/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090722.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, July 22, 2009, Vol. 13, No. 201 Headlines 973 MARKET: Involuntary Chapter 11 Case Summary ALERIS INT'L: Alvarez & Marsal Bills $1.26MM for April-May Work ALERIS INT'L: Hearing for Asset Sale Procedures Moved to Aug. 11 ALERIS INT'L: OmniSource Transfers Claims to JP Morgan ALERIS INT'L: Proposes Deloitte As Valuation Provider ALERIS INT'L: Rejects Concur Technologies Agreement ALERIS INT'L: Resolves U.S. Trustee Comments on PwC Engagement AMERICAN INT'L: Buyers Mull Tie-Ups to Bid for Nan Shan Life AMERICAN INT'L: Morgan Stanley Named as Primary Financial Adviser ARENA FOOTBALL: Closes, May File for Bankruptcy ARLINGTON CINEMA: Business As Usual Despite Ch. 11 Filing ATC TECHNOLOGY: To Restructure Drivetrain Biz After Honda Exit AURORA OIL & GAS: Court OKs Collateral Use, Limits Equity Trade AURORA OIL: Taps Cahill Gordon as Bankr. and Restructuring Counsel AURORA OIL: Wants Schedules Filing Extended Until August 12 BANK OF AMERICA: May Get Three Offers for Merrill Lynch Unit BENEFICIAL LIFE: S&P Affirms 'BB+' Counterparty Credit Rating BLACK GAMING: Missed July 15 Interest Payment; Defaults WF Loan BOSTON SCIENTIFIC: Posts $158MM Second Quarter 2009 Net Income CALPINE CCFC: S&P Assigns Corporate Credit Rating at 'B' CIRCUIT CITY: Completes Sale of Canadian Operations to Bell Canada CIRCUIT CITY: Gets Court Nod to Sell St. Cloud, Minnesota Leases CIRCUIT CITY: Proposes Auction for Intellectual Prop. Assets CIRCUIT CITY: Proposes to Sell Virginia Property to Cardinal CIRCUIT CITY: Requests for July 31 Deadline for Ch. 11 Plan CIRCUIT CITY: To Sell Moreno Valley Property for at Least $2.25MM CIT GROUP: Loses Vendor Financing Deal With Microsoft CIT GROUP: Factoring Unit Eyed By JPMorgan, The Deal Says CIT GROUP: Moody's Puts Three Classes of Notes Under Review COMSTOCK RESOURCES: Moody's Affirms 'B1' Corporate Family Rating CONCENTRA INC: Moody's Raises Ratings on First Lien Loan to 'Ba3' COUNTRY COACH: Takes in Recreation Live as Partner DELPHI CORP: Court Moves Auction to July 24; Plan Accord Reached DELPHI CORP: GM Won't Assume Pension Plan; PBGC Accord Reached DESERT SHADOW: Chapter 7 Filing May Delay Hepatitis Trial EDDIE BAUER: Creditors Panel Asks Court to OK Retention Agreements EDGEN MURRAY: S&P Changes Outlook to Negative; Affirms 'B' Rating ENBRIDGE ENERGY: DBRS Rates Jr. Subordinated Notes at 'BB' ENDOSCOPY CENTER NV: Chapter 7 Filing May Delay Hepatitis Trial FAIRCHILD CORP: Establishes August 31 General Bar Date FAIRCHILD CORP: Plan Filing Period Extended to August 31 FLYING J: Pilot Travel Merger to Resolve Suit, Allow Ch 11 Exit FORUM HEALTH: Evidentiary Hearing Postponed; Union Talks Resume FORUM HEALTH: Houlihan Engagement Spurs AFSCME's Sale Concerns FRONTIER AIRLINES: District Court Strikes Ruling Voiding CBAs GASTROENTEROLOGY CENTER NV: Ch. 7 Filing May Delay Hepatitis Trial GENERAL MOTORS: Court OKs Butzel Long as Panel's Special Counsel GENERAL MOTORS: ETC Wants Payments of $2.4 Million Claim GENERAL MOTORS: Judge Gerber Approves Purchase of Delphi's Assets GENERAL MOTORS: New GM Enters Into $7 Bil. Credit Pact With U.S. GENERAL MOTORS: Provides Updates On Asset Sale Closing GENERAL MOTORS: Stipulation Resolving Gen. Electric Cure Objection GENERAL MOTORS: Wants Schedules Deadline Extended to September 29 GENERAL MOTORS: Cuts Lexington Avenue Lease with Boston Properties GENERAL MOTORS: Magna and Sberbank Revise Offer for Opel GENERAL MOTORS: Publicis Groupe Has at Most EUR9 Million Exposure GENERAL MOTORS: Won't Assume Delphi Pension; PBGC Accord Reached GLOBAL AVIATION: S&P Assigns Corporate Credit Rating at 'B' HARTMARX CORP: Sale to Emerisque & S Kumars Postponed HUBBARD AUTOMOTIVE: Priority Automotive Acquires Dealership JL FRENCH: Proposes Pachulski as Bankruptcy Counsel JL FRENCH: U.S. Trustee Schedules Meeting of Creditors for Aug. 17 JOHNSONDIVERSEY INC: S&P Cuts Subordinated Debt Rating to 'B-' KENTUCKY ECONOMIC: Fitch Affirms 'BB-' Rating on $71.5 Mil. Bonds LAZY DAYS: Cancels Registration of 11-3/4% Senior Notes Due 2012 LEARNING CARE: S&P Downgrades Corporate Credit Rating to 'B-' LEHMAN BROTHERS: Court Approves Settlement With Kojaian Units LEHMAN BROTHERS: Europe Administrators Disclose Asset Return Plan LEHMAN BROTHERS: LBSF Wants Ch. 11 Case as Foreign Main Proceeding LEHMAN BROTHERS: Proposes Protocol to Settle Mortgage Loan Claims LEHMAN BROTHERS: Raises Loan Purchases From Aurora Bank to $450MM LEHMAN BROTHERS: Terminated $226MM Corporate Loans in June LEHMAN BROTHERS: S&P Cuts Ratings on Four Securities to 'CCC-' LEHMAN BROTHERS: Rejects Park Avenue Lease with Boston Properties LOU PEARLMAN: Trustee Digs 4 Years of Payouts from Ponzi Scheme LOUISIANA LOCAL GOV'T: Moody's Cuts Ratings on Bonds to 'Ba3' LUCKY CHASE: Ch. 11 Trustee Hires Analytic and Glenn Moses LUCKY CHASE: May Use Cash Collateral of AmTrust in the Interim METROMEDIA INT'L: Files Schedules of Assets and Liabilities METROMEDIA INT'L: Panel Taps Baker & Mckenzie as Counsel METROMEDIA INT'L: Taps Debevoise for Appeal on $188MM Judgement METROMEDIA INT'L: Employs Golub for Suit vs. Paul Weiss METROMEDIA INT'L: Also Taps Potter Anderson for Appraisal Action MID AMERICA: Lists $66MM in Liabilities Versus $80MM in Assets MONTGOMERY REALTY: Section 341(a) Meeting Set for August 17 MONTGOMERY REALTY: Taps St. James Law and McNutt Law as Counsel MOUNT HOLLY PARTNERS: MHU Holdings Seeks Case Dismissal NEWPAGE CORP: S&P Junks Corporate Credit Rating From 'B-' NEW YORK TIMES: Union at Boston Globe OKs Wage, Benefits Cut Pact NOBLE INT'L: ArcelorMittal Purchases European Laser Welded Unit NOBLE INT'L: Asks Court to Establish August 31 Bar Date NOBLE INT'L: Can Obtain $2,280,000 in New Loans NORTEL NETWORKS: MatlinPatterson Unit Offers $725MM for CDMA, LTE NOVEMBER 2005: SOLA Wants Chapter 11 Trustee to Oversee Case NV BROADCASTING: Proposes Polsinelli Shughart as Bankr. Co-Counsel PLIANT CORP: Committee Opposes Delay of Plan Process QUEBECOR WORLD: Emerges From Chapter 11 and CCAA Protection QUEBECOR WORLD: Renews Deal to Print Magazines for Schofield READER'S DIGEST: Leclair, Gavin Appointed to Board of Directors READER'S DIGEST: Files SEC Form 15 to Suspend Filing Obligations RH DONNELLEY: Fitch Affirms Issuer Default Ratings at 'D' SBA TELECOMMUNICATIONS: Moody's Puts 'Ba2' Rating on Senior Notes SBA TELECOMMUNICATIONS: S&P Assigns 'BB' Rating on $500 Mil. Notes SEMGROUP LP: BofA Wants Receiver for SemCanada, et al. SEMGROUP LP: Court Approves Sale Process for SemFuel Assets SEMGROUP LP: Files 1st Amended Plan & Disclosure Statement SEMGROUP LP: Goldman Sachs Files Objections to Plan Outline SEMGROUP LP: Nexen Wants Canada Payouts Stayed Pending Appeal SEMGROUP LP: SemCanada Proposes Cross-Border Protocol SIX FLAGS: Fitch Affirms and Withdraws 'D' Issuer Default Rating SPEEDWAY MOTORSPORTS: Moody's Changes Rating Outlook to Stable WHE HOLDINGS: Has $1.8-Mil. DIP Financing Offer from Chiron WILTON HOLDINGS: Involuntary Chapter 11 Case Summary WILTON HOLDINGS: Operating Units Not Part of Involuntary Ch. 11 * AlixPartners Survey Says 59% of Experts Want Bankr. Code Reform * KPMG Appoints Haegele to Lead Restructuring Services in the West * Upcoming Meetings, Conferences and Seminars ********* 973 MARKET: Involuntary Chapter 11 Case Summary ----------------------------------------------- Alleged Debtor: 973 Market Associates, LLC 973 Market Street San Francisco, CA 94103 Case Number: 09-32014 Involuntary Petition Date: July 19, 2009 Court: Northern District of California (San Francisco) Judge: Dennis Montali Petitioners' Counsel: Philip J. Nicholsen, Esq. nicholsenlaw@yahoo.com Law Offices of Philip J. Nicholsen 601 Montgomery St. #777 San Francisco, CA 94111 Tel: (415) 364-4000 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ UESF Engineering Inc. services $3,500 315 Bay Street 3rd Floor San Francisco, CA 94133 Michael Schinner services $2,691 96 Jessie Street San Francisco, CA 94105 Santos & Orruta Structural services $23,000 Engineers 2451 Harrison Street San Francisco, CA 94110 ALERIS INT'L: Alvarez & Marsal Bills $1.26MM for April-May Work --------------------------------------------------------------- Pursuant to Sections 330 and 331 of the Bankruptcy Code, several professionals in Aleris International Inc.'s Chapter 11 cases sought the allowance of fees for services they rendered and the reimbursement of their expenses they incurred for these periods: A. Debtors' Professionals Professional Period Fees Expenses ------------ ------ -------- -------- Alvarez & Marsal 04/01/09- North America, LLC 04/30/09 $635,683 $28,406 Alvarez & Marsal 05/01/09- North America, LLC 05/31/09 619,941 18,263 Weil, Gotshal & 04/01/09- Manges LLP 04/30/09 394,002 12,477 Weil, Gotshal & Manges 05/01/09- LLP 05/31/09 276,323 5,783 PricewaterhouseCoopers 02/12/09- LLP 04/30/09 334,954 38,795 Moelis & Company LLC 04/01/09- 04/30/09 200,000 28,650 Moelis & Company LLC 05/01/09- 05/31/09 200,000 11,948 Ernst & Young LLP 04/01/09 - 04/30/09 106,813 2,604 Ernst & Young LLP 05/01/09 - 05/31/09 129,729 638 Richards, Layton & 04/01/09 - Finger, P.A. 04/30/09 28,847 1,542 Richards, Layton & 05/01/09 - Finger, P.A. 05/31/09 25,086 1,579 Alvarez & Marsal is the Debtors' restructuring advisors. Erns & Young serves as independent auditors to the Debtors. Richards Layton is the Debtors' co-counsel. Moelis & Company is the Debtors' financial advisor. PricewaterhouseCoopers serves as the Debtors' special accountant. Weil Gotshal is the Debtors' attorneys. The Debtors told the Court they received no objections as to the fee applications of these professionals for these fee periods: Professional Fee Period ------------ ---------- Alvarez & Marsal North America, LLC 02/12/09-04/30/09 Ernst & Young LLP 04/01/09-05/31/09 Richards, Layton & Finger, P.A. 04/01/09-04/30/09 Weil, Gotshal & Manges LLP 04/01/09-04/30/09 Moelis & Company LLC 04/01/09-04/30/09 B. Professionals of the Official Committee of Unsecured Creditors Professional Period Fees Expenses ------------ ------ -------- -------- Fried, Frank, Harris, 04/01/09- Shriver & Jacobson LLP 04/30/09 $124,505 $16,844 Reed Smith LLP 04/01/09- 04/30/09 123,064 3,536 Reed Smith LLP 05/01/09- 05/31/09 183,189 8,459 Mesirow Financial 02/26/09- Consulting, LLC 03/31/09 322,850 0 Landis Rath & Cobb LLP 04/01/09- 05/31/09 7,095 764 Creditors Committee 04/01/09- Members 05/31/09 0 6,347 Reed Smith serves as the Committee's counsel. Mesirow is the Committee's financial advisor. Fried Frank serves as the Debtors' special financing, corporate, tax and litigation counsel. The Committee said it received no objections as to the fee applications of these professionals for these fee periods: Professional Fee Period ------------ ---------- Reed Smith LLP 02/20/09-04/30/09 Committee Members 02/19/09-02/28/09 Committee Members 04/01/09-05/31/09 Mesirow Financial Consulting, LLC 02/26/09-03/31/09 Landis Rath & Cobb LLP 04/01/09-05/31/09 About Aleris International Aleris International, Inc., produces and sells aluminum rolled and extruded products. Aleris operates primarily through two reportable business segments: (i) global rolled and extruded products and (ii) global recycling. Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates over 40 production facilities in North America, Europe, South America and Asia, and employs approximately 8,400 employees. Aleris operates 27 production facilities in the United States with eight production facilities that provided rolled and extruded aluminum products and 19 recycling production plants. Aleris International, Inc., aka IMCO Recycling Inc., and various affiliates filed for bankruptcy on February 12, 2009 (Bankr. D. Del. Case No. 09-10478). The Hon. Brendan Linehan Shannon presides over the cases. Stephen Karotkin, Esq., and Debra A. Dandeneau, Esq., at Weil, Gotshal & Manges LLP in New York, serve as lead counsel for the Debtors. L. Katherine Good, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A. In Wilmington, Delaware, serves as local counsel. Moelis & Company LLC, acts as financial advisors; Alvarez & Marsal LLC as restructuring advisors, and Kurtzman Carson Consultants LLC as claims and noticing agent for the Debtors. As of December 31, 2008, the Debtors had total assets of $4,168,700,000; and total debts of $3,978,699,000. Bankruptcy Creditors' Service, Inc., publishes Aleris International Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Aleris International, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) ALERIS INT'L: Hearing for Asset Sale Procedures Moved to Aug. 11 ---------------------------------------------------------------- The hearing to consider Aleris International Inc.'s motion for the establishment of asset sale procedures has been adjourned to August 11, 2009. It was previously set for July 13, 2009. In their proposal, the Debtors related that they may decide to sell some of their operations as going concern businesses. To ensure that they can sell their assets in a cost-effective and efficient manner, the Debtors sought approval of the U.S. Bankruptcy Court for the District of Delaware of two sets of asset sale procedures: 1. The first set of procedures applies to sales of assets out of the ordinary course of business having a purchase price of $1 million or more and creates a process for the approval of stalking horse bidders, bidding procedures governing auctions and an expedited sale approval process -- the Asset Sale Procedures. 2. The second set of procedures governs the sale of assets out of the ordinary course of business where the purchase price is less than $1 million and provides for the approval of those sales upon notice to certain notice parties and the expiration of an objection period -- the De Minimis Asset Sale Procedures. The Debtors believe that streamlined Sale Procedures will enable them to seek out the highest possible purchase price for each sale while controlling the costs of selling and marketing their assets. Asset Sale Procedures Katherine Good, Esq., at Richards Layton & Finger, P.A., in Wilmington, Delaware, relates that the Asset Sale Procedures are designed to enable the Debtors to sell significant assets relating to discontinued operations or closed facilities through an efficient auction process. In advance of any auction, the Debtors may market their assets to prospective purchasers and may enter into a purchase agreement with a stalking horse bidder if they believe that a Stalking Horse will facilitate bidding at an auction. Each Stalking Horse Agreement will be subject to higher and better offers received through a bidding process and auction. Each Stalking Horse will be entitled to a "break-up fee" and the reimbursement of reasonable out-of-pocket expenses in the event a transaction with a higher bidder is consummated. The Debtors will file a notice of auction on the docket and will serve the notice by overnight mail or fax. The Notice will contain information on how to bid at the auction and will attach the Stalking Horse Agreement, if any. If the Debtors elect to hold an auction with a Stalking Horse bid, parties will have five business days to file an objection to any proposed Stalking Horse or Break-Up Fee. If no objections are filed and served within that period, any Stalking Horse or Break-up Fee will be deemed approved by the Court as though a hearing has been held and a separate order entered. The Debtors will file a notice of sale hearing with the Court seeking final approval of the sale of each asset to the bidder at an auction with the highest and best offer. The Debtors will also seek the Court's approval of the assumption and assignment of certain contracts and leases that are proposed to be transferred to the Successful Bidder in connection with the asset acquisition. Parties will have five business days to object to the sale, or 10 days to object if the Debtors are assuming and assigning contracts as part of the sale. The Debtors will seek permission to pay the fee of any broker who assists them in the marketing and sale of their assets by including information about that fee in the Sale Hearing Notice. A full-text copy of the proposed Bidding Procedures is available for free at http://bankrupt.com/misc/Aleris_BddngProcdres.pdf De Minimis Asset Sale Procedures The Debtors also intend to market their De Minimis Assets and enter into a purchase and sale agreement for the sale of those assets without first seeking approval from the Court, Ms. Good notes. The Debtors will adapt their sale process as appropriate for each de minimis asset and may conduct an auction, if appropriate. Any purchase and sale agreement for the sale of De Minimis Assets owned by the Debtors must remain subject to higher and better offers pending their approval by the Court, or a deemed approval upon the expiration of a 10 business day objection period after notice of the sale to certain notice parties. Upon the deemed approval, the Debtors would also be permitted to pay transaction costs incurred in the sale and any Broker Fees charged by brokers who assist in the sale of the assets. Cure Amount Procedures In connection with the assumption and assignment of contracts and leases pursuant to any sale of property pursuant to the Asset Sale Procedures, the Debtors also propose these Cure Procedures: * Following an auction or if no auction is held, the expiration of the Bid Deadline and the Agent Bid Deadline, the Debtor will file a schedule listing the cure amounts for each contract and lease it intends to assume and assign to the Successful Bidder and will serve the Cure Schedule as an exhibit to the Sale Hearing Notice. * Bidders who require the assumption and assignment of contracts or leases must identify the contracts and leases to be assigned, and submit to the Debtors evidence of their ability to provide adequate assurance of future performance on those contracts and leases. * Any objection to the assumption and assignment of any contract or lease identified on the Cure Schedule must be in writing, filed with the Court, and served on these parties no later than 10 business days after the Debtors file the Sale Hearing Notice: -- Aleris International Inc. -- The Debtors' attorneys, Weil, Gotshal & Manges LLP -- The Debtors' financial advisor, Moelis & Co. LLC -- Attorneys for Deutsche Bank AG New York Branch as agent for the Debtors' lenders, White & Case -- Attorneys for Wilmington Trust Corporation, as trustee under the Indentures -- Attorneys for the Creditors Committee, Reed Smith LLP -- The Office of the U.S. Trustee for the District of Delaware -- The Stalking Horse bidder or its attorneys -- The Successful Bidder of its attorneys -- The Next Highest Bidder of its attorneys * The Debtors will cooperate with the counterparties to contracts and leases to attempt to reconcile any difference in a particular cure amount. If no objections are timely filed, then the cure amounts set forth in the Cure Schedule will be binding on the non-debtor party to the lease or contract for all purposes. If a timely objection is filed that cannot be resolved by the parties, the Court may hear that objection at the Sale Hearing or at a later hearing. Ms. Good avers that approval of a standardized set of procedures will provide a more efficient process for the sale of the Debtors' assets out of the ordinary course of business. The procedures will not only reduce the number of hearings required for those sales and will not only shorten the time between when the Debtors find a willing buyer and when they can close on a sale, but will also provide interested parties with the opportunity to review each proposed sale and be heard regarding any proposed transaction, she points out. About Aleris International Aleris International, Inc., produces and sells aluminum rolled and extruded products. Aleris operates primarily through two reportable business segments: (i) global rolled and extruded products and (ii) global recycling. Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates over 40 production facilities in North America, Europe, South America and Asia, and employs approximately 8,400 employees. Aleris operates 27 production facilities in the United States with eight production facilities that provided rolled and extruded aluminum products and 19 recycling production plants. Aleris International, Inc., aka IMCO Recycling Inc., and various affiliates filed for bankruptcy on February 12, 2009 (Bankr. D. Del. Case No. 09-10478). The Hon. Brendan Linehan Shannon presides over the cases. Stephen Karotkin, Esq., and Debra A. Dandeneau, Esq., at Weil, Gotshal & Manges LLP in New York, serve as lead counsel for the Debtors. L. Katherine Good, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A. In Wilmington, Delaware, serves as local counsel. Moelis & Company LLC, acts as financial advisors; Alvarez & Marsal LLC as restructuring advisors, and Kurtzman Carson Consultants LLC as claims and noticing agent for the Debtors. As of December 31, 2008, the Debtors had total assets of $4,168,700,000; and total debts of $3,978,699,000. Bankruptcy Creditors' Service, Inc., publishes Aleris International Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Aleris International, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) ALERIS INT'L: OmniSource Transfers Claims to JP Morgan ------------------------------------------------------ In separate filings, OmniSource Southeast notified the Court that it transferred its claims against each of the Debtors to OmniSource Corporation: Debtor Claim Amount ------ ------------ Aleris International, Inc., $75,642 Aleris Aluminum U.S. Sales, Inc. 75,642 Commonwealth Aluminum Metals, LLC 75,642 Wabash Alloys, LLC 14,000 Subsequently, for the period from June 3, 2009, through July 7, 2009, OmniSource Corporation informed the Court that it transferred its claims against each of the Debtors to JPMorgan Chase Bank, N.A. The Transferred Claims were filed with these debtors in various amounts: Debtor Claim Amount ------ ------------ Alchem Aluminum, Inc. 16,633 Aleris International, Inc. 75,642 Aleris International, Inc. 75,642 Aleris International, Inc. 192,235 Alumitech of Wabash, Inc. 350 Alumitech of Wabash, Inc. 26,460 Commonwealth Aluminum Lewisport, LLC 75,642 Commonwealth Aluminum Metals, LLC 75,642 Commonwealth Aluminum Metals, LLC 135,573 IMCO Recycling of Ohio, Inc. 135,573 Wabash Alloys, LLC 14,000 Wabash Alloys, LLC 712,532 Superior Aluminum Alloys LLC also notified the Court that it transferred its claims against Alumitech of Wabash, Inc., aggregating $350, to OmniSource Corporation. About Aleris International Aleris International, Inc., produces and sells aluminum rolled and extruded products. Aleris operates primarily through two reportable business segments: (i) global rolled and extruded products and (ii) global recycling. Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates over 40 production facilities in North America, Europe, South America and Asia, and employs approximately 8,400 employees. Aleris operates 27 production facilities in the United States with eight production facilities that provided rolled and extruded aluminum products and 19 recycling production plants. Aleris International, Inc., aka IMCO Recycling Inc., and various affiliates filed for bankruptcy on February 12, 2009 (Bankr. D. Del. Case No. 09-10478). The Hon. Brendan Linehan Shannon presides over the cases. Stephen Karotkin, Esq., and Debra A. Dandeneau, Esq., at Weil, Gotshal & Manges LLP in New York, serve as lead counsel for the Debtors. L. Katherine Good, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A. In Wilmington, Delaware, serves as local counsel. Moelis & Company LLC, acts as financial advisors; Alvarez & Marsal LLC as restructuring advisors, and Kurtzman Carson Consultants LLC as claims and noticing agent for the Debtors. As of December 31, 2008, the Debtors had total assets of $4,168,700,000; and total debts of $3,978,699,000. Bankruptcy Creditors' Service, Inc., publishes Aleris International Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Aleris International, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) ALERIS INT'L: Proposes Deloitte As Valuation Provider ----------------------------------------------------- Aleris International Inc. and its affiliates seek the Bankruptcy Court's authority to employ Deloitte Financial Advisory Services LLP, pursuant to Sections 327 and 328 of the Bankruptcy Code, to provide them valuation services nunc pro tunc to July 2, 2009. The Debtors relate that they selected Deloitte FAS because of the firm's extensive experience and knowledge in the field of valuation services and knowledge and understanding about their businesses. Deloitte FAS will valuate certain assets of the Debtors to assist in the Debtors' tax planning and compliance with Section 864(e) of the Internal Revenue Code. The Debtors propose to pay Deloitte FAS pursuant to the firm's current hourly rates: Classification Hourly Rate -------------- ----------- Partner/Principal $420 Director $420 Senior Manager $365 Manager $325 Senior Associate $235 Associate $190 The Debtors will also reimburse Deloitte FAS for the firm's actual and necessary expenses. The Debtors paid Deloitte FAS $5,000 for prepetition services. As of the Petition Date, the Debtors owe Deloitte FAS approximately $13,000, of which Deloitte FAS has agreed not to seek recovery. Gregory Miocic, a director of Deloitte Financial Advisory Services LLP, in New York, assures the Court that his firm is a "disinterested person" as that term is defined under Section 101(14) of the Bankruptcy Code. About Aleris International Aleris International, Inc., produces and sells aluminum rolled and extruded products. Aleris operates primarily through two reportable business segments: (i) global rolled and extruded products and (ii) global recycling. Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates over 40 production facilities in North America, Europe, South America and Asia, and employs approximately 8,400 employees. Aleris operates 27 production facilities in the United States with eight production facilities that provided rolled and extruded aluminum products and 19 recycling production plants. Aleris International, Inc., aka IMCO Recycling Inc., and various affiliates filed for bankruptcy on February 12, 2009 (Bankr. D. Del. Case No. 09-10478). The Hon. Brendan Linehan Shannon presides over the cases. Stephen Karotkin, Esq., and Debra A. Dandeneau, Esq., at Weil, Gotshal & Manges LLP in New York, serve as lead counsel for the Debtors. L. Katherine Good, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A. In Wilmington, Delaware, serves as local counsel. Moelis & Company LLC, acts as financial advisors; Alvarez & Marsal LLC as restructuring advisors, and Kurtzman Carson Consultants LLC as claims and noticing agent for the Debtors. As of December 31, 2008, the Debtors had total assets of $4,168,700,000; and total debts of $3,978,699,000. Bankruptcy Creditors' Service, Inc., publishes Aleris International Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Aleris International, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) ALERIS INT'L: Rejects Concur Technologies Agreement --------------------------------------------------- Pursuant to Section 365(a) of the Bankruptcy Code, Aleris International Inc. and its affiliates sought and obtained permission from Judge Brendan Shannon of the U.S. Bankruptcy Court for the District of Delaware to reject a business services agreement with Concur Technologies, Inc. The Contract obligates the Debtors to pay Concur Technologies $31,323 as an initial configuration fee and thereafter, monthly payments of $6,106 through December 18, 2010, for services relating to computer software. A full-text copy of the Contract is available for free at http://bankrupt.com/misc/Aleris_ConcurAgreement.pdf The Debtors assert that since they never installed the relevant software, it is in the best interest of their estates to reject the Contract. Any claim for damages arising as a result of the Contract rejection must be filed on or before September 15, 2009, the Court ruled. Prior to the Court's ruling, the Debtors' counsel noted that no objections were filed with respect to the Debtors' request. About Aleris International Aleris International, Inc., produces and sells aluminum rolled and extruded products. Aleris operates primarily through two reportable business segments: (i) global rolled and extruded products and (ii) global recycling. Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates over 40 production facilities in North America, Europe, South America and Asia, and employs approximately 8,400 employees. Aleris operates 27 production facilities in the United States with eight production facilities that provided rolled and extruded aluminum products and 19 recycling production plants. Aleris International, Inc., aka IMCO Recycling Inc., and various affiliates filed for bankruptcy on February 12, 2009 (Bankr. D. Del. Case No. 09-10478). The Hon. Brendan Linehan Shannon presides over the cases. Stephen Karotkin, Esq., and Debra A. Dandeneau, Esq., at Weil, Gotshal & Manges LLP in New York, serve as lead counsel for the Debtors. L. Katherine Good, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A. In Wilmington, Delaware, serves as local counsel. Moelis & Company LLC, acts as financial advisors; Alvarez & Marsal LLC as restructuring advisors, and Kurtzman Carson Consultants LLC as claims and noticing agent for the Debtors. As of December 31, 2008, the Debtors had total assets of $4,168,700,000; and total debts of $3,978,699,000. Bankruptcy Creditors' Service, Inc., publishes Aleris International Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Aleris International, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) ALERIS INT'L: Resolves U.S. Trustee Comments on PwC Engagement -------------------------------------------------------------- Aleris International Inc. and its affiliates informed the Bankruptcy Court that they received informal comments from the U.S. Trustee with respect to the retention application of PricewaterhouseCoopers LLP. Thus, to resolve the U.S Trustee's concerns, the Debtors revised the Proposed Order to provide that: (a) PwC will not be entitled to indemnification, contribution, or reimbursement for services other than provided under the Tax Advisory Engagement Letter, unless those services and the indemnification, contribution, or reimbursement are provided for in the Tax Advisory Engagement Letter and approved by the Court. (b) The Debtors will have no obligation to indemnify any person, or provide contribution or reimbursement to any person, for any claim or expense to the extent that it is either: (i) judicially determined to have arisen from that person's gross negligence, willful misconduct, breach of fiduciary duty, bad faith or self- dealing; (ii) for a contractual dispute in which the Debtors allege the breach of PwC's contractual obligations unless the Court determines that indemnification, contribution, or reimbursement would be permissible; or (iii) settled. (c) If, before the earlier of (i) the entry of an order confirming a Chapter 11 plan, or (ii) the entry of an order closing these Chapter 11 cases, PwC believes that it is subject to the payment of any amounts by the Debtors' indemnification, contribution, or reimbursement obligations, PwC must file an application before the Court and the Debtors may not pay any amount to PwC before entry of an order by the Court approving the payment. In a supplemental application, the Debtors asked the Court to authorize them to: (i) retain PricewaterhouseCoopers LLP to provide tax advisory services nunc pro tunc to February 12, 2009; and (ii) clarify that the Tax Advisory Services will be subject to the terms of PwC Retention Order and that PwC's services should not, in any capacity, fall within the scope of the OCP Order. The Debtors previously filed an application on March 13, 2009, for the retention of PwC to assist with designing a short term cash flow forecast on behalf of their corporate offices in Ohio and offices of non-debtor affiliates in Germany. The PwC Retention Application dated April 8, 2009, did not include a description of the Tax Advisory Services provided by PwC. The scope of the Tax Advisory Services provided by PwC includes, but is not limited to, the preparation of the U.S. and foreign income tax and the provision of related tax compliance services and tax consulting services. About Aleris International Aleris International, Inc., produces and sells aluminum rolled and extruded products. Aleris operates primarily through two reportable business segments: (i) global rolled and extruded products and (ii) global recycling. Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates over 40 production facilities in North America, Europe, South America and Asia, and employs approximately 8,400 employees. Aleris operates 27 production facilities in the United States with eight production facilities that provided rolled and extruded aluminum products and 19 recycling production plants. Aleris International, Inc., aka IMCO Recycling Inc., and various affiliates filed for bankruptcy on February 12, 2009 (Bankr. D. Del. Case No. 09-10478). The Hon. Brendan Linehan Shannon presides over the cases. Stephen Karotkin, Esq., and Debra A. Dandeneau, Esq., at Weil, Gotshal & Manges LLP in New York, serve as lead counsel for the Debtors. L. Katherine Good, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A. In Wilmington, Delaware, serves as local counsel. Moelis & Company LLC, acts as financial advisors; Alvarez & Marsal LLC as restructuring advisors, and Kurtzman Carson Consultants LLC as claims and noticing agent for the Debtors. As of December 31, 2008, the Debtors had total assets of $4,168,700,000; and total debts of $3,978,699,000. Bankruptcy Creditors' Service, Inc., publishes Aleris International Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Aleris International, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) AMERICAN INT'L: Buyers Mull Tie-Ups to Bid for Nan Shan Life ------------------------------------------------------------ Bidders for American International Group's Taiwanese unit are considering bidding jointly. AIG is putting its 95%-owned Nan Shan Life Insurance, which has assets totaling NT$1.49 trillion, on the auction block. Dow Jones says that the unit may bring in $2 billion to AIG. As reported by the Troubled Company Reporter on July 21, 2009, people familiar with the matter told The Journal that AIG shortlisted at least seven bidders to buy its Taiwan life insurance unit for about $2 billion. According to The Journal, the sources said that Taiwan's financial regulator told the private-equity companies -- Bain Capital LLC, Carlyle Group, Primus Financial Holdings Ltd. and MBK Partners Ltd. -- to form partnerships with either Chinatrust Financial Holding Co. or Fubon Financial Holding Co., if they are to win the bidding for Nan Shan Life Insurance Co. Citing the sources, the report states that Cathay Financial Holding Co. can bid on its own. Citing people familiar with the matter, Dow Jones Newswires reports that Hontai Life Insurance Co. is considering teaming up Primus Financial Holdings Ltd. and will decide "fairly soon" on whether to go ahead with a joint bid. Dow Jones quoted a source as saying, "What Nan Shan needs most is a management shakeup, and that's central to (Hontai's) discussions with Primus on whether to partner up." People familiar with the matter said that Carlyle Group L.P. is also teaming up with Fubon Financial Holding Co. to bid for the unit, Ellen Sheng and Amy Or at The Wall Street Journal relate. The Journal, citing sources, states that Bain Capital LLC, Oaktree Capital Management LLC, and Morgan Stanley's private-equity unit are in talks with local firm Chinatrust Financial Holding Co. on bidding for Nan Shan Life. According to The Journal, MBK Partners Ltd. is still looking for domestic partners to bid for Nan Shan Life, other people familiar with the situation said Tuesday, adding the companies are now contacting parties that haven't submitted initial bids for the AIG assets. 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. AMERICAN INT'L: Morgan Stanley Named as Primary Financial Adviser ----------------------------------------------------------------- Documents released by the New York Federal Reserve say that Morgan Stanley has been named as a primary financial adviser for any public offerings or divestitures for units of American International Group Inc. Joe Bel Bruno at The Wall Street Journal relates that The New York Fed said it paid Morgan Stanley an initial $4 million advisory fee along with $2.5 million each quarter since October. The New York Fed said in the documents that it will pay Ernst & Young LLP as much as $60 million for its advice relating to AIG. Based in New York, American International Group, Inc., is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received, and continues to seek buyers of its assets. At March 31, 2009, AIG had $819.75 billion in total assets and $765.53 billion in total liabilities. At September 30, 2008, AIG had $1.022 trillion in total assets and $950.9 billion in total debts. The Troubled Company Reporter reported on March 4, 2009, that Moody's Investors Service confirmed the A3 senior unsecured debt and Prime-1 short-term debt ratings of American International Group. 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. ARENA FOOTBALL: Closes, May File for Bankruptcy ----------------------------------------------- John Lombardo at Sports Business Jounrnal reports that the Arena Football League has closed and is considering filing for bankruptcy protection. SBJ relates that AFL has already cancelled the 2009 season and hopes for a 2010 game continue to dim. AFL, which has $14 million in debt, would need $10 million to $12 million in new capital for it to return in 2010, the report states. SBJ quoted a source as saying, "There is a commitment to a plan to play (in 2010) and some owners don't want to put up the cash." According to SBJ, AFL hopes to secure $10 million from a group of investors, including Steelers Hall of Famer Lynn Swann, for an expansion franchise in Pittsburgh. The Arena Football League was founded in 1987 as an American football indoor league by Jim Foster. It is played indoors on a smaller field than American football, resulting in a faster and higher-scoring game. The sport was invented in 1986, and patented, in 1990 by Mr. Foster, a former executive of the United States Football League and the National Football League. Almost two months after the New Orleans Voodoo folded on the league's owners chose to cancel the 2009 season to work on developing a long-term plan to improve its economic model. ARLINGTON CINEMA: Business As Usual Despite Ch. 11 Filing --------------------------------------------------------- Arlington, Virginia-based Arlington Cinema Inc., owner of Arlington Cinema 'N' Drafthouse, has filed for Chapter 11 bankruptcy protection. "The company expects to continue business as usual during and after reorganization," said Dan Press, Esq., at Chung & Press, P.C. Jeff Clabaugh at Washington Business Journal relates that Arlington Cinema commenced an expansion and opened Montgomery Cinema `N' Drafthouse in Wheaton in October 2008. The Company closed the theater and restaurant in December 2008, citing excessive costs and the time-consuming county permitting process. Wheaton Plaza and Westfield LLC, the landlord, wouldn't pay the remaining balance on the project's construction allowance, Arlington Cinema said. Wheaton Plaza and Westfield LLC was listed atop the list of the Company's $20 largest unsecured creditors, with a disputed claim of $5 million. The Arlington Cinema 'N' Drafthouse opened in 1985 in the former Arlington Theater. Greg Godbout bought the Company in 2005. It has expanded from second-run movies and beer, adding a restaurant as well as live music and entertainment. Arlington Cinema Inc. filed for Chapter 11 on July 15, 2009 (Bankr. E.D. Va. Case No. 09-15601). Daniel M. Press, Esq., at Chung & Press, P.C., represents the Debtor. Its petition says that assets were $50,001 to $100,000 and debts were $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/vaeb09-15601.pdf ATC TECHNOLOGY: To Restructure Drivetrain Biz After Honda Exit -------------------------------------------------------------- ATC Technology Corporation unveiled additional restructuring actions to reduce operating costs of its Drivetrain business resulting from the pending loss of the Honda transmission remanufacturing program that include additional workforce reductions and consolidation of certain warehousing activities. The Company expects the actions to result in pre-tax charges of roughly $1.5 million or $0.05 per diluted share after tax in the second half of the year for severance and related costs. The charges are in addition to the previously announced pre-tax goodwill impairment charge of $37 million, or $1.32 per share after tax, to be recorded in the second quarter of 2009. The Company's previously announced restructuring actions, which are substantially complete, total $5.3 million pre-tax or $0.17 per diluted share after tax year- to- date. Todd R. Peters, President and CEO said, "While the restructuring actions . . . will only partially mitigate the impact of Honda's decision to in-source the remanufacturing of automatic transmissions, I am pleased to share the news that ATC has been awarded contracts with two existing customers, Chrysler and Subaru, to supply remanufactured engines and related components in North America in support of both warranty and customer-pay programs. The addition of remanufactured engines and related components strengthens our product profile in North America and is a natural extension of our capabilities. The remanufacturing for these programs, slated to launch during the third quarter, will be performed at our Oklahoma City facility. These programs have been in development since late 2008 but finalization of the contracts was delayed pending Chrysler's successful emergence from bankruptcy. These engine programs, expected to partially mitigate the impending loss of Honda remanufactured transmissions, are expected to contribute approximately $15-$17 million in annualized revenue. For 2009, we expect them to contribute approximately $7- $8 million of revenue with no impact on segment profit due to projected inefficiencies related to the launch and start-up of the new programs. As a result of the addition of these engine programs, we now expect Drivetrain revenues of $147- $150 million in 2009." Mr. Peters concluded, "The additional restructuring actions will be completed by year-end. We are finalizing the details of the transition plan with Honda and expect the wind-down of the transmission program to be orderly and not disruptive to our on- going operation with production substantially completed by year- end. We will continue to provide limited remanufacturing and other services to Honda for other products. After considering the loss of the transmission business with Honda, restructuring actions, and the expected contribution from the new remanufactured engine programs, we expect the Drivetrain business to achieve adjusted segment profit in the low single- digit range for the balance of 2009 and into 2010." The Company will simultaneously host a conference call (dial-in number is (877-856-1958) and web cast on Wednesday, July 29, 2009 at 9:00 A.M. CENTRAL time to discuss the operating highlights and financial results for the second quarter of 2009 as well as details on the restructuring of the Drivetrain business and new business wins. In anticipation of the call and web cast, the Company will issue its earnings release at the market close on Tuesday, July 28, 2009. Conference call information (for those interested in asking questions after the presentation) and the web cast link (for those interested in listening only) are available at the Company's web site at www.goATC.com. Click on Investor Relations. Select Webcasts. You can access the web site up to one hour prior to the call to register, download slides and install any necessary audio/video software. A "no audio, slides only" link is also available and will allow conference call participants to view slides in sync with the conference call. The call and slides will be archived for one-year on the ATC Technology Corporation Web site and will be available two hours subsequent to the call. ATC Technology Corporation is headquartered in Downers Grove, Illinois. The Company provides comprehensive engineered solutions for logistics and refurbishment services to the consumer electronics industries and the light and medium/heavy-duty vehicle service parts markets. AURORA OIL & GAS: Court OKs Collateral Use, Limits Equity Trade --------------------------------------------------------------- Aurora Oil & Gas Corporation provided an update on its bankruptcy proceedings. On July 13, 2009, the Companies filed various "first day" motions and applications. At a hearing before the Bankruptcy Court on July 15, 2009, to consider certain of those motions, the Companies obtained approval, among other things, of three key motions: 1. The Court entered an interim Cash Collateral Order (i) Authorizing the Debtors' use of Cash Collateral, (ii) Granting Replacement Liens, Adequate Protection and Administrative Expense Priority to Certain Prepetition Lenders and (iii) Scheduling a Final Hearing Pursuant to Bankruptcy Rule 4001). This order authorizes the Companies, among other things, to use its existing cash balances and cash in-flows for disbursements according to a budget. 2. The Court entered the Interim Order on Motion for Establishing Notification and Hearing Procedures for Trading in Equity Securities. The order requires existing or potential substantial owners of the Company's stock to provide notice of holdings, and provide notice of potential sales or purchases, and it allows the Company, if the Court approves, to restrict, in specified circumstances, certain potential transactions by a substantial shareholder. Each substantial shareholder must provide advance notice of its intent to buy or sell common stock prior to effectuating any such purchase or sale. For these purposes, a substantial shareholder is defined as a person or entity that beneficially owns or, as a result of a purchase or sale transaction, would beneficially own, at least 4.5 million shares (including options to acquire shares) of the Company's common stock. 3. The Court entered the Order on Motion for Granting Authority to Limit Notice and to Establish Notice Procedures. This Order authorizes the Company to notify certain limited parties and set forth procedures by which to inform those parties of certain matters governed by Bankruptcy Rule 2002. Parties not included in the limited list of notice parties that wish to request notice must file a request pursuant to Bankruptcy Rule 2002. A hearing to consider approval of the Interim Cash Collateral Order and Interim Securities Trading Procedures Order on a final basis is scheduled for August 5, 2009, with any objections due by July 31, 2009. About Aurora Oil & Gas Based in Traverse City, Michigan, Aurora Oil & Gas Corporation (Pink Sheets: AOGS) is an independent energy company focused on unconventional natural gas exploration, acquisition, development and production, with its primary operations in the Antrim Shale of Michigan, the New Albany Shale of Indiana and Kentucky. The Company and one affiliate filed for Chapter 11 protection on July 12, 2009 (Bankr. W.D. Mich. Case Nos. 09-08254 and 09-08255). Judge Scott W. Dales presides over the case. Stephen B. Grow, Esq., at Warner Norcross & Judd, LLP, in Grand Rapids, Michigan; and Joel H. Levitin, Esq., and Richard A. Stieglitz Jr., at Cahill Gordon & Reindel LLP in New York, serve as the Debtors' counsel. Aurora listed assets and debts both ranging from $100,000,001 to $500,000,000. AURORA OIL: Taps Cahill Gordon as Bankr. and Restructuring Counsel ------------------------------------------------------------------ Aurora Oil & Gas Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Western District of Michigan for authority to employ Cahill Gordon & Reindel LLP as bankruptcy and restructuring counsel. Cahill will, among other things: a. provide the Debtors with legal advice with respect to the Debtors' powers and duties as debtors-in-possession in the continued operation of their business and efforts to maximize the value of their assets; b. provide legal support with respect to all necessary actions to protect and preserve the estates and assets of the Debtors, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiations of disputes in which the Debtors are involved, and the preparation of objections to any claims filed; c. prepare on behalf of the Debtors, as debtors-in-possession, all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtors' estates; Joel H. Levitin, a partner at Cahill, tells the Court that the hourly rates of Cahill's personnel are: Attorneys $360 - $888 Paralegals $175 - $280 Mr. Levitin adds that Cahill received payments of $1,442,172 for services rendered prepetition. Mr. Levitin assures the Court that Cahill is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Levitin can be reached at: Cahill Gordon & Reindel LLP 80 Pine Street New York, New York 10005 Tel: (212) 701-3000 Fax: (212) 269-5420 About Aurora Oil & Gas Based in Traverse City, Michigan, Aurora Oil & Gas Corporation (Pink Sheets: AOGS) is an independent energy company focused on unconventional natural gas exploration, acquisition, development and production, with its primary operations in the Antrim Shale of Michigan, the New Albany Shale of Indiana and Kentucky. The Company and one affiliate filed for Chapter 11 protection on July 12, 2009 (Bankr. W.D. Mich. Case Nos. 09-08254 and 09-08255). Judge Scott W. Dales presides over the case. Stephen B. Grow, Esq., at Warner Norcross & Judd, LLP, in Grand Rapids, Michigan; and Joel H. Levitin, Esq., and Richard A. Stieglitz Jr., at Cahill Gordon & Reindel LLP in New York, serve as the Debtors' counsel. Aurora listed assets and debts both ranging from $100,000,001 to $500,000,000. AURORA OIL: Wants Schedules Filing Extended Until August 12 ----------------------------------------------------------- Aurora Oil & Gas Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Western District of Michigan to extend until August 12, 2009, the time to file their schedules of assets and liabilities, statements of financial affairs, and schedules of executory contracts and unexpired leases. Based in Traverse City, Michigan, Aurora Oil & Gas Corporation (Pink Sheets: AOGS) is an independent energy company focused on unconventional natural gas exploration, acquisition, development and production, with its primary operations in the Antrim Shale of Michigan, the New Albany Shale of Indiana and Kentucky. The Company and an affiliate filed for Chapter 11 protection on July 12, 2009 (Bankr. W.D. Mich. Case Nos. 09-08254 and 09-08255). Judge Scott W. Dales presides over the case. Stephen B. Grow, Esq., at Warner Norcross & Judd, LLP, in Grand Rapids, Michigan; and Joel H. Levitin, Esq., and Richard A. Stieglitz Jr., at Cahill Gordon & Reindel LLP in New York, serve as the Debtors' counsel. Aurora listed assets and debts both ranging from $100,000,001 to $500,000,000. BANK OF AMERICA: May Get Three Offers for Merrill Lynch Unit ------------------------------------------------------------ Several firms are interested in acquiring the management of Bank of America Merrill Lynch's Asian real-estate investment business, including the management of its $4 billion Merrill Lynch Asian Real Estate Opportunity Fund, Nesil Staney and Nisha Gopalan at The Wall Street Journal report, citing people familiar with the matter. The Journal states that Merrill, amid uncertainty about its merger with BofA and the global market meltdown, started looking for new management for the fund and the $1 billion-plus in Asian real- estate investments it had invested in the years before it launched the fund. The Journal says that BofA decided to sell the management of the Asian real-estate businesses after the U.S. government's stress tests were released earlier this year. The Journal relates that Timothy J. Grady, who was managing the fund, left the company in March, accelerating the decision to sell. According to The Journal, a source said that the fund closed in October 2008 after raising about $2.65 billion, and is currently headed by Martin Seol, the fund's former chief administrative officer. The report says that total assets in debt and equity equal to $4 billion. According to The Journal, the sources said that Blackstone Group LP and Apollo Investment Management LP have each expressed interest on the Merrill unit, while Sumitomo Mitsui Banking Corp. and Red Fort Capital Advisors Pvt. Ltd. are mulling a joint bid. An Apollo Investment spokesperson said that the Company isn't in talks with Merrill about managing the fund, the report states. Citing a person familiar with the matter, The Journal relates that the sale of the management of the real-estate assets would close before year-end. A source, according to The Journal, said that the buyer of the fund's management will re-brand the fund. Bank of America Merrill Lynch told investors in May 2009 that it decided to transfer management of the Asia real-estate fund to "a recognized asset manager" but it would "continue to own a substantial stake in its limited partnership interest and would stay committed and aligned with the interest of the fund." Based in Charlotte, North Carolina, Bank of America -- http://www.bankofamerica.com/-- is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The Company serves more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers support to more than 4 million small business owners. The Company serves clients in more than 150 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. The bank needed the government's financial help in completing its acquisition of Merrill Lynch. Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth management, capital markets and advisory companies with offices in 40 countries and territories. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world's largest publicly traded investment management companies with more than $1 trillion in assets under management. Merrill Lynch's operations are organized into two business segments: Global Markets and Investment Banking (GMI) and Global Wealth Management (GWM). As reported by the Troubled Company Reporter on March 27, 2009, Moody's Investors Service lowered the senior debt rating of Bank of America Corporation to A2 from A1, the senior subordinated debt rating to A3 from A2, and the junior subordinated debt rating to Baa3 from A2. The preferred stock rating was downgraded to B3 from Baa1. The holding company's short-term rating was affirmed at Prime-1. BENEFICIAL LIFE: S&P Affirms 'BB+' Counterparty Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'BB+' counterparty credit and financial strength ratings on Beneficial Life Insurance Co. and removed the ratings from CreditWatch, where they had been placed with negative implications on June 17, 2009. S&P assigned a negative outlook. Subsequently, S&P withdrew the ratings at the company's request. "S&P took this rating action in response to Beneficial Life's plan to discontinue the acceptance of new applications effective Aug. 31, 2009," said Standard & Poor's credit analyst Tim Clark. "Although capitalization and liquidity historically had been relative strengths to the rating, S&P believes that asset deterioration and runoff lapse patterns may put stress on Beneficial Life's capital and liquidity." Beneficial Life's parent, Deseret Management Co., has stated its intention to continue supporting Beneficial Life. DMC has contributed a total of $594 million in capital during 2007 and 2008. However, S&P has not factored DMC's continued support into S&P's ratings because S&P is unable to assess the full financial capacity of DMC to provide such support. BLACK GAMING: Missed July 15 Interest Payment; Defaults WF Loan --------------------------------------------------------------- Due to, among other things, the failure to make the required semi-annual interest payment on January 15, 2009 due under its $125 million 9.0% Senior Secured Notes due 2012, Black Gaming, LLC is in default under the Senior Notes and the Company's Credit Agreement with Wells Fargo Foothill, Inc., dated December 20, 2004, as amended. The Company also failed to make the scheduled semi-annual interest payment due July 15, 2009 under the Senior Notes. Pursuant to the subordination provisions of the indenture governing the Company's $66 million aggregate principal amount of 12.75% Senior Subordinated Discount Notes due 2013, the Company is prohibited from making the $4,207,500 semi-annual interest payment on the Subordinated Notes due July 15, 2009 until the payment default under the Senior Notes has been cured or waived. If the scheduled interest payment on the Subordinated Notes is not made within 30 days of the scheduled payment date, an event of default will occur under the indenture governing the Subordinated Notes, and the aggregate principal amount of the Subordinated Notes, plus the unpaid interest payment and any other amounts due and owing on the Subordinated Notes could be declared immediately due and payable by the trustee or by holders of 25% or more of the aggregate principal amount of the Subordinated Notes. The failure to make the semi-annual interest payment under the Subordinated Notes within the 30-day grace period would constitute an additional event of default under the Credit Agreement. The acceleration of the Company's obligations under the Subordinated Notes would constitute an additional event of default under the Senior Notes. About Black Gaming Headquartered in Las Vegas, Nevada, Black Gaming, LLC -- http://www.blackgaming.com/-- through its subsidiaries, engages in the ownership and operation of casino hotels. Its casino properties include CasaBlanca Hotel & Casino, Oasis Hotel & Casino, and Virgin River Hotel & Casino, which are located in Mesquite, Nevada. The company also owns the Virgin River Convention Center in Mesquite, Nevada, which is used as a special events facility and for overflow hotel traffic from its other properties. Black Gaming's properties also offer amenities, including championship golf courses, spas, a bowling center, a movie theater, both gourmet and casual restaurants, and banquet and conference facilities. Founded in 1988, the company has 2,300 employees. BOSTON SCIENTIFIC: Posts $158MM Second Quarter 2009 Net Income -------------------------------------------------------------- Boston Scientific Corporation released financial results for the second quarter ended June 30, 2009, as well as guidance for net sales and earnings per share (EPS) for the third quarter and full year 2009. The Company's net income for the second quarter of 2009 was $158 million, or $0.10 per share. The Company Increased sales seven percent to $2.074 billion and achieved adjusted EPS of $0.20, both at the high end of the Company's guidance range (GAAP EPS of $0.10). Worldwide sales of cardiac rhythm management (CRM) products increased 10 percent, including a 13 percent increase in implantable cardioverter defibrillator (ICD) sales. Worldwide sales of drug-eluting stent (DES) systems increased 14 percent. The Company maintained leadership position in worldwide DES market, including a 50 percent share of the U.S. market. The Company increased worldwide Neuromodulation sales by 18 percent. Worldwide Endoscopy sales increased six percent, Urology/Gynecology seven percent. "I am excited about joining the Boston Scientific team and to help report a very good quarter," said Ray Elliott, President and Chief Executive Officer of Boston Scientific. "We delivered sales and earnings at the high end of our guidance range with almost all businesses and regions reporting solid results. The performance of our two largest businesses was particularly impressive, with Cardiovascular achieving mid-teens growth in DES sales and CRM recording its fifth consecutive quarter of double-digit growth in the U.S." Net sales for the second quarter of 2009 were $2.074 billion, as compared to net sales of $2.024 billion for the second quarter of 2008, which included sales from divested businesses of $19 million. Excluding the impact of foreign currency and sales from divested businesses, net sales increased seven percent over the prior period. Reported results included intangible asset impairment charges, acquisition- and restructuring-related charges; discrete tax items and amortization expense (after-tax) of $139 million, or $0.10 per share, which consisted of: -- $8 million ($10 million pre-tax) of intangible asset impairment charges associated primarily with certain urology-related intangible assets; -- $17 million, on both a pre-tax and after-tax basis, of purchased research and development charges, associated with the acquisition of certain technology rights; -- $22 million ($30 million pre-tax) of restructuring and restructuring-related charges associated with the Company's plant network optimization plan and expense and head count reduction initiatives; -- an $11 million credit for discrete tax items related to certain tax positions taken in a prior period; and -- $103 million ($126 million pre-tax) of amortization expense. Adjusted net income for the second quarter of 2009, excluding these charges, was $297 million, or $0.20 per share. Reported net income for the second quarter of 2008 was $98 million, or $0.07 per share. Reported results included acquisition-, divestiture-, and restructuring-related charges and amortization expense (after-tax) of $206 million, or $0.13 per share. Adjusted net income for the second quarter of 2008, excluding these charges, was $304 million, or $0.20 per share. "We were also encouraged during the quarter by positive outcomes from three important trials -- MADIT-CRT, MADIT II and SYNTAX -- all of which provided additional evidence of the effectiveness of our products," said Mr. Elliott. "New products accounted for more than 40 percent of our sales this quarter, and we continue to bring a wide range of innovations to market. We recently received FDA approval for the TAXUS((R)) Liberte((R)) Atom(TM) Paclitaxel- Eluting Coronary Stent System, the TAXUS((R)) Liberte((R)) Long Paclitaxel-Eluting Coronary Stent System and an expanded indication for the SpyScope((R)) Access and Delivery Catheter, as well as CE Mark for the ENDOTAK RELIANCE((R)) 4-SITE Defibrillation Lead System and the LATITUDE((R)) Patient Management System. These approvals position us well for the remainder of the year and, perhaps more important, provide a springboard into 2010." Guidance for Third Quarter and Full Year 2009 The Company estimates net sales for the third quarter of 2009 of between $2.0 billion and $2.1 billion. Adjusted earnings, excluding intangible asset impairment charges; acquisition-, divestiture-, litigation- and restructuring-related charges; and amortization expense, are estimated to range between $0.17 and $0.21 per share. The Company estimates net income on a GAAP basis of between $0.08 and $0.13 per share. The Company has updated its net sales estimate for the full year of 2009 to between $8.1 billion and $8.4 billion. The Company expects adjusted earnings, excluding intangible asset impairment charges; acquisition-, divestiture-, litigation- and restructuring-related charges; discrete tax items, and amortization expense, for the full year of between $0.82 and $0.86 per share. The Company expects net income on a GAAP basis of between $0.47 and $0.53 per share. About Boston Scientific Boston Scientific -- http://www.bostonscientific.com/-- is a worldwide developer, manufacturer and marketer of medical devices whose products are used in a broad range of interventional medical specialties. As reported by the Troubled Company Reporter on May 21, 2009, Fitch Ratings affirmed the 'BB+' issuer default rating on Boston Scientific Corp. Fitch also affirmed Boston Scientific's 'BB+' ratings on senior unsecured notes and unsecured bank credit facility. Fitch also revised the Rating Outlook to Positive from Stable. According to the TCR on March 27, 2009, Standard & Poor's Ratings Services said that it affirmed its 'BB+' ratings on Natick, Massachussetts-based Boston Scientific Corp., and revised the outlook to positive from negative. These actions reflect the Company's ongoing debt paydown over the past several years, maintenance of its leading market share in the drug eluting stent market in the face of increasing competition, and prospects for (at minimum) modest growth in cardiac rhythm management devices, given recent new product launches. The TCR reported on March 12, 2009, that Moody's revised Boston Scientific Corporation's rating outlook to stable from negative and changed its Speculative Grade Liquidity Rating to SGL-2 from SGL-3. At the same time, the Company's Corporate Family Rating was affirmed at Ba1. In addition, its senior unsecured note and senior shelf ratings were upgraded to Ba1 from Ba2 in accordance with Moody's Loss Given Default methodology because of changes to the Company's capital structure. CALPINE CCFC: S&P Assigns Corporate Credit Rating at 'B' -------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B' corporate credit rating and stable outlook to Calpine CCFC Holdings LLC. At the same, S&P withdrew the 'B' corporate credit rating and all issue ratings on Calpine Construction Finance Co. L.P. The rated issues at CCFC include the $385 million first-priority secured term loan and the $415 million first- priority secured term loan. CCFC recently repaid all its debt obligations using the proceeds of a $1 billion senior secured bank notes issued by CCFC Holdings. S&P withdrew the corporate credit rating on CCFC at the company's request and assigned the rating to CCFC Holdings. Ratings List Assigned Calpine CCFC Holdings LLC Corporate credit rating B/Stable/-- Withdrawn Calpine Construction Finance Co. L.P. To From -- ---- Corporate credit rating NR B/Stable/-- Senior secured debt NR BB- Recovery rating NR 1 NR -- Not rated. CIRCUIT CITY: Completes Sale of Canadian Operations to Bell Canada ------------------------------------------------------------------ Circuit City Stores, Inc., completed the sale of its Canadian operations on July 1, 2009. A subsidiary of Bell Canada acquired substantially all of the assets of InterTAN Canada Ltd., an indirect, wholly owned subsidiary of Circuit City that operated retail stores and dealer outlets in Canada primarily under the trade name The Source by Circuit City, Michelle O. Mosier, Circuit City vice president and controller, said in a regulatory filing with the U.S. Securities and Exchange Commission. Additionally, Bell purchased certain trademarks from Circuit City Stores West Coast, Inc., a wholly owned subsidiary of Circuit City, and the equity shares of a global sourcing company from Ventoux International, Inc., a wholly owned subsidiary of Circuit City, Ms. Mosier related. As previously reported, InterTAN Canada Ltd., received on November 10, 2008, creditor protection from the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act. Bell entered into the asset purchase agreement pursuant to the Court-monitored sales process. Under the terms of the asset purchase agreement, the purchase price for the transaction is $116,800,000 -- the equivalent of CND135,000,000 -- plus $30,300,000 -- the equivalent of CND35,000,000 -- for working capital, according to Ms. Mosier. The consideration for working capital is subject to closing adjustments. Of the proceeds, $15,000,000 has been paid to Circuit City for the trademarks and the shares of the sourcing company. The remaining proceeds of the sale will be used first to settle the claims made against InterTAN Canada Ltd. under the CCAA. Any remaining proceeds will be distributed to Circuit City. Circuit City continues to anticipate that no liquidation payments will be made to its equity security holders, Ms. Mosier said. About Circuit City Stores Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of August 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIRCUIT CITY: Gets Court Nod to Sell St. Cloud, Minnesota Leases ---------------------------------------------------------------- Pursuant to Sections 105, 363, and 365 of the Bankruptcy Code and Rules 2002, 6004, and 6006 of the Federal Rules of Bankruptcy Procedure, Circuit City Stores Inc. and its affiliates sought and obtained the Court's approval to enter into a sale, assumption and assignment agreement in connection with the sale of certain leases, and to sell the Leases free and clear of all interests. Circuit City Stores, Inc., is party to these leases, as amended, assigned, supplemented or extended from time to time, for the premises located at 3316 Division Street, in St. Cloud, Minnesota: (a) lease dated November 2, 1993, with St. Cloud Associates, as landlord; (b) lease dated February 21, 1997, with TVI, Inc., as sublessee; and (c) lease dated March 2, 2000, with Consolidated Stores Corporation, as sublessee. Since at or about the time the going-out-of-business sales were commenced, the Debtors, along with their real estate advisor, DJM Realty, LLC, have been marketing the Leases. As a result of these marketing efforts, the Debtors received an initial proposal to purchase the Leases from St. Cloud Associates. Upon reviewing the proposal and following further negotiations with the Purchaser, the Debtors determined that the proposal submitted by St. Cloud Associates, as revised, was the highest or otherwise best offer for the Leases, Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia, related. Before and since receiving St. Cloud Associate's proposal, the Debtors and DJM have continued to market the Leases and to solicit bids from interested purchasers. These marketing efforts have not yielded any additional bids and the Debtors do not believe further marketing would produce a competing bid, Mr. Foley informed the Court. According to Mr. Foley, the Agreement between the Debtors and St. Cloud Associates provides, among other things, that: (a) St. Cloud Associates will waive, release and forever discharge any and all claims that it may have against the Debtors, including claims under Bankruptcy Code Sections 365, 502, and 503, all year-end adjustments for 2009 and all prior years, and any obligations or liabilities that would otherwise survive assignment of the Leases -- Total Consideration. (b) In exchange for the Total Consideration, St. Cloud Associates will succeed to the entirety of the Debtors' rights and obligations in the Leases due, accruing, arising or attributable to the time period occurring on or after the effective date of May 31, 2009, and will have the rights of the tenant -- and sublandlord -- under the Leases. (c) On or before the Effective Date, the Debtors will pay to St. Cloud Associates, in cash or otherwise immediately available funds, $72,841, which represents taxes owed through the Effective Date. In the event the Debtors subsequently receive amounts under the Subleases attributable to the period of time after the Effective Date, the Debtors will promptly forward the amounts to St. Cloud Associates in accordance with the Agreement. (d) Upon the Effective Date, neither St. Cloud Associates, the Debtors, nor the Debtors' estates will have liability for cure claims of, from, or related to the Leases for any defaults or monetary obligations except for the Tax Payment. St. Cloud Associates takes the Leases "as is." Pursuant to Section 554 of the Bankruptcy Code, the Debtors are also authorized to abandon any and all Debtor-owned improvements, furniture, fixtures, equipment, inventory and any other personal property located on the Premises. The Abandoned Property is deemed abandoned on the Effective date to St. Cloud Associates free and clear of all liens, claims, and other interests. About Circuit City Stores Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of August 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIRCUIT CITY: Proposes Auction for Intellectual Prop. Assets ------------------------------------------------------------ Pursuant to Sections 105 and 363 of the Bankruptcy Code and Rules 2002 and 6004 of the Federal Rules of Bankruptcy Procedure, the Circuit City Stores Inc. and its affiliates ask the Court (i) to approve certain procedures in connection with soliciting bids for the sale of certain miscellaneous intellectual property assets, (ii) for authority to enter into stalking horse agreements in connection with the Sales, (iii) to approve the Debtors' payment of a termination fee, and (iv) approving the Sales free and clear of all interests, among other things. In the course of their continued liquidation, the Debtors have identified various assets that are valuable but for which the Debtors have no use going forward. The Debtors have determined that the sales of the Intellectual Property Assets would bring significant recovery for their estates and creditors. The Debtors' financial advisor Rothschild, Inc., contacted potential purchasers and received several indications of interest in certain of the Debtors' intellectual property and internet- related assets. Since then, the Debtors have retained Streambank LLC as their intellectual property disposition consultant, Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia, relates. The Debtors, Rothschild, and Streambank orchestrated the sale of a large portion of the Debtors' intellectual property and internet assets, including the Circuit City trademark and associated goodwill, domain names, toll-free numbers, patents and registrations and applications, Web site content, and customer information to Systemax Inc. However, many intellectual property assets remain, Mr. Foley says. To help ensure that the Debtors receive the highest or otherwise best proposal for these remaining intellectual property assets, the Debtors seek authorization to solicit bids in accordance with certain bidding procedures and to enter into stalking horse agreements for the sale of any or all of the Intellectual Property Assets to a Stalking Horse Bidder. Proposed Bidding Procedures The Debtors propose that: (a) All proposals for any or all of the Intellectual Property Assets must be submitted on or before August 11, 2009, at 5:00 p.m., Eastern Time. (b) If qualified bids are received, one or more auctions will be held on August 18, 2009, among the Qualified Bidders. The Auction will take place at the offices of Skadden, Arps, Slate, Meagher & Flom, LLP, at Four Time Square, in New York, tentatively beginning at 10:00 a.m., Eastern Time, or other time or place as the Debtors notify all Qualified Bidders who have submitted Qualified Bids. (c) At the conclusion of the Auctions, the Debtors, after consultation with counsel to the Official Committee of Unsecured Creditors, will announce the bidder or bidders submitting the proposal that they have determined the highest or otherwise best proposal, and close the Auctions. If more than one Qualified Bidder submits a Bid on the same Intellectual Property Assets as the Successful Bidder, the Debtors, after consultation with the Creditors Committee, will announce the bidder submitting the next highest or otherwise best proposal, who would proceed with the purchase of the Intellectual Property pursuant to the terms of the Bid submitted at the Auctions, if the Successful Bidder fails to consummate the Sale. (d) To entice potential bidders to establish a floor price for any asset and the terms of an offer, the Debtors should be authorized to offer bidders a Termination Fee of no more than 3% of the cash purchase price payable on terms and conditions set forth in any Stalking Horse Agreement entered on or before August 11, 2009, in the event that a bidder is chosen as a Stalking Horse Bidder but is ultimately outbid at an Auction. In the event the Successful Bidder does not close, the Stalking Horse Bidder will be deemed the Successful Bidder. In no event will any Termination Fee be payable if the Stalking Horse Agreement contains a "due diligence" or financing contingency, and the Debtors will not be permitted to offer two Termination Fees with respect to any proposal covering the same assets. A full-text copy of the proposed Bidding Procedures is available for free at: http://bankrupt.com/misc/CC_PropBidProcSaleMiscIntellectualProp070 609.pdf Mr. Foley notes that a consumer privacy ombudsman has been appointed in the chapter 11 cases to provide input with respect to the sale of personally identifiable information. Certain of the Intellectual Property Assets may include PII. Over the course of the next several weeks, the Debtors and their advisors will work with the CPO to address matters relating to the conveyance of any PII, he tells the Court. However, the PII Assets are not subject to any privacy policy or other restrictions related to the transfer or protection of customer lists and transaction data. Thus, the Debtors submit that they are not required to comply with the specific requirements outlined in Sections 363(b)(1)(A) or (B) of the Bankruptcy Code, according to Mr. Foley. About Circuit City Stores Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of August 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIRCUIT CITY: Proposes to Sell Virginia Property to Cardinal ------------------------------------------------------------ Pursuant to Sections 105, 363, and 503 of the Bankruptcy Code and Rules 2002 and 6004 of the Federal Rules of Bankruptcy Procedure, Circuit City Stores Inc. and its affiliates ask the Bankruptcy Court to: (i) authorize Circuit City Stores, Inc., to enter into an agreement with Cardinal Capital Partners, Inc., for the sale of certain of the Debtor's property located in Virginia Beach Shopping Center, at 110 South Independence Boulevard, in Virginia Beach, Virginia, subject to higher or otherwise better proposals, (ii) approve a termination fee, and (iii) approve the Sale free and clear of all liens. Circuit City owns the Property, comprising an outparcel of 0.5711 acres, adjacent to the premises at which the Debtor previously leased a retail store location, Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia, relates. Since around the time of commencement of the Debtors' going-out- of-business sales, Circuit City, along with its real estate advisor, DJM Realty, LLC, has been marketing the Property. As a result, Circuit City received various proposals to purchase the Property. Circuit City determined that the proposal submitted by Cardinal Capital was materially higher or otherwise better than the alternate proposals received, according to Mr. Foley. On May 11, 2009, Circuit City and Cardinal Capital entered into a Purchase and Sale Agreement, and amended the agreement on June 1 and 12, 2009. The Debtor and Cardinal Capital entered into the third amendment to the Purchase and Sale Agreement on June 26, 2009, pursuant to which the parties agreed to, among other things, further extend the date by which a sale order must be entered. Pursuant to the Agreement, Circuit City would sell the Property to Cardinal Capital for $439,000, plus a waiver of certain prepetition claims held by an affiliate of the Purchaser. According to Mr. Foley, the significant terms of the Agreement include: (a) Cardinal Capital would acquire the Property, consisting solely of Circuit City's right, title, and interest in and to the Property, together with all the rights and appurtenances. (b) The Property would be sold free and clear of all liens, claims and encumbrances except for (1) liens for real property taxes and assessments that are not yet due and payable, (2) zoning ordinances, building codes and other land use laws and applicable governmental regulations, (3) all covenants, agreements, conditions, easements, restrictions and rights, of record, and (4) any and all matters that would be shown by a current survey of the Property -- Permitted Encumbrances. (c) The Total Consideration for the Sale of the Property would be comprised of the Purchase Price and the Additional Consideration. The Purchase Price would be $439,000. As Additional Consideration, the Purchaser would cause its affiliate, CC-Virginia Beach, LLC, solely with respect to its prepetition claims relating to its lease with the Seller for the store located at 110 South Independence Boulevard, in Virginia Beach, Virginia, to agree at closing (1) to the disallowance of its presently filed proof of claim, dated January 27, 2009, in the total amount of $26,655 and (2) to waive its right to file a proof of claim for lease rejection damages pursuant to Section 502(b)(6) of the Bankruptcy Code and to the disallowance of its filed proof of claim dated March 27, 2009, in the total amount of $593,864. (d) In accordance with the Agreement, the Purchaser has previously delivered to an escrow agent the amount of $52,500. If the Sale is consummated under the Agreement, the Deposit will be applied to the Purchase Price. If the Agreement is terminated before the Closing of the Sale because of Cardinal Capital's breach of the Agreement, Circuit City would be entitled to retain the Deposit as the Seller's sole recourse. The Closing of the Sale of the Property will occur on the date, which is five days after the later of (1) the expiration of the due diligence period or (2) the date of entry of the Court's sale order. (e) The Agreement could be terminated before Closing in these circumstances: (1) by the Purchaser, if an action is initiated to take any material portion of the Property by eminent domain proceedings, (2) by the Purchaser, in the event that the Seller will fail to consummate the transactions contemplated by the Agreement, (3) by the Seller, in the event that the Purchaser will fail to consummate the transactions contemplated by the Agreement, (4) by the Seller, in order to permit the Seller to accept a higher or better offer for the Property pursuant to the bidding procedures, and (5) by the Purchaser or the Seller in the event that the Court has not entered a sale order by the sale deadline. In recognition of Cardinal Capital's expenditure of time, energy, and resources, Circuit City has agreed to pay Cardinal Capital a break-up fee of $15,000 if the Seller terminates the Agreement to close an alternate transaction, so long as the Purchaser is not in breach of the Agreement. Cardinal Capital is unwilling to keep open its offer to purchase the Property under the terms of the Agreement unless the Court authorizes payment of the Termination Fee, Mr. Foley tells the Court. Proposed Bidding Procedures If Circuit City receives any qualified bids, an auction will be held at the office of McGuireWoods LLP, located at One James Center, 901 E. Cary Street, in Richmond, Virginia. The Seller will advise Cardinal Capital and all other parties that submitted a Qualified Bid of the Auction. At the conclusion of any Auction, the Seller, in consultation with its advisors, would determine which bid constitutes the highest or otherwise best bid. After the Auction, if any, Circuit City intends to proceed with a hearing to approve the Sale. If no Qualified bids other than Cardinal Capital's bid are received, Circuit City would proceed with the Sale after entry of the sale order. If Circuit City receives additional Qualified Bids, then at the sale hearing, it would seek approval of the Successful Bid, as well as the second highest or best Qualified Bid. A bid would not be deemed accepted by Circuit City unless and until approved by the Court. If the Successful Bidder fails to consummate the Sale for specified reasons, then the Alternate Bid would be deemed to be the Successful Bid, and Circuit City would be permitted to effectuate a sale to the Alternate Bidder without further Court order. Circuit City believes that the Sale represents its best opportunity under the circumstances to maximize the value of the Property. The Sale of the Property is in the best interests of the Debtor's estate and stakeholders, Mr. Foley asserts. About Circuit City Stores Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of August 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIRCUIT CITY: Requests for July 31 Deadline for Ch. 11 Plan ----------------------------------------------------------- Pursuant to Section 1121(d) of the Bankruptcy Code, Circuit City Stores Inc. and its affiliates seek to extend their exclusive periods to file a plan of liquidation to July 31, 2009, and to solicit acceptances of a plan to September 29, 2009, with respect to all parties except the Official Committee of Unsecured Creditors. The Court previously extended the Debtors' Exclusive Plan Proposal Period to July 8, 2009, and the Exclusive Solicitation Period to September 6, 2009. Since the entry of the First Exclusivity Order, the Debtors have made substantial progress towards winding down their operations and estates. Indeed, the Debtors are entering the final stages of the chapter 11 cases, having resolved many of the issues facing their estates, Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia, relates. According to Mr. Foley, the Debtors have sold substantially all of the assets of their operating facilities and have fully paid the claims of the lenders under their debtor-in-possession financing facility. The Debtors have also reduced the administrative burdens upon their estates by rejecting many contracts and personal property leases and substantially all of their real property leases, he adds. The Debtors are now working to resolve the remaining issues in their Chapter 11 cases, including liquidating any remaining assets, continuing the claims reconciliation process, and developing and filing a plan, Mr. Foley tells the Court. The Debtors anticipate that they should be in a position to file a plan by the end of July 2009. As part of this process, the Debtors have been in communication with the Creditors Committee regarding the possibility of filing a joint plan. These discussions are ongoing and thus, the Debtors seek the requested extensions in order to reach a conclusion as to whether they will proceed with a joint plan, Mr. Foley informs the Court. Mr. Foley assures the Court that the brief extensions requested will not prejudice the legitimate interests of any party-in- interest in the Debtors' Chapter 11 cases. In the event that the Debtors and the Creditors Committee cannot come to an agreement on a joint plan, they have agreed to file and solicit acceptances for competing plans simultaneously, according to Mr. Foley. The Debtors have obtained a bridge order from the Court, extending the Exclusive Periods on an interim basis from July 7, 2009, through the entry of an order disposing of the Motion on its merits. The Court's ultimate disposition of the Motion will not impair any action taken pursuant to the Bridge Order, Judge Huennekens held. About Circuit City Stores Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of August 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIRCUIT CITY: To Sell Moreno Valley Property for at Least $2.25MM ----------------------------------------------------------------- Pursuant to Sections 105, 363, and 503 of the Bankruptcy Code and Rules 2002 and 6004 of the Federal Rules of Bankruptcy Procedure, Circuit City Stores Inc. and its affiliates ask the Court to, among other things: (i) approve certain bidding procedures for the sale of Circuit City Stores West Coast, Inc.'s real property located at 12530 Day Street in Moreno Valley, California, to 99> Only Stores; (ii) authorize the Seller to enter into the purchase and sale agreement dated May 15, 2009, by and among the Seller and the Purchaser; (iii) approve certain expense reimbursement in connection to the sale; and (iv) approve the Sale of the Property free and clear of all interests. As a result of the marketing efforts of the Seller and its real estate advisor, DJM Realty, LLC, the Seller received various proposals to purchase the Property. The Seller determined that the proposal submitted by the Purchaser was materially higher or otherwise better than the alternate proposals received, Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia, relates. According to Mr. Foley, the significant terms of the Agreement include: (a) The purchase price of the Property would be $2,250,000. (b) The Purchaser would acquire the Property, consisting solely of the Seller's right, title and interest in and to the property located at 12530 Day Street, in Moreno Valley, California, consisting of approximately 3.53 acres. The purchase would include (i) all rights and appurtenances pertaining to the land, (ii) all buildings, structures and other improvements on the land, (iii) electrical, mechanical, air conditioning and other fixtures attached, (iv) all vested signage rights of the Seller in connection with the real property and the building located on the property, and (v) to the extent assignable, plans, specifications, permits, reports, development rights and title insurance through an asset sale. (c) The Property would be sold free and clear of all liens, charges, pledges, security interests, conditional sale agreements or other title retention agreements, leases, mortgages, security interests, options, or other encumbrances except for (i) liens for real property taxes that are not yet due and payable, (ii) zoning ordinances, building codes and other land use laws and applicable governmental regulations, (iii) all covenants, agreements, conditions, easements, restrictions and rights, whether of record or otherwise excluding, however, mortgages, deeds of trust, mechanics liens, tax liens, judgment liens, any other liens securing monetary amounts, leases, licenses, any other similar agreements conveying possessory rights, purchase option rights, rights of first refusal and any other similar rights of purchase, and (iv) any and all matters that would be shown by a physical inspection of the Property -- Permitted Encumbrances. (d) In accordance with the Agreement, the Purchaser has previously placed $225,000 into an escrow account. Upon closing of the Sale or if the Agreement is terminated before Closing because of the Purchaser's breach of the Agreement, the Seller would be entitled to the funds in the escrow account. Retention of the Deposit would constitute the Seller's sole recourse in that event. (e) The Agreement could be terminated before Closing in these circumstances: (i) by Purchaser, if an action is initiated to take any material portion of the Property by eminent domain proceedings, (ii) by Purchaser, in the event of damage to the Property exceeding $200,000 occurring during the period after the date of the Agreement and before Closing, if Seller does not repair the damage, (iii) by Purchaser, in the event that Seller will fail to consummate the transactions contemplated by the Agreement, (iv) by Seller, in the event that Purchaser will fail to comply with the Agreement, and (v) by Seller, in order to permit Seller to accept a higher or better offer for the Property pursuant to the bidding procedures. In the event the Purchaser is not permitted to purchase the Property pursuant to the sale process, in addition to the Deposit being disbursed to the Purchaser, the Seller has agreed to reimburse the Purchaser for its reasonable out-of-pocket third- party due diligence expenses and reasonable attorneys' fees and costs incurred in connection with the Agreement. Under the Agreement, the Expense Reimbursement would not exceed $35,000 in the aggregate. In recognition of the Purchaser's expenditure of time, energy, and resources, the Seller has agreed to the Expense Reimbursement, Mr. Foley says. He adds that the Purchaser is unwilling to keep open its offer to purchase the Property under the terms of the Agreement unless the Court authorizes payment of the Expense Reimbursement. Proposed Bidding Procedures According to Mr. Foley, the material terms of the proposed Bidding Procedures include: (a) To be considered a "Qualified Bid" for purposes of the auction, the person or entity submitting the bid would be required to submit an offer by August 13, 2009. The Seller could extend the Bid Deadline, after consultation with representatives of the Official Committee of Unsecured Creditors, to a date and time that is not later than midnight on August 19, 2009, and could seek Court authority to extend the Bid Deadline to beyond that date. (b) Among other things, a bidder's offer should include (i) an executed copy of the Agreement marked to show those amendments and modifications to the Agreement that the Qualified Bidder proposes, including modifications to the Purchase Price, which price must be at least $2,350,000, (ii) a statement that the bid does not provide for any due diligence period or property inspection period, (iii) evidence, satisfactory to the Seller in its reasonable discretion of the bidder's financial wherewithal, (iv) a statement that the bid will not be conditioned on the outcome of unperformed due diligence by the bidder or any financing contingency, (v) a good faith deposit equal to the greater of (1) 10% of the cash component of the purchase price or (2) $235,000, (vi) an acknowledgment that the bidder's offer is irrevocable until two business days after the closing of the Sale of the Property; and (vii) an acknowledgment that, in the event the bidder is the Alternate Bidder, the bidder will proceed with the purchase of the Property pursuant to the terms of the Marked Agreement, as may be modified at the Auction. (c) If the Seller receives at least one Qualified Bid in addition to that of the Purchaser, it would conduct an auction of the Property at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, located at One Rodney Square, P.O. Box 636, in Wilmington, DE 19801, on August 20, 2009. The Seller could extend the commencement of the Auction to a date that is not later than August 24, 2009, and could seek Court authority to extend the Bid Deadline beyond that date. (d) The Auction would be conducted in accordance with certain procedures, among others: (i) participation in the Auction would be limited to the Purchaser and the Qualified Bidder, (ii) before the commencement of the Auction, the Seller would advise the Purchaser and all Qualified Bidders of what it believes to be the highest or otherwise best Qualified Bid received, and (iii) bidding would begin initially with the highest or otherwise best Qualified Bid and subsequently continue in such minimum increments as the Seller, after consultation with representatives of the Creditors Committee, would determine at the Auction, provided, however, that minimum increments would not exceed $50,000. (e) The sale hearing would be held on August 27, 2009, but could be adjourned or rescheduled in the Seller's sole discretion, subject to Bankruptcy Court approval, as necessary, without further notice other than an announcement of the adjourned date at the sale hearing. If no Qualified Bids other than that of the Purchaser are received, the Seller would proceed with the Sale to the Purchaser after entry of the sale approval order. If the Seller receives additional Qualified Bids, then at the sale hearing, the Seller would seek approval of the Successful Bid, as well as the second highest or best Qualified Bid. A bid would not be deemed accepted by the Seller unless and until approved by the Court. After approval of the Sale to the Successful Bidder, if the Successful Bidder fails to consummate the sale for specified reasons, then the Alternate Bid would be deemed to be the Successful Bid, and the Seller would be permitted to effectuate a Sale to the Alternate Bidder without further Court order. (f) The Good Faith Deposit submitted by the Successful Bidder, together with interest, if any, would be applied against the payment of the Purchase Price upon Closing of the Sale to the Successful Bidder. If a Successful Bidder failed to consummate an approved sale, the Seller would not have any obligation to return the Good Faith Deposit, and that deposit would irrevocably become property of the Seller. The Seller would return the Good Faith Deposits of all other Qualified Bidders, together with the accrued interest, if any. Objections to the Sale, if any, must be filed and served no later than 4:00 p.m., Eastern Time, on August 21, 2009. The Seller believes that the Sale represents its best opportunity under the circumstances to maximize the value of the Property. The Sale is in the best interests of the Seller's estate and its stakeholders, Mr. Foley asserts. About Circuit City Stores Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of August 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIT GROUP: Loses Vendor Financing Deal With Microsoft ----------------------------------------------------- Ben Worthen and Serena Ng at The Wall Street Journal report that CIT Group Inc. has lost its vendor financing deal with Microsoft Corp. CIT and Microsoft disclosed a vendor-financing partnership in the U.S. in 2007, under which CIT processed and approved applications and assumed the risk on loans while Microsoft provided some capital and acquired an interest in the loans. According to The Journal, Microsoft declined to disclose the amount of the financing. Stacie Sloane, Microsoft's director of marketing for worldwide licensing and pricing group, confirmed the news, saying that CIT will continue to service existing loans, but a plan is in place for new customers to receive financing through other vendors. Ms. Sloane said, "We will ensure any credit-approved customer financing commitments are honored." CIT said the "relationship with Microsoft hadn't yet reached its full potential," The Journal says, citing a source. WSJ relates that Snap-On Inc. ended last week a joint venture with CIT that had been around since 1999 and provided financing to franchisees and customers of Snap-On. The report states that Snap-On paid about $8.2 million to buy out CIT's stake in the joint venture, which has about $834 million in outstanding contracts. CIT Could Sell Off Units Serena Ng at The Journal says that if CIT's restructuring plan succeeds, the Company would likely be smaller. The Journal relates that CIT could sell off its units that are doing relatively well, including its Utah bank, its rail-car and aircraft-leasing arm, and its business of providing cash advances and credit to manufacturers and retailers. CIT indicated that its earlier plan to raise more funds via the bank it owns in Utah may no longer be feasible in the near term, The Journal states. The Journal reports that banking regulators issued a "cease and desist" order at CIT's Utah bank last week, limiting the bank's ability to pay dividends and capping the amount of "brokered deposits" it accepts. CIT Bank had been using such deposits to raise more funds. The Journal says that CIT had hoped to transfer more of its assets to the Utah bank, but regulators were concerned about the risk involved. CIT, in an agreement with bondholders, will pay at least 13% interest on a $3 billion emergency loan provided by some of its largest bondholders, who also will get first claims over "substantially all" of CIT's assets, the Company said in a filing with the U.S. Securities and Exchange Commission. The Journal notes that the high cost of funds shows CIT's vulnerability during the discussions and also puts pressure on the Company to quickly find a way to refinance itself. According to The Journal, CIT said it expects to report a second- quarter loss of more than $1.5 billion, which would be its ninth consecutive quarterly loss. The Federal Reserve Bank of New York conducted a review last week and found that it might need $4 billion in additional capital, The Journal relates. The Journal reports that CIT said that its status as a bank holding company could be affected if it fails to meet the minimum capital requirements and could be forced to divest itself of its CIT Bank subsidiary, or risk having CIT Bank seized by the FDIC if its capital levels are too low. Andrew Edwards at Dow Jones Newswires relates that rumors of bankruptcy panicked small-time investors, causing hundreds of millions of dollars in CIT Internotes -- bonds marketed directly to small-time investors, particularly the elderly -- to change hands over the last two days, leaving tens of millions of dollars on the table, which were scooped up by bond trading desks, brokers, and sophisticated investors. TRACE data collected by retail electronic bond-trading platform BondDesk Group LLC show that CIT Internotes were the most actively traded bonds in the U.S. markets on Friday and Monday, Dow Jones states. Dow Jones says that on Friday, traders and brokers took out an average of 6.34% in commissions on each trade, garnering millions in revenue, compared to an average of 1.06% on all other trades for the day. Citing underwriter Incapital LLC, Dow Jones reports that there are $3.4 billion in CIT Internotes outstanding. The notes were trading well below the prices garnered for equivalent bonds sold to professional investors, Dow Jones says. Citing Tradeweb, Dow Jones says that on Friday, one issue of the CIT Internotes due 2016 changed hands on at average of 42 cents on the dollar, while equivalent debt held by large investors traded at 52 cents on the dollar. Dow Jones reports that on Monday, the commissions on CIT Internotes had tightened to 29 basis points, or hundredths of a percent, and the notes were still trading several percentage points behind the non-retail market. About CIT Group CIT Group Inc.-- http://www.cit.com/-- is a bank holding company with more than $60 billion in finance and leasing assets that provides financial products and advisory services to small and middle market businesses. Operating in more than 50 countries across 30 industries, CIT provides an unparalleled combination of relationship, intellectual and financial capital to its customers worldwide. CIT maintains leadership positions in small business and middle market lending, retail finance, aerospace, equipment and rail leasing, and vendor finance. Founded in 1908 and headquartered in New York City, CIT is a member of the Fortune 500. CIT Group reported $75.7 billion in assets and $68.2 billion in liabilities, including $3 billion in deposits, at the end of the first quarter. As reported by the TCR on July 15, Standard & Poor's Ratings Services said that it lowered its ratings on CIT Group Inc., including lowering the counterparty credit ratings to 'CCC+/C' from 'BB-/B'. The ratings remain on CreditWatch, where they were placed with negative implications on June 12, 2009. "The downgrade reflects increased near-term liquidity concerns," said Standard & Poor's credit analyst Rian Pressman. Moody's Investors Service simultaneously downgraded the senior unsecured rating of CIT Group Inc. to B3 from Ba2. Additionally, Moody's placed CIT's long-term ratings on review for further possible downgrade. The Company's short-term rating remains Not Prime. The downgrade of CIT's ratings is based on Moody's growing concern with CIT's liquidity position and prospects for survival of the franchise. CIT GROUP: Factoring Unit Eyed By JPMorgan, The Deal Says --------------------------------------------------------- The Deal.com says a spokesman for J.P. Morgan Chase & Co. indicated it was keeping an eye on CIT Group Inc. as a possibility for expansion. The lender's factoring unit, widely seen as one of its most lucrative businesses, is reportedly the target. The Deal.com relates that on a conference call Thursday, JPMorgan CEO Jamie Dimon said the primary effect of a CIT collapse would be immaterial to J.P. Morgan's P&L. The Deal, citing Canadian newspaper The Globe and Mail, also relates that a CIT collapse will also hurt the National Hockey League. The Deal says CIT is a key lender to several NHL teams, including the Ottawa Senators, Montreal Canadiens, New Jersey Devils and Nashville Predators. The Globe and Mail report, according to The Deal, quoted a financial adviser to several hockey teams (not necessarily the same teams with CIT financing) as saying the lender's liquidity crisis is "going to be horrible for [the NHL]." In February, the National Basketball Association raised $200 million in financing to distribute to as many as 12 teams facing operational losses, The Deal says. As reported in yesterday's Troubled Company Reporter, Jeffrey McCracken and Serena Ng at The Wall Street Journal, citing people familiar with the matter, relate that on Thursday night, CIT officials believed that they had secured a $2 billion rescue- financing plan from JPMorgan but that fell through by Friday morning. A person familiar with the matter said that JPMorgan would have considered lending if CIT were first to seek bankruptcy protection, but the bank "couldn't get comfortable with a deal outside (bankruptcy) court," The Journal relates. The Journal states that CIT's advisers then launched talks with its bondholders and by 5:00 p.m. on Friday, CIT had sent its first term sheet to bondholders. CIT Group has instead entered into a $3 billion loan facility provided by a group of the Company's major bondholders. CIT further intends to commence a comprehensive restructuring of its liabilities to provide additional liquidity and further strengthen its capital position. The actions, including a $3 billion secured term loan with a 2.5- year maturity, are intended to provide CIT with liquidity necessary to ensure that its important base of small and middle market customers continues to have access to credit. Term loan proceeds of $2 billion are committed and available July 20, with an additional $1 billion expected to be committed and available within 10 days. CIT also commenced a cash tender offer for its outstanding Floating Rate Senior Notes due August 17, 2009. CIT is offering to purchase its August 17 Notes for $800 for each $1,000 principal amount of outstanding August 17 Notes tendered and not validly withdrawn prior to 12:00 midnight, New York City time, at the end of August 14, 2009 (unless extended by CIT). Holders who validly tender their August 17 Notes prior to 5:00 p.m., New York City time, on July 31, 2009 -- unless extended by CIT, the "early delivery time" -- and who do not validly withdraw their tenders, will be paid an additional $25 cash for each $1,000 principal amount of outstanding August 17 Notes tendered by the early delivery time. About CIT Group CIT Group Inc.-- http://www.cit.com/-- is a bank holding company with more than $60 billion in finance and leasing assets that provides financial products and advisory services to small and middle market businesses. Operating in more than 50 countries across 30 industries, CIT provides an unparalleled combination of relationship, intellectual and financial capital to its customers worldwide. CIT maintains leadership positions in small business and middle market lending, retail finance, aerospace, equipment and rail leasing, and vendor finance. Founded in 1908 and headquartered in New York City, CIT is a member of the Fortune 500. CIT Group reported $75.7 billion in assets and $68.2 billion in liabilities, including $3 billion in deposits, at the end of the first quarter. As reported by the TCR on July 15, Standard & Poor's Ratings Services said that it lowered its ratings on CIT Group Inc., including lowering the counterparty credit ratings to 'CCC+/C' from 'BB-/B'. The ratings remain on CreditWatch, where they were placed with negative implications on June 12, 2009. "The downgrade reflects increased near-term liquidity concerns," said Standard & Poor's credit analyst Rian Pressman. Moody's Investors Service simultaneously downgraded the senior unsecured rating of CIT Group Inc. to B3 from Ba2. Additionally, Moody's placed CIT's long-term ratings on review for further possible downgrade. The Company's short-term rating remains Not Prime. The downgrade of CIT's ratings is based on Moody's growing concern with CIT's liquidity position and prospects for survival of the franchise. CIT GROUP: Moody's Puts Three Classes of Notes Under Review ----------------------------------------------------------- CIT Group Inc. reported that Moody's Investors Service has placed its CIT Equipment Collateral 2009-VT1 Receivable-Backed Notes, Class A-1, Class A-2 and Class A-3 under review for possible downgrade. These Notes, issued on June 9, 2009, constituted eligible collateral under the Federal Reserve Bank of New York's Term Asset-Backed Securities Loan Facility. TALF rules require the issuing entity and the sponsor to issue a press release in the event that any of its securities, eligible for funding thereunder, are put on review or watch for downgrade by a nationally recognized statistical rating organization rating such securities. CIT Group Inc.-- http://www.cit.com/-- is a bank holding company with more than $60 billion in finance and leasing assets that provides financial products and advisory services to small and middle market businesses. Operating in more than 50 countries across 30 industries, CIT provides an unparalleled combination of relationship, intellectual and financial capital to its customers worldwide. CIT maintains leadership positions in small business and middle market lending, retail finance, aerospace, equipment and rail leasing, and vendor finance. Founded in 1908 and headquartered in New York City, CIT is a member of the Fortune 500. CIT Group reported $75.7 billion in assets and $68.2 billion in liabilities, including $3 billion in deposits, at the end of the first quarter. As reported by the TCR on July 15, Standard & Poor's Ratings Services said that it lowered its ratings on CIT Group Inc., including lowering the counterparty credit ratings to 'CCC+/C' from 'BB-/B'. The ratings remain on CreditWatch, where they were placed with negative implications on June 12, 2009. "The downgrade reflects increased near-term liquidity concerns," said Standard & Poor's credit analyst Rian Pressman. Moody's Investors Service simultaneously downgraded the senior unsecured rating of CIT Group Inc. to B3 from Ba2. Additionally, Moody's placed CIT's long-term ratings on review for further possible downgrade. The Company's short-term rating remains Not Prime. The downgrade of CIT's ratings is based on Moody's growing concern with CIT's liquidity position and prospects for survival of the franchise. COMSTOCK RESOURCES: Moody's Affirms 'B1' Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service affirmed Comstock Resources, Inc.'s B1 Corporate Family Rating and the B2 rating on the company's $175 million senior unsecured notes. The outlook is stable. "The ratings affirmation reflects Comstock's low leverage and good liquidity," commented Pete Speer, Moody's Vice-President. "However, the senior unsecured notes rating could be downgraded if the company's utilization of its bank facility is higher than expected." Comstock utilized the cash proceeds of the August 2008 sale of its 49% ownership interest in Bois d'Arc Energy, Inc., to pay down its revolving credit facility. This substantial reduction in debt levels offset the resulting decline in the company's proved reserves and production scale that is now much smaller than most B1 rated peers. While Comstock expects to significantly outspend operating cash flow in 2009 developing its Haynesville Shale properties, the company expects to maintain substantial availability under its $550 million revolving credit facility for liquidity and in case of further borrowing base reductions in the future. The B2 rating for the $175 million senior unsecured notes reflects both the overall probability of default of Comstock, to which Moody's assigns a PDR of B1, and a loss given default of LGD 5 (75% changed from 72%). The $550 million borrowing base is large enough to result in a double notching of the senior unsecured notes down from the B1 CFR under Moody's Loss Given Default Methodology. However, Moody's has decided to affirm the existing B2 notes rating based on the company's forecasted borrowings and management's stated target of maintaining at least 50% availability under the revolver borrowing base. If the borrowings under the revolver were to exceed $200 million then the notes rating could be downgraded to B3. Comstock has budgeted $360 million in capital expenditures for 2009, most of it for development drilling in its Haynesville Shale acreage. If the company does not meet its production forecasts and/or the resulting proved reserves additions are not achieved at competitive costs, the ratings outlook could be changed to negative or the ratings downgraded. The last rating action was on September 19, 2006, when Moody's affirmed the B2 ratings on Comstock's $175 million senior unsecured notes and assigned the loss given default assessments of LGD5 (72%) to those notes. Comstock Resources, Inc., is an independent exploration and production company headquartered in Frisco, Texas. CONCENTRA INC: Moody's Raises Ratings on First Lien Loan to 'Ba3' ----------------------------------------------------------------- Moody's Investors Service affirmed the Corporate Family Rating of Concentra Inc. following the repurchase of about $11.5 million face amount of second lien PIK term loan at a discount in June. Concurrently, Moody's upgraded the first lien facilities to Ba3 from B1, reflecting ongoing amortization of that facility relative to the second lien term loan, particularly if the company continues to elect to PIK interest payments. The outlook remains negative and continues to reflect ongoing deterioration in employment, and potential for loss of access to the revolver in 2010 following step downs in the company's total leverage covenant on March 31, 2010. The ratings are constrained by high financial and operating leverage, the company's relatively limited scale and scope of operations and performance below Moody's expectations since the separation of the network services business in June 2007. The ratings reflect Moody's expectation of continuing top line pressures which will impact cash flow generation in 2009, despite substantive reductions in costs and capital expenditures. The ratings are supported by the company's geographic diversity and broad customer base as well as relatively strong profitability, with EBITDA margins expected to continue to improve in 2009 in part due to cost cutting initiatives. Moody's took these rating actions: -- Affirmed the B2 Corporate Family Rating; -- Affirmed the B2 Probability of Default Rating; -- Upgraded the $75 million senior secured revolver and $330 million Senior Secured Term Loan B to Ba3 (LGD3, 30%) from B1 (LGD3, 34%); -- Affirmed the Caa1 (LGD 5, 81%) rating on the $155 million Second Lien PIK Toggle Term Loan C; The outlook for the ratings remains negative. The last rating action on Concentra was taken on October 28, 2008 when the company's outlook was changed to negative. Concentra Inc., based in Addison, Texas, is the largest national provider of occupational health services through 314 primary care centers located across 40 states. The company provides treatment for workplace injuries, physical therapy, physical examinations and pre-employment drug screenings. Concentra also provides bill review and case management services to the auto injury market through its Auto Injury Solutions unit. The company is owned by Welsh, Carson, Anderson & Stowe, a New York-based private equity firm, and other investors. Concentra had revenues of about $808 million in the twelve months ended March 31, 2009. COUNTRY COACH: Takes in Recreation Live as Partner -------------------------------------------------- Tim Christie at The Register-Guard reports that Country Coach LLC has forged an equity partnership with Recreation Live. According to The Register-Guard, Recreation Live will sell Country Coach's motor homes in other regions of the country. Recreation Live has locations in Schertz, Texas, and Pompano Beach. It will open three Country Coach factory stores and service centers in Florida, the Midwest and the Southwest over the next year, The Register-Guard states, citing Recreation Live officials. Recreation Live spokesperson Matt Howard said that the Company would own a significant equity stake in Country Coach, The Register-Guard relates. Citing Country Coach CEO Jay Howard, The Register-Guard states that the partnership with Recreation Live is an integral part of the reorganization plan, which the Company must file by August 31. Court documents show that Country Coach reported it lost a cumulative $4.9 million from April through June. Country Coach had sales revenue of $2.4 million, but expenses of $7.3 million, including $1.5 million in interest expense to its lenders. Country Coach has $51 million in debt, says The Register-Guard. Country Coach, LLC -- http://www.countrycoach.com/-- is a Highline motorcoach builder. Country Coach was founded in 1973 and has a 508,000 square feet manufacturing facility in Junction City, Oregon. Country Coach was sent to Chapter 11 less than two months after its owner, National R.V. Holdings Inc., reorganized in court. National R.V., had its reorganization plan approved by a judge in December. The Perris, California based company sought Chapter 11 protection in November 2007, listing assets of $54.4 million against debt of $30.1 million. In September, Country Coach completed a restructuring plan aimed at stemming a sharp decline in sales volume to due market pressures. In its eight-month restructuring, Country Coach cut its size by 50%, reduce staffing and inventory. Country Coach LLC's key investors, led by Bryant Riley, also reaffirmed their commitment towards the company. "Adding to the millions of dollars this group has invested in Country Coach since February 2007, the investing partners have committed an additional $6 million in new cash to ensure the company can maintain an aggressive position relative to product quality, lean manufacturing initiatives and new R & D projects like the exciting new Veranda line of coaches," a September 2008 release said. DELPHI CORP: Court Moves Auction to July 24; Plan Accord Reached ---------------------------------------------------------------- Delphi Corp. relates that as part of its efforts to facilitate further consensual discussions among representatives of General Motors Company, Platinum Equity, Delphi's DIP Lenders and other stakeholders, the Bankruptcy Court for the Southern District of New York has rescheduled the auction scheduled for July 21, 2009, to Friday, July 24, 2009 and will now commence the hearing on Delphi's Modified Plan on July 29, 2009. Delphi also said agreements have been reached with its official unsecured creditors' committee and Wilmington Trust Corporation, the indenture trustee for several series of unsecured notes, to withdraw their objections to, and support, the Modified Plan, whether based on the Master Disposition Agreement involving Platinum and GM or the pure credit bid submitted by the Administrative Agent on behalf of Delphi's DIP Lenders. Delphi previously said the deadline for submission by qualified bidders of potential alternative transactions passed without the submission of any potential alternative transactions from three third-party qualified bidders. Delphi will proceed with the auction process, however, because the company timely received a pure credit bid notice and pure credit bid support letter from JPMorgan Chase Bank, N.A., in its capacity as administrative agent under the Amended and Restated Revolving Credit, Term Loan and Guaranty Agreement dated as of May 9, 2008. The company expects to announce the outcome of the auction process on or about July 27, 2009. Accord Reached With Committee, Indenture Trustee On July 21, 2009, Delphi's Creditors' Committee and Wilmington Trust Corporation, as Indenture Trustee, approved settlements with Delphi that are also supported by GM, Platinum and several large holders of Delphi's DIP credit facility. Pursuant to the accord: -- Delphi will further modify its current plan modifications such that the potential distribution to its unsubordinated general unsecured creditors under the waterfall schedule in the Master Disposition Agreement will be increased from a maximum of $180 million to a maximum of $300 million and the distributions will based on 32.5% of all waterfall distributions in excess of $7.2 billion. -- Delphi will also modify its existing Confirmation Order to provide that reasonable fees and expenses of the Indenture Trustee, including the reasonable fees and expenses of its retained counsel in the chapter 11 cases, will be paid up to a maximum agreed cap. -- The Creditors' Committee and the Indenture Trustee have agreed to withdraw their objections to Delphi's Plan Modification Motion and to support approval of the Modified Plan. Earlier this week, as part of the voting reports filed with the Bankruptcy Court in connection with Delphi's resolicitation of certain creditor classes, it was reported that five impaired prepetition classes of creditors had voted to accept the Modified Plan. Under the Bankruptcy Code, at least one impaired non- insider class must accept the Plan in order to move forward with the plan modification process. DELPHI CORP: GM Won't Assume Pension Plan; PBGC Accord Reached -------------------------------------------------------------- Delphi Corp. relates that in its June 1 filing of modifications to its Confirmed Plan, it noted that changed economic circumstances would no longer permit the company to continue to fund its defined benefit pension plans for plan participants, including retired, former and current hourly and salaried employees following emergence from Chapter 11 reorganization. Delphi also stated that it expected that the Pension Benefit Guaranty Corporation would initiate the plan termination process for Delphi's US salaried pension plan and the other US "subsidiary" plans, which would consequently be taken over by the PBGC. The June 1 announcement also included Delphi's expectation that, in connection with the Plan Modification Hearing, it would negotiate and execute a settlement agreement with the PBGC and General Motors, which would definitively address all of the PBGC's claims against Delphi and its global affiliates. In connection with the Modified Plan and settlement discussions with the PBGC, GM has recently provided further information regarding the manner in which Delphi's US hourly pension plan obligations will be addressed. GM has advised that it will not assume the hourly pension plan and will not complete the second step of the 414(l) pension transfer contemplated under the Global Settlement Agreement with Delphi (the conditions of which have not been satisfied and which obligation is being superseded by the transactions under the Modified Plan). GM and the PBGC have negotiated a separate release and waiver agreement that contemplates a possible initiation by the PBGC of the plan termination process for Delphi's US hourly pension plan and provides consideration to the PBGC for certain releases to be granted to, among others, GM, Delphi, and Delphi's global affiliates. As a result of these developments, the PBGC is now expected to make a determination whether or not to initiate the termination process for Delphi's US hourly and salaried pension plans and the other US "subsidiary" plans. Delphi does not believe that a termination by the PBGC of the US hourly pension plan would violate Delphi's existing collective bargaining agreements or prior Bankruptcy Court orders. Nevertheless, Delphi has not agreed to a termination of the plan and will not enter into an agreement with the PBGC to take over the plan unless the Bankruptcy Court finds that that doing so is not a violation of Delphi's collective bargaining agreements or a federal district court issues an order terminating the US hourly plan. On July 21, 2009, Delphi reached agreement with the PBGC to settle the PBGC's various claims against Delphi and its global affiliates. Pursuant to that settlement agreement, the PBGC will receive a $3 billion allowed general unsecured nonpriority claim which will receive the same treatment given to holders of General Unsecured Claims under the Modified Plan. The PBGC will receive additional consideration from GM which, together with the PBGC's allowed unsecured claim, is in consideration for, among other things, a full release of all causes of action, claims, and liens; the liability to be assumed by the PBGC related to the possible termination of the US salaried plan, US hourly plan, and US subsidiary plans; and the withdrawal of all notices of liens filed by the PBGC against Delphi's global non-US affiliates. The settlement agreement, which is subject to Bankruptcy Court approval, is being filed with the Bankruptcy Court. 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 counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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) About Delphi Corp Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is a global supplier of mobile electronics and transportation systems, including powertrain, safety, steering, thermal, and controls & security systems, electrical/electronic architecture, and in-car entertainment technologies. Delphi technology is also found in computing, communications, consumer accessories, energy and medical applications. Delphi has approximately 146,600 employees and operates 150 wholly owned manufacturing sites in 34 countries with sales of $18.1 billion in 2008. The Company filed for Chapter 11 protection on October 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on December 20, 2007. The Court confirmed the Debtors' First Amended Plan on January 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) DESERT SHADOW: Chapter 7 Filing May Delay Hepatitis Trial --------------------------------------------------------- The Endoscopy Center of Southern Nevada, Gastroenterology Center of Nevada, and Desert Shadow Endoscopy Center filed for creditor protection under Chapter 7 of the Bankruptcy Code on July 17, 2009, The Associated Press reports. The AP says the three medical clinics were at the center of last year's hepatitis outbreak. AP says the bankruptcy filing threatens to delay the first civil trial involving a patient infected with hepatitis C, which is scheduled to begin October 19. AP relates the Southern Nevada Health District has linked nine cases of hepatitis C to unsafe injection practices at the endoscopy centers. Another 105 cases are possibly related. "All three centers are named in lawsuits from patients who say they contracted hepatitis C during treatments at the clinics. The bankruptcy automatically postpones those lawsuits, and a bankruptcy judge must lift the postponement before the civil suits can proceed," AP says. EDDIE BAUER: Creditors Panel Asks Court to OK Retention Agreements ------------------------------------------------------------------ The Official Committee of Unsecured Creditors in the bankruptcy cases of Eddie Bauer Holdings, Inc., and its affiliates asks the Bankruptcy Court to approve their retention of: * Cooley Godward Kronish LLP as lead counsel; * Capstone Advisory Group, LLC as financial advisor; * Young Conaway Stargatt & Taylor, LLP as co-counsel; and * Lang Michener LLP as Canadian counsel 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. EDGEN MURRAY: S&P Changes Outlook to Negative; Affirms 'B' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Edgen Murray II LP to negative from stable, reflecting increased leverage and heightened covenant pressure in the near term. All ratings, including the 'B' corporate credit rating, were affirmed. "The outlook revision to negative reflects S&P's heightened concern about a potential covenant violation, given S&P's expectation that challenging operating conditions will continue in the near term due to weak end-market demand," said Standard & Poor's credit analyst Sherwin Brandford. Specifically, the net leverage covenant steps down to 4.5x at the end of 2009 from 5x currently. Because S&P expects that EBITDA will decline to the $90 million to $100 million range during 2009, compared to $180 million in 2008, S&P believes that this metric can exceed the 4.5x level. S&P's current expectation is for outstanding revolving credit facility borrowings, which S&P estimates totaled around $15 million as of June 30, 2009, to be fully repaid by the end of 2009 (except for outstanding letters of credit). In addition, given that the covenant is calculated utilizing net debt (net of cash), S&P believes the company may elect to not repay its term loan (aside from minimum required amortization payments) from internally generated cash, but rather choose to accumulate excess cash on its balance sheet. The rating on specialty metals distributor Edgen Murray reflects its vulnerable business risk profile, driven by its exposure to the highly cyclical, competitive, and volatile specialty steel pipe industry; its modest size and limited scope of operations; and thin operating margins. In addition, it maintains an aggressive financial profile as reflected by its debt to capital ratio of more than 100%. The company's manageable capital expenditure requirements and historically countercyclical cash flow somewhat temper these factors. ENBRIDGE ENERGY: DBRS Rates Jr. Subordinated Notes at 'BB' ---------------------------------------------------------- DBRS has confirmed the ratings on the Commercial Paper, Senior Unsecured Notes and Junior Subordinated Notes of Enbridge Energy Partners, L.P., at R-2 (middle), BBB and BB (high), respectively, all with Negative trends. The rating actions follow the announcement that EEP and Enbridge Inc. have concluded a joint funding agreement under which Enbridge will effectively fund two-thirds of the $1.2 billion cost of the U.S. segment of the Alberta Clipper crude oil pipeline project (Alberta Clipper U.S.), with the remaining one-third to be funded by EEP (previously 100% EEP). Enbridge will participate in the debt financing that EEP raises for Alberta Clipper U.S. and will fund two-thirds of the project's equity requirements directly into Enbridge Energy Limited Partnership (EELP), the subsidiary of EEP that is constructing the project. EEP and Enbridge will fund all costs and receive all cash returns related to their proportionate shares in Alberta Clipper U.S. EEP and Enbridge will each have a right of first refusal on each other's investment in the project, and EEP will retain the right to fund up to 100% of any expansion, and dilute Enbridge's interest accordingly. The confirmation reflects EEP's substantially reduced funding requirements (from $2.1 billion to $1.1 billion) over 2009 to 2010 following completion of this transaction. Since DBRS's last rating action in February 2009, EEP added $350 million of incremental 364-day credit facilities in April 2009 (increasing its liquidity to nearly $2.0 billion of cash and available credit facilities as at March 31, 2009, on a pro forma basis) and completed construction of its Southern Access Stage 2 pipeline project on time and on budget. DBRS expects EEP to continue to maintain an adequate liquidity position through incremental capital markets activity, potential sale of non-core assets and/or delay or reduction of non-committed growth capex. DBRS expects that EEP's business risk profile will improve upon completion of the capex program in mid-2010. Future growth capex is heavily weighted towards the Liquids segment, compared with the Natural Gas segment, with the lower business risk profile of the former (due to strong regulatory and contractual arrangements) mitigating the higher business risk profile of the latter (due to volume and commodity price risks, although this is partly mitigated by contractual and hedging arrangements). Maintenance of the Negative trends reflects continued pressure on the Partnership's credit metrics and ongoing refinancing and project execution risks through mid-2010, although partially mitigated by this transaction. In its February 5, 2009, press release, DBRS stated that, based on EEP's 2009 earnings guidance (net income projected to decline to between $300 million and $340 million this year compared with $367 million on a DBRS-adjusted basis in 2008), DBRS expected that EEP's adjusted debt-to-capital ratio would be maintained in the low-50% range, which is acceptable. However, DBRS estimated that the resulting cash flow- to-debt, EBITDA interest-coverage and EBIT interest-coverage metrics would be in the 13% to 14%, 2.7 times to 2.8 times and 1.8 times to 1.9 times ranges, respectively, in 2009, which would be outside the parameters for the current ratings. If, in DBRS's opinion, EEP's credit metrics are likely to fall below the estimated levels noted above with limited potential for substantial recovery by 2010, further negative rating action may occur. The Partnership attributed the lowered guidance to the deteriorating global economy, a low commodity price environment and restricted access to capital. The Partnership's non-regulated segments (Natural Gas and Marketing) are subject to commodity price risk. While mostly hedged, EEP is exposed to rollover of its shorter-term hedges and lower prices on its un-hedged positions. In addition, EEP is exposed to throughput risk with respect to its fee-based arrangements. In the current low energy price environment, many oil and gas producers have reduced their capital programs and consequently drilling activity. Despite the generally attractive production growth profiles of natural gas fields where EEP's main gathering and processing assets are located (mainly on the U.S. Gulf Coast, with a concentration in Texas), these factors are expected to negatively affect EEP's earnings and cash flow in 2009 relative to 2008. About Enbridge Energy Partners Enbridge Energy Partners, L.P. -- http://www.enbridgepartners.com -- is engaged in owning and operating crude oil and liquid petroleum transportation and storage assets, and natural gas gathering, treating, processing, transportation and marketing assets in the United States. The Company operates in three business segments: liquids, natural gas and marketing. * * * As reported in the Troubled Company Reporter on February 10, 2009, Dominion Bond Rating Service has confirmed the ratings on the Commercial Paper, Senior Unsecured Notes and Junior Subordinated Notes of Enbridge Energy Partners, L.P. (EEP or the Partnership) at R-2 (middle), BBB and BB (high), respectively, with all trends changed to Negative from Stable. ENDOSCOPY CENTER NV: Chapter 7 Filing May Delay Hepatitis Trial --------------------------------------------------------------- The Endoscopy Center of Southern Nevada, Gastroenterology Center of Nevada, and Desert Shadow Endoscopy Center filed for creditor protection under Chapter 7 of the Bankruptcy Code on July 17, 2009, The Associated Press reports. The AP says the three medical clinics were at the center of last year's hepatitis outbreak. AP says the bankruptcy filing threatens to delay the first civil trial involving a patient infected with hepatitis C, which is scheduled to begin October 19. AP relates the Southern Nevada Health District has linked nine cases of hepatitis C to unsafe injection practices at the endoscopy centers. Another 105 cases are possibly related. "All three centers are named in lawsuits from patients who say they contracted hepatitis C during treatments at the clinics. The bankruptcy automatically postpones those lawsuits, and a bankruptcy judge must lift the postponement before the civil suits can proceed," AP says. FAIRCHILD CORP: Establishes August 31 General Bar Date ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has established August 31, 2009, at 5:00 p.m. 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 in The Fairchild Corporation and its affiliates' bankruptcy cases, and September 14, 2009, at 5:00 p.m. as the bar date with respect to all governmental units. All proofs of claim must be filed so as to be actually received no later than 5:00 p.m. on the applicable bar date at this address: If by first-class mail: The Fairchild Corporation Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC Grand Central Station, P.O. Box 4601 New York, NY 10163-4601 If by hand delivery or overnight mail: The Fairchild Corporation Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC 757 Third Avenue, 3rd Floor New York, NY 10017 Proofs of claim sent by facsimile or e-mail will not be accepted by Epiq. 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: Plan Filing Period Extended to August 31 -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has extended The Fairchild Corporation and its affiliates' exclusive period to propose a Chapter 11 plan through and including August 31, 2009, and their exclusive period to solicit acceptances thereof through and including November 2, 2009. In their motion, the Debtors told the Court that they had expended "tremendous efforts" over the past 120 days in closing the sale of substantially 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. FLYING J: Pilot Travel Merger to Resolve Suit, Allow Ch 11 Exit --------------------------------------------------------------- Convenience Store Decisions reports that Flying J Inc.'s merger with Pilot Travel Centers LLC will resolve a lawsuit charging the travel center operator of boycotting the Company's fuel cards. As reported by the Troubled Company Reporter on July 15, 2009, Flying J and Pilot entered into a preliminary merger agreement that will provide a framework for Flying J's core travel plaza business to emerge from Chapter 11 bankruptcy protection. Under the terms of the Letter of Intent filed with the U.S. Bankruptcy Court in Delaware, the value indicated would allow all Flying J creditor obligations to be paid in full. Pilot has also agreed to provide $100 million in Debtor-in-Possession financing for Flying J's operations, subject to Court approval and various conditions. CSD says that Flying J will receive cash and an equity stake in Pilot, which will allow the Company to emerge from Chapter 11 bankruptcy. The Knoxville News Sentinel relates that Pilot will pay between $300 million and $500 million, plus have exclusive rights for a certain period to purchase some Flying J assets. According to CSD, Flying J and Pilot will form a multibillion- dollar company with more than 550 fuel and travel centers in North America if the merger gains the Court's approval. CSD says that Pilot will gain control of Flying J's travel centers, and the headquarters of the two companies will be consolidated in Knoxville. Pilot runs 305 of centers in 40 states and one in Canada with 13,000 employees, while Flying J has 250 travel centers in 41 states and six Canadian provinces and has 15,000 employees. CSD states that assets would include all of the Flying J travel centers and trucking operations, its corporate headquarters, some properties adjacent to the travel centers and other business operations. Flying J must also guarantee Flying J's continued operation by August 4, CSD relates. About Pilot Pilot Travel Centers LLC is the nation's largest retail operator of Travel Centers, catering to the professional driver and traveling motorist in 41 states with over 300 retail interstate properties. The company is headquartered in Knoxville, Tennessee and employs 13,000 nation-wide. About Flying J Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/-- is among the 20 largest private companies in America, with 2007 sales exceeding $16 billion. The fully integrated oil company employs approximately 14,700 people in the U.S. and Canada through its interstate operations, transportation, refining and supply, exploration and production, as well as its financial services and communications, divisions. Flying J and six of its affiliates filed for bankruptcy on December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Flying J sought Chapter 11 protections after a precipitous drop in oil prices and disruption in the credit markets brought to bear significant short-term pressure on the company's liquidity position. Attorneys at Kirkland & Ellis LLP represent the Debtors as counsel. Young, Conaway, Stargatt & Taylor LLP is the Debtors' Delaware Counsel. Blackstone Advisory Services L.P. is the Debtors' investment banker and financial advisor. Epiq Bankruptcy Solutions LLC is the Debtors' notice, claims and balloting agent. In its formal schedules submitted to the Bankruptcy Court, Flying J listed assets of $1,433,724,226 and debts of $640,958,656. An official committee of unsecured creditors has been appointed in the case. Pachulski Stang Ziehl & Jones LLP has been tapped as counsel for the creditors' panel. FORUM HEALTH: Evidentiary Hearing Postponed; Union Talks Resume --------------------------------------------------------------- Andrea Wood at Business Journal reports that the Hon. Kay Woods of the U.S. Bankruptcy Court for the Northern District of Ohio, at the behest of Forum Health Inc. and the Ohio Nurses Association/Youngstown General Duty Nurses Association, has postponed until July 31 the evidentiary hearing on Forum Health Inc.'s motion to overturn their collective bargaining agreement. Business Journal relates that Forum Health and the unions will have more time to negotiate an agreement. As reported by the Troubled Company Reporter on July 16, 2009, Judge Woods set the evidentiary hearings on Forum Health's motion to overturn the ONA-YGDNA and Service Employees International Union Local 1199 contracts. For ONA contracts, the hearing will be on July 23, while the hearing for SEIU contracts is set for July 27, the report states. Judge Woods also declined Forum Health's request to reject its contracts with ONA and SEIU bargaining units at Northside Medical Center, and let it to terminate its pension plan. Court documents say that the nurses' union threatened to hold a strike, stating that Forum Health disclosed a tentative agreement with the YGNDA on June 24 only to have its board of directors vote six days later to reject the pact. Contract talks were scheduled for July 15 and July 22, Business Journal says, citing the SEIU. According to Business Journal, union negotiators said that Forum Health and its labor unions at Trumbull Memorial and Hillside ratified new contracts that contain some $8 million in concessions. Based in Warren, Ohio, Forum Health -- http://www.forumhealth.org/ -- offers health care services. The primary service area consists of the northeast Ohio counties of Mahoning, Trumbull and Columbiana; and northeast Ohio counties of Ashtabula, Geauga and Portage and the Pennsylvania counties of Mercer and Lawrence. Forum Health and its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. N.D. Ohio Lead Case No. 09-40795). Paul W. Linehan, Esq., and Shawn M Riley, Esq., at McDonald Hopkins LLC, are lead counsel to the Debtors. The Debtors have also tapped Michael A. Gallo, Esq. at Nadler Nadler & Burdman Co., LPA as co- counsel; Kurtzman Carson Consultants LLC as claims, noticing and balloting agent; and Huron Consulting Services LLC as financial advisors. Alston & Bird LLP represents the official committee of unsecured creditors formed in the Chapter 11 cases. At the time of its filing, Forum Health estimated that it had assets and debts both ranging from $100 million to $500 million. FORUM HEALTH: Houlihan Engagement Spurs AFSCME's Sale Concerns -------------------------------------------------------------- Forum Health Inc. is seeking the permission of the U.S. Bankruptcy Court for the Northern District of Ohio to retain the investment banking firm, Houlihan Lokey Howard & Zukin Capital Inc. According to Business Journal Daily, the request came as a surprise to American Federation of State, County and Municipal Employees members at the Trumbull County hospitals. Business Journal Daily quoted the AFSCME's chief negotiator, Debbie Bindas, as saying, "We are extremely disappointed that AFSCME was not contacted by Forum Health prior to that document being filed so that an explanation could be given on why it was necessary and if that really is the direction that Forum Health is going -- selling off another asset that's making money." Citing Ms. Bindas, Business Journal Daily relates that Forum Health CEO Walter J. Pishkur assured Hillside employees months ago that efforts were no longer under way to sell Trumbull Memorial Hospital, Forum Health's most profitable asset followed by Hillside, which officials say essentially breaks even. AFSCME attorneys "are investigating exactly what this means and how it impacts our members. Should a sale of Hillside come to fruition, or a plan is submitted to us to sell Hillside and disenfranchise it from Trumbull Memorial, we will resist with all legal means," Business Journal Daily quoted Tom Connelly, president of the union representing TMH 600 nurses, service and maintenance workers, as saying. Business Journal Daily states that major lenders owed $140 million by Forum Health support the Company's retention of Houlihan Lokey. Court documents say that the lenders had urged that the retention should be made "to assist the debtors in evaluating all options to maximize value and in securing financing with which to exit Chapter 11." Based in Warren, Ohio, Forum Health -- http://www.forumhealth.org/ -- offers health care services. The primary service area consists of the northeast Ohio counties of Mahoning, Trumbull and Columbiana; and northeast Ohio counties of Ashtabula, Geauga and Portage and the Pennsylvania counties of Mercer and Lawrence. Forum Health and its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. N.D. Ohio Lead Case No. 09-40795). Paul W. Linehan, Esq., and Shawn M Riley, Esq., at McDonald Hopkins LLC, are lead counsel to the Debtors. The Debtors have also tapped Michael A. Gallo, Esq. at Nadler Nadler & Burdman Co., LPA as co- counsel; Kurtzman Carson Consultants LLC as claims, noticing and balloting agent; and Huron Consulting Services LLC as financial advisors. Alston & Bird LLP represents the official committee of unsecured creditors formed in the Chapter 11 cases. At the time of its filing, Forum Health estimated that it had assets and debts both ranging from $100 million to $500 million. FRONTIER AIRLINES: District Court Strikes Ruling Voiding CBAs ------------------------------------------------------------- The International Brotherhood of Teamsters applauded a decision by the U.S. District Court for the Southern District of New York that strikes down a bankruptcy court ruling that voided Frontier Airlines' collective bargaining agreements with the union. The decision also sends the case back to the U.S. Bankruptcy Court for the Southern District of New York for further review. According to the decision, the Teamsters notes in a statement, the bankruptcy court applied improper standards by considering proposals and supporting disclosures after the hearing had begun to consider Frontier Airlines' proposal to reject the collective bargaining agreements. The bankruptcy court's decision allowed Frontier Airlines to implement a 14% cut in wages. The Teamsters Union has refused to agree to Frontier's demand that it have the unlimited right to permanently outsource its heavy- check maintenance. Frontier then sought to reject the Teamster contracts. As reported by the Troubled Company Reporter on December 1, 2008, the Teamsters Airline Division of the International Brotherhood of Teamsters notified the U.S. Bankruptcy Court that it would take an appeal to the District Court for the Southern District of New York from Judge Robert Drain's order granting Frontier Airlines' request to reject its CBA with the Teamsters. While Frontier has noted that the Court's approval of their plans will help it "achieve a competitive cost structure", Teamsters Local Union No. 961, argued that Frontier's outsourcing of all of its maintenance work to Aeroman, a company based in El Salvador, will displace the Union-represented mechanics in the airline. Judge Drain has held that Frontier may outsource its aircraft maintenance only as a last resort -- after it has exhausted all other options to perform the heavy check work at its repair station in Denver, Colorado. Judge Drain's Order is hinged upon Frontier's plan to furlough its heavy maintenance workers during periods in which the airline does not require heavy maintenance work, and recall these workers during periods that Frontier has work available. In a letter addressed to Union members promptly after Judge Robert Drain approved Frontier's plan, Teamsters Local 961 President Matthew Fazakas, and Teamsters Airline Division Director David Bourne pointed out that "the bankruptcy laws are skewed in favor of [the] Debtors and against working people." The Teamsters officials, however, commended Judge Drain for trying to get Frontier to negotiate in good faith, Marketwatch.com said. "The economic concessions must be modeled after the Teamster concession proposals, and there must be a fair and transparent process to ensure the Company works in good faith in its hiring practices so that it uses its outsourcing only as an absolute last resort," they maintained. A full-text copy of the Teamsters Officials' Letter is available at no charge at http://researcharchives.com/t/s?355c "This is a resounding victory," said Teamsters General President Jim Hoffa. "The U.S. District Court recognized that company rushed to the courthouse without bargaining in good faith with the Teamsters." "We are extremely pleased with the decision," said Capt. David Bourne, Director of the Teamsters Airline Division. "Companies should not run to court in hopes a judge will do the negotiating for them." "We will never agree to the outsourcing of work to foreign countries," said Matthew Fazakas, President of Local 961 in Denver. Republic Investment Deal As reported by the Troubled Company Reporter on June 23, 2009, Frontier Airlines has entered into an investment agreement with Republic Airways Holdings, Inc., by which Republic will serve as equity sponsor for Frontier's plan of reorganization and purchase 100% of the equity in the reorganized company for $108.75 million. The plan sponsorship agreement is subject to bankruptcy court approval and various conditions. If the plan of reorganization is approved and implemented as proposed, upon its emergence from Chapter 11, Frontier Airlines Holdings would become a wholly owned subsidiary of Republic, an airline holding company that owns Chautauqua Airlines, Republic Airlines and Shuttle America. Frontier Airlines and Lynx Aviation would maintain their current names and continue to operate as usual. Frontier filed its proposed plan of reorganization and a related disclosure statement with the U.S. Bankruptcy Court. Frontier also filed a motion to approve the investment agreement with Republic, subject to higher and better proposals under a court- supervised auction. Frontier currently expects to conclude the auction process and emerge from Chapter 11 by autumn 2009. In March 2009, Frontier received a firm commitment for $40 million in post-petition debtor-in-possession financing from Republic Airways Holdings to support Frontier's additional working capital needs and refinance its expiring DIP loan, increasing the available financing and preserving Frontier's financial stability. As a condition to the loan, Frontier agreed to allow Republic's damage claim in the amount of $150 million arising out of Frontier's rejection of its airline services agreement with Republic. The proposed plan of reorganization provides for general unsecured creditors to receive $28.75 million in cash. An additional $40 million of the sale proceeds would be applied as repayment of the outstanding DIP loan. If the plan is implemented as proposed, the company's current equity would be extinguished and holders of that equity would not receive any recovery. About Teamsters The International Brotherhood of Teamsters -- http://www.teamster.org/-- represents about 325 mechanics at Frontier Airlines that are covered under the collective bargaining agreements affected by the decision. The Teamsters was founded in 1903 and represents more than 1.4 million men and women throughout the United States, Canada and Puerto Rico. About Frontier Airlines Holdings Frontier Airlines Holdings, Inc. (Pink Sheets: FRNTQ) -- http://www.FrontierAirlines.com/-- is the parent company of Denver-based Frontier Airlines. Currently in its 15th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation has 51 aircraft with one of the youngest Airbus fleets in North America. In conjunction with a fleet of 10 Bombardier Q400 aircraft operated by Lynx Aviation -- a subsidiary of Frontier Airlines Holdings, Inc. -- Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. The Debtors' exclusive period to file a plan of reorganization will expire on October 9, 2009. Their exclusive period to solicit and obtain acceptances of that plan will expire December 9, 2009. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GASTROENTEROLOGY CENTER NV: Ch. 7 Filing May Delay Hepatitis Trial ------------------------------------------------------------------ The Endoscopy Center of Southern Nevada, Gastroenterology Center of Nevada, and Desert Shadow Endoscopy Center filed for creditor protection under Chapter 7 of the Bankruptcy Code on July 17, 2009, The Associated Press reports. The AP says the three medical clinics were at the center of last year's hepatitis outbreak. AP says the bankruptcy filing threatens to delay the first civil trial involving a patient infected with hepatitis C, which is scheduled to begin October 19. AP relates the Southern Nevada Health District has linked nine cases of hepatitis C to unsafe injection practices at the endoscopy centers. Another 105 cases are possibly related. "All three centers are named in lawsuits from patients who say they contracted hepatitis C during treatments at the clinics. The bankruptcy automatically postpones those lawsuits, and a bankruptcy judge must lift the postponement before the civil suits can proceed," AP says. GENERAL MOTORS: Court OKs Butzel Long as Panel's Special Counsel ---------------------------------------------------------------- The official committee of unsecured creditors in General Motors Corp.'s Chapter 11 obtained the Court's authority to retain Butzel Long as its special counsel nunc pro tunc to June 10, 2009. As the Committee's special counsel, Butzel Long will: (a) represent the Committee as special supplier counsel to ensure that the procedures for the assumption and assignment of supplier contracts in the Debtors' sale of substantially all their assets under Section 363(b) of the Bankruptcy Code are fair and workable, including leading discussions and negotiations on that topic with the Debtors' special automotive counsel; (b) act as conflict counsel to represent the Committee in discrete matters during the pendency of the Debtors' Chapter 11 cases for which the Committee's counsel, Kramer Levin Naftalis & Frankel, LLP, has or may have a conflict of interest, or is unable to represent the Committee; and (c) represent the Committee with respect to other issues as the Committee decides would be in its best interests. Butzel Long bills its clients according to its professionals' customary hourly rates: Title Rate per Hour ----- ------------- Shareholders $300 to $750 Counsel $285 to $625 Senior Attorneys $275 to $590 Associates $205 to $400 Paralegals $120 to $245 Butzel Long's professionals who are expected to be involved in this engagement are: Name and Position Rate per Hour ----------------- ------------- Barry N. Seidel - Shareholder $725 Martin E. Karlinsky - Shareholder $675 Robert Sidorsky - Counsel $625 Philip J. Kessler - Shareholder $600 Thomas B. Radon - Shareholder $525 Eric B. Fisher - Shareholder $525 William J. Kohler - Counsel $460 W. Patrick Dreisig - Shareholder $435 Max J. Newman - Shareholder $425 Butzel Long will apply for payment of fees and expenses pursuant to Section 330(a) of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules of the Court, the United States Trustee's Guidelines for Fees and Disbursements and other applicable procedures. Barry N. Seidel, Esq., shareholder at Butzel Long, discloses that his firm has represented and represents automotive suppliers in connection with their contractual rights under their applicable agreements with the Debtors, which list is available for free at http://bankrupt.com/misc/GM_ButzelLongSupplierSched.pdf However, Mr. Seidel says that the interests of the Supplier Clients are consistent with, and not adverse to, the interests of the Committee. Moreover, he assures the Court that Butzel Long does not represent any entity having an adverse interest in the Debtors' Chapter 11 cases pursuant to Section 1103(b) of the Bankruptcy Code. He maintains that Butzel Long is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. Judge Gerber will consider the Committee's request on July 13, 2009. Objections are due July 8. 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 counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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: ETC Wants Payments of $2.4 Million Claim -------------------------------------------------------- Environmental Testing Corporation asks the Bankruptcy Court to compel debtors General Motors Corp. and its affiliates to pay it: (a) an estimated $1.8 million to remediate and restore the Debtors' leased property located at 4750 Kingston Street in Denver, Colorado; (b) approximately $25,000 in taxes on the Leased Property; and (b) $570,000 for postpetition vehicle and engine testing it conducted, and continue to conduct, in ETC's testing facility in Aurora, Colorado. Anthony L. Leffert, Esq., at Robinson, Waters & O'Dorisio, P.C., in Denver, Colorado, says that in accordance with Section 503(b) of the Bankruptcy Code, GM is obligated to pay for the postpetition remediation of the Property, as well as the taxes that have been incurred, which the Debtors refused to pay. Moreover, the testing services ETC provided to GM account for an administrative claim and is entitled to priority distribution, because the services "relieved the estate of obligations . . . under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Hazardous Materials Transportation Act of 1980 and the Resource Conservation and Recovery Act" which relate to environmental protection, health or safety, ETC says. 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 counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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: Judge Gerber Approves Purchase of Delphi's Assets ----------------------------------------------------------------- Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York authorizes Motors Liquidation Company and its debtor affiliates to enter into the Master Disposition Agreement and related pacts with Delphi Corporation and Platinum Equity LLC. Judge Gerber overrules objections to the extent not already resolved or dismissed. Judge Gerber clarifies that the findings in this order will not be binding upon Delphi Corporation until a modified proposed transaction or an acceptable alternative transaction is approved in Delphi's bankruptcy case. Judge Gerber rules that the Order does not preclude any party, including the New York State Workers' Compensation Board, the New York State Department of Environmental Conservation, and the Michigan Department of Environmental Quality, from objecting to the approval of the Master Disposition Agreement in Delphi's Chapter 11 case. Judge Robert Drain is handling in Delphi's case. During a July 13, 2009 hearing, Judge Gerber stated that Motors Liquidation, the Old GM, which is left in bankruptcy, could take steps to effectuate the transaction. However, New GM will fund the transaction, including $1.1. billion in payments to Delphi and its creditors, $2 billion equity investment in Parnassus Holdings, and $250 million interim postpetition financing under the GM- Delphi Liquidity Arrangement. GM Inks Pact with Delphi Lenders Delphi announced on July 10 that the deadline for submission by qualified bidders of potential alternative transactions to the transaction with Parnassus Holdings, LLC, an affiliate of Platinum Equity has passed without the submission of any potential alternative transactions. Delphi, however, said it has received a notice from JPMorgan Chase Bank, N.A., in its capacity as administrative agent under the Amended and Restated Revolving Credit, Term Loan and Guaranty Agreement dated May 9, 2008, that the Administrative Agent may submit a credit bid for Delphi's assets. According to a July 16, 2009, report by the DealBook of New York Times, the temporary pact will supersede the Master Disposition Agreement among Platinum Equity, Delphi and GM. JP Morgan, as administrative agent for the Delphi DIP Lenders, which are owed $3.5 billion in Delphi's bankruptcy, entered the agreement early morning on July 16, DealBook said. Under the proposed pact with the Delphi DIP Lenders, they will proceed with a pure credit bid for Delphi's assets. A hearing on the sale of Delphi's assets will be conducted on July 23. DealBook noted that the proposed pact with the Delphi DIP Lenders could end Delphi's legal battle with its DIP Lenders, and ultimately Delphi's emergence from Chapter 11. 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 counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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: New GM Enters Into $7 Bil. Credit Pact With U.S. ---------------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission, General Motors Company disclosed its entry into: (i) a secured credit agreement with the U.S. Department of the Treasury, whereby New GM assumed $7,072,488,605 of principal amount of debt incurred by Old GM under the DIP Facility and all of Old GM's obligations; and (ii) a secured note agreement with the UAW Retiree Medical Benefits Trust, in which New GM issued a note in a principal amount of $2,500,000,000 in favor of the New Voluntary Employee Beneficiary Association Trust in connection with and as required by the Purchase Agreement. The loans under the Treasury Loan Agreement are scheduled to mature on July 10, 2015. Each Loan accrues interest at a rate per annum equal to the prime rate plus 4% or the LIBOR rate, plus 5%, per annum. The notes under the VEBA Note Agreement are scheduled to mature on July 15, 2017. Each Note has an implied interest rate equal to 9% per annum, compounded annually, on the basis of a 360-day year consisting of twelve 30-day months, accreting from July 15, 2009. GM is required to prepay the Loans and the Notes in an amount equal to the amount of net cash proceeds received from certain asset dispositions, casualty events, extraordinary receipts and the incurrence of certain debt. New GM may also voluntarily repay Loans and Notes in whole or in part at any time. Once repaid, amounts borrowed under the US Loan Agreement may not be reborrowed. The US Facilities are secured by substantially all of New GM's and certain of New GM's subsidiaries' assets, including New GM's and the Guarantors' equity interests in certain of their foreign subsidiaries, subject to certain exclusions. Canadian Loan Agreement Moreover, on July 10, 2009, General Motors of Canada Limited, a wholly owned subsidiary of New GM, and certain of GM Canada's subsidiaries entered into an amendment and restatement of its existing loan agreement with Export Development Canada. Pursuant to the amendment and restatement, GM Canada has $1,288,135,593 term loan maturing on July 10, 2015. Amounts outstanding under the Canadian Loan Agreement accrue interest at a rate per annum equal to the three-month CDOR rate, plus 5%, and accrued interest is payable quarterly. The Canadian Loan Agreement has been guaranteed by New GM, and by 1908 Holdings Ltd., Parkwood Holdings Ltd., and GM Overseas Funding LLC, each of which is a subsidiary of GM Canada. Since 65% of New GM's ownership interest in GM Canada was previously pledged to secure the obligations under the U.S. Loan Facilities, EDC received a first priority lien on 35% of New GM's equity interest in GM Canada and a second priority lien on the remaining 65%. With certain exceptions, GMCL's obligations under the Canadian Loan Agreement are secured by a first lien on substantially all of its and the Subsidiary Guarantors' assets, including GM Canada's ownership interests in the Subsidiary Guarantors and that portion of the equity interests of General Motors Product Services Inc. owned by GM Canada. Stockholders Agreement In addition, New GM, the U.S. Treasury Department, the New VEBA and 7176384 Canada Inc., also known as Canada Holdings, entered into a Stockholders Agreement dated July 10, 2009. Under the Stockholders Agreement, the board of directors of New GM will be composed of 13 members. The initial board of directors will consist of 10 members who are designated by the Treasury Department, one member who is designated by the New VEBA, one member who is designated by Canada Holdings, and the chief executive officer of New GM. At least two-thirds of the directors must be determined by the board of New GM to be independent within the meaning of New York Stock Exchange rules. So long as the New VEBA holds at least 50% of the shares of New GM common stock it held at the closing of the 363 Sale, the New VEBA will have the right to designate one nominee to the New GM board of directors. After the initial public offering, subject to the New GM board approval, the board of directors of New GM will nominate the New VEBA nominee to be elected a member of the board and include the New VEBA nominee in the proxy statement and related materials. Moreover, the New GM board of directors agrees to nominate and the stockholders parties to the Stockholders Agreement agree to appoint the director designated by Canada Holdings to the New GM board. Pursuant to the Stockholders Agreement, until the initial public offering of New GM, so long as Canada Holdings beneficially owns at least 5% of the outstanding New GM common stock, New GM may not, without the prior consent of Canada Holdings, take any action to effectuate (i) a sale of all or substantially all of the assets of New GM; (ii) any voluntary liquidation, dissolution or winding up of New GM; or (iii) an issuance of New GM common stock at a price per share less than fair market value, as determined in good faith by the board of directors. A copy of the Stockholders Agreement is available for free at: http://ResearchArchives.com/t/s?3f9a GENERAL MOTORS: Provides Updates On Asset Sale Closing ------------------------------------------------------ Motors Liquidation Company, formerly known as General Motors Corporation, apprised the U.S. Securities and Exchange Commission of the closing of the sale of substantially all of its assets to an entity sponsored by the United States Department of the Treasury. Pursuant to the Master Sale and Purchase Agreement, the purchase price paid by New GM to Motors Liquidation equaled the sum of: A. a credit bid in an amount equal to the aggregate of: -- $19,760,624,198 of principal amount of debt under Motors Liquidation's existing credit agreement with the Treasury Department, plus $1,172,811,274 of principal amount of notes issued as additional compensation for the Treasury Loan, plus interest on the debt owed as of July 10, 2009, by Motors Liquidation and its subsidiaries; and -- $33,300,000,000 of principal amount of debt under Motors Liquidation's DIP Facility, plus $2,221,110,000 of principal amount of notes issued as additional compensation for the DIP Facility, plus, interest owed as of the Closing Date by Motors Liquidation and its subsidiaries, less $8,247,488,605 of principal amount of debt owed under the DIP Facility; B. Treasury Department's return of the warrants previously issued to the Department Treasury by Motors Liquidation; C. issuance by New GM to Motors Liquidation of (a) 50,000,000 shares or 10% of New GM's common stock and (b) warrants to acquire newly issued shares of New GM common stock initially exercisable for a total of 90,909,090 shares of New GM's common stock; and D. assumption by New GM or its designated subsidiaries of certain specified liabilities of Motors Liquidation and certain of its subsidiaries. In the event that the estimated aggregate general unsecured claims against the Sellers, as determined by the Bankruptcy Court upon the request of Motors Liquidation, exceeds $35 billion, New GM is required to issue, as an adjustment to the purchase price, up to an additional 2% of its common stock to Motors Liquidation. In connection with the closing of the sale on July 10, 2009, Motors Liquidation and New GM entered into these agreements: * A definitive financing agreement with the Treasury Department restructuring and amending and restating $1,175,000,000 of principal amount of debt incurred under the DIP Facility. The Wind Down Facility is non-recourse to Motors Liquidation and its subsidiaries; and interest under the facility accrues at either the prime rate plus 200 basis points or LIBOR plus 300 basis points, per annum, and is payable in-kind. The obligations under the Wind- Down Facility are secured by substantially all assets of Motors Liquidation and the guarantors. A full-text copy of the Wind-Down Facility is available for free at: http://ResearchArchives.com/t/s?3f35 * A Master Lease Agreement, wherein certain facilities of Motors Liquidation are leased to New GM for a term starting July 10, 2009, and terminating upon the earlier of (i) 30 days after written notice of termination from New GM with respect to any facility or (ii) certain outside dates specified with respect to each facility. A full-text copy of the Agreement is available for free at: http://ResearchArchives.com/t/s?3f34 * A Transition Services Agreement, whereby New GM will provide Motors Liquidation with certain transition services and support functions required by GM in connection their operation and ultimate liquidation in bankruptcy. A full- text copy of the Agreement is available for free at: http://ResearchArchives.com/t/s?3f33 In addition, the Treasury Department, New GM, Motors Liquidation, the UAW Retiree Medical Benefits Trust and 7176384 Canada Inc. entered into an equity registration rights agreement with respect to (i) the shares of New GM common stock held by each of them, (ii) in the case of Motors Liquidation and the New VEBA, the warrants held by each of them and (iii) in the case of the U.S. Treasury, the New VEBA and 7176384 Canada Inc., the shares of New GM's Series A Fixed Rate Cumulative Perpetual Preferred Stock held by each of them. A full-text copy of the Agreement is available for free at: http://ResearchArchives.com/t/s?3f36 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 counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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: Stipulation Resolving Gen. Electric Cure Objection ------------------------------------------------------------------ Motors Liquidation Company and its debtor affiliate entered into a stipulation with General Electric Corporation resolving General Electric's objection to the sale of the Debtors' assets to General Motors Company. Pursuant to the stipulation, General Electric agreed to withdraw its objection. The Debtors have assured General Electric that none of its leases are to be assumed and assigned under the Sale and any assumption or rejection of the Leases will be subject to a separate motion. Wells Fargo Bank Northwest, National Association, as indenture trustee under the Leases, asked the Court to reconsider the stipulation to the extent it (i) affects Wells Fargo's rights under the Leases relative to General Electric or the Debtors, or (ii) limits Wells Fargo's entitlement to notice of, and opportunity to be heard with respect to, any assumption and assignment, or rejection of the Leases. To resolve Wells Fargo's objection, the Debtors, General Electric, and Wells Fargo entered into a separate stipulation stating that the Debtors' stipulation with General Electric will not modify, alter, impair, or amend any rights of Wells Fargo relative to General Electric or the Debtors under the Leases. Similarly, the Debtors' and General Electric's Stipulation will not be construed as a waiver of Wells Fargo's rights to receive due and proper notice of any rejection or assumption and assignment motion. More Cure Objections These parties, from July 11 to July 21, 2009, filed objections to the Debtors' proposed lease assumptions and proposed cure amounts: * Affiliated Computer Services, Inc. * XM Satellite Radio, Inc. * DTE Defiance, LLC * Citation Corporation * ARRK Canada, Inc. * Sap America, Inc. * Turner Broadcasting System, Inc. * FMR LLC * LC Luxcontrol asbl * AVL Instrumentation & Test Systems, Inc. * AVL Americas, Inc. * AM General LLC, and affiliates * ACE America Insurance Company, et al. * Jackson-Dawson Communications, Inc. * Channel/Vantage, Inc. * Kansas City Board of Public Utilities * Dunn & Bradstreet, Inc. * BMW Group * American Express Travel Related Services Company, Inc. Project Management Services, Inc.; T.V. Minority Company, Inc.; AW Transmission Engineering U.S.A. Inc., and Aisin AW Co., Ltd.; Analysts International Corporation; SCG Capital Corporation; Menlo Logistics, Inc.; Rassini Frenos, S.A. DE C.V., and affiliates; Unico, Inc.; Convergys Corporation; LG Electronics USA, Inc.; Shanghai Automotive Industry Corporation and affiliates; Bendix Commercial Vehicle Systems, LLC; Hydrogenics Corporation; LA Productions, Inc.; Fleet-Car Lease, Inc.; Custom Automotive Services, Inc.; The Dow Chemical Company; Inland Waters Pollution Control; Cisco Systems, Inc.; Ideal Setech, LLC; MPS Group, Inc.; Controles Eletromecanicos de Mexico S.A. de C.V.; Emerson Appliance Solutions Co., Ltd. and affiliates; Therm-O-Disc, Incorporated; Wiegant Component Technologies; Xerox Capital Services, LLC; and Macquarie Equipment Finance withdrew their objection to the assumption and assignment of their contracts. Finmecannica Spa and Ansaldo Ricerche S.p.A. withdrew their joint objection to the Sale. Norman D. Corwin, Shirley Pell, Frances H. Caterina, Jeanne M. Van Deusen, and Charles J. Hovanesian, through separate letters, objected to different aspects of the 363 Transaction. The State of Alabama objected to the Sale to the extent that General Motors Company will not take the liabilities of the Debtors, thus foreclosing the ability of the consumers of the State to seek remedies for outstanding liabilities of the Debtors. 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 counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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: Wants Schedules Deadline Extended to September 29 ----------------------------------------------------------------- Motors Liquidation Company and its debtor affiliates ask Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York to extend until September 29, 2009, to file their (i) schedules of assets and liabilities, (ii) schedules of executory contracts and unexpired leases, and (iii) statements of financial affairs. According to Stephen Karotkin, Esq., at Weil Gotshal & Manges LLP, in New York, the Debtors have commenced the task of gathering the voluminous information necessary to complete and file their Schedules and Statements. However, in view of their efforts to stabilize their business operations and prepare for and close the sale of substantially all of their assets, the Debtors will not be able to properly and accurately complete the Schedules and Statements by the July 30, 2009, deadline. In this regard, the Debtors anticipate that they will require at least an additional 60 days to complete their Schedules and Statements, Mr. Karotkin says. At the Debtors' behest, Judge Gerber will convene an expedited hearing to consider the request on July 22, 2009. Objections, if any, must be filed by July 20. 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 counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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: Cuts Lexington Avenue Lease with Boston Properties ------------------------------------------------------------------ Boston Properties Inc. reports that General Motors Corporation on June 12, 2009, rejected the parties' lease agreement effective as of June 30. Boston Properties leased approximately 120,000 square feet of office space to General Motors at 601 Lexington Avenue, in New York -- formerly known as Citigroup Center. Rent commencement for the lease at 601 Lexington Avenue began on June 1, 2009, and the lease was to expire on May 31, 2019. Boston Properties says the contribution from this lease, on a contractual basis, from July 1, 2009 through December 31, 2009, was projected to be roughly $6.6 million. It also reports that the unconsolidated joint venture that owns the General Motors Building -- of which the Company owns 60% -- currently leases approximately 101,000 square feet of space to General Motors. General Motors currently occupies the space -- other than approximately 7,000 square feet that is subleased to a third party -- and the lease expires on March 31, 2010. Boston Properties -- http://www.bostonproperties.com/-- is a fully integrated, self-administered and self-managed real estate investment trust that develops, redevelops, acquires, manages, operates and owns a diverse portfolio of Class A office properties and one hotel. The Company is one of the largest owners and developers of Class A office properties in the United States, concentrated in five markets -- Boston, Midtown Manhattan, Washington, D.C., San Francisco and Princeton, N.J. 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 counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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: Magna and Sberbank Revise Offer for Opel -------------------------------------------------------- Magna International Inc. and Savings Bank of the Russian Federation have jointly submitted a revised offer to acquire a 55% interest in Adam Opel GmbH as part of a proposed solution that is intended to assure the long-term viability of Opel. Citing a person close to the deal, The Financial Times says Magna and Sberbank revised their final bid to give each a 27.5 per cent for a combined 55 per cent stake. Their earlier offer would have seen the Russian bank taking a larger, 35 per cent stake and Magna 20 per cent, the FT notes. Under the offer, the acquired 55% interest in Opel would be owned by a 50:50 Magna/Sberbank consortium, with General Motors Company retaining a 35% interest and Opel employees acquiring 10% as part of a new labour framework. The offer was made in response to a request by General Motors for final offers regarding Opel. The offer contemplates a total equity investment by the Consortium of Euro 500 million over time. General Motors is expected to review all submitted offers for Opel and determine the next steps in the sale process. If the offer is successful, any transaction between the Consortium and General Motors would still be subject to finalization of definitive agreements and other conditions, including government- backed financing. Therefore, there is no assurance at this time that any transaction will result from the current involvement of Magna and Sberbank. If the Consortium is successful in completing the acquisition, Magna will put in place appropriate "firewalls" to ensure that its current business will operate independently from Opel. About Magna International Magna International Inc. (CA:MG.A) -- http://www.magna.com/-- is the most diversified global automotive supplier. Magna designs, develops and manufactures technologically advanced systems, assemblies, modules and components, and engineer and assemble complete vehicles, primarily for sale to original equipment manufacturers of cars and light trucks. The company's capabilities include the design, engineering, testing and manufacture of automotive interior systems; seating systems; closure systems; body and chassis systems; vision systems; electronic systems; exterior systems; power train systems; roof systems; as well as complete vehicle engineering and assembly. Magna has approximately 70,000 employees in 240 manufacturing operations and 86 product development, engineering and sales centers in 25 countries. About Sberbank Savings Bank of the Russian Federation (RTS: SBER, MISEX: SBER03) -- http://www.sberbank.ru/-- is the largest Bank in Russia Central and Eastern Europe, with about 30% of the total assets of the Russian banking system and around 260,000 of employees. The Central Bank of the Russian Federation is the founder and the majority shareholder of Sberbank (over 60% of the voting shares), with the rest of the shares dispersed among more than 200 thousand individuals and legal entities. The Bank has the most ramified branch network in Russia: 17 Regional Head Offices, over 20 thousand branches and banking outlets, as well as subsidiaries in Kazakhstan and Ukraine. The Bank holds the General License # 1481, issued by the Central Bank of the Russian Federation. 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 counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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: Publicis Groupe Has at Most EUR9 Million Exposure ----------------------------------------------------------------- Publicis Groupe says its maximum exposure to General Motors Corp. is at EUR9 million. According to Publicis Groupe, since GM's bankruptcy filing, Old GM has signed agreements with some of Publicis' agencies and assumed and assigned contracts with other of its agencies to New GM. "As a result, we have received payment of the bulk of our fee receivables as of the date of the bankruptcy, and GM has committed to pay us our remaining pre-petition fee receivables over the next few months," according to Publicis Groupe. "Taking into account the principle of sequential liability and the commitments we have received from GM, we have re-evaluated our maximum exposure at EUR 9 million, which will be reflected in our second quarter numbers when they are released on July 23, 2009," Publicis Groupe says. Publicis Groupe [Euronext Paris: FR0000130577] -- http://www.publicisgroupe.com/-- is the world's fourth largest communications group. It is ranked as the world's second largest media agency, and is a global leader in digital and healthcare communications. With activities spanning 104 countries on five continents, the Groupe employs roughly 45,000 professionals. 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 counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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: Won't Assume Delphi Pension; PBGC Accord Reached ---------------------------------------------------------------- Delphi Corp. relates that in its June 1 filing of modifications to its Confirmed Plan, it noted that changed economic circumstances would no longer permit the company to continue to fund its defined benefit pension plans for plan participants, including retired, former and current hourly and salaried employees following emergence from Chapter 11 reorganization. Delphi also stated that it expected that the Pension Benefit Guaranty Corporation would initiate the plan termination process for Delphi's US salaried pension plan and the other US "subsidiary" plans, which would consequently be taken over by the PBGC. The June 1 announcement also included Delphi's expectation that, in connection with the Plan Modification Hearing, it would negotiate and execute a settlement agreement with the PBGC and General Motors, which would definitively address all of the PBGC's claims against Delphi and its global affiliates. In connection with the Modified Plan and settlement discussions with the PBGC, GM has recently provided further information regarding the manner in which Delphi's US hourly pension plan obligations will be addressed. GM has advised that it will not assume the hourly pension plan and will not complete the second step of the 414(l) pension transfer contemplated under the Global Settlement Agreement with Delphi (the conditions of which have not been satisfied and which obligation is being superseded by the transactions under the Modified Plan). GM and the PBGC have negotiated a separate release and waiver agreement that contemplates a possible initiation by the PBGC of the plan termination process for Delphi's US hourly pension plan and provides consideration to the PBGC for certain releases to be granted to, among others, GM, Delphi, and Delphi's global affiliates. As a result of these developments, the PBGC is now expected to make a determination whether or not to initiate the termination process for Delphi's US hourly and salaried pension plans and the other US "subsidiary" plans. Delphi does not believe that a termination by the PBGC of the US hourly pension plan would violate Delphi's existing collective bargaining agreements or prior Bankruptcy Court orders. Nevertheless, Delphi has not agreed to a termination of the plan and will not enter into an agreement with the PBGC to take over the plan unless the Bankruptcy Court finds that that doing so is not a violation of Delphi's collective bargaining agreements or a federal district court issues an order terminating the US hourly plan. On July 21, 2009, Delphi reached agreement with the PBGC to settle the PBGC's various claims against Delphi and its global affiliates. Pursuant to that settlement agreement, the PBGC will receive a $3 billion allowed general unsecured nonpriority claim which will receive the same treatment given to holders of General Unsecured Claims under the Modified Plan. The PBGC will receive additional consideration from GM which, together with the PBGC's allowed unsecured claim, is in consideration for, among other things, a full release of all causes of action, claims, and liens; the liability to be assumed by the PBGC related to the possible termination of the US salaried plan, US hourly plan, and US subsidiary plans; and the withdrawal of all notices of liens filed by the PBGC against Delphi's global non-US affiliates. The settlement agreement, which is subject to Bankruptcy Court approval, is being filed with the Bankruptcy Court. About Delphi Corp Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is a global supplier of mobile electronics and transportation systems, including powertrain, safety, steering, thermal, and controls & security systems, electrical/electronic architecture, and in-car entertainment technologies. Delphi technology is also found in computing, communications, consumer accessories, energy and medical applications. Delphi has approximately 146,600 employees and operates 150 wholly owned manufacturing sites in 34 countries with sales of $18.1 billion in 2008. The Company filed for Chapter 11 protection on October 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on December 20, 2007. The Court confirmed the Debtors' First Amended Plan on January 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) 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 counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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) GLOBAL AVIATION: S&P Assigns Corporate Credit Rating at 'B' ----------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B' corporate credit rating to Global Aviation Holdings Inc. At the same time, S&P assigned its 'BB-' issue rating and '1' recovery rating to the company's proposed $165 million senior secured notes due 2013, indicating expectations of a very high (90%-100%) recovery in the event of payment default. The notes will be sold via SEC rule 144A with registration rights and will be co-issued with Global Aviation's indirect subsidiaries World Airways Inc. and North American Airlines Inc. The ratings on Global Aviation reflect the weak credit protection measures due to high lease-adjusted debt, modest positions in the currently depressed commercial cargo and passenger air charter market, and limited financial flexibility. The firm's leading position in providing passenger air charters to the U.S. military somewhat offsets these factors. S&P expects credit protection measures to be weak, but appropriate for the rating following the proposed refinancing. S&P feels that revenues and earnings are likely to decline in 2009, due to lower fuel pass-through revenues on military contracts and the effect of the weak economy on the commercial businesses. "We could place the ratings on CreditWatch with negative implications or lower the ratings if the company does not refinance the second-lien loan," said Standard & Poor's credit analyst Christopher DeNicolo. If Global Aviation does not refinance the loans by September 30, 2009, the loan terms require a "special interest" payment on that date equal to 10% of the outstanding loans and payable with the issuance of additional loans. In addition, after that date, a 15% annual paid-in-kind interest begins to accrue. S&P could also lower the ratings if earnings are weaker than S&P expected in 2009, resulting in debt to EBITDA above 6.5x. "We could revise the outlook to stable if Global Aviation refinances the second loan on reasonable terms and its operations perform as expected," he continued. HARTMARX CORP: Sale to Emerisque & S Kumars Postponed ----------------------------------------------------- Press Trust of India reports that Hartmarx Corp's sale to Emerisque and S Kumars Nationwide Ltd. has been postponed, as the buyers haven't been able to finalize the financial details. As reported by the Troubled Company Reporter on July 1, 2009, the U.S. Bankruptcy Court for the Northern District of Illinois approved the sale of substantially all of the assets of Hartmarx Corporation to Emerisque Brands UK and SKNL North America, B.V., for a total transaction value of roughly US$119 million. Emerisque Brands and SKNL expected the transaction to close July 7, 2009. Chicago Sun Times relates that the date for the completion of the sale had been moved to July 17, but now is expected to take 10 days as Emerisque and SKNL are seeking to renegotiate some aspects of the deal. According to Sun Times, lenders are demanding more collateral and higher interest rates. Based in Chicago, Illinois, Hartmarx Corporation -- http://www.hartmarx.com/-- produces and markets business, casual and golf apparel under its own brands, including Hart Schaffner Marx, Hickey-Freeman, Palm Beach, Coppley, Monarchy, Manchester Escapes, Society Brand, Racquet Club, Naturalife, Pusser's of the West Indies, Brannoch, Sansabelt, Exclusively Misook, Barrie Pace, Eye, Christopher Blue, Worn, One Girl Who . . . and b.chyll. In addition, the company has certain exclusive rights under licensing agreements to market selected products under a number of premier brands such as Austin Reed, Burberry men's tailored clothing, Ted Baker, Bobby Jones, Jack Nicklaus, Claiborne, Pierre Cardin, Lyle & Scott, Golden Bear, Jag and Dr. Martens. The Company's broad range of distribution channels includes fine specialty and leading department stores, value-oriented retailers and direct mail catalogs. Hartmarx and certain affiliates filed for bankruptcy protection on January 23, 2009 (Bankr. N.D. Ill. Lead Case No. 09-02046). George N. Panagakis, Esq., Felicia Gerber Perlman, Esq., and Eric J. Howe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed $483,108,000 in total assets and $261,220,000 in total debts as of August 31, 2008. HUBBARD AUTOMOTIVE: Priority Automotive Acquires Dealership ----------------------------------------------------------- Charlotte Business Journal reports that Priority Automotive of Virginia has acquired Hubbard Automotive/Lake Norman, LLC, aka Honda of Lake Norman, for an undisclosed amount. According to Business Journla, Honda of Lake Norman was reopened on Thursday as Priority Honda of Huntersville and is seeking to fill management, sales, service, and staff positions. Hubbard Automotive/Lake Norman, LLC -- http://www.hondaoflakenorman.com/-- is a car dealership in Huntersville, North Carolina. The Company filed for Chapter 11 bankruptcy protection on April 1, 2009 (Bankr. W.D. N.C. Case No. 09-30806). Travis W. Moon, Esq., at Hamilton Moon Stephens Steele Martin assisted the Company in its restructuring efforts. The Company listed $1,000,001 to $10,000,000 in assets and $1,000,001 to $10,000,000 in debts. JL FRENCH: Proposes Pachulski as Bankruptcy Counsel --------------------------------------------------- J.L. French Automotive Castings, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authority to employ Pachulski Stang Ziehl & Jones LLP as counsel. PSZ&J will, among other things: -- provide the Debtors with legal advice with respect to the Debtors' powers and duties as debtors-in-possession in the continued operation of their business and management of their property; -- prepare on behalf of the Debtors necessary applications, motions, answers, orders, reports, and other legal papers; and -- appear in Court on behalf of the Debtors and in order to protect the interests of the Debtors before the Court. Laura Davis Jones, a partner at PSZ&J, tells the Court that PSZ&J received $134,273 as payment for prepetition services. The hourly rates of the PSZ&J's personnel are: Ms. Jones $825 James E. O'Neill $595 Curtis A, Hehn $495 Mark M. Billion $375 Kathe Finlayson $225 Ms. Jones assures the Court that PSZ&J is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Ms. Jones can be reached at: Pachulski Stang Ziehl & Jones LLP 919 N. Market Street, 17th Floor Wilmington, DE 19702 Tel: (302) 652-4100 Fax: (302) 652-4400 About J.L. French Automotive Castings Based in Sheboygan, Wisconsin, J.L. French Automotive Castings, Inc., is a designer and manufacturer of highly engineered aluminum die cast automotive parts including oil pans, engine front covers, engine blocks and transmission cases. The Company has manufacturing facilities in Sheboygan, WI.; Glasgow, KY; Ansola, Spain; as well as a joint venture in, China. J. L. French Automotive Castings Inc., makes transmission casings for Ford Motor Co. and General Motors Co. The Company, together with six affiliates, filed for Chapter 11 on July 13, 2009 (Bankr. D. Del. Case No. 09-12445). Pachulski Stang Ziehl & Jones LLP and Milbank, Tweed, Hadley & McCloy LLP represents the Debtors in their restructuring efforts. The Debtors selected BMC Group Inc. as claims agent; Conway MacKenzie & Dunleavy Inc. as financial advisor; Houlihan Lokey Howard & Zukin Capital, Inc., as investment banker. The Creditors Committee is represented by The Abernathy MacGregor Group. The Debtors have assets and debts bothe ranging from $100 million to $500 million. The Company first filed for Chapter 11 protection on February 10, 2006 (Bankr. D. Del. Case No. 06-10119 to 06-06-10127). Attorneys at Pachulski Stang Ziehl Young & Jones, and Marc Kiesolstein, P.C., at Kirkland & Ellis LLP, represented the Debtors in their restructuring efforts. Attorneys at Ashby Geddes, PA, represented the Official Committee of Unsecured Creditors. When the Debtor filed for bankruptcy, it estimated assets and debts of more than $100 million. In June 2006, the Bankruptcy Court confirmed J.L. French's reorganization plan, and days later the J.L. French emerged from bankruptcy. JL FRENCH: U.S. Trustee Schedules Meeting of Creditors for Aug. 17 ------------------------------------------------------------------ Roberta DeAngelis, the acting U.S. Trustee for Region 3, will convene a meeting of the creditors of J.L. French Automotive Castings, Inc., and its debtor-affiliates on August 17, 2009, at 3:00 p.m. The meeting will be held at J. Caleb Boggs Federal Building, 2nd Floor, Room 2112, Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases. Attendance by the Debtors' creditors at the meeting is welcome, but not required. The Sec. 341(a) meeting offers the creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. Based in Sheboygan, Wisconsin, J.L. French Automotive Castings, Inc., is adesigner and manufacturer of highly engineered aluminum die cast automotive parts including oil pans, engine front covers, engine blocks and transmission cases. The company has manufacturing facilities in Sheboygan, WI.; Glasgow, KY; Ansola, Spain; as well as a joint venture in, China. J. L. French Automotive Castings Inc., makes transmission casings for Ford Motor Co. and General Motors Co. The Company, together with six affiliates, filed for Chapter 11 on July 13, 2009 (Bankr. D. Del. Case No. 09-12445). Pachulski Stang Ziehl & Jones LLP and Milbank, Tweed, Hadley & McCloy LLP represents the Debtors in their restructuring efforts. The Debtors selected BMC Group Inc. as claims agent; Conway MacKenzie & Dunleavy Inc. as financial advisor; Houlihan Lokey Howard & Zukin Capital, Inc., as investment banker. The Creditors Committee is represented by The Abernathy MacGregor Group. The Debtors have assets and debts bothe ranging from $100 million to $500 million. The Company first filed for Chapter 11 protection on February 10, 2006 (Bankr. D. Del. Case No. 06-10119 to 06-06-10127). Attorneys at Pachulski Stang Ziehl Young & Jones, and Marc Kiesolstein, P.C., at Kirkland & Ellis LLP, represented the Debtors in their restructuring efforts. Attorneys at Ashby Geddes, PA, represented the Official Committee of Unsecured Creditors. When the Debtor filed for bankruptcy, it estimated assets and debts of more than $100 million. In June 2006, the Bankruptcy Court confirmed J.L. French's reorganization plan, and days later the J.L. French emerged from bankruptcy. JOHNSONDIVERSEY INC: S&P Cuts Subordinated Debt Rating to 'B-' -------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its subordinated debt rating on JohnsonDiversey Inc. to 'B-' from 'B' and revised the recovery rating on this debt to '5' from '4'. This indicates that debtholders can expect modest (10% to 30%) recovery in the event of a payment default. The downgrade follows S&P's updated recovery analysis. At the same time, S&P affirmed all its other ratings on JohnsonDiversey Inc. and its holding company parent, JohnsonDiversey Holdings Inc. The outlook is stable. "The ratings on JohnsonDiversey Holdings Inc. and its operating subsidiary, JohnsonDiversey Inc., reflect a fair business risk profile, offset by high debt leverage and financing requirements in 2010 that S&P believes the company will address in a timely manner," said Standard & Poor's credit analyst Cynthia Werneth. Sturtevant, Wisconsin-based JohnsonDiversey is a leading global manufacturer and marketer of cleaning and hygiene products and related services for institutional and industrial cleaning. The company is the second-largest player in this still-fragmented market, trailing only the industry leader, Ecolab Inc. Although JohnsonDiversey is highly leveraged, S&P expects operating performance to remain relatively stable and the company to generate modest positive operating cash flow after a major, multiyear restructuring has been substantially completed in 2009. Importantly, S&P expects the company to address its obligation to purchase Unilever's one-third interest in the company, which must occur by May 2010 at the latest, without increasing leverage, and to address 2010 debt maturities in a timely manner. S&P could lower the ratings if a financing plan addressing both the Unilever put and 2010 debt maturities is not in place by the end of 2009, if the company's ability to execute it is uncertain, or if the plan meaningfully increases debt. S&P could also lower the ratings if operating performance unexpectedly falters or liquidity shrinks to unacceptable levels. S&P's ratings scenario contemplates a funds from operations to adjusted total debt ratio in the 8% to 10% range. If it falls below this level and appears likely to stay there, a downgrade would occur. KENTUCKY ECONOMIC: Fitch Affirms 'BB-' Rating on $71.5 Mil. Bonds ----------------------------------------------------------------- Fitch Ratings has affirmed the 'BB-' rating on $71,500,000 Kentucky Economic Development Finance Authority refunding and improvement revenue bonds (Appalachian Regional Healthcare, Inc.), series 1997. The Rating Outlook has been revised to Positive from Stable. The affirmation and revision in Outlook reflect Appalachian Regional Healthcare's solid operating performance since a three month nurse's strike ended in December 2007. Through the first 11 months of fiscal 2009 (year-end June 30) ARH had a positive operating margin of 1.7% ($7.7 million in operating income) and an operating EBITDA margin of 8.1%, both excellent figures for the below investment grade category. ARH ended fiscal 2008 with a negative 3.4% operating margin ($17.2 million operating loss), with over $18 million in expenses tied directly to the nurses strike. However, ARH had positive monthly operations for most of the last half of fiscal 2008 and this carried over into fiscal 2009's performance. A main driver of ARH's turnaround has been improvements to revenue cycle processes, coding, denials and length of stay as part of ARH's hiring of consulting firms to assist in compliance with front end processing, inpatient admissions and observation days. ARH is also in the process of consolidating hospital and clinic business offices, which should further improve revenue cycle functions and reduce costs. In addition, interim utilization numbers show ARH's volumes returning to historical levels, after fiscal 2008 patient volumes were affected by the strike. The 32,387 inpatient admissions for the 11 month interim period are greater than the yearly inpatient admission totals for each of the past two fiscal years. ARH's liquidity has also grown over the last year. As of May 31, 2009, ARH had days cash on hand of 55.6, a cushion ratio of 3.6 times (x), and cash to debt of 70.4%, all solid figures for the below investment grade category. This is an improvement from June 30, 2008 figures of 40.3 DCOH, a cushion ratio of 3.5x, and cash to debt of 47.8%. While the growth in liquidity has strengthened ARH's balance sheet indicators, a balance sheet concern is ARH's days in current liabilities, which stood at 96.8 days as of May 31, 2009, very high for the below investment grade category. This figure includes an increase to accounts payable, which reflects a stretching out of payments to vendors. ARH management indicated that this is a short-term strategy and does not expect its accounts payable to increase much more. Over the medium term, Fitch expects days in current liability to remain in the mid 90s and would view negatively any further rise to ARH's current liabilities. ARH will be receiving a total of approximately $19 million ($8.1 million of which was received in June 2009) from the state of Kentucky over the next two fiscal years, related to a settlement for underpayment of Medicaid, which should also help support ARH's liquidity. ARH does have a very conservative investment portfolio with no exposure to equities or alternative investments. Other credit concerns include the challenges of ARH's service area, physician recruitment, and ARH's deferring of capital spending. The majority of ARH's facilities are located in rural communities in Kentucky and West Virginia and have below average socioeconomic and demographic wealth indicators, resulting in a very high governmental payor mix (Medicare and Medicaid made up a combined 70.7% of gross revenues in fiscal 2008). In addition, physician recruitment into this area is a challenge. ARH's average age of physician is above 50, and ARH estimates that it needs to recruit approximately 40 physicians a year to keep up with physician retirements and general physician need across the system. Eight physicians are starting this summer including two surgeons, two hospitalists, a pulmonologist and an oncologist. Over the last five fiscal years, ARH has spent approximately 75%of depreciation on capital expenses and is budgeting for less than that in fiscal 2010. ARH does have plans for an $11 million renovation project for Whitesburg to address outdated inpatient rooms, and over the medium term will be implementing clinical information systems. The ability for ARH to maintain positive operations to enable the funding of these and other projects is a key rating driver for ARH. The Positive Outlook reflects Fitch's expectation that ARH's positive operating margins and the strengthening of its balance sheet will continue, with ARH being able to increase its yearly capital spend. ARH is budgeting for a 1.9% operating margin in fiscal 2010. Should ARH meet its fiscal 2010 budget and continue to grow its liquidity, without further increases to its days in current liabilities, an upgrade may be warranted. Finally, one of the union contracts that led to one of the strikes at ARH expires in fiscal 2010. Any further positive rating pressure will be affected by the outcome of the renegotiation of the new contract. The other union contract expires in 2011. ARH is headquartered in Lexington and the system comprises nine acute care hospitals, psychiatric services, 12 outpatient clinics, and other related health care businesses located throughout eastern Kentucky and West Virginia. Total revenue in fiscal 2008 was $510.1 million. ARH covenants to disclose only annual financial information and utilization statistics to the Nationally Recognized Municipal Securities Information Repositories. LAZY DAYS: Cancels Registration of 11-3/4% Senior Notes Due 2012 ---------------------------------------------------------------- Lazy Days' R.V. Center, Inc., filed a Form 15 with the Securities and Exchange Commission to terminate the registration of its 11-3/4% Senior Notes due 2012. The Company said there are about 33 holders of record of the securities as of July 16, 2009. As reported by the Troubled Company Reporter on May 21, 2009, Standard & Poor's Ratings Services lowered its corporate credit rating on Seffner, Florida-based Lazy Days' R.V. Center to 'SD' from 'CC' and lowered S&P's rating on the company's unsecured debt to 'D' from 'C'. The ratings will be withdrawn at the company's request. Lazy Days did not make the interest payment due Nov. 17, 2008, on its $137 million, 11.75% senior unsecured notes within the 30-day grace period and has received a series of forbearances from noteholders. "The company has been discussing a financial restructuring with the noteholders," Standard & Poor's credit analyst Nancy Messer had said. "A bankruptcy filing also is still possible," she continued. Although a nonpayment of interest on the notes after the grace period would have also triggered the cross-default provisions under Lazy Days' floorplan credit facility, the company has received a series of forbearances from those lenders. The U.S. recession has caused a sharp drop in sales of recreational vehicles, pressuring Lazy Days' margins, earnings, and cash flow. The TCR said June 22 Moody's Investors Service withdrew all ratings on Lazy Days' R.V. Center for business reasons. These ratings were withdrawn: -- Probability of Default Rating at Ca/LD; -- Corporate Family Rating at Ca; -- Senior Unsecured Notes at C (LGD 5, 85%); -- The negative ratings outlook -- The SGL-4 Speculative Grade Liquidity Rating The last rating action on Lazy Days was on April 27, 2009, when Moody's confirmed the company's Ca corporate family rating and changed its probability of default rating to Ca/LD. Lazy Days' ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of the company's core industry and Lazy Days' ratings are believed to be comparable to those of other issuers of similar credit risk. About Lazy Days' Lazy Days' R.V. Center, Inc., -- http://www.lazydays.com/-- a wholly owned subsidiary of LD Holdings, Inc., makes coach and beaver motorhomes, carriage fifth wheels and coachmen Rvs. LEARNING CARE: S&P Downgrades Corporate Credit Rating to 'B-' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on Learning Care Group (US) Inc. The corporate credit rating was lowered to 'B-' from 'B'. S&P removed the ratings from CreditWatch, where they were placed with negative implications April 7, 2009. The rating outlook is stable. The previous CreditWatch listing reflected S&P's concerns about the recession's impact on demand for institutional child care services, the company's operating performance and prospects, and the repercussions for liquidity amid tightening financial covenants. In addition, S&P revised its recovery rating on Learning Center's secured loan facilities to '3', indicating S&P's expectation of meaningful (50% to 70%) recovery in the event of a payment default, from '2'. In accordance with S&P's notching criteria for a '3' recovery rating, S&P lowered its issue-level rating on this debt to 'B-' (at the same level as the corporate credit rating on the company) from 'B+'. The revision of the recovery rating reflects a lower enterprise value than S&P had used in its previous analysis, as S&P's current projections of EBITDA levels at default are now meaningfully lower than those S&P previously used. Novi, Michigan-based Learning Care is the second-largest provider of early childhood education and child care in the U.S. Total debt was $294 million as of May 22, 2009. "The downgrade reflects Learning Care Group's rising debt leverage, weak liquidity, and S&P's concern that the company's cost-cutting efforts will be insufficient to offset revenue declines," explained Standard & Poor's credit analyst Hal Diamond. S&P believes that the cost reductions, which Learning Care's banks add back to EBITDA in calculating its financial covenants, have provided only a short-term degree of liquidity in view of the company's weak operating outlook and negative discretionary cash flow. During the third fiscal quarter ended March 31, 2009, Learning Care implemented $18.4 million of cost savings, expanding the cushion of compliance with the debt-to-EBITDA covenant to roughly 20% (based on S&P's estimate), from 10% at December 31, 2008. For the 12 months ended May 22, 2009, debt leverage (adjusted to capitalize the company's considerable operating lease commitments) increased to 7.4x, versus a pro forma level of roughly 6.0x at the time of the company's June 2008 LBO. Lease-adjusted EBITDA coverage of interest expense declined to 1.5x from 2.3x over the same period. Discretionary cash flow was negative $8.1 million in the eleven months ended May 22, 2009, as a result of weak profitability and cash restructuring costs, requiring a drawdown of cash balances. S&P believes that EBITDA will remain under pressure in the near term, and that negative discretionary cash flow could increase in the fiscal year ended June 30, 2010, due to weak operating performance and additional cash restructuring expenses. LEHMAN BROTHERS: Court Approves Settlement With Kojaian Units ------------------------------------------------------------- Lehman Brothers Holdings Inc. and its affiliated debtors sought and obtained the U.S. Bankruptcy Court for the Southern District of New York's approval of their settlement agreement with Kojaian Management Corporation. The Debtors and Kojaian Management entered into the settlement to resolve the terms of their loans and joint ventures agreements on various real estate projects, where LBHI and its unit, Property Asset Management Inc., own equity interests. In connection with the loans and joint venture agreements, PAMI and KMC have provided guaranties of loans made by National City Bank and JPMorgan Chase Bank N.A. to three joint ventures. Under the guaranties, PAMI and KMC have joint and several obligations of $19.6 million. LBHI has provided financing to some of the joint ventures for real estate projects in Michigan. Each of the loans it provided is secured by a mortgage on the borrower's real properties. Currently, LBHI has loans to the joint ventures in the sum of $198 million and holds mortgages on the real properties owned by 15 joint ventures. LBHI also provided $61.5 million of loans to Kojaian's affiliates; $72.2 million to TTERTT Associates L.L.C.; and $13.2 million in mezzanine loans to Michael Kojaian and C. Michael Kojaian, who control the Kojaian affiliates, and Van Buren Industrial Investors. Third party lenders also have loans outstanding in the sum of $237.7 million to nine joint ventures. Several of these borrowers reportedly failed to make payment upon the maturity of the loans. Attorney for LBHI, Richard Krasnow, Esq., at Weil Gotshal & Manges LLP, in New York, said that given the state of the real estate market in the Detroit area, LBHI and the Kojaian affiliates opted to negotiate for and enter into a settlement to resolve the terms of their agreements and maximize recoveries to the estates in a cost efficient manner. "The settlement agreement provides the best framework to reduce Lehman's exposure to the Detroit real estate market, obtain a recovery from the loans and mezzanine loans, relieve PAMI of its obligations under the joint and several guarantees to third party lenders, and release LBHI's obligations under the various real estate loans to the Kojaian affiliates," Mr. Krasnow said in court papers. Under the deal, the Lehman units and the Kojaian affiliates agreed to separate their interests in the joint ventures. Specifically, the Kojaian affiliates will transfer title to certain properties to the Lehman units or LBHI's designees, make payments to them and cause the release of the guarantees. In exchange, LBHI or the Lehman units will transfer certain properties and assign the mezzanine loans to the Kojaian affiliates or their designees, and grant a one-year option to the Kojaian affiliates to purchase certain properties. A full-text copy of the settlement agreement is available without charge at http://bankrupt.com/misc/LehmanSettlementKojaian.pdf About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was 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 offered 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 were 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. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Europe Administrators Disclose Asset Return Plan ----------------------------------------------------------------- Administrators representing Lehman Brothers Holdings Inc.'s European units disclosed plans to return frozen hedge fund assets to creditors as early as 2010, according to a July 15, 2009, report by the Associated Press. PricewaterhouseCoopers, Lehman Brothers International Europe's administrator, said it has applied to Britain's courts to block any creditor claims for assets after the end of this year, a move that would allow PwC to begin returning funds it has held in trust since the New York-based securities firm collapsed last year, the report said. Steven Pearson, joint administrator of LBIE and partner at PWC, told AP that the plan "proposes a compromise on all sides to cut through the multiplicity of complex issues to deliver a fair solution." The plan, which requires approval of both the High Court and creditors, has the unanimous support of the creditors' committee, the report said. PWC is set to meet with industry groups over the coming weeks to discuss the detail, the report added. According to PwC, LBIE had around GBP23 billion in client assets on September 15, 2008, the day New York-based Lehman Brothers filed for bankruptcy protection, the report said. Lehman Brothers' bankruptcy filing forced nearly 80 of its subsidiaries world-wide to fold. When it filed for protection from creditors in the U.K., many client assets held in custody there were frozen under the court proceeding. A number of those clients were hedge funds that maintained Lehman accounts for holding bonds, stocks and other securities. The long process of identifying clients' claims and returning assets earned the ire of these clients, several of which filed lawsuits against Lehman Brothers to reclaim their funds, according to a July 15, 2009, report by the Wall Street Journal. The administrator has returned about $13 billion of $32 billion in total client assets. Those funds were distributed to only about 35 large Lehman clients, mostly large financial institutions and hedge funds, which left nearly 1,000 clients that are still owed money by Lehman Brothers' European arm, the report said. The High Court in London will hear PWC's application on July 29 to 30. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was 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 offered 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 were 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. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LBSF Wants Ch. 11 Case as Foreign Main Proceeding ------------------------------------------------------------------ Lehman Brothers Special Financing Inc. seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to petition a court in the United Kingdom to recognize its Chapter 11 case as a foreign main proceeding. LBSF, one of Lehman Brothers Holdings Inc.'s units that filed for bankruptcy protection in the U.S. bankruptcy court, plans to file a petition in the London High Court of Justice Chancery Division to protect its properties in U.K. The move came after a group of noteholders including Perpetual Trustee Company Limited and Belmont Park Investments Pty Limited filed claims against BNY Corporate Trustee Services Limited to foreclose the collateral held in trust by BNY. The collateral secures LBSF's interest in a credit default swap with Saphir Finance Public Limited Company, an Irish corporation. LBSF has already filed an application to stay the Noteholders' actions, which are due to be heard together, in the U.K. Court. LBSF is concerned that more noteholders would follow suit even if Perpetual's and Belmont's actions are stayed. "In order to ensure that a permanent stay is in place to shield the estate from further actions that may pour into the High Court, LBSF believes that it is necessary to seek the High Court's assistance through recognition of LBSF's chapter 11 case," says Lori Fife, Esq., at Weil Gotshal & Manges LLP, in New York. "Without such assistance from the High Court, LBSF is likely to find itself having to file a series of applications in the High Court seeking to stay claims similar to the Perpetual action and Belmont action," Ms. Fife says in court papers. The hearing to consider approval of LBSF's request is scheduled for August 5, 2009. Creditors and other concerned parties have until July 31, 2009, to file their objections. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was 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 offered 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 were 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. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Proposes Protocol to Settle Mortgage Loan Claims ----------------------------------------------------------------- Lehman Brothers Holdings Inc. and its affiliated debtors seek court approval to implement procedures to settle their claims against the originator or seller of their residential mortgage loans. The Debtors have prosecuted contract and tort claims against the originator and seller of their residential mortgage loans after some of those loans have gone into default or caused them to incur losses. The residential mortgage loans were not originated by the Debtors but were indirectly acquired from third parties through the assistance of Aurora Bank FSB, formerly known as Lehman Brothers Bank. Under the proposed procedures, the Debtors may compromise and settle their claims, without court order, against any single party that: (i) in the aggregate, exclusive of any claim for payment of attorneys' fees, costs and expenses, and after offset of any counterclaim, do not exceed $3 million; or (ii) in the aggregate, exclusive of any claim for payment of attorneys' fees, costs and expenses, and after offset of any counterclaim, are greater than $3 million but only if the amount that the Debtors receive with respect to the settlement is at least 60% of the aggregate amount of the claim. For settlement of claims against any single party, which in the aggregate, exclusive of any claim for payment of attorneys' fees, costs and expenses, and after offset of any counterclaim, are greater than $3 million but less than $8 million, and the amount that the Debtors receive with respect to the settlement is less than 60% of the aggregate amount of the claim, the Debtors are required to submit the proposed settlement to the Official Committee of Unsecured Creditors, together with (i) the name of the other party to the settlement, (ii) a summary of the claim against the other party including the settlement amount, (iii) an explanation of why the settlement of the claims is favorable to the Debtors and their estates, and (iv) a copy of any proposed settlement agreement. The Creditors' Committee has three days after service of the documents to submit its objections to the proposed settlement. In case the Committee objects to the settlement, the Debtors may (i) seek to renegotiate the proposed settlement or (ii) file a motion in Court seeking approval of the proposed settlement. If the Creditors' Committee does not timely object to the proposed settlement, the Debtors will be deemed, without further court order or notice to any party, to be authorized by the Court to enter into an agreement to settle the claims. For any settlement of claims against a single party, which, in the aggregate, exclusive of any claim for payment of attorneys' fees, costs and expenses, and after offset of any counterclaim, are greater than $8 million, the Debtors are required to seek court approval of the settlement. The hearing to consider approval of the proposed procedures is scheduled for August 5, 2009. Creditors and other concerned parties have until July 31, 2009, to file their objections. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was 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 offered 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 were 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. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Raises Loan Purchases From Aurora Bank to $450MM ----------------------------------------------------------------- Lehman Brothers Holdings Inc. asks the U.S. Bankruptcy Court for the Southern District of New York to approve an amended master repurchase agreement with Aurora Bank FSB. The amendments permit LBHI to purchase from Aurora Bank, formerly known as Lehman Brothers Bank FSB, a portfolio of loans for up to $450 million. The Court previously authorized LBHI to earmark only $325 million to purchase the loans under the agreement. LBHI made the move in light of the pending maturity of up to $550 million of Aurora Bank's repayment obligations on its brokered certificates of deposit. Aurora Bank needs the additional cash to fund its obligations, which will become due come mid-August. Aurora Bank would ordinarily "rollover" or issue new certificates of deposit to finance its obligations until the Office of Thrift Supervision issued in February 2009 a directive, which required the bank to achieve an adequate capital level. The directive imposed restrictions on Aurora Bank's operations including prohibiting the bank from issuing brokered certificates of deposit, which serves as the primary source of funding for its operations. Attorney for LBHI, Alfredo Perez, Esq., at Weil Gotshal & Manges LLP, in Houston, Texas, says the OTS may not approve the business plan that Aurora Bank submitted to the regulator for approval if the bank fails to fund its obligations. He points out that the OTS may instead impose further restrictions on Aurora Bank's operations including a possible seizure of the bank and the appointment of a receiver. Under the amended repurchase agreement, LBHI is also required to buy Aurora Bank's loans for a purchase price of 50% of the value of the loans determined by LBHI. LBHI and Aurora Bank also agreed to include, at the option of LBHI, commercial real estate loans in the repurchase transactions. The initial repurchase agreement only contemplates the purchase and sale of residential mortgage loans. Aside from its entry into the amended repurchase agreement, LBHI also seeks court approval to enter into a bridge financing facility with Aurora Bank's subsidiary, Aurora Loan Services LLC. Under the deal, LBHI will provide Aurora Loan as much as $500 million in short-term secured financing. As security, LBHI will hold liens on receivables owned by Aurora Loan. The hearing to consider approval of LBHI's request is scheduled for August 5, 2009. Creditors and other concerned parties have until July 31, 2009, to file their objections. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was 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 offered 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 were 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. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Terminated $226MM Corporate Loans in June ---------------------------------------------------------- Pursuant to a court order authorizing the Debtors to terminate or assign unfunded commitments and enter into restructuring transactions with respect to their corporate loans, Lehman Brothers Holdings Inc. filed in Court a monthly report of the transactions they made for the period June 1 to June 30, 2009. The report showed that the Debtors terminated or assigned eight corporate loans, with an aggregate outstanding principal balance of $225,983,904. The Debtors did not make any payment in connection with the termination or assignment, the report said. The Debtors also disclosed that they did not enter into any restructuring transactions during the period in which they have a beneficial interest in at least 10% of the outstanding principal amount or which the outstanding principal amount due to them is more than $50 million. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was 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 offered 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 were 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. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: S&P Cuts Ratings on Four Securities to 'CCC-' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on four Lehman Bros. Holdings Inc.-related repackaged securities to 'CCC-' from 'CCC'. S&P then withdrew all four ratings. The rating actions reflect the bankruptcy of the swap guarantor, Lehman Bros. Holdings Inc. The swap guarantor in these transactions provided material support and was the primary basis for the ratings. Rating Actions Banyan Tree 2004-1 Ltd. $200 million notes Rating ------ Class To Interim From ----- -- ------- ---- Note NR CCC- CCC Restructured Asset Certificates with Enhanced Returns Series 2002-10-TR Trust $14 million certificates Rating ------ Class To Interim From ----- -- ------- ---- Certificates NR CCC- CCC Variable Funding Trust 2007-1 $500 million variable rate senior secured revolving notes Rating ------ Class To Interim From ----- -- ------- ---- Notes NR CCC- CCC Variable Funding Trust 2008-1 $500 million variable rate senior secured revolving notes Rating ------ Class To Interim From ----- -- ------- ---- Notes NR CCC- CCC LEHMAN BROTHERS: Rejects Park Avenue Lease with Boston Properties ----------------------------------------------------------------- Boston Properties Inc. reports that on April 30, 2009, Lehman Brothers, Inc., then its 10th largest tenant -- by square feet -- with roughly 437,000 net rentable square feet in the Company's 399 Park Avenue property, rejected its lease in bankruptcy. Boston Properties had previously established a reserve for the full amount of the Lehman Brothers, Inc. accrued straight-line rent balance in the third quarter of 2008. Lehman Brothers paid rent through the month of April 2009 for all of its space and continued to occupy approximately 180,000 net rentable square feet through June 22, 2009, for which the Company received an aggregate of approximately $6.5 million in the quarter ended June 30, 2009. Boston Properties says it has signed leases with tenants for approximately 37,000 net rentable square feet of the vacated space. Lehman Brothers had contributed roughly $44.9 million per year on a contractual basis to the Company's revenues from the lease. Boston Properties -- http://www.bostonproperties.com/-- is a fully integrated, self-administered and self-managed real estate investment trust that develops, redevelops, acquires, manages, operates and owns a diverse portfolio of Class A office properties and one hotel. The Company is one of the largest owners and developers of Class A office properties in the United States, concentrated in five markets -- Boston, Midtown Manhattan, Washington, D.C., San Francisco and Princeton, N.J. LOU PEARLMAN: Trustee Digs 4 Years of Payouts from Ponzi Scheme --------------------------------------------------------------- Jacqueline Palank posted at The Wall Street Journal blog, Bankruptcy Beat, that the trustee in charge of former pop manager Lou Pearlman's bankruptcy estate is seeking to recover payments that the Debtor or his related business entities transferred in the four years before the bankruptcy. Court documents show that lawsuits were filed against the investors bilked by the Ponzi scheme and seek to recover all transferred funds on the grounds that the investors knew or should have known it was a Ponzi scheme. Bankruptcy Beat says that the recovered funds will be distributed to Mr. Pearlman's creditors. Bankruptcy Beat relates that investors are fighting the lawsuits, arguing that they are the victims. The investors' lawyers said in court documents, "For most, if not all of these victim defendants, the Pearlman fraud caused them to lose their entire life savings. As if their lives were not devastated enough, the trustee has now sued the same victim defendants to collect any returned principal and any allegedly [sic] profits received." The Orlando Sentinel relates that a hearing has been set for the lawsuits on July 22. Lou Pearlman created the Backstreet Boys and 'N Sync. He is currently behind bars after bilking investors out of more than $300 million. He was forced into Chapter 11 protection in 2007 by creditors and in 2008, he was sentenced to 25 years in prison after pleading guilty to conspiring to commit an offense against the U.S. and money laundering. A federal judge ordered him to pay a total of $310.1 million in restitution to investors and lenders. LOUISIANA LOCAL GOV'T: Moody's Cuts Ratings on Bonds to 'Ba3' ------------------------------------------------------------- Moody's Investors Service has downgraded these ratings on the Louisiana Local Government Environmental Facility and Community Development Authority Multifamily Housing Revenue bonds (Park East / Bellemont Victoria / Bellemont Victoria II Apartments (Projects)): to Ba3 from Ba1 on the Senior Series 2002A bonds and to Ba3 from Ba2 on the Series 2002C bonds. This rating action affects approximately $13.4 million of debt outstanding. This rating action was prompted by Moody's review of MBIA Inc. and MBIA Insurance Corporation (currently rated Ba3/ NEG and B3 / NEG, respectively), which hold the debt service reserve fund of the Projects in a Guaranteed Investment Contract. Non-performance of the GIC provider is a risk to bondholders in transactions where bond payments rely wholly or partially on a GIC. The last rating action was on March 20, 2009, when Moody's downgraded the rating of the Series 2002A bonds to Ba1 from Baa3. LUCKY CHASE: Ch. 11 Trustee Hires Analytic and Glenn Moses ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida approved the ex parte application of Kenneth Welt, the court appointed Chapter 11 trustee in Lucky Chase II, LLC's bankruptcy case, for the employment of Sandirose Magder and Analytic Consulting Group as his financial consultant and advisor. The Court earlier approved the application of the Chapter 11 trustee to employ Glenn D. Moses as his counsel. Judge Robert A. Mark approved on June 30, 2009, the appointment of Kenneth Welt as Chapter 11 trustee, upon the motion of Donald F. Walton, the United States Trustee for Region 21. About Lucky Chase II, LLC Headquartered in Pittsburgh, Pennsylvania, Lucky Chase II, LLC, operates a single-asset, real estate company. The Company filed for Chapter 11 on April 29, 2009 (Bankr. S.D. Fla. Case No. 09-18087). Arthur J. Spector, Esq., represents the Debtor in its restructuring efforts. The Debtor listed assets and debts between $10 million and $50 million each. LUCKY CHASE: May Use Cash Collateral of AmTrust in the Interim -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida has granted the court appointed Chapter 11 trustee in Lucky Chase II, LLC's bankruptcy case, permission, on an interim basis, to use cash collateral of AmTrust Bank, formerly known as Ohio Saving Bank, to pay operating expenses, and maintain the estate's property, in accordance with a budget. AmTrust Bank claims a first priority mortgage on real property located at 13841 Southwest 90th Avenue, Miami, Florida, and a security interest in the Debtor's cash collateral. As adequate protection or the use of cash collateral, AmTrust is granted replacement liens in all postpetition assets of the Debtor, which shall be in addition to all interests, liens and rights of set-off existing in favor of Amtrust. About Lucky Chase II, LLC Headquartered in Pittsburgh, Pennsylvania, Lucky Chase II, LLC, operates a single-asset, real estate company. The Company filed for Chapter 11 on April 29, 2009 (Bankr. S.D. Fla. Case No. 09-18087). Arthur J. Spector, Esq., represents the Debtor in its restructuring efforts. The Debtor listed assets and debts between $10 million and $50 million each. METROMEDIA INT'L: Files Schedules of Assets and Liabilities ----------------------------------------------------------- MIG, Inc., formerly known as Metromedia International, has filed with the U.S. Bankruptcy Court for the District of Delaware its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ------------ A. Real Property $0 B. Personal Property $54,820,681 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $675,000 E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Non-priority Claims $209,508,657 ----------- ------------ TOTAL $54,820,681 $210,183,657 A copy of MIG's schedule of assets and liabilities is available at http://bankrupt.com/misc/MIG.SAL.pdf Based in Charlotte, North Carolina, MIG Inc. (PINK SHEETS: MTRM, MTRMP) -- http://www.metromedia-group.com/-- through its wholly owned subsidiaries, owns interests in several communications businesses in the country of Georgia. The company's core businesses include Magticom Ltd., a mobile telephony operator located in Tbilisi, Georgia, Telecom Georgia, a long distance telephony operator, and Telenet, which provides Internet access, data communications, voice telephony and international access services. MIG, Inc., fka Metromedia International Group, Inc., filed for Chapter 11 bankruptcy protection on June 18, 2009 (Bankr. D. Del. Case No. 09-12118). Scott D. Cousins, Esq., at Greenberg Traurig LLP assists the Company in its restructuring efforts. Debevoise & Plimpton LLP is the Company's special corporate counsel, while Potter Anderson & Corroon LLP is the Company's special litigation counsel. The Company listed $100 million to $500 million in assets and $100 million to $500 million in debts. METROMEDIA INT'L: Panel Taps Baker & Mckenzie as Counsel -------------------------------------------------------- The official committee of unsecured creditors of MIG, Inc., asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ Baker & McKenzie LLP as its bankruptcy counsel, nunc pro tunc to June 30, 2009. As the Committee's counsel, Baker & McKenzie will: a) advise the Committee with respect to its rights, duties and powers in the Debtor's Chapter 11 cases; b) assist and advise the Committee in its consultation with the Debtor relative to the administration of the cases; and c) assist the Committee in analyzing the claims of the Debtor's creditors and in negotiating with holders of claims and equity interests. The current hourly rates of Baker & McKenzie's professionals are: Partners $500-$925 Of Counsel $400-$700 Associates $295-$540 Paraprofessionals $100-$250 Current hourly rates of Baker & McKenzie's professionals who are expected to have primary responsibility for the engagement are: Professional Position Hourly Rate ------------ -------- ----------- Carmen H. Lonstein, Esq. Partner $565 Andrew P.R. McDermott, Esq. Associate $425 Lawrene P. Vonckx, Esq. Associate $335 Mark Young Paralegal $195 Carmen H. Lonstein, Esq., a partner at Bakr & McKenzie, assures the Court that the firm does not hold or represent any interest materially adverse to the Committee, and that the firm is as "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Based in Charlotte, North Carolina, MIG Inc. (PINK SHEETS: MTRM, MTRMP) -- http://www.metromedia-group.com/-- through its wholly owned subsidiaries, owns interests in several communications businesses in the country of Georgia. The company's core businesses include Magticom Ltd., a mobile telephony operator located in Tbilisi, Georgia, Telecom Georgia, a long distance telephony operator, and Telenet, which provides Internet access, data communications, voice telephony and international access services. MIG, Inc., fka Metromedia International Group, Inc., filed for Chapter 11 bankruptcy protection on June 18, 2009 (Bankr. D. Del. Case No. 09-12118). Scott D. Cousins, Esq., at Greenberg Traurig LLP assists the Company in its restructuring efforts. Debevoise & Plimpton LLP is the Company's special corporate counsel, while Potter Anderson & Corroon LLP is the Company's special litigation counsel. The Company listed $100 million to $500 million in assets and $100 million to $500 million in debts. METROMEDIA INT'L: Taps Debevoise for Appeal on $188MM Judgement --------------------------------------------------------------- MIG, Inc. asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ Debevoise & Plimpton LLP as special corporate and litigation counsel, effective as of the petition date. The Debtor tells the Bankruptcy Court that over the past two years, it has defended an appraisal action in the Court of Chancery of the State of Delaware in the matter captioned In re: Appraisal of Metromedia International Group, Inc., Civil Action No. 33151-CC, brought by a certain group of preferred shareholders against the Company. The appraisal action, according to the Debtor, has resulted in substantial litigation costs and a $188 million judgment entered against MIG on June 5, 2009. As special corporate and litigation counsel, Debevoise & Plimpton will represent MIG in connection with appeal of the judgment in the appraisal action. Specifically, Debevoise & Plimpton will: a) provide legal advice to MIG with respect to its appeal of the appraisal action, in coordination with Potter Anderson & Corroon, LLP, the Debtor's proposed special Delaware litigation counsel, and Greenberg Traurig, LLP, the Debtor's proposed general bankruptcy counsel; b) negotiate, draft, and pursue all documentation necessary as determined in conjunction with the appeal, in coordination with Potter Anderson and Greenberg Traurig; and c) provide legal advice regarding corporate law issues to MIG in connection with MIG's ongoing business and bankruptcy case, in coordination with Greenberg Traurig. Current hourly rates of Debevoise & Plimpton's principal attorneys and paralegals who will represent MIG in the appeal are: Gary W. Kubek, Esq. $990 Steven Klugman, Esq. $990 Gregory V. Gooding, Edq. $960 Dmitriy Tartakovskiy, Esq. $625 Eliza Sporn, Esq. $650 Courtney Dankworth, Esq. $490 As of the petition date, Debevoise & Plimpton was owed $118,917 by the Debtor, $100,000 of which is covered by retainer. MIG tells the Court that the remaining $18,917 owed by the Debtor does not represent an interest adverse to th Debtor or its estate with respect to the matters on which Debevoise & Plimpton is proposed to be retained. In addition, during the 90 day period prior to the petition date, Debevoise & Plimpton received for the Debtors an aggregate of $968,204 for professional services performed and expenses incurred. On June 16, 2009, the Debtor also provided Debevoise & Plimpton with a retainer of $100,000. As of the petition date, Debevoise has not drawn on the retainer. Gregory V. Gooding, Esq., a partner at Debevoise & Plimpton, assures the Court that the firm does not hold or represent any interest adverse to MIG or its estate with respect to the matters on which it is proposed to be retaine. Based in Charlotte, North Carolina, MIG Inc. (PINK SHEETS: MTRM, MTRMP) -- http://www.metromedia-group.com/-- through its wholly owned subsidiaries, owns interests in several communications businesses in the country of Georgia. The company's core businesses include Magticom Ltd., a mobile telephony operator located in Tbilisi, Georgia, Telecom Georgia, a long distance telephony operator, and Telenet, which provides Internet access, data communications, voice telephony and international access services. MIG, Inc., fka Metromedia International Group, Inc., filed for Chapter 11 bankruptcy protection on June 18, 2009 (Bankr. D. Del. Case No. 09-12118). Scott D. Cousins, Esq., at Greenberg Traurig LLP assists the Company in its restructuring efforts. Debevoise & Plimpton LLP is the Company's special corporate counsel, while Potter Anderson & Corroon LLP is the Company's special litigation counsel. The Company listed $100 million to $500 million in assets and $100 million to $500 million in debts. METROMEDIA INT'L: Employs Golub for Suit vs. Paul Weiss ------------------------------------------------------- MIG, Inc. asks the U.S. Bankruptcy Court for the District of Delaware for authority to employ Aaron Richard Golub, P.C., as special litigation counsel to represent it in the malpractice suit the Debtor filed against Paul, Weiss, Rifkind, Wharton & Garrison, LLP. MIG tells the Court that on June 18, 2009, MIG filed a civil action or malpractice suit against Paul Weiss. MIG says its claims arise out of Paul Weiss' legal work for MIG in connection with a "Certificate of Designation of 7.25% Cumulative Convertible Preferred Stock of Metromedia International Group, Inc.," dated September 16, 1997, which was the basis of the judgment entered by the Chancery Court. MIG filed an amended complaint on July 10, 2009. As special litigation counsel, Golub will provide MIG litigation legal advice and services with respect to the malpractice action and negotiate, draft and pursue all documentation necessary as determined in conjunction with the malpractive action. MIG says that prior to the commencement of its bankruptcy filing, it retained Golub pursuant to a representation agreement dated June 15, 2009. Pursuant to said agreement, MIG agreed to pay Golub a combination of a sliding contingency fee and a flat fee comprised of a yearly retainer and guaranteed fee of $250,000 plus a trial retainer and guaranteed fee of $250,000. MIG says it has paid Golub $250,000 for the first year's yearly retainer and placed $500,000 in escrow with Golub to secure payment of the second yearly retainer and the trial retainer. The representation agreement further requires that the escrow account be replenished in the sum of $250,000 each year. In addition to the retainer fee, MIG agreed to pay Golub a sliding scale contingency fee as follows: (a) 10% of any sum up to $50,000,000 recovered by way of settlement or judgment or otherwise resulting in actual payment to MIG; (b) 15% of any sum in excess of $50,000,000 but less than $100,000,000 recovered by way of settlement or judgment or otherwise resulting in actual payment to MIG, less $187,500. (c) 20% of any sum in excess of $100,000,000 recovered by way of settlement or judgment or otherwise resulting in actual payment to MIG, less $375,000. Aaron Richard Golub, Esq., a shareholder at Aaron Richard Golub, Esquire, P.C., assures the Court that the firm does not hold or represent any interest adverse to the Debtor or its estate with respect to the malpractice action with which Golub is to be employed. Based in Charlotte, North Carolina, MIG Inc. (PINK SHEETS: MTRM, MTRMP) -- http://www.metromedia-group.com/-- through its wholly owned subsidiaries, owns interests in several communications businesses in the country of Georgia. The company's core businesses include Magticom Ltd., a mobile telephony operator located in Tbilisi, Georgia, Telecom Georgia, a long distance telephony operator, and Telenet, which provides Internet access, data communications, voice telephony and international access services. MIG, Inc., fka Metromedia International Group, Inc., filed for Chapter 11 bankruptcy protection on June 18, 2009 (Bankr. D. Del. Case No. 09-12118). Scott D. Cousins, Esq., at Greenberg Traurig LLP assists the Company in its restructuring efforts. Debevoise & Plimpton LLP is the Company's special corporate counsel, while Potter Anderson & Corroon LLP is the Company's special litigation counsel. The Company listed $100 million to $500 million in assets and $100 million to $500 million in debts. METROMEDIA INT'L: Also Taps Potter Anderson for Appraisal Action ---------------------------------------------------------------- MIG, Inc. asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ Potter Anderson & Corroon, LLP, as special Delaware litigation counsel, effective as of the petition date. The Debtor tells the Bankruptcy Court that over the past two years, it has defended an appraisal action in the Court of Chancery of the State of Delaware in the matter captioned In re: Appraisal of Metromedia International Group, Inc., Civil Action No. 33151-CC, brought by a certain group of preferred shareholders against the Company. The appraisal action, according to the Debtor, has resulted in substantial litigation costs and a $188 million judgment entered against MIG on June 5, 2009. As special Delaware litigation counsel, Potter Anderson will provide legal advice to MIG with respect to its appeal of the judgment against the Company in the appraisal action, and negotiate, draft, and pursue all documentation necessary as determined in conjunction with the appeal, in coordination with Debevoise & Plimpton, LLP, and Greenberg Traurig, LLP, the Debtor's proposed special corporate counsel, and general bankruptcy counsel, respectively. Potter Anderson's professionals will charge MIG these hourly rates: Partners $425-$595 Associates $235-$295 Paralegals $70-$200 Arthur L. Dent, Esq., a partner at Potter Anderson, assures the Court that the firm does not hold or represent any interest adverse to MIG or its estate with respect to the appeal or judgment, and that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Debtor tells the Court that as of the petition date, Potter Anderson was owed $17,959 in respect of services provided to MIG. Further, the Debtors says that upon approval of Potter Anderson's retention in this case, Potter Anderson will waive its right to receive any fees incurred on MIG's behalf prior to the petition date. During the 90 days immediately before the petition date, according to the Debtor, it paid Potter Anderson amounts totaling $211,291, none of which constituted a retainer to Potter Anderson. Based in Charlotte, North Carolina, MIG Inc. (PINK SHEETS: MTRM, MTRMP) -- http://www.metromedia-group.com/-- through its wholly owned subsidiaries, owns interests in several communications businesses in the country of Georgia. The company's core businesses include Magticom Ltd., a mobile telephony operator located in Tbilisi, Georgia, Telecom Georgia, a long distance telephony operator, and Telenet, which provides Internet access, data communications, voice telephony and international access services. MIG, Inc., fka Metromedia International Group, Inc., filed for Chapter 11 bankruptcy protection on June 18, 2009 (Bankr. D. Del. Case No. 09-12118). Scott D. Cousins, Esq., at Greenberg Traurig LLP assists the Company in its restructuring efforts. Debevoise & Plimpton LLP is the Company's special corporate counsel, while Potter Anderson & Corroon LLP is the Company's special litigation counsel. The Company listed $100 million to $500 million in assets and $100 million to $500 million in debts. MID AMERICA: Lists $66MM in Liabilities Versus $80MM in Assets -------------------------------------------------------------- Mid America Agri Products/Horizon, LLC, listed $80 million in assets and $66 million in liabilities. Mid America Agri Products shut down its 44 million-gallon plant in January 2009 due to unfavorable economic conditions in the ethanol industry. Mid America had said it wanted to reopen the south- central Nebraska plant, but laid off its more than 30 workers since then. The Associated Press relates that city officials said that they are hoping new investors will purchase the plant and restart ethanol production. North Platte, Nebraska-based Mid America Agri Products/Horizon, LLC filed for Chapter 11 on June 3, 2009 (Bankr. D. Nebr. Case No. 09-41543). Robert V. Ginn, Esq., at Blackwell Sanders Peper Martin LLP, represents the Debtor in its restructuring efforts. MONTGOMERY REALTY: Section 341(a) Meeting Set for August 17 ----------------------------------------------------------- The U.S. Trustee for Region 17 will convene a meeting of the creditors in Montgomery Realty Group, Inc.'s Chapter 11 cases on August 11, 2009, at 10:00 a.m. The meeting will be held at the San Francisco Divisional Office, 235 Pine Street, Suite 700, San Francisco, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases. Attendance by the Debtors' creditors at the meeting is welcome, but not required. The Sec. 341(a) meeting offers the creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. San Francisco, California-based Montgomery Realty Group, Inc. leases and operates improved properties. The Company filed for Chapter 11 on July 6, 2009 (Bank. N. D. Calif. Case No. 09-31879.) Michael St. James, Esq., at St. James Law represents the Debtor in its restructuring effort. The Debtor has assets and debts both ranging from $10,000,001 to $50,000,000. MONTGOMERY REALTY: Taps St. James Law and McNutt Law as Counsel --------------------------------------------------------------- Montgomery Realty Group, Inc., asks the U.S. Bankruptcy Court for the Northern District of California for authority to employ St. James Law, P.C., and McNutt Law Group LLP as attorneys. St. James Law will act as lead counsel, and will take primary responsibility for the preparation and prosecution of the Debtor's Plan of Reorganization and its response to any motions for relief from stay. McNutt Law Group will be responsible with the preparation of schedules and statement of financial affairs, and the Debtor's representation at the Section 341 hearing. Michael St. James, Esq., St. James Law's sole employee, tells the Court that his hourly rate is $525. McNutt Law Group adds that its paralegals and Marianne Dickson, an associate who bills at $275 per hour, will provide services in the Debtor's Chapter 11 case. The Debtor assured the firms a $100,000 retainer, of which $50,000 was funded. The firms submit that they have an enforceable possessory security interest in the portion of the retainer which was funded. To the best of the Debtor's knowledge, the firms are "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. The firms can be reached at: St. James Law, P.C. 155 Montgomery St. #1004 San Francisco, CA 94104 Tel: (415)391-7566 McNutt Law Group LLP 188 The Embarcadero, Suite 800 San Francisco, CA 94105 Tel: (415) 995-8475 Fax: (415) 995-8487 About Montgomery Realty Group San Francisco, California-based Montgomery Realty Group, Inc. leases and operates improved properties. The Company filed for Chapter 11 on July 6, 2009 (Bank. N. D. Calif. Case No. 09-31879.) The Debtor has assets and debts both ranging from $10,000,001 to $50,000,000. MOUNT HOLLY PARTNERS: MHU Holdings Seeks Case Dismissal ------------------------------------------------------- MHU Holdings, LLC, asks the U.S. Bankruptcy Court for the District of Utah to dismiss the bankruptcy case of Mount Holly Partners, LLC. MHU Holdings argues the Debtor lacked the requisite authority for the bankruptcy filing. According to NetDockets, citing papers filed in Court, Mount Holly Partners was formed in December 2006 by MHU Holdings, Ares Funding, LLC, and CPB Development, LLC, to develop a luxury residential ski and golf resort in Beaver County, Utah to be called the Mount Holly Club. MHU acquired a 50% equity interest in exchange for $25 million, according to a memorandum of law. Ares was designated as the managing member of Mount Holly Partners and MHU and CPB were each designated as non-managing members. MHU asserts that disputes arose between Ares and MHU "from nearly the outset" of the project. On August 23, 2007, the parties entered into a supplement to Mount Holly Partners' operating agreement which provided for the creation of a management committee. That management committee, which was comprised of one member appointed by Ares and one member appointed by MHU, was formed to decide "extraordinary matters" which would require the unanimous consent of the members of the management committee. According to NetDockets, MHU says the bankruptcy filing for Mount Holly Partners was one such extraordinary matter. However, disputes between Ares and MHU continued and MHU was appointed as a co-manager of Mount Holly Partners pursuant to an October 2007 first amendment to the operating agreement. At the same time, MHU provided the company with $1.4 million in loans and committed to a total of $4.1 million in loans. According to NetDockets, MHU contends that Ares breached the first amendment which "obviated MHU's duty to continue to provide funds" but that MHU provided an additional $1.3 million in April 2008 in spite of the alleged breaches. According to NetDockets, MHU asserts that the breaches by Ares include "misappropriating and wasting Company assets." Specifically, MHU makes these allegations: -- The Company's records indicate that a $1 million deposit with a ski-lift company, that had been paid with Company funds, had been redeemed and redirected into Ares- controlled accounts. MHU also discovered that several parcels of land that should have been contributed to the Company were instead quit-claimed to the wife of Ares' CEO. MHU further uncovered evidence that Ares had been using Company funds to pay for expenses unrelated to the Company, foremost among these were defending the criminal prosecution of Marc Jenson, the brother of Ares' CEO and an officer of Ares, on securities fraud charges. -- As a result of the alleged misuse of Mount Holly Partners' assets by Ares, MHU issued a notice of default under the operating agreement attempting to remove Ares as a manager of Mount Holly Partners and sought relief in the United States District Court for the Southern District of New York. In response, Ares initiated an arbitration proceeding against MHU with the American Arbitration Association. In the arbitration, Ares accused MHU of "fraud, breach of contract, and breach of fiduciary duty" and sought $25 million in damages. MHU denied the allegations and counterclaimed for $25 million in damages on the same bases. The parties have completed document discovery in the arbitration proceeding and depositions were scheduled to commence on July 17, 2009, according to MHU. The arbitration hearing is scheduled for September 14-25, 2009. Additional actions between the parties have been brought in courts in Utah and Idaho. -- MHU asserts that Ares "unilaterally filed a chapter 11 bankruptcy petition on behalf of the Company in the United States Bankruptcy Court for the District of Utah" which MHU claims contravenes its "limited rights under the Operating Agreement, the Supplement, and the First Amendment." In the alternative, MHU asks the Court to lift the automatic stay to allow the arbitration to proceed to conclusion. In support of its request for stay relief, MHU argues that the dispute that is the subject of the arbitration is a non-core matter and that the court therefore lacks authority to stay the arbitration. Mount Holly Partners, LLC, in South Jordan, Utah, filed for Chapter 11 on July 9, 2009 (Bankr. D. Utah Case No. 09-27185). Judge R. Kimball Mosier presides over the case. Douglas R. Short, Esq., at Keith Barton & Associates PC in South Jordan, represents the Debtor. The Debtor listed assets ranging from $100,000,001 to $500,000,000, and debts ranging from $10,000,001 to $50,000,000. NEWPAGE CORP: S&P Junks Corporate Credit Rating From 'B-' --------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Miamisburg, Ohio-based coated paper producer NewPage Corp. to 'CC' from 'B-'. In addition, S&P is lowering the rating on the second-lien notes to 'C' from 'CCC+' and the subordinated notes to 'C' from 'CCC'. S&P has removed these ratings from CreditWatch, where they were placed with negative implications on June 11, 2009. The outlook is negative. The 'B+' issue-level rating on NewPage's secured term loan remains on CreditWatch with negative implications. "These rating actions reflect S&P's view that the tender offers at substantial discounts are tantamount to a default given NewPage's vulnerable business risk and highly leveraged financial risk profile as a result of weak demand due to the U.S. recession, pricing pressures, and its high debt burden," said Standard & Poor's credit analyst Andy Sookram. Standard & Poor's views the controlling shareholder's affiliate, NPI Investor LLC in the same light as NewPage itself acquiring the notes, particularly given the shareholder's (Cerberus Capital Management L.P) majority ownership of NewPage. Upon completion of the contemplated transactions, S&P will lower the corporate credit rating to 'SD' (selective default) and the issue-level ratings on the second-lien notes and subordinated notes to 'D' (S&P does not rate the PIK notes). As soon as is possible thereafter, S&P will reassess the corporate credit rating and revise the issue ratings based on S&P's post-closing recovery analysis. It is S&P's preliminary expectation that if the tender offers and new notes offering are completed as contemplated, S&P would raise the corporate credit rating to 'B-', the same as the previous rating, and assign a negative outlook, Although the company's near-term covenant pressures would be eliminated and some of its debt maturities extended, NewPage remains very highly leveraged (even incorporating the potential that a portion of the notes held by NPI and SEO could be contributed to capital) and S&P believes market conditions will remain challenging due to the lingering recession that will continue to dampen demand for coated paper. S&P believes that if the transactions are successful, NewPage should have adequate liquidity (including availability under its ABL facility) over the next several quarters. The outlook is negative, reflecting S&P's expectation that S&P will lower the corporate credit rating on NewPage to 'SD' following the completion of the tender offers. NEW YORK TIMES: Union at Boston Globe OKs Wage, Benefits Cut Pact ----------------------------------------------------------------- Russell Adams at The Wall Street Journal reports that Boston Newspaper Guild, the largest union at The New York Times Co.'s The Boston Globe, ratified a package of wage and benefits cuts by a vote of 366 to 179. The Journal relates that the labor contract will save Boston Globe about $10 million per year. The report states that almost 700 members of the Guild will get a 5.94% pay cut along with a number of other concessions, including: -- unpaid furloughs, -- a pension freeze, and -- the elimination of job guarantees for many members. Boston Globe spokesperson Robert Powers said in a statement, "We deeply appreciate the sacrifices that Guild members are making to help sustain the Boston Globe's mission of delivering high-quality journalism to the greater Boston community." The New York Times Co., a leading media company with 2008 revenues of $2.9 billion, includes The New York Times, the International Herald Tribune, The Boston Globe, 16 other daily newspapers, WQXR- FM and more than 50 Web sites, including NYTimes.com, Boston.com and About.com. The Company was founded in 1896. * * * As reported in the Troubled Company Reporter on December 4, 2008, the NY Times cut its quarterly dividend by 74%, as part of an effort to conserve cash. The NY Times said that it took steps to lower debt and increase liquidity, including reevaluating its assets. The NY Times has laid off employees, merged sections of the NY Times and Globe to reduce printing costs, and consolidated New York area printing plants this year. The TCR reported on May 25, 2009, that Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured issue- level ratings on New York City-based newspaper publisher The New York Times Co. to 'B' from 'B+'. These ratings were removed from CreditWatch, where they were placed with negative implications April 22, 2009. The rating outlook is stable. According to the TCR on April 28, 2009, Moody's Investors Service downgraded The New York Times Company's Corporate Family Rating and Probability of Default ratings to B1 from Ba3 and ratings on the senior unsecured notes to B1 from Ba3. The Company's speculative grade liquidity rating remains SGL-3 and the rating outlook is negative. NOBLE INT'L: ArcelorMittal Purchases European Laser Welded Unit --------------------------------------------------------------- ArcelorMittal SA completed its acquisition of all the issued and outstanding shares of Noble European Holdings B.V., a Dutch private limited liability company engaged in laser welded blanks operations primarily in Europe. On May 8, 2009, ArcelorMittal signed a definitive purchase agreement with Noble BV's parent Noble International, Ltd., which has filed for reorganization under the bankruptcy laws of the United States on April 15, 2009. The purchase was made under section 363 of Chapter 11 of the U.S. Bankruptcy Code by authorization of the United States Bankruptcy Court for the Eastern District of Michigan. As reported by the Troubled Company Reporter, despite objection from the official committee of unsecured creditors, Noble won approval on May 29, 2009, to sell its European business to European steelmaker ArcelorMittal. ArcelorMittal will pay $2.1 million in cash and take the business subject to all debt, including a $108 million bank loan, Bloomberg's Bill Rochelle said. ArcelorMittal was the previous owner of the business, and sold it to Noble for $300 million in 2007. Early this month, ArcelorMittal obtained European Union regulatory approval to proceed with the acquisition. According to Reuters, the European Commission, the 27-nation EU's executive arm, said the merger would not lead to any significant change in the market as the company would continue to face several competitors in the flat carbon steel market. Noble BV is a leading European manufacturer of tailored blanks with operations in Belgium, France, Germany, Spain, the UK, Slovakia, Australia and joint ventures in Mexico, China and India. It employs 481 full time employees and had revenues of EUR340 million in 2008. About ArcelorMittal ArcelorMittal -- http://www.arcelormittal.com/-- is a global supplier of steel, with operations in more than 60 countries. In 2008, ArcelorMittal had revenues of $124.9 billion and crude steel production of 103.3 million tonnes, representing approximately 10% of world steel output. ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT), Paris (MT), Brussels (MT), Luxembourg (MT) and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS). About Noble International 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. NOBLE INT'L: Asks Court to Establish August 31 Bar Date ------------------------------------------------------- Noble International, Ltd., et al., ask the U.S. Bankruptcy Court for the Eastern District of Michigan to establish August 31, 2009, at 5:00 p.m. as the general bar date for the filing of proofs of claim against the Debtors, and October 15, 2009, at 5:00 p.m. as the bar date with respect to all governmental units. As proposed, creditors may be permitted to submit proofs of claim in person, by courier or by mail, but not by facsimile or other electronic means. Proofs of claim will only be deemed filed when actually received by Administrar Services Group, LC, the court appointed claims agent for the Debtors, addressed to: Administrar Services Group, LLC, as Agent for the United States Bankruptcy Court Re: Noble International Ltd., et al., Claims processing 8475 Western Way, Suite 110 Jacksonville, FL 32256 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. Administrar Services Group, LLC, is the Debtors' claims agent. 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. NOBLE INT'L: Can Obtain $2,280,000 in New Loans ----------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan has entered a second order granting Noble International, Ltd., et al., authorization to obtain $2,280,000 in new loans from General Motors Corporation, Ford Motor Company and Chrysler LLC (the "Customers"), in accordance with a budget. The new loans will be secured by accounts receivable generated for the period from July 1, 2009, through July 31, 2009. The Debtors say they are in the final states of liquidating their assets and need the new loan to continue efforts to maximize value for completing their asset sales. 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. NORTEL NETWORKS: MatlinPatterson Unit Offers $725MM for CDMA, LTE ----------------------------------------------------------------- MPAM Wireless, Inc., an affiliate of MatlinPatterson Global Opportunities Partners III L.P., submitted to Nortel Networks Corp. and its creditor constituencies a proposal to acquire substantially all of Nortel's CDMA and LTE Access assets for US$725 million. MatlinPatterson believes that its alternative proposal is higher and better than the "stalking horse" bid from Nokia Siemens Networks B.V. and provides, on multiple fronts, a superior outcome for Nortel and all of its stakeholders. As reported by the Troubled Company Reporter on June 22, 2009, the Nortel Debtors entered into a "stalking horse" asset sale agreement with Nokia Siemens for the sale of substantially all of its CDMA business and LTE Access assets for US$650 million. The agreement with NSN specifies that at least 2,500 employees would have the opportunity to continue with NSN. This represents a significant portion of the employees associated with the assets being sold. MatlinPatterson has been closely following the Nortel bankruptcy and has engaged a highly experienced set of advisors, including a team of industry experts led by former Nortel executives Dion Joannou, Richard Piasentin and Tony Pirih, to assist in evaluating transaction alternatives. Following Nortel's announcement of NSN's selection as a "stalking horse" to acquire the CDMA and LTE Access assets, MatlinPatterson recognized it would have to expedite its strategy to form a "New Nortel" in order to maximize value for all stakeholders. Through an exhaustive due diligence process led by its team of advisors, which also includes former executives of AT&T Wireless, Alltel and Motorola, MatlinPatterson determined that these assets can form the basis of a stand-alone enterprise with long-term viability that will meet the needs of all stakeholders. This independently held business would provide a range of opportunities -- from additional bolt-on acquisitions to partnerships to reinvention and new ideas from within the technology asset base. MatlinPatterson issued an open letter to Nortel's employees, customers, suppliers and other stakeholders in connection with its effort to maximize value to the estate by forming a new enterprise around the selected CDMA and LTE Access assets: Fellow Nortel Stakeholders: Nortel is a unique company with a rich heritage, talented employees, an enviable customer base and innovative technologies. MatlinPatterson recognizes the value inherent in Nortel and believes that its proposal is the best way to maximize this value. MatlinPatterson is confident that the CDMA and LTE Access assets can emerge from bankruptcy as a reinvigorated, independent company. We have significant experience investing in this industry, and we have spent considerable time over the last several months evaluating Nortel's businesses. As such, and because MatlinPatterson has been an investor in Nortel for some time now, we are unwilling to accept and will actively take steps to prevent a 'fire sale' of Nortel's core assets followed by the wholesale liquidation of the remaining businesses. Having worked expeditiously during the short timeframe provided by the U.S. Bankruptcy Court, MatlinPatterson and its dedicated team of advisors, through MPAM Wireless, Inc., have today put forward an alternative proposal that we believe represents a significant step towards forming a reorganized, viable and strong New Nortel. MPAM Wireless's alternative proposal is substantially similar to the NSN proposal, but it is notably different in that it offers $75 million more than NSN's bid for the selected CDMA and LTE Access assets, it provides existing creditors with the opportunity to participate side-by-side with MPAM Wireless in its investment, and it creates potentially value- enhancing alternatives for additional Nortel assets other than liquidation. MPAM Wireless's proposal also creates opportunities to form strategic partnerships with industry leaders to further leverage the Nortel assets, including the development of the LTE Access assets. We welcome the opportunity to develop these alliances. MatlinPatterson, through its affiliate, has submitted an alternative proposal because we believe that Nortel's assets, its technologies and its people are outstanding. Nortel's CDMA business remains highly valuable and will continue to generate strong cash flow for many years to come. MatlinPatterson has a long-term investment outlook, and if we are successful in acquiring the CDMA and LTE Access assets, we will commit to achieving their full potential: we will look to partner with the existing Nortel management team and we will pursue opportunities to acquire additional Nortel assets as they become available during the Nortel Chapter 11 cases. We believe that Nortel's assets, under the right stewardship, can form the core of a reorganized Nortel with a bright future as a well-capitalized, stand-alone entity. We are confident that our proposal provides the best outcome for all of Nortel's stakeholders, as detailed below: Benefits of MatlinPatterson's Proposal For All Stakeholders -- Creates a strong, independent entity that is financially stable and well-positioned for long-term viability, growth and success. -- Alleviates much of the uncertainty that has surrounded the company over the last several months. -- Creates opportunities to explore value-enhancing alternatives with numerous potential strategic partners. -- Facilitates international opportunities. Although the CDMA international assets are excluded from this transaction, MatlinPatterson recognizes the value of existing relationships and opportunities available with Nortel's international stakeholders and together with management will seek to re-develop long-term relationships. -- Allows a highly-experienced investor with a long-term investment outlook and a track-record of working successfully with existing management teams to begin working to restore Nortel to a preeminent position in the technology and telecommunications industries. For Employees -- Preserves as many, if not more, jobs as the NSN proposal with the potential to save many thousand more Nortel jobs. -- Enables the Nortel assets to be part of an independent company with financial strength, substantially reduced debt and the support of a committed long-term equity sponsor. -- Provides the opportunity for current Nortel employees to continue working for a strong, independent Nortel, rather than working for a relatively small subsidiary of a corporate conglomerate. -- Affords Nortel's strong management team, talented engineers and committed employees with the opportunity to work together with a focused and committed financial partner that has sufficient capital and the long-term investment outlook needed to create a highly- competitive and profitable company. For Customers and Suppliers -- Provides a smooth transition and continuity of normal Commercial relations. -- Allows Nortel to remain a viable business partner so that Nortel's existing business relationships can continue without disruption. -- Ensures that the company has the financial flexibility to support its legacy footprint while continuing to invest in a world-class roadmap for the evolution of installed technologies. -- Positions MatlinPatterson to acquire additional Nortel assets to meet the global needs of the existing customer base. -- Enables the continuation of existing business relationships for many years to come through MatlinPatterson's long-term commitment to the Nortel assets. -- Provides customers the opportunity to enter into long- term supply commitments and to receive certain technology assurances. -- Allows key customers to participate in shaping the strategy for these assets through the advisory board that MatlinPatterson intends to establish. MatlinPatterson appreciates the support that it has received from other Nortel creditors as well as the company's employees, customers, suppliers and other stakeholders. We look forward to successfully completing this process, to creating a brighter future for Nortel, and to working with Nortel's talented employees and customers around the world for many years to come. BMO Capital Markets and Broadpoint.Gleacher Securities Group are serving as financial advisors to MatlinPatterson and Blake, Cassels & Graydon LLP and Bracewell & Giuliani LLP are serving as legal advisors. About MatlinPatterson Global Advisers MatlinPatterson Global Advisers LLC is a $9 billion global private equity franchise. Over a 14-year period, MatlinPatterson has successfully invested across a broad range of industries, making over 70 investments in over 40 countries. MatlinPatterson was established in 2002 and the firm's investment partners have an average experience of over 14 years and, together with an experienced team of over 60 individuals, has created a strong record of working with management teams to further their strategic plans. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NOVEMBER 2005: SOLA Wants Chapter 11 Trustee to Oversee Case ------------------------------------------------------------ SOLA Ltd., a second-lien secured creditor of November 2005 Land Investors, L.L.C., asks the U.S. Bankruptcy Court for the District of Nevada to appoint a Chapter 11 trustee in the Debtor's bankruptcy case. According to NetDocket, SOLA said November 2005 Land Investors is indirectly owned by four homebuilders (AWH North, LLC; Standard Pacific of Las Vegas, Inc.; McCormick North, LLC and Olympia NLV Associates, L.L.C.) and was formed to co-develop the infrastructure for a 2600 acre master-planned community in North Las Vegas, Nevada. The intention was for the debtor and DHRI, Inc. -- an affiliate of DR Horton, Inc. -- to develop the infrastructure to the point where "sizable parcels" could be sold to homebuilders who would then construct homes on the parcels and sell those homes to the public. According to NetDocket, SOLA wants a Chapter 11 trustee "to oversee and protect stakeholder interests against abuses likely to arise in this case due to the numerous affiliate relationships that permeate the Debtor's business, which have already begun to affect the decision making the Debtor has exercised with its primary negotiation partners in this restructuring thus far." According to NetDocket, SOLA alleges that, while it "does not allege fraud or classic mismanagement . . . it is nonetheless abundantly apparent that the Debtor has begun to engage in curious, economically irrational behavior that can only be explained when the Court focuses on the less than arms-length nature of those with whom the Debtor is negotiating -- stemming from the relationships among the Debtor's parent, the members of the Debtor's parent and their affiliates (each of which are counterparties to the Debtor's most valuable contracts)." According to NetDocket, SOLA asserts that November 2005 Land Investors is voluntarily restructuring and amending contracts with its equity holders -- and failing to attempt to enforce guarantees provided by its owners' affiliates -- to the detriment of its creditors. Therefore, SOLA claims that the appointment of a trustee is warranted in order to "ensure that arms-length negotiations take place and that the Debtor is properly exercising its sound business judgment with respect to potential restructuring terms (including, without limitation, with respect to the Adequate Protection Motion and the DIP Financing Motion), in order to maximize value for the estate and its creditors." About November 2005 November 2005 Land Investors, L.L.C., based in Las Vegas, filed for Chapter 11 protection on May 8, 2009 (Bankr. D. Nev. Case No. 09-17474). Mike K. Nakagawa handles the case. Richard F. Holley, Esq., serves as bankruptcy counsel. The Debtor disclosed estimated assets and debts of $100 million to $500 million. NV BROADCASTING: Proposes Polsinelli Shughart as Bankr. Co-Counsel ------------------------------------------------------------------ NV Broadcasting, LLC, and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authority to employ Polsinelli Shughart PC as co-counsel. Polsinelli will, among other things: a. take all necessary action to protect and preserve the estates of the Debtors, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; b. 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 properties; and c. negotiate, prepare and pursue confirmation of a plan and approval of a disclosure statement;. Polsinelli will work closely with Lord Bissell & Liddell LLP, the proposed lead counsel in the Chapter 11 cases, to avoid duplication of efforts. Prior to NV Broadcasting's petition date, Polsinelli received a $75,000 evergreen retainer. The hourly rates of Polsinelli's personnel are: Shareholders $250 - $475 Associates and Senior Counsel $175 - $235 Paraprofessionals $75 - $125 The professionals expected to represent the Debtors, and their respective hourly rates are: Christopher A. Ward, shareholder $400 Justin K. Edelson, associate $225 Shanti M. Katona, associate $210 Caretta Whitten, legal assistant $125 To the best of the Debtors' knowledge, Polsinelli is a "disintersted person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Polsinelli Shughart PC 222 Delaware Avenue, Suite 1101 Wilmington, DE 19801 Tel: (302) 252-0920 Fax: (302) 252-0921 About New Vision Television New Vision Television -- http://newvisiontv.com/-- owns and operates 14 major network-affiliated television stations across the United States. It has corporate offices in Atlanta and Los Angeles. NV Broadcasting LLC, doing business as New Vision Television, and its affiliates, NV Media LLC and NV Television LLC, filed for Chapter 11 on July 13, 2009 (Bankr. D. Del. Case No. 09-12473). NV Broadcasting listed $10 million to $50 million in assets and $100 million to $500 million in liabilities in its petitin. Attorneys at Locke Lord Bissell & Liddell LLP serve as general bankruptcy counsel. The PBC Debtors selected Womble Carlyle Sandridge & Rice, PLLC as their counsel. Moelis & Company LLC serves a financial advisor. The claims agent is BMC Group Inc. PLIANT CORP: Committee Opposes Delay of Plan Process ---------------------------------------------------- The official committee of unsecured creditors in Pliant Corp.'s case are staving off efforts by Pliant to stay court orders eliminating exclusivity and allowing private equity fund Apollo Management to put forth a competing restructuring plan, claiming that any delay in the proceedings would cause the creditors irreparable harm, according to Law360. Headquartered in Schaumburg, Illinois, Pliant Corporation produces polymer-based films and flexible packaging products for food, beverage, personal care, medical, agricultural and industrial applications. The Company has operations in Australia, New Zealand, Germany, and Mexico. Pliant and 10 of its affiliates filed for Chapter 11 protection on January 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq., at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represented the Debtors in their restructuring efforts. The Debtors tapped McMillan Binch Mendelsohn LLP, as Canadian counsel. As of September 30, 2005, the Company had $604.3 million in total assets and $1.19 billion in total debts. The Debtors emerged from Chapter 11 on July 19, 2006. Pliant Corp. and its affiliates again filed for Chapter 11 after reaching terms of a pre-packaged restructuring plan. The voluntary petitions were filed February 11, 2009 (Bank. D. Del. Case Nos. 09-10443 through 09-10451). The Hon. Mary F. Walrath presides over the cases. Jessica C.K. Boelter, Esq., at Sidley Austin LLP, in Chicago, Illinois, and Edmon L. Morton, Esq., at Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, provide bankruptcy counsel to the Debtors. Epiq Bankruptcy Solutions LLC acts as claims and noticing agent. The U.S. Trustee for Region 3 appointed five creditors to serve on an official committee of unsecured creditors. The Creditors Committee selected Lowenstein Sandler PC as its counsel. As of September 30, 2008, the Debtors had $688.6 million in total assets and $1.03 billion in total debts. QUEBECOR WORLD: Emerges From Chapter 11 and CCAA Protection ----------------------------------------------------------- Quebecor World Inc. and its affiliated debtors and debtors-in- possession have successfully emerged from protection under the Companies' Creditors Arrangement Act in Canada and Chapter 11 of the U.S. Bankruptcy Code. They have officially completed the reorganization and financial restructuring contemplated in the Canadian Plan of Reorganization and Compromise and the Joint Plan of Reorganization, including successfully closing US$ 800 million exit financing facilities. At closing, the Company drew approximately US$540 million with which it has repaid in full its DIP credit facility. As part of the implementation of the Plans, the Company's previously issued and outstanding Multiple Voting Shares, Redeemable First Preferred Shares and Subordinate Voting Shares have been effectively cancelled and the reorganized Company has issued (in escrow) 73,285,000 Common Shares, 12,500,000 Class A Convertible Preferred Shares, as well as 10,723,019 Series I Warrants and 10,723,019 Series II Warrants. In accordance with the terms of the Plans, the initial distribution to creditors and the listing and trading of the Common Shares, Series I Warrants and Series II Warrants on the Toronto Stock Exchange (TSX: WC) is expected to take place as soon as practicable but in any event within 30 days. In connection with Company's exit from protection and as part of the implementation of the Plans, the names of the entities in the Company's group are to change to World Color Press Inc. or derivatives thereof, which was previously the name of one of the merged companies that created Quebecor World in 1999. The Company intends to announce a renewed branding initiative during the next 60 days. "This is an important and exciting day for the Company, its customers, suppliers and employees. I would like to thank everyone who has supported us through this process," said Jacques Mallette, President and CEO. "The restructuring and reorganizing process has made us financially healthier and allowed us to start fresh with a strong balance sheet and a leaner cost structure. We believe the Company is now better positioned to meet the present and future competition in the industry and to create value for our stakeholders." "I would also like to offer special thanks to our outgoing directors and advisors who served the best interests of all our stakeholders during the last 18 months, as well as our dedicated employees who worked tirelessly to ensure our success. The future looks promising and I look forward to working with our new directors who will help us set a course for future growth," added Mr. Mallette. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (CA:IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina, and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The Chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the Chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for Chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The Company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective January 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. On June 30, 2009, Judge Peck and the Honorable Judge Robert Mongeon of the Quebec Superior Court of Justice, in a joint hearing, approved the plan of compromise filed by Quebecor World Inc. and its affiliates in their cases before the Canadian Companies' Creditors Arrangement Act and the Chapter 11 plan of reorganization filed by Quebecor World (USA), Inc., and its debtor affiliates in the U.S. Bankruptcy Court. Quebecor World said it will emerge from bankruptcy as a reorganized new company to be called "Novink Corp." Bankruptcy Creditors' Service, Inc., publishes Quebecor World Bankruptcy News. The newsletter tracks the parallel proceedings undertaken by QWI and its affiliates under United States and Canadian bankruptcy laws. (http://bankrupt.com/newsstand/or 215/945-7000) QUEBECOR WORLD: Renews Deal to Print Magazines for Schofield ------------------------------------------------------------ Quebecor World Inc. has signed a multiyear agreement with Schofield Media Group to continue printing 18 business-to-business magazines. Titles covered under the renewal agreement include U.S. Business Review, Manufacturing Today, Supply Chain Solutions, Beverage World, Restaurant Business and other business sector publications that reach corporate-level executives and decision- makers. "Schofield is a global leader in B2B magazine publishing with a strong history of growth and innovation," said Kevin J. Clarke, President of Quebecor World's Publishing Services Group. "We are extremely pleased under this agreement to have the privilege of printing for Schofield into the next decade." Hugh Gildea, Schofield's Chief Financial Officer based in the company's Chicago headquarters, said renewing long-term with Quebecor World reflects Schofield's appreciation for a partnership approach to doing business: "Quebecor World has been a positive and proactive partner and supplier as we have grown our publications in North America. We take pride in the quality and innovation we bring to our full portfolio of B2B titles, and Quebecor World matches that commitment." About Schofield Media group Founded in 1999, Schofield Media Group publishes business-to- business magazines and operates conferences and events in the United States, Europe and Asia. The company maintains offices in London, Norwich and Essex in the United Kingdom and Boston, Chicago, Seattle, Los Angeles and New York City in the United States. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (CA:IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina, and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The Chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the Chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for Chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The Company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective January 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. On June 30, 2009, Judge Peck and the Honorable Judge Robert Mongeon of the Quebec Superior Court of Justice, in a joint hearing, approved the plan of compromise filed by Quebecor World Inc. and its affiliates in their cases before the Canadian Companies' Creditors Arrangement Act and the Chapter 11 plan of reorganization filed by Quebecor World (USA), Inc., and its debtor affiliates in the U.S. Bankruptcy Court. Quebecor World said it will emerge from bankruptcy as a reorganized new company to be called "Novink Corp." Bankruptcy Creditors' Service, Inc., publishes Quebecor World Bankruptcy News. The newsletter tracks the parallel proceedings undertaken by QWI and its affiliates under United States and Canadian bankruptcy laws. (http://bankrupt.com/newsstand/or 215/945-7000) READER'S DIGEST: Leclair, Gavin Appointed to Board of Directors --------------------------------------------------------------- The Board of Directors of The Reader's Digest Association, Inc., on July 13, 2009, authorized an increase in the size of the Board from eight to ten members and appointed: (1) Don Leclair as a director of the Company to fill the vacancy created by the expiration of Eric Schrier's term of service on the Board; and (2) Paula Gavin as a director of the Company to fill one vacancy created by the increased size of the Board, each to serve until his or her successor shall be duly elected and qualified or until his or her earlier death, resignation or removal. There remains one vacancy on the Board. Neither Mr. Leclair nor Ms. Gavin was appointed to the Board pursuant to any arrangements or understandings between them and any other person, and no related party transaction with either of them exists. The Board also appointed Mr. Leclair and Ms. Gavin to a newly-formed Special Committee of the Board. Mr. Leclair, 57, retired from Ford Motor Company in 2008. He joined Ford in 1976, serving in various financial roles, most recently as Chief Financial Officer from August 2003 to November 2008. Prior to holding the CFO position, Mr. Leclair served as Ford's Corporate Controller from November 2001 to July 2003, and as the Controller of its North American Automotive Operations from October 2000 to October 2001. Ms. Gavin, 63, has served as the President of National Urban Fellows, Inc. since June 2007. From September 2004 to June 2007, Ms. Gavin was the CEO for the New York City Center for Charter School Excellence, a nonprofit organization that promotes the development of charter schools, and she served as the President and CEO of the YMCA of Greater New York from 1990-2004. Prior to her position with the YMCA, Ms. Gavin held multiple executive positions with AT&T, before being named Vice President of Network Operations where she supervised business planning, finance, and personnel and training for AT&T's operational unit of 60,000. About Reader's Digest The Reader's Digest Association, Inc., headquartered in Pleasantville, New York, is a global publisher and direct marketer of products including books (37% of 2007 revenue), magazines (32%), recorded music collections and home videos (18%), and food and gifts (9%). A group of investors led by Ripplewood Holdings L.L.C. (Ripplewood) acquired RDA in March 2007 and combined with Ripplewood portfolio companies WRC Media, Inc. (Weekly Reader) and Direct Holdings U.S. Corp. (Direct Holdings) in a transaction valued at approximately $2.4 billion (including refinanced debt). Annual revenue approximates $2.9 billion. * * * As reported by the Troubled Company Reporter on March 5, 2009, Tiffany Kary Bloomberg News, citing a person familiar with the matter, reported Reader's Digest hired Kirkland & Ellis LLP to evaluate restructuring options, which include a possible bankruptcy filing by the Company. The source told Bloomberg Reader's Digest is considering a pre-packaged or pre-arranged bankruptcy in which much of the restructuring work is completed out of court. Citing Moody's Investors Service analyst John Puchalla, Bloomberg said Reader's Digest's restructuring could take "a number of different forms: an out of court restructuring, an in-court restructuring, or a debt buyback." According to the report, Mr. Puchalla said that Reader's Digest has flexibility on its covenants with lenders. On February 19, 2009, Standard & Poor's Ratings Services lowered its credit and issue-level ratings on the Company. The corporate credit rating was lowered to CCC from B-, the issue-level rating of the Company's senior secured debt was lowered to CCC from B-, and the issue level rating on the Company's subordinated debt was lowered to CC from CCC. S&P stated that the rating outlook is negative. On February 20, Moody's downgraded its corporate family rating and probability of default rating to Caa3 from B3, the rating on the Company's senior secured credit facility to Caa2 from B2 and the rating on the Company's senior subordinated notes to Ca from Caa2. Moody's also stated that the rating outlook is negative. In a regulatory filing in May 2009, the Company said during the third quarter of fiscal 2009, some of its lending institutions closed five of its 10 international lines of credit, and the outstanding balances were paid in full. Furthermore, subsequent to March 31, 2009 a lending institution lowered the amount available to borrow on another international credit line. Given the current global recessionary environment, the Company said it may not generate sufficient earnings or have sufficient liquidity to operate as a going concern. The extreme volatility in the financial, foreign exchange and credit markets globally has compounded the situation, further impacting customer orders as well as normal seasonality trends. "These factors are impacting our ability to accurately forecast our performance results and cash position," the Company said. "[W]e have a number of initiatives underway and planned with a view of mitigating the effects of the current economic environment; however; there can be no assurances that our initiatives will be adequate." At March 31, 2009, the Company had $2,815,900,000 in total assets and $3,499,800,000 in total liabilities, resulting in $683,900,000 in stockholders' deficit. READER'S DIGEST: Files SEC Form 15 to Suspend Filing Obligations ---------------------------------------------------------------- The Reader's Digest Association, Inc., filed a Form 15 with the Securities and Exchange Commission to provide notice of the statutory suspension of its filing obligation with respect to its 9% Senior Subordinated Notes due 2017 and Guarantees of 9% Senior Subordinated Notes due 2017. The Company said there are about 36 holders of record of the securities as of July 16, 2009. In March 2007, Reader's Digest issued $600,000,000 aggregate principal amount of Senior Subordinated Notes due 2017 in a Rule 144A private offering. In June 2008, RDA exchanged all of the Original Notes for identical notes registered under the Securities Act of 1933, as amended, pursuant to a Registration Statement on Form S-4 (which RDA subsequently amended) declared effective by the Securities Exchange Commission on June 25, 2008. The Original Notes and the Senior Notes were each issued under an Indenture, dated as of March 2, 2007, among RDA, the guarantors named therein, and The Bank of New York, as trustee. Pursuant to Section 15(d) of the Securities Exchange Act of 1934, as amended, the duty of RDA to file reports under Section 13 of the Exchange Act was suspended commencing with the fiscal year beginning July 1, 2008, because the Senior Notes were held of record by less than 300 persons as of that date. The duty to file such reports continued to be suspended on the first day of the fiscal year beginning July 1, 2009 for the same reason. RDA has nevertheless continued to file Exchange Act reports with the Commission on a voluntary basis, pursuant to the terms of the Indenture, which requires RDA to make the filings. About Reader's Digest The Reader's Digest Association, Inc., headquartered in Pleasantville, New York, is a global publisher and direct marketer of products including books (37% of 2007 revenue), magazines (32%), recorded music collections and home videos (18%), and food and gifts (9%). A group of investors led by Ripplewood Holdings L.L.C. (Ripplewood) acquired RDA in March 2007 and combined with Ripplewood portfolio companies WRC Media, Inc. (Weekly Reader) and Direct Holdings U.S. Corp. (Direct Holdings) in a transaction valued at approximately $2.4 billion (including refinanced debt). Annual revenue approximates $2.9 billion. * * * As reported by the Troubled Company Reporter on March 5, 2009, Tiffany Kary Bloomberg News, citing a person familiar with the matter, reported Reader's Digest hired Kirkland & Ellis LLP to evaluate restructuring options, which include a possible bankruptcy filing by the Company. The source told Bloomberg Reader's Digest is considering a pre-packaged or pre-arranged bankruptcy in which much of the restructuring work is completed out of court. Citing Moody's Investors Service analyst John Puchalla, Bloomberg said Reader's Digest's restructuring could take "a number of different forms: an out of court restructuring, an in-court restructuring, or a debt buyback." According to the report, Mr. Puchalla said that Reader's Digest has flexibility on its covenants with lenders. On February 19, 2009, Standard & Poor's Ratings Services lowered its credit and issue-level ratings on the Company. The corporate credit rating was lowered to CCC from B-, the issue-level rating of the Company's senior secured debt was lowered to CCC from B-, and the issue level rating on the Company's subordinated debt was lowered to CC from CCC. S&P stated that the rating outlook is negative. On February 20, Moody's downgraded its corporate family rating and probability of default rating to Caa3 from B3, the rating on the Company's senior secured credit facility to Caa2 from B2 and the rating on the Company's senior subordinated notes to Ca from Caa2. Moody's also stated that the rating outlook is negative. In a regulatory filing in May 2009, the Company said during the third quarter of fiscal 2009, some of its lending institutions closed five of its 10 international lines of credit, and the outstanding balances were paid in full. Furthermore, subsequent to March 31, 2009 a lending institution lowered the amount available to borrow on another international credit line. Given the current global recessionary environment, the Company said it may not generate sufficient earnings or have sufficient liquidity to operate as a going concern. The extreme volatility in the financial, foreign exchange and credit markets globally has compounded the situation, further impacting customer orders as well as normal seasonality trends. "These factors are impacting our ability to accurately forecast our performance results and cash position," the Company said. "[W]e have a number of initiatives underway and planned with a view of mitigating the effects of the current economic environment; however; there can be no assurances that our initiatives will be adequate." At March 31, 2009, the Company had $2,815,900,000 in total assets and $3,499,800,000 in total liabilities, resulting in $683,900,000 in stockholders' deficit. RH DONNELLEY: Fitch Affirms Issuer Default Ratings at 'D' --------------------------------------------------------- Fitch Ratings has affirmed and withdrawn these ratings on R.H. Donnelley Corp. and its subsidiaries: RHD (Holding Company [HoldCo]) -- Issuer Default Rating (IDR) 'D'; -- Senior unsecured notes 'C/RR6'. R.H. Donnelley, Inc. (RHDI; Operating Company [OpCo]; Subsidiary of RHD) -- IDR 'D'; -- Bank facility affirmed 'CC/RR3'; -- Senior unsecured notes 'C/RR6'. Dex Media, Inc. (DXI; HoldCo; Subsidiary of RHD) -- IDR 'D'; -- Senior unsecured notes 'C/RR6'. Dex Media West (DXW; Operating Company; Subsidiary of DXI) -- IDR 'D'; -- Bank facility 'B-/RR1'; -- Senior unsecured 'C/RR4'; -- Senior subordinated 'C/RR6'. Dex Media East (DXE; Operating Company; Subsidiary of DXI) -- IDR 'D'; -- Bank facility 'CC/RR3'. Ratings may be withdrawn after 30 days have elapsed following a default. The withdrawal of RHD's ratings reflects the company's May 29, 2009 filing to voluntarily restructure its debt obligations under the protection of Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. SBA TELECOMMUNICATIONS: Moody's Puts 'Ba2' Rating on Senior Notes ----------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to new senior unsecured notes issued by SBA Telecommunications, Inc., an indirect wholly-owned subsidiary of SBA Communications Corp. The proceeds of the notes, together with cash on hand, are expected to be utilized towards repayment of the outstanding 2005 mortgage trust notes at the company's SBA Holdings subsidiaries, along with repaying the outstanding borrowings under the company's credit facilities. As part of the rating action, Moody's assigned a Ba3 corporate family rating and a Ba3 probability of default rating to SBAC. In addition, Moody's assigned an SGL-1 short-term liquidity rating, indicating very good liquidity. Assignments: SBA Communications Corp. -- Corporate Family Rating, Assigned Ba3 -- Probability of Default Rating, Assigned Ba3 -- Outlook, Assigned Stable Issuer: SBA Telecommunications, Inc. -- $250 million Senior Unsecured Notes due 2016, Assigned Ba2, LGD2, 27% -- $250 million Senior Unsecured Notes due 2019, Assigned Ba2, LGD2, 27% SBAC's Ba3 CFR reflects the company's high debt load and leverage relative to peers, which is due in large part to debt-financed acquisitions, and somewhat, to the company's previous shareholder- friendly activities through 2008. The rating does consider the company's increased scale following the acquisitions of about 1,300 towers in 2008, as well as the expected stability of much of its revenues, which are predominately derived from contractual relationships with the largest wireless operators in the U.S. Moody's believes that the fundamentals of the wireless tower sector are likely to remain favorable through the next several years and SBAC's good market position will enable its strong earnings and cash flow momentum to enable it to continue to delever, as it benefits from a full year's contribution of the cash flows from the acquired towers. Finally, the rating reflects Moody's view that SBAC will likely remain acquisitive over the ratings horizon, and will target adjusted Debt/EBITDA leverage between 7.0x and 8.0x. The SGL-1 liquidity rating reflects Moody's view that pro-forma for the $500 million note offering, SBAC will have very good liquidity characterized by solid operating cash flow, high cash balances, and full access to its $320 million revolver, with no near term debt amortization requirements. However, the company faces moderate intermediate term refinancing risk, given the $1.1 billion securitization issue and the $320 million credit facility that mature by the end of 2011. SBAC's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near- to intermediate-term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of SBAC's core industry and SBAC's ratings are believed to be comparable to those of other issuers of similar credit risk. Moody's most recent rating action was on August 1, 2006, at which time Moody's withdrew SBAC's ratings, as all the rated debt had been repaid. Based in Boca Raton, Florida, SBAC is a wireless tower operator. SBA TELECOMMUNICATIONS: S&P Assigns 'BB' Rating on $500 Mil. Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned its 'BB' rating and '1' recovery rating to SBA Telecommunications Inc.'s proposed $500 million of unsecured notes, consisting of $250 million due in 2016 and $250 million due in 2019, to be issued under Rule 144A with registration rights. Proceeds will be used for the repayment of debt and for general corporate purposes. The '1' recovery rating indicates expectations for very high (90%- 100%) recovery of principal in the event of default. S&P also assigned a 'B+' corporate credit rating to Boca Raton, Florida-based parent tower operator SBA Communications Corp. The outlook is stable. S&P expects total pro forma debt to be about $2.6 billion. "The rating reflects the company's highly leveraged capital structure and large refinancing risk in the 2011 timeframe," said Standard & Poor's credit analyst Catherine Cosentino. Debt to EBITDA of around 9.5x (adjusted for operating leases) and a November 2011 anticipated repayment date on $1.1 billion of securitization debt are factors that largely overshadow the strong investment-grade business risk characteristics of SBA's tower leasing business. SEMGROUP LP: BofA Wants Receiver for SemCanada, et al. ------------------------------------------------------ Bank of America, N.A., as administrative agent under a Credit Agreement, asked the Honorable Madame Justice Romaine in the Court of Queen's Bench of Alberta, in the Judicial District of Calgary, Canada, to lift the stay of proceedings against SemCanada Energy Company, A.E. Sharp Ltd., CEG Energy Options, Inc., 3191278 Nova Scotia Company and 1380331 Alberta ULC, to allow BofA to apply for: -- an order appointing Ernst & Young Inc. as receiver of each of the Applicants; and -- a bankruptcy order against each of SemCanada Energy, A.E. Sharp and CEG Energy, as Canadian Guarantors under the Credit Agreement. BofA asserted that as of July 30, 2008, the Canadian Debtors suspended payment of their pre-filing debts. BofA pointed out that the Applications have no ongoing business and no prospect for a restructuring of any kind. Against this backdrop, a receivership of the Applications and the bankruptcy of the Canadian Guarantors is the most appropriate and efficient method to complete the realization of the Applicants' assets, BofA told the Court. BofA added that Ernst & Young had consented to act as receiver of the Applicants. Subsequently, SemCanada Group asked the Honorable Madame to adjourn hearing on BofA's Application from June 24, 2009, to August 11, 12, or 13, 2009. About SemGroup SemGroup, L.P., -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Court Approves Sale Process for SemFuel Assets ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved the bidding procedures governing the sale of the three asset groups of Debtor SemFuel, L.P. All objections to the proposed bidding procedures and sale notice that have not been withdrawn, waived, or settled and all reservations of rights are overruled on the merits. The Court also authorizes the Debtors to pay the break-up fees due to each of the purchaser of the Asset Groups in the event that any of the assets are sold to a party other than the Stalking Horse Bidder. The asset purchase agreements entered with QuikTrip Corporation, Magellan Pipeline Company, L.P. and U.S. Oil Co., Inc. will be deemed terminated upon Court approval of a competing bid. In the event the Debtors timely receive one or more qualified bids, the Debtors will conduct an auction on August 3, 2009. Judge Shannon will convene a hearing to consider the sale of the assets either pursuant to the APAs entered into with the Stalking Horse Bidders or a competing bid on August 13, 2009. Objections to the Sale are due August 6, 2009. Judge Shannon also authorizes the Debtors to assume and assign contracts under the APAs. To the extent cure amounts under the assumed contracts are undisputed, the Debtors will pay the proposed cure amounts on or before closing of the sale. To the extent the Cure Amounts are disputed, the Debtors will pay the undisputed portions of the Disputed Cure Amounts on or before the closing and place the disputed portions in an escrow. The Debtors, according to Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, have diligently evaluated restructuring and cost-cutting measures designed to maximize the value of SemFuel's assets, which are grouped into: Group 1 -- assets located in Fort Worth, Texas Group 2 -- assets located in Green Bay, Wisconsin; Bettendorf, Iowa; and Rogers City, Michigan Group 3 -- assets located in El Dorado, Kansas; Des Moines, Iowa; and Glenpool and West Tulsa, Oklahoma Group 4 -- assets located in Bryan, Texas Group 5 -- assets located in Houston, Texas The Debtors, in mid-June 2009, entered into separate asset purchase agreements with: -- QuickTrip Corporation whereby QuickTrip agreed to purchase the Asset Group 1 for $14,125,000; -- U.S. Oil Co., Inc., whereby U.S. Oil agreed to purchase Asset Group 2 for $14,000,000; and -- Magellan Pipeline Company, L.P., whereby Magellan agreed to purchase Asset Group 3 for $23,000,000. QuickTrip APA The QuikTrip APA contains these salient terms: (a) The purchase price will be (i) $14,125,000, plus (ii) an amount equal to Estimated Working Capital, plus (iii) assumption of Assumed Liabilities. The Closing Date payment will be paid (x) an amount equal to Transferred Assets Purchase Price, plus (y) the Estimated Working Capital, minus (z) an amount equal to the Escrow Amount. (b) SemFuel will sell and assign, free and clear of liens (i) owned terminal assets; (ii) assumed contracts; and (iii) inventory of SemFuel as of the closing date. (c) On the closing date, QuikTrip will assume and pay liabilities: -- arising under any Assumed Contracts, other than amounts due as a result of prior defaults or deficiencies; -- related to the transferred assets in all cases, whether relating to period before, on or after the Closing Date, including all environmental liabilities and obligations, other than any liability or obligations of SemFuel arising from litigation between Citgo Petroleum Corporation and Prime Rail Interest, Inc., related to the Voluntary Cleanup Program on Prime Rail's property adjacent to the Fort Worth terminal; and -- arising under the Workers' Adjustment and Retraining Notification Act related to transactions. (d) On the closing date, SemFuel will assume and assign to SemFuel a Software License Agreement entered between SemFuel and Toptech Systems, Inc. (e) At closing, SemFuel will pay cure amounts due under the Assumed Contracts. To the extent that the aggregate cure amount exceeds $100,000, then, prior to the assumption of the Assumed Contracts by QuikTrip, QuikTrip will deposit with SemFuel amounts necessary to pay all cure amounts in excess of the $100,000 Cure Cap. (f) QuikTrip has made a cash deposit for $2,118,750 in connection with the sale of Transferred Assets. (g) QuikTrip APA provides for a break-up fee of $250,000, payable in the event the agreement is terminated, provided that the Break-up Fee will not be due and payable if a Purchaser Material Adverse Effect has occurred or QuikTrip has breached any of its obligations, representations or warranties in the QuickTrip APA. (h) QuickTrip APA will be terminated: -- at any time prior to the closing date by the consent of the parties; -- by either party, if the closing has not occurred on or before September 1, 2009; provided, however, that the terminating party is not in breach of its obligations under the QuickTrip APA; -- by either party, if the Court enters an order approving a Competing Bid and SemFuel executes a definitive agreement of the Competing Bid; or -- by either party, if there is any applicable law that makes consummation of the transactions under the QuikTrip APA illegal. A full-text copy of the QuikTrip APA is available for free at http://bankrupt.com/misc/SemGroup_QuikTripAPA.pdf U.S. Oil APA The U.S. Oil APA contains these salient terms: (a) U.S. Oil's total consideration will be $14 million, plus or minus estimated Working Capital, plus assumption of liabilities. The closing date payment will be paid as an amount equal to the Purchase Price, plus or minus the Estimated Working Capital, less accounts receivable, minus escrow amount, plus the aggregate amount of the Accounts Receivable, plus the deposit with Lakeside Oil Co., Inc. (b) SemFuel will sell and deliver to U.S. Oil, free and clear of liens (i) owned terminal assets; (ii) owned storage facilities; (iii) leased terminal assets; (iv) fuel distribution assets; (v) assumed contracts; (vi) inventory of SemFuel as of closing date; (vii) accounts receivable; and (viii) rights to causes of action. (c) U.S. Oil will assume and pay liabilities arising under any Assumed Contracts; all environmental liabilities and obligations; for taxes relating to the transferred assets for all taxable periods beginning after the closing date; and reflected within Working Capital. (d) U.S. Oil will arrange for the letters of credit, performance bonds, guarantees and similar assurances to be surrendered and cancelled prior to closing, and if required by the applicable counterparty, replaced with other letters of credit, performance bonds, guarantees or assurances, as applicable. (e) SemFuel will pay cure amounts due under the Assumed Contracts on or before the closing date. To the extent that the aggregate cure amount exceeds $100,000, then, prior to the assumption of the Assumed Contracts by U.S. Oil, U.S. Oil will deposit with SemFuel amounts necessary to pay all cure amounts exceeding the Cure Cap. (f) U.S. Oil has made a cash deposit for $2.1 million. (g) The U.S. Oil APA provides for a break-up fee of $280,000, payable in the event the U.S. Oil APA is terminated, provided, however that the Break-Up Fee will not be due and payable if a Purchaser Material Adverse Effect has occurred or U.S. Oil has breached any of its obligations in the U.S. Oil APA. (h) The U.S. Oil APA will be terminated: -- at any time prior to the closing date by consent of both parties; -- by either party, if the closing has not occurred on or before September 1, 2009; provided, however, that the terminating party is not in breach of its obligations under the U.S. Oil APA; -- by either party, if the Court enters an order approving a Competing Bid and SemFuel executes a definite agreement with the Competing Bidder; or -- by either party, if an applicable law makes consummation of the transactions under the U.S. Oil APA illegal. A full-text copy of the U.S. Oil APA is available for free at http://bankrupt.com/misc/SemGroup_USOilAPA.pdf Magellan Pipeline APA The Magellan APA contains these salient terms: (a) Magellan Pipeline will pay this total consideration to SemFuel $23 million, plus assumption of liabilities, minus an amount equal to SemFuel's pro-rated portion of Ad Valorem Taxes for the period from January 1, 2009, through and including the date preceding the closing date. The Closing Date Payment will be paid as an amount equal to the purchase price, minus an amount equal to the escrow amount, minus the pro-rated taxes. (b) At the closing, SemFuel will sell free and clear of all liens to Magellan Pipeline these assets (x) owned storage facilities; and (y) assumed contracts; (c) As of the closing, Magellan Pipeline will assume and pay liabilities arising under any Assumed Contracts, and related to Transferred Assets, whether relating to periods before, on or after the Closing Date, including all Environmental Liabilities and Obligations. (d) The owned inventory of SemFuel will not be transferred to Magellan Pipeline. Within three days of the closing, SemFuel will confirm to Magellan Pipeline that it no longer requires shipper status on Magellan Pipeline's pipeline and Magellan Pipeline will immediately reconsign all of SemFuel's inventory in Magellan Pipeline or its affiliates' pipelines to a central Oklahoma location to be sold by SemFuel. SemFuel's ethanol inventory will remain at its current location and SemFuel will sell all inventory after the closing date. (e) SemFuel will pay the cure amounts due under the Assumed Contracts on or before the closing date. To the extent the aggregate cure amount exceeds $100,000, then, prior to the assumption of the Assumed Contracts by Magellan Pipeline, Magellan Pipeline will deposit with SemFuel amounts necessary to pay all cure amounts exceeding the Cure Cap. (f) Magellan Pipeline has made a cash deposit for $2.3 million in connection with the Magellan APA. (g) The Magellan APA provides for a break-up fee of $230,000, payable in the event the Agreement is terminated. However, the Break-Up Fee will not be due and payable if a Purchaser Material Adverse Effect has occurred or Magellan Pipeline has breached any of its obligations in the Magellan APA. (h) The Magellan APA may be terminated: -- at any time prior to the closing date by consent of both parties; -- by either SemFuel or Magellan Pipeline if the closing has not occurred on or before September 1, 2009; provided, however, that the terminating party is not in breach of its obligations under the Magellan APA; -- by either party, if the Court approves a Competing Bid and SemFuel executes a definitive agreement with the Competing Bidder; -- by either party, if an applicable law makes consummation of the transactions under the Magellan APA illegal; or -- by either party, so long as neither of them is in breach of the Magellan APA. A full-text copy of the Magellan APA is available for free at http://bankrupt.com/misc/SemGroup_MagellanAPA.pdf Bidding Procedures To maximize the value of the Fort Worth Assets, the Debtors seek the Court's authority to implement bidding procedures. The Debtors intend to conduct a single auction covering the sale of SemFuel Asset Groups 1, 2, and 3 to allow Qualified Bidders to submit bids for one or more SemFuel Asset Groups. Any person or entity interested in participating in the Auction must submit a Qualifying Bid on or before July 27, 2009, to (i) counsel of the Debtors, (ii) financial advisor to the Debtors, The Blackstone Group, (iii) counsel and financial advisors to the Official Committee of Unsecured Creditors, and (iv) counsel and financial advisor to Bank of America, N.A., agent for certain of the Debtors' prepetition secured lenders and the DIP Lenders. To be deemed a Qualified Bidder, a Qualified Bid must, among others: * purchase at least one specified SemFuel Asset Group and, if an agreement has been executed with respect to that SemFuel Asset Group, upon the terms and conditions substantially set forth in the Agreement, and if no Agreement has been executed with respect to that SemFuel Asset Group, the Form APA; * state that the bidder will enter into a legally binding purchase and sale agreement or similar agreement; * include a clean and duly executed Asset Purchase and Sale Agreement and a marked Modified APA reflecting the changes from the applicable Agreement executed by the Purchaser; * state that the bidder is financially capable of consummating the transactions contemplated by the Modified APA; * specify each executory contract and unexpired lease that is to be assumed and assigned pursuant to the Modified APA; * not entitle the bidder to any transaction or break-up fee, expense reimbursement, or similar type of payment; and * include a cash deposit in an amount that represents the same percentage of the amount offered to purchase the applicable SemFuel Asset Group as the deposit amount set forth in the applicable Agreement for that SemFuel Asset Group bears to the purchase price, or if there is no agreement for that SemFuel Asset Group, 15% of the amount offered to purchase the applicable SemFuel Asset Group. If a person has a contractual right of first refusal to purchase SemFuel assets in any SemFuel Asset Group, the ROFR Holder will be allowed to participate in the auction, if any, and will be considered a Qualified Bidder if it submits a Modified APA. Each ROFR Holder will be permitted to match each higher bid submitted by a Qualified Bidder at the auction with respect to that SemFuel Asset Group and will not be required to comply with the bidding increment requirements. The Debtors provide these bidding increments for each SemFuel Asset Group: Asset Group 1 $300,000 Asset Group 2 350,000 Asset Group 3 250,000 Asset Group 4 50,000 Asset Group 5 50,000 The Debtors will notify bidders whether their bids have been determined to have qualified by July 31, 2009. If no timely, conforming Qualified Bids, other than the Agreement, are submitted by July 27, 2009, the Debtors may elect not to hold an auction and, instead, will seek approval of the Agreement with applicable Purchaser at a sale hearing scheduled on August 13, 2009. Objections to the sale are due August 6. In the event that the Debtors timely receive one or more Qualified Bids other than the Agreement for any SemFuel Asset Group, the Debtors will conduct an auction on August 3, 2009. The Debtors reserve the right to cancel the Auction at any time by delivering notice of cancellation to all Qualified Bidders. Good Faith Deposits will be returned to each bidder not selected by the Debtors as the Successful Bidder or the Back-Up Bidder. The Good Faith Deposit of the Back-Up Bidder will be held by the Debtors until one day after the closing of the sale transaction with the Successful Bidder. About SemGroup SemGroup, L.P., -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Files 1st Amended Plan & Disclosure Statement ---------------------------------------------------------- SemGroup, L.P., and its debtor affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware on July 13, 2009, further amendments to their Joint Plan of Reorganization and the Disclosure Statement explaining that Plan. Under the July 13 Plan, the Debtors expect their total available distributable value as of the Effective Date to be approximately $2.246 billion, consisting of: -- $911 million in cash, -- $300 million in Second Lien Term Loan Interests, and -- $1.035 billion in New Common Stock and Warrants. In addition, the Debtors and their Prepetition Lenders will contribute certain causes of action and their proceeds to a litigation trust to be created upon the effective date of the Plan. The Debtors will distribute interests in the Litigation Trust to the holders of certain Allowed Claims. The Debtors, as of July 13, have not placed a value on the Litigation Trust. The Debtors expect that their Cash on the Effective Date will include restricted cash they will receive from J. Aron & Company and BP Products North America, Inc., related to each of their Undisputed Production Receivables. The restriction on the Cash received from J. Aron and BP can be lifted by a subsequent order from the Bankruptcy Court and the Debtors said they will seek that order in connection with the confirmation of the Plan. The Debtors will retain approximately $50 million of the estimated $911 million in Cash at the Effective Date for working capital and general corporate purposes and will distribute the remaining Cash, Second Lien Term Loan Interests, New Common Stock, Warrants and interests in the Litigation Trust to holders of Allowed Claims as provided in the Plan. The Reorganized Debtors and the Prepetition Lenders will enter into the Secured Second Lien Term Loan Facility with the consummation of the Plan. Under the Facility, the Prepetition Lenders will be deemed to have loaned $300 million in aggregate principal amount to the Reorganized Debtors. Adequate Protection The Debtors estimate that as of the Petition Date they owned approximately $485 million of assets not pledged to secure any prepetition claims. The Debtors, in consultation with the Administrative Agent for the Prepetition Lenders, believe that the value of the Prepetition Lenders' collateral as of the Petition Date will have diminished by approximately $403 million as of the Effective Date. Under the Plan, the adequate protection claim of the Prepetition Lenders is satisfied by allocation of value in the Reorganized Debtors and not by cash payments. The approximately $82 million of remaining previously unencumbered value is allocated under the Plan to holders of Unsecured Claims, including Claims entitled to administrative priority under Section 503(b)(9) of the Bankruptcy Code. Administrative Expense Claims The Debtors believe that the Allowed Claims entitled to priority under Section 503(b)(9) as of the Petition Date total $295 million. The gross Section 503(b)(9) amount asserted by claimants in their proofs of claim exceeds $295 million. The Debtors do not believe the net amount due to claimants will be materially different from the $295 million scheduled. If the total value of allowed Section 503(b)(9) Claims materially exceeds $295 million, the Debtors said they may be unable to consummate the Plan because resolving Section 503(b)(9) Claims for $295 million or less is a condition to the effectiveness and consummation of the Plan. Secured Working Capital Lender Claims Each Allowed Secured Working Capital Lender Claim under Classes 70 to 95 will receive its Pro Rata share of (i) Working Capital Lender Effective Date Cash in an estimated amount of approximately $445 million of Lender Cash, (ii) 62.0% or $186 million in principal amount, of the Second Lien Term Loan Interests, and (iii) 58.88%, or 24,375,465 shares, of New Common Stock. The Debtors estimate Allowed Secured Working Capital Lender Claims to amount to $2.128 billion. The Debtors project a 57.9% recovery for this Classes of Claims. Secured Revolver/Term Lender Claims Each Allowed Secured Revolver/Term Lender Claim under Classes 96 to 121 will receive its Pro Rata Share of (i) Secured Revolver/Term Lender Effective Date Cash in an estimated amount of approximately $60 million, (ii) 38.0%, or $114 million in principal amount, of the Second Lien Term Loan Interests, and (iii) 36.12%, or 14,954,535 shares, of New Common Stock. Secured Revolver/Term Lender Claims are estimated to amount to $811 million. The Debtors project holders of claims under these Classes to receive a 66.8% recovery on their claims. Senior Notes Claims If any of Classes 149 to 174 composed of Senior Notes Claims votes to accept the Plan, then each holder of Allowed Senior Notes Claim will receive its Pro Rata Share of (i) 3.75% of New Common Stock, (ii) Warrants to purchase 3.75% of New Common Stock, (iii) 30% of the Litigation Trust Interests, and (iv) the Senior Notes Indenture Trustee Fees. If all Classes of General Unsecured Claims vote to reject the Plan and any Class of Senior Notes Claims votes to accept the Plan, each Allowed Senior Notes Claim will be entitled to receive its Pro Rata Share of the New Common Stock and Warrants that would have been distributed to the holders of General Unsecured Claims. If each Class of Senior Notes Claims votes to reject the Plan, then each holder of an Allowed Senior Notes Claim in that Class will receive (i) 0.26%, or 105,809 shares, of New Common Stock, (ii) 30% of the Litigation Trust Interests, and (iii) the Senior Notes Indenture Fees. If no Class of Senior Notes Claims votes to accept the Plan, then the shares of New Common Stock and Warrants that would have been distributed to the holders of Allowed Senior Notes Claim will be re-allocated among the Classes of General Unsecured Claims that vote to accept the Plan. If no Class of General Unsecured Claims vote to approve the Plan, then the shares of New Common Stock, but not the Warrants, that would have been distributed to the holders of Senior Notes Claims will be re-allocated among holders of Allowed Lender Deficiency Claims. Lender Deficiency Claims Each holder of Allowed Lender Deficiency Claim will receive 60% of the Litigation Trust Interests. The Debtors estimate the amount of Allowed Lender Deficiency Claims to total $1.106 billion. Canadian Plans Seven of the Debtors' affiliates -- SemCanada Nova Scotia, SemCAMS ULC, SemCanada Energy, A.E. Sharp Ltd., CEG Energy Options, Inc., 3191278 Nova Scotia Company, and 1380331 Alberta ULC -- filed plans of compromise in their insolvency proceedings under the Canadian Companies' Creditors Arrangement Act. Under the Canadian Plans, claims filed by professionals, employees and SemCanada Nova Scotia in its capacity as DIP Lender to SemCAMS, will continue to be paid in the ordinary course of business or on implementation of the Canadian Plans. These groups of creditors will not be entitled to vote on the Canadian Plans. Other creditors, principally consisting of holders of builders' and carriers' liens that are determined to have priority over the Prepetition Lenders' security and unsecured claims, will comprise a single class whose claims are compromised under the Canadian Plans and who are entitled to vote on the Canadian Plans. Holders of Exclusive Canadian Claims will receive under each of the Canadian Plans cash distributions that will be paid from two cash pools. Holders of Exclusive Canadian Secured Claims will be paid in full. Holders of Exclusive Canadian Unsecured Claims will receive their pro rata share of the applicable unsecured claims pool, which pool is estimated to be approximately C$4.1 million for SemCAMS ULC and C$10.5 million for SemCanada Nova Scotia. Under the SemCanada Nova Scotia Plan, a distribution will be made to the Prepetition Lenders in respect of the portion of the total claim of the Prepetition Lenders that will be treated as a secured claim, which distribution is estimated to be approximately C$98 million. Creditors' Committee Supports Plan The Amended Disclosure Statement included the Official Committee of Unsecured Creditors' statement unanimously supporting the Plan as the best way to ensure a prompt and fair resolution of the Debtors' Chapter 11 cases as a result of the compromise and settlement it entered into with the Debtors. A blacklined copy of the July 13 Plan is available for free at: http://bankrupt.com/misc/semgroup_planblackline.pdf A blacklined copy of the July 13 Disclosure Statement is available for free at: http://bankrupt.com/misc/semgroup_dsblackline.pdf About SemGroup SemGroup, L.P., -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Goldman Sachs Files Objections to Plan Outline ----------------------------------------------------------- Goldman Sachs Lending Partners LLC; the Official Producers' Committee; New Dominion, L.L.C.; gas and oil producers J. Aron & Company and Samson Resources Company; Murfin Drilling Company, Inc.; and Koch Materials, LLC, opposed the Disclosure Statement, accompanying the Debtors' First Amended Joint Plan of Reorganization. (1) OPC The OPC complains that the Amended Disclosure Statement still systemically "hides the ball" by failing to disclose important aspects of the Amended Plan's mechanics that the Debtors, the Lenders, and the Official Committee of Unsecured Creditors have devised to deprive producers of their rights. The OPC complains that the Disclosure Statement does note explain how the restriction on cash needed to fund the Plan would be lifted so that claims under Section 503(b)(9) of the Bankruptcy Code could be paid, or if the funds would even be sufficient. The OPC further contends that nowhere in the Disclosure Statement says that the Producers will receive less than 100% on their Section 503(b)(9) claims because OPC fees will be deducted from those distributions. Moreover, the OPC complains that the basis for dissolution of the OPC post-confirmation is not cited in the Disclosure Statement. To the extent, the Disclosure Statement is approved, the OPC asks the Court that its letter asking the Producers to vote against the Amended Plan be included in the solicitation materials sent to Producers. New Dominion, L.L.C., joins in the OPC's Objection. (2) Goldman Sachs Goldman Sachs, a Lender under a Prepetition Credit Agreement with the Debtors, and a holder of Secured Working Capital Lender Claims, complains that the Disclosure Statement does not provide Goldman Sachs the same treatment provided to all other Prepetition Lenders under Section 1123(a)(4). Under the Amended Plan, Goldman Sachs complains that it will not receive releases, which other members in its class will receive. Accordingly, Goldman Sachs asserts that the Amended Plan should be modified so that released actions do not exclude causes of action against Goldman Sachs relating to the Prepetition Credit Agreement or the DIP Financing Agreement. (3) Oil Producers To ensure the survivability of its rights under the Amended Plan, J. Aron asserts that the Disclosure Statement should be modified to state that the restrictions are integral to J. Aron's protection against double payment for the same oil and J. Aron's right to claim against the tender funds cannot be lifted without furnishing of equivalent protection. Samson Resources Company, Samson Lone Star, LLC, and Samson Contour Energy E&P, LLC, point out that the Amended Plan should provide a treatment of secured claims asserted by producers in the event the Producers prevail in their appeals. Certain operators and interest owners, including Murfin Drilling Company, Inc., LD Drilling, Inc., Davis Petroleum, Inc., RAMA Operating Co., Inc., Vess Oil Corporation, Central Crude Corporation, Redwing Gas Systems Inc., Beren Corporation, and Berexco Inc., assert that the Disclosure Statement does not say how the funds will be distributed to holders of Section 503(b)(9) Claims or General Unsecured Claims. (4) Koch Materials Koch Materials, LLC, KMC Enterprises, LLC, and Koch Materials Mexico, B.V., asphalt manufacturer, argue that the Disclosure Statement is silent on whether the Debtors intend to perform their obligations under a Purchase and Sale Agreement; or require the Koch Entities to perform their remaining obligations while the Debtors do not perform their duties. Accordingly, the Koch Entities ask the Court to direct the Debtors to insert a language in the Disclosure Statement that will describe the dispute between the Debtors and Koch Entities, a full-text copy of which is available for free at http://ResearchArchives.com/t/s?3f69 Debtors Respond to M. Coughlin's Objection The Debtors, in response to the objection filed by Matthew F. Coughlin, III, insist that they have the authority to formulate, propose and prosecute their reorganization plan. Mr. Coughlin's continued efforts to hijack the Debtors' reorganization are improper and should summarily rejected, Martin A. Sosland, Esq., at Weil, Gotshal & Manges LLP, in Dallas, Texas, asserts. Mr. Coughlin, is one of the members of the management committee of non-debtor SemGroup G.P., L.L.C., the sole general partner of SemGroup LP. Mr. Coughlin, together with John Catsimatidis, objected to the approval of the Disclosure Statement on the ground that the Plan and Disclosure Statement are ultra vires and the Disclosure Statement fails to provide adequate and accurate information concerning the ultra vires nature of the Plan and Disclosure Statement. Mr. Sosland states that on July 21, 2008, before Mr. Coughlin maneuvered his way onto the Management Committee, the Management Committee unanimously vested Terrence Ronan with authority to file the Debtors' Chapter 11 cases and to take all actions necessary to effectuate a successful reorganization. That grant of authority has never been withdrawn and remains in place, as set forth by a July 17, 2009 written consent of the Management Committee of SemGroup G.P., LLC, Mr. Sosland points out. Contrary to Mr. Coughlin's arguments, Mr. Sosland contends that Mr. Ronan's actions, including the filing of a reorganization plan and disclosure statement, were not ultra vires. Mr. Sosland further argues that the Management Committee's delegation of authority to Mr. Ronan is authorized by the operating agreement and Oklahoma law. Indeed, in January 2009, Mr. Coughlin tried to undermine that authority through a proposed resolution that would require his approval of any plan submitted by the Debtors, Mr. Sosland cites. Riverstone Global Energy, however, exercised its right under the Operating Agreement to veto the proposed resolution, ensuring that the reorganization would remain in the hands of disinterested fiduciaries. Accordingly, the Debtors who are set to emerge from bankruptcy protection in September 2009, should be free to proceed with the reorganization process, as authorized and directed by the unanimous Management Committee, free from the continued distraction and subversion of Coughlin, Mr. Sosland asserts. About SemGroup SemGroup, L.P., -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Nexen Wants Canada Payouts Stayed Pending Appeal ------------------------------------------------------------- Nexen Marketing asks the Justice of Appeal in the Court of Appeal, in Calgary, Alberta, to grant it to leave to appeal an order entered by Honorable Madam Justice Romaine in the Court of Queen's Bench of Alberta, in the Judicial District of Calgary, Canada, on April 24, 2009. Nexen argues that the issues on appeal are of importance to the practice of law, and the appeal will not unduly hinder the progress of the Canadian Debtors' proceedings. The April 24 Order, which was entered on May 13, 2009, adjourned sine die, the application of the Canadian Debtors and the Bank of America to make interim distribution. Madam Justice Romaine, however, granted the Canadian Debtors and the Bank of America leave to reapply with more current information if it becomes apparent that potential prejudice identified to the unsecured creditors is unlikely to materialize, can be avoided by other measures or that the balance of prejudice and benefit has shifted. Nexen further asks the Justice of Appeal to stay the enforcement of the April 24 Order, pending determination of the appeal. Nexen points out that April 24 Order should be stayed pending appeal, otherwise, payments made to the creditors will be irretrievable and the appeal will be rendered moot. About SemGroup SemGroup, L.P., -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: SemCanada Proposes Cross-Border Protocol ----------------------------------------------------- SemCanada Crude Company, SemCams ULC, SemCanada Energy Company, A.E. Sharp Ltd., CEG Energy Options, Inc., 3191278 Nova Scotia Company and 1380331 Alberta ULC asked the Honorable Madame Justice Romaine in the Court of Queen's Bench of Alberta, in the Judicial District of Calgary, Canada, to approve and implement a cross-border protocol, which is available for free at: http://bankrupt.com/misc/semgroup_cross-borderprotocol.pdf The Applicants reminded the Honorable Madame that their parent, SemGroup, L.P., and certain of its U.S. subsidiaries are under Chapter 11 protection. Against this backdrop, the Applicants believe that approval and implementation of the Protocol will assist in the efficient, orderly harmonization of the Applicants' CCAA proceedings and the Chapter 11 proceedings. The Applicants noted that harmonization of the insolvency proceedings will create the most stable conditions under which a successful reorganization can be achieved. About SemGroup SemGroup, L.P., -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SIX FLAGS: Fitch Affirms and Withdraws 'D' Issuer Default Rating ---------------------------------------------------------------- Fitch Ratings has affirmed and withdrawn these ratings on Six Flags, Inc., and its subsidiaries: Six Flags -- Issuer Default Rating 'D'; -- Senior unsecured notes 'C/RR6'; -- Preferred stock 'C/RR6'. Six Flags Operations Inc. -- IDR 'D'; -- Senior unsecured notes 'C/RR6'. Six Flags Theme Park Inc. -- IDR 'D'; -- Secured bank credit facility 'CCC/RR2'. Ratings may be withdrawn after 30 days have elapsed following a default. The withdrawal of Six Flags' ratings reflects the company's June 13, 2009 filing to voluntarily restructure its debt obligations under the protection of Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. SPEEDWAY MOTORSPORTS: Moody's Changes Rating Outlook to Stable -------------------------------------------------------------- Moody's Investors Service changed Speedway Motorsports, Inc's rating outlook to stable from negative and upgraded the company's speculative-grade liquidity rating to SGL-2 from SGL-4. The rating actions follow SMI's announcement that it entered into a new $300 million guaranteed senior secured revolving credit facility due July 2012 to replace the commitment and borrowings under SMI's previous $350 million revolver, whose Baa3 rating was withdrawn. SMI's Ba1 Corporate Family Rating and Probability of Default Rating are not affected. Outlook Actions: Issuer: Speedway Motorsports, Inc. -- Outlook, Changed to Stable From Negative Upgrades: Issuer: Speedway Motorsports, Inc. -- Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-4 Withdrawals: Issuer: Speedway Motorsports, Inc. -- $350 Million Senior Secured Bank Credit Facility due March 2010, Withdrawn, previously Baa3, LGD2 -- 29% The outlook revision and upgrade to SGL-2 reflect the improvement in SMI's liquidity position as the new credit facility refinances the existing revolver that was scheduled to mature on March 31, 2010 and moderately improves covenant headroom. The new agreement also allows SMI to exclude non-cash charges as a deduction to EBITDA when calculating the financial maintenance covenants, which Moody's views as reducing the risk of an impairment-driven violation. The SGL-2 rating reflects Moody's projection that SMI will maintain a meaningful cash balance and generate free cash flow of approximately $60 -- 75 million over the next 12 months, and that SMI has a good near-term maturity profile as there are no required debt payments until the revolver expires in 2012. Moody's anticipates SMI will maintain compliance with its financial covenants over the period despite pressure on consumer and corporate spending, although Moody's projections indicate only a modest level of covenant cushion. The stable rating outlook reflects Moody's belief that SMI will maintain sufficient liquidity over the next two years to manage the likely pressure on EBITDA from weakness in client spending. Debt-to-EBITDA leverage (3.1x LTM 3/31/09 incorporating Moody's standard adjustments) is currently weak for the rating, but Moody's anticipates SMI will maintain leverage at a 3x or lower range over the longer term and expects debt-to-EBITDA to return to this level once economic conditions improve. However, debt-to- EBITDA sustained above 3x due to debt-financed acquisitions, shareholder distributions, development projects or a sustained decline in profitability could lead to a downgrade. The last rating action was on May 14, 2009 when Moody's assigned a Ba1 rating to SMI's new $275 million senior notes due 2016. SMI's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of SMI's core industry and SMI's ratings are believed to be comparable to those of other issuers of similar credit risk. SMI, headquartered in Concord, North Carolina, is the second largest promoter, marketer and sponsor of motor sports activities in the U.S. primarily through its ownership of seven major race tracks including New Hampshire Motor Speedway, which SMI acquired for $340 million in January 2008. NASCAR sanctioned events account for the majority of SMI's approximate $600 million annual revenue. WHE HOLDINGS: Has $1.8-Mil. DIP Financing Offer from Chiron ----------------------------------------------------------- West Hawk Development Corp.'s subsidiaries, West Hawk Energy (USA) LLC and WHE Holdings (USA) LLC (together, WHE) have signed an offer letter for debtor-in-possession (DIP) financing of up to US$1,800,000. The proposed DIP lender, First KT Lending LLC, is a wholly owned subsidiary of Chiron Equities, LLC. Chiron Financial Advisors, LLC, WHE's financial advisor in connection with its Chapter 11 bankruptcy proceedings, is an affiliate of CE. The DIP loan will be structured as a 12-month term loan draw note, with conditions precedent to funding. Proceeds from the DIP loan will be used in accordance with a two-phase budget. The Lender will initially fund $300,000, in staged advances, to bring the first three wells at the Company's Figure Four natural gas project back into production. On completion of Phase I and assuming conditions to further funding are satisfied, the Lender will fund, in staged advances, the balance of the loan amount for Phase II, which includes bringing a further five wells (already drilled) into commercial production. Conditions precedent to the initial funding include, but are not limited to, the execution and delivery of a definitive loan agreement and other appropriate legal documentation and Lender satisfaction with all due diligence prior to August 30, 2009. Conditions precedent to the Phase II funding of the balance of the DIP loan include, but are not limited to, WHE having filed a plan of reorganization approved by the Lender, WHE having filed a plan support agreement between the Lender and WHE approved by the US Bankruptcy Court and Lender satisfaction with its due diligence review. The DIP loan will be due and payable in full on the earlier of (a) 12 months from the closing of the financing, or (b) termination of the loan agreement. The Company anticipates repayment of the loan through revenues generated by well production to the extent possible, and/or entering into a further transaction with the Lender. The Lender has stated its interest in investigating a larger potential transaction with West Hawk, to which the loan is an interim step. Monthly interest will accrue on the outstanding principal amount of the loan at an annual interest rate equal to the floating 30 day LIBOR as published in the Money Rates section of the Wall Street Journal plus 10.00%. Upon the occurrence of any event of default, principal, interest and fees will be due and payable at 4.0% per annum above the then otherwise applicable rate. A DIP loan facility fee equal to 5.0% of the total committed DIP loan amount shall be deferred and payable upon the sooner of (a) termination, or (b) prepayment. The Borrowers may prepay some or all of the DIP loan at any time, subject to an early termination fee ranging between US$50,000 and US$250,000 depending on the timing of any such prepayment. No early termination fee would be charged if the loan is paid pursuant to a plan of reorganization supported by the Lender. Events of default include the filing of a plan of reorganization without the Lender's consent; conversion of the Chapter 11 bankruptcy protection to Chapter 7 bankruptcy; termination of any of the leases or contracts for the Figure Four project; denial by the Court of the plan support agreement; a change of control of WHE; and a motion to sell WHE assets without the approval of Lender. WHE will continue to operate their respective businesses and manage their respective properties and hydrocarbon interests as debtors in possession under sections 1107 and 1108 of the Bankruptcy Code. "The DIP financing will provide the Company with the resources necessary to bring into commercial production five wells (already drilled) that will be added to the current thee wells that were in commercial production until December 2008 and will be reopened for commercial sales. This financing will provide the Company with the opportunity to have a permanent solution for the gas project and focus in the development of the Company's Groundhog coal project located in northwest British Columbia," said Gonzalo Torres Macchiavello, President and CEO of West Hawk Development Corp. About WHE Holdings, LLC Headquartered in Englewood, Colorado, WHE Holdings, LLC -- http://www.westhawkdevelopment.com/-- aka West Hawk Energy (USA) LLC provides oil well drilling services. The Debtor filed for Chapter 11 protection on April 7, 2009 (Bankr. D. Colo. Case No. 09-16019). Each of the Debtor's estimated assets and debts range from $10 million to $50 million. WILTON HOLDINGS: Involuntary Chapter 11 Case Summary ---------------------------------------------------- Alleged Debtor: Wilton Holdings Inc. 2240 West 75th Street Woodridge, IL 60517 Case Number: 09-12563 Type of Business: The Debtor makes equipment for food decoration. Involuntary Petition Date: July 17, 2009 Court: District of Delaware (Delaware) Judge: Peter J. Walsh Petitioners' Counsel: Thomas E. Lauria, Esq. Evan C. Hollander, Esq. White & Case LLP 1155 Avenue of the Americas New York, NY 10036 Tel: (212) 819-8200 Jeffrey M. Schierf, Esq. Fox Rothschild LLP Citizens Bank Center, Suite 1600 919 North Market Street Wilmington, DE 19801 Tel: (302) 654-7444 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Deutsche Bank Trust Company agreement $104,328,192 60 Wall Street New York, NY 10005 JGF Credit LLC agreement $104,328,192 430 Park Avenue New York, NY 10022 WILTON HOLDINGS: Operating Units Not Part of Involuntary Ch. 11 --------------------------------------------------------------- Wilton Brands, Inc., said in a statement that it isn't going into bankruptcy, even though an involuntary Chapter 11 bankruptcy petition was filed against its parent, Wilton Holdings Inc. Wilton Brands said in a statement, "First, and most importantly, Wilton Brands Inc. is not in Chapter 11. Further, it has not been petitioned into Chapter 11 nor have any of the other operating companies that market and sell our products. As a result of certain breaches of our loan covenants that have been previously disclosed, creditors of the parent company of Wilton Brands Inc. filed an involuntary petition against that holding company (Wilton Holdings, Inc.). While that company bears the Wilton name, the petition was not filed against any of the operating companies and does not affect their day-to-day operations." According to The Gourmet Retailer, Wilton Brands said that it's working with its lenders to resolve this matter and that management is monitoring the talks. Wilton Brands said that despite of the challenging economic environment, the company's operating results are solid. Wilton Brands said in a statement, "Operating income is ahead of last year's strong results, partially due to the achievement of our cost savings initiatives. Wilton Brands Inc. will continue to conduct its business in the ordinary course and will continue to honor its obligations. We value our relationships with all of our customers and suppliers and look forward to continued growth together." Wilton Holdings Inc. is a Woodbridge, Illinois-based baking- and crafts-supply company. Two lenders filed an involuntary Chapter 11 petition against the Company on July 20, 2009 (Bankr. D. Del. Case No. 09-12563). As reported by the Troubled Company Reporter on July 21, 2009, lenders Deutsche Bank Trust Co. Americas and JGF Credit LLC filed an involuntary Chapter 11 petition in Delaware against Wilton Holdings Inc., asserting that they are each owed $104 million. * AlixPartners Survey Says 59% of Experts Want Bankr. Code Reform ----------------------------------------------------------------- A 59% of leading restructuring experts in the nation polled say Washington should move to reform flaws in the U.S. Bankruptcy Code, according to a survey by the global business-advisory firm AlixPartners LLP. In that same survey, when asked to identify an industry that "people aren't paying much attention to now but will see a surprising amount of restructuring" in the year ahead, 38% of respondents said municipalities, 19% said hospitals and 13% said the energy industry. That question was in addition to an earlier one in which respondents were asked to name the top 3 industries "most likely" to see restructuring in the next 12 months, a list headed up by autos, retail, commercial real estate and banking/finance. The survey, which was conducted by AlixPartners among 48 select bankruptcy lawyers, bankers, fund managers and other restructuring professionals, also found 67% of those polled saying the economy won't recover from the current recession until 2011 at the earliest, with 26% saying 2012 or later. About 62% said they see don't private equity becoming a major player in American M&A again until at least 2011, with 32% saying 2012 or later. "Given the severity of this recession, it looks like American industry and private-equity firms have their work cut out for them for some time to come," said Peter Fitzsimmons, AlixPartners' president of North America and also co-lead of the firm's turnaround and restructuring practice. "As we move through the recession, it's not just industries like autos and retail that are being affected-as the experts in this survey noted. In fact, virtually every industry imaginable got at least one vote to the `most-likely' list, including restaurants, aerospace, media, travel & leisure, professional-services firms and even `green- technology' companies. Companies that hope to skirt danger during this period need to be more aggressive than perhaps they can even imagine at controlling costs and freeing up cash." When asked which part of the Bankruptcy Code most needs to be reformed, 50% of the respondents voting said the so-called "lease- assumption" language in Section 365 of the Code, which restricts the amount of time a bankrupt company has to assume or reject non- residential property leases to no more than 210 days after the commencement of its Chapter 11 case. This section, amended in 2005, has been blamed by some for leaving some companies, particularly retailers, with no choice but liquidation inside bankruptcy. Meantime, 19% of those voting pointed to the "exclusivity" language in Section 1121 as most in need of change, referring to the time period (exclusivity period) in which a debtor company retains the sole right to file a plan of reorganization-a time period that was effectively shortened in 2005. And another 19% said the "retention" language in Section 503, which sets stricter standards today than in the past as to employee retention at debtor companies, needs to be reformed the most. In all, 41% of all those polled said the Code is "seriously" flawed. About AlixPartners AlixPartners -- http://www.alixpartners.com-- is a global business advisory firm offering comprehensive services to improve corporate performance, execute corporate turnarounds, and provide litigation consulting and forensic accounting services. The firm's specialty is urgent, high-impact situations when results really matter. It was the recipient of a record four awards from the Turnaround Management Association in 2008. The firm has more than 900 professionals in 14 offices across North America, Europe, and Asia. * KPMG Appoints Haegele to Lead Restructuring Services in the West ------------------------------------------------------------------ KPMG LLP has named San Francisco-based Partner William Haegele to lead Restructuring Services in the West. He will serve as a key member of the national team of restructuring partners and professionals working with companies, lenders and other stakeholders to help provide stability, restore confidence, improve performance and begin recovery in stressed and distressed situations. "Bill Haegele's 14 years of operational restructuring experience and leadership provides company management, senior lenders and other stakeholders with a practical and seasoned approach to helping them realize value," said Drew Koecher, KPMG's U.S. Leader for Restructuring Services. "KPMG continues to make significant investments in the U.S. restructuring market, enhancing the firm's position of serving large multinationals, middle-market companies and stakeholders." Earlier this month, KPMG said New York-based Principal Gregg Pritchard would lead the firm's Restructuring Services in the Northeast. Mr. Haegele has extensive experience helping distressed companies, senior lenders, investors and private equity groups in a wide range of industries, including financial services, retail, manufacturing, hospitality and technology. He has provided clients with restructuring services and has served as financial adviser in planning for and filing for protection under bankruptcy laws. Prior to joining KPMG in 2004, he was appointed as a Chief Financial Officer responsible for preparing and guiding a company through reorganization under Chapter 11 of the U.S. Bankruptcy Code. "As part of our client-focused approach, KPMG uses a team of professionals with strong and deep industry knowledge who can help companies review their financial position and strengthen their operations and balance sheet as they seek to emerge competitively stronger from this turbulent market," said Mr. Haegele. Mr. Haegele will lead Restructuring Services in California, Washington, Oregon, Arizona, Utah, Idaho, Montana, Hawaii, and Alaska. The U.S. Restructuring team works closely with other teams of restructuring professionals from KPMG International's global network of member firms. The coordinated teams can deliver client services on initiatives that include Financial and Operational Restructuring, Chapter 11 Advisory, Transaction, Forensic, Tax, Valuation, Debt Restructuring, Real Estate, Business Performance, and Accounting Advisory services. Mr. Haegele is a graduate of San Diego State University. He is a licensed Certified Public Accountant in California, a Certified Insolvency and Restructuring Adviser, and is certified in Financial Forensics. KPMG LLP, the audit, tax and advisory firm -- http://www.us.kpmg.com/-- is the U.S. member firm of KPMG International. KPMG International's member firms have 137,000 professionals, including more than 7,600 partners, in 144 countries. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ July 29-Aug. 1, 2009 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Westin Hilton Head Island Resort & Spa, Hilton Head Island, S.C. Contact: http://www.abiworld.org/ Aug. 6-8, 2009 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Conference Hotel Hershey, Hershey, Pa. Contact: http://www.abiworld.org/ Sept. 10-11, 2009 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 2, 2009 AMERICAN BANKRUPTCY INSTITUTE ABI/GULC "Views from the Bench" Georgetown University Law Center, Washington, D.C. Contact: http://www.abiworld.org/ Oct. 7-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Oct. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Paris Las Vegas, Las Vegas, Nev. Contact: http://www.abiworld.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 21-23, 2010 INSOL International Annual Regional Conference Madinat Jumeirah, Dubai, UAE Contact: 44-0-20-7929-6679 or http://www.insol.org/ Apr. 29-May 2, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2010 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Ritz-Carlton Amelia Island, Amelia, Fla. Contact: http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 6-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Last Updated: July 12, 2009 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. 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. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission **