction will occur.
(C) Capital Transaction Fee, in cash, equal to:
(1) 0.60% of the aggregate amount of new debt raised in a
Capital Transaction in the form of secured, first
lien, non-convertible debt,
(2) 1.05% of the aggregate amount of new debt raised in a
Capital Transaction in the form of senior unsecured,
non- convertible debt,
(3) 1.35% of the aggregate amount of new debt raised in a
Capital Transaction in the form of subordinated and/or
junior lien, non-convertible debt,
(4) 1.50% of the aggregate amount of new debt raised in a
Capital Transaction in the form of convertible debt,
(5) 2.25% of the aggregate amount or face value of new
capital raised in a Capital Transaction in the form of
non-convertible preferred equity, including preferred
equity in the form of stock or partnership, membership
or limited liability company interests, equity-linked
securities, options, warrants or other rights to
acquire preferred equity interests in the Debtors, and
(6) 2.40% of the aggregate amount or face value of new
capital raised in a Capital Transaction in the form of
common equity, including common equity in the form of
stock or partnership, membership or limited liability
company interests, equity-linked securities, options,
warrants or other rights to acquire common equity
interests in the Debtors, or in the form of
convertible preferred equity, including convertible
preferred equity in the form of stock or partnership,
membership or limited liability company interests;
Each percentage, however, will be reduced:
(a) with respect to clauses (5) or (6), by 50% with
respect solely to new preferred equity or common
equity raised in a Capital Transaction from:
* any person or entity that is an existing
investor or holder of debt of the Debtors, other
than from Jeffrey Soffer or any entity that
Jeffrey Soffer controls, or
* indemnified persons specified in the Engagement
Letter, or
(b) to 0% with respect solely to new debt or new
capital raised in a Capital Transaction from Jeffrey
Soffer or any entity that Jeffrey Soffer controls.
The Capital Transaction Fee will be paid in cash
immediately upon any closing of a Capital Transaction.
A separate Capital Transaction Fee will be payable in
respect of each Capital Transaction in the event that
more than one Capital Transaction will occur.
(D) Sale Transaction Fee, in cash and in an amount equal to
0.75% of the Transaction Value.
In the event, however, that the Sale Transaction consists of
(i) a liquidation in a bankruptcy case under chapter 7, or
(ii) a credit bid by any secured lender where the credit bid
consists solely of secured debt, the cash fee will be an
amount equal to 0.60% of the Transaction Value, provided,
further, that, any Sale Transaction Fee will not exceed
$9,000,000. The Sale Transaction Fee will be paid in cash
immediately upon any closing of a Sale Transaction. A
separate Sale Transaction Fee will be payable in respect of
each Sale Transaction if more than one Sale Transaction
occurs.
Pursuant to the Engagement Letter, if any single transaction
constitutes both a Restructuring Transaction and a Sale
Transaction, Moelis will receive only one transaction fee
in respect of the single transaction, which will be equal to the
greater of the Restructuring Transaction Fee and the Sale
Transaction Fee. If a Restructuring Transaction and a Capital
Transaction occur simultaneously or at different times, whether
or not they are connected with or related to one another, the
Debtors will pay Moelis both the Restructuring Transaction Fee
and the Capital Transaction Fee.
Notwithstanding anything to the contrary contained in the
Engagement Letter, the maximum fees payable by the Debtors to
Moelis under the Engagement Letter, whether in respect of the
Monthly Fee, the Restructuring Fee, the Sale Transaction Fee or
the Capital Transaction Fee, or any of this combination, after
giving effect to any crediting, will not exceed $15,000,000 in
the aggregate.
Furthermore, if, at any time prior to the expiration
of 12 months after the expiration or termination of Moelis'
engagement, a Restructuring Transaction, Sale Transaction or
Capital Transaction, or any combination, is consummated, or if
the Debtors enter into an agreement regarding a Restructuring
Transaction, Sale Transaction or Capital Transaction, which is
subsequently consummated, then the Debtors will pay Moelis the
appropriate fee pursuant to the specified fee structure
immediately on the closing of the transaction.
The fee -- called the tail fee -- will not be paid to Moelis if
(a) the Debtors terminate Moelis' engagement due to acts or
failures to act by Moelis that are finally determined by a court
of competent jurisdiction to constitute bad faith, willful
misconduct or gross negligence, or (b) Moelis terminates its
engagement pursuant to the Engagement Letter without cause.
The Debtors will reimburse Moelis for all reasonable expenses
incurred while providing the contemplated services, whether or
not any Restructuring Transaction, Sale Transaction or Capital
Transaction is consummated.
The Debtors will also indemnify and hold harmless Moelis and its
professionals against any losses, claims, damages or liabilities
in connection with the services it provides to the Debtors
related to the Chapter 11 Cases, except liabilities that have
resulted primarily from fraud, gross negligence or willful
misconduct by Moelis or its professionals.
Before the Petition Date, Moelis received $250,000 as retainer
fee and $150,000 of monthly fees from October 2008 until June
2009. Moelis also has received $$174,543 as expense
reimbursement for the same period.
Thane W. Carlston, a managing director at Moelis & Company LLC,
in New York, says Moelis and its professionals are "disinterested
persons" within the meaning of sections 327(a) and 101(14) of
the Bankruptcy Code, but is unable to state with certainty that
it has disclosed every client relationship or other connection.
In the event that additional disclosure becomes necessary, Moelis
will file a supplemental verified statement, Mr. Carlston tells
the Court.
The Debtors believe that the retention of Moelis is necessary and
will be critical to the overall success of the reorganization
efforts.
About Fontainebleau Las Vegas
Fontainebleau Las Vegas Holdings, LLC --
http://www.fontainebleau.com/-- is constructing a luxury resort,
Fontainebleu Las Vegas, on the northern end of the Las Vegas
Strip.
Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas,
LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11
protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No.
09-21481). Judge A. Jay Cristol presides over the Debtors' cases.
Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP,
represents the Debtors in their restructuring efforts. The
Debtors' Financial Advisor are Moelis & Company LLC and Citadel
Derivatives Group LLC. The Debtors' Special Litigation Counsel is
David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman
LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and
Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors'
Claims Agent is Kurtzman Carson Consulting LLC. An official
committee of unsecured creditors has been appointed in the Chapter
11 cases.
As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than
$1 billion in debt and a similar amount in assets, while each of
Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas
Holdings, LLC listed less than $50,000 in assets and more than
$1 billion in debts.
Bankruptcy Creditors' Service, Inc., publishes Fontainebleau
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Fontainebleau Las Vegas Holdings, LLC, and its debtor-
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
FONTAINEBLEAU: Term Lenders say Citadel Duplicative to Moelis
-------------------------------------------------------------
Fontainebleau Las Vegas Holdings LLC and its affiliates sought the
U.S. Bankruptcy Court for the Southern District of Florida's
authority to employ Citadel Derivatives Group LLC as their
financial advisor and investment banker, nunc pro tunc to the
Petition Date, to assist them in the restructuring of outstanding
obligations, raising of additional capital or consummating a sale
transaction to facilitate their reorganization and emergence from
Chapter 11.
The Term Lender Steering Group points out that the Debtors'
proposed retention of Citadel Derivatives Group LLC and Moelis &
Company LLC would result to duplicative services.
According to the Steering Group, any fees to be paid to an
investment banker at the conclusion of the case should be
premised on achieving meaningful benchmarks that are tied
specifically to: (i) the ultimate recovery by Term Lenders; and
(ii) the amount of any increased recovery that is primarily
attributable to the efforts of the investment bankers.
Michael I. Goldberg, Esq., at, Akerman Senterfitt, in Miami,
Florida, says the investment bankers should not be compensated
for any financing provided by the Revolving Lenders or even other
existing Lenders, nor should fees be paid as a result of a credit
bid or foreclosure sale by the Term Lenders. In addition, no fee
should be paid for financing that is granted a priming lien over
the senior liens of the Term Lenders.
Mr. Goldberg notes that the Citadel and Moelis Agreements are
conditioned upon the Court's approval of their terms under
Section 328 of the Bankruptcy Code. The Steering Committee says
that pre-approval of fees for investment bankers or financial
advisors at the outset of a bankruptcy case is unwarranted under
any circumstances, but particularly inappropriate in the Debtors'
Cases. Under the Agreements, the "success" fees that the Debtors
propose to pay Moelis and Citadel could reach $25 million in the
aggregate. Yet, despite their magnitude, the fees are not
sufficiently linked to the success of the Cases or the recoveries
by Term Lenders and other creditors. Rather, under the
Agreements, Moelis and Citadel will together be entitled to
receive no less than $15 million in fees simply upon confirmation
of a plan or a "restructuring, reorganization, rescheduling or
recapitalization" of any kind. The Steering Committee relates
that the fees are not linked to higher recoveries and are not
premised upon the benefit provided to the Term Lenders and
other creditors. Moreover, pre-approval of the fees will create
a substantial administrative claim for which no unencumbered
assets of the estate are available to pay.
The Steering Group tried to engage in discussions with the
Debtors before filing its objection, however, the discussions did
not lead to resolution of the objection, Mr. Goldberg notes.
As the Debtors' financial advisor and investment banker, Citadel
is expected, among others, to:
(a) undertake a comprehensive business and financial
analysis of the Debtors;
(b) review and analyze the business plans and financial
projections prepared by the Debtors, including testing
assumptions and comparing those assumptions to historical
and industry trends of the Debtors;
(c) identify, initiate, review, negotiate, and evaluate any
restructuring transaction, sale transaction or capital
transaction, or any combination, and develop and evaluate
alternative proposals for a restructuring transaction,
sale transaction or capital transaction, or their
combination;
(d) solicit and evaluate indications of interest and proposals
regarding any Restructuring Transaction, Sale Transaction
or Capital Transaction from current or potential lenders,
equity investors, acquirors or strategic partners;
(e) advise and assist the Debtors in the course of their
negotiation of any Restructuring Transaction, Sale
Transaction or Capital Transaction and participate in
those negotiations, as requested;
(f) contact potential acquirors or investors that Citadel and
the Debtors have agreed may be appropriate, and in
rendering the services, Moelis may meet with
representatives of those acquirors or investors and
provide the representatives with the selling memo or
information memo and additional information about the
Debtors' assets, properties or businesses as may be
appropriate and acceptable to the Debtors, subject to
customary business confidentiality agreements in form and
substance approved by the Debtors;
(g) provide other financial advisory and investment banking
services as may be agreed upon by Moelis and the Debtors.
For the contemplated services, the Debtors will pay Citadel:
(A) A monthly fee of $25,000
(B) Restructuring fee of $6,000,000 in cash if a restructuring
transaction is consummated, to be paid immediately upon
any closing of a restructuring transaction. A separate
Restructuring Fee will be payable in respect of each
Restructuring Transaction in the event more than one
Restructuring Transaction occurs.
(C) If a capital transaction is consummated, a Capital
Transaction Fee will be paid in cash equal to:
(1) 0.40% of the aggregate amount of new debt raised in a
Capital Transaction in the form of secured, first
lien, non-convertible debt,
(2) 0.70% of the aggregate amount of new debt raised in a
Capital Transaction in the form of senior unsecured,
non-convertible debt,
(3) 0.90% of the aggregate amount of new debt raised in a
Capital Transaction in the form of subordinated and/or
junior lien, non-convertible debt,
(4) 1.00% of the aggregate amount of new debt raised in a
Capital Transaction in the form of convertible debt,
(5) 1.50% of the aggregate amount or face value of new
capital raised in a Capital Transaction in the form of
non-convertible preferred equity, including preferred
equity in the form of stock or partnership, membership
or limited liability company interests, equity-linked
securities, options, warrants or other rights to
acquire preferred equity interests in the Debtors, and
(6) 1.60% of the aggregate amount or face value of new
capital raised in a Capital Transaction in the form of
common equity, including common equity in the form of
stock or partnership, membership or limited liability
company interests, equity-linked securities, options,
warrants or other rights to acquire common equity
interests in the Debtors, or in the form of
convertible preferred equity, including convertible
preferred equity in the form of stock or partnership,
membership or limited liability company interests;
Each percentage, however, will be reduced:
(a) with respect to clauses (5) or (6), by 50% with
respect solely to new preferred equity or common
equity raised in a Capital Transaction from:
* any person or entity that is an existing
investor or holder of debt of the Debtors, other
than from Jeffrey Soffer or any entity that Jeffrey
Soffer controls, or
* any indemnified persons, pursuant to the Engagement
Letter, or
(b) to 0% with respect solely to new debt or new
capital raised in a Capital Transaction from Jeffrey
Soffer or any entity that Jeffrey Soffer controls.
The Capital Transaction Fee will be paid in cash
immediately upon any closing of a Capital Transaction.
A separate Capital Transaction Fee will be payable in
respect of each Capital Transaction in the event that
more than one Capital Transaction will occur.
(D) Sale Transaction Fee, in cash and in an amount equal to
0.75% of the transaction value if a sale transaction is
consummated.
In the event, however, that the Sale Transaction consists
of (i) a liquidation in a bankruptcy case under chapter 7,
or (ii) a credit bid by any secured lender where the
credit bid consists solely of secured debt, the cash fee
will be an amount equal to 0.40% of the Transaction Value,
provided, further, that, any Sale Transaction Fee will not
exceed $6,000,000. The Sale Transaction Fee will be paid
in cash immediately upon any closing of a Sale
Transaction. A separate Sale Transaction Fee will be
payable in respect of each Sale Transaction if more than
one Sale Transaction occurs.
Payment by the Debtors under the Engagement Letter, for Monthly
Fees, Restructuring Fees, Sale Transaction Fees or Capital
Transaction Fees, or any of this combination, after giving effect
to any crediting, will not exceed $10,000,000 in the aggregate,
notwithstanding anything to the contrary in the Engagement
Letter.
About Fontainebleau Las Vegas
Fontainebleau Las Vegas Holdings, LLC --
http://www.fontainebleau.com/-- is constructing a luxury resort,
Fontainebleu Las Vegas, on the northern end of the Las Vegas
Strip.
Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas,
LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11
protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No.
09-21481). Judge A. Jay Cristol presides over the Debtors' cases.
Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP,
represents the Debtors in their restructuring efforts. The
Debtors' Financial Advisor are Moelis & Company LLC and Citadel
Derivatives Group LLC. The Debtors' Special Litigation Counsel is
David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman
LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and
Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors'
Claims Agent is Kurtzman Carson Consulting LLC. An official
committee of unsecured creditors has been appointed in the Chapter
11 cases.
As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than
$1 billion in debt and a similar amount in assets, while each of
Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas
Holdings, LLC listed less than $50,000 in assets and more than
$1 billion in debts.
Bankruptcy Creditors' Service, Inc., publishes Fontainebleau
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Fontainebleau Las Vegas Holdings, LLC, and its debtor-
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
FORBES OFFICE FURNITURE: Voluntary Chapter 11 Case Summary
----------------------------------------------------------
Debtor: Forbes Office Furniture, LLC
450 South Henderson Road
King of Prussia, PA 19406
Bankruptcy Case No.: 09-15016
Chapter 11 Petition Date: July 8, 2009
Court: United States Bankruptcy Court
Eastern District of Pennsylvania (Philadelphia)
Debtor's Counsel: Albert A. Ciardi III, Esq.
Ciardi Ciardi & Astin, P.C.
One Commerce Square
2005 Market Street, Suite 1930
Philadelphia, PA 19103
Tel: (215) 557-3550
Fax: (215) 557-3551
Email: aciardi@ciardilaw.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $500,001 to $1,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by George Forbes, sole member of the
Company.
FORD MOTOR: Gaining Ground to Surpass GM as Largest U.S. Automaker
------------------------------------------------------------------
Keith Naughton at Bloomberg News reports that may surpass General
Motors Corp. this year to become the top-selling automaker in the
U.S. for the first time since 1931.
A U.S. government owned entity is expected to complete its
purchase of bankrupt General Motors Cor.'s assets soon. The New
GM, Bloomberg notes, has just just four car lines, down from
eight, aiming for 18.5% of the U.S. auto market. The retain
brands are Chevrolet, Cadillac, Buick and GMC, which accounted for
16.5 percent of the market in June, according to Autodata Corp.
According to Bloomberg, Ford's share was 17.2 percent, excluding
Volvo, which it is selling.
Mr. Naughton says surpassing GM would validate Ford's strategy to
go it alone and spurn government aid.
"Ford is on a real roll right now," John Wolkonowicz, an industry
analyst with IHS Global Insight of Lexington, Massachusetts, said.
"Ford could overtake GM this year."
General Motors and Chrysler LLC have sought financial aid from the
U.S. government and have both filed for bankruptcy protection to
start anew. Ford distinguishes itself as the only U.S. major
automaker not to have filed for bankruptcy.
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles in
200 markets across six continents. With about 260,000 employees
and about 100 plants worldwide, the company's core and affiliated
automotive brands include Ford, Jaguar, Land Rover, Lincoln,
Mercury, Volvo, Aston Martin, and Mazda. The Company provides
financial services through Ford Motor Credit Company.
The Company has operations in Japan in the Asia Pacific region. In
Europe, the Company maintains a presence in Sweden, and the United
Kingdom. The Company also distributes its brands in various
Latin-American regions, including Argentina and Brazil.
* * *
As reported by the Troubled Company Reporter on April 15, 2009,
Standard & Poor's Ratings Services said it raised its ratings on
Ford Motor Co. and related entities, including the corporate
credit rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor
Credit Co. are unchanged, at 'CCC+', and the ratings on FCE Bank
PLC, Ford Credit's European bank, are also unchanged, at 'B-',
maintaining the one-notch rating differential between FCE and its
parent Ford Credit. S&P said that the outlook on all entities is
negative.
Moody's Investors Service in December 2008 lowered the Corporate
Family Rating and Probability of Default Rating of Ford Motor
Company to Caa3 from Caa1 and lowered the company's Speculative
Grade Liquidity rating to SGL-4 from SGL-3. The outlook is
negative. The downgrade reflects the increased risk that Ford
will have to undertake some form of balance sheet restructuring to
achieve the same UAW concessions that General Motors and Chrysler
are likely to achieve as a result of the recently-approved
government bailout loans. Such a balance sheet restructuring
would likely entail a loss for bond holders and would be viewed by
Moody's as a distressed exchange and consequently treated as a
default for analytic purposes.
FOREST SPRINGS: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Forest Springs, LLC
Po Box 54194
Phoenix, AZ 85078
Bankruptcy Case No.: 09-15772
Chapter 11 Petition Date: July 8, 2009
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Charles G. Case II
Debtor's Counsel: Bert L. Roos, Esq.
5045 N. 12th St, Suite B
Phoenix, AZ 85014
Tel: (602) 242-7869
Fax: (602) 242-5975
Email: blrpc85015@msn.com
Estimated Assets: $1,000,001 to $100,000,000
Estimated Debts: $1,000,001 to $100,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Kenneth K. Abe, managing member of the
Company.
FREEDOM GROUP: Moody's Assigns 'B1' Rating on $200 Mil. Notes
-------------------------------------------------------------
Moody's Investors Service assigned a B1 first time rating to
Freedom Group, Inc.'s proposed $200 million senior secured notes.
Moody's also assigned Freedom Group a B1 corporate family rating,
a B1 probability of default rating and an SGL 2 speculative grade
liquidity rating. The assigned ratings are subject to the receipt
of final documentation, with no material changes to the terms as
originally reviewed by Moody's. The ratings outlook is stable.
Freedom Group is 100% owned by Cerberus, management and directors
and operates principally through two subsidiaries, Remington Arms
and Bushmaster Firearms. The $200 million secured notes plus $57
million from an ABL revolving credit facility and over $90 million
of cash will be used to refinance both Remington Arm's and
Bushmaster's existing debt and pay transaction fees and expenses.
The existing ratings on Remington, including its $200 million
senior unsecured notes, will be withdrawn when the notes are
repaid.
Freedom's Group's B1 corporate family rating reflects its modest
size with revenue of around $800 million, single industry segment
in firearms and related areas, exposure to volatile raw material
prices, the discretionary nature of its products, weak
discretionary consumer spending, and the possibility that the
company may seek to return excess cash flow to its financial
sponsor. The rating is supported by the recent surge in demand
for commercial firearms, Remington's long operating history and
strong brand recognition, growth in the government, military and
law enforcement market, leading market positions in key categories
(shotguns, rifles, and ammunition), relatively stable hunting
participation rates, moderate customer concentration, and ability
to pass through price increases.
The SGL 2 speculative grade liquidity rating reflects Freedom
Group's good liquidity profile. This assertion is supported by
consistent operating cash flow and the lack of any maturities over
the next four years. Moody's believes that the company's
liquidity profile is also enhanced by the lack of any maintenance
financial covenants and the size of the ABL at
$180 million.
The B1 rating on the senior secured notes reflects a B1
probability-of-default rating and an LGD 4. The B1 senior secured
note rating also reflects its junior position to the new proposed
$180 million ABL revolving credit facilities collateral, its
upstream guarantees from operating subsidiaries and its first or
second lien security in all company assets.
The stable outlook reflects Moody's expectation of a continued
improvement in operating performance in 2009 due to the recent
surge in demand, but a decrease in performance in 2010 and 2011 as
growth rates return to historical trends. "The stable outlook
also reflects Moody's belief that any dividends will be funded
from free cash and will not increase leverage" said Kevin Cassidy,
Senior Credit Officer at Moody's Investors Service.
Ratings/assessments assigned:
* $200 million senior secured notes at B1 (LGD 4, 57%);
* Corporate family rating at B1;
* Probability of default rating at B1;
* Speculative grade liquidity rating at SGL 2
Freedom Group, Inc., is headquartered in Madison, North Carolina.
Sales for the twelve months ended March 31, 2009, approximated
$760 million.
GENERAL MOTORS: Seeks to Terminate Contract With Stillwater
-----------------------------------------------------------
Stillwater Mining Company has received notice advising that
General Motors Corp. has petitioned the U.S. Bankruptcy Court for
the Southern District of New York to reject a contract entered by
two parties prepetition.
Stillwater expects to file an objection to GM's request to reject
their "Palladium & Rhodium Supply Agreement."
Stillwater Chairman and CEO Francis R. McAllister, noted,
"Obviously, we are extremely disappointed that GM has chosen to
reject our supply agreement outright in bankruptcy. The company
has been negotiating in good faith with GM for nearly nine months
regarding the terms of this agreement and had already implemented
two interim contract modifications at GM's request.
"The company's PGM supply agreements with GM and Ford include
provisions that guarantee a minimum purchase price for palladium
and platinum when prices fall below stipulated levels. These
provisions are currently very beneficial to us in view of today's
relatively low PGM prices. In the absence of these agreements,
the company will still be able to sell its production into the
market, but would lose the benefit of these pricing floors.
Because (1) the GM contract is the smaller of the two automotive
supply agreements, (2) the company's cash position is strong, and
(3) our employees are fully committed to our effort to be a low-
cost operator, I believe the company will be able to absorb the $5
to $10 million annual financial impact (at recent PGM prices) of
losing the GM contract, particularly if PGM prices remain at or
above their second-quarter levels. However, PGM prices have
declined in recent days, suggesting the loss of the GM floor
prices may become much more critical to the company going forward.
We expect to meet with our employees and union representatives
shortly to discuss the urgency of this situation with them.
"We certainly recognize that the current economic downturn has
decimated the automotive industry, forcing GM and others to make
some difficult choices. At the same time it seems disingenuous to
me, during a period when preserving American jobs is such a high
domestic priority, that GM, while receiving immense financial
support from the U.S. government, would elect, as I understand it,
to continue its supply agreements with foreign palladium suppliers
while seeking to terminate an agreement with the sole U.S. miner
of palladium. While I believe the company, absent any sustained
decline in PGM prices, will be able handle the loss of the GM
agreement, the message GM is sending to American taxpayers is
disconcerting. I find it ironic that GM is willing to ship
American taxpayer dollars to our competitors overseas while we
struggle to maintain economic operations here at home.
"Stillwater's employees at all levels have sacrificed personally,
and hundreds have lost their jobs, in the effort to move the
company toward economic sustainability in response to the current
economic downturn. We have achieved significant progress to date
this year with regard to sustainability. The company's mining
productivity has strengthened and cash costs per ounce are
declining, such that second quarter 2009 financial results will
exceed market expectations. The company continues to push forward
on several fronts, recognizing that its mining and processing
operations must become still more efficient in anticipation of the
expiration of the larger Ford Motor Company supply agreement at
the end of 2010. If GM is successful in rejecting our PGM supply
agreement, that will only emphasize the strategic importance of
the company's objective to be a safe, low-cost operator.
"It is not yet clear how all this will turn out, of course.
Resolution of the GM bankruptcy is clearly on an accelerated
timetable, limiting opportunities to intervene. We have sought
the support of our elected representatives in carrying our case
forward and weighing in on the company's behalf in this matter.
However, it appears that right now there is reluctance in
Washington to intercede. Hopefully our Congressional delegation
will step forward in the interest of preserving jobs in Montana.
"While by nature I am optimistic that we can find a mutually
acceptable resolution to this issue, in reality that may not be
possible. Should PGM prices decline over the next several months,
loss of the GM contract ultimately could put our employees, their
families and the communities where we live in economic jeopardy.
While I believe that the long-term prospects for the metals we
produce are favorable and that our competitive position is
steadily improving, our operations are not yet sustainable at
current PGM price levels without the benefit of the floor prices
in our automotive supply agreements. Our objective is to reach
sustainability by the end of 2010, but in the interim there can be
no assurance that the company will be able to achieve that level
of operating efficiency, nor that PGM prices will not decline
further."
About General Motors
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- manufactures and sells cars and
trucks in 35 countries. Founded in 1908, GM sells cars and trucks
under the 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.
General Motors 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.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL MOTORS: Says Beijing Auto a "Formidable Bidder" for Opel
----------------------------------------------------------------
Norihiko Shirouzu at The Wall Street Journal reports that General
Motors Corp. considers Beijing Automotive Industry Holding Co. "a
formidable bidder" for its Adam Opel GmbH unit.
Citing a person close to GM, the WSJ says GM is increasingly
attracted to Beijing Auto's offer, which is valued at EUR660
million or US$922.5 million. The WSJ discloses an advantage of
the offer, according to the knowledgeable person, is that Beijing
Auto doesn't plan to close any Opel factories in Germany, and it
would ask only EUR2.64 billion in German government guarantees,
much less than the EUR4.5 billion Magna is asking for.
The WSJ notes Beijing Auto's offer however has potential problems,
including the potential competitive threat that a Beijing
Auto-owned Opel might pose to GM's business in China.
In a July 6 report The Financial Times said Beijing Auto aimed to
rapidly expand its operations in China if it wins the race to
acquire GM's Opel business in Europe. The FT disclosed that in a
last-minute bid for GM's European operations, submitted last week,
the Chinese carmaker outlined a plan to spend US$2 billion on what
would become Opel's first factory in China. Citing several people
close to the situation, the FT said Beijing Auto proposes to shut
down GM's Belgian Antwerp plant and cut Opel's workforce across
Europe.
Magna Talks
On July 7, 2009, the Troubled Company Reporter-Europe, citing
Bloomberg News, reported that Germany Deputy Economy Minister
Jochen Homann said talks with Magna are more advanced than those
with other bidders. Magna, Canada's biggest auto-parts
manufacturer, was chosen in May by the German government as the
preferred bidder for Opel.
In the same TCR-Europe report, Reuters said that GM Europe
President Carl-Peter Forster told German newspaper Frankfurter
Allgemeine Sonntagszeitung expects to sell Opel to Magna soon.
Reuters noted Mr. Forster did not give any details on the date,
but said "it would be great if it worked out by mid-July."
Reuters also reported in June citing sources that GM and Magna had
set a target of July 15 for agreeing on the sale of a majority
stake in Opel to the Canadian auto parts group and its Russian
partner Sberbank.
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$172.8 billion in total
liabilities, resulting in US$90.5 billion in stockholders'
deficit.
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.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
GEORGE MAIER: Has $940,000 Offer for Freeport Rd. Property
----------------------------------------------------------
George A. Maier and Anita Sinicrope Maier have filed a Motion to
Sell Real Property Free and Clear of all Liens and Encumbrances
And Claims located at 311-313 Freeport Road and 331-335 Freeport
Road, Aspinwall, County of Allegheny Pennsylvania, for the sum of
$939,837.92 plus taxes and costs of sale, on an "As Is" and "Where
Is" basis. The Debtors propose that any competing bidder must
post a non-refundable deposit of $25,000 and close within 30 days.
A hearing is scheduled for July 14, 2009, at 10:00 a.m. before
Judge Jeffery A. Deller in Pittsburgh. For additional
information, contact the debtors' lawyer:
Donald R. Calaiaro, Esq.
Grant Building, Suite 1105
310 Grant Street
Pittsburgh, PA 15219-2230
Telephone (412) 232-0930
George A. Maier and Anita Sinicrope Maier filed a Chapter 11
petition (Bankr. W.D. Pa. Case No. 08-20638) on January 31, 2008.
In that petition, they estimated their assets and debts at $1
million to $100 million.
GREENBRIER COS: Posts $50.5MM Net Loss in Third Quarter 2009
------------------------------------------------------------
The Greenbrier Cos. reported results for its fiscal third quarter
ended May 31, 2009. The Company posted a $50.5 million net loss
for the third quarter of fiscal 2009.
Total revenue for the third quarter of fiscal 2009 was
$244 million, down from $382 million in the prior year's third
quarter. Margin for the quarter was 10.9% of revenue compared to
12.7% of revenue in the prior comparable period. EBITDA before
special charges was $20.3 million or 8.3% of revenue for the
quarter, compared to $34.5 million or 9.0% of revenue in the prior
year's third quarter.
Earnings before special charges were $.6 million, or $.03 per
diluted share, for the third quarter of 2009. Net loss for the
third quarter of fiscal 2009 was $50.5 million, or $3.00 per
diluted share, compared to net earnings of $8.1 million, or $.49
per diluted share, in the prior year's third quarter. During the
quarter, the Company recorded special charges of $55.7 million
($51.1 million net of tax) or $3.03 per share for impairment of a
portion of goodwill.
Backlog and GE Multi-Year Contract
Greenbrier said, "Earlier this year, General Electric Railcar
Services Corporation advised us of their desire to substantially
reduce, delay or otherwise cancel deliveries under a multi-year
contract to build 11,900 tank cars and covered hopper cars over an
eight-year period, with a current value of $1.0 billion. We are
currently in discussions with GE. We believe GE is in breach of
its obligations under our contract. GE has recently instructed us
to slow our production of railcars to a rate of production less
than that required under our agreement and does not allow for
efficient operations of our manufacturing facility, also as
required under our agreement. GE has also unilaterally begun
reducing the number of railcars they are willing to accept for
delivery despite the fact they have inspected and approved the
railcars as conforming to the specifications. GE has also advised
us of their intention to continue to unilaterally reduce the
number of monthly deliveries of railcars they will accept under
the agreement and have sought to impose hyper-technical quality
inspection practices. GE's recently proposed modifications to the
agreed upon monthly delivery schedules are substantially lower
than the amount necessary to permit us to manufacture and deliver
the contractually required total of 2,400 tank cars and 1,000
covered hopper cars by the end of the ramp up period of the
agreement in April 2011. During this period our production and
delivery of tank cars was to accelerate as our tank car
manufacturing process became more efficient.
"Through June 30, 2009 GE has accepted, and we have delivered,
only 101 tank cars and 10 covered hopper cars. In addition, we
have manufactured, and have sent for delivery to GE, an additional
16 tank cars and 13 covered hopper cars beyond the amount GE has
indicated it will accept for delivery for the month ended June 30,
2009. These railcars have been inspected and approved by GE as
conforming to the specifications.
During the period through June 30, 2009, GE unilaterally reduced
the number of railcars it would accept for delivery,
notwithstanding the requirements of the contract. GE has also
advised us of their intention to continue to unilaterally reduce
the number of deliveries of railcars they will accept through
September 30, 2009, from a contractually agreed upon cumulative
total of 432 tank cars and 200 covered hopper cars to only a
cumulative total of 178 tank cars and 40 covered hopper cars.
Through September 30, 2009, the difference between what GE has
said it will accept for delivery from what they are required to
accept for delivery under the contract is 414 cars, with an
approximate value of $35 million.
GE asserts that in subsequent periods they will accept for
delivery an even smaller number of railcars. The seriousness of
this problem to us accelerates during each fiscal quarter of
fiscal 2010 and 2011. We have not agreed upon firm delivery
schedules beyond September 30, 2009, but GE has further advised us
that they intend to accept for delivery no more than 25 tank cars
and 10 covered hopper cars per month from October 2009 to June
2010. Based on the production schedule originally proposed by
both parties for the ramp up period, this is 95 fewer tank cars
per month and 105 fewer covered hopper cars per month than what
would be required during this period to allow us to produce
railcars at an efficient rate and for both parties to fulfill
their obligations under the agreement.
Reducing railcar production to the levels currently proposed by GE
would make it impossible for us to produce the numbers of railcars
(2,400 tank cars and 1,000 covered hopper cars) GE is required to
purchase and we are required to deliver during the ramp up period.
Currently, we continue to produce, and intend to deliver, the
number of tank cars and covered hopper cars ordered by GE under
the agreement. We believe the contract contains adequate
protection in that it defines the rights and obligations of the
parties with respect to railcar purchase and sale requirements and
inspection standards and that both the contract and law provide
effective legal and equitable remedies," Greenbrier said.
Quarterly Results
William A. Furman, president and chief executive officer, said,
"The sequential improvement in our quarterly financial results as
compared to the first two quarters of 2009 was due to stronger
performance in our manufacturing and refurbishment & parts
business segments. Nevertheless, our markets remain challenging
in light of the ongoing global economic recession. Year-to-date
rail loadings in North America are down about 20%, and it is
estimated that about 20% - 25% of the entire North American
railcar fleet remains idle. In this environment, we continue to
scale our operations to reflect the current economic situation,
control costs and expenditures, manage the Company for cash flow,
and seek to pay down debt. During the quarter, we paid down net
debt by an additional $19 million. We expect this trend to
continue in the fourth quarter."
Revenue for the Refurbishment & Parts segment during the third
quarter was $120.2 million, compared to $152.4 million in the
third quarter of 2008. This segment consists of railcar repair
and refurbishment, wheels services, and railcar parts from 38
locations in North America. The segment generated nearly 50% of
total Company revenue during the period. The decrease in revenue
was due to lower volumes and declines in scrap pricing.
Gross margin for the Refurbishment & Parts segment was 12.8% of
revenue, as compared to 21.0% of revenue in the prior comparable
period. The gross margin decline was primarily due to a less
favorable mix of repair and refurbishment work, and lower net
scrap pricing.
For the Manufacturing segment, revenue for the third quarter
decreased 47% to $106.0 million, compared to $201.8 million in the
third quarter of 2008. New railcar deliveries during the third
quarter were 800 units compared to 2,200 units in the third
quarter of the prior year. Lower new railcar deliveries were
partially offset by a railcar product mix with a higher per unit
sales price and higher marine revenues.
Manufacturing gross margin for the third quarter was 4.8%,
compared to 0.5% of revenue in the third quarter of 2008.
Manufacturing gross margin improvement was due to marine labor
efficiencies and a more favorable railcar mix, offset somewhat by
lower plant utilization levels.
The Leasing & Services segment includes results from the Company's
owned lease fleet of approximately 9,000 railcars and from fleet
management services provided for approximately 215,000 railcars.
Revenue for this segment was $18.3 million for the quarter,
compared to $27.9 million in the same quarter last year.
Leasing & Services gross margin for the quarter was 34.1% of
revenue, compared to 56.2% of revenue in the same quarter last
year. The revenue and gross margin decrease was principally due
to lower lease fleet utilization, lower leasing rates on certain
railcar leases, and reduced gains on sale of railcars from the
lease fleet of $5.4 million. Lease fleet utilization as of the
end of the quarter was 92.1%, as compared to 96.1% as of the end
of the third quarter of 2008.
Selling and administrative costs were $15.9 million for the
quarter, or 6.5% of revenues, versus $23.4 million or 6.1% of
revenues for the same quarter last year. The decline is
principally due to cost reduction initiatives. Severance of $0.4
million is included in costs for the current quarter.
Interest and foreign exchange increased $0.8 million to
$10.7 million for the quarter. The current quarter includes
foreign exchange losses of $2.5 million, compared to a gain of
$0.1 million in the prior comparable quarter. Current quarter
results also include costs of $.4 million to break interest rate
swaps on the voluntary prepayment of $6.1 million of certain term
debt.
Measures to Improve Liquidity, Create Growth Platform, and Enhance
Governance
Mr. Furman said, "Over the last several months, we have taken
significant strides to strengthen the Company both in the near and
long term by: improving our liquidity; diminishing the risk of
covenant issues and related cross defaults in our funded debt; and
establishing a strategic partnership with a top tier investment
partner, WL Ross & Co., that provides Greenbrier with access to
additional capital, such that we may invest in future growth
opportunities in a prudent manner. In addition, we have
strengthened our Board of Directors and addressed Board succession
issues, in adding three new Board members: two from the Ross team
-- Wilbur Ross and Wendy Teramoto, and the third -- Victoria
McManus, a recognized expert and leader in the rail industry, as
an independent director."
Business Outlook
Mr. Furman stated, "Current market conditions continue to limit
visibility, particularly for new railcar manufacturing in North
America. This limited visibility is exacerbated by GE's
unilateral actions and the uncertainties surrounding our multi-
year contract with them. We are attempting to work with GE to
find a mutually acceptable solution. We hope to do this without
requiring further sacrifice from our partners in the North
American supply industry, our workforce, or our shareholders.
Therefore, we remain cautious on our outlook in the nearer term,
while continuing to be optimistic about the longer term
fundamentals of the rail and marine supply industry. We have
actively diversified our business model to improve our competitive
position, to diversify our revenues into less cyclical segments of
the supply industry, and enhance our integrated business model
with higher margin businesses. We expect these moves to continue
to stabilize our overall business through the current economic
downturn while providing a strong platform for growth when the
economy recovers."
Mr. Furman concluded, "During July, we will continue to
rationalize our new railcar manufacturing capacity in North
America, as we concentrate new railcar production at our GIMSA
facility until market conditions improve. We will cease new
railcar production at our Concarril facility in Mexico and focus
on marine and railcar repair & refurbishment at our Gunderson
facility in Portland, OR. As a result, we will, unfortunately, be
required to furlough an additional 550 workers, principally at our
Concarril facility."
Mark Rittenbaum, executive vice president and chief financial
officer, said, "With the completion of our recent financings, we
have sufficient liquidity to meet our business needs and have
mitigated our exposure to near-term debt maturities. We will
continue to manage for cash and anticipate that we will not draw
on our North American revolving line of credit for operating needs
until there is an upturn in the economy and market demand or until
an expansion opportunity presents itself."
About Greenbrier Companies Inc.
Headquartered in Lake Oswego, Oregon, Greenbrier (NYSE: GBX) -
http://www.gbrx.com/-- is a supplier of transportation equipment
and services to the railroad industry. The company builds new
railroad freight cars in its three manufacturing facilities in the
U.S. and Mexico and marine barges at its U.S. facility. It also
repairs and refurbishes freight cars and provides wheels and
railcar parts at 38 locations across north america. Greenbrier
also builds new railroad freight cars and refurbishes freight cars
for the european market through both its operations in Poland and
various subcontractor facilities throughout europe. Greenbrier
owns approximately 9,000 railcars, and performs management
services for approximately 138,000 railcars.
* * *
As reported by the Troubled Company Reporter on March 12, 2009,
Moody's Investors Service has lowered the debt ratings of The
Greenbrier Companies; the corporate family rating was downgraded
to B3 from B1. Greenbrier's Speculative Grade Liquidity Rating
was also changed to SGL-4 from SGL-3. The ratings outlook is
negative.
According to the TCR on March 12, 2009, Standard & Poor's Ratings
Services lowered its ratings on The Greenbrier Cos. Inc.,
including the long-term corporate credit rating to 'B-' from 'B+'.
The outlook is negative.
GRUPO TMM: Add'l Loans Needed to Continue as Going Concern
----------------------------------------------------------
Grupo TMM, S.A.B., in a Form 20-F filed with the U.S. Securities
and Exchange Commission, said that in the year ended December 31,
2008, net income was US$74.9 million. In the prior year, the
Company incurred a net loss of US$67.1 million, which included a
loss of $38.6 million from discontinued operations.
At December 31, 2008, the Company and its subsidiaries have total
assets of US$1.088 billion, against total debts of
US$916.8 million, for a stockholders' equity of US$171.2 million.
On a stand-alone basis, as of Dec. 31, 2008, Grupo TMM's total
debt was US$817.5 million, which includes US$626.1 million of its
Mexican Peso-Denominated Trust Certificates Program, US$116
million under the Securitization Facility with Deutsche Bank AG
and US$75.4 million of bank debt owed to several different banks;
of this debt, US$36.1 million is short-term debt and $781.4
million is long-term debt. As of March 31, 2009, Grupo TMM's
total debt amounted to US$796.1 million, which includes US$610.7
million of its Trust Certificates Program, US$112.9 million under
the Securitization Facility and US$72.5 million of bank debt owed
to several different banks; of this debt, US$38 million is short-
term debt and US$758.1 million is long-term debt.
On June 15, 2009, Salles, Sainz - Grant Thornton, S.C., in Mexico
City raised substantial doubt about the Company's ability to
continue as a going concern after auditing the Company's financial
report for the years ended December 31, 2006, 2007, and 2008. The
auditors pointed to the Company's sustained substantial losses
from continuing operations during the past five years. The
auditors add that substantial doubt exists as to its continuation
as a going concern. Continuation is dependent upon the success of
future operations and obtaining additional financing, the auditor
said.
A full-text copy of the Form 20-F is available for free at:
http://ResearchArchives.com/t/s?3ed3
About Grupo TMM
Headquartered in Mexico City, Grupo TMM, S.A.B. (NYSE: TMM)(MEX
VALORIS: TMMA) -- http://www.grupotmm.com/-- is a Latin
American multimodal transportation and logistics company.
Through its branch offices and network of subsidiary companies,
TMM provides a dynamic combination of ocean and land
transportation services.
H & S FISH FARM: Case Summary & 10 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: H & S Fish Farm, Inc.
aka Namid Farms
111 Depot Drive
Madison, MS 39110
Bankruptcy Case No.: 09-13451
Chapter 11 Petition Date: July 8, 2009
Court: United States Bankruptcy Court
Northern District of Mississippi (Aberdeen)
Judge: Neil P. Olack
Debtor's Counsel: Jeffrey A. Levingston, Esq.
Levingston & Levingston, PA
P.O. Box 1327
Cleveland, MS 38732
Tel: (662) 843-2791
Email: jleving@bellsouth.net
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
10 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/msnb09-13451.pdf
The petition was signed by Dan Robinson, vice-president of the
Company.
HERBST GAMING: Lenders Allowed to Opt Out from Pre-Arranged Plan
----------------------------------------------------------------
Herbst Gaming, Inc., disclosed in a July 7 filing with the
Securities and Exchange Commission an amendment to its lockup
agreement with lenders. Under the amendment, the Company affirms
its obligations under the amended lock-up agreement.
Herbst Gaming and certain of its subsidiaries are parties to a
lock-up agreement with lenders holding claims under the Company's
Second Amended and Restated Credit Agreement, dated as of January
3, 2007, as amended. In the Lockup Agreement, the parties agreed
to support a restructuring of the Company pursuant to a joint plan
of reorganization under Chapter 11. Consistent with the Lockup
Agreement, Herbst Gaming has filed for Chapter 11.
The Amended and Restated Lockup Agreement provides for, among
other things, (i) certain changes to the plan of reorganization
filed by the Debtors with the Bankruptcy Court, and (ii) an option
for a lender to opt out from the Lockup Agreement.
A full-text copy of the Amended and Restated Lock-Up Agreement is
available for free at http://ResearchArchives.com/t/s?3ed8
The Company also disclosed that on June 30, 2009, subject to
Bankruptcy Court approval, the Company and one of its
subsidiaries, Market Gaming, Inc., entered into a Twenty-Second
Amendment to Lease and Sublease Agreement with Smith's Food & Drug
Centers, Inc., related to the Company's slot route operations,
which, among other things, extended the term of the Company's
existing agreement with Smith's Food & Drug Centers, Inc.
About Herbst Gaming Inc.
Headquartered in Reno, Nevada, Herbst Gaming Inc. --
http://www.herbstgaming.com/-- is an established casino and slot
route operator, with casinos located in Nevada, Missouri and Iowa.
Herbst owns and operates 6,800 slot machines in its slot route
business and is a slot machine operator in Nevada.
The Company and 17 of its affiliates filed for Chapter
11 protection on March 22, 2009 (Bankr. D. Nev. Lead Case No.
09-50752). Thomas H. Fell, Esq., Gordon Silver, represents the
Debtors in their restructuring efforts. Herbst Gaming had
$919.1 million in total assets; and $33.5 million in total
liabilities not subject to compromise and $1.24 billion in
liabilities subject to compromise, resulting in $361.0 million in
stockholders' deficiency as of March 31, 2009.
HERBST GAMING: Files New Schedules of Assets & Liabilities
----------------------------------------------------------
Herbst Gaming, Inc., et al., filed with the U.S. Bankruptcy Court
for the District of Nevada, amended schedules of assets and
liabilities, disclosing:
Name of Debtor Assets Liabilities
-------------- ------------ ------------
Zante, Inc. $46,989,552 $1,178,363,771
Flamingo Paradise Gaming, LLC $77,362,445 $1,178,350,032
HGI Mark Twain, Inc. $61,319,608 $1,178,160,172
HGI Lakeside, Inc. $53,611,564 $1,178,356,008
E-T-T, Inc. $41,981,008 $1,178,316,890
Plantation Investments, Inc. $29,582,259 $1,178,275,218
HGI - St. Jo, Inc. $26,502,855 $1,178,186,391
Dayton Gaming, Inc. $6,994,352 $1,178,067,195
Herbst Gaming, Inc. $5,662,367 $1,179,313,724
Last Chance, Inc. $3,546,468 $1,178,084,853
Market Gaming, Inc. $1,308,699 $1,177,970,474
Cardivan Company $10,814 $1,177,971,425
Corral Coin, Inc. $0 $1,177,960,000
Copies of Herbst Gaming, Inc., et al.'s Schedules are available
at:
http://bankrupt.com/misc/zanteinc.SAL.pdf
http://bankrupt.com/misc/flamingoparadisegaming.SAL.pdf
http://bankrupt.com/misc/hgimarktwaininc.SAL.pdf
http://bankrupt.com/misc/hgilakesideinc.SAL.pdf
http://bankrupt.com/misc/e-t-tinc.SAL.pdf
http://bankrupt.com/misc/plantationinvestmentsinc.pdf
http://bankrupt.com/misc/hgi-st.joinc.SAL.pdf
http://bankrupt.com/misc/daytongaminginc.SAL.pdf
http://bankrupt.com/misc/herbstgaminginc.SAL.pdf
http://bankrupt.com/misc/lastchanceinc.SAL.pdf
http://bankrupt.com/misc/marketgaminginc.SAL.pdf
http://bankrupt.com/misc/cardivancompany.SAL.pdf
http://bankrupt.com/misc/corralcoininc.SAL.pdf
About Herbst Gaming Inc.
Headquartered in Reno, Nevada, Herbst Gaming Inc. --
http://www.herbstgaming.com/-- is an established casino and slot
route operator, with casinos located in Nevada, Missouri and Iowa.
Herbst owns and operates 6,800 slot machines in its slot route
business and is a slot machine operator in Nevada.
The Company and 17 of its affiliates filed for Chapter
11 protection on March 22, 2009 (Bankr. D. Nev. Lead Case No.
09-50752). Thomas H. Fell, Esq., Gordon Silver, represents the
Debtors in their restructuring efforts. Herbst Gaming had
$919.1 million in total assets; and $33.5 million in total
liabilities not subject to compromise and $1.24 billion in
liabilities subject to compromise, resulting in $361.0 million in
stockholders' deficiency as of March 31, 2009.
HYDROGENICS CORP: Posts $14.2-Million Net Loss for 2008
-------------------------------------------------------
Hydrogenics Corporation disclosed in a filing with the Securities
and Exchange Commission that its ability to continue as a going
concern is dependent on the successful execution of the Company's
business plan.
The Company's ability to continue as a going concern is dependent
on the successful execution of its business plan which involves:
(i) securing additional financing to fund its operations; (ii)
advancing product designs for efficiency, durability, cost
reduction and entry into complimentary markets; (iii) increasing
market penetration and sales; (iv) actively managing its
liquidity; and (v) retaining and engaging staff. At present, the
success of these initiatives cannot be assured due to the material
uncertainties attributed to the Company's ability to obtain
financing and meet its revenue targets.
The Company relates that it has sustained losses and negative cash
flows from operations since its inception. The Company expects
that this will continue throughout 2009. If it does not raise
additional capital before 2010, it does not expect its operations
to generate sufficient cash flow to fund its obligations as they
come due. On June 12, 2009, the company entered into an agreement
with the trustees of Algonquin Power Income Fund to implement a
non-dilutive financing transaction that will provide the Company
with working capital.
The Company incurred net loss of $14.2 million for the year ended
December 31, 2008, a net loss of $28.1 million for the year ended
December 31, 2007, and a net loss of $130.8 million for the year
ended December 31, 2006. The Company's accumulated deficit as of
December 31, 2008, was $291.4 million.
At December 31, 2008, the Company's balance sheet showed total
assets of $47.5 million and total liabilities of $22.0 million,
resulting in a stockholders' equity of about $25.5 million.
A full-text copy of the FORM 20-F is available for free at:
http://ResearchArchives.com/t/s?3ed4
About Hydrogenics Corporation
Based in Mississauga, Ontario, Canada, Hydrogenics Corporation --
http://www.hydrogenics.com/-- is a developer and provider of
hydrogen generation and fuel cell products and services, serving
the growing industrial and clean energy markets of today and
tomorrow. Hydrogenics has operations in North America and Europe.
IDEARC INC: MatlinPatterson Says Lenders' Liens Not Wholly Valid
----------------------------------------------------------------
A fund affiliated with MatlinPatterson Global Advisers LLC is
arguing before the U.S. Bankruptcy Court for the Northern District
of Texas in Dallas that secured lenders to Idearc. Inc. do not
have valid and enforceable security interests in all of the assets
of the Company. MatlinPatterson, a holder of senior unsecured
notes, argues, among other things, lenders don't have a security
interest in any copyrights because no filing ever was made with
the U.S. Copyright Office.
MatlinPatterson likewise says an investigation by the official
creditors' committee is showing that the lenders' collateral
doesn't include a "valuable" agreement authorizing the use of
Verizon trademarks and a license agreement giving access to
Verizon customer lists.
MatlinPatterson asks the Bankruptcy Court to extend the deadline
for creditors to file a suit to challenge the lenders' liens to
August 27. The current deadline is July
The MatlinPatterson motion also wants Court to take another look
at its interim order approving the Debtors' use of cash
collateral. MatlinPatterson wants the judge to order the
"disgorgement" of a $250 million payment to the lenders as part of
an agreement to use cash.
Idearc is using cash collateral to fund operations and has not
sought debtor-in-possession financing.
About Idearc, Inc.
Headquartered in DFW Airport, Texas, Idearc, Inc. (NYSE: IAR) --
http://www.idearc.com/-- fka Verizon Directories Disposition
Corporation, provides yellow and white page directories and
related advertising products in the United States and the District
of Columbia. Products include print yellow pages, print white
pages, Superpages.com, Switchboard.com and LocalSearch.com, the
company's online local search resources, and Superpages Mobile,
their information directory for wireless subscribers.
Idearc is the exclusive official publisher of Verizon print
directories in the markets in which Verizon is currently the
incumbent local exchange carrier. Idearc uses the Verizon brand
on their print directories in their incumbent markets, well as in
their expansion markets.
Idearc and its affiliates filed for Chapter 11 protection on
March 31, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31828). Toby L.
Gerber, Esq., at Fulbright & Jaworski, LLP, represents the Debtors
in their restructuring efforts. The Debtors have tapped Moelis &
Company as their investment banker; Kurtzman Carson Consultants
LLC as their claims agent. William T. Neary, the United States
Trustee for Region 6, appointed six creditors to serve on an
official committee of unsecured creditors of Idearc, Inc., and its
debtor-affiliates. The Committee selected Mark Milbank, Tweed,
Hadley & McCloy LLP, as counsel, and Haynes and Boone, LLP, co-
counsel. The Debtors' financial condition as of December 31,
2008, showed total assets of $1,815,000,000 and total debts of
$9,515,000,000.
Idearc simultaneous with its bankruptcy petition an agreement with
a group of secured lenders on a reorganization plan to reduce debt
to $3 billion from $9 billion. The plan gives 95% of the stock,
$3 billion in new senior secured term loans and excess cash above
$150 million to the secured lenders. Unsecured creditors are in
line for 5% of the stock and recoveries by a litigation trust.
INDALEX HOLDINGS: To Sell Auction All Assets; Sapa Is Lead Bidder
-----------------------------------------------------------------
The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware approved bidding procedures to govern the
sale of substantially all assets of Indalex Holdings Corp. and its
debtor-affiliates.
Bids for the Debtors' assets must be delivered by July 14, 2009,
no later than 10:00 a.m. An auction will take place on July 16,
2009, at 10:00 a.m. (Eastern Time) at the Offices of Young Conaway
Stargatt & Taylor LLP, The Brandywine Building, 100 West Street,
17th floor in Wilmington, Delaware, followed by a sale hearing on
July 20, 2009, at 2:00 p.m. (Eastern Time) at 824 North Market
Street, 6th floor, Courtroom No. 2 in Wilmington, Delaware.
Each bid must be accompanied by a good-faith deposit not less than
$10,000,000, to be prorated as follows:
-- a deposit of $7,250,000 will be paid to an escrow agent in
respect to the U.S. assets; and
-- a deposit of $2,750,000 will be paid to the monitor in
respect of the Canadian assets.
The Debtors agreed to pay $5,300,000 break-up fee to Sapa Holding
AB if they consummate the sale to another party.
According to the Troubled Company Reporter on June 19, 2009, the
Debtors intend to sell their assets to Sapa Holding pursuant to a
stalking horse agreement, subject to higher and better offers at
an auction. Sapa Holding offered to:
-- pay $90.1 million in cash and assume certain existing
liabilities for the Debtors' U.S. assets; and
-- pay $31.7 million in cash, and assume certain existing
liabilities for the Debtors' Canadian assets.
The payments are subject to adjustments at closing.
Jefferies & Co., the Debtors' financial advisors, assisted in the
marketing process.
Indalex Holding Corp., a wholly-owned subsidiary of Indalex
Holdings Finance Inc., through its operating subsidiaries Indalex
Inc. and Indalex Ltd., with headquarters in Lincolnshire,
Illinois, is the second largest producer of soft alloy extrusion
products in North America. The Company's aluminum extrusion
products are widely used throughout industrial, commercial, and
residential applications and are customized to meet specific end-
user requirements. Indalex operates 10 extrusion facilities, 29
extrusion presses with circle sizes up to 20 inches, a variety of
fabrication and close tolerance capabilities, two anodizing
operations, two billet casting facilities, and six electrostatic
paint lines, including powder coat capability.
Indalex is indirectly controlled by private-equity investor Sun
Capital Partners Inc. Sun Capital purchased Indalex in 2005 from
Honeywell International Inc. for $425 million. Indalex is the
12th investment by Boca Raton, Florida-based Sun Capital to file
in Chapter 11 since January 2006.
Indalex Holdings and four affiliates filed for Chapter 11 on
March 20 (Bankr. D. Del., Lead Case No. 09-10982). Donald J.
Bowman, Jr., Esq., at Young, Conaway, Stargatt & Taylor, in
Wilmington, Delaware, has been tapped as counsel. Epiq Bankruptcy
Solutions LLC is the claims and noticing agent. In its bankruptcy
petition, Indalex listed assets of $356 million against debt
totaling $456 million.
INDALEX HOLDINGS: S&P Withdraws 'D' Corporate Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings on Indalex
Holding Corp., including its 'D' corporate credit rating, because
of a lack of adequate information to continue surveillance.
The company filed for Chapter 11 bankruptcy protection on
March 20, 2009.
INFINEON AG: Sells Wireline Unit to Golden Gate for EUR250 Million
------------------------------------------------------------------
Rochelle Garner at Bloomberg News reports that Infineon
Technologies AG agreed to sell its Wireline Communications
business to an affiliate of San Francisco-based Golden Gate
Capital Corp. for EUR250 million or US$348 million.
Bloomberg relates Infineon, which has posted losses in nine
straight quarters after being hit by a slumping demand for chips,
said the deal will "significantly improve" its financial
situation. According to Bloomberg, Infineon said the transaction
is expected to close by autumn. Christian Wolff, who ran the
Wireline division, will become chief executive officer of the new
business, Bloomberg notes.
About Infineon Technologies AG
Headquartered in Neubiberg, Germany, Infineon Technologies AG
(FRA:IFX) -- http://www.infineon.com/-- is a semiconductor
company. It designs, develops, manufactures and markets a range
of semiconductors and complete systems solutions used in a variety
of microelectronic applications, including computer systems,
telecommunications systems, consumer goods, automotive products,
industrial automation and control systems, and chip card
applications. Its products include standard commodity components,
full-custom devices, semi-custom devices and application-specific
components for memory, analog, digital and mixed-signal
applications. The Company has operations, investments and
customers located in Europe, Asia and North America. Its core
business is conducted through its Automotive, Industrial &
Multimarket segment, and its Communication Solutions segment. Its
memory products business is conducted through its majority owned
subsidiary, Qimonda AG. In April 2008, LSI Corporation purchased
the assets of the hard disk drive semiconductor business of
Infineon.
JOHN SATTLER: Case Summary & 1 Largest Unsecured Creditor
---------------------------------------------------------
Debtor: John Sattler
aka John E. Sattler
90 Miller Boulevard
Syosset, NY 11791
Bankruptcy Case No.: 09-75080
Chapter 11 Petition Date: July 8, 2009
Court: United States Bankruptcy Court
Eastern District of New York (Central Islip)
Judge: Alan S. Trust
Debtor's Counsel: Gary C. Fischoff, Esq.
Steinberg, Fineo, Berger & Fischoff
40 Crossways Park Drive
Woodbury, NY 11797
Tel: (516) 747-1136
Email: gcf@title11.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor identified Patrina Gherardi with a child support claim
for $2,963 as its largest unsecured creditor. A full-text copy of
the Debtor's petition, including a list of its largest unsecured
creditor, is available for free at:
http://bankrupt.com/misc/nyeb09-75080.pdf
The petition was signed by Mr. Sattler.
JWM PARTNERS: Closed; Meriwether Returns Money to Clients
---------------------------------------------------------
Jenny Strasburg at The Wall Street Journal reports that John
Meriwether is closing hedge fund firm JWM Partners LLC.
Citing people familiar with the matter, WSJ relates that JWM's
owner, John Meriwether, returned in March 2009 most outside money
to clients in JWM's flagship Relative Value Opportunity fund. WSJ
says that JWM, which at its peak oversaw about $2.6 billion,
currently has minimal staff and no traders working in its
Greenwich offices.
Sources said that several of Mr. Meriwether's longtime partners
are breaking off to raise money for a new venture, advertising
low-risk investments, and fee cuts for some clients, WSJ states.
According to WSJ, JWM lost hundreds of millions of dollars in its
funds last year, including a 42% drop in the flagship fund's
investments. The report says that Mr. Meriwether and his deputies
capped withdrawals at year-end and scrambled to raise new money,
but when that failed, they told investors in February 2009 that
everybody who wanted out would get refunds.
WSJ relates that JWM's investment strategy depended on leverage,
or money borrowed from banks to amplify trades, as its traders
sought to take advantage of relatively small pricing differences
between securities ranging from mortgage-backed securities to U.S.
municipal and international government bonds.
JWM Partners LLC was a hedge fund started by John Meriwether after
the collapse of Long Term Capital Management in 1998. LTCM was
one of the most spectacular failures of Wall Street, leading to a
federally organized bailout of around $4 billion. Mr. Meriwether
started the Company with initial capital of $250 million with
loyal quants and traders like Victor Haghani, Larry Hilibrand,
Dick Leahy, Arjun Krishnamachar, and Eric Rosenfeld. As of April
2008, the Company had $1.6 billion in management. Mr. Rosenfeld
left to start his own fund.
LEHMAN BROTHERS: Buyback of Office Equipment From Barclays Okayed
-----------------------------------------------------------------
Lehman Brothers Holdings Inc. obtained permission from the U.S.
Bankruptcy Court for the Southern District of New York to
repurchase office furniture and equipment from Barclays Capital
Inc.
The office furniture and equipment had previously been sold to
Barclays Capital as part of the U.K. bank's acquisition of LBHI's
Northern American business. The items are located in LBHI's
leased office in New York.
Shai Waisman, Esq., at Weil Gotshal & Manges LLP, in New York,
says LBHI intends to purchase the items as part of a larger
transaction that would allow a reduction of its rent by more than
$300 million.
LBHI is currently in talks with Historic TW Inc. for a new
sublease that would provide for less space, a shorter term, and a
reduction in total rent from about $326 million to about
$21 million. As a condition, LBHI has to abandon to Historic TW
certain furniture and equipment located in LBHI's New York office
that had been sold to Barclays Capital. Historic TW, however,
would still allow LBHI to use the furniture and equipment for the
investment bank's operations.
LBHI has already reached an agreement with Barclays Capital to
purchase the items for $5,900,001, according to Mr. Waisman.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide. Through its team of more than 25,000 employees, Lehman
Brothers offers a full array of financial services in equity and
fixed income sales, trading and research, investment banking,
asset management, private investment management and private
equity. Its worldwide headquarters in New York and regional
headquarters in London and Tokyo are complemented by a network of
offices in North America, Europe, the Middle East, Latin America
and the Asia Pacific region. The firm, through predecessor
entities, was founded in 1850.
Lehman filed for Chapter 11 bankruptcy September 15, 2008 (Bankr.
S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed
$639 billion in assets and $613 billion in debts, effectively
making the firm's bankruptcy filing the largest in U.S. history.
Subsidiary LB 745 LLC, submitted a Chapter 11 petition on
September 16 (Case No. 08-13600). Several other affiliates
followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
United States District Court for the Southern District of New
York, entered an order commencing liquidation of Lehman Brothers,
Inc., pursuant to the provisions of the Securities Investor
Protection Act in the case captioned Securities Investor
Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV-
8119 (GEL). James W. Giddens has been appointed as trustee for
the SIPA liquidation of the business of LBI
Barclays Bank Plc has agreed, subject to U.S. Court and relevant
regulatory approvals, to acquire Lehman Brothers' North American
investment banking and capital markets operations and supporting
infrastructure for US$1.75 billion. Nomura Holdings Inc., the
largest brokerage house in Japan, on September 22 reached an
agreement to purchased Lehman Brothers Holdings, Inc.'s operations
in Europe and the Middle East less than 24 hours after it reached
a deal to buy Lehman's operations in the Asia Pacific for
US$225 million. Nomura paid only $2 dollars for Lehman's
investment banking and equities businesses in Europe, but agreed
to retain most of Lehman's employees.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. These are currently the only UK incorporated
companies in administration. Tony Lomas, Steven Pearson, Dan
Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers
LLP, have been appointed as joint administrators to Lehman
Brothers International (Europe) on September 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
The two units of Lehman Brothers Holdings, Inc., which has filed
for bankruptcy protection in the U.S. Bankruptcy Court for the
Southern District of New York, have combined liabilities of
JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc.
reported about JPY3.4 trillion (US$33 billion) in liabilities in
its petition. Akio Katsuragi, a former Morgan Stanley executive,
runs Lehman's Japan units.
Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited have suspended
its operations with immediate effect, including ceasing to trade
on the Hong Kong Securities Exchange and Hong Kong Futures
Exchange, until further notice. The Asian units' asset management
company, Lehman Brothers Asset Management Limited, will continue
to operate on a business as usual basis. A further notice
concerning the retail structured products issued by or arranged by
any Lehman Brothers group company will be issued as soon as
possible, a press statement said.
(Lehman Brothers Bankruptcy News; Bankruptcy Creditors' Service,
Inc., <http://bankrupt.com/newsstand/>or 215/945-7000).
LEHMAN BROTHERS: Can Sell De Minimis Assets in Ordinary Course
--------------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliated debtors obtained
court approval to implement a set of procedures for the
abandonment or sale of their "de minimis" assets with a book
value or purchase price of $2 million or less.
Pursuant to a June 17 order, the Debtors can sell assets
encumbered by liens or encumbrances only if their holders consent
to the sale, or those liens and encumbrances are "capable of
monetary satisfaction." The Debtors are also authorized to sell
an asset for $300,000 or less without further court approval or
providing notice to a party.
For sale of assets with a purchase price of more than $300,000
but less than $2 million, the Debtors are required to file a
notice of sale and provide a copy of the notice to holders of
liens and encumbrances on the assets, the Office of the U.S.
Trustee, the Official Committee of Unsecured Creditors, Lehman
Brothers Inc.'s trustee, and Barclays Capital Inc. The Debtors
are also required to file a notice if they sell ownership of a
copyright patent or trademark, and serve a copy of that notice to
the Creditors Committee and Barclays Capital.
Barclays Capital previously objected to the proposed procedures
and complained that the procedures do not ensure that none of the
assets sold to the U.K. bank under its deal with LBHI would be
inadvertently sold or abandoned. Barclays sought court ruling
directing the Debtors to provide the U.K. bank with notice of
their proposed sale or abandonment of assets.
Sale of LB Rose's Assets
The June 17 order also authorizes all buyers of the de minimis
assets to take those assets "free and clear of liens, claims and
encumbrances." This ruling, however, does not apply to the deed
restrictions described in the Declaration of Deed Restrictions
and Agreement dated December 19, 2008, among LB Rose Ranch LLC,
the Garfield County Housing Authority and the Board of
Commissioners of Garfield County. The order does not also apply
to any lien asserted on account of real property taxes due to the
Treasurer of Garfield County.
With respect to any sale of real property by LB Rose, the June 17
order authorizes LB Rose to pay its taxes from the proceeds of
the sale of that property without further motion or notice. LB
Rose has the right to contest the payment of those taxes.
LB Rose is required to provide a notice to Ironbridge Homes LLC,
Ironbridge Mountain Cottages LLC and Ironbridge Aspen Collection
LLC, for the sale of real property that is subject of the notices
of lien filed in Court on March 17, 2009. The notice must be
filed at least 10 days in advance of the closing of the sale.
If LB Rose Ranch, however, can complete the sale promptly if it
obtains approval of the sale from those companies
LB Rose Ranch is instructed to deposit as much as $509,817 of the
sale proceeds in an escrow account after payment of property
taxes, commissions and other closing costs, and to provide
Ironbridge with quarterly account statements for the escrow. Any
funds in the escrow account cannot be disbursed without further
court order or consent of LB Rose Ranch and Ironbridge.
Parties Withdraw Objections
In notices filed in Court, Garfield County Treasurer, the Board
of County Commissioners of Garfield County, Ironbridge Homes LLC
and its affiliates said they have withdrawn their objections to
the proposed procedures governing the sale or abandonment of the
Debtors' de minimis assets.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide. Through its team of more than 25,000 employees, Lehman
Brothers offers a full array of financial services in equity and
fixed income sales, trading and research, investment banking,
asset management, private investment management and private
equity. Its worldwide headquarters in New York and regional
headquarters in London and Tokyo are complemented by a network of
offices in North America, Europe, the Middle East, Latin America
and the Asia Pacific region. The firm, through predecessor
entities, was founded in 1850.
Lehman filed for Chapter 11 bankruptcy September 15, 2008 (Bankr.
S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed
$639 billion in assets and $613 billion in debts, effectively
making the firm's bankruptcy filing the largest in U.S. history.
Subsidiary LB 745 LLC, submitted a Chapter 11 petition on
September 16 (Case No. 08-13600). Several other affiliates
followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
United States District Court for the Southern District of New
York, entered an order commencing liquidation of Lehman Brothers,
Inc., pursuant to the provisions of the Securities Investor
Protection Act in the case captioned Securities Investor
Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV-
8119 (GEL). James W. Giddens has been appointed as trustee for
the SIPA liquidation of the business of LBI
Barclays Bank Plc has agreed, subject to U.S. Court and relevant
regulatory approvals, to acquire Lehman Brothers' North American
investment banking and capital markets operations and supporting
infrastructure for US$1.75 billion. Nomura Holdings Inc., the
largest brokerage house in Japan, on September 22 reached an
agreement to purchased Lehman Brothers Holdings, Inc.'s operations
in Europe and the Middle East less than 24 hours after it reached
a deal to buy Lehman's operations in the Asia Pacific for
US$225 million. Nomura paid only $2 dollars for Lehman's
investment banking and equities businesses in Europe, but agreed
to retain most of Lehman's employees.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. These are currently the only UK incorporated
companies in administration. Tony Lomas, Steven Pearson, Dan
Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers
LLP, have been appointed as joint administrators to Lehman
Brothers International (Europe) on September 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
The two units of Lehman Brothers Holdings, Inc., which has filed
for bankruptcy protection in the U.S. Bankruptcy Court for the
Southern District of New York, have combined liabilities of
JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc.
reported about JPY3.4 trillion (US$33 billion) in liabilities in
its petition. Akio Katsuragi, a former Morgan Stanley executive,
runs Lehman's Japan units.
Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited have suspended
its operations with immediate effect, including ceasing to trade
on the Hong Kong Securities Exchange and Hong Kong Futures
Exchange, until further notice. The Asian units' asset management
company, Lehman Brothers Asset Management Limited, will continue
to operate on a business as usual basis. A further notice
concerning the retail structured products issued by or arranged by
any Lehman Brothers group company will be issued as soon as
possible, a press statement said.
(Lehman Brothers Bankruptcy News; Bankruptcy Creditors' Service,
Inc., <http://bankrupt.com/newsstand/>or 215/945-7000).
LEHMAN BROTHERS: Court Allows LBSF to Assume Swap Agreements
------------------------------------------------------------
At the behest of Lehman Brothers Holdings Inc. and its affiliated
debtors, the U.S. Bankruptcy Court for the Southern District of
New York authorized Debtor Lehman Brothers Special Financing Inc.
to:
(i) assume certain prepetition credit default swap agreements
by LBSF and certain special purpose trusts following the
assignment of the insurance policies for those
agreements by Syncora Guarantee Inc. to its subsidiary,
Syncora Capital Assurance Inc., a newly formed New York
financial guaranty insurance company; and
(ii) subsequently assign at a later date those credit default
swap agreements and related insurance policies to third
parties in accordance with the procedures for the
settlement or assumption and assignment of prepetition
derivative contracts.
LBSF is currently party to certain prepetition credit default
swap agreements with the Trusts, which are organized and
controlled by Syncora Guarantee. LBSF was the purchaser of
default protection under the swap agreements. Each Trust entered
into an insurance and indemnity agreement with Syncora Guarantee,
under which Syncora Guarantee issued a financial guaranty
insurance policy to LBSF, which insured the Trust's payments
under its credit default swap agreements with LBSF.
Syncora Guarantee has recently reported a capital deficit and may
become subject to proceedings by the New York Insurance
Department. To avoid the necessity for rehabilitation
proceedings, a restructuring plan for Syncora Guarantee has been
developed which is designed to:
(1) remediate Syncora Guarantee's policyholders' surplus
deficit and restore its minimum surplus to policyholders
as required by the NYID;
(2) create DropDownCo;
(3) permit Syncora Guarantee to capitalize DropDownCo with an
agreed level of capital considered sufficient to meet its
future obligations; and
(4) transfer to DropDownCo Syncora Guarantee's financial
guaranty insurance policy and reinsurance cessions
covering public finance, selected global infrastructure,
power and utility and other bonds and CDS.
The restructuring transactions are to be consummated pursuant to
a Master Transaction Agreement among Syncora Holdings, Syncora
Guarantee, DropDownCo, the Trusts, and certain financial
institutions which are counterparties to the credit default swap
agreements with the Trusts, including LBSF. The transactions
must also be completed pursuant to a related tender offer by BCP
Voyager Master Funds SPC Ltd, acting on behalf of and for the
account of Distressed Opportunities Master Segregated Portfolio
for the acquisition of certain residential mortgage-backed
securities insured directly or indirectly pursuant to financial
guaranty insurance policy.
The 2009 MTA provides that the financial institutions including
LBSF, should settle certain credit default swap agreements and
the related financial guaranty insurance policy in exchange for
the transfer of certain consideration or "settlement proceeds" to
these financial institutions, which consist of about $1.2 billion
in cash consideration, $625 million in surplus notes issued by
Syncora Guarantee and about 40% of the outstanding common shares
of Syncora Holdings.
Closing of the 2009 MTA is predicated on the satisfaction of
certain closing conditions which include the receipt of NYID
approval, among others.
Attorney for the Debtors, L.P. Harrison 3rd, Esq., at Curtis
Mallet-Prevost Colt & Mosle LLP, in New York, says LBSF has to
participate in and facilitate Syncora Guarantee's restructuring
transactions to receive a portion of the settlement proceeds and
to preserve the value of its other credit default swap agreements
with the Trust.
Specifically, with respect to LBSF, the transactions include:
(1) settlement of certain credit default swap agreements
between LBSF and the Trusts and effective commutation of
the related financial guaranty insurance policy issued by
Syncora Guarantee, resulting in LBSF's receipt of its
share of the settlement proceeds, including a cash payment
from Syncora Guarantee;
(2) consent to the assignment from Syncora Guarantee to
DropDownCo of the financial guaranty insurance policy
insuring the remaining credit default swap agreements;
(3) conforming amendments to those remaining credit default
swap agreements reflecting the assignment of the related
financial guaranty insurance policy;
(4) the assumption of the remaining credit default swap
agreements by LBSF effective upon and conditioned upon the
closing of the 2009 MTA; and
(5) the creation of conditional credit default swap agreements
with each Trust, which are insured by financial guaranty
insurance policy issued by Syncora Guarantee and which
provide certain recourse to Syncora Guarantee for payment
in the event LBSF elects to terminate the remaining credit
default swap agreement based upon DropDownCo's default on
its obligations to LBSF under that agreement.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide. Through its team of more than 25,000 employees, Lehman
Brothers offers a full array of financial services in equity and
fixed income sales, trading and research, investment banking,
asset management, private investment management and private
equity. Its worldwide headquarters in New York and regional
headquarters in London and Tokyo are complemented by a network of
offices in North America, Europe, the Middle East, Latin America
and the Asia Pacific region. The firm, through predecessor
entities, was founded in 1850.
Lehman filed for Chapter 11 bankruptcy September 15, 2008 (Bankr.
S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed
$639 billion in assets and $613 billion in debts, effectively
making the firm's bankruptcy filing the largest in U.S. history.
Subsidiary LB 745 LLC, submitted a Chapter 11 petition on
September 16 (Case No. 08-13600). Several other affiliates
followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
United States District Court for the Southern District of New
York, entered an order commencing liquidation of Lehman Brothers,
Inc., pursuant to the provisions of the Securities Investor
Protection Act in the case captioned Securities Investor
Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV-
8119 (GEL). James W. Giddens has been appointed as trustee for
the SIPA liquidation of the business of LBI
Barclays Bank Plc has agreed, subject to U.S. Court and relevant
regulatory approvals, to acquire Lehman Brothers' North American
investment banking and capital markets operations and supporting
infrastructure for US$1.75 billion. Nomura Holdings Inc., the
largest brokerage house in Japan, on September 22 reached an
agreement to purchased Lehman Brothers Holdings, Inc.'s operations
in Europe and the Middle East less than 24 hours after it reached
a deal to buy Lehman's operations in the Asia Pacific for
US$225 million. Nomura paid only $2 dollars for Lehman's
investment banking and equities businesses in Europe, but agreed
to retain most of Lehman's employees.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. These are currently the only UK incorporated
companies in administration. Tony Lomas, Steven Pearson, Dan
Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers
LLP, have been appointed as joint administrators to Lehman
Brothers International (Europe) on September 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
The two units of Lehman Brothers Holdings, Inc., which has filed
for bankruptcy protection in the U.S. Bankruptcy Court for the
Southern District of New York, have combined liabilities of
JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc.
reported about JPY3.4 trillion (US$33 billion) in liabilities in
its petition. Akio Katsuragi, a former Morgan Stanley executive,
runs Lehman's Japan units.
Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited have suspended
its operations with immediate effect, including ceasing to trade
on the Hong Kong Securities Exchange and Hong Kong Futures
Exchange, until further notice. The Asian units' asset management
company, Lehman Brothers Asset Management Limited, will continue
to operate on a business as usual basis. A further notice
concerning the retail structured products issued by or arranged by
any Lehman Brothers group company will be issued as soon as
possible, a press statement said.
(Lehman Brothers Bankruptcy News; Bankruptcy Creditors' Service,
Inc., <http://bankrupt.com/newsstand/>or 215/945-7000).
LEHMAN BROTHERS: Liquidators Secure $200MM From China Real Estate
-----------------------------------------------------------------
The Liquidators of Lehman Brothers Commercial Corporation Asia
Limited (LBCCA) have successfully realised seven out of LBCCA's
nine real estate assets in China.
The transactions generate proceeds of over US$200m for creditors
and represent a recovery of around 80 percent of Outstanding
Principal Balances (OPBs).
The assets comprise senior and mezzanine loans secured on real
estate as well as convertible bonds. LBCCA's real estate
portfolio consists of loans to 44 counterparties mainly secured
against hotel, residential, retail and commercial properties and
developments, with the largest country and currency risk
exposures being in China and Thailand.
Most of the transactions involved a sale of the loan to the
original borrower or a compromise repayment following extensive
negotiations.
Lehman is the largest bank insolvency in history. As a result of
the different insolvency regimes under which Lehman and its
subsidiaries now operate, it is its Asian subsidiaries which
have the clearest mandate for selling assets at this time.
Accordingly, institutions involved in real estate lending around
the world are monitoring with keen interest the strategies being
adopted, and the progress being made, by the insolvency officers
appointed to Lehman's Asian subsidiaries.
Michael Lindsay, Global Head of Real Estate for KPMG Corporate
Finance leads the management and asset disposal of the LBCCA real
estate portfolio, which has a par value of US$1.26 billion. He
said: "These realisations are a strong endorsement of the
"borrower solutions" strategy adopted by the Liquidators.
Giving borrowers the space, time and encouragement to disengage
themselves from Lehmans using their own knowledge, skills and
relationships has been a win/win for all parties and enabled the
Liquidators to achieve more than would have been possible via
alternative realisation routes."
Despite significant challenges presented by the scale, spread and
risk profile of these real estate assets, combined with the
slowdown in both the Chinese and global economies, counterparties
have been successful in raising the necessary funds. Funding for
these transactions in some case came from balance sheet resources
or sales, although most came from new third party debt financing
with borrowers taking advantage of improved levels of liquidity in
the Chinese banking market over recent months.
Doug Ferguson, Partner, KPMG China, commented: "Our market
intelligence in early 2009 indicated a risk of deterioration in
commercial rental and capital values, especially in the Shanghai
offices, where LBCCA had the greatest exposure. We therefore
felt it important to act swiftly on those assets to recover value
for LBCCA's creditors."
About KPMG
KPMG is a global network of professional firms providing Audit,
Tax and Advisory services. We operate in 144 countries and have
137,000 people working in member firms around the world. The
independent member firms of the KPMG network are affiliated with
KPMG International, a Swiss cooperative. Each KPMG firm is a
legally distinct and separate entity and describes itself as such.
KPMG China has 12 offices (including KPMG Advisory (China)
Limited) in Beijing, Shenyang, Qingdao, Shanghai, Nanjing,
Chengdu, Hangzhou, Guangzhou, Fuzhou, Shenzhen, Hong Kong and
Macau, with more than 8,500 professionals.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide. Through its team of more than 25,000 employees, Lehman
Brothers offers a full array of financial services in equity and
fixed income sales, trading and research, investment banking,
asset management, private investment management and private
equity. Its worldwide headquarters in New York and regional
headquarters in London and Tokyo are complemented by a network of
offices in North America, Europe, the Middle East, Latin America
and the Asia Pacific region. The firm, through predecessor
entities, was founded in 1850.
Lehman filed for Chapter 11 bankruptcy September 15, 2008 (Bankr.
S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed
$639 billion in assets and $613 billion in debts, effectively
making the firm's bankruptcy filing the largest in U.S. history.
Subsidiary LB 745 LLC, submitted a Chapter 11 petition on
September 16 (Case No. 08-13600). Several other affiliates
followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
United States District Court for the Southern District of New
York, entered an order commencing liquidation of Lehman Brothers,
Inc., pursuant to the provisions of the Securities Investor
Protection Act in the case captioned Securities Investor
Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV-
8119 (GEL). James W. Giddens has been appointed as trustee for
the SIPA liquidation of the business of LBI
Barclays Bank Plc has agreed, subject to U.S. Court and relevant
regulatory approvals, to acquire Lehman Brothers' North American
investment banking and capital markets operations and supporting
infrastructure for US$1.75 billion. Nomura Holdings Inc., the
largest brokerage house in Japan, on September 22 reached an
agreement to purchased Lehman Brothers Holdings, Inc.'s operations
in Europe and the Middle East less than 24 hours after it reached
a deal to buy Lehman's operations in the Asia Pacific for
US$225 million. Nomura paid only $2 dollars for Lehman's
investment banking and equities businesses in Europe, but agreed
to retain most of Lehman's employees.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. These are currently the only UK incorporated
companies in administration. Tony Lomas, Steven Pearson, Dan
Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers
LLP, have been appointed as joint administrators to Lehman
Brothers International (Europe) on September 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
The two units of Lehman Brothers Holdings, Inc., which has filed
for bankruptcy protection in the U.S. Bankruptcy Court for the
Southern District of New York, have combined liabilities of
JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc.
reported about JPY3.4 trillion (US$33 billion) in liabilities in
its petition. Akio Katsuragi, a former Morgan Stanley executive,
runs Lehman's Japan units.
Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited have suspended
its operations with immediate effect, including ceasing to trade
on the Hong Kong Securities Exchange and Hong Kong Futures
Exchange, until further notice. The Asian units' asset management
company, Lehman Brothers Asset Management Limited, will continue
to operate on a business as usual basis. A further notice
concerning the retail structured products issued by or arranged by
any Lehman Brothers group company will be issued as soon as
possible, a press statement said.
(Lehman Brothers Bankruptcy News; Bankruptcy Creditors' Service,
Inc., <http://bankrupt.com/newsstand/>or 215/945-7000).
LEHMAN BROTHERS: Obtains Approval for Pachulski as Special Counsel
------------------------------------------------------------------
Lehman Brothers Holdings Inc. and its debtor-affiliates obtained
authority from the U.S. Bankruptcy Court for the Southern District
of New York to employ Pachulski Stang Ziehl & Jones LLP as their
special counsel, nunc pro tunc to February 25, 2009.
The Debtors tapped the firm to represent them in connection with
the jointly-administered Chapter 11 cases of Palmdale Hills
Property, LLC, and its affiliated debtors, which are pending in
the U.S. Bankruptcy Court for the Central District of California.
Specifically, Pachulski is tasked to:
(1) represent Lehman Brothers Holdings, Inc., and Lehman
Commercial Paper, Inc., in litigation pending against them
in the California Bankruptcy Court filed by Palmdale
Hills;
(2) represent LBHI and LCPI in relation to any issues arising
with respect to any disclosure statements and plan of
reorganization filed by Palmdale Hills and its affiliated
debtors; and
(3) represent LBHI and LCPI in relation to prosecuting or
defending various other motions and other matters in the
bankruptcy cases of Palmdale Hills and its affiliated
debtors.
The Debtors will pay Pachulski at these hourly rates:
Partners $795 - $850
Counsel $475 - $575
Associates $295 - $395
Paralegals $150 - $195
The Debtors will also reimburse the firm for the expenses incurred
in connection with its employment.
Dean Ziehl, Esq., a partner at Pachulski Stang Ziehl & Jones LLP,
assures the Court that his firm does not represent or hold any
interest adverse to the Debtors or their estates with respect to
matters for which it is to be employed.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide. Through its team of more than 25,000 employees, Lehman
Brothers offers a full array of financial services in equity and
fixed income sales, trading and research, investment banking,
asset management, private investment management and private
equity. Its worldwide headquarters in New York and regional
headquarters in London and Tokyo are complemented by a network of
offices in North America, Europe, the Middle East, Latin America
and the Asia Pacific region. The firm, through predecessor
entities, was founded in 1850.
Lehman filed for Chapter 11 bankruptcy September 15, 2008 (Bankr.
S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed
$639 billion in assets and $613 billion in debts, effectively
making the firm's bankruptcy filing the largest in U.S. history.
Subsidiary LB 745 LLC, submitted a Chapter 11 petition on
September 16 (Case No. 08-13600). Several other affiliates
followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
United States District Court for the Southern District of New
York, entered an order commencing liquidation of Lehman Brothers,
Inc., pursuant to the provisions of the Securities Investor
Protection Act in the case captioned Securities Investor
Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV-
8119 (GEL). James W. Giddens has been appointed as trustee for
the SIPA liquidation of the business of LBI
Barclays Bank Plc has agreed, subject to U.S. Court and relevant
regulatory approvals, to acquire Lehman Brothers' North American
investment banking and capital markets operations and supporting
infrastructure for US$1.75 billion. Nomura Holdings Inc., the
largest brokerage house in Japan, on September 22 reached an
agreement to purchased Lehman Brothers Holdings, Inc.'s operations
in Europe and the Middle East less than 24 hours after it reached
a deal to buy Lehman's operations in the Asia Pacific for
US$225 million. Nomura paid only $2 dollars for Lehman's
investment banking and equities businesses in Europe, but agreed
to retain most of Lehman's employees.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. These are currently the only UK incorporated
companies in administration. Tony Lomas, Steven Pearson, Dan
Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers
LLP, have been appointed as joint administrators to Lehman
Brothers International (Europe) on September 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
The two units of Lehman Brothers Holdings, Inc., which has filed
for bankruptcy protection in the U.S. Bankruptcy Court for the
Southern District of New York, have combined liabilities of
JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc.
reported about JPY3.4 trillion (US$33 billion) in liabilities in
its petition. Akio Katsuragi, a former Morgan Stanley executive,
runs Lehman's Japan units.
Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited have suspended
its operations with immediate effect, including ceasing to trade
on the Hong Kong Securities Exchange and Hong Kong Futures
Exchange, until further notice. The Asian units' asset management
company, Lehman Brothers Asset Management Limited, will continue
to operate on a business as usual basis. A further notice
concerning the retail structured products issued by or arranged by
any Lehman Brothers group company will be issued as soon as
possible, a press statement said.
(Lehman Brothers Bankruptcy News; Bankruptcy Creditors' Service,
Inc., <http://bankrupt.com/newsstand/>or 215/945-7000).
LEHMAN BROTHERS: Simpson Thacher to Help Form Asset Mgt. Biz
------------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliated debtors seek the
U.S. Bankruptcy Court for the Southern District of New York's
authority to employ Simpson Thacher & Bartlett LLP, to assist LBHI
on matters related to the formation and operation of a potential
asset management or servicing business.
Simpson Thacher will coordinate those matters with the Debtors'
lead counsel, Weil Gotshal & Manges LLP, to ensure that its
services are complementary and not duplicative of Weil Gotshal's
work.
LBHI previously obtained the Court's permission to hire Simpson
Thacher as special counsel. Its Court-approved services include:
(1) assisting Lehman Brothers Holdings with reporting
obligations under the Securities and Exchange Act of 1934;
(2) assisting the company with respect to negotiations related
to, and the closing of the sale of, the investment banking
and capital markets business of Lehman Brothers Inc. to
Barclays Capital;
(3) assisting the company in connection with the sale of its
investment management division to Bain Capital and Hellman
& Friedman;
(4) representing the company in connection with the testimony
of its chief executive officer before the Congress; and
(5) representing LBA Y.K., an indirect subsidiary of Lehman
Brothers Holdings, in its case pending in the United
States and in Japan.
In return for its services, Lehman Brothers Holdings is paying the
firm at these rates:
Personnel Hourly Rates
--------- ------------
Partners $785 - $1000
Counsel/Senior counsel $740 - $765
Associates $385 - $690
Paralegals $130 - $285
In her affidavit filed with the Court, Mary Elizabeth McGarry, a
member of Simpson Thacher, said that her firm does not have any
connection with Lehman Brothers Holdings, its units that have
filed for bankruptcy, and their creditors. She assured the Court
that the firm will not represent any party whose interest is
adverse to Lehman Brothers Holdings or its estates.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide. Through its team of more than 25,000 employees, Lehman
Brothers offers a full array of financial services in equity and
fixed income sales, trading and research, investment banking,
asset management, private investment management and private
equity. Its worldwide headquarters in New York and regional
headquarters in London and Tokyo are complemented by a network of
offices in North America, Europe, the Middle East, Latin America
and the Asia Pacific region. The firm, through predecessor
entities, was founded in 1850.
Lehman filed for Chapter 11 bankruptcy September 15, 2008 (Bankr.
S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed
$639 billion in assets and $613 billion in debts, effectively
making the firm's bankruptcy filing the largest in U.S. history.
Subsidiary LB 745 LLC, submitted a Chapter 11 petition on
September 16 (Case No. 08-13600). Several other affiliates
followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
United States District Court for the Southern District of New
York, entered an order commencing liquidation of Lehman Brothers,
Inc., pursuant to the provisions of the Securities Investor
Protection Act in the case captioned Securities Investor
Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV-
8119 (GEL). James W. Giddens has been appointed as trustee for
the SIPA liquidation of the business of LBI
Barclays Bank Plc has agreed, subject to U.S. Court and relevant
regulatory approvals, to acquire Lehman Brothers' North American
investment banking and capital markets operations and supporting
infrastructure for US$1.75 billion. Nomura Holdings Inc., the
largest brokerage house in Japan, on September 22 reached an
agreement to purchased Lehman Brothers Holdings, Inc.'s operations
in Europe and the Middle East less than 24 hours after it reached
a deal to buy Lehman's operations in the Asia Pacific for
US$225 million. Nomura paid only $2 dollars for Lehman's
investment banking and equities businesses in Europe, but agreed
to retain most of Lehman's employees.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. These are currently the only UK incorporated
companies in administration. Tony Lomas, Steven Pearson, Dan
Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers
LLP, have been appointed as joint administrators to Lehman
Brothers International (Europe) on September 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
The two units of Lehman Brothers Holdings, Inc., which has filed
for bankruptcy protection in the U.S. Bankruptcy Court for the
Southern District of New York, have combined liabilities of
JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc.
reported about JPY3.4 trillion (US$33 billion) in liabilities in
its petition. Akio Katsuragi, a former Morgan Stanley executive,
runs Lehman's Japan units.
Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited have suspended
its operations with immediate effect, including ceasing to trade
on the Hong Kong Securities Exchange and Hong Kong Futures
Exchange, until further notice. The Asian units' asset management
company, Lehman Brothers Asset Management Limited, will continue
to operate on a business as usual basis. A further notice
concerning the retail structured products issued by or arranged by
any Lehman Brothers group company will be issued as soon as
possible, a press statement said.
(Lehman Brothers Bankruptcy News; Bankruptcy Creditors' Service,
Inc., <http://bankrupt.com/newsstand/>or 215/945-7000).
LEHMAN BROTHERS: Wins Approval to Sell 2 Units to Former Employees
------------------------------------------------------------------
Debtor Lehman Brothers Holdings Inc. obtained authority from the
U.S. Bankruptcy Court for the Southern District of New York to
transfer two of its subsidiaries' assets and liabilities to
companies formed by its former employees.
The assets to be transferred include the non-participating voting
shares in foreign feeder funds held by Neuberger Berman Asset
Management LLC as well as its interests in master funds that
Lehman Brothers Asset Management Inc. advises. Also to be
transferred are the interests held by LBHI, NBAM and LBAM in the
intellectual property used exclusively in the master funds,
foreign feeder funds, among others.
The assets will be transferred to LibertyView Capital Management,
LLC and LibertyView GP LLC, and will be managed by Richard
Meckler and Randall Hutton. Mr. Meckler is the president and
chief investment officer of the LibertyView division of LBAM
while Mr. Hutton serves as the senior portfolio manager and
managing director of the division.
"LBHI determined that the expense of maintaining such assets and
liabilities would likely exceed the benefit of doing so and,
therefore, a transfer of the assets and liabilities is in the
best interest of LBHI's estate," Lori Fife, Esq., at Weil Gotshal
& Manges LLP, in New York, says in court papers. She adds that
the agreement is also the best available means for disposing the
assets and limiting LBHI's liabilities.
The assets to be transferred were not included by LBHI when it
sold its investment management unit to NBSH Acquisition LLC, the
company formed by senior managers of Neuberger Berman Group LLC.
In return for the proposed transfer, LBHI is required to
indemnify and hold the transferees harmless from any liabilities,
damages, among others, during the period prior to the
consummation of the transfer.
LBHI, NBAM and NBAM will also pay a sum of $680,000 to Messrs.
Meckler and Hutton, and current Lehman workers who have accepted
an offer of employment with the transferees, for the services
they provided connection with the funds for the period January 1,
2009, to the date of consummation of the transfer.
A full text-copy of the agreement is available without charge at:
http://bankrupt.com/misc/LehmanTransactionAgreement.pdf
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide. Through its team of more than 25,000 employees, Lehman
Brothers offers a full array of financial services in equity and
fixed income sales, trading and research, investment banking,
asset management, private investment management and private
equity. Its worldwide headquarters in New York and regional
headquarters in London and Tokyo are complemented by a network of
offices in North America, Europe, the Middle East, Latin America
and the Asia Pacific region. The firm, through predecessor
entities, was founded in 1850.
Lehman filed for Chapter 11 bankruptcy September 15, 2008 (Bankr.
S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed
$639 billion in assets and $613 billion in debts, effectively
making the firm's bankruptcy filing the largest in U.S. history.
Subsidiary LB 745 LLC, submitted a Chapter 11 petition on
September 16 (Case No. 08-13600). Several other affiliates
followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
United States District Court for the Southern District of New
York, entered an order commencing liquidation of Lehman Brothers,
Inc., pursuant to the provisions of the Securities Investor
Protection Act in the case captioned Securities Investor
Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV-
8119 (GEL). James W. Giddens has been appointed as trustee for
the SIPA liquidation of the business of LBI
Barclays Bank Plc has agreed, subject to U.S. Court and relevant
regulatory approvals, to acquire Lehman Brothers' North American
investment banking and capital markets operations and supporting
infrastructure for US$1.75 billion. Nomura Holdings Inc., the
largest brokerage house in Japan, on September 22 reached an
agreement to purchased Lehman Brothers Holdings, Inc.'s operations
in Europe and the Middle East less than 24 hours after it reached
a deal to buy Lehman's operations in the Asia Pacific for
US$225 million. Nomura paid only $2 dollars for Lehman's
investment banking and equities businesses in Europe, but agreed
to retain most of Lehman's employees.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. These are currently the only UK incorporated
companies in administration. Tony Lomas, Steven Pearson, Dan
Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers
LLP, have been appointed as joint administrators to Lehman
Brothers International (Europe) on September 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
The two units of Lehman Brothers Holdings, Inc., which has filed
for bankruptcy protection in the U.S. Bankruptcy Court for the
Southern District of New York, have combined liabilities of
JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc.
reported about JPY3.4 trillion (US$33 billion) in liabilities in
its petition. Akio Katsuragi, a former Morgan Stanley executive,
runs Lehman's Japan units.
Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited have suspended
its operations with immediate effect, including ceasing to trade
on the Hong Kong Securities Exchange and Hong Kong Futures
Exchange, until further notice. The Asian units' asset management
company, Lehman Brothers Asset Management Limited, will continue
to operate on a business as usual basis. A further notice
concerning the retail structured products issued by or arranged by
any Lehman Brothers group company will be issued as soon as
possible, a press statement said.
(Lehman Brothers Bankruptcy News; Bankruptcy Creditors' Service,
Inc., <http://bankrupt.com/newsstand/>or 215/945-7000).
LEHMAN BROTHERS: Wins Nod to Pay LB Carillon Debt to Fortress
-------------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliated debtors obtained
the U.S. Bankruptcy Court for the Southern District of New York's
approval to pay the loan that Fortress Credit Corp. provided to LB
Carillon Construction LLC, a non-debtor subsidiary of LBHI.
LB Carillon borrowed more than $238.8 million to fund a portion
of the $418 million that it loaned off to Carillon South Joint
Venture LLC and North Carillon LLC in 2006. The $418 million was
used to fund the construction of a residential condominium
project known as Canyon Ranch Living Miami Beach Condominiums in
Miami Beach, Florida.
As much as $219,186,000 in construction loan was provided to
Carillon South while $199,505,000 was provided to the other
company. The construction loans are secured by a first lien
mortgage on the southern and northern portions of the condominium
while the $238.8 million is secured by LB Carillon's interests in
the constructions loans.
LB Carillon intended to pay the $238.8 million from the amounts
paid by Carillon South and North Carillon, however, due to
difficulties in the south Florida residential real estate market,
the borrowers could not pay their construction loans on time,
according to Shai Waisman, Esq., at Weil Gotshal & Manges LLP, in
New York.
LB Carillon's loan from Fortress had an initial maturity date of
April 30, 2009, but Fortress has extended it to June 30, 2009.
In exchange for the extension, LBHI paid Fortress about $10
million on June 1 for the benefit of LB Carillon. Upon maturity,
additional amounts of less than $142 million will become due and
owing to Fortress.
"As part of a larger business plan with respect to Canyon Ranch,
the Debtors have determined it is in the best interest of their
estates to pay Fortress the amounts due," Mr. Waisman says. He
adds that LBHI will make the payment and, in exchange, LB
Carillon will provide LBHI with the so-called "secured market
rate note" in accordance with the Court's cash management order.
Pursuant to the cash management order, the Debtors can transfer
cash for the benefit of a non-debtor affiliate so long as they
obtain from that affiliate a note accruing interest at a market
rate and a valid perfected lien junior to any existing liens of
the affiliate.
"The Debtors believe that the construction loans continue to have
value, and consequently, the Debtors and their estates will
ultimately realize a recovery on the amounts lent under the
construction loans," Mr. Waisman says. He adds that the payment
to Fortress will protect LB Carillon's interest in the
construction loans by preventing Fortress from foreclosing its
collateral.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide. Through its team of more than 25,000 employees, Lehman
Brothers offers a full array of financial services in equity and
fixed income sales, trading and research, investment banking,
asset management, private investment management and private
equity. Its worldwide headquarters in New York and regional
headquarters in London and Tokyo are complemented by a network of
offices in North America, Europe, the Middle East, Latin America
and the Asia Pacific region. The firm, through predecessor
entities, was founded in 1850.
Lehman filed for Chapter 11 bankruptcy September 15, 2008 (Bankr.
S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed
$639 billion in assets and $613 billion in debts, effectively
making the firm's bankruptcy filing the largest in U.S. history.
Subsidiary LB 745 LLC, submitted a Chapter 11 petition on
September 16 (Case No. 08-13600). Several other affiliates
followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
United States District Court for the Southern District of New
York, entered an order commencing liquidation of Lehman Brothers,
Inc., pursuant to the provisions of the Securities Investor
Protection Act in the case captioned Securities Investor
Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV-
8119 (GEL). James W. Giddens has been appointed as trustee for
the SIPA liquidation of the business of LBI
Barclays Bank Plc has agreed, subject to U.S. Court and relevant
regulatory approvals, to acquire Lehman Brothers' North American
investment banking and capital markets operations and supporting
infrastructure for US$1.75 billion. Nomura Holdings Inc., the
largest brokerage house in Japan, on September 22 reached an
agreement to purchased Lehman Brothers Holdings, Inc.'s operations
in Europe and the Middle East less than 24 hours after it reached
a deal to buy Lehman's operations in the Asia Pacific for
US$225 million. Nomura paid only $2 dollars for Lehman's
investment banking and equities businesses in Europe, but agreed
to retain most of Lehman's employees.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. These are currently the only UK incorporated
companies in administration. Tony Lomas, Steven Pearson, Dan
Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers
LLP, have been appointed as joint administrators to Lehman
Brothers International (Europe) on September 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
The two units of Lehman Brothers Holdings, Inc., which has filed
for bankruptcy protection in the U.S. Bankruptcy Court for the
Southern District of New York, have combined liabilities of
JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc.
reported about JPY3.4 trillion (US$33 billion) in liabilities in
its petition. Akio Katsuragi, a former Morgan Stanley executive,
runs Lehman's Japan units.
Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited have suspended
its operations with immediate effect, including ceasing to trade
on the Hong Kong Securities Exchange and Hong Kong Futures
Exchange, until further notice. The Asian units' asset management
company, Lehman Brothers Asset Management Limited, will continue
to operate on a business as usual basis. A further notice
concerning the retail structured products issued by or arranged by
any Lehman Brothers group company will be issued as soon as
possible, a press statement said.
(Lehman Brothers Bankruptcy News; Bankruptcy Creditors' Service,
Inc., <http://bankrupt.com/newsstand/>or 215/945-7000).
LENNY DYKSTRA: Former MLB Star Seeks Protection from Creditors
--------------------------------------------------------------
Lenny Dykstra has filed for Chapter 11 bankruptcy protection in
the U.S. Bankruptcy Court for the Central District of California.
According to court documents, Mr. Dykstra listed less than $50,000
in assets and $10 million to $50 million in debts owed to 50 to 99
creditors.
Mr. Dykstra faces 20 lawsuits stemming from his entrepreneurial
work -- including The Players Club, a start-up magazine, Aaron
Kuriloff at Bloomberg News reports. Court documents say that Mr.
Dykstra owes JPMorgan Chase & Co. some $12.9 million, and Bank of
America Corp.'s Countrywide and credit-card units a combined $4.2
million.
Lenny Dykstra is a former Major League Baseball All-Star. He was
center fielder for the New York Mets and Philadelphia Phillies.
LEONARD WOOD: Moody's Cuts Rating on Military Revenue Bonds
-----------------------------------------------------------
Moody's Investors Service has downgraded the rating of the Leonard
Wood Family Communities, LLC Military Housing Revenue Bonds (Fort
Leonard Wood Housing Project) 2005 Series A (Class I) to Baa1 from
A1, Series B (Class II) to Baa3 from Baa1 and confirms Series C
(Class III) at Baa3. The downgrades are reflective of a debt
service reserve invested in a guaranteed investment contract with
MBIA Inc., which has been downgraded to Ba3 with a negative
outlook, which does not support the previously assigned A1 rating
on Class I or the Baa1 rating on Class II. Given the project's
performance, Moody's believes the MBIA rating supports the Baa3
rating on Class III. The outlook for each Class is stable based
upon the strong occupancy performance of the project.
Strengths
-- Occupancy is very strong at 99.3% of end-state units
-- Debt service coverage ratios exceed minimum underwriting
standards
-- Base essentiality remains strong
Risks And Mitigating Factors
-- The debt service reserve funds for Class I, II and III
bonds are invested in guaranteed investment contracts with
MBIA Inc. (Ba3/Negative outlook)
-- The proportion of new units planned for the end-state was
dramatically reduced with debt restructuring of 2008, thus
reducing the overall competitiveness of the product over
the long term.
Real Estate Fundamentals:
Demand Inline With Resized End State Units
The number of end-state units was reduced to 1,806 in summer of
2008 when cash in the construction account were used to redeem a
portion of debt outstanding. At the time, the number of units
occupied was averaging in the mid 1,600s. Since Balfour Beatty
took over management, occupancy has substantially increased.
Through May 2009, average units occupied on a monthly basis is
1,800 units. This translates to a 99.7% occupancy rate of end-
state units. The restructured pro forma assumed 1,571 units would
be occupied. Average monthly occupancy is 114.6% of the units
occupied in the restructured pro forma.
As of May 31, 2009, renovation construction is behind schedule.
The renovation schedule called for 467 units to be rehabbed while
only 345 have been completed. Balfour Beatty reports they
anticipate catching up with the renovation schedule and completing
the project within the initial development period. At this point
in time, Moody's considers the risks of construction being off
schedule to be largely mitigated by strong occupancy.
Financial Performance: Debt Service Coverage Is Strong
Audited financial statements for 2008 produce strong debt service
coverage levels of 2.39x for Class I, 1.94x for Class II and 1.84x
for Class III. This overstates coverage because there was a one
time write-off of management fees by the previous property manager
which understates ongoing expenses. Also, revenues include
interest earnings from the construction account, which will
ultimately be depleted and dramatically reduce investment
earnings. By conservatively eliminating all investment earnings
from the calculation, and reversing the management fee write-off,
debt service coverage ratios still exceed underwriting minimums;
the adjusted DSCR are 1.53x for Class I, 1.24x for Class II and
1.18x for Class III. Moody's considers the DSCR for the project
to be strong. The new rating levels incorporate the below
investment grade DSRF GIC provider within the context of strong
financial performance.
Outlook
The outlook for all Classes of debt is stable due to strong
occupancy and financial performance.
What Could Change The Rating Up
-- Replacement of the debt service reserve GIC with one from
a highly rated provider while maintaining satisfactory
financial performance
-- Substantial increases in debt service coverage
What Could Change The Rating Down
-- Declines in debt service coverage levels
-- Downsizing or closure of military facilities
-- Substantial or prolonged declines in occupancy
-- Substantial construction delays
-- Substantial drop in the rating of the DSRF GIC provider
The last rating action was on May 30, 2008, when the Class I bonds
were downgraded to A1, the Class II bonds were downgraded to Baa1
and the Class III bonds were downgraded to Baa3.
METARAM INC: Stops Operations; Is Shutting Down
-----------------------------------------------
VentureWire reports that MetaRAM Inc. is closing.
Tomio Geron at The Wall Street Journal blog, Venture Capital
Dispatch, relates that MetaRAM co-founder and Chief Executive
Suresh Rajan said that the Company has stopped operating. "We''re
in the process of shutting down the Company," Venture Capital
Dispatch quoted Mr. Rajan as saying.
San Jose-based MetaRAM Inc. is a semiconductor company.
MICHAEL VICK: New Plan Gives Up Future Income
---------------------------------------------
According to Bill Rochelle at Bloomberg News, Michael D. Vick's
modified Chapter 11 plan filed last week proposes to give up a
portion of his future income over six years, assuming he's
reinstated by the National Football League and signs a new
contract in order to repay unsecured creditors owed in excess of
$19 million. From annual income less than $750,000, he gives up
10 percent. The payments increase to 25 percent for earnings
between $750,000 and $2.5 million, 30 percent for $2.5 million
to $10 million, and 40 percent above $10 million a year.
If creditors haven't recovered 80 percent, they will take a
portion of what he earns under a new contract signed near the
end of the six-year payout period.
In addition, instead of keeping two homes and three vehicles, as
requested in his first plan, Mr. Vick decided to keep one home and
one vehicle. He will turn over other homes, boats, cars, horses,
real property and investments, Bill Rochelle said.
The disclosure statement explaining the Modified says creditors
allowed Mr. Vick to retain more property than he would keep in
bankruptcy and instead negotiated for more of his future income,
while being sure he would earn enough to provide incentive to seek
out the best contract.
To make up a cash shortfall that would otherwise preclude
confirming a reorganization plan, Vick's professionals agreed to
be paid some of the $3.5 million they're owed over five years.
Secured tax claims also will be stretched out.
A hearing will be held on July 31 to consider approval of the
adequacy of the information in the Disclosure Statement.
Michael Dwayne Vick, born June 26, 1980, in Newport News,
Virginia, is a suspended National Football League quarterback
under contract with the Atlanta Falcons team. In 2007, a U.S.
federal district court convicted him and several co-defendants of
criminal conspiracy resulting from felonious dog fighting and
sentenced him to serve 23 months in prison. He is being held in
the United States Penitentiary at Leavenworth, Kansas.
Mr. Vick is also under indictment for two related Virginia state
felony charges for his role in the dogfighting ring and related
gambling activity. His state trial has been delayed until he is
released from federal prison. He faces a maximum 10-year state
prison term if convicted on both counts.
Mr. Vick filed a Chapter 11 petition on July 7, 2008 (Bankr.
E.D. Va. Case No. 08-50775). Dennis T. Lewandowski, Esq., and
Paul K. Campsen, Esq., at Kaufman & Canoles, P.C., represent the
Debtor in his restructuring efforts. Mr. Vick listed assets of
$10 million to $50 mill
MONTGOMERY REALTY: Case Summary & 20 Largest Unsec. Creditors
-------------------------------------------------------------
Debtor: Montgomery Realty Group, Inc.
447 Battery St. #300
San Francisco, CA 94111
Case No.: 09-31879
Debtor-affiliate filing separate Chapter 11 petition:
Entity Case No.
------ --------
Montgomery Realty Group 09-31880
Type of Business: Montgomery leases and operates improved
properties.
Chapter 11 Petition Date: July 6, 2009
Court: United States Bankruptcy Court
Northern District of California (San Francisco)
Judge: Dennis Montali
Debtor's Counsel: Michael St. James, Esq.
St. James Law
155 Montgomery St. #1004
San Francisco, CA 94104
Tel: (415)391-7566
Email: ecf@stjames-law.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Dinesh Maniar, the Company's president.
A. Montgomery Realty's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Dinesh Maniar $500,000
2420 Pacific Avenue
San Francisco CA 94115
Diversified Investment $270,000
and Management Corporation
447 Battery Street, Suite 300
San Francisco CA 94111
PKF CPAs $60,000
HD Supply $21,141
Bartko Zankel Tarrent Miller $20,000
Franks Painting and Cleaning $18,133
Deloitte Tax LLP $18,000
Wilmar $17,731
Fritz, Byrne, Head and Harris $15,000
Pacific Gas and Electric $14,000
J4 Development $11,495
Employment, Etc. $9,594
Thyssen Krup Elevator $9,000
BHW UCS $8,400
Nicolas Professional Cleaning $7,893
Floor Trends $5,172
Maldonado Nursery $5,056
CHM Mechanical, Inc. $5,000
Mendo's Painting $4,260
TNT Glass $3,816
MORTGAGES LTD: Universal Equity Led to Close on $20MM Loan
----------------------------------------------------------
Amy Wolff Sorter at GlobeSt.com reports that Universal Equity
Group LLC has led an investment group to close on a $20 million
loan of Mortgages Ltd.'s reorganization plan.
GlobeSt.com quoted Universal Equity managing director Rob
Verhaaren as saying, "What our financing does is provide enough
operating capital so they can go out and recover the most they can
from assets. The objective is not to go out and start making
loans. It's to negotiate with borrowers, perhaps restructure
loans with borrowers and liquidate assets."
Mr. Verhaaren said that by lending the money to Mortgages Ltd.,
Universal Equity can benefit from origination fees and interest
rate that is part and parcel of the financing, GlobeSt.com states.
Universal Equity, according to GlobeSt.com, has the option to
purchase some of the assets that Mortgages Ltd. might offer up for
sale. "We get a lot of visibility simply by virtue of being the
financing source for the newly emerged entity," the report quoted
Mr. Verhaaren as saying.
GlobeSt.com relates that Mortgages Ltd. has a remaining loan
portfolio worth about $925 million.
Phoenix, Arizona-based Mortgages Ltd. -- http://www.mtgltd.com/
-- acted as a full service private lender prior to filing for
bankruptcy. Through its licensed broker dealer, Mortgages Ltd.
Securities, ML received money raised from approximately 2,700
investors for placement into loans secured by real estate located
solely in Arizona. These accredited investors financed the
lending operations of ML and received as collateral for their
funding direct fractional interests in "pass through" loans and
deeds of trust or membership interests in "Opportunity Funds"
which held fractionalized interests in loans and deeds of trust.
Mortgages Ltd. was the subject of an involuntary Chapter 7
petition dated June 20, 2008, filed by KGM Builders Inc. -- a
contractor for Grace Communities, a borrower of the company --
in the U.S. Bankruptcy Court for the District of Arizona.
Central & Monroe LLC and Osborn III Partners LLC, divisions of
Grace Communities, sought the appointment of an interim trustee
for Mortgages Ltd. in the Chapter 7 proceeding.
Mortgages Ltd. is also facing lawsuits filed by Grace Communities
and Rightpath Limited Development Group for its alleged failure to
fully fund loans. Mortgages Ltd. denied the charges. It has
filed a motion to dismiss the Rightpath suit.
The Debtor's case was converted to a chapter 11 proceeding on
June 24, 2008 (Bankr. D. Ariz. Case No. 08-07465). Judge Sarah
Sharer Curley presides over the case. Carolyn Johnsen, Esq., and
Bradley Stevens, Esq., at Jennings, Strouss & Salmon P.L.C.,
replaced Todd A. Burgess, Esq., at Greenberg Traurig LLP, as
counsel to the Debtor. As of December 31, 2007, the Debtor had
total assets of $358,416,681 and total debts of $350,169,423.
NANOGEN INC: Completes Asset Sale to Financiere Elitech
-------------------------------------------------------
Nanogen, Inc., reported that on July 2, 2009, pursuant to an Asset
Purchase Agreement dated May 13, 2009, as amended, Nanogen and its
subsidiaries Epoch BioSciences, Inc., and Nanotronics, Inc.,
completed the sale of substantially all of their assets to
Financiere Elitech SAS and its designee DxCon, Inc., in a sale
conducted under the provisions of Section 363 of the U.S.
Bankruptcy Code and approved by the U.S. Bankruptcy Court for the
District of Delaware on June 24, 2009. The aggregate gross
purchase price for the Section 363 Sale is $25,685,000.
Elitech plans to operate the Nanogen molecular diagnostics
business including Nanogen Advance Diagnostics (Italy) and the
Bothell, Washington units. DxCon will operate the rapid
diagnostics business based out of San Diego, California.
On July 6, 2009, Nanogen filed with the Delaware Secretary of
State a Certificate of Amendment of Restated Certificate of
Incorporation of Nanogen amending its Restated Certificate of
Incorporation to change its corporate name from "Nanogen, Inc." to
"Ngen, Inc."
The sale concludes the disposition of substantially all of the
assets of Nanogen and its U.S. subsidiaries. Management of
Nanogen believes that there will be no value for common
stockholders of Nanogen in the bankruptcy liquidation process.
Stockholders of a company in chapter 11 generally receive value
only if all claims of its secured and unsecured creditors are
fully satisfied. Nanogen believes that the claims of its
creditors won't be fully satisfied, even after completion of the
Section 363 Sale or future sales of remaining assets, if any, in
the liquidation process.
About Nanogen, Inc.
Headquartered in San Diego, California, Nanogen, Inc., is a
manufacturer of advanced human diagnostic products.
The Company and its affiliates filed for Chapter 11 on May 13,
2009 (Bankr. D. Del. Lead Case No. 09-11696). Karen B.
Skomorucha, Esq., Ricardo Palacio, Esq., and William Pierce
Bowden, Esq., at Ashby & Geddes, P.A., represent the Debtors in
their restructuring efforts. The Debtors have assets and debts
both ranging from $10 million to $50 million.
NOBLE INT'L: Affiliate Completes $1.5MM Sale of MI Facility
-----------------------------------------------------------
Noble International, Ltd., disclosed in a filing with the
Securities and Exchange Commission that Noble Metal Processing -
West Michigan, a subsidiary, consummated the sale to Concept Metal
Products, Inc., and J. Walton Properties, LLC, of certain assets
relating to operation of the Company's Spring Lake, Michigan
facility, including existing finished goods, works-in-process and
raw materials, for $1.52 million.
Headquartered in Warren, Michigan, Noble International, Ltd. --
http://www.nobleintl.com/home.html/-- provides flat, tubular,
shaped and enclosed formed structures to automotive original
equipment manufacturers and their suppliers, for use in automobile
applications, including doors, fenders, body side panels, pillars,
bumpers, door beams, load floors, windshield headers, door tracks,
door frames, and glass channels.
Noble International and its affiliates filed for Chapter 11
protection on April 15, 2009 (Bankr. E.D. Mich. Case No. 09-
51720). The Debtors proposed Foley & Lardner LLP as their general
bankruptcy counsel. Conway Mackenzie, Inc., has been tapped as
the Debtors' financial advisors. The official committee of
unsecured creditors is represented by Jaffe Raitt Heuer & Weiss,
P.C. The Debtors disclosed total assets of $190,763,000 and total
debts of $38,691,000, as of January 10, 2009.
NORTHEAST BIOFUELS: S&P Withdraws 'D' Rating on $140 Mil. Loan
--------------------------------------------------------------
Standard & Poor's Ratings Services said it withdrew its 'D' rating
on Northeast Biofuels LLC's $140 million senior secured term loan
after Sunoco Inc. (BBB/Negative/A-3) finalized its purchase of
substantially all NEB's assets.
NEB had been unable to restructure and emerge from Chapter 11, and
received bankruptcy court approval for a sale of its assets.
Sunoco purchased the plant out of bankruptcy in an April 2009
auction for $8.5 million, and the purchase was finalized June 15.
Based on the auction result and the outstanding $140 million debt
balance, the sale yielded a recovery to term loan lenders of about
6%, consistent with S&P's '6' recovery score, which indicates a
negligible (0-10%) recovery.
NRG ENERGY: Revised Exelon Offer 'A Step in the Right Direction'
----------------------------------------------------------------
NRG Energy, Inc.'s Board of Directors has unanimously determined
that the July 2, 2009 revised unsolicited proposal from Exelon
Corporation significantly undervalues NRG and is not in the best
interests of NRG's stockholders.
Exelon Chairman and CEO John Rowe said:
"The Board of Directors of NRG Energy, Inc., in consultation with
its financial and legal advisors, has thoroughly reviewed and
considered your revised offer, as detailed in your July 2nd news
release, which as of yesterday's close represented $27 per NRG
Share. The Board unanimously has rejected your proposal as it
determined that the revised offer is not in the best interest of
NRG stockholders in that it continues to substantially undervalue
NRG. Indeed, by any objective analysis, the increase in your
offer fails to adequately compensate NRG stockholders even for the
value created by NRG since your original offer was launched. The
Board also rejected this proposal due to the revised offer's
extraordinary conditionality which remains unchanged from Exelon's
original offer made last fall.
"While your revised offer is not acceptable as is, it certainly
represents a step in the right direction and is a welcome
development after more than eight months of the 0.485 offer. The
fact that you were able to increase your offer largely through
over $200 million per year of newfound synergies identified by
your consultants leaves open the possibility that, if you would
properly recognize the value created by NRG itself, you would be
able to increase your current 0.545 offer by a substantial
amount."
"To reiterate, these value creating actions by NRG include, but
are not limited to, the following:
-- NRG's Reliant Energy Acquisition -- Worth $4.50 Per Share
in Value: Your economists ascribed less than $1 per share
to the value of Reliant Energy. You will note from NRG's
revised guidance for 2009, we expect Reliant's adjusted
earnings per share to approach $1 per NRG share just
in the last eight months of 2009. Reliant Energy's
contribution to NRG's adjusted EBITDA over the same
period is expected to be over $400 million. The robust
countercyclical earnings power of Reliant's retail
franchise is just one of several reasons why the Reliant
acquisition is worth significantly more than $1 per NRG
share. We are confident, based solely on the earnings
guidance released today [July 8], that Exelon's
economists will see it the same way.
-- NRG's Unique Position in Leading the Nuclear
Renaissance: In your most recent investor presentation,
you explicitly ascribe zero value to NRG's nuclear
development program. Yet Exelon has spent tens of
millions of dollars over the past two years attempting to
develop a greenfield nuclear plant in neighboring
Victoria County. Surely Exelon, more than most, is in a
position to appreciate and properly value our nuclear
position in Texas, at the NRC and in the DOE loan
guarantee program.
-- NRG's Repowering Initiative Advances Low and No Carbon
Technologies: Cedar Bayou unit 4, NRG's new 550 megawatt
combined cycle plant in ERCOT's Houston Zone, our new
wind farms, GenConn and eSolar are just the current lead
projects in RepoweringNRG and are representative of low
carbon, asset-based EBITDA growth of a kind that is
absent from the Exelon portfolio.
-- NRG's Significant Cost and Performance Improvements:
Since 2005, NRG has executed on its FORNRG initiatives
NRG's Companywide, multi-year initiative to increase the
return on invested capital (ROIC) through operational
performance improvements. This project has seen
considerable success with over $150 million of after-tax
savings through December 2008 and planned after-tax
savings that we expect to result in approximately
$300 million of annual additional recurring free cash
flow improvements by 2012.
"These value enhancing developments add to NRG's financial
strength which your revised offer does not yet appreciate or
properly value. NRG is a Company that is on track to produce
annual EBITDA for 2009 of $2.5 billion, which represents a
compound annual growth rate in EBITDA over the past six years of
21% with a recurring free cash flow yield of 23%. It is the
unanimously held view of NRG's Board of Directors that such a
company is worth significantly more than the $27 per share that
your July 2nd offer represents.
"As we told you when we first met last September, NRG is open to
any proposal that properly reflects NRG's fundamental value and
extraordinary growth prospects. If you wish to pursue a possible
combination with NRG in a more cooperative fashion, you should
increase your July 2nd offer by an amount that properly reflects
the specific value of the NRG initiatives, especially in light of
the additional information provided today [July 8]. Our
management team then would be pleased to sit down with you or your
economists and consultants to validate and quantify the
combination synergies summarized in your July 2nd presentation and
to demonstrate further the full value of NRG's exceptional
operating franchise and its unique growth initiatives so that
Exelon could provide a reasonable measure of that value to NRG's
stockholders.
About NRG
Headquartered in Princeton, NRG Energy, Inc., owns and operates
power generating facilities, primarily in Texas and the northeast,
south central and western regions of the United States. NRG also
owns generating facilities in Australia and Germany.
As reported by the Troubled Company Reporter on July 6, 2009,
Moody's Investors Service is continuing its rating review of NRG
Energy, Inc. (Ba3 Corporate Family Rating; under review for
upgrade) following the announcement that Exelon Corp. increased
the exchange ratio of its tender offer for the common stock of NRG
by 12.4% to a ratio of 0.545 of Exelon common stock for each share
of NRG common stock from a ratio of 0.485 of Exelon common stock
for each share of NRG common stock.
NUVEEN INVESTMENTS: Moody's Affirms 'Caa1' Corp. Family Rating
--------------------------------------------------------------
Moody's Investors Service has affirmed the Caa1 corporate family
and debt ratings of Nuveen Investments, Inc., following the
announcement that the company will raise a new,
$350 million, 6-year, second-lien senior secured term loan to pre-
fund the redemption of outstanding notes due in 2010. Moody's has
assigned a long term debt rating of Caa2 to the new loan. The
outlook on the ratings is stable.
Moody's stated that Nuveen's actions ease pressure resulting from
the company's high leverage level by improving its liquidity
profile and permitting the company to focus on assets under
management growth. With the 2010 notes pre-funded, Nuveen's next
major debt hurdle will not be until 2013, when the company's $250
million revolver comes due. The company's remaining debt, nearly
$3.8 billion, is due in 2014 and 2015. Moody's VP/Senior Credit
Officer Matthew Noll commented, "Nuveen has adequate liquidity and
a reasonable amount of time to restore its AUM back to levels that
will allow meaningful debt pay down." The additional capital
above the amount needed for the 2010 notes will be used for
opportunistic pay downs of the company's senior secured term loan.
Moody's commented that the Caa2 rating on the new loan reflects
the debt's position within the company's capital structure. The
second-lien term loan is junior to $2.5 billion in B3-rated, first
lien bank debt and senior to over $1 billion in Caa3-rated, senior
unsecured notes. Moody's noted that the second-lien loan will be
issued from Nuveen's existing senior secured credit facility and
will be secured by the same collateral as the first-lien term loan
without any effect on the company's single financial covenant that
presently limits the ratio of senior secured net debt to EBITDA to
under 6x. Nuveen's ability to issue additional debt under the
facility's incremental debt (accordion) provision will cease
following the new capital raise.
After the expected July 15 closing, Nuveen will have over
$500 million in cash. Excess proceeds from the new loan (roughly
$75 million) must be used to pay down senior secured debt over the
next six months. The rating agency notes that the company's free
cash flow is expected to be roughly flat to slightly positive over
the near term. The cost of the new loan to Nuveen will include
amendment fees and a higher total interest expense; however,
Moody's views the transaction as favorable to the company's
overall financial flexibility, which is the dominant driver of the
firm's ratings given its extremely high leverage.
Overall, Moody's still views Nuveen's leverage as clearly
excessive in the context of the current turbulent markets. The
Caa1 corporate family rating already incorporated a high potential
for a modest capital restructuring and a strong potential for some
small losses to creditors. Based on expectations of a roughly
flat equity market for the remainder of 2009, Nuveen's total debt
to EBITDA will likely exceed 10x over the short term.
Nuveen's ratings could be upgraded if these hurdles can be met:
quarterly average AUM levels rise to above $140 billion; quarterly
EBITDA is sustained above $125 million; net quarterly asset
inflows exceed 1% of beginning of quarter AUM. Nuveen's ratings
could see downward rating pressure if any of these occur: average
AUM drops to $90 billion; the S&P 500 index level remains in the
600's for an extended period of time; quarterly EBITDA falls to
below $85 million, or if the company is experiencing quarterly net
outflows in excess of 2.5% of beginning of quarter AUM.
These ratings were affirmed with a stable outlook:
* Nuveen Investments, Inc. -- senior secured debt at B3,
corporate family at Caa1, senior unsecured debt at Caa3.
These ratings were assigned with a stable outlook:
* Nuveen Investments, Inc. -- senior secured second-lien debt
Caa2.
Nuveen Investments, Inc., headquartered in Chicago, is a US-
domiciled holding company whose subsidiaries provide investment
management products and services to retail and institutional
investors predominantly in the US. The company's assets under
management were $128 billion as of June 30, 2009.
The last rating action was on April 1, 2009, when Nuveen's
corporate family rating was downgraded to Caa1 (stable outlook)
from B2 following a period of review for possible downgrade.
Moody's Corporate Family Ratings are opinions of a corporate
family's ability to honor all of its financial obligations and is
assigned to a corporate family as if it had a single class of debt
and a single consolidated legal entity structure.
PARK AVENUE BSD: Case Summary & 4 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Park Avenue BSD, LLC
1072 Woodycrest
Bronx, NY 10452
Bankruptcy Case No.: 09-14389
Chapter 11 Petition Date: July 8, 2009
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Allan L. Gropper
Debtor's Counsel: Edward E. Neiger, Esq.
Neiger LLP
111 John Street
New York, NY 10038
Tel: (212) 267-7342
Fax: (212) 406-3677
Email: eneiger@neigerllp.com
Total Assets: $5,800,000
Total Debts: $5,660,000
A full-text copy of the Debtor's petition, including a list of its
4 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/nysb09-14389.pdf
The petition was signed by Isaac Hershkowitz.
PORTRUSH PETROLEUM: Posts C$410,000 Net Loss in 2008
----------------------------------------------------
Portrush Petroleum Corp. disclosed its financial results for the
year ended December 31, 2009. At December 31, 2009, the Company's
balance sheet showed total assets of C$1,028,804, total
liabilities of C$888,336 and stockholders' equity of C$140,468.
For the year ended December 31, 2008, the company posted net loss
of C$410,000 compared with net loss of C$1,346,000 for the same
period in the previous year.
The Company noted that its financial statements are prepared on a
going concern basis. "The going concern assumption is only
appropriate provided that additional financing continues to become
available," the Company acknowledges.
Liquidity and Capital Resources
For year ended December 31, 2008, the Company related that its
working capital was a negative C$641,725 compared with a negative
C$ 91,000 at December 31, 2007. The Company generated C$669,710
in revenue from oil/gas production.
The Company says it has insufficient financial resources to
undertake by itself the exploration and development of its planned
exploration and development programs during Fiscal 2009. Long-
term, the payment of property payments and the development of its
property interests will depend upon the Company's ability to
obtain financing through the joint venturing of projects, private
placement financing, public financing or other means. There is no
assurance that the Company will be successful in obtaining the
required financing or that financing will be available on terms
and conditions acceptable to the Company or that will not cause
significant dilution to shareholders.
A full-text copy of the FORM 20-F is available for free at:
http://ResearchArchives.com/t/s?3ecf
About Portrush Petroleum
Based in Vancouver, Canada, Portrush Petroleum Corp. (CVE:PSH) --
http://www.portrushpetroleum.com/-- is a junior oil and natural
gas exploration and production company. The Company is focused on
its core property the Mission River project, situated in Refugio
and Goliad Counties, Gulf Coast, Texas. The Company holds gas
prospect located in the Moore Township. The Company holds 12
wells program in the Mission River Project. The daily production
from the field is 2,500 thousand cubic feet per day (Mcfd) and 90
barrels of oil. The Company holds interest in two Silurian-
Ordovician prospects located in St. Clair County. The project
consists of two oil wells with excess gas being flared.
Going Concern Doubt
Davidson & Company LLP's audit report on Portrush's consolidated
financial statements is expressed in accordance with Canadian
reporting standards which do not permit a reference to events and
conditions which cast substantial doubt on the Company's ability
to continue as a going concern, when these are adequately
disclosed in the financial statements.
PRESTIGE MERCURY: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Prestige Ford-Lincoln-Mercury, Inc.
dba TA Pounding Milll Ford-Lincoln-Mercury Inc.
12764 George C. Perry Highway
Pounding Mill, VA 24637
Bankruptcy Case No.: 09-71721
Chapter 11 Petition Date: July 8, 2009
Court: United States Bankruptcy Court
Western District of Virginia (Roanoke)
Judge: William F. Stone Jr.
Debtor's Counsel: A. Carter Magee Jr., Esq.
Magee Foster Goldstein & Sayers
Po Box 404
Roanoke, VA 24003
Tel: (540) 343-9800
Email: cmagee@mfgs.com.com
Total Assets: $6,027,318
Total Debts: $9,371,645
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/vawb09-71721.pdf
The petition was signed by David M. Maynard, president of the
Company.
QUALITY STORE: LBO Payouts Cannot Be Recovered, Court Rules
-----------------------------------------------------------
The U.S. Court of Appeals for the Sixth Circuit has ruled that
payouts made to former shareholders of Quality Stores Inc. as a
result of a leveraged buyout transaction that helped tip the
company into bankruptcy cannot be recovered by the estate because
the transfers were made through an intermediary bank, and not
directly by the retailer, according to Law360.
Based in Muskegon, Michigan, Quality Stores Inc. is a specialty
retailer of farm and agriculture-related merchandise.
On October 22, 2001, the Company was sent to bankruptcy after
a group of holders of the 10-5/8% senior notes filed an
involuntary petition before the U.S. Bankruptcy Court for the
Western District of Michigan, in Grand Rapids. Under laws
relating to an involuntary bankruptcy filing, the Company is
permitted to operate its business in the ordinary course, unless
the Court orders otherwise.
QUANTUM CORP: S&P Raises Subordinated Rating to 'CCC' From 'C'
--------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its corporate
credit rating on Quantum Corp. to 'B-' from 'CC'. S&P also raised
the company's subordinated rating to 'CCC' from 'C'. S&P has
removed all ratings from CreditWatch, where they were placed on
April 3, 2009. The outlook is negative.
In addition, S&P raised Quantum's senior secured rating to 'B'
(one notch above the corporate credit rating) from 'CC' and
revised S&P's recovery rating on the debt to '2' from '3'. The
'2' recovery rating indicates expectations for substantial (70%-
90%) recovery in the event of a payment default. The recovery
rating on the subordinated debt is unchanged at '6', indicating
negligible recovery (0%-10%) recovery.
"The rating action on Quantum reflects the elimination of near-
term refinancing risk and S&P's current assessment of the
company's near- to mid-term operating prospects and financial
profile," said Standard & Poor's credit analyst Lucy Patricola.
The EMC Corp. (A-/Stable/--) refinancing satisfied the senior
lenders' requirement that at least $135 million of convertible
debt be refinanced by February 2010. At the same time, EMC has
agreed to prepay $40 million of future license fees, proceeds of
which will be used to reduce senior debt. Additionally, Quantum
has agreed to prepay $20 million of senior debt using cash on
hand.
RDJR HOLDINGS: Case Summary & 7 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: RDJR Holdings, LLC
3046 N. Sawyer
Mesa, AZ 85207
Bankruptcy Case No.: 09-15721
Chapter 11 Petition Date: July 8, 2009
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Eileen W. Hollowell
Debtor's Counsel: Paul Sala, Esq.
Allen, Sala & Bayne, PLC
Viad Corporate Center
1850 N. Central Ave., #1150
Phoenix, Az 85004
Tel: (602) 256-6000
Email: psala@asbazlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
7 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/azb09-15721.pdf
The petition was signed by Ron Brown, managing member of the
Company.
REFCO INC: Plan Admin. Makes 7th Distribution to Creditors
----------------------------------------------------------
The Plan Administrator of Refco Inc. and its debtor-affiliates,
including Refco F/X Associates, LLC, notified the Court that on
June 30, 2009, the plan administrator made a seventh distribution
of (i) Allowed Claims against the Debtors and (ii) Additional
Property to holders of Allowed Class RCM Securities Customer
Claims.
Distributions for Allowed Secured, Administrative or Priority
Claim Securities Customer Claims aggregate $55,913, while Allowed
Class 5(a) General Unsecured Claims total $4,962,828.
The Seventh Distribution will result in:
* holders of Allowed Class 5(a) receiving a distribution of
approximately 2.24% of their Allowed Claim amounts;
* contributions being made to the Disputed Claims Reserve at
the same percentage for liquidated, but unresolved Claims
against the Debtors; and
* additional contributions being made to the Disputed Claims
Reserve to establish cushion reserves at an amount that the
Plan Administrator determines is reasonable.
A complete schedule of the Seventh Allowed Claims Distributions
is available for free at:
http://bankrupt.com/misc/Refco7thAllowedClaimsDistribution.pdf
Any claim asserted against the Debtors that is not referenced in
the Schedule has either been expunged, subordinated to a class
below Class 5(a), or identified as an Old Equity Interest and
thus, not entitled to share in the Distributions.
Certain holders of Allowed Class 5(a) Claims have also received
distributions from the Debtors on account of their Allowed Class
4 Securities Customer Claims and have thus either been capped at
a 100% recovery from prior distributions or may be capped out in
connection with the Seventh Allowed Claims Distribution. Any
amounts that would have otherwise been paid to such claimants
will be recycled to other holders of Class 5(a) Contributing
Debtors General Unsecured Claims in accordance with the Plan.
With respect to Additional Property, the RCM Plan Administrator
has established (i) the Capped Claims Special Reserve and (ii)
the 502(h) Special Reserve, which were withheld from
distributions pending resolution of certain disputes.
Pending resolution of certain re-allocation issues, the RCM Plan
Administrator created the Special Reserve pursuant to Section
502(h) of the Bankruptcy Code, as a special reserve out of
Additional Property of $3,000,000. The RCM Plan Administrator is
making no distribution of the funds held in the Capped Claims
Special Reserve at this time, but will in the near future file a
motion with the Court seeking an order to resolve the issue.
Pursuant to the Plan, as of the date of the Seventh AP
Distribution, the RCM Plan Administrator will have received
$599.5 million of Additional Property from the Debtors, of which
additional $50 million is to be received by the Seventh AP
Distribution in June 2009. The Plan Administrator has also
received Additional Property from other sources totaling
approximately $101.8 million.
As a result of the Additional Property received by the RCM Plan
Administrator since the date of the sixth interim distribution of
Additional Property, $80.03 million is now available for the
distribution -- included within which is the release of the
$4.0 million Capped Claims Special Reserve -- with a portion of
the amount being placed in the Disputed Claims Reserve. A further
$3.0 million continues to be retained in the 502(h) Special
Reserve.
Under the Seventh AP Distribution, the RCM Plan Administrator
intended to distribute approximately $80.1 million from
Additional Property to the claimants. A schedule of the Claims
and their treatments with respect to the Distribution is
available for free at:
http://bankrupt.com/misc/Refco7thPropertyDistribution.pdf
The RCM Plan Administrator will also reserve $300,000 for RCM
FX/Unsecured Claims in cash in the RCM Disputed Claims Reserve
and will continue to reserve $3.0 million in the 502(h) Special
Reserve of Additional Property.
About Refco Inc.
Headquartered in New York, Refco Inc. -- http://www.refco.com/
-- is a diversified financial services organization with
operations in 14 countries and an extensive global institutional
and retail client base. Refco's worldwide subsidiaries are
members of principal U.S. and international exchanges, and are
among the most active members of futures exchanges in Chicago,
New York, London and Singapore. In addition to its futures
brokerage activities, Refco is a major broker of cash market
products, including foreign exchange, foreign exchange options,
government securities, domestic and international equities,
emerging market debt, and OTC financial and commodity products.
Refco is one of the largest global clearing firms for
derivatives. The company has operations in Bermuda.
The company and 23 of its affiliates filed for Chapter 11
protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05-
60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher
& Flom LLP, represented the Debtors in their restructuring
efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the
Official Committee of Unsecured Creditors. Refco reported
US$16.5 billion in assets and US$16.8 billion in debts to the
Bankruptcy Court on the first day of its Chapter 11 cases.
The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its Direct and Indirect Subsidiaries,
including Refco Capital Markets, Ltd., and Refco F/X Associates,
LLC, on December 15, 2006. That Plan became effective on
December 26, 2006. Pursuant to the plan, RJM, LLC, was named plan
administrator to reorganized Refco, Inc., and its affiliates, and
Marc S. Kirschner as plan administrator to Refco Capital Markets,
Ltd.
Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Refco Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
REX C-STORE LLC: Case Summary & 3 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Rex C-Store, LLC
aka Decatur Motel 6
2572 Candler Rd
Decatur, GA 30032
Bankruptcy Case No.: 09-77674
Chapter 11 Petition Date: July 7, 2009
Court: United States Bankruptcy Court
Northern District of Georgia (Atlanta)
Debtor's Counsel: Joseph H. Turner Jr., Esq.
Suite D, 6139 Oakbrook Parkway
Norcross, GA 30093
Tel: (770) 480-1939
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
3 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/ganb09-77674.pdf
The petition was signed by Hament Desai, manager of the Company.
RISKMETRICS GROUP: S&P Raises Corporate Credit Rating to 'BB-'
--------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its corporate
credit rating on New York City-based RiskMetrics Group Holdings
LLC to 'BB-' from 'B+', and its first-lien debt rating to 'BB+'
from 'BB'. The outlook is stable.
"The upgrade reflects RiskMetrics' favorable operating trends
which, despite the weak economic environment, drove significantly
improved debt leverage," said Standard & Poor's credit analyst
Joseph Spence.
RITZ CAMERA: May Seek to Liquidate & Close by July 24
-----------------------------------------------------
Court documents say that Ritz Camera will seek permission from the
U.S. Bankruptcy Court for the District of Delaware to liquidate
and close by July 24 if its sale fails, to avoid paying $3 million
in rent going into September 2009.
Ritz has already closed 400 of 800 stores through going-out-of-
business sales. It hopes that the remaining 400 stores will be
purchased by going concern buyers, though liquidators are also
allowed to bid for the stores. According to Bloomberg News, the
Company said it lacked financing to operate beyond the next three
months and didn't have capital to purchase inventory for the fall
and holiday seasons. Ritz, Bloomberg relates, said it's been
talking with two potential bidders, although neither has been
willing to sign a contract so far.
V. Dion Haynes and Emma L. Carew at Washington Post report that
Ritz Camera said that it is unable to raise the cash it needs to
operate through the summer. According to court documents, Ritz
Camera said that it "may not have sufficient availability to
continue operating through the summer as a standalone entity and
to purchase inventory required for the fall holiday season."
According to court documents, Ritz Camera said that it hopes to
sell its assets. Court documents say that Ritz Camera has been in
talks with two potential bidders who would take over its 370
stores. Washington Post relates that Ritz Camera asked to
schedule an auction for July 20.
The sale could be difficult because many of the 370 remaining
stores are located in malls with high rents and declining "foot
traffic", Washington Post says, citing Millman Search Group
President Mark Millman.
Headquartered in Beltsville, Maryland, Ritz Camera Centers, Inc. -
- http://www.ritzcamera.com/-- sells digital cameras and
accessories, and electronic products. The Company filed for
Chapter 11 protection on February 22, 2009 (Bankr. D. Del. Case
No. 09-10617). Irving E. Walker, Esq., Gary H. Leibowitz, Esq.,
at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Baltimore, are
bankruptcy counsel to the Debtor. Norman L. Pernick, Esq., and
Karen M. Mckinley, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, P.A., in Wilmington, Delaware, serve as local counsel.
Thomas & Libowitz, P.A. is Debtor's special corporate counsel and
conflicts counsel. Marc S. Seinsweig, at FTI Consulting, Inc,
acts as the Debtor's chief restructuring officer. Kurtzman Carson
Consultants LLC is the claims and noticing agent. Attorneys at
Cooley Godward Kronish LLP represent the official committee of
unsecured creditors as lead counsel. The Committee selected
Bifferato LLC as Delaware counsel. In its schedules, the Debtor
listed total assets of $277 million and total debts of $172.1
million.
RIVIERA HOLDINGS: S&P Retains 'D' Rating on Senior Facilities
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its recovery rating on
Riviera Holdings Corp.'s senior secured credit facilities to '4',
indicating S&P's expectation of average (30% to 50%) recovery for
lenders upon resolution of its payment default, from '1'. The
issue-level rating on these loans remains at 'D'.
The revised recovery rating reflects a change in S&P's valuation
approach as a result of the current unfavorable development
conditions in the Las Vegas market. S&P is now using an
enterprise valuation approach for the entire company, whereas a
portion of the previous valuation considered S&P's estimate of the
value of the Riviera Las Vegas land (26 acres on the Las Vegas
Strip).
On March 31, 2009, S&P lowered its corporate credit and issue-
level ratings for Riviera to 'D', following the company's
announcement that it did not pay the approximately $4 million of
accrued interest on the company's $245 million credit facility.
The company stated in its March 2009 10-Q filing that it was
continuing to negotiate with its various creditor constituencies
to refinance or restructure its debt. Riviera added that if it is
unable to complete a refinancing or consensual out-of-court
restructuring, it would likely be compelled to seek protection
under Chapter 11 of the U.S. Bankruptcy Code.
Ratings List
Riviera Holdings Corp.
Corporate Credit Rating D/--/--
Revised Recovery Rating
Riviera Holdings Corp.
To From
-- ----
Secured Credit Facilities D D
Recovery Rating 4 1
ROGER SPINELLI: Case Summary & 11 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Roger L. Spinelli
90 Soundview Avenue
Shelton, CT 06484
Bankruptcy Case No.: 09-51316
Chapter 11 Petition Date: July 7, 2009
Court: United States Bankruptcy Court
District of Connecticut (Bridgeport)
Debtor's Counsel: Thomas B. Lynch, Esq.
Lynch Trembicki & Boynton
63 Cherry Street
Milford, CT 06460
Tel: (203) 878-4669
Email: lynch@lemblaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of Mr. Spinelli's petition, including a list of
his 11 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/ctb09-51316.pdf
The petition was signed by Mr. Spinelli.
ROUGE INDUSTRIES: Implements Joint Plan of Liquidation
------------------------------------------------------
On July 1, 2009, the U.S. Bankruptcy Court for the District of
Delaware served notice that the Joint Plan of Liquidation of Rouge
Industries, Inc., et al., and the official committee of unsecured
creditors, as amended, became effective pursuant to Article XI of
the Plan on June 30, 2009.
The Joint Plan of Liquidation under Chapter 11 of the Bankruptcy
Code of Rouge Industries, Inc., and its affiliated debtors was
confirmed by the Court on May 4, 2009.
A full-text copy of the Debtors and the Official Committee of
Unsecured Creditors' Joint Plan of Liquidation under Chapter 11 of
the Bankruptcy Code, dated as of April 20, 2009, is available for
free at:
http://bankrupt.com/misc/rouge.planofliquidation.pdf
Pursuant to the Joint Plan, each Holder of an Allowed Unsecured
Claim under Class 3 will receive its Pro Rata share of the Initial
Class 3 Distribution Amount. On each Periodic Distribution Date,
each Holder of an Allowed Unsecured Claim will receive its Pro
Rata share of the periodic Class 3 Distribution Amount.
Equity Interests under Class 8 will be cancelled and the Holders
of Equity Interests will not receive or retain any distribution or
property under the Plan.
About Rouge Industries
Based in Dearborn, Michigan, Rouge Industries, Inc., is an
integrated producer of flat-rolled steel. Rouge Industries,
together with Rouge Steel Company, QS Steel Inc., and Eveleth
Taconite Company, filed for Chapter 11 protection on
October 23, 2003 (Bankr. D. Del. Lead Case No. 03-13272).
Adam G. Landis, Esq., Kerri K. Mumford, Esq., Rebecca L. Butcher,
Esq., at Landis, Rath & Cobb, LLP, Alicia Beth Davis, Esq., Daniel
B. Butz, Esq., Donna L. Culver, Esq., Donna L. Harris, Esq., Eric
D. Schwartz, Esq., Gregory Thomas Donilon, Esq., Gregory W.
Werkheiser, Esq., Robert J. Dehney, Esq., Thomas F. Driscoll,
Esq., William H. Sudell, Jr., at Morris, Nichols, Arsht & Tunnell
LLP, and Joanna Flynn, Esq., at Akin Gump Strauss Hauer & Feld
LLP, represent the Debtors. The U.S. Trustee for Region 3
appointed creditors to serve on an Official Committee of Unsecured
Creditors. Gaston Plantiff Loomis, II, Esq., Kurt F. Gwynne,
Esq., Richard Allen Keuler, Jr., Esq., at Reed Smith LLP, and
Thomas Joseph Francella, Jr., Esq., at Whiteford Taylor Preston
LLC, serve as counsel to the Official Committee of Unsecured
Creditors. When the Debtors filed for protection from their
creditors, they listed $558,131,000 in total assets and
$558,131,000 in total debts.
SEA LAUNCH: Section 341(a) Meeting Slated for July 31
-----------------------------------------------------
Roberta A. DeAngelis, the United States Trustee for Region 3, will
convene a meeting of creditors of Sea Launch Company LLC and its
debtor-affiliates on July 31, 2009, 11:30 a.m., at J. Caleb Boggs
Federal Building, 2nd Floor, Room 2112 in Wilmington, Delaware.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
meeting of creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible officer of the
Debtors under oath about the Company's financial affairs and
operations that would be of interest to the general body of
creditors.
Sea Launch Co. is a satellite-launch services provider that offers
commercial space launch capabilities from the Baikonur Space
Center in Kazakhstan. Its owners include Boeing Co., RSC Energia,
and Aker ASA.
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.
SEA LAUNCH: Proposes Young Conaway as Bankruptcy Counsel
--------------------------------------------------------
Sea Launch Company LLC and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for permission to
employ Young Conaway Stargatt & Taylor LLP as attorneys.
The firm will:
a) provide legal advice with respect to the Debtors' powers
and duties as debtors-in-possession in the continued
operation of their business, management of their
properties and sale of their assets;
b) prepare and pursue confirmation of a plan and approval of
a disclosure statement;
c) prepare on behalf of the Debtors necessary applications,
motions, answers, orders, reports and other legal papers;
d) appear in Court and to protect the interests of the
Debtors before the Court; and
e) perform all other legal services for the Debtors which may
be necessary and proper in these proceedings.
The firm's fees will be based on the rates of its professionals:
Professionals Hourly Rates
------------- ------------
Joel A. Waite, Esq. $610
Kenneth J. Enos, Esq. $310
Dennis Mason $210
The Debtors assure the Court that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
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.
SEA LAUNCH: Files Application to Hire Alston & Bird as Co-Counsel
-----------------------------------------------------------------
Sea Launch Company LLC and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for permission to
employ Alston & Bird LLP as co-counsel.
The firm will:
a) assist the Debtors in the preparation of their schedules,
statements of affairs, and the periodic financial reports
required by the Bankruptcy Code, the Bankruptcy Rules or
any order of the Court;
b) assist the Debtors in consultations, negotiations and all
other dealings with creditors, equity security holders
and other parties-in-interest concerning the
administration of this case;
c) prepare pleadings, conducting investigations and making
court appearances incidental to the administration of the
Debtors' estates;
d) advise the Debtors of their rights, duties and
obligations under the Bankruptcy Code, Bankruptcy Rules,
Local Rules and Orders of this Court;
e) assist the Debtors in the development and formulation of
a plan The firm's fees will be based on the rates of its
professionals and other means to maximize value to their
estates, including the preparation of a plan, disclosure
statement and any related documents for submission to
this Court and to the Debtors' creditors, equity holders,
and other parties in interest;
f) advise and assist the Debtors with respect to litigation;
g) render corporate and other legal advice and performing
all those legal services necessary and proper to the
functioning of the Debtors during the pendency of the
Chapter 11 cases; and
h) take any and all necessary actions in the interest of the
Debtors and their estates incident to the proper
representation of the Debtors in the administration
of these cases.
The firm's fees will be based on the rates of its professionals:
Professionals Hourly Rates
------------- ------------
Dennis J. Connolly, Esq. $720
Matthew W. Levin, Esq. $640
Wendy R. Reiss, Esq. $470
Sage M. Sigler, Esq. $325
The Debtors assure the Court that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
Sea Launch Co. is a satellite-launch services provider that offers
commercial space launch capabilities from the Baikonur Space
Center in Kazakhstan. Its owners include Boeing Co., RSC Energia,
and Aker ASA.
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.
SEA LAUNCH: U.S. Trustee Forms Five-Member Creditors' Committee
---------------------------------------------------------------
Roberta A. DeAngelis, the United States Trustee for Region 3,
appointed five creditors to serve on the Official Committee of
Unsecured Creditors for the Chapter 11 cases of Sea Launch Company
LLC and its debtor-affiliates.
The members of the Committee are:
a) Intelsat, Ltd.
Attn: Stephen Chernow, Esq.
3400 International Drive, NW
Washington, DC 20008
Tel: (202) 944-7771
Fax: (202) 944-7860
b) SkyTerra LP
Attn: Randy Segal
10802 Parkridge Blvd.
Reston, VA 20191
Tel: (703) 390-2718
Fax: (703) 390-6113
c) Hughes Network Systems, LLC
Attn: Dean A. Manson
11717 Exploration Lane
Germantown, MD 20876
Tel: (301) 428-5500
Fax: (301) 428-2818
d) SES Americom, Inc.
Attn: David J. Lidstene
Four Research Way
Princeton, NJ 08540
e) XM Satellite Radio Inc.
Attn: Patrick Donnelly
1221 Avenue of the Americas
New York, NY 10020
Tel: (212) 584-5180
Fax: (212) 584-5353
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.
Sea Launch Co. is a satellite-launch services provider that offers
commercial space launch capabilities from the Baikonur Space
Center in Kazakhstan. Its owners include Boeing Co., RSC Energia,
and Aker ASA.
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.
SEA LAUNCH: Wants Until Aug. 11 to File Schedules & Statements
--------------------------------------------------------------
Sea Launch Company LLC and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to further extend
until August 11, 2009, their deadline to file their schedules of
assets and liabilities, and statements of financial affairs.
An extension will improve the accuracy of their schedules and
statements, and avoid any necessary amendments, the Debtors say.
Without an extension, the Schedules will be due July 22, 2009.
Sea Launch Co. is a satellite-launch services provider that offers
commercial space launch capabilities from the Baikonur Space
Center in Kazakhstan. Its owners include Boeing Co., RSC Energia,
and Aker ASA.
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.
SENCORP: Court Establishes August 11 General Claims Bar Date
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Ohio has
established 4:00 p.m. (prevailing Eastern Standard Time) on August
11, 2009, as the general bar date for filing of proofs of claim in
SENCORP, et al.'s bankruptcy cases, and 4:00 p.m. (prevailing
Eastern Standard Time) on November 4, 2009, as the bar date with
respect to claims of governmental units.
Proofs of claim must be filed so as to be actually received by the
Noticing Agent, on or before the applicable bar date, either by
U.S Mail or by messenger or overnight courier at:
a) via U.S. Mail
The Garden City Group, Inc.
Attn: SENCORP
P.O. Box 9000 #6529
Merrick, NY 11566-9000
b) by messenger or overnight courier
The Garden City Group, Inc.
Attn: SENCORP
105 Maxess Road
Melville, NY 11747
The Debtors' Noticing Agent may be contacted toll free at
(8676) 470-5115 for assistance if there are questions concerning
the filing, amount, nature, or processing of a proof of claim.
About SENCORP
Headquartered in Cincinnati, Ohio, SENCORP makes and sells branded
pneumatic and battery powered staplers, nailers and screw systems
and collated staples, nails and screws. SENCORP's brand names are
well known in the industry for quality, reliability and service.
Certain aspects of SENCORP's businesses, including the SENCO name,
have existed for over 50 years. Most of the Company's top ten
customers have purchase products.
SENCORP and its affiliates filed for Chapter 11 on May 8 (Bankr.
S.D. Ohio Case No. 09-12869) to facilitate the sale of its assets
under 11 U.S.C. Sec. 363 to an investor group led by Wynnchurch
Capital, Ltd., and including Great Lakes Equity Partners. The
Debtors are tapping The Garden City Group, Inc., as notice, claims
and balloting agent; Mesirow Financial, Inc., as Investment
Banker; Morris-Anderson & Associates Ltd., for advice on
restructuring alternatives; Latham & Watkins LLP as bankruptcy
counsel; and Frost Brown Todd LLC as co-counsel. The secured
lenders are represented by Katten Muchin Rosenman LLP. The
Debtors listed $100 million to $500 million each in assets and
debts.
SIMMONS COMPANY: March 28 Balance Sheet Upside-Down by $367MM
------------------------------------------------------------
Simmons Company reported financial results for quarter ended
March 28, 2009.
For quarter ended March 28, 2009, the Company posted net loss of
$3.2 million compared with net income of $2.5 million for the same
period in the previous year.
At March 28, 2009, the Company's balance sheet showed total assets
of $875.6 million and total liabilities of $1.2 billion, resulting
in a stockholders' deficit of about $367.0 million.
Liquidity and Capital Resources
The Company related that the restrictive covenants in its debt
agreements restrict its ability to pay cash dividends and make
other distributions. The company's primary use of funds consists
of payments for working capital requirements, capital
expenditures, customer supply agreements, principal and interest
for its debt and acquisitions. As of March 28, 2009, the company
has $52.6 million of cash on hand and less than $0.1 million of
availability to borrow under Simmons Bedding's revolving loan
facility. As of May 30, 2009, the Company has $57.3 million of
cash on hand.
As of Sept. 27, 2008, Simmons Bedding was not in compliance with
certain covenants of its $540.0 million senior credit facility.
After being unable to obtain a waiver or an amendment from its
senior lenders to its senior credit facility, Simmons Bedding
entered into a forbearance agreement with a majority of its senior
lenders pursuant to which the senior lenders agreed to refrain
from enforcing their respective rights and remedies under the
senior credit facility. On Jan. 15, 2009, Simmons Bedding did not
make a scheduled payment of interest due on its Subordinated Notes
resulting in a default under the indenture governing the
Subordinated Notes. As a result, Simmons Bedding entered into a
forbearance agreement with a majority of the outstanding
Subordinated Notes holders, pursuant to which the noteholders
agreed to refrain from enforcing their respective rights and
remedies under the Subordinated Notes and the related indenture.
Both forbearance agreements, as amended, with its senior lenders
and the noteholders provide a forbearance period through August
14, 2009, provided that the extension of the forbearance period
with the senior lenders to Aug. 14, 2009, is subject to the
satisfaction of certain conditions on or before July 31, 2009.
The Company incurred fees and expenses in connection with the
forbearance agreements and related amendments.
As a condition to the forbearance agreement with its senior
lenders, the Company initiated a financing restructuring process
in December 2008. A special committee of independent directors
was formed by its board of directors on Jan. 23, 2009, to evaluate
and oversee proposals for restructuring its debt obligations,
including seeking additional debt or equity capital and evaluating
various strategic alternatives of the Company. There can be no
assurance that the Company will be successful in implementing a
restructuring. If the Company is unable to successfully complete
a restructuring, comply with the terms of the forbearance
agreements, or extend the forbearance periods further as needed to
successfully complete a restructuring, its payment obligations
under the senior credit facility and the Subordinated Notes may be
accelerated. An acceleration of payments or default could result
in a voluntary filing of bankruptcy by, or the filing of an
involuntary petition for bankruptcy against, Simmons Bedding, THL-
SC, Holdings, Simmons Holdco or any of its affiliates. Due to the
possibility of the circumstances occurring, the company is seeking
a negotiated restructuring, including a restructuring of its debt
obligations and/or sale of its, its affiliates or its assets,
which could occur pursuant to a pre-packaged, pre-arranged or
voluntary bankruptcy filing. Any bankruptcy filing could have a
material adverse effect on its business, financial condition,
liquidity and results of operations.
A full-text copy of the Form 10-Q is available for free at:
http://ResearchArchives.com/t/s?3ed5
About Simmons Company
Atlanta, Georgia-based Simmons Company, through its indirect
subsidiary Simmons Bedding Company -- http://www.simmons.com/--
is one of the world's largest mattress manufacturers,
manufacturing and marketing a broad range of products including
Beautyrest(R), Beautyrest Black(R), Beautyrest Studio(TM),
ComforPedic by Simmons(TM), Natural Care(R), Beautyrest
Beginnings(TM), BeautySleep(R) and Deep Sleep(R). Simmons Bedding
Company operates 19 conventional bedding manufacturing facilities
and two juvenile bedding manufacturing facilities across the
United States, Canada, and Puerto Rico. Simmons also serves as a
key supplier of beds to many of the world's leading hotel groups
and resort properties. Simmons is committed to developing
superior mattresses and promoting a higher quality sleep for
consumers around the world.
Going Concern Doubt
As reported in the Troubled Company Reporter on June 22, 2009,
PricewaterhouseCoopers LLP, in its audit report, has raised
substantial doubt about the ability of Simmons Company to continue
as a going concern.
PwC cited the Company's non-compliance with its debt covenants,
its inability to make scheduled debt repayments and uncertainty
about the ability to obtain alternative financing arrangements
within the next 12 months.
SKILLED HEALTHCARE: S&P Affirms 'B+' Corporate Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed all of
its ratings, including the 'B+' corporate credit rating, on
Skilled Healthcare Group Inc.
"The low speculative-grade rating on Foothill Ranch, California-
based Skilled Healthcare Group Inc. reflects the company's
vulnerabilities tied to its geographic concentration,
reimbursement risk, and relatively aggressive growth strategy,"
said Standard & Poor's credit analyst Cheryl Richer.
At March 31, 2009, Skilled operated in only six states, of which
California and Texas contributed 45% and 25% of first quarter
revenues, respectively. The company acquired a 74-bed facility in
Iowa in April 2009. As a moderate-size company in a limited
number of markets, Skilled is vulnerable to adverse shifts in
local economic and political developments in addition to uncertain
government and managed care reimbursement in its key areas. As of
March 31, 2009, Skilled operated 76 skilled nursing facilities and
21 wholly owned assisted living facilities in six states.
Combined, these facilities -- the company's long-term care
services segment -- generate the majority of total revenues.
Skilled nursing facilities, including integrated rehabilitation
therapy services at those facilities, provide about 84% of total
revenues. As part of its ancillary services business segment,
Skilled provides third-party rehabilitation and operates three
licensed hospices.
Medicare has grown to become Skilled's largest revenue source, at
about 36% of revenues in the first quarter of 2009. Medicare's
current reimbursement system provides incentives for nursing homes
to raise their levels of patient acuity and serve more patients
with rehabilitation needs. However, uncertain Medicare payments
are exemplified by the possibility that there may be a de facto
decline in fiscal 2010 rates, following a 3.4% increase in fiscal
2009. Moreover, adverse revisions are possible as the strain of
rapidly rising health care expenditures on the Medicare budget
continues to increase. Nevertheless, in the first quarter of
2009, reimbursement increases offset a decline in census, as
Skilled's average daily Part A Medicare rate increased by 6.9%
year over year. This resulted from both the market basket
increase and the company's strategy to drive higher patient acuity
mix through expansion of its Express Recovery Unit services.
Medicaid is the least-favorable payor to nursing homes. Skilled's
percent of total revenues derived from Medicaid has decreased to
31%, from 39% in 2004. Still, the company remains vulnerable to
changes in the program in its two major states. Notwithstanding
supplemental federal Medicaid over the next couple of years, rates
remain susceptible to state budgetary pressures related to broad
economic weakness. Skilled's operating strategy resulted in the
average daily Medicaid rate increasing by 6.6% in the three months
ended March 31, 2009, year over year, primarily the result of
increases in Texas, California, and Missouri.
Skilled's operating strategy -- focused on increasing its non-
Medicaid patient census -- has been achieving measurable success,
and the company now enjoys operating margins and a payor mix that
are superior to those of many of its peers. In addition, to help
fund growth and control debt, Skilled completed an IPO in early
2007, lowering lease-adjusted debt to EBITDA. Debt leverage was
4.6x for the 12 months ended
March 31, 2009, compared with 6.0x as of March 31, 2007.
Notwithstanding this improvement, debt-financed acquisition
activity has prevented leverage from declining further.
STANFORD GROUP: "Fantasy Island" Resort May Bring Higher Recovery
-----------------------------------------------------------------
Nigel Hamilton-Smith, liquidator and receiver-manager of Stanford
International Bank Limited, said that he may be able to repay
depositors of more than the projected 10 cents on the dollar if he
can persuade developers to build a Caribbean island resort
"fantasy island" in Guiana Island and get U.S. court-appointed
receiver, Ralph Janvey, to stop fighting him for control of
overseas assets, Laurel Brubaker Calkins of Bloomberg News
reports. Guiana Island is the largest undeveloped island in
Antigua and Barbuda.
According to the report, Mr. Hamilton-Smith said the proposed
"fantasy island" resort may not prove worth the US$3.2 billion its
owner Robert Allen Stanford claimed it was; but proper development
could generate enough value to significantly boost recovery for
investors. "We could fire-sell it as a naked bit of land . . . or
we could say, now it's got a hotel, luxury villas, a casino, boat
marinas and -- if we do all those things -- this is what its
eventual value is," the report quoted Mr. Hamilton-Smith as
saying.
Bloomberg relates Mr. Hamilton-Smith said Mr. Stanford tried to
"talk up the value" of the planned resort to a certain extent, and
that is what he is trying to do now. Bloomberg added that U.S.
prosecutors and regulators told a U.S. Judge that Mr. Stanford
inflated the value of Guiana Island 6,000-fold in a series of land
flips conducted last year.
Mr. Hamilton-Smith, the report notes, said his investigators have
located roughly US$1 billion in cash and investments in Stanford-
linked accounts and the liquid assets will only be enough to repay
SIBL's investors at the rate of roughly 10 cents on the dollar;
and any funds realized from the sale of real estate, including the
Caribbean island, would increase the amount available for
depositors.
Bloomberg adds that Mr. Hamilton-Smith said his efforts to speed
repayment to depositors has been hampered by continued conflict
with Mr. Janvey who is fighting for control of Mr. Stanford's
assets in international courts.
About Stanford International
Domiciled in Antigua, Stanford International Bank
Limited -- http://www.stanfordinternationalbank.com/-- is a
member of Stanford Private Wealth Management, a global financial
services network with US$51 billion in deposits and assets under
management or advisement. Stanford Private Wealth Management
serves more than 70,000 clients in 140 countries.
On February 16, 2009, the United States District Court for the
Northern District of Texas, Dallas Division, signed an order
appointing Ralph Janvey as receiver for all the assets and records
of Stanford International Bank, Ltd., Stanford Group Company,
Stanford Capital Management, LLC, Robert Allen Stanford, James M.
Davis and Laura Pendergest-Holt and of all entities they own or
control. The February 16 order, as amended March 12, 2009,
directs the Receiver to, among other things, take control and
possession of and to operate the Receivership Estate, and to
perform all acts necessary to conserve, hold, manage and preserve
the value of the Receivership Estate.
The U.S. Securities and Exchange Commission, on Feb. 17, charged
before the U.S. District Court in Dallas, Texas, Mr. Stanford and
three of his companies for orchestrating a fraudulent, multi-
billion dollar investment scheme centering on an US$8 billion
Certificate of Deposit program.
A criminal case was pursued against him in June before the U.S.
District Court in Houston, Texas. Mr. Stanford pleaded not guilty
to 21 charges of multi-billion dollar fraud, money-laundering and
obstruction of justice. Assistant Attorney General Lanny Breuer,
as cited by Agence France-Presse News, said in a 57-page
indictment that Mr. Stanford could face up to 250 years in prison
if convicted on all charges. Mr. Stanford surrendered to U.S.
authorities after a warrant was issued for his arrest on the
criminal charges.
The criminal case is U.S. v. Stanford, H-09-342, U.S. District
Court, Southern District of Texas (Houston). The civil case is
SEC v. Stanford International Bank, 3:09-cv-00298-N, U.S. District
Court, Northern District of Texas (Dallas).
STANFORD GROUP: Libyan Government Invested US$500 Million
---------------------------------------------------------
The Libyan government invested, in late 2008, US$500 million in
cash reserves with Stanford International Bank Limited, Anna
Driver of Reuters reports, citing a company filing.
According to the report, the court filing said that early this
year, the country has considered increasing its investment with
Robert Allen Stanford's SIBL, prompting the founder and his
girlfriend, Andrea Stoelker, to fly in to Tripoli on January 25,
2009. The report relates Mr. Stanford also met with several
officials, including Mohamed Layas, chief executive of the Libyan
Investment Authority. Reuters says it was not clear whether the
investment was recouped before the U.S. government shuttered
Mr. Stanford's network of financial firms.
According to Reuters, U.S. prosecutors cited the 2009 trip to
Libya as evidence that Mr. Stanford was a flight risk. The SIBL
founder's attorney, however, said it was only a regular business
trip.
Federal prosecutors, Bloomberg News recalls, had argued that
Mr. Stanford would flee, citing, among other factors, the
billionaire's residence outside the United States, frequent trips
on his private jet, a missing but expired passport, and a global
network of wealthy contacts.
As reported in the Troubled Company Reporter-Latin America on
July 7, 2009, Bloomberg News said Mr. Stanford's lawyer Dick
DeGuerin is seeking to re-appeal to U.S. District Judge David
Hittner to change his decision to keep Mr. Stanford in jail while
waiting for his trial. The report related one argument was that
Mr. Stanford's lost Antiguan passport was found in the possession
of Stanford Financial Group receiver, Ralph Janvey, three days
after prosecutors told Judge David Hittner they didn't know where
it was. However, the report noted, prosecutors argued that
finding the missing passport doesn't justify letting Stanford out
of jail on bail.
About Stanford International
Domiciled in Antigua, Stanford International Bank Limited --
http://www.stanfordinternationalbank.com/-- is a member of
Stanford Private Wealth Management, a global financial services
network with US$51 billion in deposits and assets under management
or advisement. Stanford Private Wealth Management serves more
than 70,000 clients in 140 countries.
On February 16, 2009, the United States District Court for the
Northern District of Texas, Dallas Division, signed an order
appointing Ralph Janvey as receiver for all the assets and records
of Stanford International Bank, Ltd., Stanford Group Company,
Stanford Capital Management, LLC, Robert Allen Stanford, James M.
Davis and Laura Pendergest-Holt and of all entities they own or
control. The February 16 order, as amended March 12, 2009,
directs the Receiver to, among other things, take control and
possession of and to operate the Receivership Estate, and to
perform all acts necessary to conserve, hold, manage and preserve
the value of the Receivership Estate.
The U.S. Securities and Exchange Commission, on Feb. 17, charged
before the U.S. District Court in Dallas, Texas, Mr. Stanford and
three of his companies for orchestrating a fraudulent, multi-
billion dollar investment scheme centering on an US$8 billion
Certificate of Deposit program.
A criminal case was pursued against him in June before the U.S.
District Court in Houston, Texas. Mr. Stanford pleaded not guilty
to 21 charges of multi-billion dollar fraud, money-laundering and
obstruction of justice. Assistant Attorney General Lanny Breuer,
as cited by Agence France-Presse News, said in a 57-page
indictment that Mr. Stanford could face up to 250 years in prison
if convicted on all charges. Mr. Stanford surrendered to U.S.
authorities after a warrant was issued for his arrest on the
criminal charges.
The criminal case is U.S. v. Stanford, H-09-342, U.S. District
Court, Southern District of Texas (Houston). The civil case is SEC
v. Stanford International Bank, 3:09-cv-00298-N, U.S. District
Court, Northern District of Texas (Dallas).
STANFORD GROUP: Owner Seeks to Access Funds to Pay Legal Fees
-------------------------------------------------------------
Andrew M. Harris and Laurel Brubaker Calkins of Bloomberg News
report that Stanford International Bank Limited owner Robert Allen
Stanford told U.S. District Judge David Godbey in Dallas that the
criminal cases against him "should be thrown out" if he doesn't
get access to his to money to pay his lawyers. Judge Godbey has
frozen Mr. Stanford's assets at the request of the U.S. Securities
and Exchange Commission.
The report relates that Mr. Stanford -- in a filing with U.S.
District Judge David Hittner in Houston, which is handling a
criminal case against him -- said the court-ordered freeze on his
assets prevents him from mounting a defense to the lawsuits filed
against him.
Judge Hittner offered to "help get the attention of the powers
that be, at least to get resolution on that point, because you've
got to start cranking up a defense."
"Throughout the duration of this case, the government has
repeatedly sought to deprive Mr. Stanford of his ability to obtain
any funds to defend himself," attorneys for Mr. Stanford said in
the 18-page submission obtained by the news agency.
Bloomberg News recalls Judge Godbey, in a July 1 ruling, denied
Mr. Stanford's request for access to his funds to pay lawyers'
fees, saying the financier hadn't complied with an earlier order
to provide an accounting of his personal assets.
About Stanford International
Domiciled in Antigua, Stanford International Bank Limited --
http://www.stanfordinternationalbank.com/-- is a member of
Stanford Private Wealth Management, a global financial services
network with US$51 billion in deposits and assets under management
or advisement. Stanford Private Wealth Management serves more
than 70,000 clients in 140 countries.
On February 16, 2009, the United States District Court for the
Northern District of Texas, Dallas Division, signed an order
appointing Ralph Janvey as receiver for all the assets and records
of Stanford International Bank, Ltd., Stanford Group Company,
Stanford Capital Management, LLC, Robert Allen Stanford, James M.
Davis and Laura Pendergest-Holt and of all entities they own or
control. The February 16 order, as amended March 12, 2009,
directs the Receiver to, among other things, take control and
possession of and to operate the Receivership Estate, and to
perform all acts necessary to conserve, hold, manage and preserve
the value of the Receivership Estate.
The U.S. Securities and Exchange Commission, on Feb. 17, charged
before the U.S. District Court in Dallas, Texas, Mr. Stanford and
three of his companies for orchestrating a fraudulent, multi-
billion dollar investment scheme centering on an US$8 billion
Certificate of Deposit program.
A criminal case was pursued against him in June before the U.S.
District Court in Houston, Texas. Mr. Stanford pleaded not guilty
to 21 charges of multi-billion dollar fraud, money-laundering and
obstruction of justice. Assistant Attorney General Lanny Breuer,
as cited by Agence France-Presse News, said in a 57-page
indictment that Mr. Stanford could face up to 250 years in prison
if convicted on all charges. Mr. Stanford surrendered to U.S.
authorities after a warrant was issued for his arrest on the
criminal charges.
The criminal case is U.S. v. Stanford, H-09-342, U.S. District
Court, Southern District of Texas (Houston). The civil case is SEC
v. Stanford International Bank, 3:09-cv-00298-N, U.S. District
Court, Northern District of Texas (Dallas).
STANFORD GROUP: SFG Employee Says He Didn't Destroy Documents
-------------------------------------------------------------
Morton Lucoff and Andrew M. Harris of Bloomberg News report that
Stanford Financial Group employee Bruce Perraud pleaded not guilty
to destroying documents sought by U.S. Officials. Mr. Perraud,
indicted by a federal grand jury in Florida, entered his plea in a
Fort Lauderdale federal court before U.S. Magistrate Judge Lurana
Snow.
"We believe that Mr. Perraud is absolutely innocent. We do not
believe that a single document was destroyed," Edward Shohat, Mr.
Perraud's lead attorney and co-counsel with his wife, Marie, told
Bloomberg News in a telephone interview.
According to the report, Mr. Perraud -- a former global security
specialist at Stanford's Fort Lauderdale office -- allegedly had a
document-shredding company destroy a 95-gallon bin full of papers
on Feb. 25, just days after the judge presiding over the U.S.
Securities and Exchange Commission case had issued an order
forbidding the alteration, removal or destruction of Stanford
Financial records.
The case is U.S. v. Perraud, 09cr60129, Southern District of
Florida (Fort Lauderdale).
About Stanford International
Domiciled in Antigua, Stanford International Bank
Limited -- http://www.stanfordinternationalbank.com/-- is a
member of Stanford Private Wealth Management, a global financial
services network with US$51 billion in deposits and assets under
management or advisement. Stanford Private Wealth Management
serves more than 70,000 clients in 140 countries.
On February 16, 2009, the United States District Court for the
Northern District of Texas, Dallas Division, signed an order
appointing Ralph Janvey as receiver for all the assets and records
of Stanford International Bank, Ltd., Stanford Group Company,
Stanford Capital Management, LLC, Robert Allen Stanford, James M.
Davis and Laura Pendergest-Holt and of all entities they own or
control. The February 16 order, as amended March 12, 2009,
directs the Receiver to, among other things, take control and
possession of and to operate the Receivership Estate, and to
perform all acts necessary to conserve, hold, manage and preserve
the value of the Receivership Estate.
The U.S. Securities and Exchange Commission, on Feb. 17, charged
before the U.S. District Court in Dallas, Texas, Mr. Stanford and
three of his companies for orchestrating a fraudulent, multi-
billion dollar investment scheme centering on an US$8 billion
Certificate of Deposit program.
A criminal case was pursued against him in June before the U.S.
District Court in Houston, Texas. Mr. Stanford pleaded not guilty
to 21 charges of multi-billion dollar fraud, money-laundering and
obstruction of justice. Assistant Attorney General Lanny Breuer,
as cited by Agence France-Presse News, said in a 57-page
indictment that Mr. Stanford could face up to 250 years in prison
if convicted on all charges. Mr. Stanford surrendered to U.S.
authorities after a warrant was issued for his arrest on the
criminal charges.
The criminal case is U.S. v. Stanford, H-09-342, U.S. District
Court, Southern District of Texas (Houston). The civil case is
SEC v. Stanford International Bank, 3:09-cv-00298-N, U.S. District
Court, Northern District of Texas (Dallas).
STILLWATER MINING: Loses Supply Contract With General Motors
------------------------------------------------------------
Stillwater Mining Company has received notice advising that
General Motors Corp. has petitioned the bankruptcy court to reject
the existing Palladium & Rhodium Supply Agreement between GM and
Stillwater Mining Company. In response, the Company expects to
file an objection with the bankruptcy court and has been in
contact with its elected representatives.
Commenting on this announcement, the Company's Chairman and CEO,
Francis R. McAllister, noted, "Obviously, we are extremely
disappointed that GM has chosen to reject our supply agreement
outright in bankruptcy. The Company has been negotiating in good
faith with GM for nearly nine months regarding the terms of this
agreement and had already implemented two interim contract
modifications at GM's request.
"The Company's PGM supply agreements with GM and Ford include
provisions that guarantee a minimum purchase price for palladium
and platinum when prices fall below stipulated levels. These
provisions are currently very beneficial to us in view of today's
relatively low PGM prices. In the absence of these agreements,
the Company will still be able to sell its production into the
market, but would lose the benefit of these pricing floors.
Because (1) the GM contract is the smaller of the two automotive
supply agreements, (2) the Company's cash position is strong, and
(3) our employees are fully committed to our effort to be a low-
cost operator, I believe the Company will be able to absorb the $5
to $10 million annual financial impact (at recent PGM prices) of
losing the GM contract, particularly if PGM prices remain at or
above their second-quarter levels. However, PGM prices have
declined in recent days, suggesting the loss of the GM floor
prices may become much more critical to the Company going forward.
We expect to meet with our employees and union representatives
shortly to discuss the urgency of this situation with them.
"We certainly recognize that the current economic downturn has
decimated the automotive industry, forcing GM and others to make
some difficult choices. At the same time it seems disingenuous to
me, during a period when preserving American jobs is such a high
domestic priority, that GM, while receiving immense financial
support from the U.S. government, would elect, as I understand it,
to continue its supply agreements with foreign palladium suppliers
while seeking to terminate an agreement with the sole U.S. miner
of palladium. While I believe the Company, absent any sustained
decline in PGM prices, will be able handle the loss of the GM
agreement, the message GM is sending to American taxpayers is
disconcerting. I find it ironic that GM is willing to ship
American taxpayer dollars to our competitors overseas while we
struggle to maintain economic operations here at home.
"Stillwater's employees at all levels have sacrificed personally,
and hundreds have lost their jobs, in the effort to move the
Company toward economic sustainability in response to the current
economic downturn. We have achieved significant progress to date
this year with regard to sustainability. The Company's mining
productivity has strengthened and cash costs per ounce are
declining, such that second quarter 2009 financial results will
exceed market expectations. The Company continues to push forward
on several fronts, recognizing that its mining and processing
operations must become still more efficient in anticipation of the
expiration of the larger Ford Motor Company supply agreement at
the end of 2010. If GM is successful in rejecting our PGM supply
agreement, that will only emphasize the strategic importance of
the Company's objective to be a safe, low-cost operator.
"It is not yet clear how all this will turn out, of course.
Resolution of the GM bankruptcy is clearly on an accelerated
timetable, limiting opportunities to intervene. We have sought
the support of our elected representatives in carrying our case
forward and weighing in on the Company's behalf in this matter.
However, it appears that right now there is reluctance in
Washington to intercede. Hopefully our Congressional delegation
will step forward in the interest of preserving jobs in Montana.
"While by nature I am optimistic that we can find a mutually
acceptable resolution to this issue, in reality that may not be
possible. Should PGM prices decline over the next several months,
loss of the GM contract ultimately could put our employees, their
families and the communities where we live in economic jeopardy.
While I believe that the long-term prospects for the metals we
produce are favorable and that our competitive position is
steadily improving, our operations are not yet sustainable at
current PGM price levels without the benefit of the floor prices
in our automotive supply agreements. Our objective is to reach
sustainability by the end of 2010, but in the interim there can be
no assurance that the Company will be able to achieve that level
of operating efficiency, nor that PGM prices will not decline
further."
About Stillwater Mining
Stillwater Mining Company -- http://www.stillwatermining.com-- is
the sole U.S. producer of palladium and platinum and is the
largest primary producer of platinum group metals outside of South
Africa and Russia. The Company's shares are traded on the New
York Stock Exchange under the symbol SWC.
As reported by the Troubled Company Reporter on May 12, 2009,
Moody's Investors Service commented that Stillwater Mining
Company's performance and relatively healthy cash position are
generally in line with Moody's expectations and therefore will not
immediately impact the company's ratings, including the Caa1
corporate family rating, or negative rating outlook.
According to the TCR on December 29, 2008, Standard & Poor's
Ratings Services said that it lowered its corporate credit rating
on Stillwater Mining Co. to 'B-' from 'B+'. At the same time, S&P
lowered its rating on the Company's $181.5 million convertible
notes due 2028 to 'B-' from 'BB-' and revised the recovery rating
to '3' from '2'.
STOCK BUILDING: Fired 81 Workers Before Emerging From Bankruptcy
----------------------------------------------------------------
Lee Weisbecker at Charlotte Business Journal reports that Stock
Building Supply Holdings, LLC, has laid off about 81 employees at
the Company's Raleigh headquarters, days before emerging from
Chapter 11 bankruptcy.
According to Business Journal, layoffs were made on June 26 at
Stock Building's corporate headquarters. Stock Building employed
about 18,000 workers at well over 250 branch locations nationwide
during the housing boom in 2006.
Raleigh, North Carolina-based Stock Building Supply --
http://www.stockbuildingsupply.com/-- is a leading supplier of
building materials to professional home builders and contractors
in the United States. Stock operates out of 19 markets including
Washington, DC; Paradise, PA; Richmond, VA; Raleigh-Durham,
Charlotte and Winston-Salem/Greensboro, NC; Greenville and
Columbia, SC; Atlanta, GA; Austin, Amarillo, Houston, Lubbock and
San Antonio, TX; Albuquerque, NM; Salt Lake City and Southern UT;
Spokane/Northern Idaho; and Los Angeles, CA.
The Company and 25 of its affiliates filed for Chapter 11
protection on May 6, 2009 (Bankr. D. Del. Lead Case No. 09-11554).
Shearman & Sterling LLP and Young, Conaway, Stargatt & Taylor,
represent the Debtors in their restructuring efforts. The Debtors
selected FTI Consulting as restructuring consultant. When the
Debtors' sought for protection from their creditors, they listed
assets between $50 million and
$100 million, and debts between $10 million and $50 million.
Stock Building Supply completed its financial restructuring and
emerged from Chapter 11. The Company's Plan of Reorganization was
confirmed by the United States Bankruptcy Court for the District
of Delaware on June 15, 2009.
SUPERVALU INC: Fitch Affirms Issuer Default Rating at 'BB-'
-----------------------------------------------------------
Fitch Ratings has affirmed these ratings on SUPERVALU Inc. and its
subsidiaries and revised the Rating Outlook to Stable from
Positive.
SUPERVALU Inc.:
-- Issuer Default Rating at 'BB-';
-- $2 billion revolving bank credit facility at 'BB';
-- $1.25 billion Term Loan A at 'BB';
-- $750 million Term Loan B at 'BB';
-- Senior unsecured notes at 'BB-'.
New Albertson's, Inc. (New Albertsons) and American Stores, Inc.
(American Stores)
-- Senior unsecured notes at 'BB-'.
In addition, Fitch assigns IDR's of 'BB-' to the New Albertson's
and American Stores entities. As of Feb. 28, 2009, the company
had $8.48 billion of debt outstanding including capital leases.
The revision in Outlook to Stable reflects the expectation that
SUPERVALU's operating performance and credit metrics will continue
to be pressured given the current economic and competitive
environment. In addition to the pressures from the current
operating environment, the ratings continue to reflect SUPERVALU's
diverse geographic presence and operating formats as well as its
commitment to debt reduction and improved liquidity position.
Future rating decisions will consider any changes to the company's
operating strategy in its endeavor to stabilize revenues and grow
market share.
SUPERVALU is one of the largest operators in the U.S. grocery
business with annual sales of about $43 billion across 2,421 food
stores and supply chain services operations. While the company
has been implementing a strategy to improve its in-store
execution, the quality of its store base and its merchandising,
operating performance has been pressured by the challenging
operating and competitive environment. Most recently, SUPERVALU
announced that for the first quarter ended June 20, 2009, the
difficult operating environment, price investments and promotional
spending resulted in identical store sales of approximately -3%
and lower operating margins. This follows identical store sales
of -1.2% and gross margin decline of 25 basis points to 22.7% in
fiscal 2009.
Fitch expects that the company's sales and operating profit will
remain challenged given the operating environment and as the
company continues to invest in price. In addition, credit metrics
are expected to be pressured despite lower debt levels. For the
fiscal year ended Feb. 28, 2009 total adjusted debt/EBITDAR was
3.9 times (x) and EBITDAR coverage of interest and rents was 2.8x,
essentially flat with the prior year, with debt lower by $349
million in fiscal 2009. The company is expected to continue to
direct a significant portion of cash flow to debt reduction over
time.
SUPERVALU's liquidity position has improved following the April
2009 issuance of $1 billion of senior unsecured notes with
proceeds used to refinance existing debt including about
$710 million of notes tendered and put in May 2009. The company
has about $400 million of remaining debt maturities and
amortizations in fiscal 2010 and had $1.357 billion of
availability under its $2 billion revolver as of Feb. 28, 2009.
Future debt maturities total about $1.1 billion in fiscal 2011,
$600 million in fiscal 2012, and $1.4 billion in fiscal 2013.
The company's $2 billion, five-year revolving credit facility
expiring on June 2, 2011, $506 million Term Loan A maturing on
June 2, 2011; and $1.116 billion Term Loan B maturing on June 2,
2012 are at the holding company level and are guaranteed by each
material subsidiary and secured by a pledge of equity interest in
those material subsidiaries, limited by existing bond indentures.
As a result, this debt has been given 'BB' ratings. The company's
$5.221 billion of senior unsecured notes and debentures as of Feb.
28, 2009 are located at the SUPERVALU, New Albertson's, American
Stores holding company levels. The American Stores debt has a
downstream guarantee from SUPERVALU, Inc. New Albertson's and
American Stores are wholly owned subsidiaries of SUPERVALU and
Fitch views these entities as having stronger or equivalent credit
profiles to SUPERVALU. As there are no restrictions on the cash
flows from the New Albertson's and American Stores entities, these
are rated on a consolidated basis.
THOMAS NICKEL: Case Summ. & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Thomas Arthur Nickel
3402 N. Stone Avenue
Tucson, AZ 85705
Bankruptcy Case No.: 09-15714
Chapter 11 Petition Date: July 8, 2009
Court: United States Bankruptcy Court
District of Arizona (Tucson)
Judge: James M. Marlar
Debtor's Counsel: Eric Slocum Sparks, Esq.
110 S Church Ave #2270
Tucson, AZ 85701
Tel: (520) 623-8330
Fax: (520) 623-9157
Email: eric@ericslocumsparkspc.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of Mr. Nickel's petition, including a list of his
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/azb09-15714.pdf
The petition was signed by Mr. Nickel.
TRIBUNE CO: Incapital to Buy Cubs, Ballpark Sold for $900 Million
-----------------------------------------------------------------
Chicago-based Incapital LLC, has agreed to buy the Chicago Cubs
professional baseball team from Tribune co. for $900 million,
Bloomberg reported, citing a person familiar with negotiations.
Wrigley Field is part of the sale to Tom Ricketts, the chairman of
Incapital LLC, according to the report. Tribune, according to
Bloomberg, said the two sides are working on a definitive
agreement.
WBBM reported that Tribune Co. on July 7 denied a Reuters report
that it has agreed to terms for the sale of the Chicago Cubs to a
group led by private equity investor Marc Utay. "We have not
reached an agreement on terms with any party," said Tribune
spokesman Gary Weitman, according to WBBM.
The Chicago Tribune, citing two people familiar with negotiations,
reported on July 8 that the Tribune continues to discuss a deal
for the Cubs, Wrigley Field and other assets with a group led by
New York investor Marc Utay.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-
13141). The Debtors proposed Sidley Austion LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of December 8, 2008, the Debtors have $7,604,195,000 in total
assets and $12,972,541,148 in total debts.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TROPICANA ENT: LandCo Debtors Exit from Chapter 11 Bankruptcy
-------------------------------------------------------------
Tropicana Las Vegas Holdings LLC and its debtor affiliates or
otherwise known as the "LandCo Debtors" have emerged from
bankruptcy. Toronto-based Onex Corporation and Alex Yemenidjian
acquired a majority stake of Tropicana Las Vegas.
The other LandCo affiliates are Adamar of Nevada Corporation,
Hotel Ramada of Nevada Corporation, Tropicana Development Company
LLC, Tropicana Enterprises, Tropicana Las Vegas Resort and Casino
LLC and Tropicana Real Estate Company LLC.
The LandCo Debtors' Chapter 11 Plan has been declared effective
on July 1, 2009. Each of the conditions precedent to
consummation of the Plan, according to Joshua D. Morse, Esq., at
Hennigan, Bennett & Dorman LLP, in Los Angeles, California,
counsel to the LandCo Debtors.
Pursuant to the LandCo Plan, all trading of LandCo Credit
Facility Claims has been halted as of June 29, 2009, as the
record date for purposes of distributions to holders of LandCo
Credit Facility Claims. New LandCo Common Stock will be
disbursed to the LandCo Lenders of record under the LandCo Credit
Facility as of the LandCo Credit Facility Record Date in
accordance with the Plan.
The LandCo Plan was previously confirmed by the U.S. Bankruptcy
Court for the District Court of Delaware on May 5, 2009.
Onex's Stake in Tropicana Las Vegas
Onex Corporation related in a public statement that it has,
together with Alex Yemenidjian, acquired a majority equity stake
in the Tropicana Las Vegas Hotel and Casino following the
property's emergence from bankruptcy protection on July 1, 2009.
Under the terms of the plan of reorganization, all secured debt
holders, of which Onex was the largest, received 100% of the
equity in the resort property. Effective immediately, Mr.
Yemenidjian, former President of MGM Mirage and Onex's partner in
the gaming sector, has been appointed Chairman and Chief
Executive Officer of Tropicana Las Vegas.
Located on 34 acres at one of the busiest intersections in the
world, the Tropicana Las Vegas is one of the oldest and best-
known casinos in the United States. The property has more than
1,850 guestrooms, a 61,000 square-foot casino, multiple
restaurants, an 850-seat showroom and a signature five-acre
tropical pool area.
Tim Duncanson, Managing Director at Onex, said, "We're very
excited about partnering with Alex to rejuvenate the Tropicana
Las Vegas. We believe this casino resort has tremendous
potential and, with Alex's extraordinary talents, will become a
strong competitor on the Las Vegas Strip."
The Tropicana Las Vegas emerges from bankruptcy with no debt,
over US$10,000,000 of cash, and commitments from Onex and certain
other equity holders to invest at least US$75,000,000 of capital
to upgrade the property.
"I am delighted to have the opportunity to partner with Onex on
returning such a storied property to its former glory," commented
Mr. Yemenidjian. "With 25 years of active ownership experience,
significant resources and business acumen, Onex is the ideal
partner to transform the Tropicana Las Vegas."
A comprehensive renovation of the property is expected to
commence later this year and will include refurbishing the
resort's guestrooms, a new casino floor featuring all of the most
in-demand slot machines and table games, an array of exciting
dining experiences, and enhanced hotel amenities including the
pool and spa facilities. Additionally, Onex and Mr. Yemenidjian
plan to reinvigorate the Tropicana Las Vegas with new
entertainment, convention and banquet activity as well as a new
nightclub. The renovation of the property is expected to be
finished in 2010.
Onex relates that in 2008, it established a gaming partnership
with Alex Yemenidjian to pursue opportunities in the currently
out-of-favour gaming sector. The Tropicana Las Vegas -- a
distressed-for-control opportunity -- is the first acquisition
resulting from this partnership and the first investment by Onex
Partners III, Onex's third large-cap private equity fund. Onex
began accumulating the senior secured debt of Tropicana Las Vegas
in 2008 and ultimately acquired more than 50% of the security.
In May 2009, the plan of reorganization was confirmed and
subsequent to Alex Yemenidjian's gaming license approval on June
18, 2009, had satisfied all conditions for the plan of
reorganization to become effective. Subject to approval by the
Nevada Gaming Commission, Onex also expects to receive its gaming
license in Nevada.
Onex notes in its press release that it is one of North America's
oldest and most successful private equity firms. Onex makes
private equity investments through the Onex Partners and ONCAP
families of Funds. Onex also manages investment platforms
focused on real estate and credit securities. In total, the
Company manages approximately US$10,000,000,000. Onex generates
annual management fee income and is entitled to a carried
interest on approximately US$7,000,000,000 of third-party
capital, and also invests its own capital directly and as a
substantial limited partner in its Funds.
Onex's businesses generate annual revenues of $37,000,000,000,
have assets of $44,000,000,000 and employ 225,000 people
worldwide. Onex shares trade on the Toronto Stock Exchange under
the stock symbol OCX.
Onex also notes that Alex Yemenidjian has a long and successful
career in the gaming and entertainment sector and served as
Chairman of the Board and CEO of Metro-Goldwyn-Mayer Inc., from
April 1999 to April 2005, and was a director from November 1997
to April 2005.
Mr. Yemenidjian also served as President of MGM MIRAGE (formerly
MGM Grand, Inc.) from July 1995 through December 1999. Mr.
Yemenidjian was a director of MGM MIRAGE from 1990 to 2005. He
also served MGM MIRAGE in other capacities during this period,
including as Chief Operating Officer from June 1995 until April
1999 and as Chief Financial Officer from May 1994 to January
1998. While at MGM MIRAGE, Mr. Yemenidjian was involved with the
design and development of MGM Grand (Las Vegas), New York - New
York, and MGM Grand (Detroit). In addition, Mr. Yemenidjian
served as an executive of Tracinda Corporation, the majority
owner of both Metro-Goldwyn-Mayer Inc., and MGM MIRAGE, from
January 1990 to January 1997 and from February 1999 to April
1999. Prior to 1990, Mr. Yemenidjian was the Managing Partner of
Parks, Palmer, Turner & Yemenidjian, Certified Public
Accountants.
Bar Dates for Admin Claims, Lease Rejection Claims
Pursuant to the Notice of Effective Date for the LandCo Debtors'
Plan, certain bar dates for certain claims have also been set.
All final requests for payment of professional claims against the
LandCo Debtors must be filed and served on the counsel for the
Liquidating LandCo Debtors no later than August 17, 2009.
All requests for payment of an administrative claim against the
LandCo Debtors must be filed with Kurtzman Carson Consultants
LLC, the claims and solicitation agent, and served on the counsel
of the Liquidating LandCo Debtors no later than July 31, 2009.
Any request that is not properly filed and served by that date
will be disallowed automatically without the need for any
objection by any party.
Pursuant to the LandCo Plan and the Confirmation Order, each
executory contract and unexpired lease of the LandCo Debtors not
otherwise noted as to be assumed by the LandCo Debtors is been
deemed automatically rejected as of the Plan Effective Date. Any
proof of claim arising from the rejection of the LandCo Debtors'
executory contracts and unexpired leases pursuant to the LandCo
Plan or otherwise must be filed with KCC by the later of
(i) July 31, 2009 and (ii) 30 days after the effective date of
rejection. A contract or lease rejection claim not timely filed
will be automatically disallowed, forever barred from assertion,
and will not be enforceable.
Moreover, pursuant to the LandCo Plan and the Confirmation Order,
each executory contract and unexpired lease of the LandCo Debtors
listed on the Schedule of Assumed and Assigned Executory
Contracts and Unexpired Leases were assumed by the LandCo Debtors
and assigned to New LandCo Corporation Purchaser as of the Plan
Effective Date. The Liquidating LandCo Debtors will pay the
proposed Cure, if any, with respect to each of the Assumed
Contract. All requests for payment of a Cure Claim that differs
from the amount set forth on the Contract Schedule must be filed
with KCC by the later of (i) July 31, 2009, or (ii) 30 days after
the effective date of the contract assumption.
About Tropicana Entertainment
Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC --
http://www.tropicanacasinos.com/-- is an indirect subsidiary of
Tropicana Casinos and Resorts. The company is one of the largest
privately-held gaming entertainment providers in the United
States. Tropicana Entertainment owns eleven casino properties in
eight distinct gaming markets with premier properties in Las
Vegas, Nevada, and Atlantic City, New Jersey.
Tropicana Entertainment LLC and its debtor-affiliates filed for
Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No.
08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at
Richards Layton & Finger, represent the Debtors in their
restructuring efforts. Their financial advisor is Lazard Ltd.
Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor.
Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell
LLP represent the Official Committee of Unsecured Creditors in
this case. Capstone Advisory Group LLC is financial advisor to
the Creditors' Committee.
On April 29, 2009, Adamar of New Jersey, Inc., doing business as
Tropicana Casino and Resort, and its affiliate, Manchester Mall,
Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09-
20711). Judge Judith H. Wizmur presides over the cases. Adamar
and Manchester Mall or the New Jersey Debtors are both affiliates
of Tropicana Entertainment LLC. Manchester Mall is a wholly owned
subsidiary of Adamar that owns and operates certain real property
utilized in the New Jersey Debtors' business operations.
The New Jersey Debtors own and operate one of the largest, and one
of the most established, destination casino resorts in Atlantic
City, New Jersey, known as Tropicana Casino and Resort - Atlantic
City, which ranks third in gaming positions among Atlantic City's
11 casino properties. The New Jersey Debtors initiated the
Chapter 11 cases to effectuate a sale of substantially all their
assets in accordance with a mandate issued by the New Jersey
Casino Control Commission pursuant to the New Jersey Casino
Control Act.
Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz,
Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the
New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their
claims and notice agent. Adamar disclosed $500 million to
$1 billion both in total assets and debts in its petition.
Manchester Mall disclosed $1 million to $10 million in total
assets, and less than $50,000 in total debts in its petition.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the chapter 11
restructuring proceedings commenced by Tropicana Entertainment LLC
and its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
TROPICANA ENT: NJ Debtors Employ Fox Rothschild as Labor Counsel
----------------------------------------------------------------
Adamar of New Jersey, Inc., doing business as Tropicana Casino and
Resort, and its affiliate, Manchester Mall, Inc., -- the New
Jersey Debtors -- sought and obtained permission from the U.S.
Bankruptcy Court for the District of New Jersey to employ Fox
Rothschild LLP as their special labor counsel nunc pro tunc to
April 29, 2009.
Fox Rothschild will represent the New Jersey Debtors in matters
related to (i) the resolution of labor practice charges and
grievances pending for arbitration, (ii) the handling of union
negotiations and labor crisis management, (iii) the negotiation
of collective bargaining agreements, (iv) the conduct of
grievances and arbitration proceedings, and (v) advice on
employment issues related to corporate restructuring.
Fox Rothschild has been representing the New Jersey Debtors on
matters of this nature for approximately 15 years and as a
result, has gained an intimate knowledge of the New Jersey
Debtors' business, operations, and legal positions, Mark
Giannantonio, president and chief operating officer of the New
Jersey Debtors, told the Court.
During the 90-day period before the Petition Date, Fox Rothschild
received $168,249 in the aggregate from the New Jersey Debtors
for contemporaneous services rendered and disbursements and other
charges incurred. The firm does not have a claim against the New
Jersey Debtors as of the Petition Date, according to Michael
Barabander, a shareholder of Fox Rothschild.
Mr. Barabander noted that the New Jersey Debtors retained Cole,
Schotz, Meisel, Forman & Leonard, P.A., as their general
bankruptcy counsel. Fox Rothschild intends to carefully
coordinate its efforts with Cole Schotz and the New Jersey
Debtors to prevent needless duplication of effort, he assured the
Court.
The New Jersey Debtors will pay Fox Rothschild on an hourly
basis. The current hourly rates of the Fox Rothschild
professionals most likely to render the contemplated services
are:
Shareholder $300
Associate $300
Paralegals $150
Fox Rothschild state that it may have in the past represented,
currently represents, and may in the future represent, certain
entities that are claimants or potential claimants of the New
Jersey Debtors, or other parties-in-interest, in matters wholly
unrelated to these Chapter 11 cases. Those entities include AC
Coin Slot Service, American Guarantee Liability, Aztar, Aztar
Indiana, Bally Gaming, Black Diamond Capital Management, Buckley
Mary, and Capital One NA. Fox Rothschild has not and will not
represent these entities with respect to the New Jersey Debtors'
bankruptcy cases or the entities' respective claims against the
New Jersey Debtors, Mr. Barabander assured the Court.
Fox Rothschild does not hold or represent any interest adverse to
the New Jersey Debtors or their estates with respect to the
matters for which it is being retained, Mr. Barabander
maintained.
About Tropicana Entertainment
Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC --
http://www.tropicanacasinos.com/-- is an indirect subsidiary of
Tropicana Casinos and Resorts. The company is one of the largest
privately-held gaming entertainment providers in the United
States. Tropicana Entertainment owns eleven casino properties in
eight distinct gaming markets with premier properties in Las
Vegas, Nevada, and Atlantic City, New Jersey.
Tropicana Entertainment LLC and its debtor-affiliates filed for
Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No.
08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at
Richards Layton & Finger, represent the Debtors in their
restructuring efforts. Their financial advisor is Lazard Ltd.
Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor.
Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell
LLP represent the Official Committee of Unsecured Creditors in
this case. Capstone Advisory Group LLC is financial advisor to
the Creditors' Committee.
On April 29, 2009, Adamar of New Jersey, Inc., doing business as
Tropicana Casino and Resort, and its affiliate, Manchester Mall,
Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09-
20711). Judge Judith H. Wizmur presides over the cases. Adamar
and Manchester Mall or the New Jersey Debtors are both affiliates
of Tropicana Entertainment LLC. Manchester Mall is a wholly owned
subsidiary of Adamar that owns and operates certain real property
utilized in the New Jersey Debtors' business operations.
The New Jersey Debtors own and operate one of the largest, and one
of the most established, destination casino resorts in Atlantic
City, New Jersey, known as Tropicana Casino and Resort - Atlantic
City, which ranks third in gaming positions among Atlantic City's
11 casino properties. The New Jersey Debtors initiated the
Chapter 11 cases to effectuate a sale of substantially all their
assets in accordance with a mandate issued by the New Jersey
Casino Control Commission pursuant to the New Jersey Casino
Control Act.
Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz,
Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the
New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their
claims and notice agent. Adamar disclosed $500 million to $1
billion both in total assets and debts in its petition.
Manchester Mall disclosed $1 million to $10 million in total
assets, and less than $50,000 in total debts in its petition.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the chapter 11
restructuring proceedings commenced by Tropicana Entertainment LLC
and its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
TROPICANA ENT: NJ Debtors Employ J.H. Cohn as Financial Advisors
----------------------------------------------------------------
Adamar of New Jersey, Inc., doing business as Tropicana Casino and
Resort, and its affiliate, Manchester Mall, Inc., -- the New
Jersey Debtors -- sought and obtained permission from the U.S.
Bankruptcy Court for the District of New Jersey to J.H. Cohn LLP,
as their financial advisors, nunc pro tunc to April 29, 2009.
According to Mark Giannantonio, president and chief operating
officer of the New Jersey Debtors, JH Cohn is expected to, among
other things:
(a) assist the New Jersey Debtors in the preparation of
certain projections;
(b) assist the New Jersey Debtors' management with the
identification and implementation of short-term cash
management procedures and controls;
(c) assist the New Jersey Debtors and their counsel in the
preparation and negotiation of an asset stock purchase
agreement;
(d) assist, prepare, or review reporting for the New Jersey
Casino Control Commission and the New Jersey Division of
Gaming Enforcement and other regulatory agencies;
(e) review all financial aspects of motions and their
responses for accuracy; and
(f) perform other services as directed by the New Jersey
Debtors or their bankruptcy counsel.
During the 90-day period before the Petition date, JH Cohn
received a total of $497,527 from the Debtors for contemporaneous
services rendered and disbursements and other charges incurred.
JH Cohn does not hold any claim against the New Jersey Debtors or
their estates for prepetition services rendered, Mr. Giannantonio
said.
In addition, in connection with these matters, the New Jersey
Debtors provided JH Cohn with a $100,000 retainer for
professional services to be rendered and charges and
disbursements to be incurred by the firm on the New Jersey
Debtors' behalf after the Petition Date.
The firm will bill for its services in accordance with usual and
customary rates and will seek reimbursement for out-of-pocket
expenses incurred in connection with its services in the New
Jersey Debtors' cases. JH Cohn's current hourly rates are:
Partners $540 - $695
Manager, sr. manager, director $420 - $525
Other professional staff $180 - $350
Staff, paraprofessional $150 - $165
Bernard A. Katz, a partner at JH Cohn, told the Court that JH
Cohn does not hold or represent any entity having an adverse
interest in the New Jersey Debtors' Chapter 11 cases, although
the firm has in the past worked with, continues to work with, and
has mutual clients with certain law firms who may represent
parties-in-interest in these cases.
JH Cohn has performed and presently may be performing accounting,
tax, or consulting services for certain parties in matters
unrelated to the New Jersey Debtors' bankruptcy proceedings.
Fees for those engagements represent less than 1% of the firm's
annual revenue, according to Mr. Katz.
Mr. Katz assured the Court that JH Cohn's services to certain
entities that may be creditors of the New Jersey Debtors or
parties-in-interest in these cases do not and will not relate to,
or have any direct connection with, these bankruptcy cases.
Those entities include AIG, Alliance Capital Management, Bank of
America, Bank of New York, Barclays Bank PLC, Gary Stein, Lehman
Brothers, Inc., and Morgan Stanley.
JH Cohn has no interest adverse to the New Jersey Debtors or
their estates, and is a disinterested person within the meaning
of Sections 327(a) and 101(14) of the Bankruptcy Code, Mr. Katz
asserted.
About Tropicana Entertainment
Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC --
http://www.tropicanacasinos.com/-- is an indirect subsidiary of
Tropicana Casinos and Resorts. The company is one of the largest
privately-held gaming entertainment providers in the United
States. Tropicana Entertainment owns eleven casino properties in
eight distinct gaming markets with premier properties in Las
Vegas, Nevada, and Atlantic City, New Jersey.
Tropicana Entertainment LLC and its debtor-affiliates filed for
Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No.
08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at
Richards Layton & Finger, represent the Debtors in their
restructuring efforts. Their financial advisor is Lazard Ltd.
Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor.
Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell
LLP represent the Official Committee of Unsecured Creditors in
this case. Capstone Advisory Group LLC is financial advisor to
the Creditors' Committee.
On April 29, 2009, Adamar of New Jersey, Inc., doing business as
Tropicana Casino and Resort, and its affiliate, Manchester Mall,
Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09-
20711). Judge Judith H. Wizmur presides over the cases. Adamar
and Manchester Mall or the New Jersey Debtors are both affiliates
of Tropicana Entertainment LLC. Manchester Mall is a wholly owned
subsidiary of Adamar that owns and operates certain real property
utilized in the New Jersey Debtors' business operations.
The New Jersey Debtors own and operate one of the largest, and one
of the most established, destination casino resorts in Atlantic
City, New Jersey, known as Tropicana Casino and Resort - Atlantic
City, which ranks third in gaming positions among Atlantic City's
11 casino properties. The New Jersey Debtors initiated the
Chapter 11 cases to effectuate a sale of substantially all their
assets in accordance with a mandate issued by the New Jersey
Casino Control Commission pursuant to the New Jersey Casino
Control Act.
Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz,
Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the
New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their
claims and notice agent. Adamar disclosed $500 million to $1
billion both in total assets and debts in its petition.
Manchester Mall disclosed $1 million to $10 million in total
assets, and less than $50,000 in total debts in its petition.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the chapter 11
restructuring proceedings commenced by Tropicana Entertainment LLC
and its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
TROPICANA ENT: NJ Debtors Hire Cooper Levenson as Special Counsel
-----------------------------------------------------------------
Adamar of New Jersey, Inc., doing business as Tropicana Casino and
Resort, and its affiliate, Manchester Mall, Inc., -- the New
Jersey Debtors -- sought and obtained permission from the U.S.
Bankruptcy Court for the District of New Jersey to employ Cooper,
Levenson, April, Niedelman & Wagenheim, P.A., as their special
litigation counsel, nunc pro tunc to April 29, 2009.
Cooper Levenson will represent the New Jersey Debtors in
connection with a variety of litigation matters, including
workers' compensation, employment, and general liability.
Although many of the currently pending disputes will be stayed by
the automatic stay under Section 362(a) of the Bankruptcy Code,
it is possible that certain of the plaintiffs and potential
future claimants might obtain relief from the automatic stay to
proceed with their claims. The New Jersey Debtors will need
Cooper Levenson's services in those instances, Mark Giannantonio,
president and chief operating officer of the New Jersey Debtors,
told the Court.
Lloyd D. Levenson, Esq., chief executive officer of Cooper
Levenson, disclosed that his firm received $477,975 from the New
Jersey Debtors for services rendered and disbursements and other
charges incurred during the 90-day period before the Petition
Date.
Mr. Levenson noted that the New Jersey Debtors retained Cole,
Schotz, Meisel, Forman & Leonard, P.A., as their general
bankruptcy counsel. He assured the Court that Cooper Levenson
intends to coordinate carefully its discrete efforts with Cole
Schotz and the New Jersey Debtors to prevent needless duplication
of effort.
The New Jersey Debtors will pay Cooper Levenson on an hourly
basis or fixed fee basis, or both, depending on the type of case.
A copy of the firm's billing rates is available for free at:
http://bankrupt.com/misc/TropiA_EACooperLevensonBillRates.pdf
Upon review of the list of interested parties, Cooper Levenson
noted that they have or are currently performing services for
these entities in matters unrelated to the Debtors' Chapter 11
cases:
* AC Electric,
* AC Linen Supply Inc.,
* AT&T Communications,
* IGT,
* Magic Disposal,
* Pepco Energy Services Inc.,
* ACE American Insurance Co.,
* Liberty Mutual Fire Insurance Co.,
* GAB Robins, and
* The Cordish Company.
Cooper Levenson does not hold or represent any interest adverse
to the New Jersey Debtors or their estates with respect to the
matters for which the firm is to be employed, Mr. Levenson
asserted.
About Tropicana Entertainment
Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC --
http://www.tropicanacasinos.com/-- is an indirect subsidiary of
Tropicana Casinos and Resorts. The company is one of the largest
privately-held gaming entertainment providers in the United
States. Tropicana Entertainment owns eleven casino properties in
eight distinct gaming markets with premier properties in Las
Vegas, Nevada, and Atlantic City, New Jersey.
Tropicana Entertainment LLC and its debtor-affiliates filed for
Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No.
08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at
Richards Layton & Finger, represent the Debtors in their
restructuring efforts. Their financial advisor is Lazard Ltd.
Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor.
Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell
LLP represent the Official Committee of Unsecured Creditors in
this case. Capstone Advisory Group LLC is financial advisor to
the Creditors' Committee.
On April 29, 2009, Adamar of New Jersey, Inc., doing business as
Tropicana Casino and Resort, and its affiliate, Manchester Mall,
Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09-
20711). Judge Judith H. Wizmur presides over the cases. Adamar
and Manchester Mall or the New Jersey Debtors are both affiliates
of Tropicana Entertainment LLC. Manchester Mall is a wholly owned
subsidiary of Adamar that owns and operates certain real property
utilized in the New Jersey Debtors' business operations.
The New Jersey Debtors own and operate one of the largest, and one
of the most established, destination casino resorts in Atlantic
City, New Jersey, known as Tropicana Casino and Resort - Atlantic
City, which ranks third in gaming positions among Atlantic City's
11 casino properties. The New Jersey Debtors initiated the
Chapter 11 cases to effectuate a sale of substantially all their
assets in accordance with a mandate issued by the New Jersey
Casino Control Commission pursuant to the New Jersey Casino
Control Act.
Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz,
Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the
New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their
claims and notice agent. Adamar disclosed $500 million to
$1 billion both in total assets and debts in its petition.
Manchester Mall disclosed $1 million to $10 million in total
assets, and less than $50,000 in total debts in its petition.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the chapter 11
restructuring proceedings commenced by Tropicana Entertainment LLC
and its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
TROPICANA ENT: Seeks to Assume & Assign Starbucks Pact
------------------------------------------------------
Tropicana Entertainment LLC and its debtor-affiliates seek the
U.S. Bankruptcy Court for the District of Delaware's authority to
assume and assign a Starbucks Corporation Master Licensing
Agreement dated April 23, 2001, to Lake Tahoe Realty I, LLC. The
Debtors also ask the Court to approve their proposed cure amount
with respect to the Starbucks Agreement.
As previously reported, the Court authorized the Debtors on
May 5, 2009, to assume and assign amended leases for the Lake
Tahoe Horizon Casino, and to assume amended leases for the
Montbleu Resort Casino & Spa Properties. In order to complete
the transactions contemplated by the Horizon Casino Assumption
and Assignment Order, the Debtors are now seeking to assume and
assign the Starbucks Agreement to the new lessee, according to
Lee E. Kaufman, Esq., at Richards Layton & Finger, P.A., in
Wilmington, Delaware.
Although the Starbucks Agreement was previously designated as an
executory contract to be rejected under the OpCo Plan, the OpCo
Debtors' Plan and Confirmation Order permits the Debtors to
change that designation, Mr. Kaufman notes.
The cure amount with respect to the Starbucks Agreement is
$10,920, which Lake Tahoe will pay in full satisfaction of any
and all defaults arising under the Starbucks Agreement, which are
required to be cured by Section 365(b)(1)(A) of the Bankruptcy
Code.
The Debtors believe that the assumption and assignment of the
Starbucks Agreement in order to complete the transactions
contemplated by the Horizon Casino Assumption and Assignment
Order, and Lake Tahoe's agreement to make payment of the Cure
Amount, demonstrate adequate assurance of future performance and
satisfy the requirements of Section 365(b)(1)(C) of the
Bankruptcy Code.
About Tropicana Entertainment
Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC --
http://www.tropicanacasinos.com/-- is an indirect subsidiary of
Tropicana Casinos and Resorts. The company is one of the largest
privately-held gaming entertainment providers in the United
States. Tropicana Entertainment owns eleven casino properties in
eight distinct gaming markets with premier properties in Las
Vegas, Nevada, and Atlantic City, New Jersey.
Tropicana Entertainment LLC and its debtor-affiliates filed for
Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No.
08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at
Richards Layton & Finger, represent the Debtors in their
restructuring efforts. Their financial advisor is Lazard Ltd.
Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor.
Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell
LLP represent the Official Committee of Unsecured Creditors in
this case. Capstone Advisory Group LLC is financial advisor to
the Creditors' Committee.
On April 29, 2009, Adamar of New Jersey, Inc., doing business as
Tropicana Casino and Resort, and its affiliate, Manchester Mall,
Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09-
20711). Judge Judith H. Wizmur presides over the cases. Adamar
and Manchester Mall or the New Jersey Debtors are both affiliates
of Tropicana Entertainment LLC. Manchester Mall is a wholly owned
subsidiary of Adamar that owns and operates certain real property
utilized in the New Jersey Debtors' business operations.
The New Jersey Debtors own and operate one of the largest, and one
of the most established, destination casino resorts in Atlantic
City, New Jersey, known as Tropicana Casino and Resort - Atlantic
City, which ranks third in gaming positions among Atlantic City's
11 casino properties. The New Jersey Debtors initiated the
Chapter 11 cases to effectuate a sale of substantially all their
assets in accordance with a mandate issued by the New Jersey
Casino Control Commission pursuant to the New Jersey Casino
Control Act.
Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz,
Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the
New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their
claims and notice agent. Adamar disclosed $500 million to $1
billion both in total assets and debts in its petition.
Manchester Mall disclosed $1 million to $10 million in total
assets, and less than $50,000 in total debts in its petition.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the chapter 11
restructuring proceedings commenced by Tropicana Entertainment LLC
and its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
UBS AG: Swiss Gov't May Seize Data Sought by U.S. in Tax Probe
--------------------------------------------------------------
David Voreacos, Michael McKee and Mort Lucoff at Bloomberg News
report that in a July 7 filing in federal court in Miami, the
Swiss government said it would seize UBS AG data to prevent the
U.S. Justice Department from pursuing a U.S. court order seeking
the identities of 52,000 American account holders in a crackdown
on tax evaders.
Bloomberg relates that in a July 8 order, U.S. District Judge Alan
Gold told the Justice Department to respond by July 12 to the
Swiss filing. Judge Gold, as cited by Bloomberg, said the U.S.
government should explain "how far it intends to proceed by way of
request for enforcement, up through and including receivership
and/or seizure of UBS' assets within the United States" if he
grants the petition and the Swiss "prevent or otherwise prohibit
UBS from complying."
Bloomberg relates that the Justice Department sued UBS on Feb. 19,
a day after the bank avoided U.S. prosecution for helping wealthy
Americans evade taxes. UBS, Bloomberg recounts, agreed Feb. 18 to
pay US$780 million in penalties, admitted it helped taxpayers hide
money in Swiss accounts and gave the Internal Revenue Service more
than 250 clients' names. Bloomberg notes the bank and Switzerland
have since argued that the U.S. lawsuit represents a threat to
Swiss sovereignty.
Judge Gold will hold an evidentiary hearing July 13.
Settlement
Goran Mijuk at Dow Jones Newswires reports that UBS may still
reach a settlement with U.S. regulators on the turning over of
confidential client data. According to Dow Jones, tax specialists
say that the most likely outcome is a potential multi-billion
dollar out-of-court settlement with the IRS, which could be
reached before or during the trial that starts Monday in a U.S.
District Court in Miami. Dow Jones says such an outcome could
cost UBS up to US$5 billion but would end legal insecurity that
has weighed on the bank during the past few months.
"Quick" Resolution
The Financial Times reported Tuesday that Doris Leuthard, the
Swiss economy minister, called for a swift resolution of the UBS
legal case brought by US tax authorities on Wednesday at the start
of a trip to Washington. The FT disclosed the minister said the
ratification of the newly initialled tax treaty between the two
countries-an agreement to share information on tax evaders-could
depend on the outcome of the UBS case. "Our goal is to have a
settlement," the FT quoted Ms. Leuthard as saying. "We don't want
a long procedure on this case."
Management Shake-up
In a July 5 report, the FT disclosed Oswald Gruebel, UBS's chief
executive, wants to shake up the top managerial ranks of the
bank's brokerage business in the US after deciding against a sale.
Citing people close the situation, the FT said UBS had contacted
senior figures in the financial industry to sound them out over
taking a top role in its US brokerage business, whose operations
have been hamstrung by a US Justice Department and Internal
Revenue Service probe into whether the bank helped as many as
19,000 American citizens move US$20 billion into overseas bank
accounts, avoiding as much as US$300 million in annual taxes. The
wealth management unit's performance has also suffered in the
financial crisis as many private banking clients have withdrawn
their funds, the FT noted.
About UBS AG
Based in Zurich, Switzerland, UBS AG (VTX:UBSN) --
http://www.ubs.com/-- is a global provider of financial services
for wealthy clients. UBS's financial businesses are organized on
a worldwide basis into three Business Groups and the Corporate
Center. Global Wealth Management & Business Banking consists of
three segments: Wealth Management International & Switzerland,
Wealth Management US and Business Banking Switzerland. The
Business Groups Investment Bank and Global Asset Management
constitute one segment each. The Industrial Holdings segment
holds all industrial operations controlled by the Group. Global
Asset Management provides investment products and services to
institutional investors and wholesale intermediaries around the
globe. The Investment Bank operates globally as a client-driven
investment banking and securities firm. The Industrial Holdings
segment comprises the non-financial businesses of UBS, including
the private equity business, which primarily invests UBS and
third-party funds in unlisted companies.
As reported in the Troubled Company Reporter-Europe, UBS has
amassed more than US$53 billion in writedowns and losses since the
credit crisis began. The bank expects to post a loss in the
second quarter of 2009. The bank's net loss for full-year 2008
widened to CHF19,697 million from of CHF5,247 million in the prior
year. Net losses from continuing operations totaled CHF19,327
million, compared with losses of CHF5,111 million in the prior
year. UBS attributed the losses to negative revenues in its fixed
income, currencies and commodities (FICC) area. For the 2008
fourth quarter, UBS incurred a net loss of CHF8,100 million, down
from a net profit of CHF296 million. Net loss from continuing
operations was CHF7,997 million compared with a profit of CHF433
million. The Investment Bank recorded a pre-tax loss of CHF7,483
million, compared with a pre-tax loss of CHF2,748 million in the
prior quarter. This result was primarily due to trading losses,
losses on exposures to monolines and impairment charges taken
against leveraged finance commitments. An own credit charge of
CHF1,616 million was recorded by the Investment Bank in fourth
quarter 2008, mainly due to redemptions and repurchases of UBS
debt during this period.
UBS said it will further reduce its headcount to 15,000 by the end
of the year. UBS's personnel numbers reduced to 77,783 on
December 31, 2008, down by 1,782 from September 30, 2008, with
most staff reductions at its investment banking unit.
USI HOLDINGS: S&P Withdraws 'B-' Senior Secured Debt Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services said it withdrew its 'B-'
senior secured debt rating on USI Holdings Corp.'s proposed
$117 million incremental senior secured term loan. At the same
time, Standard & Poor's revised its recovery rating on USI's
existing senior secured credit facilities to '2', indicating S&P's
expectation for substantial (70%-90%) recovery for lenders in the
event of a payment default, from '3'. The senior secured credit
facilities consist of a $550 million term loan B and a $100
million revolving credit facility. As a result, S&P raised its
ratings on these loans to 'B' (one notch above the 'B-'
counterparty credit rating on the company) from 'B-', in
accordance with S&P's notching criteria for a recovery rating of
'2'.
Standard & Poor's also affirmed its 'CCC' (two notches lower than
the counterparty credit rating) issue-level rating on USI's
unsecured credit facilities, which consist of senior floating-rate
notes and senior subordinated notes. The recovery rating on this
debt remains at '6', indicating S&P's expectation for negligible
(0%-10%) recovery for lenders in the event of a payment default.
"We withdrew S&P's rating on USI's proposed secured term loan
following the company's decision not to proceed with the
offering," said Standard & Poor's credit analyst Julie Herman.
USI planned to use the funding under the proposed incremental term
loan to conduct a cash tender for up to $100 million of its
existing $225 million senior floating-rate notes (LIBOR plus 387.5
basis points) due 2014 and an estimated 37.5% of its existing $175
million senior subordinated notes (9.75% coupon) due 2015.
"However, as a result of minimal participation, the company
terminated its planned tender," said Ms. Herman. The revised
senior secured recovery rating of '2' reflects the same recovery
rating that S&P had on USI's secured debt prior to the incremental
term loan issuance.
VISTEON CORP: Court Approves Kirkland & Ellis as Counsel
--------------------------------------------------------
Judge Christopher Sontchi of the U.S. Bankruptcy for the District
of Delaware has approved Visteon Corp. and its affiliates'
application to employ Kirkland & Ellis as their counsel, as
amended.
Before the Court issued its ruling, the Debtors revised their
request to address some concerns noted by the U.S. Trustee. The
Debtors specifically noted that the retainer received by Kirkland
will not be held as security for payment until the conclusion
these bankruptcy cases, but will be instead applied in
satisfaction of the Debtors' outstanding invoices.
The Debtors have selected Kirkland & Ellis to represent them
because of the firm's recognized expertise and extensive
experience and knowledge in the field of debtors' protections,
creditors' rights, and business reorganizations under Chapter 11
of the Bankruptcy Code.
According to the Debtors, Kirkland & Ellis has advised them on
various legal matters since 2004, including negotiation and
administration of financing arrangements, compliance with
securities law, employee benefit and labor issues, and the
negotiation of commercial disputes. Thus, the Debtors assert,
Kirkland & Ellis is intimately familiar with their financing and
business operations in general, as well as many of the legal
issues that may arise in the context of their Chapter 11 cases.
Moreover, the Debtors tell the Court that Kirkland & Ellis has
advised them with respect to all aspects of preparation for their
Chapter 11 cases, including analysis of their capital structure,
commercial agreements, employee obligations, and negotiation and
documentation related to efforts to secure a debtor in possession
financing facility as well as issues related to the Debtors' cash
collateral.
As counsel to the Debtors, Kirkland & Ellis will:
(a) advise the Debtors with respect to their powers and duties
as debtors-in-possession in the continued management and
operation of their business and properties;
(b) advise and consult on the conduct of the Chapter 11 cases,
including all of the legal and administrative requirements
of operating in Chapter 11;
(c) attend meetings and negotiate with representatives of the
creditors and other parties-in-interest;
(d) take all necessary action to protect and preserve the
Debtors' estates, including prosecuting actions on the
Debtors' behalf, defending any action commenced against
the Debtors and representing the Debtors' interest in
negotiations concerning litigation in which the Debtors
are involved, including objections to claims against the
Debtors' estates;
(e) prepare all pleadings, including motions, applications,
answers, orders, reports and papers necessary or otherwise
beneficial to the administration of the Debtors' estates;
(f) represent the Debtors in connection with obtaining
postpetition financing;
(g) advise the Debtors in connection with any potential sale
of its assets or business;
(h) appear before the Court and any appellate courts to
represent the interests of the Debtors' estates;
(i) consult with the Debtors regarding tax, environmental,
employment, pension, real estate and other matters;
(j) take any necessary action on behalf of the Debtors to
negotiate, prepare on behalf of the Debtors and obtain
approval of a Chapter 11 plan and all documents; and
(k) perform all other necessary or otherwise beneficial legal
services for the Debtors in connection with the
prosecution of the Chapter 11 cases, including (i)
analysis of the Debtors' leases and contracts and the
assumptions, rejections or assignments; (ii) analysis of
the validity of liens against the Debtors; and (iii)
advice on corporate and litigation matters.
The Debtors propose to pay for Kirkland & Ellis' services based
on the firm's customary hourly rates:
Professional Rate/Hour
------------ ---------
Partners $550-$965
Of Counsel $500-$965
Associates $320-$660
Paraprofessionals $120-$280
James H.M. Sprayregen, Marc Kieselstein, and James J. Mazza are
the Kirkland & Ellis professionals presently expected to have
primary responsibility for providing services to the Debtors. The
Debtors will also reimburse Kirkland & Ellis for reasonable
expenses, including postage, overnight mail, courier delivery,
transportation and overtime expenses. The Debtors tell the Court
they have paid Kirkland & Ellis a total of $1,000,000 as classic
retainer as of May 27, 2009.
Marc Kieselstein, P.C., a partner of Kirkland & Ellis LLP, in
Chicago, Illinois, assures the Court that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Kirkland Files Declaration
Marc Kieselstein, Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, informed the Court that his firm represents these
additional entities in matters unrelated to the Debtors' Chapter
11 cases:
(a) General Motors Corporation, one of the Debtors customers;
(b) FTI Consulting, Inc., financial advisors to the Official
Committee of Unsecured Creditors; and
(c) Golden Gate Capital, an affiliate of TDK Corporation of
America, creditor of the Debtors.
About Visteon Corp.
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is a global automotive
supplier that designs, engineers and manufactures innovative
climate, interior, electronic and lighting products for vehicle
manufacturers, and also provides a range of products and services
to aftermarket customers. The company has corporate offices in
Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen,
Germany. It has facilities in 27 countries and employs roughly
35,500 people. The Company has assets of $4,561,000,000 and debts
of $5,311,000,000 as of March 31, 2009.
Visteon Corp. and 30 of its affiliates filed for Chapter 11
protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786
through 09-11818). Judge Christopher S. Sontchi oversees the
Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein,
Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, represent the Debtors in their restructuring
efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy
P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors'
local counsel. The Debtors' investment banker and financial
advisor is Rothschild Inc. The Debtors' notice, claims, and
solicitation agent is Kurtzman Carson Consultants LLC. The
Debtors' restructuring advisor is Alvarez & Marsal North America,
LLC.
Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Visteon
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
VISTEON CORP: K&S Wiring, et al., Wants to Reclaim Goods Delivered
------------------------------------------------------------------
Pursuant to Section 546(c) of the Bankruptcy Code, more than 30
creditors of the Debtors asserted reclamation of goods which were
allegedly delivered to the Debtors within 45 days before the
Petition Date. They are:
Creditor Reclamation Claim
-------- -----------------
K&S Wiring Systems, Inc. $1,668,896
Nissan Trading Corp., USA 1,310,246
Hua Wei Surface Decoration
Technologies (Shanghai) Co., Limited 863,222
Sunningdale Precision Industries (Shanghai) Co. Ltd. 792,488
Texas Instruments Incorporated 709,443
Philips Automotive Lighting North America 508,706
ON Semiconductor 473,737
Clarion Corporation of America 447,796
Panasonic Electric Works Corporation of America 442,537
Sunningdale Technologies SA de CV (Mexico) 431,433
Clarion Corporation of America 384,971
Gibbs Die Casting Corporation 315,482
Clarion Corporation of America 303,029
STMicroelectronics, Inc. 278,523
Milan Metal Systems, LLC 224,580
Bose Corporation 179,230
Philips Lumileds Lighting Company, LLC 151,899
Assembleon America, Inc. 151,280
Eimo Technologies, Inc. 148,064
Merix Corporation 140,185
TDK Corporation of America 131,929
Fujikoki America, Inc. 99,970
Idemitsu Lubricants America Corporation 96,737
Sunningdale Precision Industries Ltd 82,436
Tinnerman Palnut Engineered Products, Inc. 76,882
Integrated Interiors Management, LLC 73,825
Rima Manufacturing Company 70,502
Nichia America Corporation 64,932
Unique Fabricating, Inc. 50,686
Hagemeyer, N.A. 49,312
Assembleon America, Inc. 32,472
Reko Tool & Mould (1987), Inc. 24,500
Plastomer Corporation 21,420
3M 12,011
Viking Plastics 4,420
Sumitomo Electric Wiring Systems, Inc. -
Dow Corning Corporation -
About Visteon Corp.
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is a global automotive
supplier that designs, engineers and manufactures innovative
climate, interior, electronic and lighting products for vehicle
manufacturers, and also provides a range of products and services
to aftermarket customers. The company has corporate offices in
Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen,
Germany. It has facilities in 27 countries and employs roughly
35,500 people. The Company has assets of $4,561,000,000 and debts
of $5,311,000,000 as of March 31, 2009.
Visteon Corp. and 30 of its affiliates filed for Chapter 11
protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786
through 09-11818). Judge Christopher S. Sontchi oversees the
Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein,
Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, represent the Debtors in their restructuring
efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy
P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors'
local counsel. The Debtors' investment banker and financial
advisor is Rothschild Inc. The Debtors' notice, claims, and
solicitation agent is Kurtzman Carson Consultants LLC. The
Debtors' restructuring advisor is Alvarez & Marsal North America,
LLC.
Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Visteon
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
VISTEON CORP: Mazda & Panasonic Joint Venture Expands to China
--------------------------------------------------------------
Japan Climate Systems (JCS), a joint venture of Visteon
Corporation, Mazda Motor Corporation and Panasonic Corporation,
announced the official opening of JCS Nanjing on June 19. The
state-of-the-art manufacturing facility is set to support the
growing needs of Mazda China programs and Chinese automakers.
"As our first plant outside Japan, JCS Nanjing marks a significant
milestone in the expansion of JCS," said Kazuhiko Tanaka, JCS
president. "With this plant opening, we are well-positioned to
better capture growth opportunities in China." With an initial
investment of 68 million RMB, JCS Nanjing specializes in
manufacturing various heat exchanger components for vehicle
climate control systems, including evaporators, heater cores, and
condensers. This 10,000-square meter facility is designed to
house approximately 300 employees over the next three years.
Located in the Jiangning Economic and Technological Development
Zone in Nanjing city, Jiangsu province, the new facility has the
capacity to produce 800,000 evaporators, 300,000 condensers and
300,000 heater cores, destined both for the Chinese domestic
market and for export markets such as Japan and ASEAN countries.
"JCS Nanjing's position within the overall Visteon climate control
systems network will strengthen Visteon's climate control systems
footprint and product offering in China," said Joy Greenway,
Visteon vice president and president, climate product group.
"We are fully committed to supporting JCS Nanjing for its long-
term success," said Bob Pallash, senior vice president of Visteon
Corporation and president, Visteon global customer group.
"This is strong testimony to our long-term commitment to the
China market."
The facility has adopted standard manufacturing processes to
produce the highest quality heat exchangers, using state-of-the-
art equipment including a controlled atmosphere blazing furnace
and automatic core builder. In addition, most of the employee
leaders have received rigorous training at JCS headquarter in
Japan.
"We congratulate JCS on the opening of its new facility in
Nanjing," said Toru Oka, managing executive officer of Mazda
purchasing. "We are confident that JCS Nanjing will apply its
advanced manufacturing expertise to ensure the highest quality
products."
Founded in 1987, JCS is an industry leader in the development,
manufacturing and sales of vehicle air conditioning systems.
Headquartered in Hiroshima, Japan, it also operates a plant in
Yamaguchi, Japan and JCS Nanjing, China.
About Visteon Corp.
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is a global automotive
supplier that designs, engineers and manufactures innovative
climate, interior, electronic and lighting products for vehicle
manufacturers, and also provides a range of products and services
to aftermarket customers. The company has corporate offices in
Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen,
Germany. It has facilities in 27 countries and employs roughly
35,500 people. The Company has assets of $4,561,000,000 and debts
of $5,311,000,000 as of March 31, 2009.
Visteon Corp. and 30 of its affiliates filed for Chapter 11
protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786
through 09-11818). Judge Christopher S. Sontchi oversees the
Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein,
Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, represent the Debtors in their restructuring
efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy
P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors'
local counsel. The Debtors' investment banker and financial
advisor is Rothschild Inc. The Debtors' notice, claims, and
solicitation agent is Kurtzman Carson Consultants LLC. The
Debtors' restructuring advisor is Alvarez & Marsal North America,
LLC.
Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Visteon
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
VISTEON CORP: Wins Consent to Hire Pachulski Stang as Co-Counsel
----------------------------------------------------------------
Visteon Corporation and its debtor-affiliates obtained authority
from the U.S. Bankruptcy Court for the District of Delaware to
employ Pachulski Stang Ziehl & Jones LLP as their co-counsel nunc
pro tunc to May 28, 2009, pursuant to Section 327(a) of the
Bankruptcy Code.
The Debtors relate that they received informal comments from the
U.S. Trustee with respect to the proposed retention of Pachulski
Stang Ziehl & Jones LLP as their co-counsel. Accordingly, to
address the U.S. Trustee's concerns, the Debtors revised the form
of the proposed order to provide that the retainer received by
Pachulski will not be held as security for payment until the
conclusion of their bankruptcy cases, but will instead applied in
satisfaction of Pachulski's outstanding invoices.
The Debtors have selected Pachulski Stang because of the firm's
extensive experience and knowledge in the field of debtors' and
creditors' rights and business reorganizations under Chapter 11
of the Bankruptcy Code. William G. Quigley, III, chief financial
officer and executive vice president of Visteon Corporation, says
that in preparing for their representation of the Debtors,
Pachulski Stang has become familiar with the Debtors' affairs and
many of the potential legal issues which may arise.
As co-counsel to the Debtors, Pachulski Stang will:
(a) provide legal advice with respect to the Debtors' powers
and duties as debtors-in-possession in the continued
operation of their businesses and management of their
property;
(b) prepare on behalf of the Debtors any necessary
applications, motions, answers, orders, reports, and other
legal papers;
(c) appear in Court on behalf of the Debtors;
(d) prepare and pursue confirmation of a Chapter 11 plan of
reorganization and approval of a disclosure statement; and
(e) perform other legal services for the Debtors that may be
necessary and proper in the proceedings.
The Debtors propose to pay Pachulski Stang for the firm's
services on an hourly basis, and reimburse the firm of its
actual, necessary expenses and other charges. The principal
attorneys and paralegals presently designated to represent the
Debtors and their current standard hourly rates are:
Professional Rate/Hour
------------ ---------
Laura Davis Jones $795
James E. O'Neill $535
Timothy P. Cairns $395
Mark M. Billion $325
Karina Yee $215
Mr. Quigley relates that prior to the Petition Date, the Debtors
have paid Pachulski Stang $132,209 in connection with the firm's
prepetition representation of the Debtors. Pachulski Stang has
not yet completed a final reconciliation of its prepetition fees
and expenses. Upon final reconciliation of the amount actually
expended prepetition, any balance remaining from the prepetition
payments to the firm will be credited to the Debtors and utilized
as Pachulski Stang's retainer to apply to postpetition fees and
expenses, Mr. Quigley tells the Court.
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in
Wilmington, Delaware, assures the Court that her firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Visteon Corp.
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is a global automotive
supplier that designs, engineers and manufactures innovative
climate, interior, electronic and lighting products for vehicle
manufacturers, and also provides a range of products and services
to aftermarket customers. The company has corporate offices in
Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen,
Germany. It has facilities in 27 countries and employs roughly
35,500 people. The Company has assets of $4,561,000,000 and debts
of $5,311,000,000 as of March 31, 2009.
Visteon Corp. and 30 of its affiliates filed for Chapter 11
protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786
through 09-11818). Judge Christopher S. Sontchi oversees the
Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein,
Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, represent the Debtors in their restructuring
efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy
P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors'
local counsel. The Debtors' investment banker and financial
advisor is Rothschild Inc. The Debtors' notice, claims, and
solicitation agent is Kurtzman Carson Consultants LLC. The
Debtors' restructuring advisor is Alvarez & Marsal North America,
LLC.
Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Visteon
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
About Visteon Corp.
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is a global automotive
supplier that designs, engineers and manufactures innovative
climate, interior, electronic and lighting products for vehicle
manufacturers, and also provides a range of products and services
to aftermarket customers. The company has corporate offices in
Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen,
Germany. It has facilities in 27 countries and employs roughly
35,500 people. The Company has assets of $4,561,000,000 and debts
of $5,311,000,000 as of March 31, 2009.
Visteon Corp. and 30 of its affiliates filed for Chapter 11
protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786
through 09-11818). Judge Christopher S. Sontchi oversees the
Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein,
Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, represent the Debtors in their restructuring
efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy
P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors'
local counsel. The Debtors' investment banker and financial
advisor is Rothschild Inc. The Debtors' notice, claims, and
solicitation agent is Kurtzman Carson Consultants LLC. The
Debtors' restructuring advisor is Alvarez & Marsal North America,
LLC.
Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Visteon
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
WCI COMMUNITIES: Can Sell Maryland/Virginia Properties to NVR
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
approved the sale of WCI Mid-Atlantic U.S. Region, Inc., Poplar
Tree, LLC, MHI-Rugby Road, L.L.C., Renaissance at Oak Creek Club,
LLC, Renaissance at Belleview Road, LLC, and WCI Hunter Mill, LLC,
and their affiliated debtors' real property, and personal property
located in Fairfax and Loudoun Counties, Virginia and Prince
Georges County, Maryland, to NVR, Inc. and NVR Mid-Atlantic Asset
Acquision L.L.C.
The NVR Parties submitted a bid of $41,364,500 for the assets and
was declared the winning bidder at the July 1, 2009 sale hearing.
The NVR Parties' stalking horse bid was $35,564,500.
Headquartered in Bonita Springs, Florida, WCI Communities, Inc.
(Pink Sheets: WCIMQ) -- http://www.wcicommunities.com/-- is a
fully integrated homebuilding and real estate services company.
It has operations in Florida, New York, New Jersey, Connecticut,
Massachusetts, Virginia and Maryland. The company directly
employs roughly 1,800 people, as well as roughly 1,800 sales
representatives as independent contract employees.
The Company and 126 of its affiliates filed for Chapter 11
protection on August 4, 2008 (Bankr. D. Del. Lead Case No.
08-11643 through 08-11770). On July 2, 2009, debtor-affiliates
WCI 2009 Corporation, WCI 2009 Management LLC and WCI 2009 Asset
Holding LLC filed separate Chapter 11 petitions (Case No. from 09-
12269 to 09-12271).
Thomas E. Lauria, Esq., Frank L. Eaton, Esq., and Linda M. Leali,
Esq., at White & Case LLP, in Miami, Florida, represent the
Debtors as counsel. Eric Michael Sutty, Esq., and Jeffrey M.
Schlerf, Esq., at Fox Rothschild LLP, represent the Debtors as
Delaware counsel. Lazard Freres & Co. LLC is the Debtors'
financial advisor. Epiq Bankruptcy Solutions LLC is the claims
and notice agent for the Debtors. The U.S. Trustee for Region 3
appointed five creditors to serve on an official committee of
unsecured creditors. Daniel H. Golden, Esq., Lisa Beckerman,
Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer &
Feld LLP; and Laura Davis Jones, Esq., Michael R. Seidl, Esq., and
Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP,
represent the committee in these cases. When the Debtors filed
for protection from their creditors, they listed total assets of
$2,178,179,000 and total debts of $1,915,034,000.
WCI COMMUNITIES: Sale of Hotel and Condo Units to Elevation Okayed
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the sale of WCI Communities, Inc.'s real and personal property
located in Miami-Dade County, Florida, to Elevation Communities,
Inc., free and clear of all liens and encumbrances.
Other than the Elevation's bid, no other qualified bids were
received by WCI.
As reported in the Troubled Company Reporter on May 25, 2009, the
properties include:
-- a Hotel Lot, a Restaurant lot, and Spa Lot, which
include the 18-story luxury hotel known as the "The
Regent Bal Harbour", a full service fine dining food and
beverage facility and a full service spa facility.
-- 51 hotel condominium units, inclusive of 7 ADA compliant
units, one presidential suite and connecting studio unit.
Elevation Communities contracted to purchase the property for
$14,600,000.
A full-text copy of the Asset Purchase Agreement is available at:
http://bankrupt.com/misc/WCI.ElevationAPAPart1.pdf
http://bankrupt.com/misc/WCI.ElevationAPAPart2.pdf
Headquartered in Bonita Springs, Florida, WCI Communities, Inc.
(Pink Sheets: WCIMQ) -- http://www.wcicommunities.com/-- is a
fully integrated homebuilding and real estate services company.
It has operations in Florida, New York, New Jersey, Connecticut,
Massachusetts, Virginia and Maryland. The company directly
employs roughly 1,800 people, as well as roughly 1,800 sales
representatives as independent contract employees.
The Company and 126 of its affiliates filed for Chapter 11
protection on August 4, 2008 (Bankr. D. Del. Lead Case No.
08-11643 through 08-11770). On July 2, 2009, debtor-affiliates
WCI 2009 Corporation, WCI 2009 Management LLC and WCI 2009 Asset
Holding LLC filed separate Chapter 11 petitions (Case No. from 09-
12269 to 09-12271).
Thomas E. Lauria, Esq., Frank L. Eaton, Esq., and Linda M. Leali,
Esq., at White & Case LLP, in Miami, Florida, represent the
Debtors as counsel. Eric Michael Sutty, Esq., and Jeffrey M.
Schlerf, Esq., at Fox Rothschild LLP, represent the Debtors as
Delaware counsel. Lazard Freres & Co. LLC is the Debtors'
financial advisor. Epiq Bankruptcy Solutions LLC is the claims
and notice agent for the Debtors. The U.S. Trustee for Region 3
appointed five creditors to serve on an official committee of
unsecured creditors. Daniel H. Golden, Esq., Lisa Beckerman,
Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer &
Feld LLP; and Laura Davis Jones, Esq., Michael R. Seidl, Esq., and
Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP,
represent the committee in these cases. When the Debtors filed
for protection from their creditors, they listed total assets of
$2,178,179,000 and total debts of $1,915,034,000.
WCI COMMUNITIES: Wants to Sell Florida Property to EOLA Capital
---------------------------------------------------------------
Communities Finance Company, LLC, and its affiliated debtors ask
the U.S. Bankruptcy Court for the District of Delaware for
authorization to sell a 260-acre parcel of land located in Palm
Beach County, Florida to EOLA Capital, LLC. The Debtors will sell
the assets to EOLA for $20,250,000, absent higher and better
offers.
The property to be sold is zoned for a golf course, 50 time-share
units, 48 multi-family units, 25,000 square feet of retail space
and 25,000 square fee of office space and is located at the
northwest intersection of the Florida Turnpike and Indiantown Road
in Jupiter, Florida.
Under the terms of purchase agreement, the total consideration for
the property is $20,250,000. The property will be sold on an "as
is," "where is" basis and "with all faults" and in its condition
at the time of closing. EOLA will receive a $405,000 break-up fee
if the Debtors consummate a sale with another party.
The Debtors request the Court to schedule an auction on August 11,
2009, at 1:00 p.m. and a sale hearing on August 12, 2009, at 11:00
a.m. (Prevailing Eastern Time). The Debtors also request the sale
objection deadline be set for August 1, 2009.
The deadline for submitting bids has not yet been set. Competing
bids must exceed EOLA's offer by at least $1,000,000, on terms
that are substantially comparable to the terms of the purchase
agreement, and must be received by the bid deadline.
As reported in the Troubled Company Reporter on July 8, 2009,
WCI Communities Inc. and its official committee of unsecured
creditors filed a first amended joint chapter 11 plan of
reorganization and related disclosure statement with the U.S.
Bankruptcy Court. A full-text copy of the disclosure statement
explaining the terms of the Plan is available at:
http://ResearchArchives.com/t/s?3ebc
Headquartered in Bonita Springs, Florida, WCI Communities, Inc.
(Pink Sheets: WCIMQ) -- http://www.wcicommunities.com/-- is a
fully integrated homebuilding and real estate services company.
It has operations in Florida, New York, New Jersey, Connecticut,
Massachusetts, Virginia and Maryland. The company directly
employs roughly 1,800 people, as well as roughly 1,800 sales
representatives as independent contract employees.
The Company and 126 of its affiliates filed for Chapter 11
protection on August 4, 2008 (Bankr. D. Del. Lead Case No.
08-11643 through 08-11770). On July 2, 2009, debtor-affiliates
WCI 2009 Corporation, WCI 2009 Management LLC and WCI 2009 Asset
Holding LLC filed separate Chapter 11 petitions (Case No. from 09-
12269 to 09-12271).
Thomas E. Lauria, Esq., Frank L. Eaton, Esq., and Linda M. Leali,
Esq., at White & Case LLP, in Miami, Florida, represent the
Debtors as counsel. Eric Michael Sutty, Esq., and Jeffrey M.
Schlerf, Esq., at Fox Rothschild LLP, represent the Debtors as
Delaware counsel. Lazard Freres & Co. LLC is the Debtors'
financial advisor. Epiq Bankruptcy Solutions LLC is the claims
and notice agent for the Debtors. The U.S. Trustee for Region 3
appointed five creditors to serve on an official committee of
unsecured creditors. Daniel H. Golden, Esq., Lisa Beckerman,
Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer &
Feld LLP; and Laura Davis Jones, Esq., Michael R. Seidl, Esq., and
Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP,
represent the committee in these cases. When the Debtors filed
for protection from their creditors, they listed total assets of
$2,178,179,000 and total debts of $1,915,034,000.
WEST SPEEDWAY: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: West Speedway Phase II, LLC
2404 Bonniebrook Dr.
Stockton, CA 95207
Bankruptcy Case No.: 09-15664
Chapter 11 Petition Date: July 8, 2009
Court: United States Bankruptcy Court
District of Arizona (Tucson)
Judge: Eileen W. Hollowell
Debtor's Counsel: Eric Slocum Sparks, Esq.
110 S Church Ave #2270
Tucson, AZ 85701
Tel: (520) 623-8330
Fax: (520) 623-9157
Email: eric@ericslocumsparkspc.com
Estimated Assets: $1,000,001 to $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 Joseph L. Donati, managing member of
the Company.
WINE LOFT PITTSBURGH: Case Summary & 4 Largest Unsec. Creditors
---------------------------------------------------------------
Debtor: The Wine Loft Pittsburgh, Inc.
P.O. Box 42375
Pittsburgh, PA 15203
Bankruptcy Case No.: 09-25084
Chapter 11 Petition Date: July 8, 2009
Court: United States Bankruptcy Court
Western District of Pennsylvania (Pittsburgh)
Debtor's Counsel: Donald R. Calaiaro, Esq.
Calaiaro & Corbett, P.C.
Grant Building, Suite 1105
310 Grant Street
Pittsburgh, PA 15219-2230
Tel: (412) 232-0930
Fax: (412) 232-3858
Email: dcalaiaro@calaiarocorbett.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $500,001 to $1,000,000
A list of the Company's 4 largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/pawb09-25084.pdf
The petition was signed by Joseph Degruttola, president of the
Company.
WL HOMES: May Auction Brio Property, Consultant Says
----------------------------------------------------
WL Homes LLC's Brio property could wind up in the auction block in
less than a year, Lou Ponsi at The Orange County Register reports,
citing Orange County real estate consultant Walther Hahn.
As reported by the Troubled Company Reporter on June 10, 2009, the
Hon. Brendan Shannon of the U.S. Bankruptcy Court for the District
of Delaware has converted WL Homes' Chapter 11 reorganization case
to Chapter 7 liquidation, at the behest of the official committee
of unsecured creditors. The Creditors
Committee sought the conversion because WL Homes closed its
operations and planned to liquidate assets rather than reorganize.
The Orange County Register relates that the Brio homes were
originally expected to sell in $500,000 range, but only three
model homes have been built since 2007, and the property remains
gated and undeveloped. The report quoted Mr. Hahn as saying, "My
experience (with Chapter 7) is that the judge opens it up for an
auction and the highest bidder gets it . . . . Home builders will
bid, but they won't pay much." The developer who buys the
property will look for a low price, the report says, citing Mr.
Hahn.
According to The Orange County Register, Mr. Hahn estimates the
Brio homes that would have sold for a half-million will now sell
for $350,000 to $400,000.
Headquartered in Irvine, California, WL Homes LLC, dba John Laing
Homes, sells and builds houses. The Debtor and five of its
affiliates filed for Chapter 11 protection on February 19, 2009
(Bankr. D. Del. Lead Case No. 09-10571). Laura Davis Jones, Esq.,
and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP,
represent the Debtors' in their restructuring efforts. The U.S.
Trustee for Region 2 appointed creditors to serve on the Official
Committee of Unsecured Creditors of the Debtors' Chapter 11 cases.
Ashby & Geddes represents the Committee. When the Debtors sought
protection from their creditors, they listed assets of more than
$1 billion, and debts between $500 million and $1 billion.
YOUNG BROADCASTING: Three Firms Interested in Acquiring Assets
--------------------------------------------------------------
At least three companies may be interested in obtaining all or a
part of Young Broadcasting, Inc., Bill Gorman at VbytheNumbers.com
says, citing people familiar with the matter.
According to TVbytheNumbers.com, the sources said that these firms
may be eyeing Young Broadcasting:
-- Local TV LLC,
-- Nexstar Broadcasting Group, and
-- Silver Point Capital.
TVbytheNumbers.com quoted a source as saying, "My sense is they
have very short list of people interested."
Young Broadcasting, Inc. -- http://www.youngbroadcasting.com/--
owns 10 television stations and the national television
representation firm, Adam Young, Inc. Five stations are
affiliated with the ABC Television Network (WKRN-TV - Nashville,
TN, WTEN-TV - Albany, NY, WRIC-TV - Richmond, VA, WATE-TV -
Knoxville, TN, and WBAY-TV - Green Bay, WI), three are affiliated
with the CBS Television Network (WLNS-TV - Lansing, MI, KLFY-TV -
Lafayette, LA and KELO-TV - Sioux Falls, SD), one is affiliated
with the NBC Television Network (KWQC-TV - Davenport, IA) and one
is affiliated with MyNetwork (KRON-TV - San Francisco, CA). In
addition, KELO- TV- Sioux Falls, SD is also the MyNetwork
affiliate in that market through the use of its digital channel
capacity.
The Company and its affiliates filed for Chapter 11 protection on
February 13, 2009, (Bankr. S.D.N.Y. Lead Case No. 09-10645). Jo
Christine Reed, Esq., at Sonnenschein Nath & Rosenthal LLP,
represents the Debtors in their restructuring efforts. Andrew N.
Rosenberg, Esq., at Paul Weiss Rifkind Wharton & Harrison LLP,
represents the official committtee of unsecured creditors as
counsel. The Debtors selected UBS Securities LLC as consultant;
Ernst & Young LLP as accountant; Epiq Bankruptcy Solutions LLC as
claims agent; and David Pauker chief restructuring officer. The
Debtors listed total assets of $575,600,070 and total debts of
$980,425,190.
YRC WORLDWIDE: Bankruptcy Likely, Morgan Keegan & Co. Says
-----------------------------------------------------------
Morgan Keegan & Co. Inc. analyst Art Hatfield said that YRC
Worldwide Inc. may go bankrupt, St. Louis Business Journal
reports.
Citing Mr. Hatfiled, Business Journal states that YRC Worldwide's
ongoing talks with the International Brotherhood of Teamsters
union could fail. YRC Worldwide, according to the report, started
the concessions talks with the Teamsters on June 29. The report
quoted Mr. Hatfield as saying, "Given the developments with the
negotiations between the two parties and the increasing
uncertainty pertaining to the outcome of those negotiations, we
believe a bankruptcy at YRC Worldwide is still likely in the near
to mid-term."
Business Journal relates that YRC reportedly wants to end its
union pension payments for 14 months, which would provide savings
of $500 million. According to the report, Mr. Hatfield said,
"From what we know, YRC would not be conceding anything material
to the pension plans and/or its Teamsters employees under the
proposal. Additionally, if the proposal goes on to a vote to the
Teamster-represented employees at YRC, we believe the likelihood
of a favorable vote would be low at best, given that the employees
would be the ones to feel the brunt of these terminated payments
over the long term . . . and that security provisions and
protections for Teamsters employees are not part of the
concessions made by the company (to our knowledge)."
The Teamsters probably want payment deferrals instead, which would
be difficult for YRC Worldwide, as its lenders would be reluctant
to let the Company tie up assets or real estate as collateral, and
the Company probably has little left to offer as collateral,
Business Journal says, citing Mr. Hatfield.
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.
* Pace of Bankruptcy Filings Moderates From Early 2009
------------------------------------------------------
According to Bloomberg News, the number of Americans seeking
relief in bankruptcy is down from the peak earlier this year,
though it's well ahead of last year.
The almost 125,000 bankruptcy filings of all types in June
represented a 33% increase from the same month last year, though
it's the fewest at a daily rate since February, Bloomberg's Bill
Rochelle said, citing data compiled by Automated Access to Court
Electronic Records.
Commercial bankruptcies, nearly 7,900 in June, were also the
fewest since February while still amounting to a 48% increase from
June 2008, the study said from AACER, a service of Jupiter
ESources LLC in Oklahoma City.
The nearly 1,400 filings by larger companies for reorganization or
liquidation in Chapter 11 were down in June from the peak in
April. The June Chapter 11 filings were 80% above the same month
in 2008. There have been nearly 8,000 Chapter 11 filings so far
this year, compared with 10,100 in all of 2008.
The total number of bankruptcy petitions of all types in the first
six months of 2009, almost 700,000, is on a pace to exceed by a
comfortable margin the nearly 1.1 million in 2008.
According to Bloomberg, bankruptcy filings remain behind the all-
time record of 2.1 million set in 2005, when 630,000 Americans
sought bankruptcy protection in the two weeks before revisions to
federal bankruptcy laws in October made it more difficult for
individuals to erase debts.
* BOOK REVIEW: Bankruptcy and Distressed Restructurings --
Analytical
----------------------------------------------------------
Issues and Investment Opportunities
Editor: Edward I. Altman
Publisher: Beard Books
Softcover: 430 pages
Price: $34.95
Review by Henry Berry
Bankruptcy and Distressed Restructurings offers the trenchant
observations of over 30 experts from leading financial firms and
business schools, including Salomon Brothers, Merrill Lynch, the
London Business School, Harvard Business School, and the Stern
School of Business at New York University (NYU). The book's
content comes from collected papers from a March 1991 conference
at NYU that was devoted to studying the relationships between
bankruptcy and distressed restructurings. While an esoteric
subject, it is made eminently readable under the capable editing
of Edward Altman. Altman divides the subject matter into four
main sections -- restructuring, bankruptcy costs and company
valuations, investing and trading in distressed firms, and
strategic issues for both the firms and investors.
Altman is also coauthor of the chapter "Firm Valuation and
Corporate Leveraged Restructurings," and he writes the closing
chapter on trends in the field.
Most of the chapters offer a combination of introductory and
advanced material, and apply the material to resolving
hypothetical and actual cases. For example, there is a
chapter on highly-leveraged transaction (HLT) loans that reviews
the rationale for this emerging market for both fixed-income and
equity investors, compares the structure of
HLT loans to that of other high-yield instruments, and suggests a
valuation convention to compare yields and relative value. HLT
loans are loans that are traded near par with little price
differentiation for fundamental credit variables. The authors of
this chapter, from the New York firm Salomon Brothers, take an
introductory approach to this subject, but also presuppose a
fairly developed knowledge of this financial area. The
introductory approach is not so basic as to define or explain
fixed-income, equity, high-yield instruments, and valuation, for
instance.
Many of the chapters utilize studies and statistics and sometimes
refer to individual companies in applying the material toward
actual conditions or cases. Two of the chapters present results
of a survey of firms that underwent reorganization. The results
show the differences and commonalities of such firms. Other
chapters offer an empirical study and investigation of troubled
companies and provide a context for the prospective investor who
is weighing whether to become involved in a distressed situation.
Still other chapters deal with the valuation of distressed
companies and regulatory matters that should be considered before
investing in one.
Management, which is essential to the recovery of a distressed
firm and a favorable return on investment, is another topic given
full treatment in this book. The financial risks with regard to
managing bankruptcies of or investments in distressed corporations
are so high, the issues so complex and often cloudy, and the
opportunities so inviting yet uncertain that the field attracts
the best minds and top performers. With these collected papers,
readers have access to the thinking of many experts on a range of
central matters in this fascinating field.
Edward I. Altman is internationally recognized in the field of
corporate bankruptcy and credit risk analysis from awards he has
received, positions he holds, and books he has written. He is the
Max L. Heine Professor of Finance at NYU's Stern School of
Business.
*********
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. Joseph Medel C. Martirez, Denise Marie Varquez, Philline
Reluya, 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.
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