/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090724.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, July 24, 2009, Vol. 13, No. 203 Headlines 1601 NW 62 ST LLC: Case Summary 2 Largest Unsecured Creditors ACCREDITED HOME: Bi-Lo Close to Completing 5-Year Business Plan ADVANCED CELL: March 31 Balance Sheet Upside-Down by $44 Million ADVANCED CELL: No Date Yet for Special Stockholders' Meeting AFFILIATED FOODS: Seeks to Convert Bankruptcy Case to Chapter 7 AIR 2: S&P Places Ratings on CreditWatch Negative ALJ REGIONAL: Modifies KES Senior and Subordinated Debt Terms AMERICAN FIBERS: Wants Plan Filing Deadline Extended to Oct. 19 AMR CORP: S&P Puts 'B-' Corporate Rating on CreditWatch Negative ATLANTA FIGHT CLUBS: Case Summary & 20 Largest Unsecured Creditors AURORA OIL: Has Until August 15 to Use Cash Collateral AURORA OIL: Section 341(a) Meeting Set for August 24 AURORA OIL: Taps Warner Norcross as Local Counsel AURORA OIL: U.S. Trustee Appoints Four-Member Panel BASIC ENERGY: Moody's Rates $225 Mil. Senior Notes at 'Ba3' BAYONNE MEDICAL: Sues Blue Cross for Fraud & Unethical Practices BAYWOOD INT'L: Inks Final Settlement with Farmatek BEARINGPOINT INC: Creditors, Former Workers Go Head-to-Head on Pay BEARD COMPANY: Gets $825,388 in VISA Patent Suit Settlement BH S&B HOLDINGS: Protests Ch. 7 Conversion Plea Sought by Ableco BOMBARDIER RECREATIONAL: Moody's Retains 'Caa1' Corporate Rating BORDERS GROUP: Focuses on Young-Adult Books to Boost Sales CABLEVISION SYSTEMS: Fitch Upgrades Issuer Default Rating to 'BB-' CARAUSTER INDUSTRIES: To Obtain $75-Mil. Exit Financing from GE CCS MEDICAL: U.S. Trustee Fails to Appoint Creditors' Committee CENTRAL MONTGOMERY: Case Summary 20 Largest Unsecured Creditors CHOCOLATE MOUNTAIN: Case Summary & 2 Largest Unsecured Creditors CHRYSLER FINANCIAL: Asks Dealers to Pay Reserve Money CHRYSLER FINANCIAL: Repays $1.5 Billion in TARP Loan CHRYSLER LLC: 50% of Rejected Dealers Still in Business CHRYSLER LLC: Chrysler Group Mulls Over New Sedan Plan CHRYSLER LLC: Court Approves Lemon Law Claims Assumption Protocol CHRYSLER LLC: Essex County's Motion to Proceed With Claims CHRYSLER LLC: House Committee Wants Chrysler, GM Documents CHRYSLER LLC: House Passes Bill Restoring Dealershp Agreements CHRYSLER LLC: Merrill Report Says Chrysler Market Share to Decline CHRYSLER LLC: Stipulation with Daimler Further Amended CHRYSLER LLC: To Keep 3rd Shift at Ontario Minivan Factory CHRYSLER LLC: Togut Segal Bills $1.3 Million for May Work CHRYSLER LLC: Wilmington's Motion To Lift Stay to Exercise Rights CIT GROUP: DBRS Downgrades Long Term Debt Ratings to 'CC' CIT GROUP: Fitch Expects Rating Cut to 'RD' on Tender Offer CIT GROUP: Mulls Which Assets to Sell, May Let Go of Two Units CIT GROUP: Recapitalization Plan Won't Affect S&P's 'CC' Rating CITY LOBSTER: Files for Chapter 11 Bankruptcy Protection CRAFTMADE INT'L: Gets Covenant Relief Under $40-Mil. BofA Loan CREATIVE LOAFING: Publisher Teams Up With BIA to Fend Off Atalaya CRESCENT RESOURCES: Receives Final Court OK for $110MM DIP Loan CRESCENT RESOURCES: Titan Sues Phillip Near for Fraud CROWN CASTLE: S&P Affirms Corporate Credit Rating at 'B+' DAVE & BUSTER'S: Moody's Affirms 'B2' Corporate Family Rating DAYTON SUPERIOR: Can Employ AlixPartners as Restructuring Advisor DAYTON SUPERIOR: Panel Can Hire Conway Del Genio as Fin'l Advisor DAYTON SUPERIOR: Panel Can Employ Stroock & Stroock as Counsel DEL MONTE: S&P Changes Outlook to Positive, Affirms 'BB-' Rating DELPHI CORP: Reports Accord With Lenders, Creditors and PBGC DELPHI CORP: Majority of Creditors Vote to Reject Modified Plan DELPHI CORP: Amends Modified Plan-Related Contract List DELPHI CORP: 17th Amendment to DIP Accomm. Pact Expires July 24 DEVIN ENTERPRISES: Case Summary 3 Largest Unsecured Creditors EASTERN ORGANIC RESOURCES: Voluntary Chapter 11 Case Summary EDDIE BAUER: Court Fixes September 14 as Claims Bar Date EDDIE BAUER: Golden Gate Offer Approved; Deal to Close in August ENERGAS RESOURCES: Eide Bailly Resigns as Outside Accountant ENERGY PARTNERS: Installs Alan D. Bell as Executive Officer ENRON CORP: Amends Document Disposal Procedures ENRON CORP: Commercial Paper Dispute May Be Headed for Trial ENRON CORP: ECRC Files 19th Post-Confirmation Report ENRON CORP: Goldman Proposes Newby Settlement ENRON CORP: Objects to L. Wright's Claims EPIX PHARMACEUTICALS: Taps Joseph Finn to Liquidate Assets FIA CARD: Moody's Reviews 'D+' Bank Financial Strength Rating FLEETWOOD ENTERPRISES: Nets $33.5 Million From Sale of RV Business FLEETWOOD ENTERPRISES: Six Directors to Resign Effective July 26 FORD MOTOR: Posts $2.3 Billion Net Income for Second Quarter FORD MOTOR: Better 2nd Quarter Results May Lead to Equity Offering FREDDIE MAC: Names Charles Haldeman Jr. as Chief Executive Officer FRONTIER AIRLINES: Court Approves Disclosure Statement FRONTIER AIRLINES: Court Approves Republic Investment Agreement FRONTIER AIRLINES: Paul Dempsey Disposes Of 5,500 Shares Of Stock FRONTIER AIRLINES: Seeks to Extend LRU Lease Decision Period FRUIT OF THE LOOM: Judge Walsh Declines Magnetek's Invitation GENERAL MOTORS: German Gov't Still Favors Magna Bid for Opel GHOST TOWN: Asks Court for 3-Month Delay of Plan Filing Deadline GLOBAL MOTORSPORT: Court Extends Period to Remove Actions GLOBAL MOTORSPORT: Plan Filing Period Extended to September 30 GREEKTOWN CASINO: Detroit Appeals Development Agreement Assumption GREEKTOWN CASINO: Exceeds 2008 Revenues for 3rd Straight Month GREEKTOWN CASINO: Fine Consulting Bills $2 Million for March-May GREEKTOWN CASINO: Parties File Objections to Disclosure Statement GREEKTOWN CASINO: Proposes to Assume Detroit Casino Council CBA GREIF INC: Moody's Assigns 'Ba2' Rating on New Senior Notes GREIF INC: S&P Assigns 'BB+' Rating on $250 Mil. Senior Notes GSI GROUP: S&P Changes Outlook to Negative; Affirms 'B' Rating HAWAII SUPERFERRY: Court Sets August 24 as Claims Bar Date HEALTH NET: UnitedHealth Deal Won't Affect Fitch's Ratings HIGHGATE ESTATES: Voluntary Chapter 11 Case Summary HILLSIDE BAPTIST CHURCH: Case Summary 1 Largest Unsec. Creditor HITCHIN POST: Files for Ch 11 Bankruptcy; Blames Economic Downturn HJ HEINZ: Moody's Affirms Ba1 Preferred Stock Rating HOMEWORKS INTERIORS: Case Summary & 20 Largest Unsecured Creditors HYDROGENICS CORP: Terminates APC Manufacturing and Supply Deal IL LUGANO: Plan Solicitation Period Extended to September 16 INDALEX HOLDINGS: Wants Until October 16 to File Chapter 11 Plan INTEGRA TELECOM: Reduces Overall Debt by More than Half JACK HICKS STEEL: Case Summary & 20 Largest Unsecured Creditors JAMES STEPHENS: Files for Chapter 11 Bankruptcy Protection JEFFERSON COUNTY: Moody's Affirms 'Caa3' Rating on $3.2 Bil. Bonds KB TOYS: Bids for IP Assets Due Aug. 4; No Stalking Horse Bidder KERRY ANTHONY DARDEN: Case Summary & 20 Largest Unsec. Creditors LANDAMERICA FIN'L: Plan Filing Deadline Moved to September 15 LANDAMERICA FIN'L: LAC Wants Plan Filing Deadline Moved to Nov. 3 LANDAMERICA FIN'L: Deadline to Remove Actions Moved to Oct. 27 LANDAMERICA FIN'L: Title, Et Al.'s Motion to Set Bar Date LANDAMERICA FIN'L: U.S. Trustee Appoints 1031's Creditors Panel LANDSOURCE COMMUNITIES: Court's Formal Order Confirming Plan LANDSOURCE COMMUNITIES: Deal Protecting Sensitive Information LARRY GEISER: Case Summary & 9 Largest Unsecured Creditors LYONDELL CHEMICAL: Committee Sue Buyout Architects for $22 Billion MAGMA DESIGN: Inability to Pay Bond Debt Cues Going Concern Doubt MAGNA ENTERTAINMENT: Creditors Want MID Unit's Claim Subordinated MARK IV: Former Execs. Want Info on Insurance Policies MEDICURE INC: Lender Extends US$1.7MM Payment Deadline to Aug. 14 MILACRON INC: Anderson Resigns as Head of Machinery Tech NA MINCO GOLD: Receives Non-Compliance Notice From NYSE Amex LLC MOBILE BAY INVESTMENTS: Case Summary & 5 Largest Unsec. Creditors MOMENTIVE PERFORMANCE: In Talks with Lenders for Covenant Relief MOORE-HANDLEY: Bostwick-Braun Expresses Interest in Buying Assets MORRIS PUBLISHING: S&P Withdraws 'D' Corporate Credit Rating NEIMAN MARCUS: Moody's Gives Stable Outlook; Affirms 'Caa1' Rating NEWPARK RESOURCES: Covenant Violations Cue Loan Amendment NATIONAL HERITAGE: Files Bankruptcy Plan and Disclosure Statement NEPTUNE INDUSTRIES: Court OKs Global Deal Dismissing Ch. 11 Case NEPTUNE INDUSTRIES: Discloses to the SEC Its Management Changes NEXT INC: Net Loss Narrows to $329,000 in Quarter Ended May 31 NOBLE INT'L: To Be Delisted From Nasdaq Effective July 27 NORTEL NETWORKS: CALA Unit Files For Chapter 11 Protection NORTEL NETWORKS: Calgary Employees Ask Stay Relief to Pursue Claim NORTEL NETWORKS: Courts Approve NNL-Flextronics Settlement NORTEL NETWORKS: Employees' Request to Lift Stay to Prosecute Suit NORTEL NETWORKS: NCCE to Appeal Koskie Minsky Appointment NORTEL NETWORKS: Ontario Court OKs Reduced Pension Payments NORTEL NETWORKS: Sets September 30 Claims Bar Date NORTEL NETWORKS: Submits Proposal to Sell Enterprise Biz. to Avaya NORTEL NETWORKS: US Court Enforces Canada Order on LG-Nortel Sale NORWOOD PROMOTIONAL: Panel May Employ Arent Fox as Lead Counsel NORWOOD PROMOTIONAL: Panel May Employ EG as Delaware Counsel NORWOOD PROMOTIONAL: Time to Remove Actions Extended to November 2 NOVADEL PHARMA: Engages Arthur Wood as Financial Advisors NOVADEL PHARMA: May Issue 12MM Shares over the Next 12 Months NTELOS INC: S&P Rates Proposed $670 Mil. Facilities at 'BB' O2DIESEL CORPORATION: Case Summary & 20 Largest Unsec. Creditors PACIFIC RESOURCES: U.S. Govt. Wants Property Let Go Free of Hazard PATRICK INDUSTRIES: Has Deal to Sell Aluminum Extrusion Operation PORTER HAYDEN: "Suit . . . Seeking Damages" Phrase Explained PROVIDENT ROYALTIES: Shareholder Opposes Sale, Absent Schedules QUEBECOR WORLD: GE Capital Joint Leads $800 Mil. Exit Financing QUICKSILVER RESOURCES: Seeks Changes to Terms of 2024 Debentures RITE AID: GE Capital Joint Lead Arranger to $1-Billion Loan ROBERT JOSHUA SCHOR: Case Summary & 20 Largest Unsecured Creditors ROBERTO CASTELLANOS: Case Summary & 20 Largest Unsecured Creditors ROGER WAYNE CHEN: Case Summary & 20 Largest Unsecured Creditors RONSON CORP: Has Deal to Sell Unit; Wells Fargo Moratorium Moved SEMGROUP LP: May Now Send Plan to Creditors for Voting SHELDON GOOD: Court Approves Asset Sale to Racebrook Marketing SIX FLAGS: Court Approves Richards Layton As Counsel SIX FLAGS: Gets Court Nod to Employ Paul Hastings As Counsel SIX FLAGS: In Talks With Lenders to Amend Credit Agreement SIX FLAGS: Proposes KPMG LLP as Auditors SIX FLAGS: Stipulation on Cash Collateral Use Approved on Interim SIX FLAGS: U.S. Trustee Objects to Terms of Houlihan Engagement SOLUTIA INC: To Release 2nd Quarter 2009 Results on July 27 STARWOOD HOTELS: Ownership of St. Regis Transferred to Citi STEPHEN BALDWIN: Staves Off Foreclosure Through Chapter 11 Filing STONERIDGE INC: S&P Affirms 'B+' Corporate Credit Rating SUN PRODUCTS: Moody's Upgrades Corporate Family Rating to 'B1' TAMBURO HOLDING CO: Voluntary Chapter 11 Case Summary TEMECULA VALLEY: Receives Notice from NASDAQ Confirming Delisting TRONOX INC: Another Class Suit Filed Against Anadarko, Kerr-McGee TRUE TEMPER: Lenders Extend Forbearance Through August 17 TXCO RESOURCES: Can't Provide Counsel for Board of Directors UAL CORP: Asks Court to Enter Final Decree Closing Ch. 11 Cases UAL CORP: Provides Financial Projections For 3rd Quarter 2009 UAL CORP: Releases Second Quarter 2009 Results UAL CORP: Reports June 2009 Traffic Results UAL CORP: S&P Puts 'B-' Corp. Rating on CreditWatch Negative WEBSTER FINANCIAL: Fitch Corrects Preferred Stock Rating to 'BB' VSEVOLOD OKHRIMOVSKI: Case Summary & 15 Largest Unsec. Creditors WHC LLC: Case Summary & 20 Largest Unsecured Creditors WHITEHALL JEWELERS: Can Use Cash Collateral Until September 30 WHITEHALL JEWELERS: Wants Plan Filing Period Extended to Oct. 20 WILD WINGS OVER: Voluntary Chapter 11 Case Summary WJL EQUITIES: Wants Access to Cash Collateral for KeyBank's Loan WR GRACE: June 30 Balance Sheet Upside-Down by $351.7 Million * Bankrupt Corporate Asset Sales/Divestitures Jump by 55% * FTI Appoints Khemlani and Vallerie to Finance/Restructuring Unit * BOOK REVIEW: Strategies for Investing in Intellectual Property - Intangible Valuations, Real Returns ********* 1601 NW 62 ST LLC: Case Summary 2 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: 1601 NW 62 St, LLC 6405 NW 36th St Miami, FL 33166 Bankruptcy Case No.: 09-24904 Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court Southern District of Florida (Miami) Judge: Robert A. Mark Debtor's Counsel: Joel M. Aresty, Esq. 13499 Biscayne Blvd #T-3 No. Miami, FL 33181 Tel: (305) 899-9876 Fax: (305) 723-7893 Email: aresty@mac.com Total Assets: $900,000 Total Debts: $1,074,000 A list of the Company's 2 largest unsecured creditors is available for free at: http://bankrupt.com/misc/flsb09-24904.pdf The petition was signed by Daniel Jaramillo, managing member of the Company. ACCREDITED HOME: Bi-Lo Close to Completing 5-Year Business Plan --------------------------------------------------------------- Bi-Lo is expected to complete a five-year business plan by the end of this month. The plan will be the foundation for Bi-Lo's emergence from bankruptcy as a new or rejuvenated company, David Dykes at The Greenville News relates, citing company officials. Bi-Lo officials said in court documents that their options include retention of all or part of the Company's business, a merger or consolidation, and a sale or distribution of its operations to a creditor or other interested party. According to court documents, Bi-Lo officials said that until the five-year plan has been completed and analyzed, they "have made no determination as to which of the many paths towards emergence from Chapter 11 is the best route" and speculation about any course of action "would be premature." Bi-Lo LLC said in court documents that "preliminary discussions" have started with potential buyers or investors and that "high- level discussions" are underway with lenders regarding exit financing. Accredited Home Lenders Holding Co. -- http://www.accredhome.com/ -- is a mortgage banker servicing U.S. markets for conforming and non-prime residential mortgage loans operating throughout the U.S. and in Canada. Founded in 1990, the company is headquartered in San Diego. The Company was acquired by Lone Star Funds for $300 million in October 2007. Lone Star also owns Bruno's Supermarkets LLC and Bi-Lo LLC, two grocery retailers in Chapter 11. Accredited Home and its affiliates filed for Chapter 11 on May 1, 2009 (Bankr. D. Del. Lead Case No. 09-11516). The Debtors selected Hunton & Williams LLP as Chapter 11 counsel, and Pachulski Stang Ziehl & Jones LLP as co-counsel. Accredited Home also tapped Luce, Forward, Hamilton & Scripps LLP and Quinn Emanuel Urquhart Oliver & Hedges LLP for various litigation. APS Services LLC has been tapped to provide management services, including a CRO for the Debtors. Kurtzman Carson Consultants is the Debtors' claims agent. The official committee of unsecured credtiors tapped Arent Fox as counsel, Elliott Greenleaf as Delaware and conflicts counsel, and Weiser LLP as financial advisor. According to its bankruptcy petition, Accredited Home's assets range from $10 million to $50 million and its debts from $100 million to $500 million. ADVANCED CELL: March 31 Balance Sheet Upside-Down by $44 Million ---------------------------------------------------------------- Advanced Cell Technology, Inc.'s balance sheet at March 31, 2009, showed total assets of $7,524,668, and total liabilities of $51,998,745, resulting in a stockholders' deficit of $44,474,077. For three months ended March 31, 2009, the Company posted a net loss of $18,999,876 compared with a net loss of $9,519,659 for the same period in the previous year. The Company related that its cash and cash equivalents are limited. In the short term, it will require substantial additional funding prior to March 31, 2010, in order to maintain its current level of operations. If the Company is unable to raise additional funding, it will be forced to either substantially scale back its business operations or curtail its business operations entirely. The Company intends to seek additional funding through public or private financing transactions, and, to a lesser degree, new licensing or scientific collaborations, grants from governmental or other institutions, and other related transactions. The Company cannot assure that public or private financing or grants will be available on acceptable terms, if at all. Several factors will affect its ability to raise additional funding, including, but not limited to, the volatility of its Common Stock. According to Advanced Cell, management has taken or plans to take these steps that it believes will be sufficient to provide the Company with the ability to continue in existence: -- Between September 29, 2008 and January 20, 2009, the Company settled certain past due accounts payable by the issuance of shares of its common stock. In aggregate, the Company settled $1,108,673 in accounts payable through the issuance of 260,116,283 shares of its common stock. -- On December 18, 2008, the Company entered into a license agreement with an Ireland-based investor, Transition Holdings Inc., for certain of its non-core technology. Under the agreement, Transition agreed to acquire a license to the technology for $3.5 million in cash. Through December 31, 2008, the Company had received $2 million in cash under this agreement. During the three months ended March 31, 2009, the Company received $1.5 million in cash under this agreement. The Company expects to apply the proceeds towards its retinal epithelium cells program. -- On March 30, 2009, the Company entered into a license agreement with CHA under which the Company will license its retinal pigment epithelium technology, for the treatment of diseases of the eye, to CHA for development and commercialization exclusively in Korea. The Company is eligible to receive up to a total of $1.9 million in fees based upon the parties achieving certain milestones, including the Company making an IND submission to the US FDA to commence clinical trials in humans using the technology. The Company received an up-front fee under the license in the amount of $1,100,000 during the second quarter of 2009. Under the agreement, CHA will incur all of the costs associated with the RPA clinical trials in Korea. The agreement is part of continuing cooperation and collaboration between the two companies. -- On March 11, 2009, the Company entered into a $5 million credit facility with a life sciences fund. Under the agreement, the proceeds from the Facility must be used exclusively for the Company to file an investigational new drug for its retinal pigment epithelium program, and will allow the Company to complete both Phase I and Phase II studies in humans. An IND is required to commence clinical trials. Under the terms of the agreement, the Company may draw down funds, as needed for clinical development of the RPE program, from the investor through the issuance of Series A-1 convertible preferred stock. The preferred stock pays dividends, in kind of preferred stock, at an annual rate of 10%, matures in four years from the initial issuance date, and is convertible into common stock at $0.75 per share. As of June 30, 2009, the Company has drawn down roughly $1,810,000 on the facility. -- On May 13, 2009, the Company entered into another license agreement with CHA under which the Company will license its proprietary "single blastomere technology," which has the potential to generate stable cell lines, including RPE for the treatment of diseases of the eye, for development and commercialization exclusively in Korea. The Company received an upfront license fee of $300,000. -- Management anticipates raising additional future capital from its current convertible debenture holders, or other financing sources, that will be used to fund any capital shortfalls. The terms of any financing will likely be negotiated based upon current market terms for similar financings. No commitments have been received for additional investment and no assurances can be given that this financing will ultimately be completed. -- Management has focused its scientific operations on product development to accelerate the time to market products which will ultimately generate revenues. While the amount or timing of such revenues cannot be determined, management believes that focused development will ultimately provide a quicker path to revenues, and an increased likelihood of raising additional financing. -- Management will continue to pursue licensing opportunities of the Company's extensive intellectual property portfolio. A full-text copy of the Company's quarterly report is available at no charge http://ResearchArchives.com/t/s?3fca A full-text copy of the Company's annual report is available at no charge http://ResearchArchives.com/t/s?3fd4 Going Concern Doubt In its audit report on July 2, 2008, SingerLewak LLP in Los Angeles, California, said the Company has suffered recurring net losses from operations, negative cash flows from operations, a substantial stockholders' deficit and its total liabilities exceeds its total assets. This raises substantial doubt about the Company's ability to continue as a going concern. As reported in the Troubled Company Reporter on June 12, 2008, Singer Lewak Greenbaum & Goldstein LLP expressed substantial doubt about Advanced Cell's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended December 31, 2007. The auditor pointed to the company's recurring losses from operations, negative cash flows from operations, substantial stockholders' deficit and current liabilities that exceed current assets. About Advanced Cell Based in Worcester, Massachusetts, Advanced Cell Technology Inc. (OTC BB: ACTC) -- http://www.advancedcell.com/-- is a biotechnology company focused on developing and commercializing human embryonic and adult stem cell technology in the emerging fields of regenerative medicine. Principal activities to date have included obtaining financing, securing operating facilities, and conducting research and development. The Company has no therapeutic products currently available for sale and does not expect to have any therapeutic products commercially available for sale for a period of years, if at all. ADVANCED CELL: No Date Yet for Special Stockholders' Meeting ------------------------------------------------------------ Advanced Cell Technology, Inc., will hold a Special Meeting of Stockholders at a yet to be scheduled date for these purposes: -- To consider and act upon a proposal to approve an amendment to the Company's 2005 Stock Incentive Plan to increase the number of shares issuable thereunder to a total of 145,837,250 shares; and -- To consider and act upon a proposal to approve an amendment to the Certificate of Incorporation of the Company to effect an increase in the authorized shares of common stock, par value $0.001 of the Company from 500,000,000 to 1,750,000,000. All stockholders are invited to attend the meeting. A full-text copy of the Company's Proxy Statement pursuant to Section 14(a) of the Securities Exchange Act of 1934 is available at no charge at http://ResearchArchives.com/t/s?3fd3 About Advanced Cell Based in Worcester, Mass., Advanced Cell Technology Inc. (OTC BB: ACTC) -- http://www.advancedcell.com/-- is a biotechnology company focused on developing and commercializing human embryonic and adult stem cell technology in the emerging fields of regenerative medicine. Principal activities to date have included obtaining financing, securing operating facilities, and conducting research and development. The company has no therapeutic products currently available for sale and does not expect to have any therapeutic products commercially available for sale for a period of years, if at all. AFFILIATED FOODS: Seeks to Convert Bankruptcy Case to Chapter 7 --------------------------------------------------------------- Mark Friedman at ArkansasBusiness.com reports that Affiliated Foods Southwest, Inc., has asked the U.S. Bankruptcy Court for the Eastern District of Arkansas to convert its Chapter 11 case to Chapter 7 liquidation without notice or a hearing. Affiliated Foods said that its inventory has been sold and that it has laid off its remaining workers, ArkansasBusiness.com relates. According to court documents, Affiliated Foods said that it couldn't get additional liability and workers' compensation insurance coverage beyond July 17. "According, the Debtors are ceasing operations on July 17, 2009 and terminating all employees. The Debtors assert that it is not in the best interest of the estates, the creditors, its former employees and the public to continue operations without sufficient insurance coverage," Affiliated Foods stated. Little Rock, Arkansas-based Affiliated Foods Southwest, Inc., and its affiliates filed for Chapter 11 on May 5, 2009 (Bankr. E.D. Ark. Case No. 09-13178). W. Michael Reif, Esq., at Dover Dixon Horne represents the Debtors in their restructuring efforts. The Debtors listed assets between $10 million to $50 million and debts between $100 million to $500 million. AIR 2: S&P Places Ratings on CreditWatch Negative ------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Air 2 US LLC on CreditWatch with negative implications. Air 2 US is a Cayman Islands-based limited liability company that issued more than $1.1 billion of enhanced aircraft notes in 1999. This special-purpose entity relies on lease rental payments on planes leased to American Airlines Inc. (B-/Watch Neg/--) and United Air Lines Inc. (B-/Watch Neg/--) by various financing subsidiaries of Airbus Industries SAS. "The outcome of S&P's reviews of American and United, as well as S&P's assessment of the aircraft that secure the Air 2 US notes and their importance to the two airlines in any future bankruptcy proceedings, will determine S&P's resolution of the CreditWatch review of the Air 2 US equipment note ratings," said Standard & Poor's credit analyst Betsy R. Snyder. "We will resolve the CreditWatch listing on Air 2 US along with S&P's reviews of American and United," she continued. ALJ REGIONAL: Modifies KES Senior and Subordinated Debt Terms ------------------------------------------------------------- ALJ Regional Holdings, Inc., said its operating subsidiary KES Acquisition Company has amended the terms of its senior credit facility and the junior indebtedness evidenced by its 8% subordinated secured notes. On July 20, 2009, KES entered into the Third Amendment to the Financing Agreement and First Amendment to Security Agreement by and among KES and its lenders, Ableco Finance and PNC Bank, National Association. The Amendment provides for the modifications to the Senior Debt, among others: -- The final maturity date was extended for one year to February 22, 2011, and as a result the quarterly principal payments under the term loan were reduced from $750,000 to $500,000; -- Certain financial covenants and metrics, including the EBITDAM covenant were reduced and the borrowing base multiplier was increased; -- The interest rate was increased by one percentage point; and -- Subject to certain limitations, KES is now permitted to create two acquisition subsidiaries that will not be encumbered pursuant to the terms of the Senior Debt. Discussing the transaction, John Scheel, Chief Executive Officer of KES and ALJ said, "We are happy that we were able to work with our lenders to modify our debt in a manner that benefits everyone. The extended maturity date and new financial covenants provide us with additional flexibility as we are starting to see a slight improvement in demand. Further, our new ability to create subsidiaries outside of the Senior Debt will better position us to explore strategic opportunities." In addition, KES made certain modifications to the terms of its Junior Debt. The lenders with respect to KES' Junior Debt include, among others: Ableco, ALJ and Jess Ravich, Hal Byer, and Scott Fritz, all of whom serve on ALJ's board. ALJ Regional Holdings, Inc. (Pink Sheets: ALJJ) is the parent company of KES Acquisition Company dba Kentucky Electric Steel, the owner and operator of a steel mini-mill near Ashland, Kentucky producing both merchant bar quality flats (MBQ Bar Flats), and special bar quality steel flats (SBQ Bar Flats). AMERICAN FIBERS: Wants Plan Filing Deadline Extended to Oct. 19 --------------------------------------------------------------- AFY Holding Company and its wholly owned subsidiary, American Fibers and Yarns Company, ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to file a Chapter 11 plan and to solicit acceptances of a plan to October 19, 2009, and December 15, 2009, respectively. This is the Debtors' third request for an extension. The Debtors tell the Court that during the recent extension of their exclusive periods, they were able to secure Court approval for the sale of their Afton, Virginia facility. Significant time and resources have also been spent in the collection of outstanding accounts receivables. In view of these efforts, the Debtors relate that have not had ample opportunity to fully develop, in consultation with the Official Committee of Unsecured Creditors, a Chapter 11 plan. In addition, the Debtors say that they still have assets that must be sold and must close the sale of their Afton, Virginia facility. The Debtors will also need additional time to review and evaluate claims filed against their estates. About American Fibers Headquartered in Chapel Hill, North Carolina, American Fibers and Yarns Company -- http://www.afyarns.com/-- manufactures solution- dyed Polypropylene yarns in its Bainbridge, Georgia and Afton, Virginia production facilities for distribution throughout the United States. American Fibers is 100% owned by AFY Holding Company. On September 22, 2008, AFY Holding and American Fibers and Yarns filed voluntary petitions seeking Chapter 11 relief (Bankr. D. Del. Lead Case No. 08-12175). Edward J. Kosmowski, Esq., Michael R. Nestor, Esq., Robert F. Poppiti, Jr., Esq., and Nathan D. Grow, Esq., at Young, Conaway, Stargatt & Taylor, LLP, represent the Debtors as counsel. RAS Management Advisors, LLC serves as the Debtors' restructuring advisors. Epiq Bankruptcy Solutions, LLC serves as the Debtors' claims, noticing and balloting agent. The U.S. Trustee for Region 3 appointed creditors to serve on an Official Committee of Unsecured Creditors. Kenneth A. Rosen, Esq., Sharon L. Levine, Esq., Eric H. Horn, Esq., and Sean E. Quigley, Esq., at Lowenstein Sandler PC, represents the Debtors as counsel. William P. Bowden, Esq., Don A. Beskrone, Esq, and Amanda M. Winfree, Esq., at Ashby & Geddes, P.A., represent the Committee as Delaware counsel. When American Fibers sought bankruptcy protection from creditors, it listed between $10 million and $50 million each in assets and debts. AMR CORP: S&P Puts 'B-' Corporate Rating on CreditWatch Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'B-' corporate credit ratings, on AMR Corp. and its American Airlines Inc. subsidiary, on CreditWatch with negative implications, due to concerns about revenue generation and liquidity. AMR reported a second-quarter 2009 net loss of $390 million, which included about $70 million of nonrecurring charges. Excluding these charges, the net loss was $319 million, higher than the $298 million net loss (excluding $1.2 billion of nonrecurring charges) the company recorded in the previous-year period. Revenues declined by $1.3 billion (an 8.2% decline in traffic and a 16% decline in unit revenue), more than offsetting a $1.1 billion decline in fuel expense. The company has indicated, thus far, that bookings remain weak in the third quarter, which could result in a load factor decline of 1.5 points compared with the previous-year period. "We will evaluate AMR's revenue and liquidity outlook to resolve the CreditWatch listing," said Standard & Poor's credit analyst Betsy R. Snyder. "Our review of ratings on aircraft-backed debt will also consider any material changes in collateral coverage of these obligations," she continued. ATLANTA FIGHT CLUBS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Atlanta Fight Clubs, L.L.C. dba Knuckle Up Fitness 5956 Roswell Road Atlanta, GA 30342 Bankruptcy Case No.: 09-78879 Chapter 11 Petition Date: July 21, 2009 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Judge: Paul W. Bonapfel Debtor's Counsel: Craig J. Ehrlich, Esq. Ehrlich Law Group 457 Flat Shoals Ave., Suite 3 Atlanta, GA 30316 Total Assets: $1,600,100 Total Debts: $1,681,822 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/ganb09-78879.pdf The petition was signed by Craig J. Ehrlich, attorney of the Company. AURORA OIL: Has Until August 15 to Use Cash Collateral ------------------------------------------------------ Aurora Oil & Gas Corporation reports that the authorization by the U.S. Bankruptcy Court for the Western District of Michigan for the use of cash collateral is expected to terminate on August 15, 2009, subject to the extension of the Expiration Date. However, there are numerous terminating trigger events that could occur prior to August 15. A hearing to consider approval of the Interim Order on a final basis is scheduled for August 5, 2009, at 1:30 p.m., with any objections due by July 31, 2009, at 3:30 p.m. At the behest of Aurora Oil & Gas and its subsidiary, Hudson Pipeline & Processing Co., LLC, the Court on July 15, 2009, entered the Interim 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 authorizing the Debtors, among other things, to use cash collateral in accordance with a budget. The Debtors proposed to provide adequate protection to the syndicate of prepetition senior secured lenders for whom BNP Paribas is the first lien administrative agent; and the syndicate of prepetition second lien lenders for whom Laminar Direct Capital LLC is the second lien administrative agent. As of the Petition Date, the Debtors owed the First Lien secured lenders $72,021,445; and the Second Lien secured lenders $56,087,440. As additional adequate protection, the Debtors will pay in cash reasonable professional fees and expenses incurred by the Administrative Agents. The First Lien Administrative Agent is represented by: -- Russell L. Munsch, Esq. Kevin M. Lippman, Esq. Munsch Hardt Kopf & Harr, P.C. 3800 Lincoln Plaza, 500 N. Akard Street Dallas, Texas 75201 -- Rozanne M. Giunta, Esq. Lambert, Leser, Isackson, Cook & Giunta, P.C. 916 Washington Ave., Suite 309 Bay City, Michigan 48708 The Second Lien Administrative Agent is represented by: -- Trey Wood, Esq. Bracewell & Guiliani LLP 711 Louisiana Street, Suite 2300 Houston, Texas 77002 These professionals also provide services to the Administrative Agents: * FTI Consulting Inc., * H.J. Gruy & Associates, and * Ancell Energy Consulting, Inc. A full-text copy of the Interim Cash Collateral Order and the Debtors' 13-week cash flow projection is available at no charge at: http://ResearchArchives.com/t/s?3fd6 Aurora has said the bankruptcy filing constituted an event of default under: (A) the amended and restated senior secured credit facility dated August 20, 2007 between the Company, BNP and the lenders under the senior secured credit facility. Under the terms of the Senior Secured Credit Facility, BNP and the lenders have the right to declare the outstanding obligation of approximately $70 million (plus accrued and unpaid interest and other asserted charges) to be due and payable in full. The Company did not pay interest in the approximate amount of $1.1 million due June 30, 2009, for the period April 1, 2009, to June 30, 2009. (B) the second lien term loan dated August 20, 2007, between the Company, Laminar and the lenders under second lien term loan. Under the terms of the Second Lien Term Loan, Laminar and lenders under the second lien term loan have the right to declare the outstanding obligation of approximately $50 million (plus accrued and unpaid interest) to be due and payable in full. (C) a mortgage loan agreement dated May 26, 2009, between the Company and Northwestern Bank. Monthly interest only payments are due through November 1, 2009. As of the filing date, approximately $2.6 million remained outstanding under the Loan Agreement. Under the terms of the Loan Agreement, upon an event of default Northwestern Bank has the right to increase the interest rate to 7.45% which is an increase of 2.00%. Northwestern Bank also has the right to declare the entire unpaid principal balance and all accrued interest immediately due. (D) a master equipment lease agreement dated June 21, 2007, between the Company and Fifth Third Bank. On June 21, 2007, and December 19, 2007, the Company entered into two separate equipment leases under the Master Lease Agreement covering a total of 13 compressors. Monthly lease payments for both equipment leases are $45,823 until the expiration of the first lease on January 1, 2013. Upon expiration of the first lease, the monthly payments are reduced to $8,713 until the expiration of the second lease on June 1, 2014. The buyout provisions on the first and second lease is estimated to be approximately $1.1 million and $0.3 million, respectively. Under the terms of the Master Lease Agreement, upon an event of default Fifth Third Bank has the right to (1) have the Company promptly return all compressors at the Company's expense, (2) enter the Company's premises where the compressors are located at take possession, (3) sell, re-lease or otherwise dispose of the compressors without notice to the Company, (4) proceed by court action to enforce performance by the Company or (5) by offset, recoupment or other manner of application, apply any security deposit, monies held in deposit or other sums held by the Company against any obligations under the Master Lease Agreement whether or not the Company has pledged, assigned or granted a security interest to Fifth Third Bank in any or all such sums as collateral. Any remedies that may exist related to the events of default are stayed, under section 362 of the Bankruptcy Code. 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: Section 341(a) Meeting Set for August 24 ---------------------------------------------------- The first meeting of creditors in Aurora Oil & Gas Corporation and Hudson Pipeline & Processing Co., LLC's jointly administered bankruptcy cases will be held on August 24, 2009, at 11:00 a.m. at Logan Place West, 3429 Racquet Club Drive, Traverse City, Michigan 49684. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. 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 between $100 million and $500 million each in assets and debts. AURORA OIL: Taps Warner Norcross as Local Counsel ------------------------------------------------- Aurora Oil & Gas Corporation and Hudson Pipeline & Processing Co., LLC, request the U.S. Bankruptcy Court for the Western District of Michigan for authorization to employ Warner Norcross & Judd LLP as local counsel. Warner Norcross will: a) assist in advising the Debtors with respect to their rights, powers and duties as debtors and debtors-in-possession; b) attend meetings and negotiate with representatives of creditors and other parties-in-interest; and c) assist in advising and consulting the Debtors regarding the conduct of these cases, including all of the legal and administrative requirements of operating in Chapter 11. Stephen B. Grow, a partner at Warner Norcross, assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Warner Norcross' professionals who will have primary responsibility in the engagement and their hourly rates are: Robert Skilton, Esq. $420 Stephen Grow, Esq., $395 Inga Hofer, Esq. $210 Paralegal $110 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 between $100 million and $500 million each in assets and debts. AURORA OIL: U.S. Trustee Appoints Four-Member Panel --------------------------------------------------- Daniel M. McDermott, United States Trustee for Region 9, appointed four creditors to serve on the official committee of unsecured creditors in Aurora Oil & Gas Corporation and Hudson Pipeline & Processing Co., LLC's jointly administered Chapter 11 cases. The Creditors Committee members are: a) Janet Roskeley PMR Services, Inc. 1171 Hastings Street P.O. Box 734 Traverse City, MI 49686 Tel: (231) 946-5181 Fax: (231) 946-3810 b) Karen Findley Jet Subsurface Rod Pumps Corporation P.O. Box 1866 Gaylord, MI 49734 Tel: (989) 619-7513 Fax: (231) 331-6869 c) Rick Deneweth Copper Ridge Professional Condo Association Five (CRPC5) 9590 Edgewood Avenue Traverse City, MI 49684 Tel: (231) 929-2955 Fax: (231) 929-7199 d) Michael N. Coy Oil Energy Corporation 954 Business Park Drive, Suite #5 Traverse City, MI 49686 Tel: (231) 933-3600 Fax: (231) 933-4068 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About 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 between $100 million and $500 million each in assets and debts. BASIC ENERGY: Moody's Rates $225 Mil. Senior Notes at 'Ba3' ----------------------------------------------------------- Moody's Investors Service rated Basic Energy Services, Inc.'s proposed $225 million senior secured notes offering Ba3 (LGD 2, 23%). This offering replaces the previously rated (B3, LGD 4, 65%) $225 million senior secured notes offering that has been terminated. The ratings for the terminated offering have been withdrawn. Moody's also affirmed BAS's B2 Corporate Family Rating and the B2 Probability of Default Rating. However, the existing senior unsecured notes rating has been downgraded to Caa1 (LGD 5, 78%) from B3 (LGD 4, 65%). The ratings on the senior secured credit facilities will be withdrawn upon closing of the secured notes. The outlook remains negative. Under Moody's Loss-Given-Default methodology, the new secured notes are rated Ba3 (two notches above the CFR) due to their having a first lien on a substantial portion of BAS's assets. The new notes, which will repay borrowings under the senior secured credit facilities, are collateralized by essentially all of the company's assets with the exception of cash, working capital assets, certain inland barges, some real estate, and some assets already secured by capital leases. Moody's believe the value of the collateral is sufficient to cover the new secured notes. Simultaneous to closing the new notes, BAS will terminate the existing credit facility as it will result in the company being in breach of the indentures' secured debt carve-outs. At that time, Moody's will withdraw the ratings of the credit facility. Moody's estimates that the indenture for the senior unsecured notes currently permits a facility up to $30 million, which Moody's have incorporated into the liability waterfall. Given that Moody's fully do not expect the company to operate without a credit facility for any significant period of time, a new facility has been incorporated into the LGD liability waterfall. However, as a result of the higher amount of funded secured debt in the capital structure from the new notes (even if Moody's assume no new secured credit facility), the ratings for the existing senior unsecured notes are notched down to Caa1, two notches below the CFR. The CFR was downgraded on July 7, 2009, due to ongoing weakness in BAS's business, which is reflective of underlying weakness in the North American oilfield services markets. This weakness is expected to lead to significantly higher leverage for BAS over the next six months, placing it on the high end of the peer group, with no visible near-term catalyst for improvement. For further details, see the press release dated 7/7/09. Basic's liquidity profile is adequate to cover its cash needs over the next four quarters. Although the company will have to terminate its existing credit facility, the cash balances should be adequate to cover its needs, particularly given the ability to significantly reduce its capex spending. The company will have $157 million of cash on hand at 03/31/09 pro-forma for the new $225 million notes offering. This cash, along with expected EBITDA for the next four quarters, BAS should have sufficient liquidity to cover its planned capex of about $32 million, interest costs of about $40 million and lower working capital needs for 2009. The last rating action for Basic was on July 7, 2009 when Moody's downgraded the company's ratings and assigned a B3 to a proposed $225 million senior unsecured notes offering. Basic Energy Services is headquartered in Midland, Texas. BAYONNE MEDICAL: Sues Blue Cross for Fraud & Unethical Practices ---------------------------------------------------------------- Bayonne Hospital Center has filed a federal lawsuit against Horizon Blue Cross Blue Shield of New Jersey (Horizon), the largest provider of health insurance in the state. The lawsuit was filed in an effort to halt Horizon's illegal, fraudulent, egregious and unethical business practices which are endangering the lives of the citizens of New Jersey and threatening Bayonne Hospital Center's financial viability, all in the name of boosting its own bottom line and prospects for an initial public offering. Horizon's practices and activities include, among other things: a systematic campaign of intimidating patients into abandoning emergency care at BHC that is already underway, including calls to patients and the sending of couriers to instruct patients to leave the hospital while still in the midst of emergency treatment; egregious and arbitrary denials of coverage and claims for emergency care at BHC; and constant efforts to under-compensate the only emergency care option in the Bayonne community, a hospital just rescued from bankruptcy. The complaint, filed late July 21 in the U.S. District Court in Newark, New Jersey, provides a detailed account of Horizon's business practices which run counter to the insurer's contractual duties to its customers, its obligations under state law and its stated commitment to the interest of public health. Some of the most offensive Horizon practices detailed in the complaint include: -- A systematic campaign discouraging patients from seeking emergency care at BHC despite it being the closest and safest option for urgent care for the residents of Bayonne -- Intimidation of patients by threatening denial of coverage if they seek treatment at BHC -- Interference with care by sending couriers to BHC to tell patients undergoing medically necessary treatments to leave BHC and seek care at a hospital that is "in network" -- Indefensible denial of claims, often while the patient is still undergoing care -- Unilateral determinations by Horizon bureaucrats that emergency room patients are medically stable enough to be discharged to home or transferred to other in-network facilities without consulting the patient's attending physician The complaint not only details Horizon's atrocious behavior and policies with BHC, but also exposes Horizon's multi-billion dollar financial success at a time when New Jersey's hospitals cannot afford to provide healthcare to the communities which they serve. The complaint also reveals Horizon's gold-plated executive compensation packages and its publicly stated plans for conversion to a "for profit" entity and initial public offering. Joining the suit as a plaintiff is Dr. John Godinsky, a Horizon customer who was admitted to Bayonne Hospital Center through its emergency room for atrial fibrillation (irregular and often rapid heart rhythm). While still in the hospital, Horizon contacted Dr. Godinsky and Bayonne administration to inform him his stay was being denied based on what Horizon erroneously claimed was a pre- existing condition. Against the advice of his attending physicians, Dr. Godinsky left the hospital fearing the large financial obligation associated with the uncovered stay. Given the cavalier manner in which Horizon attempts to steamroll hospitals into accepting grossly inadequate reimbursement rates and payment policies, it should come as no surprise that approximately half of the hospitals in New Jersey are losing money. Perhaps even less surprising is the fact that Horizon is petitioning to become a "for profit" entity, clearing the way for an initial public offering and a big payday for its executives. Daniel Kane, CEO of Bayonne Hospital Center, said, "Ultimately, Horizon's attacks are not on hospitals but on the communities they serve. Their relentless assault on patients, doctors and hospitals for the sake of their own profits is a prime reason that New Jersey ranks last in the country for emergency rooms per capita. Neither this hospital nor the people of Bayonne will be bullied by Horizon. BHC filed this case to fight for patients' rights for quality health care and hopes that other hospitals will do the same in their conflicts with Horizon." Bayonne patients with questions about their insurance being accepted at the hospital should call their Insurance Hotline at 201-858-7342. Bankruptcy Plan On April 9, 2009, the Court confirmed the first amended joint plan of liquidation under Chapter 11 of Bayonne Medical Center dated and filed on February 23, 2009. Bayonne filed a liquidation plan, which was co-sponsored by the official committee of unsecured creditors, after sold its 278-bed nonprofit acute-care hospital in Bayonne. The hospital was sold for $41.5 million, consisting of $100,000 cash, plus the assumption of $7 million owing to one of the secured creditors and the remainder by taking on various pre- and post-bankruptcy obligations. The Plan was made possible through a settlement with the secured creditor, according to Bill Rochelle at Bloomberg News. The terms of the Plan, according to the report, are: -- After costs of the Chapter 11 case and priority claims are paid, unsecured creditors will split up the first $3 million. -- The secured lender, on account of its deficiency claim of $46.7 million, will take the next $1 million. -- Unsecured creditors and the lender will split the remainder 50/50. About Bayonne Hospital Center Established in 1888, Bayonne Hospital Center -- http://www.BayonneMedicalCenter.org/-- is a 278-bed, fully accredited, award-winning acute-care hospital located in Hudson County. Since opening its doors more than a century ago, it has been committed to providing quality, comprehensive, community- based healthcare services to more than 70,000 people annually. With its finger on the pulse of the community, Bayonne Hospital Center continually develops new and expanded services to meet the changing needs of the people it serves. Bayonne Medical Center filed for Chapter 11 protection April 16, 2007 (Bankr. D. N.J. Case No. 07-15195). Lawrence C. Gottlieb, Esq., Adam C. Rogoff, Esq., and Eric J. Haber, Esq., at Cooley Godward Kronish LLP, represent the Debtor in its restructuring efforts. Stephen V. Falanga, Esq., at Connell Foley LLP, is the Debtor's local counsel. Kurtzman Carson Consultants LLC is the Debtor's claims and noticing agent. Andrew H. Sherman, Esq., and Boris I. Mankovetskiy, Esq., at Sills Cummis Epstein & Gross PC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $1 million to $100 million. The Debtor's exclusive period to file a plan expired Nov. 12, 2007. BAYWOOD INT'L: Inks Final Settlement with Farmatek -------------------------------------------------- Baywood International, Inc., on June 12, 2009, entered into a final Settlement Agreement and Mutual Release with Farmatek IC VE DIS TIC, LTD, STI, memorializing a previously disclosed settlement reached by the Company and Farmatek in February 2009. The Agreement relates to a claim filed by Farmatek on December 27, 2007, in the Superior Court of California, County of Orange, against the Company's wholly owned subsidiary, Nutritional Specialties. Farmatek alleged breach of contract and a violation of California Business and Professional Code. Farmatek was seeking $4,000,000 plus punitive damages and costs. The Agreement provides that the Company will pay an aggregate of $250,000: * $50,000 before June 22, 2009; * $75,000 by September 15, 2009; * $75,000 by December 15, 2009; and * $50,000 by March 15, 2010 As part of the execution of the Agreement, Farmatek filed a Request for Dismissal of its original claim. Each party executed mutual releases. About Baywood International Headquartered in Scottsdale, Ariz., Baywood International Inc. (OTC BB: BYWD) -- http://www.bywd.com/-- is a nutraceutical company specializing in the development, marketing and distribution of nutraceutical products under the LifeTime(R) and Baywood brands. Going Concern Doubt In its quarterly report for the period ended March 31, 2009, the Company noted it had negative net working capital of roughly $10,931,000 at March 31, 2009. The Company has not yet created positive cash flows from operating activities and its ability to generate profitable operations on a sustainable basis is uncertain. The Company is in default on a number of notes payable. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company believes that its existing cash resources, combined with projected cash flows from operations may not be sufficient to execute its business plan and continue operations for the next 12 months. Management has taken steps to reduce the Company's operating expenses. Additionally, the Company is evaluating its strategic direction aimed at achieving profitability and positive cash flow. In addition, the Company will continue to explore various strategic alternatives, including business combinations and private placements of debt or equity securities. In April 2009, the Company engaged an investment banking firm to assist management in exploring business combinations or raising additional capital. However, the Company may not be successful in obtaining additional financing on acceptable terms, on a timely basis, or at all, in which case, the Company may be forced to make further cut backs, or cease operations. Malone & Bailey, PC, in Houston, expressed substantial doubt about Baywood International Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the Company's recurring losses from operations and working capital deficiency. At March 31, 2009, the Company had $17,817,331 in total assets and $17,284,371 in total liabilities. BEARINGPOINT INC: Creditors, Former Workers Go Head-to-Head on Pay ------------------------------------------------------------------ Darlene Darcy at Washington Business Journal reports that BearingPoint Inc.'s creditors and former workers are waiting for the decision of the Hon. Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York on whether the Company will pay $30 million in paid time off that employees claim they are due. According to Business Journal, creditors argue that they would get more money from BearingPoint's liquidation, while employees said that they were promised the additional compensation. Business Journal states that creditors argued that: -- they didn't have time to contest the payments; -- the order was made under Chapter 11 reorganization and not liquidation; -- BearingPoint was looking for a buyer for its public services business, but didn't say that a voluntary liquidation was possible. Judge Gerber ruled in February that BearingPoint be allowed to pay out wages and other employee benefits, including severance and paid time off. Workers were told that they would be rewarded with full pay for earned time off if they stayed with BearingPoint, but the restructuring later turned into a liquidation of the Company's assets, Business Journal states. According to the report, Deloitte LLP closed a deal with BearingPoint in May in which it would fork over $350 million for BearingPoint's North American public services practice, its biggest operation, which stipulated that Deloitte would be responsible for paying employee bonuses while BearingPoint covered paid time off for the 4,200 workers who went to Deloitte. Creditors, according to Business Journal, asked the Court to reverse its order allowing BearingPoint to pay out workers' earned paid time off, saying that the $30 million in paid time off could increase to $100 million for all units if the payments were allowed to stand. Business Journal relates that Judge Gerber told creditors and BearingPoint during a June 29 hearing to try to negotiate a resolution. BearingPoint, Inc. -- http://www.BearingPoint.com/-- was one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. Based in McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP - - has approximately 15,000 employees focusing on the Public Services, Commercial Services and Financial Services industries. The Company's service offerings are designed to help clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next- generation" technology. BearingPoint, Inc., fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 protection on February 18, 2009 (Bankr. S.D.N.Y., Case No. 09-10691). Alfredo R. Perez, Esq., at Weil Gotshal & Manges LLP, in Houston; Marcia J. Goldstein, Esq., Ronit J. Berkovich, Esq., and Jose R. Alcantar, Esq., at Weil Gotshal & Manges LLP, in New York, represent the Debtors as restructuring counsel. AlixPartners, LLP, is the Debtors' restructuring advisors. Greenhill & Co., LLC, is the Debtor's financial advisor & investment banker. Jeffrey S. Sabin, Esq., at Bingham McCutchen LLP represents the Creditors' Committee as counsel. BearingPoint disclosed total assets of $1,762,689,000, and debts of $2,231,839,000 as of September 30, 2008. BEARD COMPANY: Gets $825,388 in VISA Patent Suit Settlement ----------------------------------------------------------- The Beard Company reports that as of June 1, 2009, the Company; starpay.com, l.l.c.; VIMACHINE, Inc.; Marc Messner, Kirit Talati; and MEDICALMAP-EMR, LLC, entered into an agreement with Visa International Service Association and Visa U.S.A. Inc. to settle a lawsuit filed against Visa by starpay and VIMACHINE in the United States District Court for the Northern District of Texas on May 8, 2003, Case No. CIV:3-03CV0976-L. Starpay.com and VIMACHINE filed a lawsuit alleging patent infringement and trade secret misappropriation. Visa U.S.A. Inc. and Visa International Service filed counterclaims. While expressly denying and disclaiming wrongdoing or liability of any kind whatsoever, the parties agree to enter into the Agreement to avoid further expense, inconvenience, and the distraction of litigation and to put to rest certain claims among the parties. Under the terms of the Agreement, certain patents and patent rights owned by starpay or VIMACHINE were granted to Visa and related parties. On June 8, 2009, the Settlement funds were wired by Visa to the other parties to the Agreement. The Agreement will become effective when the Stipulated Order of Dismissal has been executed by the parties and is filed with the Court. Plaintiffs' counsel has advised that motions concerning the filing of the Order of Dismissal are still being filed, and that the deadline for filing has been extended to July 31. Beard Company's share of the Settlement amounted to $825,388. Beard Company says a press release concerning the transaction was delayed pending advices from the Company's counsel that Visa has granted permission to disclose the Company's share of the Settlement. The Company expects to record a $825,388 gain in the quarter ending June 30, 2009, as all of the patent rights owned by starpay (and the Company's 71% share thereof) in connection with the patent rights conveyed to Visa have been fully depreciated. Herb Mee, Jr., President of The Beard Company, stated, "After more than six years of litigation, we are pleased that this matter has been resolved, that a cash settlement has been received, and that we can move on to more constructive pursuits." A full-text copy of the Settlement Agreement is available at no charge at http://ResearchArchives.com/t/s?3fd7 About The Beard Company The Beard Company creates, acquires, or invests in businesses, primarily related to natural resources, that management believes have high growth or above-average profit potential and can enhance shareholder value. The Company is involved in oil and gas activities; coal reclamation activities; minerals exploration and development through its Geohedral investment, and e-commerce activities conducted through its starpay(TM) subsidiary. The Company is headquartered in Oklahoma City and its common stock trades on the OTC Bulletin Board under the symbol "BRCO". Going Concern Doubt As reported in the Troubled Company Reporter on April 23, 2008, Cole & Reed, P.C., in Oklahoma City, expressed substantial doubt about The Beard Company's ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended December 31, 2007, and 2006. Cole & Reed pointed to the company's recurring losses and negative cash flows from operations. The Beard Company's consolidated balance sheet at March 31, 2009, showed $1,672,000 in total assets; $2,102,000 in total current liabilities, $420,000 in long-term debt, $2,250,000 in long-term debt for related entities, and $169,000 in other long-term liabilities. BH S&B HOLDINGS: Protests Ch. 7 Conversion Plea Sought by Ableco ---------------------------------------------------------------- BH S&B Holdings LLC, owner of Steve & Barry's discount clothing chain, objects a proposal by Ableco Finance LLC for the conversion of the Chapter 11 bankruptcy proceedings to Chapter 7, saying it is well on its way to reconciling its outstanding claims and that a reorganization plan is still a possibility, according to Law360. BH S&B Holdings LLC filed for bankruptcy protection together with seven other affiliates on November 19, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-14604). The seven debtor-affiliates are BH S&B Distribution LLC, BH S&B Lico LLC, BH S&B Retail LLC, BHY S&B Intermediate Holdco LLC, Cubicle Licensing LLC, Fashion Plate Licensing LLC, and Heritage Licensing LLC. BH S&B was formed by investment firms Bay Harbour Management and York Capital Management in August 2008 to acquire the business operations and assets of bankrupt retailer Steve & Barry's for $163 million in August 2008. Steve and Barry's, based in Port Washington, New York, was a specialty retailer of apparel and accessories, selling, among other things, university apparel and lifestyle brands, private-label casual clothing, and exclusive celebrity endorsed apparel. Steve & Barry's had 240 locations when it was bought and the new owners had planned to cut that down to 173 stores. BH S&B had intended to operate certain Steve & Barry's stores as going concerns and to liquidate inventory at other locations. Since the sale closing, however, for various reasons, including the general health of the American economy and the state of the retail market in particular, sales at all stores have been disappointing, and BH S&B's revenue has suffered. As a result, BH S&B was not in compliance with certain covenants under their senior secured credit facility and had no prospects for continued financing of their business as a going concern. In consultation with its lenders, BH S&B decided that the appropriate course of action to maximize value for the benefit of all of its stakeholders was an orderly liquidation in Chapter 11. Bay Harbour Management is an SEC registered investment advisor with significant experience in purchasing distressed companies and effectuating their turnaround. The firm's holdings have included the retailer Barneys New York, the facilities based CLEC Telcove, and the former Aladdin Casino, now operating on the Las Vegas strip as the Planet Hollywood Resort and Casino following its rebranding and turnaround. York Capital Management is an SEC registered investment advisor with offices in New York, London, and Hong Kong with more than $15 billion in assets under management. York Capital was founded in 1991 and specializes in value oriented and event driven equity and credit investments. BH S&B is 100% owned by BHY S&B Intermediate Holdco LLC. BH S&B and its affiliates' chapter 11 cases are presided over by the Honorable Martin Glenn. Joel H. Levitin, Esq., and Richard A. Stieglitz, Jr., Esq., at Cahill Gordon & Reindel LLP, in New York, serve as bankruptcy counsel to BH S&B and its affiliates. RAS Management Advisors LLC acts as restructuring advisors, and Kurtzman Carson Consultants LLC as claims and notice agent. BOMBARDIER RECREATIONAL: Moody's Retains 'Caa1' Corporate Rating ---------------------------------------------------------------- Moody's Investors Service notes that Bombardier Recreational Products Inc. has recently repurchased US$60 million of its term debt at a discount to face value. BRP obtained an amendment to its bank facility earlier this year that enables it to repurchase up to US$250 million of debt through at least April 30, 2010. While the completed repurchases are not yet considered to be sufficient to constitute a distressed exchange, Moody's could take rating action to indicate a distressed exchange if such discounted repurchases continue over the near term. BRP's Caa1 Corporate Family Rating and negative rating outlook are unchanged. The rating and outlook continue to consider the weak sales trends for the company's motorized recreational products combined with a lack of visibility for the sector due to the depth of the economic recession and persisting weakness in consumer discretionary spending. The last rating action on BRP was taken on April 9, 2009, when Moody's downgraded the company's Corporate Family Rating to Caa1 with a negative outlook. Headquartered in Valcourt, Quebec, Bombardier Recreational Products Inc. is a leading designer, manufacturer, and distributor of motorized recreational products worldwide. BORDERS GROUP: Focuses on Young-Adult Books to Boost Sales ---------------------------------------------------------- Jeffrey A. Trachtenberg at The Wall Street Journal reports that Borders Group Inc. will launch a teens department to capitalize on writers like Stephenie Meyer and Sarah Dessen, as young-adult authors provide a badly needed lift to booksellers. Citing Fordham University's Graduate School of Business Administration professor Albert N. Greco, The Journal says that young-adult fiction, fantasy, and science fiction will generate about $744.3 million in U.S. publisher revenue this year, increasing 13% from $659.1 million in 2008. According to The Journal, the Borders Ink shops will stock graphic novels, fantasy, and young-adult titles and are expected to be available in 80% to 90% of the 513 superstores Borders operates nationwide by the end of August. The report says that some have already opened in Michigan. Borders, The Journal relates, has also planted created a Borders Ink page in Facebook in hopes of becoming a "source for info on all things teen lit and graphic novels." Borders declined to say how much it is spending on its teen initiative, The Journal states. Headquartered in Ann Arbor, Mich., Borders Group, Inc. -- http://www.bordersgroupinc.com/-- describes itself as a $3.8 billion retailer of books, music and movies with more than 1,100 stores and over 30,000 employees worldwide. Borders owns a majority stake in Paperchase Products Limited, a leading gifts and stationery retailer in the United Kingdom, and showcases their products in their stores, as well as Books etc., Borders other, mostly London-based bookshop chain. As reported by the Troubled Company Reporter on April 7, 2009, Jim McTevia, managing partner of Bingham Farms-based turnaround firm McTevia & Associates, said that downsizing and cuts in inventory most likely wouldn't staunch, and Borders would probably be forced to file for Chapter 11 bankruptcy protection this year. CABLEVISION SYSTEMS: Fitch Upgrades Issuer Default Rating to 'BB-' ------------------------------------------------------------------ Fitch Ratings has upgraded the Issuer Default Rating assigned to Cablevision Systems Corporation and its wholly owned subsidiary CSC Holdings, Inc., to 'BB-' from 'B+'. Additionally, Fitch has upgraded the ratings assigned to the various debt securities issued by CVC and CSCH by one notch as summarized at the end of this release. The Rating Outlook for all of CVC and CSCH's ratings remains Stable. Approximately $12.2 billion of debt outstanding as of March 31, 2009 is affected by Fitch's action. Fitch's rating actions incorporates the continuing strengthening of CVC's credit profile, the company's improved liquidity position and financial flexibility and Fitch's expectation of sustainable free cash flow generation. On a consolidated basis, CVC's leverage metric for the last 12 months ended March 31, 2009, was 5.14 times (x) reflecting the steady improvement from 6.86x as of year-end 2006. Fitch expects that CVC's leverage metric will continue to improve during the balance of 2009 due to lower debt levels and ongoing EBITDA growth and finish 2009 with leverage approximating 4.9x on a consolidated basis. Driven by the combination of a 14% year-over-year EBITDA increase and a 5% year-over-year decline of CVC's capital expenditures, the company's free cash flow (defined as cash from operations less capital expenditures and dividends) increased over 110% during the first quarter when compared with the same period last year. After generating nearly $383 million of free cash flow during 2008, Fitch expects CVC to generate in excess of $600 million of free cash flow during 2009 (assuming constant dividends). During 2009, Fitch expects CVC's capital expenditures to decline relative to 2008 capital expenditure levels both in terms of the absolute dollar amount and as a percentage of revenues. The decline will be precipitated by lower capital spending within the company's core cable segment, which as a percent of cable segment revenues, Fitch expects to trend closer to 10% of cable segment revenues during 2009. Entering 2009 Cablevision's liquidity position was a concern within its credit profile. While subsidiaries of CVC maintain relatively strong revolver borrowing capacity, the company's liquidity position was weakened by high levels of near-term scheduled maturities as over $1.7 billion of unsecured debt and bank amortization was scheduled to mature during 2009. Fitch's concern was substantially alleviated by CVC's continued access to the capital markets through CSCH's issuance of nearly $1.4 billion of senior unsecured notes during the first quarter of 2009, which when coupled with existing cash on hand ($335 million as of March 31, 2009) and anticipated free cash flow, adequately positions the company to retire remaining maturities scheduled during 2009 and 2010. Having successfully addressed its near term scheduled maturities, CVC appears to be proactively addressing the $6.1 billion of debt scheduled to mature during 2011 and 2012, including over $4.5 billion (as of March 31, 2009) scheduled during 2012. While outside of Fitch's typical rating horizon, the 2012 scheduled maturity is substantial and CVC will not be able to satisfy its obligations through internal liquidity sources creating refinancing risk. CSCH successfully amended and restated its senior secured credit agreement extending the final maturity date of the Incremental Term Loan Facility for lenders holding approximately $1.2 billion of outstanding Incremental Term Loan Facility loans to March 29, 2016 from March 29, 2013, effectively pushing approximately $837 million of 2012 maturities to 2016. From Fitch's perspective, the potential spin-off of the MSG segment is a modest positive for CVC's credit profile. The spin- off would simplify CVC's business and increases focus on the company's core cable operations. Additionally the spin-off would isolate any financing requirements related to the renovation of MSG in an entity separate from CVC's cable operations, limiting the risk that CVC would use cash generated by its cable operations to support MSG investments. Lastly, depending on how MSG would be capitalized upon its spin-off from CVC, CVC could use any potential proceeds received from MSG to reduce outstanding debt and lessen the refinancing risk associated with the maturities scheduled during 2011 and 2012. Overall, Fitch's ratings reflect the solid operating profile and competitive strength of CVC's core cable business derived from CVC's tightly clustered subscriber base, the company's efficiently managed cable plant, and the company's growing revenue diversity owing to the success of CVC's Triple Play service offering and growing commercial business. CVC's scale and system clustering provide the company with competitive advantages in terms of driving higher operating efficiencies through its cable plant, taking cost out of customer premise equipment, lowering programming costs growth, and positioning the company to enhance its product offerings so that it can differentiate them from the competition's offering. CVC's cable business consistently produces industry leading service penetration levels, average revenue per unit and ARPU growth rates in an increasingly competitive operating environment. Within the context of existing competitive pressures and weak economic conditions, the ratings incorporate Fitch's expectation that the company will continue to generate solid operating metrics and sustainable free cash flow growth over Fitch's rating horizon. Additionally, the ratings recognize that ARPU, revenue and EBITDA growth rates will slow relative to historical growth rates. Rating concerns center on CVC's ability to maintain its relative competitive position given the changing competitive and economic environment, growing revenues beyond its core Triple Play service offering, efficiently managing its cable plant to maximize desirable high-definition content while balancing capital expenditures to maximize free cash flow generation. Fitch believes event risks surrounding CVC's acquisition and non-core investment strategy as well as its financial policies related to the allocation of capital to CVC shareholders is expected to remain a key rating consideration. A Stable Rating Outlook reflects Fitch's expectation that the company's operating profile will remain relatively consistent during the near term in the face of competition and slowing economic conditions. Further, the Stable Outlook considers the company accommodating non-core acquisitions, and investments in a credit neutral manner and the absence of other leveraging transactions. Fitch has upgraded these ratings: CVC -- IDR to 'BB-' from 'B+'; -- Senior Unsecured Debt to 'B-' from 'CCC+/RR6'. CSCH -- IDR to 'BB-' from 'B+'; -- Senior Secured Credit Facility to 'BB+' from 'BB/RR1'; -- Senior Unsecured Debt to 'BB' from 'BB-/RR3'. CARAUSTER INDUSTRIES: To Obtain $75-Mil. Exit Financing from GE --------------------------------------------------------------- Carauster Industries Inc. and its debtor-affiliates said in documents submitted to the Bankruptcy Court that upon consummation of its proposed Chapter 11 plan of reorganization, it will obtain $77 million of bankruptcy exit financing GE Capital Markets Inc. and other banks based on these terms: Borrowers Caraustar Industries and certain domestic debtor subsidiaries Guarantors Existing and future domestic subsidiaries of Caraustar Lenders GE Capital Markets Inc. and other lenders acceptable to agent. Agent General Electric Capital Corporation Maximum Amount $75 million, including a letter of credit subfacility of up to $22 million. The revolver commitment will also include a swing line subfacility of up to $7,500,000. Maturity June 1, 2012 Use of Proceeds Loans made on the date of the financing is consummated will be used to refinance the Debtors' existing working capital indebtedness on the consummation date of their Chapter 11 plan. Caraustar delivered to the Bankruptcy Court a supplement to their first amended joint Chapter 11 plan of reorganization that contains (a) amended and restated articles of incorporation, (b) amended and restated by-laws, (c) term sheet for exit facility credit agreement, (d) term sheet for new secured notes indenture, (e) reorganized Caraustar shareholders agreement, (f) summary of reincorporation transactions, and (g) rejected executory contracts. According to the Troubled Company Reporter on July 7, 2009, the Court approved the disclosure statement to Caraustar Industries Inc.'s pre-negotiated Chapter 11 plan, paving the way for the Plan to go to creditors for voting. The Court will convene a hearing to consider confirmation of the Plan on August 5. Pre-bankruptcy, Caraustar reached agreement with holders of approximately 83% of its 7-3/8% Senior Notes maturing June 1, 2009, and 91% of its 7-1/4% Senior Notes maturing May 1, 2010, on the terms of a Chapter 11 restructuring that would reduce the company's debt obligations by approximately $135 million. Under the Chapter 11 plan, the Company's common stock holders will receive their pro rata share of $2.9 million, or about 10 cents per share, subject to certain conditions, the Company said. Further, the Company's existing Senior Notes will be exchanged for an aggregate of $85 million in new Senior Secured Notes and 100% of the common stock of the reorganized company. Unsecured creditors will receive full recovery. The reorganized company is expected to emerge as a private entity with Wayzata Investment Partners LLC becoming the Company's controlling shareholder, Caraustar stated. A full-text copy of the supplement to the amended Chapter 11 plan is available for free at http://ResearchArchives.com/t/s?3fd1 About Caraustar Industries Headquartered in Austell, Georgia, Caraustar Industries, Inc. -- http://www.caraustar.com/-- is one of North America's largest integrated manufacturers of 100% recycled paperboard and converted paperboard products. Caraustar serves the four principal recycled boxboard product end-use markets: tubes and cores; folding cartons; gypsum facing paper and specialty paperboard products. Caraustar reached an agreement with holders of roughly 83% of its 7-3/8% Senior Notes maturing June 1, 2009, and 91% of its 7-1/4% Senior Notes maturing May 1, 2010, on the terms of a cooperative financial restructuring that would reduce the Company's debt obligations by roughly $135 million. The Company and its domestic subsidiaries filed voluntary Chapter 11 petitions along with a pre-negotiated Plan of Reorganization in the United States Bankruptcy Court for the Northern District of Georgia on May 31, 2009 (Bankr. N.D. Ga. Lead Case No. 09-73830). James A. Pardo, Jr., Esq., and Mark M. Maloney, Esq., at King & Spalding represent the Debtors on their restructuring efforts. The Debtors listed $50 million to $100 million in assets and $100 million to $500 million in debts. CCS MEDICAL: U.S. Trustee Fails to Appoint Creditors' Committee --------------------------------------------------------------- NetDockets reports that the United States Trustee for Region 3 filed a notice with the U.S. Bankruptcy Court for the District of Delaware indicating that no Official Committee of Unsecured Creditors has been appointed in the bankruptcy case of CCS Medical, Inc. The U.S. Trustee said it received an insufficient indication of interest by creditors to serve on the committee. Founded in 1994, CCS Medical, Inc. -- http://www.ccsmed.com/-- has become a leading provider of medical supplies. CCS Medical assists patients that need diabetes test strips, insulin pumps, urological supplies, ostomy supplies, advanced wound care dressings and prescription drugs. Clear Water, Florida-based CCS Medical specializes in providing a convenient way for patients to receive supplies for their chronic illnesses in a manner that saves them time and money. CCS Medical, along with its affiliates, filed for Chapter 11 on July 8, 2009 (Bankr. D. Del. Case No. 09-12390). At the time of the filing, CCS Medical said that it had assets of $100 million to $500 million against debts of $500 million to $1 billion. Willkie Farr & Gallagher LLP serves as co-counsel to the Debtors. Goldman, Sachs & Co., serves as investment banker and Alvarez & Marsal Healthcare Industry Group, LLC, as restructuring advisor. Epiq Bankruptcy Solutions LLC is claims agent. CENTRAL MONTGOMERY: Case Summary 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Central Montgomery Dermatology dba Center for Aesthetics Associates, LLC 1003 South Broad Street Lansdale, PA 19446 Bankruptcy Case No.: 09-15345 Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Debtor's Counsel: Paul Brinton Maschmeyer, Esq. Maschmeyer Karalis P.C. 1900 Spruce Street Philadelphia, Pa 19103 Tel: (215) 546-4500 Email: pmaschmeyer@cmklaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/paeb09-15345.pdf The petition was signed by James C. Fairfield. CHOCOLATE MOUNTAIN: Case Summary & 2 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Chocolate Mountain Ranch Estates, LLC 10004 Chocolate Summit Drive El Cajon, CA 92126 Bankruptcy Case No.: 09-10513 Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. ------ -------- Marwan Younis 09-10513 Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court Southern District of California (San Diego) Judge: Louise DeCarl Adler Debtor's Counsel: Louis Clinton Burr, Esq. Van Dyke & Associates, APLC 12760 High Bluff Drive, Suite 250 San Diego, CA 92130-2019 Tel: (760) 485-3046 Email: clintburr@hotmail.com Richard S. Van Dyke, Esq. Van Dyke & Associates, APLC 12760 High Bluff Drive, Suite 250 San Diego, CA 92130-2019 Tel: (858) 365-5588 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 2 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/casb09-10513.pdf The petition was signed by Marwan A. Younis, managing member of the Company. CHRYSLER FINANCIAL: Asks Dealers to Pay Reserve Money ----------------------------------------------------- Chrysler Financial Services is asking dealers of Chrysler Group LLC to pay large sums to cover possible loan losses, Automotive News reported. The payment, which ranges from $75,000 to $250,000, is designed to cover the risks as early loans payoffs and defaults of consumer loans, the report said. During Chrysler's bankruptcy, Chrysler Financial was replaced by GMAC Financial Services as the primary retail and commercial lender for the dealers. The lending company, however, still holds considerable clout with dealers that have loans with the company. If a dealer refuses to pay the reserve money, Chrysler Financial may block a dealer from getting a new floorplan lender by refusing to release its commercial lien on a dealer's inventory and assets, which is a standard requirement in floorplan agreements, the report said. Chrysler Financial declined to comment on possible actions to prevent a dealer from finding a new lender, according to the report. About Chrysler Financial Chrysler Financial served as Chrysler LLC's preferred lender until the automaker filed for bankruptcy protection on April 30. It was replaced by GMAC Financial Services as part of the government- backed restructuring of Chrysler. With a loan portfolio of $45 billion, Chrysler Financial continues to offer dealership insurance and financial products to consumers, AP reported. As reported by the TCR on July 10, 2009, Fitch Ratings has affirmed and removed from Rating Watch Negative Chrysler Financial Services Americas LLC's Issuer Default Ratings: Long-term IDR at 'CC'; and Short-term IDR at 'C'. At the same time, CFS' senior debt ratings have been revised following changes in Fitch's rating definitions published in March 2009. CHRYSLER FINANCIAL: Repays $1.5 Billion in TARP Loan ---------------------------------------------------- Chrysler Financial, the former lending arm of Chrysler LLC, said July 14 that it has repaid $1.5 billion in government loans, The Wall Street Journal reported. The company received the loan on January 16 through the U.S. Department of Treasury's Troubled Asset Relief Program. The loan was plowed into new consumer incentive programs and used to fund 85,000 consumer loans for the purchase of Chrysler vehicles, the report said. Chrysler Financial had five years to pay off the loan. The company, however, said its TARP loan contained provisions that increased its costs over time, motivating the company to pay off the loan quickly, according to an Associated Press report. About Chrysler Financial Chrysler Financial served as Chrysler LLC's preferred lender until the automaker filed for bankruptcy protection on April 30. It was replaced by GMAC Financial Services as part of the government- backed restructuring of Chrysler. With a loan portfolio of $45 billion, Chrysler Financial continues to offer dealership insurance and financial products to consumers, AP reported. As reported by the TCR on July 10, 2009, Fitch Ratings has affirmed and removed from Rating Watch Negative Chrysler Financial Services Americas LLC's Issuer Default Ratings: Long-term IDR at 'CC'; and Short-term IDR at 'C'. At the same time, CFS' senior debt ratings have been revised following changes in Fitch's rating definitions published in March 2009. CHRYSLER LLC: 50% of Rejected Dealers Still in Business ------------------------------------------------------- Chrysler Group LLC has acquired a strong dealer network from Chrysler LLC, which remains in Chapter 11. The company's new dealer network is comprised of 2,385 dealers open for business across the United States, and are selling new Chrysler, Jeep(R) and Dodge vehicles and servicing Chrysler products with genuine, authorized Mopar(R) parts: * 1,364 Chrysler, Jeep and Dodge dealers are located in rural communities, * 592 Chrysler, Jeep and Dodge dealers serving Metro areas, * 429 Chrysler, Jeep and Dodge dealers serve secondary markets More than 50 percent of the 789 dealers whose contracts were rejected during Chrysler LLC's bankruptcy reorganization remain in business -- selling other manufacturer's new vehicles, selling and servicing used vehicles, or operating groundbreaking new business ventures, such as acting as a buyer's advocate for consumers purchasing a vehicle. In addition, Chrysler launched a job- posting function as part of its dealer computer system to match displaced dealership employees with remaining dealerships. To date, 239 dealerships have hired 436 displaced employees and 202 open jobs are currently posted. Chrysler actively worked with dealers whose contracts were rejected to facilitate a soft landing within the constraints of bankruptcy reorganization. Its dealer reductions took place as part of bankruptcy reorganization, and as a result there was not funding to repurchase vehicle, parts or special tools inventory. Chrysler, working with the major wholesale floorplan lenders, facilitated the redistribution of 100 percent of the remaining vehicle inventory Chrysler was not obligated to make arrangements for the left-over inventory, but felt it was the right thing to do. Chrysler matched "rejected" dealers who wanted to sell parts and special tools inventory with remaining dealers interested in purchasing parts and special tools inventory: * 590 of the 789 dealers requested assistance with parts redistribution * Of the 590 dealers, 528 (almost 90 percent) have received commitments for redistribution There is a substantial cost to Chrysler to support underperforming dealers: * $33 million annually in administrative costs to maintain 789 discontinued dealers (personnel to support ordering, auditing, processing of payments and invoices, etc.) * $150 million annually for Marketing and Advertising for the 789 dealers (corporate cost -- above and beyond dealer contributions) * $1.5 billion in lost revenue due to underperformance in 2008 CY (the 789 rejected dealers achieved only 73 percent of their minimum sales responsibility, resulting in 55,000 lost vehicle sales, which equates to $1.5 billion. This is revenue that is lost not only to Chrysler, but to the dealer, the community and the state, as well) * $1.4 billion (over 4 years) for product engineering and development of "sister" vehicles (the company had to develop "sister" vehicles when the majority of the dealer network did not have all three brands under one roof) In addition to the "hard" costs, there are soft costs that affect Chrysler Group LLC's corporate and brand reputations. When there are too many dealers in an area, the dealers are not as profitable as they could be, resulting in a reduced ability to invest back in the business, which ultimately affects a customer's perception of the dealer and the brand. A first impression is lasting. Once a customer is lost over their first negative impression of a lackluster dealership, it's very difficult to get them back. Too many dealers in a market drive down the prices on vehicles because they compete against each other for the sale, which negatively impacts dealers and the company, as well as residual values, which can hurt the consumer. Retaining the best salespeople is key to both selling vehicles and providing the customer with an exemplary experience. It is difficult to keep top talent if they have the potential to triple their income at other manufacturers' dealerships. (Average throughput at Chrysler LLC dealerships prior to the rejection was 405 sales annually. The U.S. average is 525, Honda's average is 1,219, Toyota is 1,292 and Nissan is 693. Again this contributes to a negative perception by consumers and hurts the company's, and dealer's brand image). Simple fact is new vehicle sales have declined 40 percent since 2007. * The U.S. dealer network was built to service a 16 million unit per year industry which no longer exists. There are too many dealers for the business. * From 1990 to 2007, annual new vehicle sales in the United States averaged 16 million units per year. In 2008, that figure dropped to 13.5 million units, and in 2009 it is forecasted to be approximately 10 million units. * Even the dealers whose contracts were rejected testified during the bankruptcy proceedings that Chrysler's dealer network was too large and needed to be reduced. Chrysler has been reducing the size of its dealer network for more than 10 years. The bankruptcy reorganization necessitated speeding the process up and completing it during the court process. The U.S. Bankruptcy Court, Southern District of New York, approved Chrysler's motion to reject the contracts of 789 dealers In the opinion approving the motion, Judge Gonzalez noted that the "court concluded that the procedures utilized by the Debtors to determine which contracts would be assumed and assigned to New Chrysler was a reasonable exercise of the Debtors' business judgment. The decision-making process used by the debtors was rational and an exercise of sound business judgment." He further noted "The Court also finds that no evidence has been presented to the Court showing that the Debtors made their individual rejection decisions irrationally, such that the rejections demonstrate bad faith or whim or caprice." (Opinion regarding authorization of rejection of all executory contracts and unexpired leases with certain domestic dealers and granting certain related relief -- Case No. 09-50002, Judge Arthur J. Gonzalez) About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The Company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan, and Australia. In 2007, Cerberus Capital Management LP acquired an 80.1% stake in Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Chrysler Group Mulls Over New Sedan Plan ------------------------------------------------------ Chrysler Group LLC mulls over the replacement of its mid-sized sedan twins, the Chrysler Sebring and Dodge Avenger, with a pair of models built on different platforms, according to a July 20 report by the Automotive News. The change is being considered as part of a plan to differentiate vehicles sold in combined Chrysler, Dodge and Jeep dealerships, the report said. According to the report, the Dodge Avenger's replacement could switch to rear-wheel drive, with the engine mounted longitudinally and would be based on a modified Dodge Challenger platform. The future Chrysler Sebring, meanwhile, would remain a front-wheel- drive car with a transverse-mounted engine but it would switch to Fiat S.p.A.'s D-Evo platform. Basing the Chrysler Sebring and Dodge Avenger replacements on different platforms is part of Chrysler Group's plan to eliminate sister vehicles among its brands, Automotive News reported. Between 2005 and 2008, the company incurred about $1.4 billion in incremental costs to develop those vehicles. Chrysler Group is expected to decide plans for its mid-sized sedans early next month, according to the report. CHRYSLER LLC: Court Approves Lemon Law Claims Assumption Protocol ----------------------------------------------------------------- Chrysler LLC and its affiliated debtors obtained court approval to implement a set of protocol governing Chrysler Group LLC's assumption of claims under lemon laws. Judge Arthur Gonzalez authorized the Debtors to file a notice of the terms of the Chrysler-Fiat Sale Order governing the assumption of lemon law claims, and other documents in each of the lemon law actions. He also authorized the Debtors to file a dismissal, stipulation or other papers to allow creditors to pursue their claims assumed by Chrysler Group solely against the new company. The claimants are authorized to pursue the assumed claims by: (i) filing papers in the lemon law action to indicate that Chrysler Group is being substituted for the Debtors as the defendant in the proceeding, provided that the papers contain an affirmative statement that only the assumed claims are being pursued against Chrysler Group, and that any additional pre-closing liabilities will be pursued only by filing a proof of claim in the Debtors' cases; (ii) dismissing the lemon law action and filing a new action solely against Chrysler Group, which seeks only relief with respect to the assumed claims; or (iii) any other similar arrangement acceptable to the Debtors and Chrysler Group in their sole discretion that results in no claims being pursued against the Debtors in any non-bankruptcy forum and no "excluded liabilities" being pursued against Chrysler Group. Any claimant who complies with one of those three alternatives will not be considered in violation of the "automatic stay," Judge Gonzalez ruled. In response to Don Kozich's objection, Judge Gonzalez ruled that the lawsuit filed by Mr. Kozich against DaimlerChrysler Corp. will not be subject to the terms of the court order. Mr. Kozich filed an objection on grounds that his lawsuit stemmed from alleged fraudulent acts and is not a lemon law action. Ohio Attorney General Richard Cordray, Theodore Becker and Adam Becker also objected to the approval of the Debtors' motion on grounds that it would empower the Debtors and Chrysler Group to unilaterally determine whether an arrangement regarding procedures in pending cases is acceptable, that the motion is silent on the issue of how their claims will be classified, among other reasons. Mr. Cordray eventually withdrew his objection. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The Company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan, and Australia. In 2007, Cerberus Capital Management LP acquired an 80.1% stake in Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Essex County's Motion to Proceed With Claims ---------------------------------------------------------- The Essex County Sheriff's Office, through a notice, says that it will ask Judge Gonzales to lift the automatic stay on July 30, 2009, to permit the Essex County Sheriff's Office to proceed with its cross-claims against Chrysler LLC in a civil lawsuit. The lawsuit was filed by Kathleen O'Neill against DaimlerChrysler Corporation subsequently known as Chrysler LLC, Awilda Colon, the City of Orange and the Orange Police Department, Essex County Sheriff's Officer Daniel Amoresano, Government Employees Insurance Company, as well as numerous fictitiously named defendants. Ms. O'Neill suffered injuries from an accident while driving a 1991 Dodge Dakota pickup truck. Her vehicle burst into flames when it hit a concrete abutment after being struck with a 1987 Toyota Supra. She subsequently asserted a products liability claim against DaimlerChrysler alleging design and manufacturing defects with her vehicle's fuel tank system. David L. Blank, Esq., of Schwartz Simon Edelstein Celso & Zitomer LLC, in Morristown, New Jersey, the Essex County Sheriff Office's counsel, says that it is his client's position that any bodily injuries which Ms. O'Neill sustained were caused by Chrysler LLC, which prompted the Essex County Sheriff to assert cross-claims against Chrysler LLC. On May 28, 2009, the Superior Court of New Jersey dismissed all claims against Chrysler without prejudice in the O'Neill lawsuit. Ms. O'Neill and the Essex County Sheriff's Office subsequently filed separate proofs of claim against Chrysler. Mr. Blank asserts that there is cause for the automatic stay to be lifted pursuant to Section 362(d)(1) of the Bankruptcy Code which provides that on request of a party-in-interest and after notice and a hearing, the court will grant relief from the stay for cause, including the lack of adequate protection of an interest in property of the party-in-interest. If the Bankruptcy Court will not lift the automatic stay, the Essex County Sheriff's Office will ask the Court to require Chrysler LLC to provide adequate protection pursuant to Section 361 of the Bankruptcy Code. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The Company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan, and Australia. In 2007, Cerberus Capital Management LP acquired an 80.1% stake in Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: House Committee Wants Chrysler, GM Documents ---------------------------------------------------------- A House committee asked the Obama administration to release documents on the federal bailouts of Chrysler Group LLC and General Motors Co., to seek more details on decisions that led to their bankruptcies, The Associated Press reported. The request to the Obama administration, approved by the House Financial Services Committee on a voice vote, seeks information about the work of the Obama administration's auto task force and the billions in federal aid to the automakers, the report said. "They negotiated, they reviewed and they approved every aspect of the Chrysler and General Motors reorganization. We don't know how the president's auto task force reached its conclusion," AP quoted Rep. Spencer Bachus, an Alabama Republican, as saying. The resolution, proposed by House Republican Leader John Boehner, highlighted resentment in Congress over the government's work to push GM and Chrysler into bankruptcy. The resolution does not compel the Obama administration to turn over the documents; it moves next to the full House for consideration, according to the AP report. Meanwhile, representatives of Chrysler and General Motors Corp. are set to explain before a congressional panel next week what the automakers are doing with their federal loans, according to a July 20 report by wwj.com. The financial officers are among those invited to testify before the congressional panel that has been examining how the funds taken from the Troubled Asset Relief Program are being used. Also expected to testify is Ron Bloom, the new head of President Barack Obama's Automotive Task Force. The TARP was implemented by the U.S. government to help struggling financial institutions but some of the funds were allocated to help the restructuring of Chrysler and GM. The hearing is set for 10 a.m. on Monday, July 25 at Wayne State University in Detroit. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The Company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan, and Australia. In 2007, Cerberus Capital Management LP acquired an 80.1% stake in Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: House Passes Bill Restoring Dealershp Agreements -------------------------------------------------------------- Despite opposition from the Obama administration, the U.S. House of Representatives approved a plan that would force Chrysler Group LLC and General Motors Corp. to restore their agreements with dealers, Bloomberg News reported. The provision, part of a $46-billion budget bill for government agencies that passed 219-208, would require the automakers to restore franchise agreements with their dealers as a condition of receiving federal aid. Chrysler terminated 789 dealerships as part of its bankruptcy while GM has identified about 1,300 dealers that are to be wound down through October 2010. The termination has angered lawmakers who said that many of their hometown car dealers were closed down without a full explanation or enough time to prepare. Representative Steve LaTourette, an Ohio Republican who proposed the plan, said it would not necessarily require the automakers to keep the dealerships open, only that they end agreements in accordance with state franchise laws. He said, that procedure, which would mean compensating affected dealers who may now be in another business, was short-circuited by the bankruptcy courts, Bloomberg reported. Only Rep. John Dingell, a Michigan Democrat, spoke against the proposal on the House floor, saying Congress was "playing with fire." "This is the wrong lever, and the wrong time and the wrong way. The result of this playing with fire could be a serious disaster, which we visit upon ourselves, upon the auto industry and upon all of those who are dependent on it," Detroit Free Press quoted Mr. Dingell as saying. The automakers and the Obama administration previously warned Congress that restoring the dealers could jeopardize the automakers' recovery from bankruptcy. In a July 9 statement, Chrysler said the legislation would "jeopardize the viability of the new company," and that it "used sound business judgment" to determine the appropriate size for its dealer network. "The reorganization under the guidance of the U.S. Bankruptcy Court necessitated that tough, painful business decisions be made including reducing the number of manufacturing facilities, employees and dealers. These decisions were not taken lightly, nor were they made irrationally," Chrysler said. The Obama administration, meanwhile, said in a July 15 statement that the decision by Chrysler and GM to rationalize their dealer networks was "a critical part of their overall restructuring to achieve long-term viability in order to save jobs in the long run, and to improve the prospects for the companies' repayment of the substantial taxpayer investments." "Without the significant steps these automakers have taken to revamp their operations, the companies would have failed, imperiling every GM and Chrysler dealer in the country," the statement said. A version of the plan in the Senate has 25 cosponsors. Rep. David Obey, a Wisconsin Democrat, said it was unlikely the plan would survive as written. "What we do want is to see that language used as an opportunity to get the auto dealers and auto companies to sit down and work out a better appeals process," Detroit Free Press quoted Mr. Obey as saying. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The Company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan, and Australia. In 2007, Cerberus Capital Management LP acquired an 80.1% stake in Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Merrill Report Says Chrysler Market Share to Decline ------------------------------------------------------------------ Chrysler is likely to be half its current size in a few years due to lack of product, The Detroit News reported, citing the annual "Car Wars" report prepared by Merrill Lynch. Chrysler's share of the market including its Dodge and Jeep brands has been on a steady decline, slipping from 13.6% in 2005 to 11% last year, with 1.45 million vehicles sold and 9.8% for the first six months of this year. "Chrysler severely lags the industry on a number of key metrics, which is an ominous sign for market share. In our view, this is a result of a lack of investment by previous owners and the dubious potential for Fiat products in the U.S. market," analyst John Murphy wrote in the annual report. The annual Car Wars report by Merrill Lynch, now owned by Bank of America, essentially measures the freshness of an automaker's lineup by looking at statistics such as the average age of its vehicles, and the percentage of new models in the range, according to The Detroit News report. Over the next four years, Merrill Lynch predicts that Chrysler and GM will have the smallest proportion of entirely new or redesigned vehicles in their lineup, 33% for Chrysler and 45% for GM. A Chrysler spokesman said the automaker is rolling out 24 vehicles in the next 48 months and has "no plans to be half our size in the future," The Detroit News reported. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The Company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan, and Australia. In 2007, Cerberus Capital Management LP acquired an 80.1% stake in Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Stipulation with Daimler Further Amended ------------------------------------------------------ In connection with the asset sale to Fiat S.p.A., the Court entered an order on June 5, 2009, approving a certain "Settlement Agreement III," which provides that, among other things, Chrysler LLC and its affiliates will release Daimler AG and certain of its affiliates "from any and all Section 101 Claims, including Avoidance and Other Actions," with certain exceptions. Section 6(b) of Settlement Agreement III provides that Daimler and certain of its affiliates are released from certain claims except to the extent that the Creditors Committee delivers, within 45 days from the Approval Order, a written demand to Debtors' counsel that Old Carco LLC bring a claim against Daimler as set forth in a proposed complaint. The 45-day period ended July 20, 2009. Additionally, pursuant to Section 6(b), the Complaint must be filed within 25 calendar days after the delivery of the Committee Demand, but in no event later than 60 calendar days after the entry of the Approval Order. If Old Carco LLC refuses to file the Complaint, the Creditors Committee must obtain leave from the Court to file the Complaint within the period. The 60-day period expires on August 4, 2009. Section 10 of Settlement Agreement III provides that the forgiveness, release and discharge by Daimler North America Finance Corporation set forth in Section 7(a) of Settlement Agreement III, and the related agreements of DNAF in Section 7(c) of Settlement Agreement III, are expressly conditioned upon and will not be effective until the occurrence of certain loan release condition, which is based on those time periods as set forth in Section 6(b). In a stipulation and agreed order signed by Judge Gonzalez, the Debtors, the Official Committee of Unsecured Creditors, Daimler AG, Daimler North America Corporation, Daimler North America Finance Corporation, Daimler Investments US Corporation, and their related entities stipulate to modify Section 6(b) of Settlement Agreement III to provide the Creditors Committee with an additional week to deliver the Committee Demand, if any, to Debtors' counsel, and should the Debtors refuse to file any Complaint, for the Committee to obtain leave from the Court to file the Complaint on behalf of the Debtors' bankruptcy estates. Upon the Creditors Committee's delivery of a copy of the proposed Complaint to counsel for Debtors and counsel for Daimler, the parties agree that Section 6(b) is modified to provide that: (i) the time period that the Creditors Committee will have to deliver the Committee Demand to Debtors' counsel is extended from July 20, 2009, to July 27, 2009; and (ii) the date by which the Debtors' or the Creditors Committee, after obtaining leave from the Court, may file the Complaint in accordance with the provisions of the Section 6(b), is extended from August 4, 2009, to August 11, 2009. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The Company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan, and Australia. In 2007, Cerberus Capital Management LP acquired an 80.1% stake in Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: To Keep 3rd Shift at Ontario Minivan Factory ---------------------------------------------------------- Chrysler has reversed a decision to cancel the third shift at its minivan plant in Windsor, Ontario, a move that will save more than 1,000 jobs, the Reuters reported. Chrysler said in March it planned to cut the shift as part of an effort to restructure its operations in the face of slumping sales, the report notes. "It's great news for 1,200 CAW Local 444 members out at the Chrysler plant and obviously the spinoff jobs that come with it," Reuters quoted Canadian Auto Workers President Ken Lewenza as saying. "Obviously, it's a strong message from Chrysler that they plan to maintain their market share lead in the minivan segment," he said. Reid Bigland, president and chief executive of Chrysler Canada, echoed Mr. Lewenza's comments. "This is great news for our employees, our community and our buyers," he said in a statement. "Demand for our minivans in the second half of 2009 has been steadily rising and this decision will allow us to meet that demand." The plant in Windsor employs about 4,450 hourly workers and makes the Dodge Grand Caravan, Chrysler Town & Country minivans and the Volkswagen Routan. The plant is closing for two weeks as part of its regular summer shutdown, and after that it had been set to operate on only two shifts, according to the report. CHRYSLER LLC: Togut Segal Bills $1.3 Million for May Work --------------------------------------------------------- Professionals retained in connection with the Debtors' bankruptcy cases filed applications for payment of fees and reimbursement of expenses for the specified period: Professional Applicable Period Fees Expenses ------------ ----------------- ---- -------- Togut Segal & 04/30/09 - 05/31/09 $1,326,055 $13,851 Segal LLP The Siegfried 05/22/09 - 05/31/09 27,751 1,862 Group LLP 06/01/09 - 06/30/09 54,904 22,326 Schulte Roth & 06/01/09 - 06/30/09 1,271,811 26,715 Zabel LLP Cahill Gordon & 06/01/09 - 06/30/09 127,887 3,860 Reindel LLP Greenhill & Co. 06/01/09 - 06/30/09 0 124,709 LLC About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The Company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan, and Australia. In 2007, Cerberus Capital Management LP acquired an 80.1% stake in Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Wilmington's Motion To Lift Stay to Exercise Rights ----------------------------------------------------------------- Wilmington Trust Company, a state-chartered bank and trust company, asks the Court to lift the automatic stay so that it can exercise its rights as a secured creditor or compel the Debtors to abandon any interest in certain vehicles. In their Chapter 11 cases, the Debtors assumed and assigned two dealerships as part of their deal with Fiat S.p.A. The dealerships are I.G. Burton of Seaford LLC which operates a Chrysler, Jeep, Dodge dealership in Seaford, Delaware, and I.G. Burton of Milford LLC which operates a Chrysler, Jeep, Dodge dealership in Milford, Delaware. Before the Petition Date, WTC entered into an agreement with Seaford to provide it with floor-plan financing pursuant to which WTC agreed, among other things, to lend Seaford money to be used to purchase new vehicles from the Debtors, and Seaford agreed to repay amounts advanced by WTC for the new vehicles. According to Deborah Kovsky, Esq., at Pepper Hamilton LLP, in Detroit, Michigan, the Agreement also grants WTC a security interest in the vehicles which was perfected by the filing of a financing statement with the UCC Filing Section of the Delaware Department of State on January 11, 2007. As of July 8, 2009, Seaford is indebted to WTC for $1,514,373, all of which is secured by a first-priority, purchase money security interest in the Vehicles, Ms. Kovsky says. She adds that Milford has agreed to be bound to Seaford's obligations to WTC. On February 6, 2009, Seaford and Chrysler Motors LLC entered into an agreement that contemplated the termination of the Seaford dealership as of March 9, 2009. As required by the terms of the dealership agreement between Chrysler and Seaford, as well as by Delaware law, Chrysler agreed to repurchase the 2009 model year vehicles owned by Seaford, all of which were subject to WTC's purchase money security interest. On April 2, 2009, the Debtors took delivery of and agreed to repurchase 61 vehicles owned by Seaford that were subject to WTC's purchase money security interest, Ms. Kovsky tells the Court. She says that the Debtors agreed to pay Seaford $1,514,373 for the Vehicles. Ms. Kovsky contends that at no time before or after the delivery of the Vehicles did WTC agree to release its security interest in the Vehicles. She notes that in a payoff letter, WTC advised Chrysler that the Vehicles were subject to its perfected security interest and provided Chrysler with the amount that would have to be paid before WTC would release its security interest. On May 19, 2009, WTC filed its response to the Debtors' motion to sell its assets to a purchaser formed by Fiat in which, inter alia, WTC demanded adequate protection of its security interest in the Vehicles. As a result of negotiations among the Debtors, the purchaser, and WTC, the order entered approving the Sale Motion provides that the Assets do not include the Vehicles. Subsequently and in the ordinary course of its business, the Debtors delivered the Vehicles to Milford pursuant to its redirection program, which involves the sale of inventory of dealers whose dealership agreements have been terminated through dealerships whose dealership agreements have not been terminated. Ms. Kovsky tells the Court that Chrysler's intention for doing this was to permit Milford to sell the Vehicles so that the proceeds of sale could be applied as determined by Seaford, Milford, and WTC. She explains that under its agreement with WTC, Milford will sell the Vehicles and the proceeds of the sale will be applied to the WTC Debt, thus paying down WTC's secured claim against Chrysler. WTC has been trying since early June 2009 to resolve the issues, Ms. Kovsky says. At the request of Debtors' counsel, counsel for WTC even went so far as to draft a stipulation addressing the issues. "While WTC does not believe that the Debtors oppose, or could oppose, the relief requested in this motion, to date the Debtors have been unable to address WTC's concerns as set forth herein," Ms. Kovsky asserts. The Court will convene a hearing on WTC's Request on July 30, 2009. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The Company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan, and Australia. In 2007, Cerberus Capital Management LP acquired an 80.1% stake in Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIT GROUP: DBRS Downgrades Long Term Debt Ratings to 'CC' --------------------------------------------------------- DBRS has downgraded the Long-Term Debt ratings of CIT Group Inc. and its related subsidiaries to CC from CCC. Concurrently, DBRS has downgraded the Company's Floating Rate Senior Notes Due August 2009 (ISIN #US125581CR74) to C from CCC. CIT's Issuer Rating remains CCC and its Short-Term Instruments rating remains R-5. All ratings remain Under Review with Negative Implications, where they were placed on April 24, 2009. The rating actions follows CIT's announcement that it has entered into a $3.0 billion secured loan facility, commenced a cash tender offer for certain debt and initiated a recapitalization plan that will include a series of exchange offers. Indicating that default is imminent, the $1.0 billion Floating Rate Senior Notes due August 17, 2009, were downgraded to C from CCC. This action reflects the announced cash tender offer for the Notes. Under the terms of the offer, bondholders will receive $800 for each $1,000 of principal amount of the Notes tendered. Bondholders tendering their Notes on or before July 31, 2009, will receive $825 per $1,000 of principal of the Notes tendered. Importantly, CIT indicated that failure to receive tenders of at least 90% of the aggregate principal of the Notes outstanding would result in the offer not being completed, which may lead to the Company seeking protection under the U.S. Bankruptcy Code. DBRS views the tender offer as coercive and therefore a default under DBRS policy. DBRS will lower the rating to D upon completion of the exchange. Under DBRS policy, certain securities are typically placed in a default status, if an exchange results in a final outcome that leads to terms that are disadvantageous to bondholders or effectively a forced consent exchange because failure to do so would likely lead to an issuer's inability to pay. In addition, CIT's announcement indicated that a comprehensive series of exchange offers will be forthcoming as part of the Company's recapitalization plan. As such, DBRS has lowered the Long-Term Debt ratings on all remaining CIT long-term debt to CC, given DBRS's anticipation that further exchange offers are likely to be coercive and disadvantageous to bondholders. CIT's Issuer Rating remains Under Review with Negative Implications as the Company's earnings ability remains weak. This weakness is illustrated in CIT's regulatory filing today disclosing that the Company anticipates reporting an outsized loss of $1.5 billion for the second quarter of 2009. The Company's liquidity profile is severely pressured and funding remains challenged. In DBRS's view, the announced credit facility only provides liquidity relief in the immediate term absent a successful debt restructuring. Moreover, liquidity is further stressed by the announced Cease and Desist order recently issued by the FDIC, which among other actions, prohibits CIT Bank from increasing the amount of brokered deposits above the $5.5 billion held as of July 16, 2009. DBRS views this condition as further constraining the Company's financial flexibility and reducing the likelihood that the Company will be successful in transitioning from a capital markets funded business to a diversified deposit funding model. DBRS's review will include an assessment of the Company's comprehensive restructuring plan. The review will consider any debt-for-equity exchange offers and their impact on existing bondholders. Moreover, DBRS will review the plan's impact on CIT's future earnings power, liquidity profile, capital base and funding strategy. In addition, DBRS will assess the extent that the Company's franchise has been weakened by the recent negative headlines and limited new lending capacity. DBRS's ratings have been underpinned by the strength of the Company's franchise. Further, DBRS believes that the recessionary environment will continue to drive the Company's credit costs higher pressuring profitability. 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 20, Standard & Poor's Ratings Services said that it downgraded CIT Group Inc., including lowering its long-term counterparty credit rating to 'CC' from 'CCC+'. The ratings remain on CreditWatch Negative, where they were placed June 12, 2009. "The downgrade reflects S&P's belief that there is an increased risk that CIT may declare bankruptcy in the near term or take other actions that will be detrimental to debt holders," said Standard & Poor's credit analyst Rian M. Pressman, CFA. Moody's Investors Service simultaneously lowered CIT Group Inc.'s senior unsecured rating to Ca from B3 and issuer rating to Ca from B3. The downgrade follows CIT's announcement that that it expects no additional support from the U.S. government and that it is evaluating alternatives, which Moody's believes includes a high probability of a near-term bankruptcy filing. CIT GROUP: Fitch Expects Rating Cut to 'RD' on Tender Offer ----------------------------------------------------------- CIT Group Inc. announced that it has commenced a cash tender offer to purchase the company's senior notes due August 17, 2009 (August Notes) for 80% of par, according to Fitch Ratings. Upon completion of the offer, Fitch expects to downgrade CIT's long- term Issuer Default Rating to 'RD' from 'C', as Fitch would consider the purchase a Coercive Debt Exchange. On July 16, 2009, Fitch downgraded CIT's IDR to 'C' which indicated that a default ('D') or restricted default ('RD') appears imminent or inevitable. The tender offer has been driven by the announcement that CIT has entered into a $3 billion loan facility provided by the company's major bondholders. The Credit Facility will be secured by substantially all of CIT's unencumbered assets and includes fairly stringent collateral coverage covenants. Such terms are extremely onerous and may limit the company's future financial flexibility. While CIT's announcements may forestall an event of default due to a bankruptcy filing, consummation of the debt tender offer is consistent with Fitch's criteria of a CDE. Specifically, bondholders will receive a reduction in principal and, absent the tender offer, there would exist a high probability that CIT would file for bankruptcy. It is also possible that, as part of the company's broader recapitalization plan, bondholders will receive equity or other hybrid instruments in exchange for debt which would also constitute a CDE. A rating of 'RD' indicates an issuer has experienced an uncured payment default on a material financial obligation but which has not entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, and which has not otherwise ceased business. Despite receipt of Credit Facility proceeds and announced recapitalization plans, Fitch believes bankruptcy is still a potential outcome. Under that scenario Fitch would downgrade CIT's IDR to 'D'. Fitch also acknowledges CIT Bank's consent to an Order to Cease and Desist (C&D) issued by the FDIC. The order prevents extension of credit to CIT and affiliates without written consent from the FDIC and the Utah Department of Financial Institutions. CIT Bank is also prohibited from declaring or paying dividends and increasing brokered deposits above $5.5 billion. The ring-fencing of the bank's assets significantly reduces any chance of CIT furthering its bank strategy. In the event CIT files for bankruptcy, Fitch believes it is highly likely that regulators would seize control of CIT Bank. Under that scenario Fitch would downgrade the bank's IDR and Individual Ratings to 'D' and 'F', respectively. CIT GROUP: Mulls Which Assets to Sell, May Let Go of Two Units -------------------------------------------------------------- Jeffrey McCracken, Serena Ng, and Mike Spector at The Wall Street Journal report that CIT Group and its advisers are evaluating which assets to sell. Citing a person familiar with the matter, The Journal says that asset sales are an essential part of plans to reduce the beleaguered lender's $75 billion balance sheet, "to half or much less of that." According to the report, the reductions are essential because CIT can't raise new funding in the marketplace. People familiar with the matter said that CIT is most likely to sell its aviation-finance and rail-finance operations, The Journal relates. CIT and its bankers have determined that the Company will struggle to make money in its aviation and railcar businesses, according to The Journal. CIT has about 116,000 railcars, which are leased to shippers and railroads. The Company also leases airplanes to 100 airlines around the world. The Journal says that CIT explored a sale of its railcar-leasing business in 2008 and collected bids from potential buyers, but executives stopped the sale because the bids were too low. According to The Journal, CIT is likely to keep its: -- corporate-finance department -- its largest division that handles asset-based loans and other commercial loans; and -- factoring business, which provides trade finance to retailers and many small retail vendors. The Journal says that the fate of its vendor-financing business, which allows companies like Dell and Konica Minolta to finance their customers purchase, is uncertain. The Journal states that the division is losing business rapidly. As reported by the Troubled Company Reporter on July 22, 2009, CIT lost its vendor financing deal with Microsoft Corp. 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: Recapitalization Plan Won't Affect S&P's 'CC' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on CIT Group Inc. (CC/Negative/C) are not immediately affected by the company's announcement that it had initiated a recapitalization plan and entered into a $3 billion loan facility provided by a group of major bondholders. The current rating level continues to reflect a significantly heightened risk of bankruptcy. The ratings remain on CreditWatch Negative, where they were placed on June 12, 2009. As the first step in a planned restructuring of its liabilities, CIT commenced a cash tender offer for its outstanding floating- rate senior notes due August 17, 2009. The price offered is less than face value, and the company has indicated that without a successful tender offer it may have to file for bankruptcy protection. In accordance with S&P's criteria -- following the successful execution of this tender offer -- S&P will lower its counterparty credit rating on the company to 'SD' (selective default). In addition, S&P will lower the ratings on the affected debt issue to 'D'. If the tender offer is successful, S&P expects that a comprehensive series of exchange offers will follow, with a restructuring plan announced by October 1, 2009. In S&P's opinion, the $3 billion loan facility will allow CIT to meet its liquidity obligations in the short-term and forestall an immediate declaration of bankruptcy. However, S&P believes the risk of bankruptcy remains significantly heightened, especially given the company's continued net losses (in excess of $1.5 billion in second-quarter 2009), deficiencies in regulatory capital at the holding company, and the lack of a sustainable mechanism for funding. CITY LOBSTER: Files for Chapter 11 Bankruptcy Protection -------------------------------------------------------- Rock 49th Rest. Corp., dba City Lobster & Steak, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York. According to Crain's New York Business, City Lobster said that it owes more than $500,000 to 50 various creditors. City Lobster owes $230,000 to its largest creditor, landlord 1251 America Associates II L, although the restaurant is disputing that amount. City Lobster also owes almost $27,000 to Jordan Lobster and Seafood in Island Park, N.Y., and almost $9,000 to Buckhead Beef of South Plainfield, N.J. Court documents say that City Lobster owed some $25,000 to Brother Jimmy's Restaurant, but an amended filing deleted mention of that debt. Crain's quoted Andrew Rigie, director of operations for the New York State Restaurant Association, as saying, "Many of the restaurants in the business districts have been hit hard. They can't rely on the second turn at lunch anymore. Many restaurants are lucky to fill all their tables once during lunch." Rock 49th Rest. Corp. is located near Radio City Music Hall and Rockefeller Center. It was noted in last year's Zagat Survey as a well-situated standby for business lunches. CRAFTMADE INT'L: Gets Covenant Relief Under $40-Mil. BofA Loan -------------------------------------------------------------- Craftmade International, Inc., said effective July 10, 2009, it completed a $40 million Loan and Security Agreement with Bank of America, N.A. The Revolving Loan Agreement provides for revolving loans in an aggregate amount up to $40,000,000 and is secured by substantially all of the Borrowers' assets, excluding its current real estate holdings. On July 10, 2009, Woodard-CM, LLC, a wholly owned subsidiary of Craftmade, entered into a Term Loan Agreement with The Frost National Bank, San Antonio, Texas, in conjunction with executing a Term Loan Note, in the principal amount of $3,500,000, payable to Frost, secured by Woodard's primary manufacturing and distribution facility located in Owosso, Michigan. In aggregate the proceeds from the Revolving Loan Agreement and the Term Loan Agreement were used to pay off amounts owed under the Third Amended and Restated Loan Agreement with Frost, as Administrative Agent and the Other Lenders, dated as of December 31, 2007. Loans under the Revolving Loan Agreement may be deemed to be either base rate loans or LIBOR rate loans. Base rate loans will bear interest at a per annum rate equal to the greater of (a) the Prime Rate (as published by Bank of America); (b) the Federal Funds Rate plus 0.50%; or (c) 30-day London Interbank Offered Rate plus 1.0%; plus an applicable margin ranging from 0.75% to 1.25% based on Craftmade's cash flow performance as measured by the Fixed Charge Coverage Ratio for the most recent month. LIBOR rate loans will bear interest at LIBOR for the applicable Interest Period -- 30, 60 or 90 days -- plus an applicable margin ranging from 3.00% to 4.00% based on Craftmade's cash flow performance as measured by the Fixed Charge Coverage Ratio for the most recent month. The maximum amount of loans under the Loan Agreement will be determined by a formula taking into consideration the receivables and inventory of the Borrowers, net of any reserves put into place by Bank of America. The Loan Agreement will terminate on July 7, 2012. Pursuant to the Revolving Loan Agreement, the financial covenants require Craftmade to maintain a Fixed Charge Coverage Ratio of not less than 0.85 for the initial periods, and building to not less that 1.0 by August 2009 and thereafter. All wholly owned domestic subsidiaries of Craftmade and Design Trends LLC, a 50% owned subsidiary of Craftmade, have agreed to be guarantors of the Revolving Loan Agreement. Should Craftmade achieve and maintain a minimum of $6,000,000 of availability -- calculated as the Borrowing Base minus the principal balance of all loans -- for 60 days, the Fixed Charge Coverage Ratio shall not be tested until such time as availability drops below $6,000,000. The Frost Note bears a floating interest rate based on Prime Rate (as published in the Wall Street Journal) plus 2.0% per annum. Pursuant to the Frost Note, Woodard has agreed to pay equal monthly payments of principal and interest based on a 10-year amortization schedule, with the unpaid principal and interest payable on July 7, 2012. As security for the payment and performance of the Frost Note, Woodard granted to Frost a lien in the Michigan Facility pursuant to a mortgage, which facility Woodard acquired as part of the January 4, 2008 acquisition of certain net assets of Woodard, LLC. Craftmade entered into guaranty agreements with Frost pursuant to which Craftmade, together with certain of its direct or indirect subsidiaries, has agreed to guarantee payment and performance of the Frost Note by Woodard. The Revolving Loan Agreement and the Term Loan Agreement are subject to customary events of default. If any event of default occurs and is continuing, Bank of America or Frost, respectively, may accelerate amounts due under the agreements and exercise other rights and remedies. "These loans will provide essential support for our working capital needs during a challenging economic time, and they also expand our banking relationships for the next three years," commented J. Marcus Scrudder, Craftmade's Chief Executive Officer. "Refinancing of our line of credit has been a top priority for the company. We're happy to have established a new banking relationship with Bank of America, while at the same time continuing our long association with Frost." About Craftmade Founded in 1985, Craftmade International, Inc. -- http://www.craftmade.com/-- is engaged in the design, manufacturing, distribution and marketing of a broad range of home decor products, including proprietary ceiling fans, lighting products and outdoor furniture. The Company distributes its premium products through a network of independent showrooms and mass retail customers through its headquarters and distribution facility in Coppell, Texas and manufacturing plant in Owosso, Michigan. CREATIVE LOAFING: Publisher Teams Up With BIA to Fend Off Atalaya ----------------------------------------------------------------- Michael Hinman at Washington Business Journal reports that an auction may be set for Creative Loafing Inc. next month. The U.S. Bankruptcy Court for the Middle District of Florida is preparing to set the rules on July 27 for the August 25 equity auction of Creative Loafing's assets, Business Journal states. According to Business Journal, Atalaya Capital Management and Creative Loafing agreed on a plan last week that would put the Company up for auction in August. Atalaya Capital Management has tried to gain control of Creative Loafing since the Company filed for Chapter 11 bankruptcy in September 2008. Business Journal states that under the agreement, Atalaya would be the stalking horse bid starting at $2 million. Without restrictions, it would be able to bid up to the $31 million it is owed without having to pay out a single dollar, Business Journal says. Business Journal relates that Atalaya said that it handed Creative Loafing about $31 million in 2007 to buy alternative papers Washington City Paper and Chicago Reader. Creative Loafing publisher Ben Eason said that if one of the Company's major creditors isn't restricted, he would lose his ownership stake in the chain, Business Journal reports. Mr. Eason, Business Journal relates, has joined with BIA Digital Partners of Virginia -- whom Creative Loafing owes $10 million as part of the Washington and Chicago newspaper purchases -- to bid for the assets. "It appears the way Atalaya is coming at this, they'll put their money in and immediately take it out. We're looking to make sure that whoever bids at the equity auction truly wants to hold the company," Chicago Reader quoted Mr. Eason as saying. Headquartered in Tampa, Florida, Creative Loafing, Inc. -- http://www.creativeloafing.com/-- publishes newspapers and magazines. The Company and eight of its affiliates filed for Chapter 11 protection on September 29, 2008 (Bankr. M.D. Fla. Lead Case No. 08-14939). Chad S. Bowen, Esq., and David S. Jennis, Esq., Jennis & Bowen, P.L., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets and debts of between $10 million and $50 million each. CRESCENT RESOURCES: Receives Final Court OK for $110MM DIP Loan --------------------------------------------------------------- Crescent Resources said the U.S. Bankruptcy Court in the Western District of Texas has granted final approval of the Company's $110 million debtor-in-possession credit financing. The Court had previously granted Crescent interim authority to access $35 million of the DIP facility. Approval of Crescent's DIP financing will allow the company to continue normal operations during its restructuring and enable the company to meet its working capital and general business needs. Andrew Hede, chief executive officer of Crescent Resources, said, "We are pleased to have received final Court approval of our DIP credit facility, which will provide the company with the financial flexibility necessary to continue operations as usual throughout the remainder of the restructuring process. This is a key step forward as we restructure our balance sheet and position Crescent for a stable future." The U.S. Trustee will hold a meeting of creditors in Crescent Resources cases on August 4, 2009, at 10:00 a.m. (Central Time), at the Homer J. Thornberry Judicial Building, 903 San Jacinto Boulevard, Room 118, in Austin, Texas. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. About Crescent Resources Crescent Resources, LLC -- http://www.crescent-resources.com/-- is a land management and real estate development company with interests in 10 states in the southeastern and southwestern United States. Based in Charlotte, North Carolina, Crescent Resources is a joint venture between Duke Energy and the Morgan Stanley Real Estate Funds. Established in 1969, Crescent creates mixed-use developments, award-winning country club communities, single- family neighborhoods, apartment and condominium communities, Class A office space, business and industrial parks and shopping centers. Crescent Resources and 120 affiliates filed separate chapter 11 petitions on June 10, 2009 (Bankr. W.D. Tex. Lead Case No. 09- 11507). The Hon. Craig A. Gargotta presides over the case. Attorneys at Weil Gotshal Manges LLP represent the Debtors in their Chapter 11 cases. Eric J. Taube, Esq., at Hohmann, Taube & Summers, L.L.P., serves as the Debtors' co-counsel. Garden City Group serves as claims and notice agent. The Debtors disclosed more than $1 billion each in assets and debts when they filed for bankruptcy. CRESCENT RESOURCES: Titan Sues Phillip Near for Fraud ----------------------------------------------------- David Twiddy at The Associated Press reports that Titan Global Holdings Inc. has sued former Crescent Resources LLC President Phillip Near, accusing him of committing fraud during an acquisition process involving the two companies. The AP relates that the lawsuit was a countersuit against Mr. Near, who sued Titan in May. Mr. Near claimed that Titan offered to buy Crescent in 2008 but instead siphoned off money, which caused the financial problems leading to the Company's bankruptcy, and that Titan forced him out in March 2009 without paying him for his stock shares, leaving him millions of dollars in debt. According to The AP, Titan executives denied Mr. Near's claims and accused Mr. Near of committing fraud against the Company during the acquisition process. Titan said that Crescent was already close to bankruptcy before it started considering acquisition, The AP states. Mr. Near covered up the depth of Crescent's financial problems through a series of secret agreements with certain convenience store clients, the report says, citing Titan. According to the report, the agreements created large accounts receivable on Crescent's books. Titan, the report states, said that clients were told that they wouldn't have to pay those accounts and that Mr. Near executed agreements with the customers in November 2008, canceling those payments. The AP quoted Titan as saying, "Near's actions in forgiving such accounts receivables caused a sudden and intense deterioration in the working capital available to Crescent, causing Crescent to enter bankruptcy. Once Crescent entered bankruptcy, the truth about Near's mismanagement and fraudulent activities slowly began to surface, and various operators of convenience stores to which Crescent supplied fuel began telling Titan story after story about the secret 'off book' agreements that Near had orchestrated with such operators." The Titan executives said that they were defrauded and are demanding damages because they relied on the financial information provided by Mr. Near as accurate, according to The AP. "The claims are absolutely 100 percent false," the AP quoted Michael Pospisil, one of Mr. Near's lawyers, as saying. Titan didn't provide any detail on the alleged "off book" agreements or which customers were involved, the report says, citing Mr. Pospisil. Crescent Resources, LLC -- http://www.crescent-resources.com/-- is a land management and real estate development company with interests in 10 states in the southeastern and southwestern United States. Based in Charlotte, North Carolina, Crescent Resources is a joint venture between Duke Energy and the Morgan Stanley Real Estate Funds. Established in 1969, Crescent creates mixed-use developments, award-winning country club communities, single- family neighborhoods, apartment and condominium communities, Class A office space, business and industrial parks and shopping centers. Crescent Resources and 120 affiliates filed separate chapter 11 petitions on June 10, 2009 (Bankr. W.D. Tex. Lead Case No. 09- 11507). The Hon. Craig A. Gargotta presides over the case. Attorneys at Weil Gotshal Manges LLP represent the Debtors in their Chapter 11 cases. Eric J. Taube, Esq., at Hohmann, Taube & Summers, L.L.P., serves as the Debtors' co-counsel. Garden City Group serves as claims and notice agent. The Debtors disclosed more than $1 billion each in assets and debts when they filed for bankruptcy. CROWN CASTLE: S&P Affirms Corporate Credit Rating at 'B+' --------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed Houston-based wireless tower operator Crown Castle International Corp.'s 'B+' corporate credit rating and all other issue ratings on the company and its related subsidiaries, including the 'B+' rating on unsecured debt at parent Crown Castle International Corp. However, S&P revised the recovery rating on the parent's unsecured debt to '4' from '3', denoting prospects for average (30%-50%) recovery in the event of a payment default. The outlook is stable. "The affirmations and recovery rating revision follow the company's announcement that it has issued $250 million of new senior secured notes," said Standard & Poor's credit analyst Catherine Cosentino. The proceeds will be used to repay the CMBS debt issued by Global Signal Trust II, which had a December 2009 maturity. The new debt does not materially change the company's overall financial profile. However, S&P's previous recovery rating of '3' on the $900 million of unsecured notes at Crown Castle assumed that the CMBS notes would be repaid from cash on hand, both internally generated and from the net proceeds of another $1.2 billion of financings completed earlier this year. "Therefore," added Ms. Cosentino, "the new debt issue creates net additional priority claims relative to the parent notes that weakens recovery, lowering it to '4' from '3'." DAVE & BUSTER'S: Moody's Affirms 'B2' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service affirmed all of Dave & Buster's Inc.'s ratings -- including its B2 Corporate Family and Probability of Default ratings, and the SGL-3 speculative grade liquidity rating. The rating outlook was revised from stable to negative. The affirmation of the B2 Corporate Family Rating recognizes D&B's improvement in operating margin in the recent years, through a combination of implementing margin-focused initiatives and proactively driving amusement/game aspect of its business which typically commands a higher margin than that of the restaurant sales. The affirmation also incorporates the company's relatively modest leverage for its current rating and expected adequate liquidity profile in the next twelve months as reflected in the SGL-3. The change of outlook to negative, however, depicts Moody's concern on the company's continued weakening top-line performance such as same store sales growth since the back half of 2008 and expectations that negative trends are likely to persist in the foreseeable future. The company's current credit metrics, some of which are already weak for its B2 rating (such as weak interest coverage and thin free cash flow generation), are likely to deteriorate below the current level. Moody's believes that the wide-spread economic malaise would likely continue to negatively affect D&B's revenues, in large part due to its dependency on consumer's discretionary spending. Although its traditional customers (professional adult and family having average income in excess of $75,000) enjoy relatively higher income, the company is not immune to the prolonged recession, in particular to the effect from the escalating unemployment rate and tightened corporate expense account (which affected its special events business). "Its operating cost is relatively high given its large format, and a significant portion of the expense is fixed," commented Moody's analyst John Zhao. "Thus the rising negative pressure on sales is tempering the margin improvement achieved in the past, and hence a concern." The rating action is: * Rating Outlook -- changed to negative from stable Ratings affirmed: * Corporate Family Rating -- B2 * Probability of Default Rating -- B2 * Senior Secured Credit Facilities Rating -- Ba2 (LGD2, 14%) * $160 million 11.25% Senior Unsecured Notes due 2014 -- B3(LGD4, 69%) * Speculative Grade Liquidity rating -- SGL-3 The last rating action occurred on September 28, 2006 when its bank debt rating was raised to Ba2. Headquartered in Dallas, Texas, Dave & Buster's, Inc., is a leading operator of large format, high volume specialty restaurant-entertainment complexes. The company operates under the Dave & Buster's, Dave & Buster's Grand Sports Cafe, and Jillian's brand names and owns approximately 52 units in the United States and Canada and franchises one unit in Mexico. Revenues for the last twelve months ended May 3, 2009, were approximately $529 million. DAYTON SUPERIOR: Can Employ AlixPartners as Restructuring Advisor ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted Dayton Superior Corporation permission to employ AlixPartners, LLP, as its restructuring advisor. AlixPartners will: -- work with the senior management of the Debtor and its other constituencies and its advisors to provide financial consulting services and restructuring advice. -- assist the Debtor with preparing and filing of the bankruptcy schedules and statements of financial affairs. -- assist with the overall claims and contracts resolution process and provide both the Debtor and counsel access to the claims and contracts data. As compensation, AlixPartners professionals bills at these hourly rates: Managing Directors $595 Directors $485 Vice Presidents $395 Associates $295 Analysts $195 Paraprofessionals $120 Todd B. Brents, a managing director at AlixPartners, assures the Court that the firm does not hold or represent any interest adverse to the Debtor or its estate, and that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Headquartered in Dayton, Ohio, Dayton Superior Corporation -- http://www.daytonsuperior.com/-- makes and distributes construction products. Aztec Concrete Accessories Inc., Dayton Superior Specialty Chemical Corporation, Dur-O-Wa Inc., Southern Construction Products Inc., Symons Corporation and Trevecca Holdings Inc. were merged with the Company on December 31, 2004. The Company filed for Chapter 11 protection on April 19, 2009 (Bankr. D. Del. Case No. 09-11351). Keith A. Simon, Esq., Jude M. Gorman, Esq., and Joseph S. Fabiani, Esq., at Latham & Watkins LLP serve as the Debtors' bankruptcy counsel. Russell C. Silberglied, Esq., John H. Knight, Esq., Paul N. Heath, Esq., and Lee E. Kaufman, Esq., at Richards, Layton & Finger, P.A., serve as Delaware counsel. Dayton Superior had $288,709,000 in assets and $405,867,000 in debts as of February 27, 2009. DAYTON SUPERIOR: Panel Can Hire Conway Del Genio as Fin'l Advisor ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted the official committee of unsecured creditors of Dayton Superior Corporation permission to employ Conway, Del Genio, Gries & Co., LLC, as financial advisor, nunc pro tunc to May 7, 2009. Conway Del Genio will: -- evaluate the liquidity position of the company, including cash conversion strategies, cost reduction efforts, and rationalization of other required payments through analysis of rolling 13-week cash forecasting; -- analyze the Company's near-term capital obligations, including debt service requirements, capital expenditures and working capital requirements; and -- review the Company's long-term business plan. Pursuant to the engagement letter, Conway Del Genio will receive a monthly fee of $150,000 for its services. As ordered by the Court, however, Conway Del Genio will apply for compensation for professional services rendered and reimbursement of expenses incurred in compliance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules, and any other applicable procedures and orders of the Court. Mark Gries, a principal at Conway Del Genio, assures the Court that the firm does not hold or represent any interest adverse to the Debtor or its estate, and that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Headquartered in Dayton, Ohio, Dayton Superior Corporation -- http://www.daytonsuperior.com/-- makes and distributes construction products. Aztec Concrete Accessories Inc., Dayton Superior Specialty Chemical Corporation, Dur-O-Wa Inc., Southern Construction Products Inc., Symons Corporation and Trevecca Holdings Inc. were merged with the Company on December 31, 2004. The Company filed for Chapter 11 protection on April 19, 2009 (Bankr. D. Del. Case No. 09-11351). Keith A. Simon, Esq., Jude M. Gorman, Esq., and Joseph S. Fabiani, Esq., at Latham & Watkins LLP serve as the Debtors' bankruptcy counsel. Russell C. Silberglied, Esq., John H. Knight, Esq., Paul N. Heath, Esq., and Lee E. Kaufman, Esq., at Richards, Layton & Finger, P.A., serve as Delaware counsel. Dayton Superior had $288,709,000 in assets and $405,867,000 in debts as of February 27, 2009. DAYTON SUPERIOR: Panel Can Employ Stroock & Stroock as Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted the official committee of unsecured creditors of Dayton Superior Corporation permission to employ Strook & Stroock & Lavan LLP as its lead counsel, nunc pro tunc to April 30, 2009. Stroock & Stroock will: -- advise the committee with respect to its rights, duties and powers in the Chapter 11 case; -- assist and advise the Committee in its consultations and negotiations with the Debtor relative to the administration of this case; and -- assist the Committee in analyzing the claims of the Debtor's creditors and in negotiating with said creditors. Stroock & Stroock's current hourly rates for its professionals are: Partners $675-$995 Counsel $630-$720 Associates $310-$630 Paraprofessionals $235-$295 Litigation Support $175-$280 Kenneth Pasquale, a member at Stroock & Stroock, assures the Court that the firm does not hold or represent any interest adverse to the Debtor or its estate, and that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Headquartered in Dayton, Ohio, Dayton Superior Corporation -- http://www.daytonsuperior.com/-- makes and distributes construction products. Aztec Concrete Accessories Inc., Dayton Superior Specialty Chemical Corporation, Dur-O-Wa Inc., Southern Construction Products Inc., Symons Corporation and Trevecca Holdings Inc. were merged with the Company on December 31, 2004. The Company filed for Chapter 11 protection on April 19, 2009 (Bankr. D. Del. Case No. 09-11351). Keith A. Simon, Esq., Jude M. Gorman, Esq., and Joseph S. Fabiani, Esq., at Latham & Watkins LLP serve as the Debtors' bankruptcy counsel. Russell C. Silberglied, Esq., John H. Knight, Esq., Paul N. Heath, Esq., and Lee E. Kaufman, Esq., at Richards, Layton & Finger, P.A., serve as Delaware counsel. Dayton Superior had $288,709,000 in assets and $405,867,000 in debts as of February 27, 2009. DEL MONTE: S&P Changes Outlook to Positive, Affirms 'BB-' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on San Francisco, Califronia-based Del Monte Foods Co. to positive from stable. At the same time, Standard & Poor's affirmed its 'BB-' corporate credit rating and other ratings. As of May 3, 2009, Del Monte had about $1.6 billion of debt outstanding. "The outlook revision reflects Del Monte's good operating performance and stronger credit measures for the fiscal year ended May 3, 2009, and S&P's expectation that the company will be able to maintain its improved financial profile, despite some cost pressures," said Standard & Poor's credit analyst Alison Sullivan. As a result of EBITDA growth and debt repayment, S&P estimates leverage declined to about 3.8x in fiscal 2009, as compared with about 4.8x during fiscal 2008. Although S&P believes Del Monte will experience modest increases in commodity and marketing costs, S&P expects the company's operating momentum and cash flow should benefit from fiscal 2009 pricing increases, productivity improvements, and new product mix. S&P believes Del Monte will continue to improve operating performance and key credit measures over the next year, with ongoing modest growth in the consumer and pet products segments despite the challenging economic environment. The ratings on Del Monte reflect moderate debt levels and exposure to volatile commodity costs. Del Monte benefits from its diverse product portfolio with leading market shares and high brand recognition in the stable, domestic, shelf-stable fruit and vegetable processing industry and pet food sector. The company holds leading market shares in the processed fruit, vegetable, tomato, broth, and pet food markets, with brand names including the Del Monte brand, as well as Meow Mix and Milk Bone. It is S&P's opinion that these markets are highly competitive, as retail customers in the food industry are rationalizing costs and reducing inventory levels to improve profitability. There is some customer concentration as Wal-Mart (including Sam's Club) constitutes 34% of list sales, and the 10-largest customers accounted for 62% of list sales in fiscal 2009. The outlook on Del Monte is positive. Although S&P estimates that leverage could be slightly more than 3.5x for the next two quarters due to seasonality, S&P expects Del Monte will apply its free cash flow to debt reduction, and reduce and sustain leverage to less than 3.5x by fiscal year-end 2010 while maintaining FFO to total debt near current levels. S&P could upgrade the company if it is able to sustain its positive operating momentum and reach these fiscal 2010 target credit measures. S&P could revise the outlook to stable if operating performance declines such that credit measures weaken and leverage is more than 4x. This could occur in a scenario of relatively flat debt levels, less than 5% revenue growth, and a 200-basis-point EBITDA margin contraction, over fiscal 2009 levels. DELPHI CORP: Reports Accord With Lenders, Creditors and PBGC ------------------------------------------------------------ Delphi Corp. (PINKSHEETS:DPHIQ) announced that as part of its efforts to facilitate further consensual discussions among representatives of General Motors Company (GM), Platinum Equity, Delphi's DIP Lenders and other stakeholders, the Bankruptcy Court for the Southern District of New York has rescheduled the auction previously 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 announced that 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 stated that 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. As part of the accord, 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. Statement Regarding Delphi's Defined Benefit Pension Plans In its June 1 filing of modifications to its Confirmed Plan, Delphi 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 PBGC 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 GM, 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 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 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, [was] filed with the Bankruptcy Court [July 21, 2009]. Changes in Delphi's Timeline Judge Drain further modified, on July 21, 2009, the Amended Modifications Procedures Order to reflect these dates: * July 27, 2009 would be the deadline to object to auction or selection of successful bidder. * July 27, 2009 would also be the deadline for the Debtors to file (i) reply in support of the Modified Plan and the Master Disposition Agreement and the 363 Implementation Agreement, and (ii) proposed revisions to the final order approving the Modified Plan and submit a proposed form of Section 363 sale order. * July 30, 2009 is the date contemplated under Master Disposition Agreement for the entry of the order confirming the Modified Plan or approving the Section 363 Sale. According to a July 21, 2009 report from Bloomberg News, the deadline for Delphi's DIP Lenders to submit pure credit bids for the Delphi assets was extended to July 22, 2009. Moreover, on July 17, 2009, Judge Drain also modified the Amended Modifications Procedures Order to direct the Debtors to file their reply to the objections filed by JPMorgan Chase Bank, N.A., administrative agent to the DIP Lenders, Kensington International Limited, Manchester Securities Corp., and Springfield Associates, LLC, and a collective of the DIP Lenders by July 22, 2009. Pursuant to the July 17 Order, Judge Drain moved the contemplated auction of the Debtors' assets from July 17, 2009, to July 21, 2009. JPMorgan is directed by the Court to state on the record at the Auction whether a pure credit bid will be made. In addition, a July 16, 2009, report by the DealBook of New York Times disclosed that JP Morgan Chase Bank, N.A., administrative agent to Delphi's DIP Lenders, and General Motors Corporation entered into an agreement in principle that will supersede the Master Disposition Agreement executed among Platinum Equity LLC, Delphi and GM. Under the temporary pact, the DIP Lenders will pursue their credit bid on Delphi. More importantly, the temporary pact could resolve Delphi's legal battle with its DIP Lenders, and ultimately facilitate Delphi's emergence from Chapter 11, DealBook said. Delphi-PBGC Settlement Agreement Pursuant to the Modified Plan, Delphi seeks the Bankruptcy Court's approval of a settlement agreement it entered with the Pension Benefit Guaranty Corporation on July 21, 2009, whereby the Debtors will grant the PBGC an allowed general unsecured non- priority claim, which will receive the same treatment given to holders of General Unsecured Claims and certain other consideration. The salient terms of the Delphi-PBGC Settlement Agreement are: (1) Effective as of the closing date, whether pursuant to the Modified Plan, or in connection with a sale transaction to be approved at the alternative sale hearing on July 29, 2009, the PBGC will receive an allowed prepetition general unsecured claim against each of the Debtors, aggregating $3 billion. If the Modified Plan is approved and consummated, the PBGC will receive with respect to the Allowed PBGC General Unsecured Claim the treatment set forth in the Modified Plan. If the Modified Plan is not approved and consummated, the Allowed PBGC General Unsecured Claim will be treated as other allowed prepetition, general, non-priority unsecured claim against the Debtors. (2) The distributions to the PBGC will fully satisfy all obligations of Delphi and any member of Delphi's controlled group, known as the Delphi Group, under the Employee Retirement Income Security Act with respect to the Delphi Retirement Program for Salaried Employees, the Delphi Mechatronics Systems Retirement Program, the ASEC Manufacturing Retirement Program, the Packard-Hughes Interconnect Bargaining Retirement Plan, the Packard-Hughes Interconnect Non-Bargaining Retirement Plan, and the Delphi Hourly-Rate Employees Pension Plan will constitute the recovery afforded to the PBGC on account of the claims related to the Pension Plans, and will also fully satisfy (i) all liens asserted and assertable by the PBGC against the Delphi Group with respect to the Pension Plans, and (ii) the Contingent PBGC Adequate Protection Liens. (3) Effective as of the Closing Date, the parties agree to mutual releases with respect to disputes, and obligations of any kind, upon any legal or equitable theory that the parties ever had, or may have against each other relating to obligations with respect to the Pension Plans under the ERISA. The parties will take no action against each other to collect, impose or enforce liability or liens with respect to the Pension Plans under ERISA or the Internal Revenue Code. However, nothing in the Delphi-PBGC Settlement Agreement will release or discharge (i) the parties from their obligations, including Delphi's obligation to grant to the PBGC the Allowed PBGC General Unsecured Claim, or (ii) any person or entity from liability arising as a result of that person's breach of fiduciary trust under ERISA. (4) The PBGC will withdraw all 412(n)/430(k) Lien Notices relating to the Pension Plans, including notices related to the Contingent PBGC Adequate Protection Liens, and will complete withdrawal of the Lien Notices within 60 days after the closing of the Master Disposition Agreement or an alternative transaction, to which General Motors Company or "New GM" is a party. (5) Immediately after entry of an order confirming the Modified Plan or approving an alternative sale transaction of the Debtors, the PBGC will determine whether to initiate or proceed with the involuntary termination under Section 1342 of the Labor Code of each of the Pension Plans, other than the Bargaining Plan and the Hourly Plan, which terminations will be effective on the date established under Section 1348 of the Labor Code. Upon issuance by the PBGC of a notice of determination pursuant to Section 1342 of the Labor Code, the PBGC and the plan administrator will execute termination and trusteeship agreements with respect to each Non-Bargaining Plan, terminating each Non- Bargaining Plan, establishing the Termination Date as the date of plan termination, and appointing the PBGC as the statutory trustee of each Non-Bargaining Plan. (6) Similarly, after confirmation of the Modified Plan or approval of a sale transaction, the PBGC will determine whether to initiate or proceed with the involuntary termination under Section 1342 of the Bargaining Plan and Hourly Plan, which terminations will be effective on the Termination Date. If the PBGC issues a notice of determination pursuant to Section 1342 that the Bargaining Plan and Hourly Plan should terminate, the PBGC will seek termination of the Bargaining Plan and Hourly Plan under Section 1342(c). -- In line with Delphi's seeking Bankruptcy Court approval of the Delphi-PBGC Settlement Agreement, Delphi will seek a finding by the Bankruptcy Court that the termination is not a violation of the Labor MOUs, the Union 1113/1114 Settlement Approval Orders, or the Local Agreement between Delphi Connection Systems and Electronic and Space Technicians Local 1553. If the Bankruptcy Court approves the Delphi-PBGC Settlement Agreement and enters that finding, the PBGC and Delphi will execute a termination and trusteeship agreement with respect to the Bargaining Plan and the Hourly Plan, terminating the Hourly Plan and the Bargaining Plan, establishing the Termination Date as the date of plan termination, and appointing the PBGC as statutory trustee of the Bargaining Plan and Hourly Plan. -- If the Bankruptcy Court does not enter that finding, the PBGC will seek an order from a United States District Court terminating the Bargaining Plan or Hourly Plan pursuant to Section 1342(c). Moreover, the PBGC and GM will enter into a separate waiver and release agreement to resolve asserted or unasserted liens and claims of PBGC against the Delphi Group. A full- text copy of the Delphi-PBGC Settlement dated July 21, 2009, is available for free at: http://bankrupt.com/misc/Delphi_PBGCSettlement.pdf GM's Statement In a public statement, GM relates that it has reached a preliminary agreement with PBGC, whereby PBGC would receive a $70 million cash payment from GM, as well as a portion of future distributions to GM from the new company that acquires the Delphi assets upon resolution of its bankruptcy. GM avers that it continues to meet its obligations toward the Delphi pensions, and to support Delphi's emergence from bankruptcy. 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) DELPHI CORP: Majority of Creditors Vote to Reject Modified Plan --------------------------------------------------------------- Kurtzman Carson Consultants LLC and Financial Balloting Group LLC, on July 20, 2009, presented to the Court a tabulation of the votes received for Delphi Corporation's Modified Confirmed First Amended Joint Plan of Reorganization. As gathered from the KCC Report, 10 out of 17 classes entitled to vote on the Modified Plan opposed the Plan embodying Delphi's deal with Platinum Equity. KCC presented to the Court a summary of the voting results: # of Ballots # of Ballots Amount Amount Accepting Rejecting Accepting Rejecting Description/ (% of Num. (% of Num. (% of Amt. (% of Amt. Class Voted) Voted) Voted) Voted) ---------- ------------ ------------ ---------- ---------- Delphi-DAS Debtors 3 20 $135,191 $431,992 1A-1 (13.04%) (86.96%) (23.84%) (76.16%) Connection System Debtors 0 0 $0 $0 3A-1 (0.00%) (0.00%) (0.00%) (0.00%) Specialty Electronics Debtors 0 0 $0 $0 4A-1 (0.00%) (0.00%) (0.00%) (0.00%) Delphi-DAS Debtors 658 2,226 $683,455,873 $1,509,920 1C-1 (22.82%) (77.18%) (31.16%) (68.84%) DASHI Debtors 0 0 $0 $0 2C-1 (0.00%) (0.00%) (0.00%) (0.00%) Connection System Debtors 14 92 $222,096 $682,539 3C-1 (13.21%) (86.79%) (24.55%) (75.45%) Specialty Electronics Debtors 1 17 $81,284 $95,123 4C-1 (5.56%) (94.44%) (46.08%) (53.92%) Delco Electronics Overseas Corporation 4 5 $25,363 $16,004 5C-1 (44.44%) (55.56%) (61.31%) (38.69%) Delphi Diesel Systems Corp. 6 38 $575,171 $1,186,645 6C-1 (13.64%) (86.36%) (32.65%) (67.35%) Delphi Furukawa Wiring Systems LLC 0 0 $0 $0 7C-1 (0.00%) (0.00%) (0.00%) (0.00%) Delphi Mechatronic Systems Inc. 29 76 $1,787,126 $873,788 8C-1 (27.62%) (72.38%) (67.16%) (32.84%) Delphi Medical Systems Corporation 0 0 $0 $0 9C-1 (0.00%) (0.00%) (0.00%) (0.00%) Delphi Medical Systems Colorado Corporation 21 153 $897,295 $1,737,912 10C-1 (12.07%) (87.93%) (34.05%) (65.95%) Delphi Medical Systems Texas Corporation 3 32 $23,773 $155,014 11C-1 (8.57%) (91.43%) (13.30%) (86.70%) MobileAria, Inc. 0 10 $0 $43,536 12C-1 (0.00%) (100.00%) (0.00%) (100.00%) PBGC Claims 1 0 $7,137,800,000 $0 1C-2 - 12C-2 (100.00%) (0.00%) (100.00%) (0.00%) GMClaims 1 0 $1 $0 1D - 12D (100.00%) (0.00%) (100.00%) (0.00%) A copy of the Tabulation Report of the votes on the Modified Plan is available for free at: http://bankrupt.com/misc/Delphi_PlanTabulationResults.pdf Classes 1B through 12B, 1J through 12J, and 1K through 12K are not entitled to vote as they are deemed to accept the Modified Plan. Similarly, Class 1I, Classes 1E, 1G-1, 1G-2, 1H and 8H are deemed to reject the Modified Plan. Classes 1F through 12F Intercompany Claims were deemed to be proponents of the Modified Plan. Classes 1A-1, 3A-1, 4A-1, 1C-1 through 12C-1, 1C-2 through 12C-2, and 1D through 12D are impaired and entitled to vote on the Modified Plan. Evan Gershbein, chief executive officer of KCC, related that certain ballots were not counted because they did not conform with the Solicitation Procedures. A schedule of the Nonconforming Ballots is available for free at: http://bankrupt.com/misc/Delphi_NonconformingBallots.pdf Similarly, Jane Sullivan, executive director of FBG, noted that ballot submitted by UBS Securities LLC for Class 1C-1 for $14,400 was not included in the tabulation because the UBS ballot was received after the July 15 Voting Deadline. KCC added that they also sent provisional ballots to Fiduciary Counselors, Inc., Hyundai Motors Company and Hyundai Motor America, and the International Union of Operating Engineers Locals 832S, 18S, and 101S, the International Brotherhood of Electrical Workers and its Local 663, and the International Association of Machinists and Aerospace Workers and its District 10 and Tool and Die Makers Lodge 78 pursuant to their motions under Rule 3018(a) of the Federal Rules of Bankruptcy Procedure. 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) DELPHI CORP: Amends Modified Plan-Related Contract List ------------------------------------------------------- Delphi Corp. and its affiliates amended on July 20, 2009, an exhibit to their Modified Plan containing the list of contracts and leases to be rejected pursuant to the Modified Plan. The Debtors noted that the 180 Contracts to be rejected either have been terminated or have expired. A schedule of the Amended Plan Exhibit is available for free at: http://bankrupt.com/misc/Delphi_PlanRejectedContracts.pdf The Debtors also submitted to the Court on July 15, 2009, an additional list of contracts to be assumed and assigned to Parnassus Holdings II, LLC, under the Master Disposition Agreement. A schedule of the Additional Parnassus Assumed Contracts is available for free at: http://bankrupt.com/misc/Delphi_AddlParnassusContracts.pdf 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) DELPHI CORP: 17th Amendment to DIP Accomm. Pact Expires July 24 --------------------------------------------------------------- Delphi Corporation disclosed in a regulatory filing with the Securities and Exchange Commission that it executed four amendments to its DIP Accommodation Agreement with JP Morgan Chase Bank, N.A., and certain requisite lenders under a $4.35 billion DIP Credit Facility, to further extend the DIP Accommodation Period to these dates: Accommodation Period Amendment Termination Date --------- -------------------- Thirteenth Amendment July 15, 2009 Fourteenth Amendment July 16, 2009 Fifteenth Amendment July 18, 2009 Sixteenth Amendment July 22, 2009 Specifically, the Debtors sought the Court's authority to (i) enter into the DIP Accommodation Sixteenth Amendment and related documents; and (ii) pay fees and expenses in connection with the DIP Accommodation Sixteenth Amendment. The Debtors further sought the Court's authority to waive the 10-day stay under Rule 6004(h) of the Federal Rules of Bankruptcy Procedure so that they can effectuate the DIP Accommodation Sixteenth Amendment immediately. The Debtors noted that to facilitate the auction of their assets and their consideration of a potential transaction by means of a DIP Lender Pure Credit Bid, a continuation of the Accommodation Period is necessary. Hearing on the DIP Accommodation Sixteenth Amendment has been scheduled for July 23, 2009. Moreover, the Debtors and JP Morgan and the DIP Lenders entered into a "seventeenth amendment" to the DIP Accommodation Agreement on July 21, 2009. Delphi Vice President and Chief Financial Officer John D. Sheehan relates that the salient terms of the DIP Accommodation Seventeenth Amendment are: * A Repayment Obligation will be triggered on July 24, 2009, unless on or prior to July 23, 2009, the Debtors deliver a term sheet. * The Accommodation Period will terminate on July 25, 2009, in the event that the requisite DIP Lenders have not notified the Debtors that the term sheet detailing terms of a global resolution of the Debtors' Chapter 11 cases and General Motors Company's contribution to that resolution is satisfactory on or before July 24, 2009. * The DIP Accommodation Seventeenth Amendment postpones until July 24, 2009, the date by which interest payments with respect to the Tranche C Term Loan must be paid, which payments are to be applied ratably to repayments of principal amounts outstanding under the Tranche A Facility and the Tranche B Term Loan. Full-text copies of the amendments to the DIP Accommodation Agreement are available for free at: * DIP Accommodation Thirteenth Amendment, executed July 14, 2009, at: http://ResearchArchives.com/t/s?3fb7 * DIP Accommodation Fourteenth Amendment, executed July 15, 2009, at: http://ResearchArchives.com/t/s?3fb8 * DIP Accommodation Fifteenth Amendment, executed July 15, 2009, at: http://ResearchArchives.com/t/s?3fb9 * DIP Accommodation Sixteenth Amendment, executed on July 17, 2009, at: http://ResearchArchives.com/t/s?3fba * DIP Accommodation Seventeenth Amendment, executed July 21, 2009, at http://ResearchArchives.com/t/s?3fc7 As of July 22, 2009, approximately $230 million is outstanding under the Tranche A Facility, $311 million under the Tranche B Term Loan, and $2.75 billion under the Tranche C Term Loan under the Amended and Restated DIP Credit Facility. 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) DEVIN ENTERPRISES: Case Summary 3 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Devin Enterprises, LLC 1500 Woodridge Place Birmingham, AL 35216 Bankruptcy Case No.: 09-04305 Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court Northern District Of Alabama (Birmingham) Debtor's Counsel: Walter F. McArdle, Esq. Spain & Gilllon LLC 2117 Second Avenue N Birmingham, AL 35203 Tel: (205) 581-6295 Email: wfm@spain-gillon.com Total Assets: $1,500,900 Total Debts: $585,340 A list of the Company's 3 largest unsecured creditors is available for free at: http://bankrupt.com/misc/alnb09-04305.pdf The petition was signed by Laura Waldheim, managing member of the Company. EASTERN ORGANIC RESOURCES: Voluntary Chapter 11 Case Summary ------------------------------------------------------------ Debtor: Eastern Organic Resources, LLC dba Woodhue Ltd. 2469 Saylors Pond Road Wrightstown, NJ 08562 Bankruptcy Case No.: 09-29013 Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court District of New Jersey (Trenton) Debtor's Counsel: Jerrold S. Kulback, Esq. Archer & Greiner One Centennial Square Haddonfield, NJ 08033 Tel: (856) 795-2121 Fax: (856) 795-0574 Email: jkulback@archerlaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by J. Michael Maynard. EDDIE BAUER: Court Fixes September 14 as Claims Bar Date -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved the request of Eddie Bauer Holdings, Inc., and its debtor- affiliates to establish September 14, 2009, at 4:00 p.m. as the general bar date for the filing of proofs of claim in their bankruptcy cases, and December 14, 2009, at 4:00 p.m. with respect to all governmental units. As reported by the Troubled Company Reporter on July 16, 2009, proofs of claim must be filed so as to be actually received by Kurtzman Carson Consultants, LLC, the Debtor's claims and noticing agent, on or before the applicable bar date, addressed to: Eddie Bauer Claims Processing Center c/o Kurtzman Carson Consultants, LLC 2335 Alaska Avenue, El Segundo, CA 90245 Entities asserting claims against more than one Debtor must file a separate proof of claim for each Debtor. About Eddie Bauer Established in 1920 in Seattle, Washington, Eddie Bauer is a specialty retailer that sells outerwear, apparel and accessories for the active outdoor lifestyle. The Eddie Bauer brand is a nationally recognized brand that stands for high quality, innovation, style and customer service. Eddie Bauer products are available at 371 stores throughout the United States and Canada, through catalog sales and online at http://www.eddiebauer.com/ Eddie Bauer participates in a joint venture in Japan and has licensing agreements across a variety of product categories. Eddie Bauer, Inc., was a subsidiary of Spiegel, Inc. Eddie Bauer Inc. emerged from Spiegel's 2003 Chapter 11 case as a separate, reorganized entity under the control and ownership of Eddie Bauer Holdings, Inc. Eddie Bauer Holdings, Inc., and eight affiliates filed for bankruptcy on June 17, 2009 (Bankr. D. Del. Lead Case No. 09-12099). Judge Mary F. Walrath presides over the case. David S. Heller, Esq., Josef S. Athanas, Esq., and Heather L. Fowler, Esq., at Latham & Watkins LLP, serve as the Debtors' general counsel. Kara Hammond Coyle, Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor LLP, serve as local counsel. The Debtors' restructuring advisors are Alvarez and Marsal North America LLC. Their financial advisors are Peter J. Solomon Company. Kurtzman Carson Consultants LLC acts as claims and notice agent. The U.S. Trustee appointed four members to the Official Committee of Unsecured Creditors. As of April 4, 2009, Eddie Bauer had $525,224,000 in total assets and $448,907,000 in total liabilities. EDDIE BAUER: Golden Gate Offer Approved; Deal to Close in August ---------------------------------------------------------------- Eddie Bauer Holdings, Inc., received Bankruptcy Court approval to proceed with the sale of its business to Golden Gate Capital for $286 million in cash. With the Court's approval, the transaction is on track to close in early August. As reported by the Troubled Company Reporter on July 21, 2009, Eddie Bauer said Golden Gate's all cash bid was selected as the highest and best offer. The Golden Gate offer was presented for court approval on July 22. The Golden Gate offer will maintain the substantial majority of Eddie Bauer's stores and employees in a newly formed going concern company. Pursuant to the purchase agreement Eddie Bauer gift cards will be honored in the ordinary course of business. The transaction is not expected to result in any distribution to the stockholders of Eddie Bauer Holdings, Inc. As reported by the TCR on July 1, 2009, Eddie Bauer had obtained approval of a sale process under which, an affiliate of CCMP Capital Advisors, LLC, served as stalking horse bidder. Eddie Bauer's business would have been sold to the CCMP affiliate for $202 million cash, absent higher and better bids at the auction. The TCR said July 17 Iconix Brand Group Inc. and VF Corp. have presented bids for Eddie Bauer Holdings, Inc.'s assets, according to Jonathan Keehner and Lauren Coleman-Lochner at Bloomberg News, citing people familiar with the matter. Bloomberg also said Eddie Bauer received an offer from Golden Gate and a joint bid from Hilco Consumer Capital and Gordon Brothers Group LLC. The sale will enable Eddie Bauer to emerge quickly from bankruptcy as a new company positioned for success, with a well-capitalized partner, a substantially lower cost structure, little or no long- term debt and a much stronger balance sheet, according to a company statement. Golden Gate has indicated its support for Eddie Bauer's management team and its strategy, including operating as a tri-channel retailer with an extensive store fleet. Golden Gate plans to maintain the substantial majority of Eddie Bauer's stores and employees in the newly formed company. In addition, under the terms of the transaction, Eddie Bauer gift cards will be honored in the ordinary course of business. About Golden Gate Capital Golden Gate Capital -- http://www.goldengatecap.com/-- is a San Francisco-based private equity investment firm with roughly $9 billion of assets under management. The firm's charter is to partner with world-class management teams to make equity investments in situations where there is a demonstrable opportunity to significantly enhance a company's value. About Eddie Bauer Established in 1920 in Seattle, Eddie Bauer Holdings, Inc. (Pink Sheets: EBHIQ) 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. ENERGAS RESOURCES: Eide Bailly Resigns as Outside Accountant ------------------------------------------------------------ Energas Resources Inc. reports that on July 15, 2009, Eide Bailly LLP resigned as the Company's independent registered public accounting firm. The report of Eide Bailly regarding the Company's financial statements for the fiscal year ended January 31, 2009 did not contain any adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles. However, the report of Eide Bailly for that fiscal year was qualified with respect to uncertainty as to the Company's ability to continue as a going concern. During the year ended January 31, 2009, and during the period from January 31, 2009, through July 15, 2009, the date of resignation, there were no disagreements with Eide Bailly on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Eide Bailly would have caused it to make reference to such disagreement in its reports. Based in Oklahoma City, Oklahoma, Energas Resources Inc. (OTC BB: EGSR) -- http://www.energasresources.com/-- is primarily engaged in the operation, development, production, exploration and acquisition of petroleum and natural gas properties in the United States through its wholly-owned subsidiary, A.T. Gas Gathering Systems Inc. In addition, the company owns and operates natural gas gathering systems located in Oklahoma, which serve wells operated by the company for delivery to a mainline transmission system. The majority of the company's operations are maintained and occur through A.T. Gas. Going Concern Doubt Murrell, Hall, McIntosh & Co PLLP, in Oklahoma City, expressed substantial doubt about Energas Resources' ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended January 31, 2008, and 2007. The auditing firm pointed to the Company's recurring losses from operations. At April 30, 2008, the Company's balance sheet showed total assets of $1,843,868, total liabilities of $744,641 and stockholders' equity of $1,099,227. ENERGY PARTNERS: Installs Alan D. Bell as Executive Officer ----------------------------------------------------------- Energy Partners, Ltd., on July 14, 2009, designated Alan D. Bell as the Company's principal executive officer. Mr. Bell, 63, joined the Company in March 2009 as the Company's Chief Restructuring Officer. Mr. Bell has extensive experience in the petroleum industry. Mr. Bell started his career as a production engineer from 1969 to 1972 for Chevron Oil Company in the Gulf of Mexico. He then spent 33 years with Ernst & Young auditing natural resource companies, dealing with the Securities and Exchange Commission and working with senior executives and boards of directors of public companies within the energy industry. At the time of his retirement in June 2006, Mr. Bell was the director of Ernst & Young LLP's energy practice in the Southwest U.S. area, a position that he held for over 5 years. Mr. Bell earned a master's degree in business from Tulane University and a bachelor's degree in Petroleum engineering from the Colorado School of Mines, and is a certified public accountant licensed in Texas. There are no arrangements or understandings between Mr. Bell and any other person pursuant to which he was selected as the Company's principal executive officer. Mr. Bell does not have any family relationship with any director or other executive officer of the Company or any person nominated or chosen by the Company to become a director or executive officer, and there are no transactions in which Mr. Bell has an interest requiring disclosure under Item 404(a) of Regulation S-K. Also on July 14, 2009, the Company designated T.J. Thom as the Company's principal financial officer. Ms. Thom, 37, has previously undertaken certain financial duties in her current positions as Vice President, Treasurer and Investor Relations of the Company. Ms. Thom joined the Company in 2000 as a Senior Asset Management Engineer, and has since held the positions of Director of Corporate Reserves and Director of Investor Relations. Prior to joining the Company, Ms. Thom was a Senior Reservoir Engineer with Exxon Production Company and ExxonMobil Company. Ms. Thom holds a B.S. in Engineering from the University of Illinois and a M.B.A. in Management with a concentration in Finance from Tulane University. There are no arrangements or understandings between Ms. Thom and any other person pursuant to which she was selected as the Company's principal financial officer. Ms. Thom does not have any family relationship with any director or other executive officer of the Company or any person nominated or chosen by the Company to become a director or executive officer, and there are no transactions in which Ms. Thom has an interest requiring disclosure under Item 404(a) of Regulation S-K. About Energy Partners Based in New Orleans, Louisiana, Energy Partners, Ltd., (Pink Sheets: ERPL.PK) is an independent oil and natural gas exploration and production company. The Company had interests in 24 producing fields, six fields under development and one property on which drilling operations were then being conducted, all of which are located in the Gulf of Mexico Region. Energy Partners, Ltd., and its affiliates filed for Chapter 11 on May 1, 2009 (Bankr. S.D. Tex. Lead Case No. 09-32957). Paul E. Heath, Esq., at Vinson & Elkins LLP, represents the Debtors in their restructuring efforts. The Debtors propose to employ Parkman Whaling LLC as financial advisor. The Debtors' financial condition as of December 31, 2008, showed total assets of $770,445,000 and total debts of $708,370,000. ENRON CORP: Amends Document Disposal Procedures ----------------------------------------------- Prior to the Petition Date, Enron Corp. employed a document retention policy that allowed the disposal of various categories of documents based upon many criteria. Shortly prior to the Petition Date, Enron Corp. suspended its document retention policy to the extent the policy allowed disposal of documents related to certain transactions under investigation by Enron, federal authorities, and legislative committees. On January 25, 2002, the U.S. Bankruptcy Court for the Southern District of New York entered an order requiring the Debtors and their employees to "preserve, and refrain from destroying or disposing of, any of Enron's records, either in electronic or paper form." On February 15, 2002, the Court entered a Stipulation and Consent Order by and between Enron Corp., and its affiliated debtors-in-possession and the Official Committee of Unsecured Creditors regarding document preservation and retention. In connection with a class of action shareholder litigation proceeding -- the Newby Litigation -- in the U.S. District Court for the Southern District of Texas, the Texas District Court entered an order establishing a procedure for depositing documents in a depository for the purpose of, among other things, providing access and ensuring the existence of relevant documents. In addition to the Document Retention Orders and the Newby Depository Order, Section 42.12 of the Supplemental Modified Debtors' Fifth Amended Joint Plan of Affiliated Debtors, notwithstanding the terms and provisions of the Document Retention Orders, the Reorganized Debtors "will retain and not destroy or otherwise dispose of the Documents" unless otherwise ordered by the Bankruptcy Court. John S. Delnero, Esq., at K&L Gates LLP, in Chicago, Illinois, says the Reorganized Debtors have preserved all documents in compliance with the Document Retention Orders, the Newby Depository Order, and the Plan, and have also taken the additional step of creating electronic versions of all hard-copy documents produced since the Petition Date, including in connection with the numerous litigations related to their Chapter 11 cases. However, since confirmation of the Plan, the Reorganized Debtors have worked diligently to wind-down their estates. Consequently, the Reorganized Debtors sought, and the Bankruptcy Court approved, the Order Granting Relief from Reorganized Debtors' Document Retention Obligations and Approving Document Disposal Procedures, dated August 30, 2007. The Reorganized Debtors sought further relief from the Document Disposal Procedures on June 27, 2008, again to reduce the substantial costs associated with the continued maintenance of records. "While the Reorganized Debtors have made significant progress in disposing of documents and reducing costs to the estates for the retention of such documents, the Reorganized Debtors continue retain and store approximately 42,766 boxes of hard copy documents," Mr. Delnero tells the Court. He adds that these documents are stored in a warehouse that costs the Reorganized Debtors around $122,200 per month for rent, warehouse staff, security and related costs. Based on the Document Relief Order and the Document Transfer Procedure, the Reorganized Debtors believe that they currently have authority from the Bankruptcy Court, in their business judgment, to destroy most, if not all, of the Remaining Hard Copy Documents in their possession. In addition, the Debtors maintain an electronic system where the Litigation Document Library is maintained. According to the Reorganized Debtors, maintaining the IT System -- which is no longer needed as the Reorganized Debtors wind down -- costs the Debtors approximately $15,000 per month and has become burdensome. With regard to the IT System, the Reorganized Debtors propose these procedure to relieve them of the costs associated with maintaining the Litigation Document Library and the IT System: (a) Within 30 days of the entry of an order approving this Motion, the Reorganized Debtors will arrange for creation of two or more copies of the Litigation Document Library on electronic tape media. One set of Tapes will be made available to the Securities and Exchange Commission and two sets of Tapes will be provided to a custodian employed by the Reorganized Debtors. The Tapes will be maintained for a period of two years from the date that the Court enters its order approving this Motion. (b) Parties that wish to obtain access to the Tapes should serve a written discovery request detailing the purpose for the Request on K&L Gates at the following address: K&L Gates LLP Attn: John S. Delnero 70 W. Madison St., Chicago Illinois 60602 (c) K&L Gates will then have 30 days to either object to the Request or to arrange a mutually agreeable time for the Requesting Party to view the Tapes. The Requesting Party will bear all costs associated with viewing the Tapes and printing copies of documents from the Tapes. (d) In the event that there are no outstanding Requests as of the Termination date, the Custodian, the Securities and Exchange Commission, and any party holding a set of Tapes will have the right to destroy the Tapes in their possession. In the event that there remains an outstanding Request as of the Termination Date, the parties holding sets of Tapes will be authorized to destroy their set of Tapes immediately upon the resolution of the Request or Requests outstanding as of the Termination Date or upon order of the Bankruptcy Court if no resolution is obtained. Mr. Delnero avers that the Document Procedure will provide Requesting Parties the opportunity to review documents potentially relevant to their cases while alleviating the Reorganized Debtors of the associated costs. Mr. Delnero asserts that the amendments to the procedures are necessary and appropriate because it is no longer imperative to maintain and preserve the Remaining Hardcopy Documents or the IT System and Tapes. According to Mr. Delnero, the economic burden of maintaining these items at the combined cost of approximately $137,200 per month is no longer justified, especially in light of the Reorganized Debtors' dwindling workforce, which ultimately will be insufficient to undertake further disposal of documents. Mr. Delnero adds that with regard to the Remaining Hardcopy Documents, the Reorganized Debtors will dispose of the documents. * * * At the Reorganized Debtors' behest, Judge Gonzalez approves the Motion in its entirety. Commission's fraud allegations for $31,500,000 in December 2008. About Enron Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection on December 2, 2001 (Bankr. S.D. N.Y. Case No. 01- 16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP, Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On January 9, 2004, they filed their fifth Amended Plan and on the same day the Court approved the adequacy of the Disclosure Statement. On July 15, 2004, the Court confirmed the Debtors' Modified Fifth Amended Plan and that plan was declared effective on November 17, 2004. After the approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre-bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. (Enron Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ENRON CORP: Commercial Paper Dispute May Be Headed for Trial ------------------------------------------------------------ In mid-2008, most of the nearly 200 defendants in the adversary proceeding filed by the Debtors against J.P. Morgan Securities, Inc., et al., moved for summary judgment. The vast majority of the defendants reached a settlement with Enron and has been dismissed from the action. The four remaining defendant investors are: (a) ING VP Balanced Portfolio, a mutual fund; (b) Aetna Bond VP, a mutual fund; (c) Aeltus Investment Management, Inc., an investment advisor; and (d) Alfa S.A.B. de C.V. ING VP and Aetna Bond comprise the ING Funds. The Investors engaged in transactions with JPMorgan in mid- September or mid-October 2001 to acquire commercial paper issued by Enron Corp. and then transferred the commercial paper to JPMorgan in late October 2009, prior to their maturity dates. On that same day, JPMorgan transferred that same commercial paper to Enron's Chase IPA account at a Depository Trust Company and Enron paid JPMorgan, again through the DTC. The Investors contend that payments from JP Morgan for the commercial paper were made to complete securities transactions, and that they were settlement payments protected by safe harbor under Section 546(e) of the Bankruptcy Code. Judge Arthur J. Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York found that, where commercial paper is redeemed by the issuer prior to maturity thereby extinguishing the commercial paper, and when the payment made for that commercial paper is equal to the principal plus the accrued interest to the date of payment, the payment made by the issuer is for the purpose of satisfying the underlying debt. Judge Gonzalez concluded that because the payment would be for the retirement of the underlying debt, it would not be for a sale of the commercial paper to the issuer and the payment would not be a settlement payment. In an opinion and order dated June 29, 2009, Judge Gonzalez said a trial is necessary to determine whether JPMorgan acted as principal or agent. If JPMorgan acted as agent for Enron, then any transfers to retire debt that benefited the Investors are not protected from avoidance by the safe harbor, Judge Gonzalez held. Based on those findings, Judge Gonzalez denied the motions for summary judgment filed by the ING Funds and Alfa. On the other hand, Judge Gonzalez granted the motion for summary judgment filed by Aeltus. The Court concluded that the benefit received by Aeltus is too remote and unascertainable, under the facts of this case, to qualify it as a party that benefited under Section 550(a)(1) of the Bankruptcy Code. Furthermore, the Court concluded that, under the circumstances of the case, the earmarking principle would not apply to protect the payments from avoidance. Enron previously issued and sold unsecured commercial papers to various entities which had maturities of up to 270 days. Enron maintains that the transfers it made between October 26 and November 6, 2001, were for the purpose of paying, prior to their maturity date, the notes that had been previously issued by Enron. Enron sought avoidance of the transfers as preferential payments under Section 547(b) of the Bankruptcy Code. Dismissal of Claims Pursuant to Rule 7041 of the Federal Rules of Bankruptcy Procedure, Enron Creditors Recovery Corp., and Fremont General Corporation stipulate and agree that the claims against Fremont in this adversary proceeding are dismissed with prejudice, and with each party to bear its own costs and attorney's fees. The Court approved the parties' agreement. About Enron Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection on December 2, 2001 (Bankr. S.D. N.Y. Case No. 01- 16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP, Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On January 9, 2004, they filed their fifth Amended Plan and on the same day the Court approved the adequacy of the Disclosure Statement. On July 15, 2004, the Court confirmed the Debtors' Modified Fifth Amended Plan and that plan was declared effective on November 17, 2004. After the approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre-bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. (Enron Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ENRON CORP: ECRC Files 19th Post-Confirmation Report ---------------------------------------------------- Enron Creditors Recovery Corp., formerly Enron Corp., and its reorganized debtor affiliates delivered to the U.S. Bankruptcy Court for the Southern District of New York their Nineteenth Post-Confirmation Status Report. A. Distributions The Reorganized Debtors made distributions of approximately $128,300,000 to holders of Allowed Administrative, Priority, Secured, General Unsecured, Guaranty and Convenience Claims, with the substantial majority of that amount being paid to holders of Allowed General Unsecured and Guaranty Claims. The distribution consisted entirely of cash since all PGE Common Stock equivalents had previously been distributed. As of July 15, 2009, $21,637,000,000 in Cash, PGE Common Stock and PGE Common Stock equivalents have been distributed to holders of Allowed Claims, including $267,000,000 of interest, capital gains and dividends. All Disputed Claims have been resolved and all reserves previously held in the Disputed Claims Reserve, including interest, dividends and gains have been released. As of July 15, 2009, the General Unsecured Creditors of Enron have received 52.3% return of allowed claim amounts compared to original estimates in the Disclosure Statement of 17.4% and the Creditors of Enron North America Corp have received 51.9% compared to original estimates in the Disclosure Statement of 20.1%. The combined rate of return for ENA Creditors who also hold an Enron Guaranty claim is 93.9% excluding gains, interest and dividends. B. Claims Resolution Process More than 25,000 proofs of claim were filed against the Debtors. The Reorganized Debtors and, prior to the Effective Date, the Debtors, have worked diligently to review, reconcile, and resolve these claims. In the third quarter of 2008, all Disputed Claims were resolved. Of the more than 25,000 proofs of claim filed, approximately 5,652 have been ordered allowed and approximately 2,333 have been allowed as filed. The remaining filed claims have been expunged, withdrawn, subordinated, or otherwise resolved. C. Settlement and Recoveries The Reorganized Debtors continue to reach settlements with the Commercial Paper Defendants. In April 2009, Enron received approximately $418,000 from a settlement with MTB Investment Advisors. The Reorganized Debtors also previously reported a settlement with Piper Jaffray & Co. and Dish Network that resulted in a payment of $6,200,522, which was received in May 2009. On May 14, 2009, a settlement order between Enron Creditors Recovery Corp and Fremont General Corporation was issued by the Bankruptcy Court. Under the settlement terms, The Reorganized Debtors are granted an allowed general unsecured claim of $4,000,000 in the current Chapter 11 proceedings of Fremont General Corporation. The Reorganized Debtor's claim of $4,000,000 is limited under the settlement terms to actual cash receipts from Fremont of $2,000,000. In June 2009, the Bankruptcy Court ruled on a summary judgment motion filed by the three remaining Commercial Paper Defendants. Summary judgment was granted to one defendant and dates for a pre-trial conference are to be scheduled for the remaining two. On May 14, 2009, the Bankruptcy Court entered an order approving a $16,000,000 settlement between Arthur Andersen LLP and the Reorganized Debtors. Enron received an initial payment from Arthur Andersen of $10,000,000 in June 2009. An additional $2,000,000 is scheduled to be received on each of the three subsequent anniversaries of the settlement's effective date. The Reorganized Debtors have collected approximately $10,900,000 of additional recoveries since the filing of the Eighteenth Post- Confirmation Status Report. The majority of this amount is attributable to the collection of approximately $7,800,000 in refunds from various domestic and international taxing jurisdictions. D. Other Activities The Reorganized Debtors continue to oversee additional various Enron activities including: (a) Document Administration and Disposal. In accordance with Bankruptcy Court-approved procedures, approximately 179,000 boxes of documents have been approved for disposal with 43,000 boxes remaining. The Reorganized Debtors worked to identify and dispose of all documents for which no business or litigation interest remained. On June 9, 2009 a revised Document Retention motion was filed with the Bankruptcy Court requesting authority to destroy most, if not all, remaining hardcopy documents not required for a specific business purpose. The Reorganized Debtors also request authority to arrange for the creation of electronic tape media to store its Litigation Document Library while discontinuing the burdensome maintenance of its electronic system for documentation storage. (b) Dissolution of Corporate Entities. There are 10 remaining entities, of which four are Debtors, four are non-Debtors and two are Post Final-Distribution Trusts. The Debtors and non-Debtors are taking great care to ensure all liabilities are satisfied prior to dissolution and that those dissolutions are in accordance with the governing laws. Additionally, the foreign entities have additional complexities and time components that the Debtors and non- Debtors are working through to ensure orderly dissolutions. (c) Tax Return Compliance. Tax returns are being prepared and filed for all remaining entities; for 2008, 59 filings for 235 entities and for 2009, less than 20 filings for 15 entities remain to be filed. In addition, the final tax return for the DCR Trust has been filed with the Internal Revenue Service. The Reorganized Debtors are also preparing final federal and provincial tax returns for the 2009 tax year for two Canadian entities, which should complete Canadian filing obligations. In addition, there are two Dutch entities with potential Netherlands filing obligations that should also be finalized in 2009. (d) Resolution of Outstanding Litigation. Twenty-six cases remain pending. Moreover, the Reorganized Debtors continue to perform the necessary accounting, control and reporting work required to maximize timely distributions to creditors. When deemed necessary, the Reorganized Debtors have expended efforts to establish communications with creditors, and contacts within the creditors' organizations, to ensure the Reorganized Debtors' records are current and accurate for distribution purposes. Two remaining headcount and engaged professional firms: * support litigation; * handle accounting, tax, cash management and reporting for the 10 remaining entities; * calculate and control creditor distributions; * perform claims management; * complete disposition of remaining assets; * oversee wind-up of employee matters and benefit plans; and * oversee IT and corporate services providers and non- litigation matters. About Enron Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection on December 2, 2001 (Bankr. S.D. N.Y. Case No. 01- 16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP, Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On January 9, 2004, they filed their fifth Amended Plan and on the same day the Court approved the adequacy of the Disclosure Statement. On July 15, 2004, the Court confirmed the Debtors' Modified Fifth Amended Plan and that plan was declared effective on November 17, 2004. After the approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre-bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. (Enron Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ENRON CORP: Goldman Proposes Newby Settlement --------------------------------------------- Goldman, Sachs & Co., asks the Bankruptcy Court to approve its settlement fund proof of claim submitted in the case titled Newby v. Enron Corp., for propriety losses it suffered on publicly- traded Enron and Enron-related debt and equity securities. After Enron Corp.'s collapse, Goldman Sachs asserts it suffered massive losses as a result of its investments and holdings in Enron or Enron-related securities, including securities purchased from September 9, 1997 through December 31, 2001, the class period in Newby. In accordance with the terms of the orders governing the Enron settlement fund distribution, Goldman Sachs avers it submitted a timely proof of claim for a distribution from the settlement fund based on its losses. By letter dated November 25, 2008, Gilardi & Co., LLC, the claims administrator for the Enron settlement fund, informed Goldman Sachs that its claim had been rejected on the sole ground that "Defendants in the consolidated Newby Action . . . are not Eligible Claimants." Goldman Sachs asserts that it is not and has never been a defendant in Newby and does not fall within any other class exclusions. "While Goldman Sachs was named as a defendant in other Enron- related lawsuits that were coordinated or consolidated with Newby for pre-trial purposes, nothing in the relevant court orders that define the claimants eligible to partake in the Enron settlement fund precludes Goldman Sachs' eligibility," James Pennington, Esq., at Law Office of James Pennington, in Houston, Texas, attorney for Goldman, Sachs & Co., says. "Indeed, to the contrary, this Court recently confirmed that the question of who is entitled to share in the settlement is guided by the separate Stipulations or Settlement that govern the settlement funds which, combined, comprise the Enron settlement fund," he adds. According to Mr. Pennington, the definitions of the Settlement Classes set out in the Stipulations of Settlement expressly establish that Goldman Sachs is a member of three of the Settlement Classes. As a member of those Settlement Classes, Mr. Pennington asserts, Goldman Sachs is entitled to recovery from the Enron settlement fund pursuant to the terms of the Stipulations of Settlement and the Orders approving them. Thus, Mr. Pennington contends the Court should approve the Goldman Sachs proof of claim as a matter of equity. Mr. Pennington notes Goldman Sachs was never alleged to be a "wrongdoer" in the "fraudulent scheme" underlying Newby and thus there is absolutely no equitable or other good reason to deprive Goldman Sachs of its right as a purchaser of Enron securities. UC Regents Objects The Regents of the University of California opposes Goldman Sachs' motion asserting that Goldman Sachs' motion is premised on erroneous assumptions. Keith F. Park, Esq., at Coughlin Stoia Geller Rudman & Robbins LLP, in San Diego, California, attorney for the Regents, argues that Goldman Sachs' assertion that "it is not and has never been a defendant in Newby" ignores the fact that the definition of "Newby Action" in each of the three Court-approved settlement agreements includes cases that are proceeding as part of the consolidated Newby Action, at least one of which, The Regents of the University of California v. Milbank Tweed Hadley & McCloy, et al., No. H-04-0088, named Goldman as a "Defendant" and excludes it from each class certified in connection with the three early settlements. "Whether its potential liability sounds in fraud, negligence, strict liability or some other legal theory, [Goldman Sachs] was an actor that participated in and, to a degree, caused the Enron debacle," Mr. Park tells the Court. "That conduct is antagonistic to the interests of members of the settlement classes and that is a sufficient basis, quite aside from the Court's equitable powers to exclude Goldman from sharing in the settlement funds, to justify its exclusion, by definition, from any of the classes," he further asserts. Thus, The Regents asks the Court to deny Goldman's Motion. About Enron Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection on December 2, 2001 (Bankr. S.D. N.Y. Case No. 01- 16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP, Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On January 9, 2004, they filed their fifth Amended Plan and on the same day the Court approved the adequacy of the Disclosure Statement. On July 15, 2004, the Court confirmed the Debtors' Modified Fifth Amended Plan and that plan was declared effective on November 17, 2004. After the approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre-bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. (Enron Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ENRON CORP: Objects to L. Wright's Claims ----------------------------------------- On January 26, 2009, Lynn Anne Wright, acting in her capacity as the independent executrix for the estate of Evelyn R. Wright, filed two claims against Enron Creditors Recovery Corp. with the U.S. Bankruptcy Court for the Southern District of New York. Enron Creditors Recovery Corp., complains that Ms. Wright has filed each of Claims more than six years after the October 15, 2002 Claims Bar Date. Enron says it has reviewed the Claims and has verified that the Untimely Claims are not amendments to any other previously filed claim in the Reorganized Debtor's chapter 11 cases. Thus, the Reorganized Debtors ask the Court to disallow and expunged the claims in their entirety. About Enron Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection on December 2, 2001 (Bankr. S.D. N.Y. Case No. 01- 16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP, Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On January 9, 2004, they filed their fifth Amended Plan and on the same day the Court approved the adequacy of the Disclosure Statement. On July 15, 2004, the Court confirmed the Debtors' Modified Fifth Amended Plan and that plan was declared effective on November 17, 2004. After the approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre-bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. (Enron Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). EPIX PHARMACEUTICALS: Taps Joseph Finn to Liquidate Assets ---------------------------------------------------------- Joseph F. Finn, Jr., C.P.A., said assets of EPIX Pharmaceuticals, Inc. have been assigned to him for the benefit of EPIX's creditors. EPIX's products and services focus on the discovery and development of novel therapeutics through the use of its proprietary and highly efficient in silico drug discovery platform. The company has a pipeline of internally-discovered drug candidates currently in clinical development to treat diseases of the central nervous system and lung conditions. In addition, EPIX has several programs related to its MRI imaging business, including a commercial MRI imaging drug in Europe, (MS- 325), formerly marketed as Vasorist(R), gadofosveset trisodium, by Bayer Schering Pharma.) EPIX also has collaborations with several leading pharmaceutical and research foundations. The intellectual property, regulatory dossier, fixed assets and clinical inventory will be sold at auction, the time and date of which will be announced within a week. Persons interested in bidding must sign a Confidentiality Disclosure Agreement obtained from Finn's Office jffinnjr@earthlink.net or 781-237-8840. They will then receive a bid package. As reported by the Troubled Company Reporter on July 21, 2009, EPIX Pharmaceuticals said, in light of the Company's lack of capital and inability to obtain additional financing or consummate a strategic transaction, it has entered into an Assignment for the Benefit of Creditors, effective immediately, in accordance with Massachusetts law. The purpose of the Assignment is to conclude the Company's operations and provide for an orderly liquidation of its assets. The Company indicated it had sufficient cash to fund its operations only through August 2009, and the Company had been seeking a strategic alternative, including a financing, recapitalization, sale or disposition of one or more corporate assets, a potential merger or a strategic business combination, with various third parties for several months. The Assignment is a common law business liquidation mechanism under Massachusetts law that is an alternative to a formal bankruptcy proceeding. Under the terms of the Assignment, the Company transferred all of its assets to an assignee for orderly liquidation and distribution of the proceeds to the Company's creditors. Following the liquidation of the Company's assets and distribution of proceeds by the assignee, the Company does not expect that there will be any proceeds for distribution to the Company's stockholders. Elkan Gamzu, Ph.D., president and chief executive officer of EPIX, stated, "It is with great disappointment that the Company must proceed with this decision. Over the past several months we had taken several actions in an effort to improve the financial health of EPIX, including the retirement of our $100 million aggregate principle amount of 3.00% Convertible Senior Notes due 2024. Despite this and the efforts of our financial advisors who approached numerous third-parties over the past several months, we were unable to obtain additional funding to continue our operations or consummate a strategic transaction." As part of the Assignment and the Company's wind-down of its operations, the Company has terminated the employment of substantially all of its employees. The Company expects to retain its president and chief executive officer, Dr. Elkan Gamzu, for a short period of time to assist in the implementation of an orderly dissolution. About Joseph F. Finn, Jr., C.P.A. Joseph F. Finn, Jr., C.P.A. is the founding partner of the firm, Finn, Warnke & Gayton, Certified Public Accountants of Wellesley Hills, Massachusetts. He works primarily in the area of management consulting for distressed enterprises, bankruptcy accounting and related matters, such as assignee for the benefit of creditors and liquidating agent for a corporation. He has been involved in a number of loan workouts and bankruptcy cases for 35 years. His most recent Assignments for the Benefit of Creditors in the biotech field include Spherics, Inc., ActivBiotics, Inc. and Prospect Therapeutics, Inc. About EPIX Pharmaceuticals EPIX Pharmaceuticals, Inc. (NASDAQ:EPIX), is a biopharmaceutical company focused on discovering and developing novel therapeutics through the use of its proprietary and highly efficient in silico drug discovery platform. The company has a pipeline of internally-discovered drug candidates currently in clinical development to treat diseases of the central nervous system -- see http://www.trialforAD.com/-- and lung conditions. EPIX also has collaborations with leading organizations, including GlaxoSmithKline, Amgen and Cystic Fibrosis Foundation Therapeutics. FIA CARD: Moody's Reviews 'D+' Bank Financial Strength Rating ------------------------------------------------------------- Moody's Investors Service placed the D+ Bank Financial Strength Rating of FIA Card Services, N.A. under review for possible downgrade. FIA's long-term debt and deposit ratings were affirmed at Aa3, and the company's short-term ratings were affirmed at Prime-1, with a stable outlook. The rating action reflects the continued sharp erosion of FIA's asset quality, which has been significantly worse than Moody's expectations and among the worst of its large credit card peers. In Moody's view the ongoing deterioration increases the likelihood that parent Bank of America Corp. will need to provide capital support to FIA. The BFSR is intended to express an opinion about the likelihood of such an event. During its review, Moody's will evaluate the specific strategies being employed by FIA to mitigate portfolio losses in the current highly challenging environment. Moody's will also assess the prospects for and potential effects on FIA's intrinsic credit quality of capital support from BAC, and the prospective implications of new regulations and legislation (Credit CARD Act). Notwithstanding the pressure on FIA's stand-alone financial position, Moody's believes that FIA benefits from a very high likelihood of support from its parent and affiliates and from the U.S. government. Moody's affirmation of the bank's debt and deposit ratings at Aa3/Prime-1 with a stable outlook reflects this view. The rating action is also consistent with Moody's recent recalibration of the relative importance attached to certain rating factors within its bank rating methodologies. Capital adequacy, in particular, takes on increasing importance in determining the BFSR in the current environment. Meanwhile, debt and deposit ratings will reflect the fact that Moody's expects that its support assumptions will continue to increase for systemically important institutions during this global financial crisis. The last rating action on FIA was on April 20, 2009, when Moody's lowered FIA's BFSR and assigned a negative outlook. FIA Card Services, N.A., based in Wilmington, Delaware, reported total assets of $147.7 billion as of March 31, 2009. FIA, an indirect wholly owned U.S. bank subsidiary of BAC, is the legal entity for BAC's U.S., Canada, and U.K. credit card businesses. FLEETWOOD ENTERPRISES: Nets $33.5 Million From Sale of RV Business ------------------------------------------------------------------ Fleetwood Enterprises, Inc., reports that after giving effect to certain closing adjustments, the net purchase price paid by a unit of American Industrial Partners Capital Fund IV, L.P., for the acquisition of Fleetwood's motorized recreational vehicle business was roughly $33.5 million, including: -- $2.5 million deposited into an escrow account for potential purchase price adjustments; and -- $2.0 million deposited into a segregated account to secure the Company's performance of certain information technology services under a transition services agreement. AIP offered $53 million for the assets, subject to pre-closing conditions and post-closing adjustments. As reported by the Troubled Company Reporter, Fleetwood and certain of its subsidiaries on May 29, 2009, entered into an Asset Purchase Agreement with AIP RV Acquisition Company LLC for the sale of substantially all of the Sellers' motorized recreational vehicle business assets. Prior to the closing of the sale of the RV Assets, AIP assigned its interest in the Purchase Agreement to two of its affiliates, Fleetwood RV, Inc., and Goldshield Fiberglass, Inc. The sale of the RV Assets pursuant to the Purchase Agreement was approved by the United States Bankruptcy Court for the Central District of California, Riverside Division, filed and entered on July 2, 2009. On July 17, 2009, the Company consummated the sale of the RV Assets to the Purchaser. About Fleetwood Enterprises Founded in 1950, Fleetwood Enterprises, Inc., and its various subsidiaries produce, distribute, and service recreational vehicles and manufactured housing. Fleetwood employed 2,100 people in 14 plants located in 10 states. Based in Riverside, California, the Company, together with 19 of affiliates, filed for Chapter 11 protection on March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09-14254). Craig Millet, Esq., at Gibson, Dunn & Crutcher LLP, represents the Debtors in their restructuring efforts. The Debtors also tapped Ernst & Young LLP as auditor, FTI Consulting Inc. as consultant, and Greenhill & Co. LLC as financial advisor. Fleetwood was authorized in June to sell its recreational vehicle business for $53 million to private-equity investor American Industrial Partners. FLEETWOOD ENTERPRISES: Six Directors to Resign Effective July 26 ---------------------------------------------------------------- Fleetwood Enterprises, Inc., reports that on July 15, 2009, each of the directors of the Company submitted a written resignation to the chairman of the board, resigning from his/her position as a director of the Company, such resignations to become effective at 5:00 p.m. PDT on July 26, 2009: -- Paul D. Borghesani, -- Dr. James L. Doti, -- Margaret S. Dano, -- David S. Engelman, -- John T. Montford, and -- Daniel D. Villanueva Fleetwood also reports that on July 15, 2009, the board of directors of the Company approved an amendment to Section 3.02 of the Company's Amended and Restated Bylaws to, effective July 26, 2009, reduce the number of directors from 10 to 4. A full-text copy of the Amended and Restated Bylaws, as amended, is available at no charge at http://ResearchArchives.com/t/s?3fd5 About Fleetwood Enterprises Founded in 1950, Fleetwood Enterprises, Inc., and its various subsidiaries produce, distribute, and service recreational vehicles and manufactured housing. Fleetwood employed 2,100 people in 14 plants located in 10 states. Based in Riverside, California, the Company, together with 19 of affiliates, filed for Chapter 11 protection on March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09-14254). Craig Millet, Esq., at Gibson, Dunn & Crutcher LLP, represents the Debtors in their restructuring efforts. The Debtors also tapped Ernst & Young LLP as auditor, FTI Consulting Inc. as consultant, and Greenhill & Co. LLC as financial advisor. Fleetwood was authorized in June to sell its recreational vehicle business for $53 million to private-equity investor American Industrial Partners. FORD MOTOR: Posts $2.3 Billion Net Income for Second Quarter ------------------------------------------------------------ Ford Motor Company reported a pre-tax operating loss of $424 million in the second quarter of 2009, excluding special items -- a $609 million improvement compared with the second quarter of last year -- as cost reductions, net pricing, Ford Credit results and market share helped offset the continued impact of the severe global economic downturn. On an after-tax basis, excluding special items, Ford posted an operating loss of $638 million in the second quarter, or $0.21 per share, compared with a loss of $1.4 billion, or $0.63 per share, a year ago. Ford posted net income of $2.3 billion, or $0.69 per share. The results compare with a net loss of $8.7 billion, or $3.89 per share, in the second quarter of 2008. The results for the second quarter 2009 include a special items net gain totaling $2.8 billion, or $0.90 per share, which includes a $3.4 billion gain related to Ford and Ford Credit's recent debt-reduction actions. Ford's second quarter revenue was $27.2 billion, down $11 billion from the same period a year ago. "While the business environment remained extremely challenging around the world, we made significant progress on our transformation plan," said Ford President and CEO Alan Mulally. "Our underlying business is growing progressively stronger as we introduce great new products that customers want and value, while continuing to aggressively restructure our business and strengthen our balance sheet." In the second quarter, Ford completed several actions to strengthen its overall business, including: -- Completing a series of transactions that reduced Automotive debt obligations by $10.1 billion, which will save the company more than $500 million a year in interest expense -- Raising $1.6 billion through the issuance of 345 million shares of Ford common stock -- Reducing Automotive structural costs by $1.8 billion, including $1.2 billion in North America -- Reducing the U.S. hourly work force by approximately 1,000 through a buyout program Ford reached agreement with the UAW, subject to court and other approvals, to allow Ford the option to fund up to half of its VEBA obligations with Ford common stock at market prices instead of fixed prices in 2009, 2010, and 2011. Ford finished the second quarter with $21 billion in Automotive gross cash, compared with $21.3 billion at the end of the first quarter of 2009. Automotive operating-related cash flow was $1 billion negative during the second quarter of 2009, an improvement of $2.7 billion from the first quarter of 2009. Automotive operating-related cash flow was $4.7 billion negative during the first half; on track with Ford's plan. "Ford delivered a very solid quarter, and our transformation plan remains well on track," said Lewis Booth, Ford executive vice president and chief financial officer. "We strengthened our balance sheet, reduced cash outflows and improved our year-over- year financial results despite sharply lower industry volumes." Ford's Second Quarter Highlights: -- Ford gained market share in all regions compared with the second quarter 2008: * U.S. market share rose for Ford, Lincoln and Mercury by two points to 16.4 percent. Canada and Mexico were both up, with increases of 2.8 and 1.1 points, respectively, helping Ford become Canada's top-selling brand in June for the first time in 50 years; * Ford's share of the South American market improved one point to 10.4 percent; * In Europe, Ford market share rose a half point to 9.0 percent, its highest second quarter level in the past 10 years; and * In the Asia Pacific Africa region, Ford market share was up one-tenth of a point; -- For the first time in the 28-year history of the Global Quality Research System (GQRS) study, U.S. Ford, Lincoln and Mercury brand vehicles had the fewest number of "things gone wrong" among all automakers. Customer satisfaction with vehicle quality also continued to improve, reaching its highest level in North America and equaling Toyota; -- The company posted an eighth straight year of improvement in the J.D. Power Initial Quality Study. Ford and Mercury brands placed among the Top 10 in initial quality; -- All Ford brands improved significantly in the J.D. Power APEAL study of customer satisfaction. The Ford F-150 and Ford Flex led their respective segments and were noted for their fuel efficiency and styling; -- Ford average vehicle transaction prices in the U.S. increased at a rate above the industry average, reflecting that customers are equipping these new products with high levels of content and features; -- Ford announced a $550 million investment to transform its Michigan Assembly Plant to build Ford's next-generation Focus global small car and new battery-electric Focus; -- A new passenger car plant was launched in Thailand in partnership with Mazda to build Mazda2 and Ford Fiesta models, which will be exported throughout the Southeast Asian market beginning this fall; -- Ford qualified for $5.9 billion in loans from the U.S. Department of Energy for advanced fuel efficient vehicles. Ford plans to invest nearly $14 billion in the U.S. over the next seven years on advanced technology vehicles; -- Ford's total sales in China were up 39 percent in the second quarter of 2009 aided by the strong launch of the new Ford Fiesta and continued strong sales of the Ford Focus; -- The new Ford Fiesta is now Europe's No. 2-selling car, with more than 300,000 units sold since its introduction there last fall; -- The company successfully completed the European launches of the new Ford Transit Connect, Ford Ranger and Ford Transit ECOnetic; -- Began production of the 2010 Ford Taurus and the high- performance 2010 Ford Taurus SHO in North America. Ford's flagship sedan arrives soon in dealer showrooms; -- Production has begun for the 2010 Ford Transit Connect for North America, a purpose-built van for small businesses, which will debut this summer; -- Production is under way for the 3.5-liter V6 EcoBoost engine, which will be available this year on the Lincoln MKS, Ford Flex, Ford Taurus SHO and Lincoln MKT. EcoBoost delivers the horsepower of a V8 with the fuel efficiency of a V6; and -- The Lincoln MKZ, Ford Focus and Volvo C30 earned the "Top Safety Pick" award from the Insurance Institute for Highway Safety. Ford has more IIHS "Top Safety Pick" awards than any other automaker. Automotive Sector For the second quarter of 2009, Ford's worldwide Automotive sector reported a pre-tax operating loss of $1 billion, compared with a pre-tax loss of $699 million a year ago. The decline reflected lower industry volumes, actions to reduce dealer stocks, higher material costs and unfavorable exchange, largely offset by structural cost reductions, favorable net pricing and improved market share. Worldwide Automotive revenue in the second quarter was $24 billion, down from $34.1 billion a year ago. The decrease is primarily explained by lower volumes and unfavorable exchange, partly offset by favorable net pricing. Total vehicle wholesales in the second quarter were 1,172,000, compared with 1,562,000 units a year ago. Automotive structural cost reductions in the second quarter totaled $1.8 billion, including $1.2 billion in North America. Manufacturing and engineering costs were $1.1 billion lower, largely reflecting the continued benefits of personnel actions in North America and Europe. Overall, Ford reduced Automotive structural costs by $3.6 billion in the first half. Net pricing was about $1.2 billion favorable, primarily explained by higher pricing in the U.S., reflecting the success of new products, including the Ford F-150, Ford Fusion and Ford Mustang, and the continuation of its disciplined approach on incentives. For the second quarter, Ford North America reported a pre-tax loss of $851 million, compared with a loss of $1.3 billion a year ago. The improvement was primarily explained by structural cost reductions, favorable net pricing and improved market share, partly offset by lower U.S. industry volume, a reduction in dealer stocks, higher material cost and unfavorable exchange. Second quarter revenue was $10.8 billion, down from $14.2 billion a year ago. Financial Services Sector For the second quarter, the Financial Services sector reported a pre-tax profit of $595 million, compared with a loss of $334 million a year ago. Ford Motor Credit Company reported a pre-tax profit of $646 million in the second quarter, compared with a pre-tax loss of $294 million a year ago. The improvement primarily reflected lower depreciation expense for leased vehicles due to higher auction values, net gains related to unhedged currency exposures, a lower provision for credit losses and lower operating costs. These factors were partly offset by lower volume and non- recurrence of a gain related to the sale of approximately half of Ford Credit's ownership interest in its Nordic operations. Other Financial Services reported a loss of $51 million in the second quarter, compared with a pre-tax loss of $40 million a year ago. The decline is more than explained by a loss related to a real estate transaction. Ford Continues to Make Progress Despite the severe global downturn, Ford said it continues to make progress on all four pillars of its plan: -- Aggressively restructure to operate profitably at the current demand and changing model mix; -- Accelerate the development of new products that customers want and value; -- Finance the plan and improve the balance sheet; and -- Work together effectively as one team, leveraging Ford's global assets. Ford said it remains on track to achieve or exceed all of its 2009 financial targets and most of its operational metrics. The Company said it now expects full-year market share to improve compared to 2008 in the U.S. and Europe, reflecting share increases in the first half and strong reception to new product introductions. Ford expects 2009 U.S. industry sales will be between 10.5 million and 11 million units, consistent with the outlook previously communicated by the company. Based on first half European industry volume, Ford now expects that Europe's full-year industry sales will be in the range of 15 million to 15.5 million units, which is higher than the previous outlook. Ford expects third quarter 2009 production to be up, compared with 2008 and second quarter 2009 production. This increase is largely due to tightly controlled inventories and higher market demand for our products. Ford remains on track to exceed its $4 billion Automotive structural cost reduction target for 2009. Second half cost reductions will be less than the first half, reflecting the significant cost reductions achieved during the third and fourth quarters of 2008. Ford expects Automotive operating-related cash flows in the second half to improve from first half levels consistent with its current planning assumptions. However, due to substantial improvements in the second quarter, third quarter levels may not improve sequentially. Ford Credit expects its second half 2009 results to be lower than its first half 2009 results. Ford Credit does not expect the net gains related to unhedged currency exposures or improvements in lease residual losses in the amounts experienced in the second quarter 2009 to continue. A continuing decline in receivables will also contribute to lower second half 2009 results. Based on its current planning assumptions, Ford has sufficient liquidity to fund its product-led transformation plan and provide a cushion against the uncertain global economic environment. In addition, Ford will continue to pursue actions to improve its balance sheet. The company remains on track to achieve its key 2011 financial targets, based on current planning assumptions, including overall and North American Automotive pre-tax results being breakeven or better, excluding special items, and Automotive operating-related cash flow being breakeven or better. "Our product-led transformation is working, and we are pleased with our progress in the second quarter," Mr. Mulally said. "While the economic environment remains challenging, I am more convinced than ever we are on the right path to create a healthy and profitably growing Ford." A full-text copy of Ford's news statement and key financial highlights is available at no charge at: http://ResearchArchives.com/t/s?3fde Matthew Dolan and Jeff Bennett at The Wall Street Journal relate that Ford's rate of cash use dropped largely as a result of limited spending on buyer incentives and increased production at its North American plants. "Ford delivered exactly what we wanted to see -- lower cash burn. But it's still too early to tell whether Ford has got its swagger back since some of the improvement was due to market share and price gains that Ford probably picked up at General Motors and Chrysler's expense while they were in bankruptcy," The Journal quoted corporate bond research firm Gimme Credit analyst Shelly Lombard as saying. A slower-than-expected economic recovery or a disruption of the industry's parts supply could dampen Ford's optimistic outlook, The Journal states, citing Ford Chief Financial Officer Lewis Booth. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The Company provides financial services through Ford Motor Credit Company. The Company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported by the Troubled Company Reporter on April 15, 2009, Standard & Poor's Ratings Services said it raised its ratings on Ford Motor Co. and related entities, including the corporate credit rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor Credit Co. are unchanged, at 'CCC+', and the ratings on FCE Bank PLC, Ford Credit's European bank, are also unchanged, at 'B-', maintaining the one-notch rating differential between FCE and its parent Ford Credit. S&P said that the outlook on all entities is negative. Moody's Investors Service in December 2008 lowered the Corporate Family Rating and Probability of Default Rating of Ford Motor Company to Caa3 from Caa1 and lowered the company's Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently-approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. FORD MOTOR: Better 2nd Quarter Results May Lead to Equity Offering ------------------------------------------------------------------ A narrower second quarter loss, which surpasses analysts' expectations, may boost stock that could give Ford Motor Co. a chance for an equity offering to cut debt, Jeff Green and Katie Merx at Bloomberg News report, citing Fifth Third Asset Management senior portfolio manager Mirko Mikelic. Bloomberg relates that Credit Suisse Holdings USA Inc. Chris Ceraso cut his loss estimate for Ford last week to 28 cents a share from 78 cents, while JPMorgan Chase & Co. analyst Himanshu Patel, citing improvements in pricing and increased production in North America and Europe, said in a note to investors on July 17 that Ford will beat analysts' adjusted-loss estimates by a "meaningful" amount, without revising his projection for a 68-cent deficit. Bloomberg relates that Mr. Mikelic, who helps supervise $19 billion in fixed-income assets at Fifth Third in Grand Rapids, Michigan, including Ford Motor Credit debt, said that beating estimates will help Ford "tap the capital markets. For them to survive, they have to be able to tap the capital markets." According to Bloomberg, Ford CEO Alan Mulally's decision to forgo federal aid is forcing him to pare $25.8 billion in debt from automotive operations through March. Mr. Patel said in an e-mail on July 17 that Ford's debt will increase to $40 billion by 2011, Bloomberg states. Bloomberg quoted Morgan Keegan & Co. fixed-income analyst Pete Hastings as saying, "The big questions are how do they manage their debt load going forward, and the expense rate, and do they see their volume growing enough that they can accomplish what they need to do?" Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The Company provides financial services through Ford Motor Credit Company. The Company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported by the Troubled Company Reporter on April 15, 2009, Standard & Poor's Ratings Services said it raised its ratings on Ford Motor Co. and related entities, including the corporate credit rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor Credit Co. are unchanged, at 'CCC+', and the ratings on FCE Bank PLC, Ford Credit's European bank, are also unchanged, at 'B-', maintaining the one-notch rating differential between FCE and its parent Ford Credit. S&P said that the outlook on all entities is negative. Moody's Investors Service in December 2008 lowered the Corporate Family Rating and Probability of Default Rating of Ford Motor Company to Caa3 from Caa1 and lowered the company's Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently-approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. FREDDIE MAC: Names Charles Haldeman Jr. as Chief Executive Officer ------------------------------------------------------------------ Freddie Mac said its board of directors has named finance industry veteran Charles E. Haldeman, Jr., as the Company's chief executive officer and has elected him as a member of the board of directors. Mr. Haldeman was chairman of Putnam Investment Management, LLC, the investment advisor for the Putnam Funds, until June 30, 2009. Previously, he served as president and chief executive officer of Putnam Investments. Freddie Mac expects that Mr. Haldeman's employment and board tenure will begin in August 2009, following release of the company's second quarter financial results. He will succeed John A. Koskinen who has been serving as Freddie Mac's interim chief executive officer since March 2009. Mr. Koskinen will resume his previous position as non-executive chairman of the board. Mr. Haldeman has more than 35 years of investment and management experience. Prior to assuming the role of chairman of Putnam Investment Management in July 2008, he served as president and chief executive officer of Putnam Investments, a position to which he was appointed in 2003. He was charged with reorganizing the business and improving business policies and compliance following a series of probes into the industry's business practices. Based on that success, CFA Magazine named him "One of the Most Influential CFA Institute Members" in December 2006, citing his personal commitment to fiduciary duty, his work to restore Putnam's reputation and his creation of an organizational culture that reinforced trust in the firm. Mr. Haldeman also spearheaded the sale of Putnam Investments to Power Financial Corporation in January 2007. A member of the Putnam Funds' Board of Trustees since 2004, he was named president of the Putnam Funds in 2007. He joined Putnam Investments in 2002 as co-head of the investment division. Putnam is one of the world's largest mutual fund administrators, with more than $100 billion in assets under management. Prior to joining Putnam, Mr. Haldeman served as chairman and chief executive officer of Delaware Investments, and as president and chief operating officer of United Asset Management Corporation (UAM). He began his career at Cooke & Bieler, Inc., an affiliate of UAM, in 1974, where he held a series of senior executive positions. Mr.Haldeman earned an M.B.A. from Harvard Business School, where he was a Baker Scholar, a J.D. cum laude from Harvard Law School, and an A.B. summa cum laude from Dartmouth College. He is a Chartered Financial Analyst (CFA). Mr. Haldeman is currently chairman of the Board of Trustees of Dartmouth College. He also serves on the Harvard Business School Board of Dean's Advisors, the Partners HealthCare Investment Committee, and the Executive Committee of the Boston Chamber of Commerce. He formerly served on the Board of Governors of the Investment Company Institute. He and his wife, Barbara, have three children. About Freddie Mac The Federal Home Loan Mortgage Corporation (FHLMC) NYSE: FRE -- http://www.freddiemac.com/-- commonly known as Freddie Mac, is a stockholder-owned government-sponsored enterprise authorized to make loans and loan guarantees. Freddie Mac was created in 1970 to provide a continuous and low cost source of credit to finance America's housing. Freddie Mac conducts its business primarily by buying mortgages from lenders, packaging the mortgages into securities and selling the securities -- guaranteed by Freddie Mac -- to investors. Mortgage lenders use the proceeds from selling loans to Freddie Mac to fund new mortgages, constantly replenishing the pool of funds available for lending to homebuyers and apartment owners. At December 31, 2008, the Company's balance sheet showed total assets of $850.9 billion and total liabilities of $881.6 billion, resulting in a stockholders' deficit of $30.7 billion. Conservatorship As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. Being under Conservatorship, Freddie Mac said it is dependent upon the continued support of Treasury and FHFA to continue operating its business. FRONTIER AIRLINES: Court Approves Disclosure Statement ------------------------------------------------------ The United States Bankruptcy Court for the Southern District of New York approved the Disclosure Statement explaining Frontier Airlines Holdings, Inc., and its debtor-affiliates' Joint Plan of Reorganization, at a hearing held July 22, 2009. Judge Robert D. Drain held that the Disclosure Statement contains adequate information within the meaning of Section 1125 of the Bankruptcy Code that would enable creditors to make an informed decision on whether to accept or reject the Plan. The Disclosure Statement discusses information with respect to, among other things, the Debtors' available assets and their value, the anticipated future of the Debtors, the condition and performance of the Debtor while in Chapter 11, the claims against the estate, the Debtors' financial information and the tax consequences of the Plan. Approval of the Disclosure Statement is a go-ahead signal for the Debtors to start soliciting votes for acceptance of their Plan, which will come before the Court for confirmation at a hearing on September 10, 2009, at 10:00 a.m., Eastern Standard Time. Parties have until August 28 to file objections to the Plan. Judge Drain established July 22, 2009, as the Voting Record Date for determining (i) the creditors who are entitled to vote on the Plan, and (ii) in the case of non-voting classes, the creditors and interest holders that are to receive certain informational materials. A full-text copy of the Debtors' Plan is available for free at: http://bankrupt.com/misc/FAH_Chapter11Plan.pdf A full-text copy of the Debtors' Disclosure Statement is available for free at: http://bankrupt.com/misc/FAH_DisclosureStatement.pdf Disclosure Statement Objections Resolved Damian S. Schaible, Esq., at Davis Polk and Wardwell, in New York informs the Court that Frontier Airlines Holdings, Inc. and its debtor-affiliates received several informal objections to the approval of their Disclosure Statement explaining their Chapter 11 Plan of Reorganization. To resolve these Objections, the Debtors submitted to Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York, on July 20, 2009, their Amended Disclosure Statement and Plan to incorporate these "minor changes": (1) Each collective bargaining agreement to which the Debtors are parties, as amended, will be deemed assumed effective as of the Effective Date of the Plan. However, the assumption will not affect the treatment of claims asserted under the Agreements to the extent that they are (i) previously allowed by the Bankruptcy Court's final order or (ii) filed by the International Brotherhood of Teamsters and related to the Debtors' postpetition consensual and non-consensual modification of the IBT Material Specialist Agreement or the IBT Maintenance Agreement. (2) The Debtors have not yet determined how to treat certain insurance policies issued by ACE American Insurance Company. Nothing in the Plan, however, will be read to authorize the unilateral amendment by the Debtors of any of the terms of the ACE Policies and Agreements. Prior to the filing of the Amended Disclosure Statement and Plan, Diana G. Adams, the United States Trustee for Region 2, argued that the discharge of non-debtor third-parties under the Disclosure Statement is prohibited by Section 524(e) of the Bankruptcy Code. She pointed out that the Disclosure Statement provides that the "discharge of a debt of the debtor does not affect the liability of any other entity on, or the property of any other entity for, [the] debt." In addition, the Plan specifies that none of the Debtors, Reorganized Debtors, the Official Committee of Unsecured Creditors, the Agent and Lenders under the Debtor-in-Possession Credit Agreement, the Plan Sponsor, the Indenture Trustee, the Frontier Airlines Pilots Association Released Parties, the Transport Workers Union and the International Brotherhood of Teamsters Released Parties will have or incur any liability to any holder of a Claim or Interest for any act or omission in connection with, related to or arising out of, the Plan. Ms. Adams clarified that she does not object to the exculpation for the Debtors and the Official Committee of Unsecured Creditors to the extent that the Exculpation is limited to the language of Section 1125(e) of the Bankruptcy Code. In the event that the Court finds any Releases to be appropriate, she said the Release language in the Disclosure Statement and Plan should be modified to conform to the policies of the U.S. Trustee. Specifically, the Amendments should not: * apply in the event of fraud, gross negligence, willful misconduct, malpractice, criminal conduct, unauthorized use of confidential information that causes damages, or ultra vires" acts; and * limit the liability of the Debtors' professionals to their client contrary to the requirements of Rule 1.8(h)(1) of the New York Rules of Professional Conduct. Neither the Disclosure Statement nor the Plan explains why the Non-Debtor Release is warranted or justified, Ms. Adams further stated, citing Deutsche Bank AG v. Metromedia Fiber Network, Inc., 416 F. 3d 136, 141 (2d Cir. 2005). The U.S. Trustee added that she is "unable to discern from the Plan or Disclosure Statement" any factors that would justify the Releases. Absent adequate explanation from the Debtors as to their justification, the Proposed Releases should be disallowed, Ms. Adams said. She added that the Plan does include "language carving out Government Claims from the Proposed Releases." In this regard, the Plan fails (i) to require either the Disbursing Agent to obtain a bond with respect to any funds held for distribution to creditors or other parties, or (ii) to agree to notify the Court and the U.S. Trustee before terminating any bond that is obtained, Ms. Adams told the Court. Subsequently, the Debtors confirmed that they and the U.S. Trustee have agreed to treat the U.S. Trustee's objection as an objection to confirmation of the Plan rather than an objection to approval of the Disclosure Statement. Frontier further noted that the Objection is "largely technical in nature," which is unlikely to block the Court's approval of the Plan, notes news reports. Similarly, Travis County, the City of Austin, Austin Community College, Del Valle Independent School District and Travis County Hospital District averred that the Plan is "unfair and unconfirmable" under Sections 511(a) and 1129(b)(2)(A) of the Bankruptcy Code, as it does not allow for payment of Travis County's Claim. Travis County asserts a claim against the Debtors totaling $1,930, which is secured by a lien pursuant to Section 32.01 of the Texas Property Tax Code, on the Debtors' property. Travis County Tax Assessor-Collector Nelda Wells Spears maintained that the Claim "takes priority over the claims and interests of any other creditor" in the Debtors' cases. Moreover, pursuant to Sections 33.01(a) and (c) of the Texas Property Tax Code, the Claim receives a 12% penalty as well as interest at the rate of 1% for each month that the property taxes remain unpaid. The lien is automatically perfected on January 1, Ms. Spears added. In a subsequent filing, the Debtors told the Court that, as a result of negotiations, Travis County will withdraw its objection to the Plan. 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) FRONTIER AIRLINES: Court Approves Republic Investment Agreement --------------------------------------------------------------- Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York issued a written order on July 13, 2009, approving the investment agreement between Frontier Airlines Holdings, Inc., and Republic Airways Holdings, Inc. The Court approved the Proposal Process in all respects, and will govern all proceedings related to, the solicitation and selection of alternative proposals. An auction will be conducted for the period from August 11 to August 17, 2009, during which time Frontier may seek higher or otherwise better competing bids. Any interested bidders must submit an initial proposal by August 3, and a final proposal by August 10. If Frontier identifies and chooses to accept an alternative Successful Proposal, the Debtors may, in effect terminate the Investment Agreement with Republic. If the Investment Agreement is terminated by Republic or Frontier Holdings for any reason at any time during the Proposal Process, the Debtors may, in their sole discretion, but after consultation with the Official Committee of Unsecured Creditors, terminate the Proposal Process. Neither Republic nor the Debtors will have any obligations with respect to the termination of the Proposal Process, but will not affect the Debtors' obligations to Republic with respect to the Termination Fee or Expense Reimbursement. "The Debtors' subsequent presentation of a superior Alternative Proposal to the Court for approval does not constitute the Debtors' acceptance of the proposal. The Debtors will be deemed to have accepted an Alternative Proposal only when the proposal has been approved by the Court," Judge Drain ruled. Under the Auction Procedures, the Debtors will present the Successful Proposal for Court approval at a hearing to be scheduled not later than 21 days following the Auction. The Court also approved the Notice of Auction and directed the Debtors to publish it in the national edition of The Wall Street Journal. The Debtors subsequently submitted to Judge Drain a copy of the Notice. Subject to the terms of the Investment Agreement, Judge Drain allowed the Debtors and Republic to waive, modify, amend or supplement the Investment Agreement without further Court order, provided that (i) the Amendments are favorable to the Debtors or immaterial to the estates' creditors, and (ii) notice of the Amendments will be given to the Creditors' Committee at least 48 hours prior to effectiveness. To recall, Republic has agreed to purchase 100% of the stock of Frontier Holdings upon its emergence from bankruptcy for $108.75 million, under certain conditions. Consequently, Frontier Airlines Holdings would become a wholly owned subsidiary of Republic. However, Frontier Airlines and Lynx Aviation would maintain their current names and continue to operate as usual. A full-text copy of Judge Drain's Order is available for free at: http://bankrupt.com/misc/FAH_InvestmentPact&AuctionOrder.pdf 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) FRONTIER AIRLINES: Paul Dempsey Disposes Of 5,500 Shares Of Stock ----------------------------------------------------------------- Paul S. Dempsey, a director at Frontier Airlines Holdings, Inc., informed the U.S. Securities and Exchange Commission that on July 13, 2009, he disposed of 5,500 shares of the Company's common stock at $0.05. Following the transaction, Mr. Dempsey beneficially owned zero Frontier shares. 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) FRONTIER AIRLINES: Seeks to Extend LRU Lease Decision Period ------------------------------------------------------------ Pursuant to Section 365 of the Bankruptcy Code and Rule 6006 of the Federal Rules of Bankruptcy Procedure, Frontier Airlines Holdings Inc. and its affiliates ask the Bankruptcy Court to extend the period during which they may assume their standard industrial lease of the LRU Reservations Center in El Paso, Texas, through and including September 30, 2009. According to Timothy E. Graulich, Esq., at Davis Polk & Wardwell LLP, in New York, the Extended Assumption Deadline was consensually reached with Mesilla Valley Business Park, LLC, as the Landlord, to provide additional time for the parties to review the LRU Lease. Absent the Extension, the LRU Lease, if not assumed, will be deemed rejected as of August 1, 2009. Frontier agrees to continue paying all rentals required under the LRU Lease Agreement with Mesilla Valley until September 30, 2009, Mr. Graulich says. 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) FRUIT OF THE LOOM: Judge Walsh Declines Magnetek's Invitation ------------------------------------------------------------- Permissive abstention was warranted in an adversary proceeding in which the reorganized debtors in a Chapter 11 case sought a declaration that the claims asserted against one debtor by a creditor in state-court actions were waived, released, and discharged under a settlement agreement and that the creditor's addition of the debtor as the defendant in the state-court actions breached the settlement agreement. The adversary proceeding would not have a significant effect on the efficient administration of the bankruptcy estate, since the debtors' plan took effect more than seven years earlier. Moreover, state law issues predominated over bankruptcy issues, and the issues were straightforward contract issues. The court's jurisdictional basis rested solely on bankruptcy jurisdiction, furthermore, and the adversary proceeding was remote from the main bankruptcy case and was not a core proceeding. In re Fruit of the Loom, Inc., --- B.R. ----, 2009 WL 2058383 (Bankr. D. Del.). Fruit of the Loom, Inc., and a number of its subsidiaries, filed voluntary chapter 11 petitions (Bankr. D. Del. Case No. 99-04497) on On December 29, 1999. Magnetek filed proofs of claim in several of the related cases asserting liability on account of environmental, health, and safety matters, related to a facility in Bridgeport, Connecticut. Fruit of the Loom and Magnetek entered into a Settlement Agreement which the Bankruptcy Court approved on April 25, 2002. Reorganized Fruit of the Loom brought an adversary proceeding against Magnetek, Inc. (Bankr. D. Del. Adv. Pro. No. 09-50948), seeking a declaration that claims asserted against the reorganized company by Magnetek in state-court actions were waived, released, and discharged under settlement agreement and that creditor's addition of debtor as a defendant in those actions breached settlement agreement. Magnetek moved for abstention, and the Honorable Peter J. Walsh held that (1) Magnetek's waiver of its right to seek mandatory or permissive abstention did not prevent the bankruptcy court from sua sponte addressing the issue of whether permissive abstention was warranted, and (2) permissive abstention was warranted. GENERAL MOTORS: German Gov't Still Favors Magna Bid for Opel ------------------------------------------------------------ BBC News reports the German government has said that after initial evaluations of the three bids for General Motors Corp.'s European unit, Opel, it still favors a deal with Canadian car parts maker Magna International Inc. The government initially supported Magna's bid in May. According to BBC, a buyer for Opel, which includes Vauxhall in the UK, is expected to be chosen by the end of July. BBC says a final deal could then be agreed by the end of October. "We have indicated that we see the Magna concept as a sustainable one," BBC News quoted Chancellor Angela Merkel as saying. On July 22, 2009, the Troubled Company Reporter-Europe, citing The Financial Times, reported that GM said on Monday that it had received three final bids for its European business. The FT disclosed Magna and OAO Sberbank entered bids alongside Belgium's RHJ International SA and China's Beijing Automotive Industry Holding Co for a controlling stake in Opel/Vauxhall. GM, as cited by the FT, said it would now analyze and compare the bids before reviewing them with Germany and other affected governments, the European Commission, and the Opel/Vauxhall Trust Board. Citing a person close to the deal, the FT disclosed 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 said. Loan Guarantees As reported in the Troubled Company Reporter-Europe on July 17, 2009, The Wall Street Journal said the German government warned GM that, if it sells its European car business to anyone other than Magna, then Germany might withdraw its offer to provide state aid. The WSJ disclosed German politicians pledged to support Magna's plan with EUR4.5 billion (US$6.3 billion) in loan guarantees. German officials pointed out GM couldn't complete a deal without Germany's aid and approval, the WSJ said. According to the WSJ, German states that host Opel factories, and which are contributing to EUR1.5 billion of interim loans to keep Opel alive, also said that an alternative buyer would have to renegotiate state aid. 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) GHOST TOWN: Asks Court for 3-Month Delay of Plan Filing Deadline ---------------------------------------------------------------- Becky Johnson at Smoky Mountain News reports that Ghost Town in the Sky has asked the U.S. Bankruptcy Court for the Western District of North Carolina to extend by three months the deadline for the submission of its reorganization plan. According to Smoky Mountain, Ghost Town was scheduled to file a reorganization plan in the Court within four months, which would have been this early July. Smoky Mountain relates that Maggie Valley resident and business owner Alaska Pressley has offered a $250,000 loan to Ghost Town to help the park on its road to recovery. Court documents say that the loan would be used to help get the incline railway working. Smoky Mountain says that Ghost Town proposes to pay back the loan over the course of five years, with $1 per customer this year and $2 per customer for the next four years. This arrangement would let Mr. Pressley to sidestep others who are owed money by Ghost Town by directly tapping the park's revenue stream, says Smoky Mountain. Smoky Mountain states that BB&T objected to the proposal as it would funnel profits off the park to pay back a select lender. BB&T holds a $9.5 mortgage on the property, says the report. Located in the Great Smoky Mountains in Maggie Valley, North Carolina, Ghost Town in the Sky -- http://www.ghosttowninthesky.com/-- features staged gunfights, live music and shows, crafts, and food. Based in Waynesville, North Carolina, Ghost Town Partners, LLC, operates an amusement park. The Debtor filed for Chapter 11 protection on March 11, 2009 (Bankr. W.D. N.C. Case No. 09-10271). David G. Gray, Esq., at Westall, Gray, Connolly & Davis, P.A., and William E. Cannon, Jr., at Brown, Ward & Haynes P.A., represent the Debtor in its restructuring efforts. In its bankruptcy petition, the Debtor listed total assets of $13,035,300 and total debts of $12,305,672. GLOBAL MOTORSPORT: Court Extends Period to Remove Actions --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has ordered that the time period provided by Bankruptcy Rule 9027 within which Global Motorsport Group, Inc., et al., may file notices of removal of related proceedings under Bankruptcy Rule 9027(a)(2) through the later of (a) December 31, 2009, or (b) 30 days after entry of an order terminating the automatic stay with respect to any particular action sought to be removed. The Court further extended the time period provided by Bankruptcy Rule 9027 within which the Debtors may file notices of removal of related proceedings under Bankruptcy Rule 9027(a)(3) to the later of (i) December 31, 2009, or (ii) the time period specified in Bankruptcy Rule 9027(a)(3)(A) and (B)(i.e., the shorter of (A) 30 days after receipt, through service or otherwise, of a copy of the initial pleading setting forth the claim or cause of action sought to be removed, or (B) 30 days after receipt of the summons if the initial pleading has been filed with the court but not served with the summons. About Global Motorsport Headquartered in Morgan Hill, California, Global Motorsport Group Inc. -- http://www.gmgracing.com/-- is a dealer of European model sports cars. The Company is also known as Global Motorsport Parts Inc. The Company and three of its affiliates filed for protection on January 31, 2008 (Bankr. D. Del. Lead Case No. 08-10192). Laura Davis Jones, Esq., James O'Neill, Esq., and Joshua Fried, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as counsel to the Debtors. T. Scott Avil, Esq., at CRG Partners Group LLC, is the Debtors' restructuring services provider. Federico G.M. Mennella, Esq., at Lincoln International Advisors, LLC, is the Debtors' investment banker. The Debtors selected Epiq Bankruptcy Solution LLC as their claims agent. The U.S. Trustee for Region 3 has appointed five creditors to serve on an Official Committee of Unsecured Creditors. Fox Rothschild LLP and Andrews Kurth LLP serve as the Committee's counsel. Edward T. Gavin, CTP, at NachmanHaysBrownstein, Inc., is the Committee's financial advisor. Adam Harris, Esq., and David Hillman, Esq., at Schulte Roth & Zabel LLP, serve as counsel to the prepetition and postpetition secured lenders. When the Debtors filed for protection from their creditors, they listed assets of between $50 million and $100 million and debts of between $100 million and $500 million. GLOBAL MOTORSPORT: Plan Filing Period Extended to September 30 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has extended Global Motorsport Group, Inc., et al.'s exclusive period to propose a plan through July 31, 2009, and their exclusive period to solicit acceptances thereof through September 30, 2009. This is the Debtors' fourth extension of their exclusive periods. In their motion, the Debtors told the Court that they, together with the Official Committee of Unsecured Creditors and secured lender Ableco Finance LLC, have agreed on the essential terms of a plan, and have executed a term sheet memorializing the terms of that agreement. As reported in the Troubled Company Reporter on March 12, 2008, the Debtors obtained approval of the sale of substantially of their assets to Dae-II USA, Inc., for $16 million. The sale closed on March 7, 2008. About Global Motorsport Headquartered in Morgan Hill, California, Global Motorsport Group Inc. -- http://www.gmgracing.com/-- is a dealer of European model sports cars. The Company is also known as Global Motorsport Parts Inc. The Company and three of its affiliates filed for protection on January 31, 2008 (Bankr. D. Del. Lead Case No. 08-10192). Laura Davis Jones, Esq., James O'Neill, Esq., and Joshua Fried, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as counsel to the Debtors. T. Scott Avil, Esq., at CRG Partners Group LLC, is the Debtors' restructuring services provider. Federico G.M. Mennella, Esq., at Lincoln International Advisors, LLC, is the Debtors' investment banker. The Debtors selected Epiq Bankruptcy Solution LLC as their claims agent. The U.S. Trustee for Region 3 has appointed five creditors to serve on an Official Committee of Unsecured Creditors. Fox Rothschild LLP and Andrews Kurth LLP serve as the Committee's counsel. Edward T. Gavin, CTP, at NachmanHaysBrownstein, Inc., is the Committee's financial advisor. Adam Harris, Esq., and David Hillman, Esq., at Schulte Roth & Zabel LLP, serve as counsel to the prepetition and postpetition secured lenders. When the Debtors filed for protection from their creditors, they listed assets of between $50 million and $100 million and debts of between $100 million and $500 million. GREEKTOWN CASINO: Detroit Appeals Development Agreement Assumption ------------------------------------------------------------------ The City of Detroit has filed an appeal to the United States District Court for the Eastern District of Michigan, Southern Division of the Bankruptcy Court's decision authorizing the Debtors to assume their Development Agreement with the City. The Appeal has been assigned to Judge Paul D. Borman as Civil Casino No. 09-cv-12460. Cezar M. Froelich, Esq., at Shefsky & Froelich Ltd., in Chicago, Illinois, says that the City wants the District Court to review if the Bankruptcy Court erred in concluding that: (1) it should apply the actual test and not the hypothetical test under Section 365(c) of the Bankruptcy Code when considering the Debtors' request for authority to assume the Development Agreement and whether application of the hypothetical test would have barred the Debtors' assumption; (2) the Debtors are not barred from assuming the Development Agreement because Section 365(e)(2)(A) of the Bankruptcy Code do not revive the City's "ipso facto clauses" in the Development Agreement which made the Debtors' filing of a bankruptcy petition a default; (3) the Debtors had no obligation to cure any defaults for which they did not have formal notice and an opportunity to cure; (4) notice was not given to the Debtors of their numerous defaults under the Development Agreement; (5) notice is required under the Development Agreement for every type of default for a default to exist; (6) the Debtors did not have to cure any of their numerous defaults under the Development Agreement nor provide adequate assurance of future performance prior to assumption of the executory contract; (7) the Debtors did not waive the formal notice requirement contained in the Development Agreement, or should not be estopped from asserting the notice requirement as a defense; and (8) all provisions in the Development Agreement required a formal notice or cure period before a default existed and whether the Debtors were able to satisfy the other requirements of Section 365 of the Bankruptcy Code prior to its assumption of the Development Agreement. The City also submitted a designation of items to be included in the record on appeal, a copy of which is available for free at: http://bankrupt.com/misc/GrktwnCityItems.pdf About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GREEKTOWN CASINO: Exceeds 2008 Revenues for 3rd Straight Month -------------------------------------------------------------- Greektown Casino-Hotel posted all-time highs for both profit and revenue in June, announced casino officials. Projected EBITDAR (Earnings before Interest, Taxes, Depreciation, Amortization, and Restructuring Expenses) for June 2009 is expected to be more than three times as high as June 2008, and the highest ever in the month of June for Greektown. Revenue for June was also up year- over-year by 24.2 percent, the third-straight month the property has surpassed 2008 numbers. Finally, Greektown once again gained market share, capturing nearly another percent of the Detroit market. The positive results all came on the heels of a stellar May, when Greektown posted a 7.2 percent year-over-year revenue increase while the overall gaming market in Detroit saw a 4.2 percent decline. "We have spent the month welcoming thousands of former Windsor customers, which not only helps our bottom line but adds jobs and tax revenues right here in Detroit. We are thrilled with the results of our 'Match Windsor' promotion and are honoring it again in July," said Randall A. Fine, Managing Director of The Fine Point Group and Chief Executive Officer of Greektown. "To grow revenues 24% in this economy is something each Greektown team member can be proud of, but more than that, I cannot emphasize enough that we are doing this while dramatically growing our profits and increasing our operating margins. Anyone can buy business -- to triple profits in this economy is awfully hard to ignore," Fine added. Located at 555 E. Lafayette Boulevard in Detroit's Greektown Entertainment District, Greektown Casino-Hotel opened on November 10, 2000. Readers of The Detroit News and Detroit Free Press have voted Greektown Casino-Hotel Michigan's and Detroit's "Best Casino" numerous times. Greektown Casino-Hotel offers such amenities as their all-new International Buffet, the Eclipz Lounge and a VIP lounge for players. In addition to being named "Best Casino" by readers of The News and Free Press, Greektown Casino-Hotel also placed first in other categories in The News' reader survey, including "Best Slots," "Best Wait Staff Outfits," "Best Craps Tables," "Best Blackjack Tables," "Best High Rollers Area," "Best Casino Restaurant," and "Best Casino Entertainment." Greektown Casino-Hotel opened its new 400-room hotel tower February 2009. For reservations and group events, call 877-GCH- 5554 or visit http://www.greektowncasino.com About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GREEKTOWN CASINO: Fine Consulting Bills $2 Million for March-May ---------------------------------------------------------------- Nine professionals in the Debtors' bankruptcy cases ask the Court to grant them allowance of fees for services rendered and reimbursement of expenses incurred for the quarter period from March 2009 through May 2009: A. Debtors' Professionals Firm Role Fees Expenses ---- ---- -------- -------- Fine Consulting, Inc. Gaming $2,021,900 $54,813 Consultant Conway Mackenzie, Financial 837,986 11,482 Inc. Advisor Honigman Miller Special 720,062 15,448 Scwartz & Cohn LLP Counsel Moelis & Company LLC Investment 450,000 77,279 Banker Ernst & Young Accountant 149,639 669 Jackier Gould PC Special 29,167 230 Counsel Floyd E. Allen & Counsel 20,137 622 Associates B. Committee's Professionals Firm Role Fees Expenses ---- ---- -------- -------- Clark Hill PLC Counsel $115,578 $243 XRoads Solutions Financial 232,138 175 Group LLC Advisor These professionals submitted certificates of no objection regarding their requests for payment of services rendered and expenses incurred for the period from March 2009 through May 2009: -- Schafer and Weiner PLLC, -- Jackier Gould PC, -- Honigman Miller Schwartz & Cohn LLP, -- Ernst & Young LLP, -- Clark Hill PLC, and -- Floyd E. Allen & Associates. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GREEKTOWN CASINO: Parties File Objections to Disclosure Statement ----------------------------------------------------------------- Greektown Holdings LLC and its debtor affiliates submitted to the U.S. Bankruptcy Court for the Eastern District of Michigan on July 10, 2009, exhibits to the Disclosure Statement describing the Joint Plan of Reorganization. The exhibits include a liquidation analysis; a corporate structure chart of Greektown Casinos as of the Petition Date; pro forma financial projections for the years 2009 through 2013; a reorganizational valuation analysis; and historical financial results. Full-text copies of the Exhibits is available for free at http://bankrupt.com/misc/GrktnDSExhibits.pdf Subsequently, the Debtors sought and obtained a Court order striking the Exhibits from the record, removing them from the Court's PACER system, and allowing the Debtors to file replacement Exhibits identical in all respects except redacting the confidential information inadvertently disclosed in the reorganization and valuation analysis to the Exhibits. John J. Stockdale, Jr., Esq., at Schafer and Weiner PLLC, in Bloomfield Hills, Michigan, relates that confidential information was erroneously included. The Debtors delivered the revised Exhibits without the confidential information to the Court on July 13, 2009. Copies of the Amended Exhibits are available for free at: http://bankrupt.com/misc/GrktnDSExhibitsAmend.pdf A full-text copy of the Greektown Chapter 11 Plan is available for free at http://bankrupt.com/misc/GrktwnReorgPlan.pdf A full-text copy of the Greektown Disclosure Statement is available for free at http://bankrupt.com/misc/GrktwnDS.pdf Liquidation Analysis The Debtors' Liquidation Analysis assumes conversion of the Debtors' Chapter 11 cases to Chapter 7 liquidation proceedings on August 31, 2009 and assumes a liquidation of all of the Debtors' assets. Two different approaches were used to estimate the approximate liquidation range of value for the Debtors' assets: (a) a forced sale analysis of the business as a going concern; and (b) an asset-by-asset liquidation analysis. The Debtors aver that the forced sale as a going concern scenario would generate greater liquidation proceeds. However, the Debtors note that as a result of regulatory issues, including the requirement that the operator of a casino business in the State of Michigan be licensed, it is possible that the casino would be closed and the assets would be sold on a piecemeal basis. The Debtors add hat retention pay for professionals is estimated at $500,000 in the asset-by-asset scenario and $1 million on the forced sale as a going concern scenario. The Debtors note that the estimated recoveries under a liquidation proceeding are: A. The DIP facility is estimated to approximate $200 million as of August 31, 2009. The forced sale as a going concern scenario estimates that the claims would be satisfied in full in a Chapter 7 liquidation, while the asset-by-asset scenario estimates that the claims would receive between 35%-52% of their value in a Cbapter 7 liquidation. B. Administrative and priority claims are estimated to approximate $25 million to $28 million as of August 31, 2009. The claims include a contracted management success fee, postpetition accounts payable and accrued expenses, administrative claims, DIP facility exit fees, and estimated liabilities to taxing authorities. The forced sale as a going concern scenario estimates that the claims would be satisfied in full in a Chapter 7 liquidation, while the asset-by-asset scenario estimates that there would be insufficient liquidation proceeds for any recovery related to the claims in a Chapter 7 liquidation. c. Prepetition secured debt is estimated to approximate $346 million as of August 31, 2009. The prepetition secured debt includes the revolving credit facility, term loans, letter of credit draws, swap agreement termination values, and accrued but unpaid adequate protection payments. The forced sale scenario estimates that the claims would receive between 20-35% of their value in a Chapter 7 liquidation, while the asset-by-asset scenario estimates that there would be insufficient liquidation proceeds for any recovery related to these claims in a Chapter 7 liquidation. D. Both liquidation scenarios estimate that there would be insufficient liquidation proceeds for any recovery related to other classes of claims in a Chapter 7 liquidation. The Debtors estimate that the value which would be generated by selling the business as a going concern on a forced sale basis would approximate $300 million to $350 million. Valuation Analysis Solely for purposes of the Plan, the analysis performed by Moelis and Company indicates that the estimated reorganization value of the Reorganized Debtors is within the hypothetical range of $500 million to $580 million, with a mid-point estimate of $540 million. The Valuation Analysis is based on data and information available to the Debtors and provided to Moelis as of June 30, 2009. Committee & MGCB Seek Hearing Adjournment The Official Committee of Unsecured Creditors asked the Court to adjourn the July 20, 2009 hearing on the Disclosure Statement to a later date. The Committee asserted that the Debtors violated Rule 2002(b) of the Federal Rules of Bankruptcy Procedure by filing a "woefully" incomplete Disclosure Statement, which effectively denied the time period for the Committee and other parties-in-interest to consider the Disclosure Statement and complex financial information. Joel D. Applebaum, Esq., at Clark Hill PLC, in Detroit, Michigan, contends that parties-in-interest won't have adequate time for review because the Debtors filed the Disclosure Statement Exhibits on July 10, 2009. The Committee's request is joined by the Michigan Gaming Control Board. The Debtors ask the Court to approve uniform solicitation, notice, voting, and tabulation procedures for the Join Plan of Reorganization proposed in their cases. Parties Object to Disclosure Statement A. MI Gaming Control Board The State of Michigan Gaming Control Board asks the Court to deny approval of the Debtors' Disclosure Statement on the grounds that it does not provide adequate information to parties-in-interest as required by Section 1125 of the Bankruptcy Code. Susan M. Cook, Esq., the MGCB's special assistant attorney general, points out that the Disclosure Statement and Plan incorrectly imply that the MGCB participated in negotiations with respect to the Plan. She says that the Disclosure Statement and Plan was presented to the MGCB in roughly the form filed with the Court, with very little discussion and no negotiation regarding its terms. "To date, the [MGCB] has not yet taken a position on the acceptability of the Plan," Ms. Cook tells the Court. The MGCB also objects to the language in the Plan which would deem confirmation of the Plan to act as a consent on the part of the MGCB to the Plan or in any way seek to limit the regulatory authority of the MGCB to oversee the Debtors' operations subsequent to a confirmation date, Ms. Cook notes. The MGCB further objects to the language in the Plan, which states that "to the extent a term in this Plan is ambiguous, the Reorganized Debtors are authorized to interpret such term in their sole discretion." Ms. Cook argues that a free hand to interpret the Plan provisions renders the terms of the Disclosure Statement itself of questionable value. In addition, Ms. Cook says that the Debtors described the authority of the MGCB in ongoing regulation of the Debtors in broad terms. She asserts that: -- the language does not provide sufficient detail to be deemed adequate information with regard to the MGCB's authority and its oversight of the Debtors; -- the Disclosure Statement should outline the history and status of the gaming license; -- the Debtors should disclose that the MGCB requires annual renewal of the license and that the Debtors' license renewal process has been held in abeyance for over a year; and -- the Disclosure Statement should identify statutory issues, which the MGCB must consider in granting a renewal. The Debtors should also disclose that they remain in violation of certain financial covenants provided for in the 2005 order of the MGCB, which approved a debt transaction, Ms. Cook says. She adds that in the interests of complete and accurate disclosure, the continuing violations and their possible negative implications for license renewal should be set forth in the Disclosure Statement. Furthermore, although the Debtors mention the matter, they do not make it sufficiently clear that the MGCB continues to assert that the bankruptcy stay is not a barrier to its continuation of a sale transaction initiated in May 2008, Ms. Cook notes. She avers that to date, the MGCB has used its discretion to refrain from exercising the authority. B. Creditors Committee On behalf of the Official Committee of Unsecured Creditors, Joel D. Applebaum, Esq., at Clark Hill PLC, in Detroit, Michigan, points out that the Joint Plan of Reorganization proposed by the Debtors, the DIP Agent, and the Prepetition Agent apparently assume that the Debtors' Prepetition Lenders are undersecured and therefore, that Greektown Casino LLC's and Greektown Holdings' unsecured creditors are not entitled to any distribution on account of their unsecured claims and whatever distribution is contemplated for Class 10 and Class 11 unsecured creditors is essentially a gift. The Disclosure Statement does not contain any financial information with respect to the amount of the DIP Lenders' and Prepetition Lenders' claims, the assumed value of the secured lenders' collateral, financial projections for the Debtors' future operations, or a liquidation analysis, Mr. Applebaum adds. Because the Debtors have failed to provide any meaningful financial information or current valuation information, creditors are forced to guess at the Debtors' valuation assumptions and thus, render the Disclosure Statement deficient, Mr. Applebaum contends. Current information is essential as the enterprise value of the casino is rapidly increasing and the Committee is informed and believes that the Prepetition Lenders are fully secured, Mr. Applebaum argues. He concludes that therefore, the Debtors' treatment of unsecured creditors at the Greektown Casino and Holdings levels are in violation of Section 1129 of the Bankruptcy Code. Even assuming that the Prepetition Lenders are undersecured, Mr. Applebaum contends, the Plan improperly distributes the value of the Debtors' gaming license -- a hugely valuable unencumbered asset -- as well as the value of avoidance claims and other equally unencumbered assets, for the exclusive benefit of the Prepetition Lenders. "Significant value must be attributed to the Debtors' gaming license, one of only three gaming licenses available within the City of Detroit, and the value must be allocated among all of the Debtors' unsecured creditors," he maintains. The Disclosure Statement is utterly silent as to the value of the gaming license or the Avoidance Claims, or how the value of the unencumbered assets is being allocated, Mr. Applebaum points out. Because the Disclosure Statement is entirely devoid of the relevant financial information, the Disclosure Statement fails to provide creditors with adequate information required by Section 1125 of the Bankruptcy Code and cannot be approved, Mr. Applebaum asserts. He adds that approval of the Disclosure Statement must be denied where the Disclosure Statement summarizes a Plan that is so "fatally flawed" that plan confirmation is impossible. For these reasons, the Committee asks the Court to deny approval of the Disclosure Statement. C. Deutsche Bank Deutsche Bank Trust Company Americas is the indenture trustee for the senior notes due 2013 issued by Greektown Holdings and Greektown Holdings II. Deutsche Bank has asserted a claim for $194 million, representing principal of $185 million plus prepetition interest. The Notes will receive no recovery under the Debtors' proposed Chapter 11 Plan. On behalf of Deutsche Bank Trust Company Americas, Alan Kolod, Esq., at Moses & Singer LLP, in New York, relates that the Debtors prepared financial projections, commissioned a valuation, and undertook a sale process during the "bleakest financial period since the Great Depression" and before their hotel and casino were actually completed. He notes that as of January 19, 2009, the Debtors' advisors valued their enterprise at $375 million. The initial valuation work was quickly rendered moot, however, as the climate in the gaming industry began to improve and the Debtors completed their hotel and casino and under new professional management, the casino dramatically outperformed any of the projections previously prepared by the Debtors and their financial advisors. It has become obvious to all observers that the Debtors are currently capable of generating about $100 million annually and that their enterprise value is approaching $700 million, Mr. Kolod notes. Yet, the Debtors filed their Plan based on the already superceded valuation report of January 2009, which would wipe out all creditors except the secured creditors, Mr. Kolod contends. He adds that subsequently, the Debtors filed new reports from their financial advisors to justify the Plan, which now proposes a valuation of only $540 million. "It is apparent the new report was carefully designed to understate the true reorganization value of the Debtors in order to justify the wipe-out Plan filed six weeks earlier," Mr. Kolod says. Nevertheless, the new report still reflects an astounding 44% increase in the Debtors' enterprise value in the six months since the last valuation, Mr. Kolod points out. Mr. Kolod asserts that the Debtors are rushing to confirm that Plan because they know that with the passage of time the hugely- improved financial performance of the casino and hotel will only improve further, demonstrating just how absurdly low their valuation of the casino is, and making confirmation of the wipe- out Plan impossible. He cites that in their rush to confirmation, the Debtors filed a meaningless "placeholder" disclosure statement that was devoid of any financial information whatsoever so that they could schedule a July 20, 2009 disclosure hearing. While classes that were to be "wiped-out" were identified in the Disclosure Statement, it was impossible to tell what recovery any other class would receive under the Plan because the Plan made no provision for any recoveries, Mr. Kolod argues. He adds that the Disclosure Statement failed even to disclose the amount of claims within each class. Accordingly, Deutsche Bank asks the Court to disapprove the Disclosure Statement and require the Debtors to re-notice the hearing on the required 25 days' notice if they intend to proceed with respect to the entirely new plan and disclosure documents filed on July 10, 2009. Deutsche Bank Seeks Discovery Deutsche Bank, in a separate filing and in connection with its objection to the Disclosure Statement, asks the Court for authority to conduct discovery with regard to these topics: -- who prepared the Plan; -- what information or valuation was the plan based on; -- how and with whom the Plan was negotiated; -- the amount of claims within each class in the proposed Plan; -- the Debtors' efforts to obtain exit financing; -- the Debtors' actual current financial performance; -- the financial projection of the Debtors' businesses, attached as Exhibit D to the Disclosure Statement; -- the Debtors' proffered valuation of their assets, attached as Exhibit E to the Disclosure Statement; and -- the good faith of the Debtors in filing the Plan and Disclosure Statement. According to Mr. Kolod, the Debtors do not appear to have obtained exit financing to repay their DIP Lenders and as a result, the secured creditors who hold DIP claims are being given veto power over any possible modification of the Plan. He adds that it also appears that the only constituency in the case with whom the Debtors negotiated the Plan were the secured creditors as the Debtors did not engage in negotiations with the Official Committee of Unsecured Creditors, the Noteholders, Deutsche Bank, their trade creditors, the City of Detroit or the Michigan Gaming Control Board. "Publically available information suggests that the limited information provided in the Disclosure Statement is either outright false or entirely misleading," Mr. Kolod says. Deutsche Bank specifically seeks to conduct the proposed discovery with regard to the Topics and depose: -- Clifford J. Vallier, the Debtors' Chief Financial Officer and Assistant Manager; -- D. Joe McCoy, a member of the Debtors' Board of Directors; -- Jacob Miklojcizk, a member of the Debtors' Board of Directors; -- Louis Glazier, a member of the Debtors' Board of Directors; -- Merrill Lynch, Pierce, Fenner & Smith Incorporated; -- Moelis & Company by Thane Carlson, Co-Head of Recapitalization and Restructuring Group, investment banker of the Debtors; -- The Fine Point Group by Randall Fine, Managing Director, Chief Executive Officer of the Debtors; -- Conway MacKenzie & Dunleavy by Charles Moore, financial advisor to the Debtors. Deutsche Bank also seeks the production of certain documents from the Directors, the Debtors, Moelis, Fine Point and CMD. The Creditors Committee joins in the discovery request of Deutsche Bank. At the behest of Deutsche Bank, the Court is set to consider the Discovery Request on an expedited basis on July 20, 2009. Debtors Object The Debtors relate that they do not dispute Deutsche Bank's ultimate right to some form of discovery related to the confirmation of the Plan. However, the Debtors do strenuously object to Deutsche Bank's attempt to link its requests for discovery to the Debtors' Disclosure Statement. Daniel J. Weiner, Esq., at Schafer and Weiner PLLC, in Bloomfield Hills, Michigan, argues that the Request made by Deutsche Bank, who is already deemed to reject the Plan, is a thinly veiled attempt to significantly delay the hearing on the adequacy of the Disclosure Statement, to the extreme prejudice of the Debtors and all parties-in-interest in the Debtors' cases. Deutsche Bank's objection to the Disclosure Statement, which the Discovery Request simply repackages, disguises a variety of objections to the "confirmability" of the Debtors' Plan as purported objections to the adequacy of the Disclosure Statement, Mr. Weiner asserts. The lack of "good cause" for the Discovery Request is highlighted by the fact that Deutsche Bank is not even a creditor in a voting class under the Debtors' Plan, Mr. Weiner elaborates. For these reasons, the Debtors ask the Court to deny Deutsche Bank's Discovery Request. D. City of Detroit According to Cezar M. Froelich, Esq., at Shefsky & Froelich Ltd., in Chicago, Illinois, the City of Detroit opposes approval of the Disclosure Statement because it fails to: (a) provide "adequate information," within the meaning of Section 1125(a)(1) of the Bankruptcy Code that would enable a hypothetical reasonable investor typical of holders of claims or interests of the relevant class to make an informed judgment about the plan; and (b) accurately describe and disclose the status of the Debtors' executory contract with the City or the "Development Agreement," its significance to the case, and the impact of the pending and future litigation on the Debtors. Mr. Froelich tells the Court that the Disclosure Statement is flawed because it fails to disclose the totality of the issues surrounding the Development Agreement. He explains that the Disclosure Statement fails to accurately describe the Debtors' current relationship with the City as contentious, adversarial, and subject to ongoing and future litigation. In addition, the Disclosure Statement fails to disclose the legal and financial impacts of the Development Agreement as an assumed contract and fails to provide transparency in the nature and amount of administrative claims, the future management of the Debtors, and the ability to confirm the Plan as proposed without the consent of the City, Mr. Froelich relates. "It is impossible for creditors to make an informed judgment about the Plan without adequate disclosure concerning the Development Agreement and Debtors' relationship with the City," Mr. Froelich maintains. For these reasons, the City asserts that the Court should not approve the Disclosure Statement. E. MFC Global MFC Global Investment (U.S.) LLC, in its capacity as a holder or beneficial owner of 10-3/4% Senior Notes due 2013 issued by Greektown Holdings LLC and Greektown Holdings II, Inc., opposes the approval of the Disclosure Statement for the Debtors' Joint Plan of Reorganization. On behalf of MFC, Craig P. Druehl, Esq., at Goodwin Procter LLP, in New York, contends that the Disclosure Statement, as originally filed, contained little to no material information necessary for creditors to make an informed decision regarding the Plan, which in any event is unconfirmable. MFC Global acknowledges that 40 days after the initial filing of the Disclosure Statement and just three days prior to the extended objection deadline, the Plan Proponents filed exhibits to the Disclosure Statement, including their valuation analysis -- perhaps hoping that the lack of sufficient time to review the Exhibits would prevent potential objectors from discovering inadequacies in disclosure. However, Mr. Druehl tells the Court, even an expedited review of the Exhibits confirms that the Disclosure Statement still does not provide adequate information for creditors or the Court to make decisions regarding the Plan. Section 1125(a) of the Bankruptcy Code defines "adequate information" as "information of a kind, and in sufficient detail that would enable a hypothetical investor typical of the holders of clams of interests of the relevant class to make an informed judgment about the plan." Mr. Druehl says that the projections contained in the Exhibits and the Disclosure Statement are substantially inconsistent with the recent more optimistic statements of the Debtors' chief executive officer at an investors conference as well as the Debtors' recent operating results, both of which demonstrate that the future earnings potential is significantly more positive than the projections that the Debtors have filed. "Neither the Disclosure Statement nor the Exhibits themselves contain adequate information as to how these inconsistencies can be reconciled," Mr. Druehl argues. Thus, the hearing to consider the Disclosure Statement should be adjourned and in any event, the Court should not approve the Disclosure Statement, MFC maintains. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GREEKTOWN CASINO: Proposes to Assume Detroit Casino Council CBA --------------------------------------------------------------- In 2007, Greektown Holdings LLC and its affiliates entered into a collective bargaining agreement with the Detroit Casino Council, which is the exclusive bargaining representative for certain of the Debtors' full and regular part-time employees. The Collective Bargaining Agreement governs the relationship between the Debtors and their employees. The CBA's continued existence is critical to the Debtors' ability to secure the continued services of its workforce and to maintain normal operations, Brendan G. Best, Esq., at Schafer and Weiner PLLC, in Bloomfield Hills, Michigan, contends. Recognizing the current economic challenges facing the Debtors, parties to the Detroit Casino Council CBA entered into a memorandum of understanding on June 1, 2009, to modify certain terms and conditions of the CBA. Among other things, the Memorandum of Understanding permits the Debtors to defer wage increases to certain employees due under the CBA, and establishes a joint health care benefits committee responsible for exploring cost saving measures to health care plans for employees. Full-text copies of the CBA and the Memorandum of Understanding are available for free at: http://bankrupt.com/misc/GrktwnCBA.pdf http://bankrupt.com/misc/GrktwnMOU.pdf By this motion, the Debtors seek the Court's authority to assume the Detroit Casino Control CBA, as modified by the Memorandum of Understanding. Mr. Best argues that assumption of the CBA allows the Debtors to secure the continued benefits and services of its highly trained workforce without delay or interruption, while also implementing certain modifications to the CBA, which both parties have recognized as being critical to the Debtors' efforts to successfully reorganize. "Assumption of the Collective Bargaining Agreement, as modified, is not only essential to maintaining normal relations between the Debtors and their employees, but also greatly enhances the value of the Debtors' bankruptcy estate, as well as their profitability and competitive ability, as a result of the modifications," Mr. Best says. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GREIF INC: Moody's Assigns 'Ba2' Rating on New Senior Notes ----------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to the new senior unsecured notes due 2019 and affirmed the Ba1 corporate family rating of Greif, Inc. The rating is in response to the company's announcement on July 22, 2009, that it intends to issue $250 million of senior unsecured notes due 2019. The proceeds are to be used to reduce revolver borrowings. Moody's believes the immediate transaction is credit neutral given the repayment of outstanding indebtedness. Moody's took these rating actions for Greif, Inc.: -- Assigned $250 million senior unsecured notes due 2019, Ba2 (LGD 5, 75%) -- Affirmed $300 million senior unsecured notes due February 2017, Ba2 (LGD 5, 75%) from (LGD 5, 83%) -- Affirmed corporate family rating, Ba1 -- Affirmed probability of default rating, Ba1 -- Affirmed speculative grade liquidity rating, SGL-1 The rating outlook is stable. The Ba1 Corporate Family Rating considers Greif's modest financial leverage and comfortable interest coverage metrics. The rating benefits from the company's leading market position in global industrial packaging and its geographic, customer and end market diversity. Greif holds an approximate 30% market share of the global industrial packaging industry. Its business operations are closely embedded into many long-standing customer relationships. The ratings also benefit from the company's robust liquidity profile. The ratings are constrained by Greif's inherent cyclicality, acquisitiveness and free cash flow that is weak for the rating category. Moody's anticipates the company will benefit from the extensive cost cutting actions it has undertaken and, eventually, from an improvement in the economy. Moody's last rating action on Greif occurred on January 22, 2007, when Moody's upgraded the corporate family rating to Ba1 from Ba2. Greif, Inc., headquartered in Delaware, Ohio, is a world leader in industrial packaging products and services, including steel, plastic, fibre, and corrugated and multi-wall containers for a wide range of industries. Greif also produces containerboard and manages timber properties in North America. In the LTM period ending April 30, 2009, the company generated approximately $3.3 billion in revenues and $138 million in net income. GREIF INC: S&P Assigns 'BB+' Rating on $250 Mil. Senior Notes ------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB+' issue-level rating to Greif Inc.'s (BB+/Stable/--) proposed $250 million senior notes due 2019, which is the same as the corporate credit rating on the company. The recovery rating on this debt is '4', indicating S&P's expectation of average (30%-50%) recovery in the event of a default. The company largely expects to use proceeds from the offering to repay outstanding revolver borrowings. The ratings on Delaware, Ohio-based Greif reflect the company's intermediate financial risk profile, which more than offsets the company's fair business risk profile. The company has leading positions in cyclical, niche markets which sell commodity-like products that can experience intense pricing pressures. Greif has defensible positions in the challenging global industrial packaging sector and an improving cost structure. The company's industrial packaging and services segment (which generates about 75% of operating profit) serves mature and fragmented markets. This segment benefits from Greif's broad product portfolio and global distribution network, which enable it to work with a diverse mix of large customers worldwide. Greif's paper and packaging segment has high operating leverage, making earnings vulnerable to declines in market demand. In this segment, Greif is a price taker, rather than a price leader, and this can hurt profitability. Total debt (adjusted for accounts receivables securitizations, operating leases, and pensions) to capital was about 53% on April 30, 2009, while funds from operations (FFO) to total debt was about 29%. Standard & Poor's expects total debt to capital to average about 45%, and FFO to total debt of about 25%. The outlook is stable. Standard & Poor's could take a negative rating action if the company engages in large debt-financed acquisition activity or if business performance materially weakens. If, for example, FFO to total debt fell and remained below 20%, S&P could consider a negative rating action. S&P could revise the outlook to positive or raise the ratings if S&P's view of the business risk profile improves, possibly through broadened scale and scope of operations, and the company maintains an intermediate financial risk profile, which would support credit measures appropriate for a higher rating. Ratings List New Rating Greif Inc. Senior US$250 mil. notes due 2019 BB+ Recovery Rating 4 GSI GROUP: S&P Changes Outlook to Negative; Affirms 'B' Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised the outlook on GSI Group Inc. to negative from stable. S&P also affirmed all ratings on the company, including the 'B' long-term corporate credit rating. "The outlook revision on Assumption, Ill.-based GSI reflects a weaker-than-expected operating performance that will stretch credit measures further than S&P had anticipated," said Standard & Poor's credit analyst Helena Song. "We are also concerned with declining headroom under its financial covenants, which may become very limited when the covenant steps down in June 2010," she continued. Still, S&P expects GSI to generate positive cash flow, and the company is well positioned if the market stabilizes. The ratings on GSI reflect the company's highly leveraged financial profile, which more than offsets its weak business risk profile. GSI is exposed to cyclical and competitive niche agricultural equipment markets, and raw material cost volatility. The company's leading position in its niche markets partially offsets these factors. S&P could lower the ratings if the likelihood of a covenant violation increases or if the company fails to meet its financial obligations. S&P could revise the outlook to stable if the company appears likely to maintain sufficient headroom under its covenant and debt to EBITDA approaches the 5x-6x range. HAWAII SUPERFERRY: Court Sets August 24 as Claims Bar Date ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware grants the request of HSF Holding, Inc., and Hawaii Superferry, Inc., and establishes August 24, 2009, at 5:00 p.m. (Eastern) as the last day for creditors to file proofs of claim in the Chapter 11 cases. The Court sets November 26, 2009, at 5:00 p.m. (Eastern) as the governmental unit bar date. Wilmington, Delaware-based HSF Holding Inc. operates as the parent company of Hawaii Superferry, Inc., a Hawaiian inter-island ferry service expected to commence operations in early 2007. The Company is planning to use the latest generation of large, high- speed roll-on/roll-off catamaran ferries. The ferries will be used to transport travellers from island to island as well as transport agricultural and bulk goods. The Company and its affiliate filed for Chapter 11 on May 30, 2009 (Bankr. D. Del. Case Nos. 09-11901 and 09-11902). David B. Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamilton LLP represent the Debtors in their restructuring efforts. When the Debtors sought protection from their creditors, they listed assets and debts both between $100 million and $500 million. HEALTH NET: UnitedHealth Deal Won't Affect Fitch's Ratings ---------------------------------------------------------- Fitch Ratings current ratings for Health Net Inc. are unchanged following this week's announcement that the company is selling its northeast operations to UnitedHealth Group, Inc. While Health Net's northeast business comprised approximately 8.9% of its total membership as of March 31, 2009, the business was not a primary source of growth or earnings for the company. In addition, the move had been widely expected for many months. Health Net's management has previously indicated that it was also seeking strategic alternatives for its Arizona business to include a possible sale, but has announced that the business now presents additional opportunity for the company and will remain part of Health Net for the foreseeable future. Monday's announcement follows a notice last week from the Department of Defense indicating that Health Net's contract as the Managed Care Support Contractor for the TRICARE North Region was not being renewed. TRICARE is a DOD program that provides health insurance to active members of the U.S. military and their families in partnership with private insurers. Upon the announcement, Fitch downgraded Health Net's Issuer Default Rating (IDR) to 'BB-', its senior debt rating to 'B+', and the Insurer Financial Strength ratings of its insurance subsidiaries to 'BBB-'. A primary uncertainty related to the sale of the northeast business involves Health Net's use of proceeds. Factoring in the loss of the TRICARE contract and assuming the sale is approved, the company will be contracting significantly in the next 12-18 months. Fitch believes that negative rating pressure could ease should Health Net use some combination of its future earnings, cash and proceeds from the sale to reduce its financial leverage and strengthen the capitalization of its operating subsidiaries. Fitch recognizes the potential for a material shift in the profile of the health insurance and managed care sector driven by reform efforts currently underway in Congress. Fitch is closely following these developments and their impact on the sector. Health Net, Inc., is among the largest publicly traded managed care operations in the U.S., reporting March 31, 2009 enrollment of approximately 6.1 million individuals, including enrollment associated with its TRICARE business. The company provides a variety of indemnity, PPO, POS, and HMO plans in the group, individual, Medicare risk, Medicaid, and TRICARE markets. The company also reported membership of approximately 449,000 in the company's Medicare Part D plans at March 31, 2009. HIGHGATE ESTATES: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Highgate Estates, LLC 7370 Hodgson Memorial Drive, Suite D-10 Savannah, GA 31406 Bankruptcy Case No.: 09-41557 Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court Southern District of Georgia (Savannah) Debtor's Counsel: James L. Drake Jr., Esq. P.O. Box 9945 Savannah, GA 31412 Tel: (912) 790-1533 Email: jdrake7@bellsouth.net Total Assets: $3,040,079 Total Debts: $2,327,198 The Company says it does not have unsecured creditors who are non insiders when they filed their petition. The petition was signed by Louis C. Young Jr. HILLSIDE BAPTIST CHURCH: Case Summary 1 Largest Unsec. Creditor --------------------------------------------------------------- Debtor: Hillside Baptist Church, Inc. 13080 Highway 49 North Gulfport, MS 39503 Bankruptcy Case No.: 09-51541 Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court Southern District of Mississippi (Gulfport Divisional Office) Judge: Neil P. Olack Debtor's Counsel: Kimberly R. Lentz, Esq. Lentz & Little, P.A. PO Box 927 Gulfport, MS 39502 Tel: (228) 867-6050 Fax: (228) 867-6077 Email: lentzlittle@bellsouth.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor identified Dr. Travis Anderson with debt claim for $18,377 as its largest unsecured creditor. A list of the Company's largest unsecured creditor is available for free at: http://bankrupt.com/misc/mssb09-51541.pdf The petition was signed by Dr. Travis Anderson, president of the Company. HITCHIN POST: Files for Ch 11 Bankruptcy; Blames Economic Downturn ------------------------------------------------------------------ Hitchin Post Steak Co. has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Kansas. Dan Margolies at The Kansas City Star reports that Hitchin Post is blaming the economic downturn for its collapse. Hitchin Post, The Kansas City Star relates, listed Tyson Foods Inc. as its largest unsecured creditor, holding a $549,350 claim. According to court documents, Hitchin Post and its affiliate HP Distribution LLP, which also filed for Chapter 11 protection, said that they had arranged for post-bankruptcy funding of $1.2 million from Transportation Alliance Bank and Transportation Alliance Leasing. Hitchin Post Steak Co. is a decade-old meat processor based in Kansas City, Kansas. HJ HEINZ: Moody's Affirms Ba1 Preferred Stock Rating ---------------------------------------------------- Moody's Investors Service assigned a Baa2 rating to thirty-year senior unsecured notes being offered by H.J. Heinz Company under Rule 144A of the Securities Act. Moody's also affirmed the existing Baa2 long term debt rating, Ba1 preferred stock rating, and Prime-2 short term debt rating of Heinz and its subsidiaries. The rating outlook is stable. The Notes are being issued in two stages as part of a planned debt exchange offer for any and all of the outstanding $800 million 15.59% Dealer Remarketable Securities notes due December 1, 2020. In an initial stage, Heinz intends to issue $250 million of the Notes, and use the proceeds to fund the cash portion of the anticipated debt exchange offer. Shortly thereafter, assuming the initial offering is successfully placed, Heinz will launch the Exchange Offer. As a result of the proposed transactions, total net debt is expected to increase by up to $300 million, depending on the amount of the DRS that are exchanged; however, the ratings will not be affected. "The resulting modest increase in debt in effect represents a tax deductible upfront payment of interest due on the DRS notes; thus, the overall credit profile is unchanged.," said Moody's senior analyst Brian Weddington. Ratings assigned: H.J. Heinz Finance Company -- Senior unsecured notes due 2039 at Baa2 under full guarantee of H.J. Heinz Company Ratings affirmed: H.J. Heinz Company -- Senior unsecured debt at Baa2 H.J. Heinz Finance Company -- Senior unsecured debt at Baa2 under full guarantee of H.J. Heinz Company -- Preferred stock at Ba1 H.J. Heinz Finance UK PLC -- Senior unsecured debt at Baa2 under full guarantee of H.J. Heinz Company H.J. Heinz Company -- Short term debt at Prime-2 H.J. Heinz Finance Company -- Short term debt at Prime-2 under full guarantee of H.J. Heinz Company H.J. Heinz B.V. -- Short term debt at Prime-2 under full guarantee of H.J. Heinz Company H.J. Heinz Finance UK PLC -- Short term debt at Prime-2 under full guarantee of H.J. Heinz Company H.J. Heinz Company of Canada Limited -- Short term debt at Prime-2 under full guarantee of H.J. Heinz Company Founded in 1869, H. J. Heinz Company is a leading marketer and producer of branded foods in ketchup, condiments, sauces, meals, soups, seafood, snacks, and infant foods. Key brands include Heinz(R) Ketchup, sauces, soups, beans, pasta and infant foods, Ore-Ida(R) French Fries and roasted potatoes, Boston Market(R) and Smart Ones(R) meals and Plasmon(R) baby food. Heinz's 50 companies have number-one or number-two brands in 200 countries. H.J. Heinz Company is located in Pittsburgh, Pennsylvania. The last rating action on Heinz occurred on July 10, 2008, when Moody's assigned a Baa2 rating to $500 million of five-year senior unsecured notes issued by H.J. Heinz Company and a Ba1 rating to $350 million of series B cumulative preferred stock issued by H.J. Heinz Finance Company, and affirmed the other ratings of Heinz and its subsidiaries. HOMEWORKS INTERIORS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: HomeWorks Interiors, LLC fka HomeWorks I, LLC fka HOmeWorks St. Louis, LLC fka Premier Kitchens & Baths II, LLC 13861 Manchester Town & Country, MO 63011 Bankruptcy Case No.: 09-47008 Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court Eastern District of Missouri (St. Louis) Judge: Barry S. Schermer Debtor's Counsel: A. Thomas DeWoskin, Esq. Danna McKitrick, PC 7701 Forsyth, Suite 800 St. Louis, MO 63105 Tel: (314) 726-1000 Email: edmoecf@dmfirm.com Total Assets: $22,050 Total Debts: $2,292,754 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/moeb09-47008.pdf The petition was signed by John Huhn, managing member of the Company. HYDROGENICS CORP: Terminates APC Manufacturing and Supply Deal -------------------------------------------------------------- Hydrogenics Corporation has formally notified American Power Conversion Corporation of the termination of the parties' manufacturing and supply agreement dated August 9, 2006. The Supply Agreement provided that APC would purchase up to 500 HyPM(R) XR 12 kW Fuel Cell Power Modules from Hydrogenics for integration into APC's NCPI solutions, specifically its InfraStruXure(R) architecture, over a three year period, subject to the terms of the Supply Agreement. In the notice of termination, Hydrogenics has requested a termination payment of approximately US$2.1 million by APC, as determined by a formula in the Supply Agreement based on the number of products for which APC has issued orders and paid for under the Supply Agreement. "We remain committed to working with APC towards an amicable resolution of APC's obligations under the Supply Agreement," said Daryl Wilson, President and Chief Executive Officer of Hydrogenics. "We strongly believe that despite the termination of the Supply Agreement, our independent efforts over the past three years have resulted in the development of significant expertise and know-how, which will allow us to build upon and benefit other fuel cell products, applications and solutions." As reported by the Troubled Company Reporter on July 10, 2009, Hydrogenics said in a filing with the Securities and Exchange Commission that its ability to continue as a going concern is dependent on the successful execution of the Company's business plan. The Company's ability to continue as a going concern is dependent on the successful execution of its business plan which involves: (i) securing additional financing to fund its operations; (ii) advancing product designs for efficiency, durability, cost reduction and entry into complimentary markets; (iii) increasing market penetration and sales; (iv) actively managing its liquidity; and (v) retaining and engaging staff. At present, the success of these initiatives cannot be assured due to the material uncertainties attributed to the Company's ability to obtain financing and meet its revenue targets. About Hydrogenics Corporation Based in Mississauga, Ontario, Canada, Hydrogenics Corporation -- http://www.hydrogenics.com/-- is a developer and provider of hydrogen generation and fuel cell products and services, serving the growing industrial and clean energy markets of today and tomorrow. Hydrogenics has operations in North America and Europe. IL LUGANO: Plan Solicitation Period Extended to September 16 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Connecticut has extended IL Lugano, LLC's exclusive period to obtain acceptances of a plan of reorganization through and including September 16, 2009. Iin its motion, Il Lugano said that it is current in the payment of its postpetition obligations and the short extension of its exclusive period to solicit acceptances of its Chapter 11 plan will not prejudice the interests of creditors. As reported in the TCR on April 13, 2009, Il Lugano, LLC, filed with the Bankruptcy Court a Plan of Reorganization under Chapter 11 of the Bankruptcy Code. Il Lugano still has to file a disclosure statement explaining its Plan. Approval of the adequacy of the information in the disclosure statement is necessary before the debtor could commence solicitation of votes, and then seek confirmation of, the Plan. Under the Plan, SC Vegas' secured claim will be paid 100% of its allowed claim in cash within 30 days after the later of (a) the closing on a sale of the collateral securing its claim or (b) the allowance date with respect to said claim. Allowed general unsecured claims will receive payment in cash within 30 days after the later of (a) the closing on a sale of the collateral that secures SC Vegas' secured claim or (b) the allowance date with respect to an allowed general unsecured claim. Payment will include interest at the Case Interest Rate from the Petition Date through the date such Allowed general unsecured claim is paid in full. Holders of Interests in the Debtor will retain their interests in the Debtor from and after the Plan's Effective Date. Funding for the distributions to be made under the Plan will be sourced from the operations of the Debtor, the net proceeds from the sale of the Debtor's assets, and any cash generated or received by the Debtor after the Plan's Effective Date. Between the Plan's Effective Date and the liquidation of the Debtor's assets, funding for the Debtor's operating and capital costs and expenses will continue to be provided by SC Finance and SageCrest Holdings Limited in proportion to their respective economic interests in the Debtor. A full-text copy of the Chapter 11 Plan: http://bankrupt.com/misc/IlLugano.Ch.11Plan.pdf Based in Fort Lauderdale, Florida, IL Lugano, LLC is the owner of a 4-star, boutique-style, luxury condominium-hotel property located in Fort Lauderdale, Florida, which opened to the public on January 16, 2008. The Debtor is a wholly owned subsidiary of SageCrest Vegas LLC, which is a wholly owned subsidiary of SageCrest II LLC. On August 17, 2008, SageCrest II, LLC and SageCrest Holdings Limited each filed a voluntary petition for Chapter 11 protection (Bankr. D. Conn. Lead Case No. 08-50754). The hotel portion of the property has 105 rooms and the condominium portion of the property has approximately 23 condominium units. Since the Petition Date, IL Lugano has completed construction of an upscale Todd English restaurant, which opened to the public on November 17, 2008, and is expected to generate substantial additional revenue. The Company filed for Chapter 11 protection on August 29, 2008 (Bankr. D. Conn. Case No. 08-50811). Douglas J. Buncher, Esq., at Neligan Foley LLP, and James Berman, Esq., at Zeisler and Zeisler, represent the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed assets of between $50 million and $100 million and debts of between $1 million and $10 million. IL Lugano filed for bankruptcy to prevent any adverse judgment and subsequent enforcement actions against IL Lugano in a lawsuit filed by EPI NCL, LLLC, in the Circuit Court of the 17th Judicial Circuit of Broward County, Florida, which was set for trial on September 2, 2008, and to allow adequate time for completion of the restaurant and sale of the property. INDALEX HOLDINGS: Wants Until October 16 to File Chapter 11 Plan ---------------------------------------------------------------- Indalex Holdings Finance Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to: -- file a Chapter 11 plan until October 16, 2009; and -- solicit acceptances of that plan until December 15, 2009. The Debtors tell the Court that the initial exclusive periods prove to be an unrealistic time frame to file and solicit acceptances of a meaningful Chapter 11 plan that might garner support from parties-in-interest. A hearing is set for Aug. 5, 2009, at 2:00 p.m., to consider the Debtors' request. Objections, if any, are due July 29, at 4:00 p.m. Indalex Holding Corp., a wholly-owned subsidiary of Indalex Holdings Finance Inc., through its operating subsidiaries Indalex Inc. and Indalex Ltd., with headquarters in Lincolnshire, Illinois, is the second largest producer of soft alloy extrusion products in North America. The Company's aluminum extrusion products are widely used throughout industrial, commercial, and residential applications and are customized to meet specific end- user requirements. Indalex operates 10 extrusion facilities, 29 extrusion presses with circle sizes up to 20 inches, a variety of fabrication and close tolerance capabilities, two anodizing operations, two billet casting facilities, and six electrostatic paint lines, including powder coat capability. Indalex is indirectly controlled by private-equity investor Sun Capital Partners Inc. Sun Capital purchased Indalex in 2005 from Honeywell International Inc. for $425 million. Indalex is the 12th investment by Boca Raton, Florida-based Sun Capital to file in Chapter 11 since January 2006. Indalex Holdings and four affiliates filed for Chapter 11 on March 20 (Bankr. D. Del., Lead Case No. 09-10982). Donald J. Bowman, Jr., Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, has been tapped as counsel. Epiq Bankruptcy Solutions LLC is the claims and noticing agent. In its bankruptcy petition, Indalex listed assets of $356 million against debt totalling $456 million. INTEGRA TELECOM: Reduces Overall Debt by More than Half ------------------------------------------------------- Integra Telecom Inc. reached an agreement with requisite majorities in its three primary lender groups to effect a full restructuring of the Company's balance sheet. According to the agreement, all of Integra's senior secured second lien operating company debt and unsecured parent company debt will be converted into common equity. As a result, the Company's overall debt will be reduced from almost $1.3 billion to approximately $600 million. This new debt level translates to 2.7 times Integra's 2008 operating EBITDA (earnings before interest, taxes, depreciation and amortization) of $225 million. Additionally, Integra will welcome Goldman, Sachs & Co., Tennenbaum Capital Partners, and funds managed by Farallon Capital Management LLC as major new shareholders. These shareholders join Warburg Pincus alongside other Integra investors. "This agreement strengthens our business by increasing our equity base while reducing our total debt burden by more than half, thereby better aligning our balance sheet with the needs of our business and enabling us to continue to focus on our customers," said Dudley Slater, CEO of Integra Telecom. "We are confident that this agreement will position Integra to be an even stronger, more profitable company moving forward." Integra initiated negotiations with its lenders earlier this year to better align the terms of its loans with the economy and the company's business strategy. Integra is the largest local exchange carrier based in the Western U.S., generates the highest levels of operating cash flow, and is recognized for its industry- leading, locally staffed customer service. The agreement focuses solely on the restructuring of the company's balance sheet, and the management team anticipates no impact on the company's workforce or ongoing operations. "We have been investors in Integra, and the competitive telecommunications industry, for many years. Integra stands out as one of the top performing companies in this industry, and we are pleased to support this transaction which creates a stronger balance sheet better suited to the current economic environment," said Michael Leitner, Managing Partner, Tennenbaum Capital Partners. "Along with all the new shareholders, we share a conviction to grow and establish Integra Telecom as the premier competitive telecom provider in the Western U.S." "Despite the recession, Integra has remained an operating-free- cash-flow-positive company and this restructuring positions Integra as one of the highest operating-free-cash-flow producing companies in its industry and adds to their competitive advantage, leaving them with what will now be one of the lowest levels of debt among their peers," said Carlyn Taylor, Senior Managing Director of FTI Capital Advisors, who advised the company in the restructuring process. "Our strengthened balance sheet allows us to focus on our core business objectives: focusing on our customers, investing in our network and supporting innovative new products. This agreement ensures our continued ability to invest cash profits back into our network and services for the long-term benefit of our customers," said Slater. "Integra closed the first half of 2009 recording two of the company's best months in its history, as measured by our new account acquisitions, and we look forward to continuing that momentum in the months and years ahead." The restructuring transaction is conditional on state and federal regulatory approvals. The Company will also be conducting a full vote solicitation of smaller holders of the company's debt, who are expected to support the transaction. Integra anticipates the transaction to be completed by the end of the year. About Integra Telecom Integra Telecom Inc. -- http://www.integratelecom.com/-- provides voice, data and Internet communications to thousands of business and carrier customers in 11 Western states, including: Arizona, California, Colorado, Idaho, Minnesota, Montana, Nevada, North Dakota, Oregon, Utah, and Washington. The Company owns and operates a best-in-class fiber-optic network comprised of metropolitan access networks, a nationally acclaimed tier one Internet and data network, and a 4,700-mile high-speed long haul network. The Company has earned some of the highest customer loyalty and customer satisfaction ratings in the telecommunications industry. Integra Telecom and Electric Lightwave are registered trademarks of Integra Telecom Inc. JACK HICKS STEEL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Jack Hicks Steel Fabrication & Erection, Inc. PO Box 669 Plant City, FL 33564 Bankruptcy Case No.: 09-15775 Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Judge: K. Rodney May Debtor's Counsel: Buddy D. Ford, Esq. 115 N. MacDill Avenue Tampa, FL 33609-1521 Tel: (813) 877-4669 Fax: (813) 877-5543 Email: Buddy@tampaesq.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flmb09-15775.pdf The petition was signed by Diane E. Hicks, president of the Company. JAMES STEPHENS: Files for Chapter 11 Bankruptcy Protection ---------------------------------------------------------- Tom Daykin at the Journal Sentinel reports that James C. Stephens has filed for Chapter bankruptcy protection. According to court documents, Mr. Stephens' listed $10 million to $50 million in assets and $10 million to $50 million in debts. DJDL Holdings LLC is Mr. Stephens' largest unsecured creditor holding a $200,000 claim. James C. Stephens is Milwaukee apartment and condominium developer in Cassidy Realty. JEFFERSON COUNTY: Moody's Affirms 'Caa3' Rating on $3.2 Bil. Bonds ------------------------------------------------------------------ Moody's Investors Service has affirmed the Caa3 rating and negative outlook on Jefferson County's (Alabama) outstanding $3.2 billion sewer revenue bonds. Moody's underlying Caa3 rating reflects the likelihood of eventual repayment by the county of principal, irrespective of outside enhancement through bond insurance. It does not reflect the claims paying ability of Syncora, which is rated Ca and failed to fulfill its obligation to make a July 1 Bank Bond principal payment. Under the legal provisions in the Trust Indenture, the county's nonpayment of Bank Bond principal, which initially began amortizing on April 1, 2008, constituted an Event of Default, at which point the Trustee could have accelerated all outstanding principal on parity debt, including all fixed and Auction Rate debt, as well as Variable Rate Demand Obligations that are currently held by the liquidity banks. When the insurers, Syncora and FGIC, made the payments of Bank Bond principal on behalf of the county at that time, the insurers subrogated, or assumed, the rights of bondholders. While Moody's believes the insurers have the right to demand all debt be immediately due and payable, they have not exercised that right as negotiations with the county and the liquidity providers have continued. According to the Trust Indenture, due to Syncora's missed payment on July 1, the insurer has relinquished its rights as bondholder. Moody's believes one possible result of this action could be immediate acceleration of principal by bondholders or the remaining insurers, although no such action has occurred yet. Despite the enhanced possibility of acceleration of at least a portion of the county's total sewer debt outstanding, and although Moody's continues to believe that some eventual loss to bondholders remains a possibility, the likelihood or magnitude of eventual recovery by bondholders has not changed appreciably due to Syncora's missed debt payment. Moody's will continue to monitor the ongoing negotiations and actions by involved parties to determine if there is a change in credit quality that would require a rating adjustment. The negative outlook reflects Moody's belief that the county continues to face significant challenges in solving the sewer system's financial crisis in a way that limits losses to bondholders. Moody's also notes that the county has announced that it plans to furlough as many as 1,200 of its employees beginning August 1 in response to a severe cash crisis in the wake of the loss of the county's ability to levy an occupational and business license tax, which was struck down by a circuit court judge in January as unconstitutional. The tax generates approximately $75 million in annual revenues. The county has outlined a six-week timeframe for the furlough and continues to await a reinstitution of the tax by the state legislature or by the state Supreme Court. Moody's Caa1 rating and negative outlook reflect the county's continued severe financial stress and default on general obligation bank bond principal payments in September of last year. Moody's will continue assess the county's near- and long-term financial condition and may take further rating action on the general obligation and other, non-sewer revenue ratings when appropriate. The county's sewer revenue debt was last rated on April 28, 2009, when the Caa3 rating was confirmed, removed from Watchlist for a downgrade and the outlook revised to negative. KB TOYS: Bids for IP Assets Due Aug. 4; No Stalking Horse Bidder ---------------------------------------------------------------- Streambank, LLC said a bid deadline and auction date have been finalized for the sale of the intellectual property assets of KB Toys, Inc. Bids may be entered until 4:00 p.m., Tuesday, August 4. The auction will commence Thursday, August 6 at 10:00 a.m. The US Bankruptcy Court for the District of Delaware approved KB's sale procedures at a hearing on July 17. The KB Toys assets for sale include 15 registered trademarks, among them KB Toys, Toy Works and Toy Liquidators. More than 65 URLs are also available including http://www.kbtoys.com/ In addition to private label and licensing, the assets offer a wide variety of opportunities including franchising, seasonal store or specialty store, e-commerce, and 'store within a store' distribution. "Given the wide recognition of the KB Toys name, the company's intellectual property offers a wealth of opportunities," said Gabe Fried, Managing Member and Founder, Streambank, LLC. "Streambank is in contact with numerous firms with varying levels of interest. We anticipate a very productive auction." No stalking horse bidder has been established, according to Mr. Fried. Interested parties may contact Streambank at 781.444.4940 to receive a copy of the Asset Purchase Agreement, or request additional information about the assets for sale. Streambank was retained in May to undertake the marketing and sales efforts for the KB Toys IP portfolio. Streambank -- http://www.streambankllc.com/-- is an intellectual property consulting firm, specializing in the valuation, sales and marketing of intangible assets. Serving healthy and distressed businesses, Streambank identifies, preserves, and extracts value for clients through the application of experience, diligence and creativity. The firm's experience spans a broad range of industries including apparel, automotive, consumer products, food, manufacturing, medical technologies, retail and textiles. Streambank is headquartered in Needham, MA. Once one of the nation's largest and oldest toy retailers, KB Toys filed voluntary Chapter 11 bankruptcy petitions in December 2008, citing tightening credit markets and a sudden and steep decline in consumer sales. In connection with the filing, KB Toys announced it would close all of its approximately 460 remaining stores, and attempt to locate a buyer for its wholesale distribution unit. KERRY ANTHONY DARDEN: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Joint Debtors: Kerry Anthony Darden Rhonda Charise Darden 6955 Lost River Place Hughesville, MD 20637 Bankruptcy Case No.: 09-23420 Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Debtors' Counsel: Diana L. Klein, Esq. Preller, Fastow & Klein, LLC 2450 Riva Road Annapolis, MD 21401 Tel: (410) 573-1611 Fax: (410) 573-1615 Email: klein-tp@hotmail.com Steven B. Preller, Esq. Torese, Preller & Dukes, LLC 2450 Riva Road Annapolis, MD 21401 Tel: (410) 573-1611 Fax: (410) 573-1036 Email: klein-tp@hotmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mdb09-23420.pdf The petition was signed by the Joint Debtors. LANDAMERICA FIN'L: Plan Filing Deadline Moved to September 15 ------------------------------------------------------------- Landamerica Financial Group Inc. and its affiliates, pursuant to Section 1121(d) of the Bankruptcy Code, sought and obtained an order from the Court extending the period within which Debtors LandAmerica Financial Group, Inc., LandAmerica 1031 Exchange Services, Inc., LandAmerica Title Company, Southland Title Corporation, Southland Title of Orange County, and Southland Title of San Diego have the exclusive right: (a) to file a Chapter 11 plan or plans, through and including September 15, 2009; and (b) to solicit acceptances that plan or plans, through and including November 15, 2009. According to the Debtors, despite the tremendous progress that they have made as a result of their concentrated efforts with the Creditors Committees, their estates remain in an extremely fragile state. The Debtors related that as negotiations are still underway, it is critical that only one plan of liquidation that encompasses all agreed upon terms be proposed and that they remain at the helm to steer their estates through the plan, solicitation and confirmation process. The Debtors argued that if multiple competing plans are permitted, much of the success reached by the parties in their negotiations and their long-standing efforts to reach consensual resolutions could very well be squandered. About LandAmerica Financial Group LandAmerica Financial Group, Inc., is a leading provider of real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc., filed for Chapter 11 protection November 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Dion W. Hayes, Esq., and John H. Maddock III, Esq., at McGuireWoods LLP are the Debtors' bankruptcy counsel. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of September 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDAMERICA FIN'L: LAC Wants Plan Filing Deadline Moved to Nov. 3 ----------------------------------------------------------------- Section 1121(b) of the Bankruptcy Code establishes an initial period of 120 days after the commencement of a Chapter 11 case during which only a debtor may file a plan of reorganization. If that debtor files a plan within the 120-day period, Section 1121(c)(3) extends the exclusivity period to 180 days after the commencement of a chapter 11 case to permit the debtor to garner support for that plan. Section 1121(d) permits a court to extend a debtor's exclusive periods upon a demonstration of cause subject to certain limitations. By this motion, Debtor LandAmerica Assessment Corporation sought and obtained from the Court an order extending the time within which it has the exclusive right: (a) to file a chapter 11 plan by 120 days, through and including November 3, 2009; and (b) to solicit acceptances of that plan, through and including December 31, 2009. LAC avers that it commenced its Chapter 11 case only five months ago and that terminating its Exclusive Periods could adversely impact its bankruptcy proceeding. About LandAmerica Financial Group LandAmerica Financial Group, Inc., is a leading provider of real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc., filed for Chapter 11 protection November 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Dion W. Hayes, Esq., and John H. Maddock III, Esq., at McGuireWoods LLP are the Debtors' bankruptcy counsel. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of September 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDAMERICA FIN'L: Deadline to Remove Actions Moved to Oct. 27 -------------------------------------------------------------- Debtors LandAmerica Financial Group, Inc., LandAmerica 1031 Exchange Services, Inc., LandAmerica Title Company, and Southland Title Corporation, Southland Title of Orange County, and Southland Title of San Diego sought and obtained from the Court an order extending time within which they may remove actions, pursuant to Section 1452 of the Judiciary and Judicial Procedure and Rules 9006 and 9027 of the Federal Rules of Bankruptcy Procedure, through and including October 27, 2009. The Debtors conclude that the extension will provide them with sufficient time to make fully informed decisions concerning the removal of certain actions to ensure that their valuable rights granted by Section 1452 can be exercised in an appropriate manner. The Debtors aver that the rights of parties to the Actions will not be prejudiced by the extension. Inasmuch as Section 362(a) of the Bankruptcy Code automatically stays actions against the Debtors, the Actions will not proceed in their respective courts even without the relief requested. Moreover, the Debtors maintain, if they ultimately seek to remove Actions pursuant to Bankruptcy Rule 9027, parties to the Actions will retain their rights to have the Actions remanded pursuant to Section 1452(b). About LandAmerica Financial Group LandAmerica Financial Group, Inc., is a leading provider of real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc., filed for Chapter 11 protection November 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Dion W. Hayes, Esq., and John H. Maddock III, Esq., at McGuireWoods LLP are the Debtors' bankruptcy counsel. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of September 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDAMERICA FIN'L: Title, Et Al.'s Motion to Set Bar Date --------------------------------------------------------- At the behest of Debtors LandAmerica Title Company, Southland Title Corporation, Southland Title of Orange County, and Southland Title of San Diego, the Court established: (a) July 20, 2009, as the date within which the Debtors' creditors may file proofs of claim; (b) September 23, 2009, as the date within which all governmental units asserting claims against LandAm Title may file their proofs of claims; and (c) September 28, 2009, as the date within which all governmental units asserting claims against the Southland Entities may file their proofs of claims. Proofs of claim must conform substantially to Form No. 10 of the Official Bankruptcy Forms. Proofs of claim may be filed at these addresses: * If Delivered by Mail: LandAmerica Title Company, Southland Title Corporation, Southland Title of Orange County, and Southland Title of San Diego Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC FDR Station, P.O. Box 5285 New York, NY 10150-5285 * If Delivered by Overnight or Hand Delivery: LandAmerica Title Company, Southland Title Corporation, Southland Title of Orange County, and Southland Title of San Diego Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC 757 Third Avenue, 3rd Floor New York, NY 10017 The Claims Processing Center will not accept Proofs of Claim sent by facsimile, telecopy, or electronic mail transmission. Proofs of claim will be deemed filed only when actually received by the Claims Processing Center on or before the applicable Bar Date. Proofs of claim must (i) be signed, (ii) include supporting documentation or an explanation as to why documentation is not available, (iii) be in the English language, and (iv) be denominated in United States currency. Proofs of claim must also specify the name and case number of the relevant Bar Date Debtor. These persons or entities are not required to file proofs of claim with respect to their prepetition claims: (a) Any person or entity that has already properly filed, with the Clerk of the United States Bankruptcy Court for the Eastern District of Virginia or Epiq Bankruptcy Solutions, LLC, a proof of claim against the correct Bar Date Debtor utilizing a claim form that substantially conforms to Official Form No. 10. (b) Any person or entity (i) whose claim is set forth on the Bankruptcy Schedules, (ii) whose claim is not described as "disputed," "contingent," or "unliquidated," and (iii) who does not dispute the amount or type of the claim for the person or entity as set forth on the Bankruptcy Schedules. (c) Claims allowed by order of the Court entered on or before the applicable Bar Date. (d) Claims that have been paid by a Bar Date Debtor. (e) Claims of any Debtor against a Bar Date Debtor. (f) Claims allowable under Sections 503(b) and 507(a) of the Bankruptcy Code as an administrative expense. (g) Claims by a current officer or director of a Bar Date Debtor but only to the extent the claim is solely for indemnification or reimbursement against the Bar Date Debtor; provided further that any current officer or director of a Bar Date Debtor who wishes to assert a claim that is not for indemnification or reimbursement must file proof of claim on or prior to the General Bar Date. Any claim arising solely from, or as a consequence of, the rejection of an unexpired lease or executory contract of a Bar Date Debtor will be filed by the later of (a) 20 days following the date of any order of the Court authorizing the Bar Date Debtor to reject the unexpired lease or executory contract; (b) the date set by any other order of the Court; and (c) the General Bar Date, or, if applicable, the Governmental Unit Bar Date. All other claims with respect to a lease or contract are required to be filed on or before the applicable Bar Date. About LandAmerica Financial Group LandAmerica Financial Group, Inc., is a leading provider of real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc., filed for Chapter 11 protection November 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Dion W. Hayes, Esq., and John H. Maddock III, Esq., at McGuireWoods LLP are the Debtors' bankruptcy counsel. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of September 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDAMERICA FIN'L: U.S. Trustee Appoints 1031's Creditors Panel --------------------------------------------------------------- Pursuant to Section 1102 of the Bankruptcy Code, the United States Trustee for Region 4 adds two more members to the Official Committee of Unsecured Creditors of LandAmerica 1031 Exchange Services, Inc. The Committee now consists of: (1) Millmar Holdings, LLC Attn: John C. Miller 909 Hockett Road Manakin-Sabot, VA 23103 Tel No.: 804-784-4799 Fax No.: 804-784-4371 Email: jmiller-1@comcast.net Jmiller@millmarhomes.com (2) Endless Ocean, LLC Attn: Richard F. Giacomo 2 Bonnie Briar Lane Larchmont, NY 10538 Tel No.: 914-633-3303 Email: rg@lrccapital.com (3) MB Venture, Ltd. Attn: Jay Miller and Howard Miller P.O. Box 46468 St. Petersburg, FL 33741 Tel No.: 727-820-3958 Fax No.: 727-820-3959 Email: hmiller@trenam.com (4) Amarillo Tower Limited Attn: David L. Long 5475 G Street Chino, CA 91710 Tel No.: 909-628-5531 Fax No.: 909-628-0970 Email: david@dllong.com (5) Petaluma Southpoint, LLC Attn: Kenneth C. Martin P.O. Box 11218 Santa Rosa, CA 95406 Tel No.: 707-494-3849 707-578-1125 ext. 29 Fax No.: 707-578-4124 Email: kmartin185@aol.com (6) The Mary and Fred Piro 1987 Trust Attn: Fred Piro 9851 La Tuna Canyon Road Sun Valley, CA 91352 Tel No.: 818-438-3944 Email: itsmetoyouok@yahoo.com (7) Gregory D. Schultz 875 14th Street Boulder, CO 80302-7619 Tel No.: 303-956-2323 Fax No.: 800-876-9620 Email: gregs@mapletonre.com About LandAmerica Financial Group LandAmerica Financial Group, Inc., is a leading provider of real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc., filed for Chapter 11 protection November 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Dion W. Hayes, Esq., and John H. Maddock III, Esq., at McGuireWoods LLP are the Debtors' bankruptcy counsel. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of September 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDSOURCE COMMUNITIES: Court's Formal Order Confirming Plan ------------------------------------------------------------ Judge Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware confirmed the Second Amended Plan of Reorganization proposed by Barclays Bank PLC, as plan proponent, for LandSource Communities Development LLC and its debtor affiliates on July 20, 2009. Pursuant to the Confirmed Plan, LandSource will emerge from bankruptcy as a reorganized company called Newhall Land Development, LLC. The confirmation clears the way for the reorganized company to emerge from Chapter 11 with more than $90 million in cash and free of debt, Lennar Corporation related in a public statement. As part of the Confirmed Plan, Lennar will invest approximately $140 million in exchange for a 15 percent equity stake in the reorganized Newhall, the settlement and the release of all claims that might have been asserted against Lennar, and ownership of the equity in several projects that were formerly owned by LandSource. Upon review, Judge Carey held that the LandSource Plan complied with the confirmation requirements pursuant to Section 1129(a) of the Bankruptcy Code: (1) The Plan complies with Section 1129(a)(1) because: -- The Plan complies with the classification requirements of Sections 1122 and 1123(a)(i) of the Bankruptcy Code because all Claims within a particular class are substantially similar to the other Claims or Interests in that class or are part of a class approved as reasonable and necessary for administrative convenience. -- The Plan complies with the requirements set forth in Section 1123(a)(1)-(7) of the Bankruptcy Code. (2) The Plan satisfies Section 1129(a)(2) because the Plan Proponent has complied with the applicable provisions of the Bankruptcy Code. (3) The Plan complies with Section 1129(a)(3) because the Plan was proposed with the legitimate and honest purpose of maximizing the value of the Debtors' estates and to effectuate a successful reorganization of the Debtors. (4) The Plan complies with Section 1129(a)(4) because payments made or to be made by the Debtors to professionals for services or costs and expenses incurred have been approved by, or are subject to the approval of, the Bankruptcy Court. (5) The Plan complies with Section 1129(a)(5) because the identity and affiliations of the persons proposed to serve as initial managers of the Reorganized Debtors after confirmation of the Plan have been fully disclosed in the Plan Supplement. (6) Section 1129(a)(6) is satisfied as the Plan does not provide for any change in rates over which a governmental governmental regulatory commission has jurisdiction. (7) The Plan complies with the requirements of Section 1129(a)(7) because the liquidation analyses provided in the Disclosure Statement (a) are persuasive and credible, (b) have not been controverted by other evidence, and (c) establish that each Holder of an Impaired Claim or Interest either has accepted the Plan or will receive or retain under the Plan, on account of the Claim or Interest, property of a value, as of the Effective Date, that is not less than the amount that the Holder would receive or retain if the Debtors were liquidated under Chapter 7 of the Bankruptcy Code on that date. (8) The Plan satisfies Section 1129(a)(8) because Priority Non- Tax Claims and Senior Permitted Lien Claims under the Plan are Classes of Unimpaired Claims that are conclusively presumed to have accepted the Plan under Section 1126(t) and the accepting Classes, as set forth in the Voting Certification, have voted to accept the Plan in accordance with Sections 1126(c) and (d). Section 1129(a)(8) has not been satisfied with respect to Classes 7 (a)-(u) and Interests in the Debtors, which will not receive any property under the Plan and therefore, are deemed to have rejected the Plan pursuant to Section 1126(g). Certain other Classes have rejected the Plan. (9) The Plan complies with the requirements of Section 1129(a)(9) because it provides for the treatment of Administrative, Priority Tax and Non-Priority Tax Claims. (10) Classes 3(a)-(u) and 4(a)-(u) have accepted the Plan. Accordingly, at least one Class of Claims that is impaired under the Plan has accepted the Plan, thus satisfying the requirements of Section 1129(a)(10). (11) The Disclosure Statement and the Plan (a) are persuasive and credible, (b) have not been controverted by other evidence, and (c) establish that confirmation of the Plan is not likely to be followed by further financial reorganization of the Reorganized Debtors, thus complying with Section 1129(a)(11). (12) The Plan complies with the requirements of Section 1129(a)(12) because all fees payable under Section 1930 of the Judiciary and Judicial Procedure have been paid or will be paid and thereafter as may be required for each Debtor until entry of a final decree with respect to that Debtor. (13) The Plan provides that on and after the Effective Date, the Reorganized Debtors will continue to timely pay without modification, all retiree benefits, as defined in Section 1114 of the Bankruptcy Code, thereby satisfying Section 1129(a)(13). (14) Section 1129(a)(14), which addresses domestic support obligations, does not apply to the Debtors. (15) Section 1129(a)(15), which concerns individual debtors, does not apply to the Debtors. (16) Section 1129(a)(16), which addresses non-profit organizations, does not apply to the Debtors. Voting Results Drake D. Foster, senior consultant with Kurtzman Carson Consultants LLC, delivered to the Court on July 17, 2009, a summary of the voting results on the Plan. Majority of the creditors voted to accept the Plan. About 91% in number of Class 3 Claimants, and about 92% in number of Class 4 Claimants, voted to accept the Plan. About 80% to 100% of the subclasses of Class 5 Claimants voted to accept the Plan. A copy of the chart on the Voting Results is available for free at http://bankrupt.com/misc/LandS_VotingResults.pdf Plan Supplements & Affidavits Prior to the Confirmation hearing, the Debtors submitted to the Court a Third Plan Supplement and a Fourth Plan Supplement. Among others, the Third Plan Supplement identifies KDW Restructuring and Liquidation Services LLC as the Creditor Trustee and the members of the Creditor Trust Advisory Board. He Advisory Board will consist of (1) Jeff Myers of Oakridge Landscape Inc., (2) John Burgeson of John Burgeson Contractors, and (3) Jim Frankian of RT. Frankian & Associates. The Third Plan Supplement also includes a copy of the Creditor Trust Agreement, a copy of the Amended Backstop Rights Purchase Agreement, and a copy of the Amended Executory Contract Lists. The Fourth Plan Supplement provides copies of the Amended Holdco LLC Agreement, the Amended Newhall Intermediary LLC Agreement and the Amended Reorganized LandSource Communities LLC Agreement. Full-text copies of the 3rd & 4th Plan Supplements are available at: http://bankrupt.com/misc/LandS_3rdPlanSupp.pdf http://bankrupt.com/misc/LandS_4thPlanSupp.pdf The Plan Proponent also submitted to the Court, before the Confirmation hearing, a brief in further support of confirmation of the Plan. Ari N. Lefkovits, director in the Restructuring Group of Lazard Freres & Company LLC; Emile Haddad, chief investment officer of Lennar Corporation; Mark Manski, managing director of Barclays Bank, PLC; and Lennar Corporation, Lennar Homes of California, Inc. and their affiliates involved in the Chapter 11 cases, also submitted briefs and declarations in further support of the Plan. Moreover, Lawrence Webb, the Debtors' co-Chief Restructuring Officer, together with Timothy P. Hogan, submitted to the Court on July 17, 2009, an affidavit supporting and explaining the Debtors' Financial Projections and Liquidation Analysis attached to the Disclosure Statement. Following the Confirmation Hearing, the Plan Proponent present to the Court on July 22, 2009, a copy of the Plan with an accompanying blackline version reflecting the changes that have been made to the Plan as of July 22. A full-text copy of the blackline version is available for free at: http://bankrupt.com/misc/LandS_Plan072209.pdf Claims Allowance, Admin Claims Bar Date Pursuant to the Confirmation Order, Judge Carey also allowed these claims based on the evidence presented by the Plan Proponent at the Confirmation Hearing: DIP Revolver Loan Claims $136,533,082 First Lien Claims $1,115,751,827 First Lien Deficiency Claim $969,600,000 Second Lien Claims $244,000,000 In the event the LNR Investment Agreement is not consummated, then the First Lien Deficiency Claim will be allowed in the amount of $983,800,000, the Court clarified. Pursuant to the Confirmation Order, the deadline for filing proofs of claim for Administrative Expense Claims other than those Administrative Expense Claims set forth in the Plan is September 18, 2009. The Plan's Distribution Record Date is set as July 20, 2009. Resolution of Confirmation Objections Prior to the Confirmation Hearing, more parties voiced out their objections to the Plan and the Plan Supplements. The Objectors include Kevin Kurzhals, Altfillisch Contractors, Inc., R.T. Frankian & Associates, Oakridge Landscape Inc., Independent Construction Company, and Westchester Fire Insurance Company and ACE USA. Judge Carey, however, overruled all objections that have not been withdrawn, waived, or settled. Before the Confirmation Hearing, Hunsaker & Associates, Los Angeles, Inc., SprintCom, Inc. and Nextel of California, Inc., and CH2M HILL Constructors, Inc., withdrew their objections to the Plan, the Plan Supplements, and the proposed cure amounts for the Contracts and Leases to be assumed by the Reorganized Debtors. As to certain Objectors and concerns, the Court entered these rulings: 1. U.S. Department of Veterans Affairs. Any licenses or permits issued by the United States to which one or more of the debtors is a party, permittee or licensee as well as the Consent Agreement In The Matter of Mare Island Naval Shipyard (Eastern Transfer Parcel), USEPA Docket No. TSCA-9- 2002-0002, the non-residential real property lease between Lennar Mare Island LLC and the United States of America Department of Veterans Affairs for the property located at 1175 Nimitz Avenue, in Vallejo, California, with US Lease No. V101-183R-IOI-05-04, and all other contracts and leases with the United States of America, including the Veterans Affairs Dept., if any, to the extent they are assumed by the Debtors or Reorganized Debtors will be treated and administered in the ordinary course of business as if the Debtors' Chapter 11 cases had never been filed. 2. Matters Specific to Lennar Mare Island, LLC. The Settlement Agreement dated July 15, 2009, by and between Lennar Mare Island, LLC and CH2M HILL Constructors, Inc. and LMI's execution of it, are approved. As per the July 17, 2009 declaration of Michael Patrick White, Lennar Corp. executive vice president for asset management, the LMI-CH2M Settlement Agreement provides that on the Effective Date, LMI will assume a Guaranteed Fixed Price Contract between LMI and CH2M. No amounts will be owed by LMI to CH2M on the Effective Date to cure any existing defaults under the GFPC. All rights, claims and defenses of Steadfast Insurance Company, LMI and CH2M, as to any coverage issues arising under the certain insurance policies issued by Steadfast and listed as being assumed by LMI in the Second Plan Supplement, or based upon the LMI-CH2M Settlement Agreement, are unimpaired by the Plan and the Confirmation Order. The Steadfast Policies are deemed assumed by LMI, and Steadfast's objection to the confirmation of the Plan is deemed withdrawn. 3. West Valley LLC. West Valley LLC will not be deemed a Lennar Entity nor will any Claim asserted by West Valley be deemed a Lennar Claim. Within 20 days after the occurrence of the Effective Date, LandSource Holding Company LLC will transfer all of its interest in and to the parcels of a property located in El Dorado County, California, that are retained by West Valley, under an Agreement of Purchase and Sale between West Valley, as seller, and Lennar Homes of California, Inc., as the purchaser. 4. Internal Revenue Service. The Debtors and the Reorganized Debtors will not be deemed to have received any prospective tax rulings or tax relief from the Internal Revenue Service. 5. Dolce View (Los Angeles) LLC and CIM Fund III, L.P. In the event any amount is determined to be payable as an Allowed Administrative Expense Claim by the estate of LNR-Lennar Washington Square LLC to Dolce View (Los Angeles) LLC and CIM Fund III, L.P. in connection with (x) a final non- appealable determination or decision in Adversary Proceeding No. 09-508885 (KJC) or (y) a valid settlement or compromise of the Dolce Litigation, the Allowed Administrative Expense Claim will be deemed validly asserted against and payable under the terms of the Plan by each of the Debtors' estates -- except Lennar Mare Island LLC and Friendswood Development Company LLC -- until the amount is paid in full. 6. Kings Ridge Community Association. LandSource Holding Company LLC will transfer all of its interest in and to the certain real property located in Lake County, Florida, by quit claim deed to The Kings Ridge Community Association, a Florida Not-Far-Profit corporation, the HOA, which Property was dedicated to the HOA in the Plat for Devonshire at Kings Ridge. 7. Altfillisch Contractors, Inc. Pending resolution of Adversary Proceeding No. 09-51509, the lien asserted by Altfillisch will not be affected by the Confirmation Order, and the validity and amount of the lien and claim will be determined in connection with the pending adversary proceeding. 8. Chaudhary and Associates, Inc., and Ghilotti Construction Company, Inc. The $152,869 lien asserted by Ghilotti with respect to the work performed on the Mare Island project is a Senior Permitted Lien Claim and will be paid in full on the Effective Date of the Plan. The $335,829 lien asserted by Chaudhary with respect to the work performed on the Mare Island project is asserted to be a Senior Permitted Lien Claim and is disputed by the Debtors. To the extent the Chaudhary Lien is determined to be a Senior Permitted Lien Claim, it will be paid in full in accordance with the terms of the Plan. 9. American Heritage Landscape LP. To the extent necessary, the mechanic's lien claim of American Heritage, in the amount of $131,577, with respect to West Creek "C" Recreation Center, will be deemed to be on Exhibit I of the Disclosure Statement. A full-text copy of the LandSource Confirmation Order is available for free at: http://bankrupt.com/misc/LandS_ConfirmationORD.pdf About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for Chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. Bankruptcy Creditors' Service, Inc., publishes LandSource Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandSource Communities Development LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) LANDSOURCE COMMUNITIES: Deal Protecting Sensitive Information ------------------------------------------------------------- Pursuant to Rules 7026 and 7029 of the Federal Rules of Bankruptcy Procedure and the Local Rules for the United States Bankruptcy Court for the District of Delaware, Barclays Bank, PLC, as Administrative Agent under the First Lien Credit Agreement; the Debtors; the Official Committee of Unsecured Creditors; Lennar Corporation and its affiliates; and The Bank of New York, in its capacity as administrative agent for the Second Lien Lenders, entered into a Court-approved stipulation agreeing on uniform procedures designed to assure the protection of sensitive and confidential business records, and the propriety of financial information produced in the matter In re LandSource Communities Development LLC, et al., Case No. 08-11111 (KJC), which information will be stamped "Confidential." Sensitive or confidential business records, trade secrets, non- public business or commercial information, confidential research, development, propriety and financial information or analyses produced in the Debtors' proceeding may be shown, or its contents disclosed, to these persons only: (a) parties to the agreement; (b) counsel of record and office personnel employed and assisting the concerned parties in the case; (c) any expert retained by counsel in connection with the case; (d) any witness present in capacity at any hearing, deposition, or other proceeding in the Case; (e) the Court before which the case are pending; (f) any court reporter present in his or her official capacity at any hearing, deposition, or other proceeding in the case; and (g) any other person or entity to which Barclays, the Debtors, the Committee, Lennar, the Second Lien Agent, or the Second Lien Lenders is obligated to disclose the Confidential Information by law or Court process. Any person to whom any Confidential Information is disclosed will first execute a Confidentiality Stipulation, agreeing to abide by the terms of the Confidentiality Stipulation. Confidential Information or any information derived from it will be used or disclosed solely for the purpose of assisting counsel of record in connection with the case and not for any other litigation, proceeding, competitive business or any other purpose whatsoever. Counsel desiring to make disclosure of Confidential Information of the other party to any person other than those listed must request permission from the other party. The parties must first attempt to resolve any dispute in good faith on an informal basis. About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada, and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for Chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. Bankruptcy Creditors' Service, Inc., publishes LandSource Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandSource Communities Development LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) LARRY GEISER: Case Summary & 9 Largest Unsecured Creditors ---------------------------------------------------------- Joint Debtors: Larry Geiser Jacqueline Geiser aka Jackie Geiser 8077 Eagle Ridge Drive West Chester, OH 45069 Bankruptcy Case No.: 09-14642 Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court Southern District of Ohio (Cincinnati) Debtors' Counsel: Elliott Polaniecki, Esq. 9000 Plainfield Road Cincinnati, OH 45236 Tel: (513) 793-5999 Fax: (513) 793-4691 Email: e28p@aol.com Total Assets: $3,016,692 Total Debts: $4,789,948 A full-text copy of the Debtors' petition, including a list of their 9 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ohsb09-14642.pdf The petition was signed by the Joint Debtors. LYONDELL CHEMICAL: Committee Sue Buyout Architects for $22 Billion ------------------------------------------------------------------ Emily Chasan at Reuters reports that the official committee of unsecured creditors for Lyondell Chemical Co. has filed a lawsuit seeking to recover as much as $22 billion from the banks, advisers, and executives who arranged the 2007 leveraged buyout of the Company. As reported by the Troubled Company Reporter on July 23, 2009, the Hon. Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York allowed the committee to move forward with fraud claims against Access Industries, the debtor LyondellBasell's parent, as part of the Company's Chapter 11 bankruptcy case. The committee alleged that backers of LyondellBasell's $12.7 billion buyout of Lyondell Chemical intentionally pushed a flawed merger in 2007 to reap short-term profit on the deal. The complainants wanted the Court to require the defendants to pay LyondellBasell, increasing the amount it has to pay creditors. According to LyondllellBasell and Access Industries spokespersons, Judge Gerber said that the case must proceed quickly so it doesn't interfere with LyondellBasell's plan to emerge from bankruptcy by year-end. Reuters quoted the committee as saying, "If successful in maintaining ownership of assets through the turn of the petrochemical cycle, [Access Industries chairperson Len] Blavatnik's upside would be great. If, as it turned out, he overleveraged and could not finance his business through a downturn, because of his minimal equity investment, the pain would largely be felt by others." According to Reuters, the committee claimed that the $48 per share purchase price paid to Lyondell shareholders was "excessive" and was made to prevent other competitive bids for Lyondell. Reuters relates that the defendants include: -- these investments banks for helping to arrange the deal: -- Citibank, -- Goldman Sachs Group Inc, -- Deutsche Bank, -- ABN Amro Bank NV, -- UBS Securities, and -- Merrill Lynch; and -- investors in the deal, which include: -- Barclays Global Investors, and -- LeverageSource. Reuters states that the creditors are seeking a jury trial that will prove as many as 21 different claims against the defendants for fraudulent transfer, breach of contract, breach of fiduciary and mismanagement. LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately $8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a $6.5 billion term loan, which comprises a $3.25 billion in new loans and a $3.25 billion roll-up of existing loans; and a $1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MAGMA DESIGN: Inability to Pay Bond Debt Cues Going Concern Doubt ----------------------------------------------------------------- Grant Thornton LLP in San Jose, California, raised substantial doubt about Magma Design Automation, Inc.'s ability to continue as a going concern after auditing the Company's financial reports for the period ended May 3, 2009, and April 6, 2008. The auditor pointed that the Company experienced a significant decline in revenue and operating cash flows and does not have the financing in place to pay the $49,900,000 in bond debt maturing May 25, 2010. At May 3, 2009, the Company's balance sheet showed total assets of $127,075,000, and total liabilities of $141,765,000, resulting in a stockholders' deficit of $14,690,000. The Company posted a net loss of $127,750,000 for the year ended May 3, 2009, compared with a net loss of $32,409,000 for the year ended April 6, 2008. Cash and cash equivalents available for use aggregated a total of $32,900,000 at May 3, 2009. For fiscal 2009, net cash flow used in operations was $5,400,000. Since fiscal 2004 the Company has not achieved profitability. Since inception, the Company has incurred aggregate consolidated net losses of $377,400,000, and may continue to incur net losses for the foreseeable future. In addition, the Company has experienced a significant decline in revenues during fiscal 2009. A full-text copy of the Company's Form 10-K is available for free at http://ResearchArchives.com/t/s?3fc8 Magma Design Automation, Inc. (NASDAQ:LAVA) provides electronic design automation software products and related services. The Company's products comprise a digital integrated solution for the chip development cycle, from initial design through physical implementation. MAGNA ENTERTAINMENT: Creditors Want MID Unit's Claim Subordinated ----------------------------------------------------------------- MI Developments Inc. said its subsidiary MID Islandi sf. has been named as a defendant in an action commenced by the Official Committee of Unsecured Creditors in connection with the bankruptcy proceedings of Magna Entertainment Corp. under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. The Committee's action seeks, among other things, recharacterization as equity of the MID Lender's claims in relation to the indebtedness previously advanced to MEC and its subsidiaries, equitable subordination of the MID Lender's claims against the debtors in the Chapter 11 proceedings and the avoidance of allegedly fraudulent transfers to the MID Lender. In addition, the Committee has sought leave of the Court to pursue a separate action against MID that alleges, among other things, breach of fiduciary duty owed to MEC and its creditors. MID believes that the Committee's claims are without merit and intends to contest them vigorously. As reported by the Troubled Company Reporter on April 22, 2009, the Hon. Mary F. Walrath granted final approval of a modified financing plan for Magna Entertainment Corp. The financing plan calls for $38.4 million to be provided to MEC by a subsidiary of parent company MI Developments. The Associated Press said the amount was decreased from the $62.5 million initially proposed, and the maturity was extended 60 days until November 6, giving a longer marketing period for potential sales of MEC's assets. MID is a real estate operating company engaged primarily in the acquisition, development, construction, leasing, management, and ownership of a predominantly industrial rental portfolio leased primarily to Magna International Inc. and its subsidiaries in North America and Europe. MID also acquires land that it intends to develop for mixed-use and residential projects. MID holds a majority equity interest in Magna Entertainment Corp. (MEC), an owner and operator of horse racetracks, and a supplier, via simulcasting, of live horseracing content to the inter-track, off- track and account wagering markets. MEC has filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. About Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a fifty% interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720). Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, have been engaged as bankruptcy counsel. L. Katherine Good, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., are the Debtors' local counsel. Miller Buckfire & Co. LLC, has been tapped as financial advisor and Kurtzman Carson Consultants LLC, as claims agent. Magna Entertainment Corp. had total assets of $1.054 billion and total liabilities of $947.3 million based on unaudited consolidated financial statements as of December 31, 2008. MARK IV: Former Execs. Want Info on Insurance Policies ------------------------------------------------------ Gerald S. Lippes, William P. Montague, Frederic L. Cook, Richard L. Grenolds, and John J. Byrne, former executives of Mark IV Industries Inc. and its debtor-affiliates object to the disclosure statement with respect to the joint plan of reorganization filed by the Debtors in the U.S. Bankruptcy Court for the Southern District of New York on June 17, 2009, arguing that the disclosure statement contains inadequate information. The former executives said that they were unable to determine particularly whether the split-dollar life insurance policies, the health insurance coverage and the term life insurance programs will be continued in accordance with the prepetition arrangements or whether the Debtor has a different intention, which has not been disclosed. Accordingly, the form executives request not to approve the disclosure statement until all of the relevant information has been supplied with an adequate opportunity to parties-in-interest and creditors. Troubled Company Reporter said on June 26, 2009, the Court set a hearing on July 28, 2009, at 2:00 p.m. (Eastern time) to consider approval of the Debtors' proposed disclosure statement with respect to the Joint Plan of Reorganization. Mark IV seeks to emerge from Chapter 11 as a privately held company. Pursuant to the Plan, the lenders under Mark IV's prepetition $865 million first lien credit facility would receive 92% of the equity in the reorganized Mark IV. General unsecured creditors would get the remaining 8% of the new common stock. The Plan classifies all claims of Mark IV's second lien lenders as general unsecured claims. Holders of equity interests in Mark IV are out of the money. According to the Plan, the new common stock issued to the lenders and the unsecured creditors would be subject to dilution from the exercise of options and grants of restricted stock to employees pursuant to a new Management Equity Incentive Plan. The Plan documents do not indicate the percentage of equity that may be issued pursuant to the proposed incentive plan. A full-text copy of Mark IV's plan of reorganization filed June 17, 2009, is available at no charge at: http://bankrupt.com/misc/MarIVPlan.PDF A full-text copy of Mark IV's disclosure statement filed June 17, 2009, is available at no charge at: http://bankrupt.com/misc/MarIVDS.PDF About Mark IV Industries Headquartered in Amherst, New York, Mark IV Industries, Inc. -- http://www.mark-iv.com/-- is a privately held leading global diversified manufacturer of highly engineered systems and components for vehicles, transportation infrastructure and equipment. The company's systems and components are designed to promote a cleaner and safer environment and include power transmission, air admission and cooling, advanced radio frequency, and information display, technologies. The company has a geographically diverse innovation, marketing and manufacturing footprint. Mark IV Industries, Inc. and 17 affiliates filed for chapter 11 on April 30, 209 (Bankr. S.D.N.Y. Lead Case No. 09-12795). Judge Stuart M. Bernstein presides over the case. Jay M. Goffman, Esq., J. Eric Ivester, Esq., and Matthew M. Murphy, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as the Debtors' counsel. David Orlofsky, Managing Director; Tadd Crane, Director; Jose Alvarez; and Jeffrey Genova at Zolfo Cooper serve as Restructuring Advisors. David Hilty and Saul Burian, Managing Directors at Houlihan Lokey, serve as Investment Bankers and Financial Advisors. Sitrick and Company acts as Public Relations Advisor. Steven M. Fuhrman, Esq., at Simpson Thacher & Bartlett LLP, represents JPMorgan Chase Bank, N.A., the First Lien Agent and the DIP Agent. Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Creditors' Committee. The Debtors disclosed $100 million to $500 million in estimated assets and more than $1 billion in debts when they filed for bankruptcy. MEDICURE INC: Lender Extends US$1.7MM Payment Deadline to Aug. 14 ----------------------------------------------------------------- Medicure Inc. reached an agreement with the lender under its secured debt financing agreement dated September 17, 2007, to defer a required payment of roughly US$1.7 million to August 14, 2009. The agreement will allow the Company to continue a dialogue with the lender regarding its payment obligations. Management is continuing work to improve overall financial performance and to further refine its commercial strategy for AGGRASTAT(R). About Medicure Inc. Based in Winnipeg, Manitoba, Medicure Inc. (CA:MPH) -- http://www.medicure.com/-- is a biopharmaceutical company focused on the research, development and commercialization of novel small molecules to treat cardiovascular and neurological disorders. The Company's primary business activity is the marketing and distribution of AGGRASTAT(R) (tirofiban hydrochloride) in the United States for acute coronary syndromes. MILACRON INC: Anderson Resigns as Head of Machinery Tech NA ----------------------------------------------------------- Milacron Inc. reports that effective July 14, 2009, Ross A. Anderson resigned as the Company's Vice President and President- Machinery Technologies North America. Sale Dispute As reported by the Troubled Company Reporter, the United States Bankruptcy Court in the Debtors' Chapter 11 proceeding approved on June 26, 2009, the sale of substantially all of the Debtors' assets to a company formed by affiliates of Avenue Capital Group, certain funds or accounts managed by DDJ Capital Management LLC and certain other entities that together hold approximately 93% of the Company's 11-1/2% Senior Secured Notes pursuant to the definitive Purchase Agreement dated May 3, 2009, as subsequently amended. On June 30, the Court entered its order approving the sale. The TCR said July 14, 2009, the Official Committee of Unsecured Creditors and a group of retirees in the bankruptcy cases of Milacron Inc. and its affiliates ask the U.S. Bankruptcy Court to reconsider its order approving the sale of substantially all of the Debtors' assets to the stalking horse bidder, MI 363 Bid LLC - - a company formed by affiliates of Avenue Capital, certain funds or accounts managed by DDJ Capital and certain other entities that together hold approximately 93% of the Company's 11-1/2% Senior Secured Notes. About Milacron Inc. Headquartered in Batavia, Ohio, Milacron Inc. (Pink Sheets: MZIAQ) supplies plastics-processing technologies and industrial fluids, with major manufacturing facilities in North America, Europe and Asia. First incorporated in 1884, Milacron also manufactures synthetic water-based industrial fluids used in metalworking applications. The Company and six of its affiliates filed for protection on March 10, 2009 (Bankr. S.D. Ohio Lead Case No. 09-11235). On the same day, the Company filed an ancillary proceeding for reorganization of its Canadian subsidiary under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. The petitions include the Company and its U.S. and Canadian subsidiaries and its non-operating Dutch holding company subsidiary only, and do not include any of the Company's operating subsidiaries outside the U.S. and Canada. Kim Martin Lewis, Esq., Tim J. Robinson, Esq., and Patrick D. Burns, Esq., at Dinsmore & Shohl LLP, represent the Debtors in their restructuring efforts. Conway, Del Genio, Gries Co., LLC, is the Debtors' financial advisor. Rothschild Inc. is the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC is the noticing, balloting and disbursing agent for the Debtors. Paul, Hastings, Janofsky & Walker LLP, represents DIP Lender General Electric Capital Corp. Taft Stettinius & Hollister LLP is counsel for the Official Committee of Unsecured Creditors. At April 30, 2009, the Company had $527,497,000 in total assets and $809,732,000 in total liabilities. MINCO GOLD: Receives Non-Compliance Notice From NYSE Amex LLC ------------------------------------------------------------- Minco Gold Corporation advises that on July 16, 2009, the Company received a notice from NYSE Amex LLC indicating that the Company has yet to file its Form 20-F for the year ended December 31, 2008. The Exchange advises that the Company is not in compliance with Sections 134, 1101, and 1003(d) of the Exchange's Company Guide as the timely filing of the Form 20-F is a condition for the Company's continued listing on the Exchange. The Company is working diligently with its independent auditors through the review process of the Form 20-F and expected to be the position to file the Form 20-F shortly. About Minco Gold Minco Gold Corporation (CA:MMM) (NYSE Amex: MGH)(FRANKFURT: MI5) -- http://www.mincomining.ca/-- is a Canadian mining company involved in the direct acquisition and development of high-grade, advanced stage gold properties. The Company owns an exploration property portfolio covering more than 1,000 square kilometres of mineral rights in China. MOBILE BAY INVESTMENTS: Case Summary & 5 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Mobile Bay Investments, L.L.C. Post Office Box 8631 Mobile, AL 36689-0631 Case No.: 09-13322 Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court Southern District of Alabama (Mobile) Debtor's Counsel: C. Michael Smith, Esq. 150 South Dearborn St. Mobile, AL 36602-1606 Tel: (251) 433-0588 Email: paulandsmithpc@earthlink.net Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Logan U. Gewin, the company's managing member. Debtor's List of 5 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Julian Gewin Trust FBO $149,349 Madge U. Gewin Burton Brothers Managements $108,500 Co., Inc. RTBH, LLP $87,020 Madge G. Rody $78,882 JYMCO $54,500 MOMENTIVE PERFORMANCE: In Talks with Lenders for Covenant Relief ---------------------------------------------------------------- Momentive Performance Materials Inc. said it is presently in discussions with certain lenders under Momentive's senior secured credit facility to, among other things, amend or waive (if necessary) financial maintenance covenant set forth in its Credit Agreement dated December 4, 2006 regarding its Senior Secured Leverage Ratio. No definitive agreement with respect to an amendment or waiver has been reached, and there can be no assurance that such agreement will be reached. On July 16, 2009, Momentive announced preliminary results for the second quarter ended June 28, 2009. Momentive expects to post second quarter 2009 net sales of roughly $485 million to $495 million, GAAP operating income of roughly $0 to $10 million - - which does not reflect the gain on the early extinguishment of debt -- and Adjusted EBITDA of roughly $58 million to $68 million. In the second quarter of 2008, Momentive recorded net sales of roughly $738 million, GAAP operating income of roughly $37 million, and Adjusted EBITDA of roughly $105 million -- reflecting pro-forma effects of certain estimated cost savings. Second quarter 2009 results benefited from modest improvements in demand compared to the first quarter and cost reduction efforts but the recession continued to significantly impact year-over-year comparisons. Going forward, sales and EBITDA visibility remains limited. Momentive expects to be in compliance with all of the terms of the agreements governing its outstanding indebtedness, including the financial covenants, at the end of the second quarter of 2009. Momentive estimates that its total debt, net of cash and cash equivalents, was roughly $2,898 million at the end of the second quarter of 2009, down from $2,913 million at March 29, 2009. This reduction was primarily driven by the early extinguishment of debt in connection with the consummation of Momentive's debt exchange on June 15, 2009, pursuant to which it issued $200 million in aggregate principal amount of new second-lien notes with an annual interest rate of 12.5% in exchange for roughly $350 million in aggregate principal amount of unsecured notes, with annual interest rates between 9% and 11.5%, largely offset by cash used in operating activities (primarily stemming from Momentive's semi- annual cash interest payments on its notes) and unfavorable exchange rate fluctuations. At the end of the second quarter, Momentive had $250 million of outstanding borrowings and roughly $26 million of outstanding letters of credit under its revolving credit facility, leaving unused borrowing capacity of about $24 million, and roughly $316 million of cash and cash equivalents. Momentive also expects to record a one-time gain on a GAAP basis of roughly $142 million in the second quarter as a result of the early extinguishment of debt in connection with the consummation of its debt exchange described above. Momentive expects to file a more detailed press release regarding its second quarter 2009 results on Form 8-K as well as filing its Form 10-Q for the three months ended June 28, 2009, in early August 2009 with an accompanying investor conference call to follow shortly thereafter. About Momentive Performance Materials Momentive Performance Materials, Inc., is a producer of silicones and silicone derivatives, and is engaged in the development and manufacture of products derived from quartz and specialty ceramics. As of December 31, 2008, the Company had 25 production sites located worldwide, which allows it to produce the majority of its products locally in the Americas, Europe and Asia. Momentive's customers include companies in industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot and Lowe's. As of March 29, 2009, Momentive had $3.42 billion in total assets on $4.08 billion in total liabilities, resulting in $662.8 billion in stockholders' deficit. The Troubled Company Reporter said on June 17, 2009, that Standard & Poor's Ratings Services lowered its corporate credit rating on Momentive Performance Materials to 'SD' from 'CC' and its senior unsecured and subordinated debt ratings on the company to 'D' from 'C' following the completion of what S&P considers to be a distressed exchange offer. In addition S&P has removed the ratings from CreditWatch, where they were placed with negative implications on March 17, 2009. All S&P's other ratings on Momentive and its subsidiaries remain unchanged. Moody's Investors Service also deemed the recently concluded notes exchange offer which included issuance of secured second lien notes to be a distressed exchange, and lowered the Probability of Default Rating of Momentive Performance Materials to Ca/LD from Caa3. Moody's also changed some of Momentive's other ratings to reflect the occurrence of a distressed exchange. The ratings on Momentive's senior unsecured notes and senior subordinated notes were changed to Ca from Caa2 and Caa3, respectively, reflecting the low applicable clearing price resulting from the exchange offer. Moody's affirmed Momentive's Corporate Family Rating at Caa1, its senior secured first lien debt (revolver and term loan) at B1 and its Speculative Grade Liquidity Rating at SGL-3. The rating outlook is negative. MOORE-HANDLEY: Bostwick-Braun Expresses Interest in Buying Assets ----------------------------------------------------------------- Moore-Handley, Inc., received a letter of interest from Bostwick- Braun, indicating its preliminary interest in pursuing the purchase of certain of Moore-Handley's assets by a new company to be formed by Bostwick-Braun. If the transaction is completed, it is anticipated that the new company will operate as a full-service distributor from Moore- Handley's Pelham, Alabama, warehouse, maintaining the current sales force and operations. The proposed transaction is subject to several conditions precedent, including completion of Bostwick-Braun's due diligence, the negotiation of final terms of the transaction and execution of a definitive purchase agreement, and the approval of both companies' boards of directors, as well as the completion of appropriate approval procedures in Moore-Handley's bankruptcy case and approval of the transaction by the U.S. Bankruptcy Court for the Northern District of Alabama. As reported by the Troubled Company Reporter on July 21, 2009, Moore-Handley filed for Chapter 11 due to difficulty getting cash from troubled lender CIT Group Inc. Moore-Handley said in court filings it has tried to negotiate with CIT, though "the federal government's recent decision not to support CIT's reorganization has thrown CIT into disarray and casts substantial doubt on CIT's ability to continue to fund the Debtor's working capital requirements." Moore-Handley has asked the U.S. Bankruptcy Court for authority to use cash pledged as collateral to CIT even though it doesn't have consent from CIT. Moore-Handley owes CIT $18.8 million in secured debt, including $11.2 million on a revolving credit and $6.4 million on a term loan. About Moore-Handley Moore-Handley, Inc. (Pink Sheets:MHCO) supplies tools and other items to hardware stores and home centers. With net sales of $145.5 million in 2008, it claims to be the second-largest independent hardware and building material distributor in the U.S. Moore-Handley filed for Chapter 11 on July 17, 2009 (Bankr. N.D. Ala. Case No. 09-4198). Judge Thomas B. Bennett presides over the case. Christopher L. Hawkins, Esq., and Jennifer Anne Harris, Esq., at Bradley Arant Rose & White LLP, serve as the Debtor's counsel. The Company listed total assets ranging from $10,000,001 to $50,000,000 and total debts ranging from $10,000,001 to $50,000,000 when it filed for bankruptcy. MORRIS PUBLISHING: S&P Withdraws 'D' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its ratings on Augusta, Georgia-based newspaper publisher Morris Publishing Group LLC at the company's request. After Morris missed its $9.7 million interest payment due Feb. 1 on $278 million of senior subordinated notes, S&P lowered its corporate credit rating on the company and the issue-level rating on the notes to 'D'. Ratings List Withdrawn Morris Publishing Group LLC To From -- ---- Corporate Credit Rating NR D/--/-- Secured NR CC Recovery Rating NR 2 Subordinated NR D Recovery Rating NR 6 NR -- Not rated. NEIMAN MARCUS: Moody's Gives Stable Outlook; Affirms 'Caa1' Rating ------------------------------------------------------------------ Moody's Investors Service changed Neiman Marcus Group, Inc.'s rating outlook to stable from negative. In addition, Moody's upgraded Neiman Marcus' speculative grade liquidity rating to SGL- 2 from SGL-3. All other ratings -- including the company's Caa1 Corporate Family Rating and Caa1 Probability of Default Rating -- were affirmed. The change in outlook to stable from negative and the upgrade to SGL-2 acknowledges Neiman Marcus's improved liquidity given the successful refinancing of its $600 million asset based revolving credit facility expiring January 15, 2013. This refinancing along with the company's healthy cash level gives the company the financial flexibility to weather the current economic downturn. In addition, Neiman's financial flexibility is bolstered by the lack of any near dated debt maturities. Its nearest debt maturity is not until January 15, 2013, when the its revolving credit facility expires followed by its $1.625 billion term loan maturing in April 2013. The Caa1 probability of default rating reflects the company's very poor credit metrics, its very high debt levels, as well as Moody's expectation that the overall luxury market will contract further. In addition, the rating reflects Moody's expectation that Neiman Marcus' earnings will remain pressured making it likely that interest coverage will deteriorate to well below one time by its fiscal year ended August 2009. Positive ratings consideration was given to Neiman Marcus' good liquidity and its solid competitive position within the luxury market. The SGL-2 Speculative Grade Liquidity rating represents good liquidity. Moody's expects Neiman Marcus to be able to cover its working capital, capital expenditures, and cash interest with internally generated cash over the next twelve months while maintaining healthy levels of cash ($229 million at May 2, 2009). In addition, it has a $600 million asset based revolving credit facility that expires in January 2013. This facility is only expected to be used for letters of credit (about $33 million on July 15, 2009). In addition, the facility only contains one financial covenant (fixed charge coverage) which is only required to be tested when availability falls below $60 million. The stable outlook reflects Neiman Marcus' good liquidity and lack of near dated maturities which provides the company with the ability to weather the current economic storm while experiencing a period of weak credit metrics. This rating was upgraded: -- Speculative grade liquidity rating to SGL-2 from SGL-3.; These ratings were affirmed and LGD point estimates changed: -- Corporate Family Rating at Caa1; -- Probability of Default Rating at Caa1; -- Senior secured bank facility at B3 to (LGD 3, 35%) from (LGD 3, 36%); -- Senior secured debentures at B3 to (LGD 3, 35%) from (LGD 3, 36%); -- Senior unsecured debt at Caa2 (LGD 5, 76%); and -- Senior subordinated debt at Caa3 (LGD 6, 92%). The last rating action on Neiman Marcus was on March 17, 2009 when its Corporate Family Rating and Probability of Default rating were downgraded to Caa1 with a negative outlook. Neiman Marcus Group, Inc., headquartered in Dallas, Texas, operates 40 Neiman Marcus stores, 2 Bergdorf Goodman stores, 27 clearance centers, and a direct business. Total revenues are about $3.9 billion. NEWPARK RESOURCES: Covenant Violations Cue Loan Amendment --------------------------------------------------------- Newpark Resources, Inc., entered into a First Amendment and Waiver to Amended and Restated Credit Agreement, amending provisions of its existing Amended and Restated Credit Agreement. The First Amendment was principally entered into as a result of the Company's non-compliance with the consolidated fixed charge coverage ratio and consolidated leverage ratio financial covenants under its existing credit agreement as of June 30, 2009. The First Amendment provides a waiver of the financial covenant violations by the Company's lenders, modifies certain financial covenant requirements in future periods, and amends certain provisions of the existing credit agreement. Pursuant to the First Amendment, favorable adjustments were made to the consolidated fixed charge coverage ratio covenant through June 2010 and the consolidated leverage ratio covenant through March 2010. In addition, the method of calculating these two ratios was modified to utilize annualized results beginning with the Company's third quarter of 2009 and ending with the first quarter of 2010. Thereafter, the calculations will be made using the trailing four fiscal quarter results, as set forth in the original credit agreement. The First Amendment increases the interest cost of borrowings to reflect current market conditions, including an increase in the margin on LIBOR based borrowings, which constitutes a substantial portion of the Company's borrowings, from a range of 150 to 250 basis points to a range of 400 to 750 basis points, depending upon the Company's consolidated leverage ratio. The margin will initially be 750 basis points. The First Amendment also reduces the revolving credit facility from $175 million to $150 million. The amount outstanding under the revolving credit facility at June 30, 2009, was $100.6 million, including letters of credit of $3.6 million. Paul Howes, President and Chief Executive Officer of Newpark, stated, "We are pleased to be able to execute this amendment with our lenders as we continue to manage through this severe downturn in drilling activity in North America. We believe that this amendment provides us with the opportunity to continue to position Newpark for further growth in our international businesses and a recovery in our North American business." Based in The Woodlands, Texas, Newpark Resources, Inc. -- http://www.newpark.com/-- is a worldwide provider of drilling fluids, temporary worksites and access roads for oilfield and other commercial markets, and environmental waste treatment solutions. NATIONAL HERITAGE: Files Bankruptcy Plan and Disclosure Statement ----------------------------------------------------------------- National Heritage Foundation, Inc., filed a proposed Plan of Reorganization and accompanying proposed Disclosure Statement with the U.S. Bankruptcy Court for the Eastern District of Virginia. According to NetDockets, the proposed disclosure statement provides that the Debtor is a not-for-profit 501(c)(3) public charity. The disclosure statement states that the "Debtor maintains Donor-Advised Funds, which permits [sic] Donors to make non-binding recommendations for charitable grants in accord with section 4966 et seq. of the Internal Revenue Code. . . It helps to further the progress of scientific, charitable, educational and religious activities by consolidating and centralizing the administration of charitable donations and projects. Toward that end, the Debtor made charitable contributions and grants of approximately $21.9 million for the year ending on December 31, 2008, $21.3 million for the year ending on December 31, 2007, and $27.3 million for the year ending on December 31, 2006, for projects that further its and its donors' charitable goals . . . . As of December 31, 2008, the Debtor managed net assets with a book value of approximately $152 million in approximately 6,014 donor advised 'funds.'" According to NetDockets, the Disclosure Statement provides that the proposed "Plan provides for a partial liquidation of the Debtor's Assets, the proceeds of which, together with cash on hand, will be used to fund payment in full of all Allowed Claims . . . as provided by the terms of the Plan." According to NetDockets, the Plan "does not classify equity interest holders, Donors, or third-party trustors and beneficiaries of its Charitable Remainder Trusts, because the Debtor believes such entities are not Claimants." NetDockets relates that, according to the Debtor, the claims listed on its schedules of assets and liabilities and claims filed against its estate (net of expected duplicate claims) total approximately $42 million. However, $11.4 million of that amount are claims filed by donors (which, the company asserts are not creditors). In comparison, according to NetDockets, National Heritage Foundation anticipates having assets with an approximate value of $170 million, including $26 million of cash on hand, as of the effective date of the proposed Plan. The Plan provides for an initial distribution to claimants as early as the effective date with subsequent distributions being made as assets are liquidated to cash. National Heritage Foundation would retain excess assets and continue its operations as a reorganized company. Falls Church, Virginia-based National Heritage Foundation, Inc. -- http://www.nhf.org/-- is a non-profit tax-exempt charitable institution. The company filed for Chapter 11 bankruptcy protection on Jan. 24, 2009 (Bankr. E.D. Va. Case No. 09-10525). Alan Michael Noskow, Esq., at Patton Boggs LLP assists the company in its restructuring effort. The company listed more than $100 million in assets and $1 million to $100 million in debts. NEPTUNE INDUSTRIES: Court OKs Global Deal Dismissing Ch. 11 Case ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida approved the voluntary dismissal of the involuntary chapter 11 case commenced against Neptune Industries, Inc., in accordance to a global settlement. The involuntary petition under Chapter 11 of the Bankruptcy Code was filed February 13, 2009, against the Company by certain holders of the Company's outstanding convertible debentures. The case is In re: Neptune Industries, Inc., Case No. 09-12509-EPK. On February 26, 2009, the Court granted the Petitioning Creditors' Motion to Appoint Chapter 11 Trustee and Barry E. Mukamal was appointed Chapter 11 trustee that same day. Sale of Assets During the month of March 2009, the Court granted several motions from the Trustee approving interim financing from various lenders to allow the Trustee to continue operating the Company's business. Only portions of the post-petition financing approved by the Court were actually funded. Without the proper funding, the Trustee was unable to continue the Company's business at normal production levels. A significant portion of the Company's current assets was its inventory, which consisted of raw materials, such as salt, oxygen and fish feed, and work in process, represented by the pounds of fish growing in the separate tanks and raceways on the farm property. As a result of the Trustee's inability to obtain adequate funding, during the months of April to June 2009, the Trustee was required to periodically sell the larger fish to customers of the Company at various prices ranging from full market price to substantially discounted prices. In addition, during that time, the Trustee liquidated the smaller fish that were not suitable for sale to the market by selling the live fish to local fish farmers, as well as donating live fish to the Florida Fish and Wildlife Conservation Commission, and selling the remaining fish to a company to be processed as bait. The Company also sold the remaining fish feed to fish and alligator farmers and sold the salt back to the salt supplier at half price. All of the purchasers of the Company's fish stock were third parties that had no material relationship, other than in respect of the transaction, with the Company or any of its officers, directors and affiliates. Execution of Settlement Agreement After consulting with the Petitioning Creditors, during June 2009, the Trustee determined that the most effective way to reorganize the Company's business was to allow the creditors and the Company to negotiate a global settlement of their respective claims. Accordingly, on June 25, 2009, the Company entered into a settlement agreement with the Company's former executive officers and directors, Messrs. Ernest D. Papadoyianis and Xavier T. Sal Cherch -- the Majority Shareholders -- to allow the Company to exit Chapter 11 via a dismissal of the original bankruptcy filing. Holders of 85% of the Company's total outstanding debt obligations in the amount of approximately $3 million approved the Agreement. As part of the Agreement, the Company agreed that the Aqua-Sphere technology, its patents, trademarks, and ancillary intellectual property will be the sole and exclusive property of the Majority Shareholders, and that any and all prior rights of the Company have been terminated. In addition, the Company agreed to convey to the Majority Shareholders 100% of the outstanding common stock of the Company's subsidiary, Aqua Biologics, Inc, including all of the assets of the corporation such as: the Ento Protein technologies and associated intellectual property rights, all equipment related to the Lake Linda site, but not including any debts or liabilities incurred after the Petition Date. The Majority Shareholders agreed to grant a 10-year non-exclusive licensing agreement to the Company for the Aqua-Sphere technology. The agreement would allow the Company to purchase Aqua-Sphere systems from the Majority Shareholders at retail pricing, and without prejudice, for the Company's own use, on a worldwide basis. Additionally, the licensing agreement would grant the Company the right to act as a non-exclusive sales agent for the Majority Shareholders, and provide payment to the Company on a commission basis equal to 10% of the selling price of any Aqua- Sphere systems delivered by the Majority Shareholders as a result of the efforts of the Company. In exchange and as consideration for such conveyance of ABI, the Majority Shareholders agreed to surrender back to the Company all ownership in the Company, including but not limited to all shares of the Company's common stock, par value $0.001 and preferred stock, as well as all stock options, warrants and any stock rights they held in the Company. Specifically, Mr. Papadoyianis will return 12,208,060 shares of Common Stock and Mr. Cherch will return 12,164,377 shares of Common Stock for cancellation. In addition, Messrs. Papadoyianis and Cherch will also return options to purchase 1,500,000 shares of Common Stock each, as well as warrants to purchase 44,944 shares of Common Stock each. The Majority Shareholders, however, are entitled to receive shares of the Company's Common Stock equal to 3% of the recapitalized Common Stock after the Company's withdrawal from the Chapter 11 proceedings. This equity interest will dilute on a pari passu basis to other equity in the Company as a result of any financings. In addition, the Majority Shareholders agreed to cancel all notes, claims, debts or obligations (including forfeiture of any accrued salaries and interest) they may have with the Company, except Company credit cards, secured personally be the Majority Shareholders, which will be paid in full, and the Majority Shareholders will be reimbursed for monies paid personally on these cards from the time of the bankruptcy filings to present up to a maximum of $43,200. The Majority Shareholders also agreed to grant the Company a 3% ownership in Closed Containment Systems, Inc. and Aqua Biologics, Inc. This equity interest will dilute on a pari passu basis to other equity in CCS and Aqua Biologics, Inc. as a result of any financings. About Neptune Industries Headquartered in Boca Raton, Fla., Neptune Industries Inc. (OTC BB: NPDI.OB) -- http://www.neptuneindustries.net/-- through its subsidiaries, provides aquaculture technology primarily in the United States. As reported by the Troubled Company Reporter on March 2, 2009, Neptune Industries was unable to complete the preparation of its financial statements in time to complete the report on Form 10-Q for the quarter ended December 31, 2008, on a timely basis. The Company said it will file the Form 10-Q very soon. Going Concern Doubt As reported in the Troubled Company Reporter on October 19, 2007, Berman Hopkins Wright & Laham, CPAs and Associates, LLP, expressed substantial doubt about Neptune Industries' ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended June 30, 2007. The auditing firm pointed to the company's recurring losses from operations and recurring deficiencies in working capital. Neptune Industries' consolidated balance sheet at September 30, 2008, showed $1,507,478 in total assets and $4,208,526 in total liabilities, resulting in a $2,701,048 total stockholders' deficit. NEPTUNE INDUSTRIES: Discloses to the SEC Its Management Changes --------------------------------------------------------------- Neptune Industries, Inc., relates that as a result of the involuntary bankruptcy, on or about March 16, 2009, several officers and directors of the Company resigned from all of their respective positions with the Company: -- Ernest D. Papadoyianis, Chairman, President and Chief Executive Officer; -- Xavier T. Sal Cherch, Chief Operating Officer, Secretary/Treasurer and Director; -- William H. Ryan, Director; and -- James M. Harvey, Director. On or about March 19, 2009, Don C. Tewksbury resigned as a director of the Company. The resignations were not the result of any disagreements between the Company and the respective directors and executive officers. Following the resignations, the Company was left without any officers and directors. Election of Executive Officer On July 15, 2009, to appoint an interim executive officer to manage the affairs of the Company while it actively seeks a chief executive officer and chief financial officer, Messrs. Ernest D. Papadoyianis and Xavier T. Sal Cherch -- the Majority Shareholders -- executed a written consent appointing Mr. Steve Carbone as Interim Executive Chairman of the Company. Mr. Carbone, 57, has served as a consultant to the Company through his firm, Southeastern Associates, since June 30, 3009, concentrating on customer, vendor, shareholder and noteholder relations and acting as an overseer of the Company's financial restructuring. In January 2008, Mr. Carbone founded and now operates Southeastern Associates in Fort Lauderdale, Florida. He serves in the capacity of Chief Executive Officer and operates the company as business consultants with clients worldwide participating in business opportunities in the Southeastern United States. The firm pursues opportunities with the Department of Defense utilizing contract vehicles such as R23G (rapid response government contract), ETOSS (government contract utilized for manufactured products rather than services) and S3 (government contract providing lifecycle & logistics services). In 1981, Mr. Carbone founded Freedom Electronics, Inc., and built that company into a contract manufacturer of telecom products. As part of that growth, he founded Freedom do Brasil in 1999 and co- founded Freedom Vertical Technologies in 2000 in an effort to expand business opportunities. Mr. Carbone served as CEO and Business Development Manager of Freedom Vertical Technologies from January 2002 until his resignation in January 2009. Mr. Carbone was nominated in 1996 for the Ernst & Young's Entrepreneur of the Year. Mr. Carbone received a Bachelor of Science degree in Biology and Related Sciences from Seton Hall University. Neither Mr. Carbone nor any of his immediate family members have been a party to any transaction or currently proposed transaction with the Company that is reportable under Item 404(a) of Regulation S-K. There are no family relationships between Mr. Carbone and the Company's directors and executive officers. Election of New Directors On July 6, 2009, to fill two of the vacant board seats, the Majority Shareholders executed a written consent electing Steve Carbone and Michael Joubert to the Company's board of directors. This election will be effective 20 days after the Company first mails an information statement on Schedule 14C to its shareholders. The information statement on Schedule 14C will be filed with the Securities and Exchange Commission not later than the date of mailing to the Company's shareholders. Thereafter, Messrs. Carbone and Joubert will remain directors until the next annual meeting of the shareholders as provided for in the Company's By-laws, whereupon a duly elected board of directors will be appointed. Certain Relationships and Related Transactions Neptune Industries also relates Michael Joubert has been employed by the Company or its subsidiaries since December 2002, initially as farm manager and commencing in July 2005, as Vice President of Operations of the Company. The Company previously entered into an employment agreement with Mr. Joubert terminating October 31, 2005, which provided for a minimum annual salary of $35,000. The employment agreement was subsequently renewed, effective November 1, 2005, for another four years through October 31, 2009, and provided for a minimum annual salary of $42,500. On February 11, 2005, the Company issued Mr. Joubert 834 shares of Common Stock as an annual bonus. In addition, effective March 31, 2006, the Company granted Mr. Joubert options to purchase 15,000 shares of Common Stock at an exercise price of $0.3133 per share exercisable for ten years from the issue date, which was July 1, 2006. The board of directors of the Company subsequently approved the grant of options to Mr. Joubert to purchase an additional 30,000 shares of Common Stock on August 1, 2008. The board consent granting the options indicated that the options would have an exercise price equal to the average bid price of the Company's Common Stock for the five trading days prior to the award of the options, however, Mr. Joubert has not yet received any formal documentation related to the award. During February 2008, Mr. Joubert's salary was increased to $52,500 per year. Effective January 16, 2009, Mr. Joubert was terminated by the Company's previous management but was rehired by the Trustee on or about February 27, 2009 in order to assist the Trustee in the management of the fish farm at the same base salary of $52,500 per year. Mr. Joubert continues to be compensated at an annual salary of $52,500 for his present work in rebuilding the Company's fish farm, however, there is no employment agreement currently in place. About Neptune Industries Headquartered in Boca Raton, Fla., Neptune Industries Inc. (OTC BB: NPDI.OB) -- http://www.neptuneindustries.net/-- through its subsidiaries, provides aquaculture technology primarily in the United States. As reported by the Troubled Company Reporter on March 2, 2009, Neptune Industries was unable to complete the preparation of its financial statements in time to complete the report on Form 10-Q for the quarter ended December 31, 2008, on a timely basis. The Company said it will file the Form 10-Q very soon. Going Concern Doubt As reported in the Troubled Company Reporter on October 19, 2007, Berman Hopkins Wright & Laham, CPAs and Associates, LLP, expressed substantial doubt about Neptune Industries' ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended June 30, 2007. The auditing firm pointed to the company's recurring losses from operations and recurring deficiencies in working capital. Neptune Industries' consolidated balance sheet at September 30, 2008, showed $1,507,478 in total assets and $4,208,526 in total liabilities, resulting in a $2,701,048 total stockholders' deficit. NEXT INC: Net Loss Narrows to $329,000 in Quarter Ended May 31 -------------------------------------------------------------- Next, Inc., posted a net loss of $329,007 for the three months ended May 31, 2009, compared with a net loss of $559,796 for the same period in the previous year. At May 31, 2009, the Company's balance sheet showed total assets of $10,109,152, total liabilities of $9,103,197 and stockholders' equity of $1,005,955. The Company related that it that the reclassification of long-term debt owed to Crossroads Bank to current liabilities resulted as a consequence of substantial doubt about the Company's ability to continue as a going concern. This reclassification was made due to the Company's failure to meet certain financial covenants. Working capital was $792,352 at May 31, 2009, compared with $1,680,375 at November 28, 2008, before reclassifications of long- term debt owed to Crossroads Bank carried as current liabilities as a consequence of failing to meet certain financial covenants. Working capital was decreased by $888,023 from working capital without the reclassification at November 28, 2008. A substantially lower trade receivables balance and decrease in inventory partially offset by decreases in trade accounts payable and borrowings under the revolving credit facility contribute to the lower working capital. The Company's cash on hand and in banks at May 31, 2009, was $151,586, as compared to $139,909 at November 28, 2008. Differences in cash on hand are attributed to the timing of disbursements. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?3fc9 Next, Inc. (OTC:NXTI) is a sales and marketing organization that designs, develops, markets and distributes licensed and branded imprinted sportswear primarily through key licensing agreements in addition to the Company's own designs. Products are imported, outsourced and embellished in-house via both the screenprint and embroidery processes. Next's products include 200 licenses and agreements to distribute its Cadre Athletic and Campus Traditions USA line for colleges and universities in the United States. It has licensing agreements with Chevrolet, Pontiac, Hummer, Cadillac, Buick, CorvetteC6, Dodge, GMC and Ford. The Company's designs include American Biker, American Wildlife, Ragtops Sportswear, Campus Traditions USA and Cadre Athletic. It also has licensing and distribution agreements with GRITS and Chuck E. Cheese. Next have two wholly owned subsidiaries: Next Marketing, Inc., and Choice International, Inc. NOBLE INT'L: To Be Delisted From Nasdaq Effective July 27 --------------------------------------------------------- Noble International, Inc., reports that The Nasdaq Stock Market, Inc. has determined to remove from listing the common stock of Noble International, effective at the opening of the trading session on July 27, 2009. Based on review of the information provided by the Company, Nasdaq Staff determined that the Company no longer qualified for listing on the Exchange pursuant to Listing Rules 5250(c)(1),5500,and 5110(b). The Company was notified of the Staff determinations on March 18, April 16, and March 23, 2009. The Company requested a review of the Staff determination before the Listing Qualifications Hearings Panel, but before the scheduled hearing took place, withdrew its request for an appeal. The staff determinations became final on May 11, 2009, and trading in the Company's securities was suspended on May 13, 2009. 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. NORTEL NETWORKS: CALA Unit Files For Chapter 11 Protection ---------------------------------------------------------- Nortel Networks (CALA) Inc., a Florida corporation, is a direct subsidiary of Nortel Networks Inc. The Company is headquartered in Sunrise, Florida. It operates in the United States and in the Caribbean and Latin America or "CALA" region. A substantial majority of NN CALA's customers are foreign companies and governmental entities in the CALA region. In a Chapter 11 petition signed by John Doolittle, treasurer of NN CALA, the Company's Board of Directors has evaluated NN CALA's alternatives and has determined that the filing of a voluntary petition under Chapter 11 of the Bankruptcy Code is in the Company's best interests. The Company seeks Chapter 11 protection to preserve assets and administer its estates in accordance with the original Nortel Networks Debtors' larger restructuring efforts. Accordingly, NN CALA filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code on July 14, 2009. NN CALA continues to operate is businesses and manage its properties as a debtor-in-possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed in its case. 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) NORTEL NETWORKS: Calgary Employees Ask Stay Relief to Pursue Claim ------------------------------------------------------------------ At the behest of a group of employees, the Ontario Superior Court of Justice modifies the stay to permit the group to file a statement of claim against Nortel Networks Corporation and its four Canadian affiliates. The employees assert claims against the CCAA Applicants on account of unpaid severance and other benefits. They were terminated after the CCAA Applicants shut down their operations in Calgary, Alberta. Certain officers of the CCAA Applicants reportedly assured the employees that they would receive severance payment once the closure is completed if they would remain with the CCAA Applicants during the transition period. The officers also advised them that there would not be any changes to the severance practices and that the CCAA Applicants would be solvent until at least late 2009. However, since NNC filed for bankruptcy protection under the Companies' Creditors Arrangement Act on January 14, 2009, the employees have not received the payment. The filing of the statement of claim, the employees said, would allow them to preserve their right under the Canada Business Corporations Act to later bring an action against the officers should the CCAA Applicants' restructuring be unsuccessful. 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) NORTEL NETWORKS: Courts Approve NNL-Flextronics Settlement ---------------------------------------------------------- Nortel Networks Inc. and its debtor-affiliates obtained the U.S. Bankruptcy Court for the District of Delaware's approval of the settlement agreement they entered into with their major suppliers, Flextronics Telecom Systems Ltd. and Flextronics Corporation. The Debtors also obtained a separate court order granting their request to keep unredacted copies of their settlement agreement segregated and under seal by the Clerk of Court. Parts of the settlement agreement reportedly contain sensitive commercial information about their business relationship with FTC and Flextronics Corporation. The Debtors filed in court a side letter agreement as supplement to their settlement agreement with FTS and Flextronics Corporation. A copy of the side letter agreement is available without charge at: http://bankrupt.com/misc/NortelSideLetterAgreement.pdf The side letter agreement provides that Ernst & Young LLP and Ernst & Young Chartered Accountants, as administrators of certain Nortel units, will waive under a certain circumstance the provision in the settlement agreement that conditions the effectiveness of that agreement on a direction from the High Court of Justice in London, England, if sought, that the administrators are at liberty to enter into the settlement agreement. Section 13(a) of the settlement agreement provides that the administrators may waive this condition at their election. Deal Gets Canadian Court's Nod The Ontario Superior Court of Justice also issued a parallel order approving Nortel Networks Corporation and its Canadian affiliates' settlement agreement with Flextronics. The companies reached the settlement to resolve their disputes over the interpretation of the terms contained in their agreement dated January 13, 2009. The January 13 agreement amended the Master Contract Manufacturing Services Agreements, which govern the business relationship among the Nortel companies, FTS, Flextronics Corporation and their affiliates. A full-text copy of the Settlement Agreement is available without charge at: http://bankrupt.com/misc/NortelSettlementFlextronics.pdf The CCAA Applicants also sought and obtained the Canadian Court's approval to file under seal parts of the Settlement Agreement, which contain sensitive commercial information about their business relationship with the Flextronics entities. On June 11, 2009, Ernst & Young Inc., as monitor for the Applicants under Canada's Companies' Creditors Arrangement Act, delivered to the Ontario Court its thirteenth monitor report to express support on the Flextronics settlement. Ernst & Young recommended that the Canadian Court approve the Settlement Agreement to maintain satisfactory business relationship among the companies. "As a result of the unique and critical role the Flextronics entities play in Nortel's supply chain, it is essential that a satisfactory, workable relationship exists between the parties to ensure stability in Nortel's operations during these proceedings by maintaining market confidence in its ability to manage its supply chain and meet its customer delivery obligations," Ernst & Young said. "Such market confidence is required to ensure a maximization of recoveries to the various stakeholder groups affected by these proceedings," the firm further said. FTS, Flextronics Corporation and various other contract manufacturers purchased most of the Nortel companies' inventory and manufacturing facilities in 2004. The business relationship among the Flextronics entities and the Nortel companies is governed by a number of agreements including (i) the Master Contract Manufacturing Services Agreements entered into between NNL and Flextronics Corporation, formerly known as Solectron Corporation, on September 30, 2003; and (ii) the Amended and Restated MCMSA entered into between NNL and FTS on June 29, 2004. The Flextronics entities currently provide about 70% of Nortel's hardware products on a global basis and a significant portion of logistics and repair services required in connection with those products. In recognition of the strategic importance of the Flextronics entities' cooperation during the proceedings, NNL entered into an agreement with the companies dated January 13, 2009. The agreement amended the MCMSAs to provide minimal disruptions to the Nortel companies' supply chain and a corresponding degree of stability for their customer base during the post-filing period. The terms of the Amending Agreement, which was approved by the Ontario Superior Court of Justice on January 14, 2009, provided for the payment to the Flextronics entities of $120 million. To date, the Nortel companies have already paid $100 million. Since execution of the Amending Agreement, disputes have ensued among the Nortel companies and the Flextronics entities over the interpretation of the terms contained in the agreement. The issues revolve around, among other things: (i) inventories to which the $120 million payment to the Flextronics entities applied; (ii) excess and obsolete inventories which are subject to post- filing buy back provisions; (iii) allocation of obligations between pre-filing and post- filing periods; (iv) compliance with the post-filing payment terms agreed to in the Amending Agreement; and (v) whether termination of the 2003 MCMSA will occur on July 12, 2009. In recognition of the continuing importance of their business relationship, negotiations to resolve the dispute were held among the senior management of the Nortel companies and the Flextronics entities. These negotiations were successful and a settlement agreement has been entered into by the companies, subject to approval of the Canadian Court and the U.S. Bankruptcy Court for the District of Delaware. The Settlement Agreement provides for the full and final resolution of all disputes known as of May 22, 2009, relating to the interpretation of the Amending Agreement and other matters, including: (1) confirmation that the purchase of inventory in accordance with the existing plans of record is in addition to the obligation of the Nortel companies to purchase $120 million of inventory from the Flextronics entities pursuant to the Amending Agreement; (2) confirmation that inventory acquired by the Flextronics entities on or before the effective date of the Amending Agreement may be used in the calculation of the Nortel companies' quarterly E&O purchase orders, but that Nortel should not be required to purchase the inventory as part of their purchase of the quarterly E&O; (3) confirmation that for purposes of calculating the due date on Flextronics entities' invoices, "delivered" means goods physically received at a Nortel facility or other final delivery location; and (4) the resolution of other operational issues addressed in the side letter, which was executed in connection with the settlement. Representatives of the Official Committee of Unsecured Creditors, the ad hoc committee of bondholders and other parties had been kept apprised of negotiations and the settlement, and that none of them raised objection to the terms of the settlement. The U.S. Bankruptcy Court for the District of Delaware already approved the settlement at a June 11 hearing as well as the sealing of the redacted portion of the Settlement Agreement, which contains confidential and sensitive information about the Nortel companies' supply chain and business relationship with their most significant supplier. ERISA Litigation The Monitor's report also provides information regarding the CCAA Applicants' motion and the motion of certain plaintiffs regarding the applicability of the stay of proceedings against the directors and officers of NNC and Nortel Networks Limited, who are defendants of the lawsuit filed in the U.S. District Court for the Middle District of Tennessee. Ernst & Young recommended that the stay of proceedings be extended to the directors and officers to keep NNC, NNL and NNI from expending significant resources, which would be detrimental to their restructuring. In 2001, an action was commenced in the U.S., alleging imprudent investment of the assets of NNI's contribution retirement plan and breach of duties under the Employee Retirement Income Security Act of 1974. The current statement of claim, known as the Second Amendment Complaint, was filed June 17, 2005, in the U.S. District Court for the Middle District of Tennessee, Nashville Division. The plaintiffs in the ERISA litigation assert breach of fiduciary duty claims against NNI, NNC, NNL and 27 individual defendants including former and incumbent officers and directors of NNC and NNL. The officers and directors named in the ERISA litigation include John Doolittle, Treasurer of NNC and NNL, and John Manley and Harry Pearce, who are both directors of the companies. The plaintiffs and the Nortel companies agree that the litigation is stayed against NNC, NNL, and NNI but they dispute over the question of whether the litigation is or should be stayed against the directors and defendants. The Nortel companies have filed a motion for a determination that the stay of proceedings extends to the directors and officers. Meanwhile, the plaintiffs have filed a cross-motion to permit the continuation of proceedings against the directors and officers. 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) NORTEL NETWORKS: Employees' Request to Lift Stay to Prosecute Suit ------------------------------------------------------------------ A group of employees asks the Ontario Superior Court of Justice to lift the stay so that it could prosecute the lawsuit it filed in the U.S. District Court for the Middle District of Tennessee. The group consists of former and current employees of U.S.-based Nortel Networks Inc. who are or were participants under the Long- Term Investment Plan sponsored by the company. The employees filed the lawsuit in 2001 against NNI, Nortel Networks Corporation, Nortel Networks Limited for alleged breach of fiduciary duties under the Employee Retirement Income Security Act of 1974. Also named are 27 individual defendants including former and incumbent officers and directors of NNC and NNL. The lawsuit accused the defendants of facilitating and maintaining investments of the Plan's retirement savings in NNC's common stock although they are aware of the unsuitable nature and vulnerability of the investment. Attorney for the employees, Ron Kilgard, Esq., at Keller Rohrback P.L.C., in Phoenix, Arizona, says the employees concede that the litigation is stayed with respect to the three companies as a result of their bankruptcy filing. He points out, however, that the directors and officers are not protected by the stay. "The individual defendants are fiduciaries and are not protected nor intended to be protected by the stay," Mr. Kilgard contends. "The individual defendants are not named in the [litigation] because they are officers or directors but because they are fiduciaries." "If the stay of proceedings is not lifted to allow the [litigation] to proceed against the individual defendants, the plaintiffs will be forced to delay the entire litigation indefinitely, which will result in unnecessary costs, delay and injustice," Mr. Kilgard further says. Mr. Kilgard says the employees are prepared to accommodate the officers and directors who are involved in restructuring the companies by "scheduling the remaining steps in the [litigation] so that they are not distracted from their restructuring efforts." 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) NORTEL NETWORKS: NCCE to Appeal Koskie Minsky Appointment --------------------------------------------------------- The Nortel Continuing Canadian Employees Committee is set to file before the Ontario Court of Appeal a motion for leave to appeal the decision issued May 20 by the Ontario Superior Court of Justice. The Canadian Court issued the decision in favor of Koskie Minsky, which it appointed as sole representative counsel of all former employees of Nortel Networks Corporation and its affiliates. It also dismissed the motions of other groups, including NCCE, to appoint Juroviesky Ricci LLP, Nelligan O'Brien Payne LLP, Shibley Righton LLP, and CAW to represent the employees. NCCE contends the Canadian Court erred in its decision because it dismissed the group's motion without any reasons, and that it denied representation to the continuing employees who will be affected by the proceeding commenced by NNC under the Companies' Creditors Arrangement Act. "This proposed appeal to the Court of Appeal for Ontario raises serious and arguable grounds that are of real and significant interest and importance to the parties, the public, CCAA proceedings, insolvency practice in general and the law as it involves the appointment of employees to represent the interests of continuing employees of a company that is subject to an order made under the CCAA," NCCE says in court papers. 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) NORTEL NETWORKS: Ontario Court OKs Reduced Pension Payments ----------------------------------------------------------- The Ontario Superior Court of Justice authorized Nortel Networks Limited to reduce the commuted value payments from the pension plans based on a transfer ratio equal to 69% without filing new actuarial valuation reports for those plans. The Canadian Court held that any individual, who was sent an election form by NNL or its agent before May 21, 2009, indicating that he may elect to receive commuted value payments from one of the pension plans at a transfer ratio of 86% or 85%, is entitled to receive the commuted value payments calculated in accordance with the higher transfer ratio. The individual, however, must complete the election form and return it to NNL or its agent within the time limit prescribed in the election form. The Canadian Court held that NNL, its officers and directors, members of the pension plan committees and the Northern Trust Company will not incur any liability as a result of (i) the reduction of the commuted value payments from the pension plans to a level permitted by the Canadian Court's order with respect to persons receiving commuted value payments from the plans without filing new actuarial valuation reports with the Superintendent of Financial Services, or (ii) making commuted value payments from the pension 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) NORTEL NETWORKS: Sets September 30 Claims Bar Date -------------------------------------------------- Nortel Networks Inc. and its debtor affiliates ask the U.S. Bankruptcy Court for the District of Delaware to set September 30, 2009, as the deadline for creditors holding prepetition claims against the Debtors to file their proofs of claim. Under U.S. bankruptcy laws, any creditor asserting prepetition claim against a debtor, which is not listed in that debtor's schedules of assets and liabilities or which is listed as disputed, contingent or unliquidated, is required to file a proof of claim by the deadline fixed by the bankruptcy court. For creditors whose claims stemmed from the rejection of their unexpired leases and executory contracts, the Debtors ask the Court to allow those creditors to file their proofs of claim 30 days after the Debtors send a notice or a copy of the order authorizing the rejection. For creditors whose scheduled claims have been amended, they will have 20 days after receipt of a notice to file their proofs of claim. Requirements for Filing Proofs of Claim Creditors are required to submit their proofs of claim to Epiq Bankruptcy Solutions LLC, the Debtors' claims agent. If by first-class mail, the proof of claim must be sent to: Nortel Networks Inc. Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC FDR Station, P.O. Box 5075 New York, NY 10150-5075 If by hand delivery or overnight courier, the proof of claim must be sent to: Nortel Networks Inc. Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC 757 Third Avenue, 3rd Floor New York, NY 10017 Proofs of claim forms sent by facsimile or telecopy will not be accepted. Creditors that fail to file their proofs of claim by the Claims Bar Date will be barred from asserting their claims; will not be permitted to vote on any plan or plans of the Debtors; and will not be allowed to participate in any distribution on account of their claims. These creditors are not required to file a proof of claim: (1) Any creditor that has already filed a proof of claim in the Clerk of the Bankruptcy Court for the District of Delaware or Epiq Bankruptcy Solutions LLC. (2) Any creditor whose claim is listed in the Debtors' schedules of assets and liabilities provided that the claim is not scheduled as disputed, contingent or unliquidated; who does not disagree with the amount, nature and priority of the claim as stated in the schedules; and who does not dispute that the claim is an obligation of a specific debtor against which the claim is listed in the schedules. (3) Any holder of a claim that has been allowed by order of the Court. (4) Any creditor whose claim has been paid in full by any of the Debtors pursuant to a court order. (5) Any holder of a claim for which specific deadlines have previously been fixed by the Court. (6) Any debtor, non-debtor affiliates of NNI and Canada-based Nortel Networks Corporation, and their subsidiaries which hold claims against NNI and its U.S.-based affiliated debtors. (7) Any creditor that has a claim against the non-debtor affiliates or subsidiaries of the Debtors. (8) Any holder of a claim allowable as an administrative expense. (9) Any claim of officers and directors, who are officers and directors as of August 1, 2009, for indemnification and contribution on account of their service to the Debtors and their affiliates. (10) Any creditor whose claim is limited exclusively to the repayment of principal, interest and other fees and expenses in connection with its ownership or holding of notes. (11) Holders of equity security interests in the Debtors need not file proofs of interest, provided that if any such holder asserts a claim that stems from its ownership, a proof of that claim must be filed on or before September 30, 2009. Notice for Filing Proofs of Claim The Debtors will mail before August 10, 2009, notices for filing proofs of claim to the U.S. Trustee, attorneys for the Official Committee of Unsecured Creditors, and creditors known by the Debtors, among others. The Debtors will also have the notice published in the national and global editions of The Globe and Mail and The Wall Street Journal at least 45 days before September 30, 2009. A hearing to consider approval of the Debtors' request is scheduled for August 4, 2009. Creditors and other concerned parties have until July 28, 2009, to file their objections. 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) NORTEL NETWORKS: Submits Proposal to Sell Enterprise Biz. to Avaya ----------------------------------------------------------------- Nortel Networks Inc. and its debtor affiliates seek approval of the U.S. Bankruptcy Court for the District of Delaware to sell the enterprise solutions business of NNI, Nortel Networks Limited and Nortel Networks Corporation to Avaya Inc. for US$475 million, subject to better offers. The assets to be sold comprise Nortel's Enterprise Solutions business in North American, Caribbean and Latin American and Asian region as well as a portion of their business in Europe, Middle East and Africa. In connection with the sale, the Debtors also ask the Court to approve a bidding process to flush out better offers for the assets. The deadline for submitting bids for the assets is September 4, 2009, at 12:00 p.m. Eastern Time. If a bid from another company is submitted, an auction will be conducted on September 11, 2009, at 9:30 a.m. Eastern Time, at the offices of Cleary Gottlieb Steen & Hamilton LLP, at One Liberty Plaza, in New York. In case Avaya is not selected as the winning bidder, the Debtors agree to entitle Avaya to a $14.25 million break-up fee for its efforts in bidding for the assets. Consummation of the sale is subject to the satisfaction of regulatory and other conditions and the receipt of various approvals, including governmental approvals in Canada and the United States and the approval of the courts in France and Israel. The sale is also subject to purchase price adjustments under certain circumstances. A full-text copy of the Nortel-Avaya Sale Agreement can be accessed at http://bankrupt.com/misc/NortelSaleAgreementAvaya.pdf A full-text copy of the document detailing the bidding procedures for the proposed sale of Nortel's Enterprise Solutions Business is available for free at: http://bankrupt.com/misc/NortelBiddingAvaya.pdf "We continue to be fully focused on running our operations and continuing to serve our customers while actively engaged in the sale of our businesses. We have determined that the sale of our businesses maximizes value while preserving innovation platforms, customer relationships and jobs to the greatest extent possible," Mike Zafirovski, Nortel President and Chief Executive Officer, said in a July 20 statement. "Today's agreements underscore the value of Enterprise Solutions and the investments we have made in enterprise telephony, unified communications and data networking core competencies. If successfully completed, this transaction will provide clarity on the path forward for our Enterprise customers, partners and employees, and enable the industry to continue to benefit from Nortel-created technology, know-how and leading-edge innovation," he said. Joel Hackney, President of Nortel's Enterprise Solutions, said that Avaya or the winning bidder "will gain access to an industry-leading portfolio that is optimized for real-time communications, bringing speed and simplicity to customers' network environments and allowing them to enhance collaboration, streamline business processes and improve productivity." "Enterprise Solutions has strong relationships with key customers and partners around the world, and we have helped them achieve industry-leading differentiation and competitive advantages. We remain committed to serving them without interruption through this process and, as we move forward, we pledge to communicate our progress to the greatest extent possible," Mr. Hackney said. The Court will conduct a hearing on August 4, 2009. Creditors and other concerned parties have until July 28, 2009, to file their objections. Avaya Taps Nortel Partners To further solidify its bid for the Nortel Wireless Assets, Avaya has brought 19 of Nortel Networks' partners into its programs with the promise of incentives, the ChannelWeb reported. Seventeen of the Nortel partners are in the U.S, while the other two are in Canada. The report noted that seven are among Nortel's 10 largest partners. Avaya's North American Channels Vice President Carol Giles Neslund said the incentives offered in connection with the move is aimed to help offset the massive investment required to partner with a new vendor, ChannelWeb noted. Nortel partners that sign up by July 31 are offered an extra 5% rebate on the back end on Avaya deals, according to Andrew R. Hickey of ChannelWeb. About 2% will go directly to marketing funds and the remaining 3% serves as rebate. Avaya has also vowed to fast-track Nortel partners with training, sales, marketing and services support, the news source added. The partners will also have opportunities for additional discounts to further defray the extra costs, Mr. Hickey pointed out. Those incentives will remain in place until May 2010, the report said. 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) NORTEL NETWORKS: US Court Enforces Canada Order on LG-Nortel Sale ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware issued an order in the Chapter 15 cases of Nortel Networks Corporations and its four Canadian affiliates approving their motion to enforce the Ontario Superior Court's order to sell their stake in LG- Nortel Co. Ltd. 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) NORWOOD PROMOTIONAL: Panel May Employ Arent Fox as Lead Counsel --------------------------------------------------------------- The U.S. Bankrupty Court for the District of Delaware has granted the official committee of unsecured creditors of Norwood Promotional Products, Inc., et al., permission to employ Arent Fox LLP, as counsel, nunc pro tunc to May 14, 2009. As the Committee's counsel, Arent Fox will: -- assist, advise and represent the Committee in its consultation with the Debtors relative to the administration of these cases; -- assist, advise and represent the Committee in analyzing the Debtors' assets and liabilities, investigating the extent and validity of liens and participating in and reviewing any proposed asset sales or dispositions; and -- attend meeting and negotiate with the representatives of the Debtors and secured creditors. Aren Fox's current hourly rates for its professionals are: Partners $465-$840 Of Counsel $465-$760 Associates $290-$540 Paraprofessionals $150-$270 Andrew I. Sifken, Esq., a partner and chair of the Bankruptcy and Financial Restructuring Group at Arent Fox, assures the Court that the firm does not hold or represent any interest adverse to the Committee, and that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Norwood Promotional Products -- http://www.norwood.com/-- is an industry leading supplier of imprinted promotional products. The Company offers nearly 5,000 products and is a market leader in several of the industry's major product categories. Norwood also offers hundreds of products on 24-Hour service at no extra charge. Norwood Promotional Products Holdings, Inc., and five affiliates filed for Chapter 11 on May 5 (Bankr. D. Del. Case No. 09-11547). Judge Peter Walsh is handling the case. The Debtors hired Margaret Whiteman Greecher, Esq., and Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor, as counsel. Kirkland & Ellis LLP is general counsel and Mackinax Partners LLC is the restructuring consultant. Epiq Bankruptcy Solutions, LLC, has been hired as claims and noticing agent. The Company said its assets are $150 million while debt totals $295 million. NORWOOD PROMOTIONAL: Panel May Employ EG as Delaware Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has granted the official committee of unsecured creditors of Norwood Promotional Products, Inc., et al., permission to employ Elliott Greenleaf as Delaware and conflicts counsel, nunc pro tunc to May 14, 2009. As the Committee's Delaware and conflicts counsel, Elliott Greanleaf will: (a) render legal advice with respect to the powers and duties of the Committee and the other participants in the Debtors' cases; (b) assist the Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors, the operation of the Debtors' business and any other matter relevant to the Bankruptcy cases, as and to the extent said matters may affect the Debtors' creditors; and (c) participate in negotiations with parties-in-interest with respect to any disposition of the Debtors' assets, plan of reorganization and disclosure statement in connection with said plan and otherwise protect and promote the interests of the Debtors' unsecured creditors. Rafael X. Zahralddin-Aravena, a managing shareholder at the Wilmington office of Elliott Greenleaf, assures the Court that the firm does not hold or represent any interest adverse to the Debtors, their estates, or any class of creditors or equity security holders, and that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Elliott Greenleaf's professionals who will primarily provide the services in this engagement and their hourly rates are: Rafael X. Zahralddin-Aravena, Esq. $575 Henry F. Siedzikowski, Esq. $565 Shelley A. Kinsella, Esq. $385 Brian R. Elias, Esq. $260 Neil R. Lapinski, Esq. $375 Elizabeth A. Williams, Esq. $225 Kristin A. McCloskey $200 Aron M. Pillard $200 Norwood Promotional Products -- http://www.norwood.com/-- is an industry leading supplier of imprinted promotional products. The Company offers nearly 5,000 products and is a market leader in several of the industry's major product categories. Norwood also offers hundreds of products on 24-Hour service at no extra charge. Norwood Promotional Products Holdings, Inc., and five affiliates filed for Chapter 11 on May 5 (Bankr. D. Del. Case No. 09-11547). Judge Peter Walsh is handling the case. The Debtors hired Margaret Whiteman Greecher, Esq., and Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor, as counsel. Kirkland & Ellis LLP is general counsel and Mackinax Partners LLC is the restructuring consultant. Epiq Bankruptcy Solutions, LLC, has been hired as claims and noticing agent. The Company said its assets are $150 million while debt totals $295 million. NORWOOD PROMOTIONAL: Time to Remove Actions Extended to November 2 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has extended the time period during which Norwood Promotional Products, Inc., et al., may remove actions pending as of the petition date, pursuant to 28 U.S.C. Sec. 1452, through and including November 2, 2009. Norwood Promotional Products -- http://www.norwood.com/-- is an industry leading supplier of imprinted promotional products. The Company offers nearly 5,000 products and is a market leader in several of the industry's major product categories. Norwood also offers hundreds of products on 24-Hour service at no extra charge. Norwood Promotional Products Holdings, Inc., and five affiliates filed for Chapter 11 on May 5 (Bankr. D. Del. Case No. 09-11547). Judge Peter Walsh is handling the case. The Debtors hired Margaret Whiteman Greecher, Esq., and Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor, as counsel. Kirkland & Ellis LLP is general counsel and Mackinax Partners LLC is the restructuring consultant. Epiq Bankruptcy Solutions, LLC, has been hired as claims and noticing agent. The Company said its assets are $150 million while debt totals $295 million. NOVADEL PHARMA: Engages Arthur Wood as Financial Advisors --------------------------------------------------------- NovaDel Pharma Inc. on June 15, 2009, entered into an Agreement with Arthur W. Wood Company, Inc. AWW has agreed to assist the Company as a non-exclusive financial advisor for the purposes of assisting the Company in seeking capital. In consideration of AWW's services, the Company agreed to pay AWW upon closing of a capital-raising transaction, a fee equal to 3% of the aggregate value of the proceeds paid or payable in the Placement. As reported by the Troubled Company Reporter, the Company on June 26, 2009, entered into a transaction with Seaside 88, LP, relating to the offering and sale of up to a total of 13,000,000 shares of the Company's common stock, $0.001 par value per share. The initial closing of the Offering took place on July 17, 2009. About NovaDel Pharma Based in Flemington, New Jersey, NovaDel Pharma Inc. (NYSE AMEX: NVD) -- http://www.novadel.com/-- is a specialty pharmaceutical company developing oral spray formulations for a broad range of marketed drugs. The Company filed with the Securities and Exchange Commission its Annual Report for the year ended December 31, 2008, which included an audit opinion with a "going concern" explanatory paragraph. The going-concern explanatory paragraph from NovaDel's independent registered public accounting firm -- J.H. Cohn LLP in Roseland, New Jersey -- expressed substantial doubt, based upon current financial resources, as to whether NovaDel can continue to meet its obligations beyond 2009 without access to additional working capital. At March 31, 2009, the Company had $5,209,000 in total assets and $10,300,000 in total liabilities, resulting in $5,091,000 stockholders' deficiency. NOVADEL PHARMA: May Issue 12MM Shares over the Next 12 Months ------------------------------------------------------------- NovaDel Pharma Inc. received approval from the NYSE AMEX July 16, 2009, to issue up to 12.0 million shares over the next 12 months. On June 30, 2009, the Company entered into a Common Stock Purchase Agreement with Seaside relating to the offering and sale of up to a total of 13,000,000 shares of the Company's common stock, $0.001 par value per share. The Agreement requires the Company to issue and sell, and Seaside to purchase, 500,000 shares of the Company's Common Stock once every two weeks, subject to the satisfaction of customary closing conditions, for 26 closings over a 52-week period. At the initial closing, which was set to occur after receipt of NYSE Amex approval and subject to the satisfactory completion of customary closing conditions, the offering price of the Company's Common Stock equaled 87% of the volume weighted average trading price of the Common Stock during the trading day immediately prior to the initial closing date. At each subsequent closing, on each 14th day thereafter, the offering price of the Company's Common Stock will equal 87% of the volume weighted average trading price of the Common Stock for the 10-day trading period immediately preceding each subsequent closing date. If, with respect to any subsequent closing, the volume weighted average trading price of the Company's Common Stock for the three trading days immediately prior to such closing is below $0.25 per share, then the particular subsequent closing will not occur and the aggregate number of Shares to be purchased shall be reduced by 500,000 shares of Common Stock. The Company has the right to terminate the Agreement between the 6th and 7th closings, based on the Company's assessment of its financing needs at that time. On July 17, 2009, NovaDel executed the initial closing with Seaside 88 receiving gross proceeds of roughly $114,000 upon the issuance of 500,000 shares at a price of $0.23 per share. The Company received net proceeds of roughly $91,000, after deducting commissions payable to Arthur W. Wood Company, Inc., and $20,000 in non-accountable expenses. The purchase price for all closings executed under the agreement is determined by applying a 13% discount to a volume-weighted- average price of NovaDel's common stock. The price of the shares sold at the initial closing was based on the VWAP of NovaDel's common stock on July 16. The pricing of all subsequent closings will be based on the VWAP of NovaDel's common stock for the ten trading days preceding each closing. The scheduled closings will not take place if the Company's VWAP for the three preceding trading days is less than $0.25. NovaDel has the right to terminate the agreement between the 6th and 7th closings, based on the Company's assessment of its financing needs at that time. NovaDel is offering the securities under the Seaside agreement pursuant to an effective shelf registration statement. NovaDel filed a prospectus supplement relating to its offer to sell up to 13,000,000 shares of its common stock. A full-text copy of the prospectus supplement is available at no charge at http://ResearchArchives.com/t/s?3fd8 About NovaDel Pharma Based in Flemington, New Jersey, NovaDel Pharma Inc. (NYSE AMEX: NVD) -- http://www.novadel.com/-- is a specialty pharmaceutical company developing oral spray formulations for a broad range of marketed drugs. The Company filed with the Securities and Exchange Commission its Annual Report for the year ended December 31, 2008, which included an audit opinion with a "going concern" explanatory paragraph. The going-concern explanatory paragraph from NovaDel's independent registered public accounting firm -- J.H. Cohn LLP in Roseland, New Jersey -- expressed substantial doubt, based upon current financial resources, as to whether NovaDel can continue to meet its obligations beyond 2009 without access to additional working capital. At March 31, 2009, the Company had $5,209,000 in total assets and $10,300,000 in total liabilities, resulting in $5,091,000 stockholders' deficiency. NTELOS INC: S&P Rates Proposed $670 Mil. Facilities at 'BB' ----------------------------------------------------------- Standard & Poor's Ratings Services said it rated NTELOS Inc.'s proposed million aggregate $670 million credit facilities at 'BB'. S&P also assigned a '2' recovery rating to the facility, indicating expectations for substantial (50%-70%) recovery in the event of payment default. Proceeds of the new facility, which will consist of a six-year $635 million term loan and a five-year $35 million revolver, will be largely used to repay the current $603 million term loan that matures in August 2011. S&P also affirmed the 'BB-' corporate credit rating on Waynesboro, Va.-based parent NTELOS Holdings Corp., an integrated communications provider in portions of West Virginia and Virginia. The proposed credit facility will comprise the entirety of the company's debt. The outlook is positive. "The ratings recognizes NTELOS' overall fair business position, reflecting its core, well-managed regional wireless business," said Standard & Poor's credit analyst Richard Siderman, "which benefits from its strategic alliance with Sprint Nextel, as well as a degree of business diversity provided by its smaller, competitive and rural local exchange businesses." The Sprint Nextel strategic alliance agreement, which extends through July 2015, provides minimum Sprint Nextel purchase commitments of $9 million per month and also gives NTELOS access to Sprint Nextel's nationwide network at favorable rates, making it more economical for NTELOS to offer competitive national wireless plans. O2DIESEL CORPORATION: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: O2Diesel Corporation 100 Commerce Drive Newark, DE 19713 Bankruptcy Case No.: 09-12585 Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. ------ -------- O2Diesel Fuels Inc. 09-12586 Chapter 11 Petition Date: July 21, 2009 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Kevin J. Carey Debtor's Counsel: Mark E. Felger, Esq. Cozen O'Connor 1201 N. Market Street, Ste 1400 Wilmington, DE 19801 Tel: (302) 295-2087 Fax: (302) 295-2013 Email: mfelger@cozen.com Total Assets: $42,317 Total Debts: $2,230,461 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/deb09-12585.pdf The petition was signed by Alan Rae, chief executive officer of the Company. PACIFIC RESOURCES: U.S. Govt. Wants Property Let Go Free of Hazard ------------------------------------------------------------------ The United States on behalf of the Department of Interior and through the Bureau of Land Management, was one of several entities that filed with the U.S. Bankruptcy Court objections to Pacific Energy Resources' alternative motion for an order authorizing the abandonment of certain interests in oil and gas properties in Alaska -- excluding Trading Bay -- and rejection of executory contracts relating thereto, according to BankruptcyData.com. The Bureau of Land Management objection states that before the Debtors can abandon a certain BLM/CIRI lease, they must, at a minimum, provide the Court with sufficient information to determine whether the abandoned property constitutes a hazard to the public health and safety, the report says. Headquartered in Long Beach, California, Pacific Energy Resources Ltd. -- http://www.pacenergy.com/-- engages in the acquisition and development of oil and gas properties, primarily in the United States. The Company and seven of its affiliates filed for Chapter 11 protection on March 8, 2009 (Bankr. D. Del. Lead Case No. 09-10785). Attorneys at Pachulski Stang Ziehl & Jones LLP, represent the Debtors as counsel. The Debtors proposed Rutan & Tucker LLP as special corporation and litigation counsel; Schully, Roberts, Slattery & Marino, PLC, as special oil and gas and transactional counsel; Devlin Jensen as special Canadian counsel; Scott W. Winn, at Zolfo Cooper Management, LLC, as chief restructuring officer; Lazard Freres & Co. LLC as investment banker; and Albrecht & Associates, Inc., as agent for the Debtors in the sale of their oil and gas properties. Omni Management Group, LLC, is the claims, balloting, notice and administrative agent for the Debtors. When the Debtors filed for protection from their creditors, they listed between $100 million and $500 million each in assets and debts. PATRICK INDUSTRIES: Has Deal to Sell Aluminum Extrusion Operation ----------------------------------------------------------------- Patrick Industries, Inc., has signed a definitive agreement to sell certain assets of its aluminum extrusion operation located in Mishawaka, Indiana to Patrick Aluminum, Inc., a member of the UMC family of companies. The transaction is expected to be completed by the end of July 2009. Net proceeds from the sale are expected to be approximately $7.4 million and are subject to final transaction costs and certain closing adjustments. The aluminum extrusion operation produces and paints semi- fabricated and fabricated aluminum extrusions for structural and non-structural applications, and comprised Patrick's Engineered Solutions business segment. This business segment was classified as a discontinued operation in the fourth quarter of 2008. The Company anticipates using a portion of the net proceeds received from the sale of fixed assets and the building that houses the aluminum extrusion operation to pay down principal on the Company's term loan and pay off the Economic Development Revenue Bonds related to this facility in the third quarter of 2009. Todd Cleveland, President and CEO said, "This divestiture reflects our continued commitment to reduce our leverage position to an acceptable level during these difficult economic times, to the benefit of both our lenders and our shareholders. We continue to execute and deliver on our strategy to align our current operations with businesses within our core competencies, reduce overall fixed costs, and position the Company to be able to take advantage of any upticks in our end markets." The aluminum extrusion operation will continue to operate under the name "Patrick Metals". Mr. Cleveland further commented, "While no longer a member of the Patrick family, we wish the team at Patrick Metals, as well as the UMC Companies, continued success and prosperity with this operation, which has represented Patrick Industries with class throughout its entire tenure as a division of the Company." At March 1, 2009, Patrick was in violation of the Consolidated EBITDA financial covenant under the terms of its credit agreement. On April 14, 2009, the Company entered into a Third Amendment to the Company's Credit Agreement dated May 18, 2007. The Third Amendment amended and added certain definitions, terms and reporting requirements and included these provisions: (a) The lenders waived any actual or potential Event of Default resulting from the Company's failure to comply with the one-month and two-month Consolidated EBITDA covenants for the fiscal months ended March 1, 2009, and March 29, 2009. (b) The financial covenants were modified to establish new one-month and two-month minimum Consolidated EBITDA requirements that will be effective beginning with the fiscal months ended June 28, 2009, and July 26, 2009, respectively. Until that date, there is no applicable minimum Consolidated EBITDA requirement. (c) The definition of Consolidated EBITDA was amended to exclude the effects of losses and gains due to discontinued operations and restructuring charges, subject to approval of the administrative agent. (d) The revolving commitments were reduced by $5.0 million to a maximum of $30.0 million. (e) The monthly borrowing limits under the revolving commitments were reset in conjunction with projected monthly cash flows. (f) The Company will provide an appraisal by a lender approved firm of each parcel of real estate owned by the Company and its subsidiaries within 60 days of the effectiveness of the Third Amendment. (g) The receipt of net cash proceeds related to any asset disposition, other than proceeds attributable to inventory and receivables, will be used to pay down principal on the term loan. Effective with the Third Amendment, the Company's credit facility consists of a term loan and a revolving line of credit. Borrowings under the revolving commitments are subject to a borrowing base, up to a borrowing limit. The maximum borrowing limit amount was reduced from $33.0 million (as defined in the second amendment to the Credit Agreement) to $29.0 million. The principal amount outstanding under the term loan at March 29, 2009, remained unchanged under the amended terms. The interest rates for borrowings under the revolving line of credit and the term loan, and the expiration date of the Credit Agreement also remained unchanged. The Company's ability to access the borrowings is subject to compliance with the terms and conditions of the credit facility including the financial covenants. Effective with the December 2008 amendment to the Credit Agreement, the Company has the option to pay a portion of the interest in kind on its term loan. At March 29, 2009, the Company elected the PIK Interest option and increased the principal amount outstanding under the term loan by roughly $300,000. About Patrick Industries Patrick Industries, Inc. -- http://www.patrickind.com/-- is a major manufacturer of component products and distributor of building products serving the manufactured housing, recreational vehicle, kitchen cabinet, home and office furniture, fixture and commercial furnishings, marine, and other industrial markets and operates coast-to-coast through locations in 13 states. Patrick's major manufactured products include decorative vinyl and paper panels, wrapped moldings, cabinet doors and components, slotwall and slotwall components, and countertops. The Company also distributes drywall and drywall finishing products, interior passage doors, flooring and roofing products, vinyl and cement siding, ceramic tile, and other miscellaneous products. PORTER HAYDEN: "Suit . . . Seeking Damages" Phrase Explained ------------------------------------------------------------ Under Maryland law, as predicted by the district court, WestLaw reports, the term "suit . . . seeking damages," as used in the coverage section of a Chapter 11 debtor-insured's liability insurance policies, which required the insurer to defend the debtor against any "suit . . . seeking damages," was not limited to complaints filed in a court of law but, rather, encompassed claims submitted to the Asbestos Bodily Injury Trust that had been created as part of the debtor's confirmed plan. Given the ambiguity arising from the policies' use of the term, the court would construe the policy language liberally in favor of the debtor, as the insured. Moreover, the claims in question sought damages for the debtor's liability. The claimants and the Trust thus had competing, even adversarial, interests, inasmuch as the claimants sought maximum damages and the Trust, which had a limited supply of funds, sought to minimize those damages. Finally, the court noted, the equities supported a broad reading of the term. National Union Fire Ins. Co. of Pittsburgh, PA v. Porter Hayden Co., --- B.R. ----, 2009 WL 2003774 (D. Md.). National Union sought a declaratory judgment that Prter Hayden, a corporation that had sold and installed industrial insulation products containing asbestos fibers, was not entitled to a defense or indemnity, in whole or in part as to each, for asbestos-related liability claims. Following withdrawal of the reference from the bankruptcy court, as well as creation of an asbestos claims facility, the Asbestos Bodily Injury Trust, as part of the debtor's confirmed plan, the parties filed cross-motions for summary judgment, with the debtor seeking a declaration that the insurer's obligation to defend included paying for costs incurred in handling claims presented to the Trust and the insurer seeking a declaration that it had no such obligation. The Honorable Andre M. Davis held that: (1) the debtor was "legally obligated" to the asbestos claimants under Maryland law, even though the claimants were enjoined from bringing suit against the debtor; (2) the bankruptcy court's discharge order and supplemental jurisdiction did not eliminate either the debtor's or the insurer's legal obligation to the asbestos claimants; (3) the plan and the subsequent injunction did not have the effect of transferring or assigning the debtor's legal obligations to the Trust and, thus, the insurer was not absolved of its contractual duty to defend the debtor; (4) under Maryland law, as predicted by the court, see 331 B.R. 652, the term "suit . . . seeking damages," as used in the policies' coverage section, was not limited to complaints filed in a court of law but, rather, encompassed claims submitted to the Trust; and (5) the policies' no-action clause did not preclude coverage. Accordingly, Judge Davis denied National Union's motion and granted Porter Hayden's motion. About Porter Hayden Headquartered in Baltimore, Maryland, Porter Hayden sold and installed insulation products. The Company went out of business in 1989. Since then, its activities have been limited to running off its asbestos claims, securing insurance coverage for the claims, and paying claims and related expenses. The Company filed for chapter 11 protection on March 15, 2002 (Bankr. D. Md. Case No. 02-54152). Paul Nussbaum, Esq., at Whiteford, Taylor & Preston, LLP, represents the Debtor. Philip Milch, Esq., at Campbell & Levine, represents the Unsecured Creditors Committee. Edward Harron, Esq., at Young Conaway, is counsel for the Legal Representative for Future Asbestos Claimants. Following a rare joint hearing before the U.S. District Court for the District of Maryland and the U.S. Bankruptcy Court for the District of Maryland, the Chapter 11 reorganization plan for Porter Hayden Company was approved on July 7, 2006. An Asbestos Trust, a pool of funds for payment of tens of thousands of existing claimants and potentially thousands of future claimants, was also created. PROVIDENT ROYALTIES: Shareholder Opposes Sale, Absent Schedules --------------------------------------------------------------- Denise Johnson, equity preferred shareholder interest of Shale Royalties 16 of Provident Royalties LLC and its debtor-affiliates, objects to the Debtors' proposals to: -- implement bidding procedures relating to sale of the Debtors' assets; -- use cash collateral and grant adequate protection to prior protected lienholders; and -- employ Patton Boggs LLC as bankruptcy counsel, Bridge Associates LLC as restructuring consultant, and Epiq Bankruptcy Solutions LLC as claims agent. Ms. Johnson tells the before the U.S. Bankruptcy Court for the Northern District of Texas that the request to approve bidding procedures and interim & final use of cash collateral are premature. The Court should not allow the Debtors to sell assets or access to cash collateral until the Debtors have provided a complete schedules and financial plan. "Even if the Debtors are allowed to sell at a fraction of their value prior to their schedules and a complete financial plan being presented, it will create additional and further harm to the creditors and shareholders by reducing the value of their recoverable interest, which could ultimately force a liquidation rather than a reorganization," Ms. Johson relates. Ms. Johnson further argues that the employment applications filed by the Debtors are a ridiculous waste of assets that are already in a questionable position. The Debtors' are not in a financial position to request to pay the higher end of legally hourly rates and costs for bankruptcy protection, she says. "Granting this application will only allow the Debtors to continue to throw away assets which will further reduce creditor and shareholder interests if a liquidation is required, according to Ms. Johnson. About Provident Royalties Based in Dallas, Texas, Provident Royalties LLC owns working interests in oil and gas properties primarily in Oklahoma. Provident and its affiliates filed for Chapter 11 on June 22, 2009 (Bankr. N.D. Tex. Case No. 09-33886). Judge Harlin DeWayne Hale presides over the case. Patton Boggs LLP represents the Debtors as their bankruptcy counsel. Epiq Bankruptcy Solutions, LLC, is the claims and noticing agent. The United States Trustee for the Northern District of Texas appointed nine members to the Official Committee of Unsecured Creditors. ennis L. Roossien, Jr., Esq., at Munsch Hardt Kopf & Harr P.C. in Dallas, Texas, serve as the Debtors' Chapter 11 trustee. The Company listed between $100 million and $500 million each in assets and debts. QUEBECOR WORLD: GE Capital Joint Leads $800 Mil. Exit Financing --------------------------------------------------------------- GE Capital says it acted as co-agent on an $800 million exit financing for the U.S. and Canadian businesses of Quebecor World Inc., a worldwide leader in commercial printing. GE Capital Markets and GE Capital Markets (Canada) Ltd. acted as joint-lead arrangers. The loan will be used to support the company's exit from bankruptcy protection under both a Plan of Reorganization (under Chapter 11 of the US Bankruptcy Code) and a Plan of Arrangement (under Canada's Companies' Creditors Arrangement Act) by refinancing the company's existing debtor in possession loans and by providing liquidity to support the company's operations going forward. "The GE team worked closely with the company to co-arrange the financing and provide the liquidity we required to successfully restructure and exit from bankruptcy protection," said Jeremy Roberts, CFO for Quebecor World Inc. "Working with Quebecor World to help arrange and fund both the DIP as well as one of the largest exit financings this year demonstrates that well structured facilities of all sizes are possible even in challenging market environments," said Rob McMahon, managing director of GE Capital, Restructuring Finance. "Our customers value the benefits of a lender who operates in both the Canadian lending market, and the specialty lending markets such as restructuring finance," said Patrick Palerme, President and CEO of GE Capital in Canada. "For more than 20 years we've been committed to supporting Canadian companies by providing them with financing to help meet their business objectives." In connection with Quebecor World's exit from creditor protection on July 21, 2009 and as part of the implementation of the Reorganization Plans, the names of the entities in the Company's group are changed 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. About GE Capital With more than 20 offices throughout Canada, GE Capital -- http://www.gecapital.ca/-- in Canada is a leading provider of financial and fleet management solutions to businesses operating in a broad range of economic sectors, including construction, transportation, energy, manufacturing and retail. The business' customized solutions include asset based working capital and term financing, cash flow financing, corporate aircraft, franchise and fleet financing as well as financial solutions and services to equipment manufacturers, fleet operators, distributors, dealers and their end users. GE Capital, Restructuring Finance -- http://www.gelending.com/clnews-- provides senior secured loans to distressed companies supporting Chapter 11 filings, plan-of- reorganizations and out-of-court restructurings. GE Capital offers consumers and businesses around the globe an array of financial products and services. GE -- http://www.ge.com/-- is a diversified technology, media and financial services company focused on solving some of the world's toughest problems. 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. On July 21, 2009, Quebecor World Inc. and its affiliated debtors and debtors-in-possession emerged from protection under the Companies' Creditors Arrangement Act in Canada and Chapter 11 of the U.S. Bankruptcy Code. Quebecor World has 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) QUICKSILVER RESOURCES: Seeks Changes to Terms of 2024 Debentures ---------------------------------------------------------------- Quicksilver Resources Inc. launched a consent solicitation seeking to amend the definition of "Designated Subsidiary" contained in the indenture governing its 1.875% Convertible Subordinated Debentures Due 2024 to provide Quicksilver with greater strategic and operational flexibility, including greater flexibility to grow and expand the operations of Quicksilver Gas Services Holdings LLC, Quicksilver Gas Services LP, its general partner, Quicksilver Gas Services GP LLC, and its subsidiaries. Quicksilver is offering a consent fee of $5.00 per $1,000 principal amount of the 1.875% Convertible Subordinated Debentures Due 2024, to holders of record at the close of business on July 21, 2009, that validly provide their consent to the proposed amendment by the expiration time of 5:00 p.m., New York City time on July 31, 2009, unless extended. Quicksilver's obligation to accept consents and pay a consent fee to consenting holders is subject to numerous conditions as set forth in the consent solicitation statement. No default or event of default currently exists under the 1.875% Convertible Subordinated Debentures Due 2024. BofA Merrill Lynch is acting as the sole solicitation agent for the consent solicitation. Global Bondholder Services is acting as tabulation and information agent for the consent solicitation. Questions concerning the terms of this solicitation should be directed to BofA Merrill Lynch at (888) 292-0070 (toll free) or (980) 388-4603 (collect). Requests for assistance in completing the consent form or requests for additional copies of the consent solicitation statement, the consent form or other related documents may be directed to Global Bondholder Services Corporation at 866-294-2200 (toll free), Banks and Brokers Call: 212-430-3774. The identification numbers for the 1.875% Convertible Subordinated Debentures Due 2024 are as follows -- CUSIP No. 74837RAB0, 74837RAA2 and ISIN No. US74837RAB06, US74837RAA23. Under no circumstances should any holder tender or deliver any debentures to Quicksilver, the trustee, the solicitation agent or the tabulation and information agent at any time. About Quicksilver Resources Fort Worth, Texas-based Quicksilver Resources -- http://www.qrinc.com/-- is a natural gas and crude oil exploration and production company engaged in the development and acquisition of long-lived, unconventional natural gas reserves, including coalbed methane, shale gas, and tight sands gas in North America. The company has U.S. offices in Fort Worth, Texas; Glen Rose, Texas and Cut Bank, Montana. Quicksilver's Canadian subsidiary, Quicksilver Resources Canada Inc., is headquartered in Calgary, Alberta. * * * As reported by the Troubled Company Reporter on June 25, 2009, Standard & Poor's Ratings Services raised its long-term corporate credit on Quicksilver Resources to 'B+' from 'B'. At the same time, S&P removed the rating from CreditWatch, where it had been placed with positive implications on June 18, 2009. The TCR said June 19, 2009, Moody's Investors Service assigned a B2, LGD4 (67%) rating to Quicksilver Resources' proposed offering of $425 million of senior unsecured notes. Moody's also affirmed the B1 Corporate Family Rating and Probability of Default Rating and the B2, LGD4 (67% changed from 62%) ratings on the company's existing senior secured second lien term loan and senior unsecured notes ratings, and the B3, LGD6 (90% changed from 91%) senior subordinated notes rating. The Speculative Grade Liquidity Rating is SGL-3 and the outlook remains negative. RITE AID: GE Capital Joint Lead Arranger to $1-Billion Loan ----------------------------------------------------------- GE Capital, Corporate Retail Finance, said it committed $290 million of new money to a $1 billion asset-based revolving line of credit for Rite Aid Corporation. The loan will be used for working capital purposes. GE Capital Markets served as joint lead arranger. As reported by the Troubled Company Reporter on July 14, 2009, as part of Rite Aid's refinancing of its September 2010 debt maturities, on June 26, 2009, Rite Aid entered into a refinancing amendment to its Amended and Restated Credit Agreement, dated as of June 5, 2009. Borrowings under the New Revolver bear interest, at Rite Aid's option, at (a) an adjusted LIBOR rate with a floor of 3.00% per annum, plus the New Revolver Margin or (b) the greater of (x) Citibank's base rate with a 4.00% per annum base rate floor and (y) the federal funds rate plus 0.50%, in each case plus the New Revolver Margin. The "New Revolver Margin" is 4.50% for LIBOR borrowings and 3.50% for base rate borrowings, and following the second fiscal quarter after the effective date of the New Revolver, can fluctuate depending on the amount of revolver availability, as specified in the Restated Credit Agreement as modified by the Amendment. Rite Aid is required to pay fees on the daily unused amount of the New Revolver in an amount per annum equal to 1.00% and, following the second fiscal quarter after the effective date of the New Revolver, in an amount per annum equal to 1.00% or 0.75% depending on the amount of revolver availability. The New Revolver will be guaranteed by the same subsidiaries that guarantee Rite Aid's senior secured credit facility and its 9.750% senior secured notes due 2016. The Subsidiary Guarantors also guarantee Rite Aid's outstanding 10.375% senior secured notes due 2016, 7.5% senior secured notes due 2017, 8.625% senior notes due 2015, 9.375% senior notes due 2015 and 9.5% senior notes due 2017. The New Revolver and the guarantees thereof are secured by the same senior liens granted by the Subsidiary Guarantors on the collateral that secures Rite Aid's obligations under its senior secured credit facility and the 9.750% Notes. The New Revolver has the same covenants and events of default as the Restated Credit Agreement and the amounts drawn on the New Revolver become due and payable in September 2012. In connection with the establishment of the New Revolver, Rite Aid will retire Rite Aid's existing revolving credit facility and pay related fees and expenses. A copy of Refinancing Amendment No. 2, dated June 26, 2009, is available at no charge at http://ResearchArchives.com/t/s?3efc Rite Aid notes that certain financial institutions and their affiliates related to the transactions have performed investment banking, commercial banking and advisory services for Rite Aid from time to time for which they have received customary fees and expenses. Citigroup Global Markets Inc. acted as joint lead arranger and joint book-runner, and an affiliate of Citigroup Global Markets Inc. is the administrative agent and collateral agent, under Rite Aid's senior secured credit facility, including the New Revolver. Banc of America Securities LLC acted as joint lead arranger and joint book-runner, and an affiliate of Banc of America Securities LLC is the syndication agent, under Rite Aid's senior secured credit facility, including the New Revolver. Wachovia Capital Markets, LLC, acted as joint lead arranger and joint book-runner and an affiliate of Wachovia Capital Markets, LLC, acted as co-documentation agent under the New Revolver. Affiliates of the financial institutions are lenders under Rite Aid's senior secured credit facility, including the New Revolver. In connection with these roles, these financial institutions and their respective affiliates each received customary fees. Affiliates of one or more of the financial institutions are also lenders under Rite Aid's existing revolving credit facility being repaid in connection with the New Revolver. "As a longstanding GE borrower, we value having a lender who understands our business, has in-depth knowledge of the retail sector and access to capital," said Frank Vitrano, CFO of Rite Aid Corporation. "GE showed its commitment throughout the loan process ensuring we secured the liquidity we required." "With deep experience and expertise in retail finance we're comfortable making significant capital commitments to retail customers," said Jim Hogan, managing director of GE Capital, Corporate Retail Finance. "Especially in this challenging market environment, we're working closely with customers to provide capital to help meet their business objectives." GE Capital, Corporate Retail Finance -- http://www.gelending.com/clnews-- is a leading provider of senior secured loans to retailers, primarily in the U.S., to support working capital, growth, acquisitions and more. GE Capital -- http://www.ge.com/-- offers consumers and businesses around the globe an array of financial products and services. About Rite Aid Corporation Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- is the largest drugstore chain on the East Coast and the third largest drugstore chain in the U.S. The company operates more than 4,900 stores in 31 states and the District of Columbia. * * * The Troubled Company Reporter said on June 2, 2009, Moody's Investors Service assigned a B3 rating to Rite Aid Corporation's $400 million term loan due 2015. All other ratings, including the company's Caa2 Corporate Family Rating, Caa2 Probability of Default Rating, and SGL-4 Speculative Grade Liquidity rating, were affirmed. According to the Troubled Company Reporter on April 29, 2009, Fitch Ratings has affirmed Rite Aid's Issuer Default Rating at 'B-' and revised the Rating Outlook to Negative from Stable. Rite Aid had $6 billion of book debt outstanding as of February 28, 2009. ROBERT JOSHUA SCHOR: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Joint Debtors: Robert Joshua Schor dba Sign Solutions of South Florida aka R. J. Schor,Inc. aka Sign Solutions aka International Sign Solutions, Inc. Michelle Leah Schor dba Sign Solutions of South Florida 1481 NE 29th Street Pompano Beach, FL 33064 Bankruptcy Case No.: 09-24869 Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: John K. Olson Debtors' Counsel: John B. Culverhouse Sr., Esq. 320 S Indian River Dr # 100 Ft Pierce, FL 34950 Tel: (772) 465-7572 Email: bradculverhouselaw@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flsb09-24869.pdf The petition was signed by the Joint Debtors. ROBERTO CASTELLANOS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Joint Debtors: Roberto C. Castellanos Maria M. Castellanos 5206 St. Regis Place Orlando, FL 32812 Bankruptcy Case No.: 09-10471 Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court Middle District of Florida (Orlando) Debtors' Counsel: Aldo G. Bartolone Jr., Esq. Bartolone Law Firm PA 1015 Maitland Center Commons Blvd, Suite 110 Maitland, FL 32751 Tel: (407) 671-3131 Fax: (407) 671-3132 Email: abartolone@bartolonelaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flmb09-10471.pdf The petition was signed by the Joint Debtors. ROGER WAYNE CHEN: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Joint Debtors: Roger Wayne Chen Tasha Tamara Chen 3734 SE Matanzas Street Stuart, FL 34996 Bankruptcy Case No.: 09-24968 Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman, Jr. Debtors' Counsel: Nadine V. White-Boyd, Esq. 11382 Prosperity Farms Rd # 230 Palm Beach Gardens, FL 33410 Tel: (561) 626-4700 Email: nwbbnk@bellsouth.net Total Assets: $1,399,300 Total Debts: $1,549,321 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flsb09-24968.pdf The petition was signed by the Joint Debtors. RONSON CORP: Has Deal to Sell Unit; Wells Fargo Moratorium Moved ---------------------------------------------------------------- Ronson Corporation executed a non-binding letter of intent to sell substantially all of the assets of its wholly owned subsidiaries, Ronson Consumer Products Corporation and Ronson Corporation of Canada Ltd., as well as the related intellectual property owned by Ronson Corporation, to a European manufacturer of pocket and utility lighters. Ronson Consumer Products manufactures and markets packaged fuels and flints and lighters and torches. Details and financial terms are not being announced at this time pending negotiation of definitive documentation, which is subject, among other things, to the satisfactory completion of the purchaser's due diligence review of Ronson Consumer Products. In addition to definitive documentation, the consummation of the transaction would be subject to final approval by the parties' boards of directors and approval by the Company's shareholders, receipt of required third-party consents and various other customary conditions. The Company also said its primary lender, Wells Fargo Bank, National Association, has further extended its moratorium during which the bank will not assert rights relating to existing events of default through July 31, 2009, or such earlier date permitted under the Company's agreement with the bank. During the extended moratorium, Wells Fargo will continue to provide advances under the Company's revolving credit line, in amounts of up to $2,500,000, in addition to an overadvance facility of $750,000. Wells Fargo has further agreed to extend the moratorium and to increase its overadvance facility if additional conditions are satisfied relating to the divestiture of either the Company's consumer products division or its aviation division. The operations of Somerset, New Jersey-based Ronson Corporation (Pink Sheets: RONC) -- http://www.ronsoncorp.com/-- include its wholly-owned subsidiaries: 1) Ronson Consumer Products Corporation in Woodbridge, New Jersey, 2) Ronson Corporation of Canada Ltd., and 3) Ronson Aviation, Inc. SEMGROUP LP: May Now Send Plan to Creditors for Voting ------------------------------------------------------ Judge Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware approved, on July 20, 2009, the Disclosure Statement explaining SemGroup LP and its debtor affiliates' Joint Plan of Reorganization, Martin A. Sosland, Esq., at Weil, Gotshal & Manges, LLP, in Dallas, Texas, said in a notice filed with the Court. A signed order approving the Disclosure Statement is not yet available in the Debtors' dockets. In connection with the ruling, Judge Shannon made a finding on the record that the Debtors have full organizational authority to propose and prosecute the Plan and Disclosure Statement. Prior to the July 20 Disclosure Statement Hearing, the Debtors filed with the Court a Second Amended Plan and Disclosure Statement. The Second Amended Plan increases the expected total available distributable value of the Debtors as of the Effective Date from $2.246 billion to $2.3 billion composed of: -- $965 million in Cash, -- $300 million in Second Lien Term Loan Interests, and -- $1.035 million in New Common Stock and Warrants. Martin A. Sosland, Esq., at Weil, Gotshal & Manges, LLP, in Dallas, Texas, said in a notice filed with the Court, that Judge Shannon has approved the procedures governing the solicitation and tabulating of votes for the Debtors' Joint Plan of Reorganization. A signed order approving the Disclosure Statement is not yet available in the Debtors' dockets. Catsimatidis Group Settlement A core addition in the Second Amended Plan is the settlement agreement entered into among the Debtors, a group led by John Catsimatidis, Terrence Ronan; SemGroup, G.P., L.L.C.; Bank of America, N.A., as agent for the prepetition and postpetition lenders; and the Official Committee of Unsecured Creditors. The Catsimatidis Group is composed of Mr. Catsimatidis, Nelson Happy, Myron L. Turfitt, James C. Hansel, United Refining Energy Corp., and United Refining Company, who are members of the management committee of non-debtor SemGroup G.P., L.L.C., the sole general partner of SemGroup LP. The Settlement Agreement will entirely resolve: (i) United Refining's complaint for declaratory judgment and for turnover of property pursuant to Section 542(b) of the Bankruptcy Code against Debtor SemMaterials, L.P.; (ii) the Debtors' complaints, as amended, for breach of contract, declaratory judgment, breach of fiduciary duty, injunctive relief, and violation of the automatic stay against Messrs. Catsimatidis, Matthew Coughlin, III, Bring, Happy, Turfitt, and United Refining Energy Corp.; and Tulsa Energy Acquisitions, LLC; and (iii) the Catsimatidis Group's complaint against Mr. Ronan for declaratory relief and breach of duty of loyalty. As part of the agreement, Mr. Catsimatidis, and three other members of the Management Committee of SemGroup's general partner -- J. Nelson Happy, James Hansel, and Martin Bring -- will withdraw their objection to the Debtors' Disclosure Statement and will support the Debtors' Plan. Additionally, Messrs. Catsimatidis, Happy, Hansel, and Bring will resign from the Management Committee effective as of the date of final judicial approval of the settlement. United Refining will purchase SemMaterials' interest in an asphalt marketing joint venture for a one-time payment of $3.9 million. At the option of United Refining, the Vulcan Joint Venture will either be dissolved or the Debtors will transfer their interest in the Vulcan Joint Venture to an entity designated by United Refining. United Refining will notify the Debtors on whether the Vulcan Joint Venture will be dissolved or if the Debtors' interest will be transferred. Dissolution or transfer of the Debtors' interest in the Vulcan Joint Venture will occur within 30 days of entry of the Settlement Agreement Order. If no notice is given and the Vulcan Settlement Amount has been paid, the Vulcan Joint Venture will dissolve on the 30th day. Upon approval of the Settlement Agreement, the parties agree to mutual releases. The parties agree not to make or file any further objections to the Debtors' Plan or Disclosure Statement. If asked by the Debtors, the parties will publicly or in open court state that they support the Plan. Claims released will be added to the release and exculpation provisions of the Plan. If the Official Producers' Committee joins in support of the Plan, then the Debtors will ask that the OPC exchange releases with the Settling Defendants. The Debtors stress that the Settlement Agreement resolves a disputed issue at the core of the Debtors' reorganization - whether the Debtors have authority to prosecute their Second Amended Plan of Reorganization. The Debtors insist that approval of the Settlement Agreement will curtail multiple costly litigations and allow them to channel their efforts and resources to the plan confirmation process. The settlement is subject to Bankruptcy Court approval, separate from the Plan. According to a notice of hearing agenda, hearing on the settlement will be scheduled on a date to be determined by the Court. Matthew Coughlin is not a party to the settlement and will remain a member of the Management Committee. SemGroup plans to pursue its pending claims against Mr. Coughlin. A full-text copy of the Settlement Agreement is available for free at http://bankrupt.com/misc/semgroup_settlementpact.pdf Claims Treatment The Debtors also disclose in the Second Amended Plan that from July 22, 2008, to June 19, 2009, approximately $104.2 million in Professional Compensation and Reimbursement Claims have been invoiced and $82.4 million in Professional Compensation and Reimbursement Claims have been paid in connection with the Chapter 11 cases. The Debtors estimate that the accrued and unpaid Professional Compensation and Reimbursement Claims to be paid pursuant to the Plan as of the Effective Date will be approximately $50 million. Under the Plan, the Professional Compensation and Reimbursement Claims will be paid in full. On the Effective Date, the Debtors expect that the total amount of outstanding Priority Tax Claims will be approximately $5.5 million. Under the Plan, the Priority Tax Claims will be paid in full. On the Effective Date, the Debtors expect that the Prepetition Lenders will have approximately $1.070 billion of deficiency claims, after taking into account Administrative Expense Claims, Postpetition Financing Claims and Professional Compensation and Reimbursement Claims, but prior to taking into account the compromise and settlement reflected in the Plan. Pursuant to the Disclosure Statement and Voting Procedures Order, votes to approve or reject the Plan will be made by operators and not interest, as the operators are the holders of General Unsecured Claims as a result of their direct contractual relationship with the Debtors. Accordingly, the Debtors will distribute any amounts allocated to those General Unsecured Claims to those operators and not directly to any interest owners. Because there are currently no Allowed Producer Secured Claims, Classes 53 through 69 will be deemed to reject the Plan. Canadian Plans SemCanada Energy, A.E. Sharp Ltd., and CEG Energy Options, Inc., will file a plan in the Court of Queen's Bench of Alberta, in the Judicial District of Calgary, Canada, which plan will facilitate the liquidations of their remaining assets and make distributions to certain creditors, compromise certain claims, and relieve them from their guarantee obligations to the Prepetition Lenders and the holders of Senior Notes Claims. Further, as part of the plan, SemCanada Energy, A.E. Sharp, and CEG Energy will also become subject to bankruptcy proceedings under Canada's Bankruptcy and Insolvency Act. SemCAMS ULC and SemCanada Nova Scotia will be submitting separate plans of arrangement and reorganization in Canada. Plan Support The U.S. Term Lender Group, in addition to the Official Committee of Unsecured Creditors, expressed support to the Plan. The U.S. Term Lender Group is composed of ad hoc group of holders of US Term Loans and Revolver Loans formed in July 2008 and represented throughout the Chapter 11 Cases by Ropes & Gray LLP and Saul Ewing LLP. Under the Second Amended Plan, the Debtors will pay the U.S. Term Lender Group a fee of up to $930,000 for reasonable fees and expenses incurred from the Petition Date through July 15, 2009, by Ropes & Gray LLP, Alvarez & Marsal, Saul Ewing LLP, and Duff & Phelps. A full-text copy of the Second Amended Plan is available for free at http://bankrupt.com/misc/semgroup2ndplan.pdf A full-text copy of the Second Amended Disclosure Statement is available for free at http://bankrupt.com/misc/semgroup2ndds.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) SHELDON GOOD: Court Approves Asset Sale to Racebrook Marketing -------------------------------------------------------------- Racebrook Marketing Concepts, LLC will acquire the assets of Sheldon Good & Company pursuant to a sale approved Tuesday by the United States Bankruptcy Court in the Southern District of New York. The new corporate structure will take effect on August 1, 2009, with the firm's headquarters to be relocated from Chicago to New York City. John J. Cuticelli, Jr., a former Sheldon Good & Company executive who established its New York office in 1989 and ran it until 1991, will assume the position of CEO. Oversight of the company's operations will be assumed by the Racebrook management team. Mr. Cuticelli's company, Cuticelli Capital, provided Debtor in Possession financing and was the "Stalking Horse Bidder" after Sheldon Good & Company declared Chapter 11 bankruptcy in April. Racebrook Marketing Concepts, a Racebrook portfolio company -- http://www.racebrook.com/-- is a wholly-owned subsidiary of Cuticelli Capital. Mr. Cuticelli indicated that he is looking forward to realizing significant synergies created by adding Sheldon Good & Company's capabilities to the Racebrook team and anticipates that emerging real estate market conditions will provide substantial growth opportunities in the upcoming years. He commented, "Sheldon Good & Company is a real estate industry pioneer and has a great brand name. I am looking forward to working with the staff of Sheldon Good & Company to build on past successes and create a bright future by introducing the institutional quality management practices the company deserves." New York-based Racebrook Capital, a private equity firm, was originally founded by Mr. Cuticelli in 2004 as a portfolio company of Warburg Pincus to capitalize on increasing prospects of disintermediation in distressed debt and real estate capital markets. Through its affiliated companies, Racebrook invests directly in troubled real estate ventures and also provides a range of services to other investors active in distressed real estate and capital markets . Together with the Racebrook management team, Mr. Cuticelli has expanded the firm's core disciplines into the asset backed securities arena, as an anchor investor in TALF bonds, and has become a provider of Debtor in Possession financing to real estate related entities in bankruptcy. Racebrook Capital and Sheldon Good & Company will join forces and share regional offices in New York, Chicago and San Francisco. New York-based Sheldon Good & Company Auctions, Northeast, LLC, founded in 1965, is a leading real estate auction marketing firm with offices in Chicago, New York, Phoenix, and Denver. The Company has sold more than 45,000 U.S. and international properties in more than 100 different asset classes and produced more than $10 billion in sales. The Company and its affiliates filed for Chapter 11 bankruptcy protection on April 24, 2009 (Bankr. S.D.N.Y. Case No. 09-12535). As reported in the Troubled Company Reporter on April 28, 2009, The Company filed for bankruptcy to remedy the effects of improper actions taken by its former chairperson, Steven Good. These improprieties, which left the Company with a shortage of reserves in the face of the current economic downturn, came to light following his death in January 2009. Heidi J. Sorvino, Esq., at Smith, Gambrell & Russell, LLP, assists the Debtors in their restructuring efforts. Sheldon Good listed up to $50,000 in assets and $500,001 to $1,000,000 in liabilities. SIX FLAGS: Court Approves Richards Layton As Counsel ---------------------------------------------------- Six Flags Inc. and its affiliates obtained the Bankruptcy Court's authority to employ Richards, Layton & Finger, P.A., as local bankruptcy co-counsel effective nunc pro tunc to the Petition Date. The Debtors, pursuant to Rule 9010-1(c) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware, are required to employ a local Delaware counsel. As co-counsel, RL&F will: (a) advise the Debtors of their rights, powers and duties as debtors and debtors-in-possession; (b) take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; (c) prepare on behalf of the Debtors all necessary motions, applications, answers, orders, reports and papers in connection with the administration of the Debtors' estates; and (d) perform all other necessary legal services in connection with the Bankruptcy Cases. The Debtors will pay RL&F on hourly basis. Between May 6, 2009, and the Petition Date, the Debtors paid RL&F $246,843 as initial retainer and to cover fees and expenses actually incurred prior to the Petition Date. The Debtors propose that any Retainer monies paid to RL&F and not expended for prepetition services and disbursements be treated as an evergreen retainer to be held by RL&F as security throughout the Bankruptcy Cases until RL&F's fees and expenses are awarded by final order and are then payable to RL&F. The principal professionals and paraprofessionals designated to represent the Debtors and their current hourly rates are: Professional Hourly Rate ------------ ----------- Daniel J. DeFranceshi $550 L. Katherine Good 275 Zachary I. Shapiro 245 Barbara Witters 185 The Debtors will also reimburse RL&F for its expenses incurred in connection with the Debtors' cases, including secretarial, travel, "working meals" and other expenses. Daniel J. DeFranceshi, Esq., a director of Richards, Layton & Finger, P.A., in Wilmington, Delaware, assures the Court that his firm neither holds nor represents any interest adverse to the Debtors or their estates in matters on which RL&F is to be employed. Further, he assures the Court that RL&F is a "disinterested person" s that term is defined in Section 101(14) as modified by Section 1107(b) of the Bankruptcy Code. About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SIX FLAGS: Gets Court Nod to Employ Paul Hastings As Counsel ------------------------------------------------------------ Pursuant to Sections 327(a) and 329(a) of the Bankruptcy Code, Six Flags Inc. and its affiliates obtained the Court's authority to employ the law firm Paul, Hastings, Janofsky & Walker LLP, as counsel nunc pro tunc to the Petition Date. Jeffrey R. Speed, Six Flags, Inc.'s executive vice president and chief operating officer, relates that Paul Hastings is familiar with the Debtors. In connection with various prepetition matters, Paul Hastings' professional have worked closely with the Debtors' management and other professional and, as a result, have become well acquainted with the Debtors' history, operations, capital structure and related matters, Mr. Speed says. Accordingly, the firm has developed substantial knowledge regarding the Debtors that will result in effective and efficient services in the Debtors' bankruptcy cases. As counsel, Paul Hastings will: (a) advise the Debtors of their rights, powers and duties as Debtors and debtors-in-possession while operating and managing their businesses and properties under Chapter 11 of the Bankruptcy Code; (b) prepare on behalf of the Debtors all necessary and appropriate applications, motions, proposed orders, other pleadings, notices, schedules, and other documents and reviewing all financial and other reports to be filed in the Bankruptcy Cases; (c) advise the Debtors concerning, and preparing responses to applications, motions, other pleadings, notices and other papers that may be filed by other parties in these Bankruptcy Cases; (d) advise the Debtors with respect to, and assist in the negotiation and documentation of, financing agreements and related transactions; (e) review the nature and validity of any liens asserted against the Debtors' property and advising the Debtors concerning the enforceability of liens; (f) advise the Debtors regarding their ability to initiate actions to collect and recover property for the benefit of their estates; (g) advise and assist the Debtors in connection with any potential property dispositions; (h) advise the Debtors concerning executory contract and unexpired lease assumptions, assignments, and rejections, as well as lease restructurings and re-characterizations; (i) advise the Debtors in connection with the formulation, negotiation, and promulgation of a plans of reorganization and related transactional documents; (j) assist the Debtors in connection in reviewing, estimating, and resolve claims asserted against the Debtors' estates; (k) commence and conduct litigation necessary and appropriate to assert rights held by the Debtors, protect assets of the Debtors' Chapter 11 estates, or otherwise further the goal of completing the Debtors;' successful reorganization; and (l) provide non-bankruptcy services for the Debtors to the extent requested by the Debtors. The Debtors will pay Paul Hastings on their hourly rates and reimburse the firm of its actual and necessary out-of-pocket expenses in connection of the representation of the Debtors in these cases. Paul Hastings' professionals and paraprofessionals expected to be most active in these cases include: Professional Position Hourly rate ------------ -------- ----------- Paul E. Harner, Esq. Partner $950 Steven T. Catlett, Esq. Partner 775 Christian M. Auty, Esq. Associate 515 Mary T. Weber, Esq. Associate 475 Emily N. Dillingham, Esq. Associate 425 Michael T. Stefanelli, Esq. Associate 425 Ravi P. Pillay, Esq. Associate 375 Ruth P. Rosen Paralegal 320 Paul E. Harner, Esq., a member of Paul, Hastings, Janofsky & Walker LLP, in Chicago, Illinois, assures the Court that his firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SIX FLAGS: In Talks With Lenders to Amend Credit Agreement ---------------------------------------------------------- Six Flags, Inc., disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that it is in talks with JP Morgan Chase Bank, N.A., and a consortium of lenders regarding a proposed amendment to Six Flags' credit agreement dated May 25, 2007. JP Morgan is the administrative agent in the May 2007 Credit Agreement, which is composed of a term loan facility and a revolving facility. Six Flags and its affiliates, Six Flags Operations Inc., Six Flags Theme Parks Inc., are the primary borrowers. The Proposed Amendment, if effected, would, among other things, allocate payments from certain events and circumstances like free cash flow prepayments, asset dispositions, and certain future debt issuances ratably among the lenders under the term loan facility and the lenders under the revolving credit facilities and would provide the Term Lenders with the protections of a senior secured leverage covenant on the same terms as are presently afforded to the Revolving Lenders. Six Flags said it has agreed to support the Proposed Amendment in connection with a support agreement, dated June 13, 2009, entered into among the Company, SFO, SPTP, certain of SFTP's domestic subsidiaries and certain Lenders. Each of the Supporting Lenders entered into the Support Agreement with respect to the claim amount designated for the Supporting Lender therein, which claim amounts represented, in the aggregate, as of June 13, 2009, approximately 50% of the aggregate amount of claims under the Credit Agreement. The terms and conditions of the Proposed Amendment have not been finalized by the Lenders, and will require the approval of Judge Christopher S. Sontchi of the United States Bankruptcy Court for the District of Delaware prior to becoming effective. A full-text copy of the proposed Amended Credit Agreement is available for free at http://ResearchArchives.com/t/s?3f93 About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SIX FLAGS: Proposes KPMG LLP as Auditors ---------------------------------------- Pursuant to Section 327(a) of the Bankruptcy Code and Rule 2014(a) of the Federal Rules of Bankruptcy Procedure, Six Flags Inc. and its affiliates seek the Court's authority to employ the KPMG LLP, as auditors effective nunc pro tunc as of the Petition Date. According to L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, the Debtors have selected KPMG as their auditors because of the firm's diverse experience and extensive knowledge in the fields of accounting, taxation, operational controls for large sophisticated companies both in as well as outside of Chapter 11. The Debtors have employed KPMG for the last 15 years. By virtue of its prior engagements, KPMG is familiar with the books, records, financial information and other data maintained by the Debtors and is qualified to continue to provide audit services to the Debtors, Ms. Good asserts. The Debtors anticipate KPMG to: (a) Audit of the Debtors' consolidated balance sheets as of December 31, 2009, and 2008 and the related consolidated statements of operations, stockholders' equity, and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2009, and the audit of internal control over the financial reporting of December 31, 2009; (b) Quarterly review procedures for the quarters ended June 30, 2009, September 30, 2009, March 31, 2010, June 30, 2010, and September 30, 2010; (c) Report regarding Debt Compliance Letters; and (d) Provide other consulting, advice, research, planning, and analysis regarding audit services as maybe necessary, desirable or requested from time to time. The Debtors propose to pay KPMG based on KPMG's reduced hourly rates plus reimbursement of necessary, reasonable out-of-pocket expenses. KPMG's hourly rates are: Professional Specialty Hourly Rate ------------ --------- ----------- Partners Audit $425 Partners Tax, IT & other specialist $425-$560 Senior Managers Audit $350 Senior Managers Tax, IT & other specialist $350-$480 Managers Audit $290 Managers Tax, IT & other specialist $290-$390 Senior Associates Audit $229 Senior Associates Tax, IT & other specialist $215-$290 Associates Audit $107-$137 Associates Tax, IT & other specialist $137-$244 Para Professionals $60 The Debtors have paid KPMG more than $1,541,400 for prepetition fees and reimbursable expenses. Upon the request of the U.S. Trustee, KMPG will provide and accounting of: (a) total fees incurred prepetition for services rendered; (b) total amounts reimbursed for necessary expenses prepetition; and (c) total payments by the Debtors prepetition. Keith J. Schwartz, a partner of KPMG LLP, assures the Court that KPMG is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SIX FLAGS: Stipulation on Cash Collateral Use Approved on Interim ----------------------------------------------------------------- Judge Christopher Sontchi approved, on an interim basis, a stipulation entered into between Six Flags Inc. and its affiliates, the Lenders, and JP Morgan Chase Bank, N.A., as administrative agent for the Lenders, on the one hand, and Credit Suisse Cayman Islands Branch and Lehman Commercial Paper Inc., as co-syndication agents, on the other hand, authorizing the Debtors to use the cash securing their prepetition indebtedness during the period from the Petition Date through and including July 29, 2009. The Cash Collateral will be used for general corporate purposes and costs and expenses related to the Debtors Chapter 11 cases in accordance with a 13-Week Budget, a full-text copy of which is available for free at: http://bankrupt.com/misc/SixF_cashcollbudget.pdf Judge Sontchi directed the Debtors to immediately pay, as adequate protection, (i) all accrued and unpaid interest on all the Prepetition Obligations and letter of credit fees at the non- default contract rates provided for in the loan documents, and (ii) all other accrued and unpaid fees and disbursements owing to the Administrative Agent under the Loan Documents and incurred prior to the Petition Date. Judge Sontchi also directed the Debtors, starting July 1, 2009, and on the first business day of each month thereafter, to pay as adequate protection all accrued but unpaid interest on the Prepetition Obligations at the non-default LIBOR-based rate, with default interest to accrue on the outstanding Prepetition Obligations, and immediately pay letter of credit and agency, administrative, and other fees as and when due, all at the non- default contract rates provided for in the Loan Documents. Judge Sontchi directed the Debtors, as further adequate protection, to provide the Administrative Agent these reports, among others: (i) all copies of financial reports; (ii) a proposed budget covering a subsequently agreed upon period not later than 15 days prior to the last day covered by the Budget; (iii) a 13-week rolling cash flow projections; (iv) a weekly statement showing the ending cash balance on a consolidated basis for the prior week and the revenue for the prior week; (v) financial statements for the Debtors and non-Debtor subsidiaries; (vi) monthly performance report detailing the attendance and revenue of each park The salient terms of the stipulation are: (1) The Debtors acknowledge and agree that as of the Petition Date, that they were liable to the Lenders under the Credit Agreement and certain interest rate protection arrangements (i) approximately $1,100,000,000 plus additional amounts in respect of accrued but unpaid interest, fees and other charges, plus (ii) approximately $20,000,000 in respect of the Debtors' obligations in respect of interest rate protection arrangements, plus (iii) approximately $30,000,000 on account of the Debtors' obligations with respect to letters of credit issued pursuant to the Credit Agreement which remained outstanding as of the Petition Date. (2) The prepetition obligations are secured by perfected first priority liens and security interests upon substantially all of the assets and property of the Debtors. (3) The Debtors acknowledge and agree that certain cash of the Debtors, including cash on deposit in accounts maintained with any Lender affiliate, constitute Prepetition Collateral or the proceeds of the Prepetition Collateral and, thus, is the Cash Collateral of the Lenders within the meaning of Section 363(a) of the Bankruptcy Code. (4) The Administrative Agent does not consent to the use by the Debtors of the Prepetition Collateral, including the Cash Collateral, except on the terms of this Interim Order or other order that may be entered by the Court with the Administrative Agent's consent. (5) The Lenders are entitled to adequate protection, pursuant to Sections 361 and 363(e) of the Bankruptcy Code, including the imposition of the automatic stay. On July 7, 2009, the Court issued another stipulation and interim order authorizing the Debtors to use the Cash Collateral. Unlike the previous interim order which only required the Debtors to submit a proposed 13-week budget to the Administrative Agent for concurrence, while the new interim order directed the Debtors to file a Motion for the approval of their 13-week budget. The Court later vacated the latter order on June 8 for undisclosed reasons. Court Issues 2nd Interim Order On July 13, the Court has issued a second interim order reaffirming the terms of the stipulation and overruling on their merits all objections that have not been previously resolved or withdrawn, or to the extent applicable, deferred until the hearing on the Final Order. Judge Sontchi ruled that: -- The cost of Carve-out must not exceed $5,000 in the aggregate, plus Professional Fees and Disbursements previously incurred prior to the occurrence of an Event of Default. -- The costs and administrative expenses of any action for preferences, fraudulent conveyances, other avoidance power claims or any other claims or causes of action against the Administrative Agent or the Lenders must not exceed $150,000. -- Replacement Liens granted pursuant to the Second Interim Order will not be (i) subject to any lien that is avoided and preserved for the benefit of the Debtors' estates or (ii) subordinated to or made pari passu with any other lien other than the Permitted Lien, -- The Administrative Agent's consent to the use of Cash Collateral will terminate on July 29, 2009, if the Final Order has not been entered on or before this date. A full-text copy of the Court's Second Interim Order is available for free at http://bankrupt.com/misc/SixF_cashcoll_2ndInt_ord.pdf Creditors' Committee Objects The Official Committee of Unsecured Creditors objects to the Debtors' Cash Collateral Motion and asks the Court to address its concerns. Under the Stipulation and Interim Order, the Debtors' right to use Cash Collateral will terminate upon the occurrence of a "Termination Event" under a "Lock-Up Agreement". The Creditors' Committee notes that the Lock-Up Agreement locks the Debtors into a tight time frame by which they must file and achieve confirmation of a plan of reorganization supported by the Lenders and under which substantially all of the value in the Debtors' estates would go to the Lenders. If the Debtors do not proceed in a lockstep towards confirmation of the plan, a Termination Event will occur and they lose their consensual right to use Cash Collateral. Laura Davis Jones, Esq., at Pachulski, Stang Ziehl & Jones in Wilmington, Delaware, tells the Court that the Creditors' Committee has been seriously concerned regarding several aspects of the Cash Collateral Motion and the Interim Order including: * Financial projections were not provided with the 13-week budget. Without this information, it is impossible for the Creditors' Committee's financial advisors to determine whether or not these covenants will force an early termination of these cases for the Lenders' benefit. * The "adequate protection payments" equal to postpetition interest to the Lenders should be conditioned on the Debtors maintaining certain minimum levels of liquidity, over and above the cash balances required under the covenants in the Interim Order. * The final Cash Collateral Order should also make clear that (i) the Lenders' prepetition liens did not extend to the bulk of the Debtors' cash as of the Petition Date, and (ii) do not extend to the additional cash that will build up as a result of the operation of the Debtors' business after the Petition Date. * Any Order granting relief sought in the Cash Collateral Motion should include the customary procedures for the Creditors' Committee and the U.S. Trustee's Office to review the reasonableness of the professional fees payable to the Agent's counsel and financial advisors. * The proposed final Cash Collateral order contains a waiver of all collateral surcharge rights under Section 506(c) of the Bankruptcy Code even though the Debtors did not provide notice of their intent to request that provision in the Cash Collateral Motion, and notwithstanding the negative impact the waiver may have on unsecured creditors. Avenue Capital Issues The Debtors argue that giving Avenue Capital Management II L.P. the entitlement to current fee reimbursement that it seeks would be particularly inappropriate as Avenue Capital is but one of many members of the senior secured lending group. Reimbursing Avenue would unfairly and unreasonably privilege Avenue Capital among the senior secured lenders, the Debtors assert. J.P. Morgan Chase Bank, N.A., in its capacity as administrative agent under the Second Amended and Restated Credit Agreement, joins in the Debtors' response. Avenue Capital maintains that it is entitled to the payment of its postpetition legal fees and expenses as the Court ruled during the June 23, 2009 interim hearing. Avenue Capital further stresses that the Court's ruling is entirely consistent with the Credit Agreement. In a separate filing, Avenue Capital asks the Court to deny the Debtors' request for a final order authorizing the Debtors to modify the Cash Collateral Budget without further Court order complaining that that request is not consistent with the Court's ruling at the First Interim Order. Avenue Capital's counsel, Michael D. DeBaecke, Esq., at Blank Rome LLP, in Wilmington, Delaware, reminds the Court of the ruling on the First Interim Hearing that any modification to the budget will have to be approved by the Court, and that parties must be given a full and fair opportunity to be heard in court regarding any modification. About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SIX FLAGS: U.S. Trustee Objects to Terms of Houlihan Engagement ---------------------------------------------------------------- Acting United States Trustee for Region 3, Roberta A. DeAngeles, asks the Court to deny the Debtors' application to employ Houlihan Lokey Howard & Zukin Capital, Inc., as Financial Advisors and Investment Bankers, complaining that the Debtors' application does not disclose "the typical fee structure" for either HLHZ or other financial advisory and investment banking firms. Further, Ms. DeAngeles stresses that without an evidentiary record establishing that HLHZ's proposed fees are consistent with the fees customarily charged by HLHZ and other financial advisory and investment firms for similar services, the Debtors and HLHZ cannot meet their burden of establishing that HLHZ's proposed fees are reasonable. The Debtors selected Houlihan Lokey as their investment banker and financial advisor based on, among other things, (a) the Debtors' need to retain an investment banking and financial advisory firm to provide advice with respect to the restructuring, and (b) the firm's extensive experience and excellent reputation in providing investment banking and financial advisory services in complex Chapter 11 cases. As financial advisor and investment banker, Houlihan Lokey will: (a) assist the Debtors in the development, preparation and distribution of selected information, documents and other materials in an effort to enable the consummation of any Transactions; (b) evaluate indications of interest and proposals regarding any Transactions from current or potential lenders, equity investors, acquirers or strategic partners; (c) assist the Debtors with the development, structuring and implementation of any Transaction, including participating as a representative of the Debtors in meetings with creditors and other parties involved in any transactions; (d) assist the Debtors in valuing the Debtors' assets and operations; (e) provide expert advice and testimony regarding financial matters related to any Transactions; (f) advise and attend meetings of the Debtors' Board of Directors, creditor groups, official constituencies and other interested parties; and (g) provide other financial advisory and investment banking services as maybe agreed upon by Houlihan Lokey and the Debtors. The Debtors will pay Houlihan Lokey on these terms: (a) a Monthly Fee of $200,000, wherein 50% of each Monthly Fee earned and received by Houlihan Lokey following the sixth month will be credited against the Restructuring Transaction Fee; (b) reimbursement of all reasonable out-of-pocket expenses, including (i) reasonable fees of Houlihan Lokey's counsel, and (ii) reasonable disbursements of Houlihan Lokey's documented travel expenses, duplicating charges, computer charges, messenger services and long-distance telephone calls; (c) upon the date of confirmation of a plan of reorganization, a Restructuring Fee equal to $7,500,000. The Debtors propose that all compensation due to Houlihan Lokey and all expenses the firm incurs will not be subjected to the standard review. Furthermore, the Debtors ask the Court to modify the requirements of Rule 2016-2(d) of the Local Delaware Bankruptcy Rules due to the nature of Houlihan Lokey's engagement and its compensation structure. Houlihan Lokey submits that payment of its fees, including the Monthly Fees and the Transaction Fee, if any, on a fixed-rate basis, is customary in the investment banking and financial advisory services industry, thus, submission of detailed time entries pursuant to Local Rule 2016-(2)(d) is unnecessary. Pursuant to a Letter Agreement memorializing Houlihan Lokey's engagement, the Debtors agree to indemnify and hold harmless the firm and its representatives and advisors from any claims or liabilities arising out of its role as the financial advisor and investment banker to the Debtors. As of the Petition Date, the Debtors have paid Houlihan Lokey $1,538,743 for prepetition fees and reimbursable expenses. On or before July 3, 2009, Houlihan Lokey will provide an accounting of the total payments it received from the Debtors prepetition. A full-text copy of the Letter Agreement between the Debtors and Houlihan Lokey is available for free at: http://bankrupt.com/misc/SixF_HL_letter_agreement.pdf David R. Hilty, managing director of Houlihan Lokey Howard & Zukin Capital, Inc., assures the Court that his firm does not hold or represent any interest materially adverse to the Debtors in the matters for which the firm is retained. Further, he states that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code and is otherwise qualified to represent the Debtors as their financial advisors under Sections 327(a) and 329(a). About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SOLUTIA INC: To Release 2nd Quarter 2009 Results on July 27 ----------------------------------------------------------- Solutia Inc. (NYSE: SOA) announced it will issue financial results for the second quarter of 2009 on Monday, July 27, 2009, after the market closes. The company will then hold a conference call at 9 a.m. Central Time (10 a.m. Eastern Time) on Tuesday, July 28, 2009, during which Solutia executives will elaborate upon the company's second quarter 2009 financial results. A live Webcast of the conference call and slides will be available through the Investors section of http://www.solutia.comThe phone number for the call is 888-713-4205 (U.S.) or 617-213-4862 (International), and the pass code is 12444176. Participants are encouraged to dial in 10 minutes early, and also may pre-register for the event at https://www.theconferencingservice.com/prereg/key.process?key=PLU RAMTHC Pre-registrants will be issued a pin number to use when dialing into the live call that will provide quick access to the conference by bypassing the operator upon connection. A replay of the event will be available through http://www.solutia.comfor two weeks or by calling 888-286-8010 (U.S.) or 617-801-6888 (International) and entering the pass code 24445015. agree to dismiss the Appeal. About Solutia Inc. Based in St. Louis, Missouri, Solutia Inc. (NYSE: SOA) -- http://www.solutia.com/-- and its subsidiaries, manufactures and sells chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Lead Case No. 03- 17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. On February 14, 2006, the Debtors filed their Reorganization Plan & Disclosure Statement. On May 15, 2007, they filed an Amended Reorganization Plan and on July 9, 2007, filed a 2nd Amended Reorganization Plan. The Bankruptcy Court approved the Debtors' amended Disclosure Statement on October 19, 2007. On October 22, 2007, the Debtor re-filed a Consensual Plan & Disclosure Statement and on November 29, 2007, the Court confirmed the Debtors' Consensual Plan. Solutia emerged from Chapter 11 protection February 28, 2008. Solutia was represented by Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP, in New York, as lead bankruptcy counsel, and David A. Warfield, Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St. Louis Missouri, as special counsel. Trumbull Group LLC was the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represented the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provided the Creditors' Committee with financial advice. The Official Committee of Retirees of Solutia, Inc., et al., was represented by Daniel D. Doyle, Esq., Nicholas A. Franke, Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne, LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E. Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, in Birmingham, Alabama. Solutia's $2.05 billion exit financing facility was funded by Citigroup Global Markets Inc., Goldman Sachs Credit Partners L.P., and Deutsche Bank Securities Inc. The exit financing is being used to pay certain creditors, and for ongoing operations. Bankruptcy Creditors' Service, Inc., publishes Solutia Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Solutia Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on March 5, 2009, Standard & Poor's Ratings Services said it lowered its corporate credit rating on Solutia Inc. to 'B' from 'B+', and placed the ratings on CreditWatch with negative implications. At the same time, Standard & Poor's lowered its rating on the company's $1.2 billion senior secured term loan facility to 'B' from 'B+', and revised its recovery rating on the term loan to '4', indicating average recovery (30%- 50%) of principal in the event of a default, from '3'. According to the TCR on April 6, S&P said its ratings and outlook on Solutia (B/Watch Neg/--) remain unchanged following Solutia's announcement that it has entered into a definitive agreement to sell its nylon business to an affiliate of SK Capital Partners II L.P., a New York-based private equity firm. The transaction is expected to close in the second quarter of 2009. STARWOOD HOTELS: Ownership of St. Regis Transferred to Citi ----------------------------------------------------------- Starwood Hotels & Resorts Worldwide, Inc., said The St. Regis Monarch Beach resort will continue to operate business as usual following a consensual transfer by its owner to Citi, the lender, which now owns the 400-room hotel. In a statement issued, Citi affirmed that the St. Regis brand will continue to manage the hotel and said, "The acquisition will have no impact on the hotel, golf club or beach club, which will continue to operate at the highest standards of service seamlessly and without interruption for guests and employees." California's only five star, five diamond resort, The St. Regis Monarch Beach opened in 2001 and quickly established itself as the state's premier luxury hotel host to high profile events, tastemakers and global travelers. Citi and St. Regis are communicating to the community, associates, guests and meeting planners that the change in ownership will not impact hotel operations. "The St. Regis won't skip a beat in providing the bespoke signature services that have made the property one of the most exclusive resorts in North America," said Johnny So, General Manager of the St. Regis Monarch Beach Resort. "We remain committed to providing our guests with a flawless experience at every turn, and we are proud, that despite the challenging economic times, the St. Regis Monarch Beach continues to gain market share and is outperforming its competitive set." St. Regis Monarch Beach and Resort is fully operational, including its popular destination bars as well as award-winning restaurants and Spas - Club 19, Stonehill tavern, Motif Restaurant, and Spa Gaucin. About St. Regis Hotels & Resorts Founded by John Jacob Astor IV, with the opening of the first St. Regis Hotel in New York City over a century ago, The St. Regis brand of hotels -- http://www.stregis.com/-- is known for its unique luxury dimension, customized service and refined elegance, in the best destinations worldwide. Plans for this brand to globally continue its legacy include long-awaited St. Regis properties in Bahia Beach, Puerto Rico, Bal Harbour, Deer Crest and Hawaii in the US, and on the exclusive island of Bermuda. In Latin America St. Regis plans to unveil new hotels and resorts in Buenos Aires, Kanai Riviera, and Mexico City. St. Regis has also announced plans to open properties in Bangkok, Chengdu, Kuala Lumpur, Lhasa, Nanjing, Osaka, Sanya Yalong Bay and Tianjin. In Africa and the Middle East, the St. Regis brand will continue to expand in Abu Dhabi, Cairo, Doha, and Mauritius. The distinctive trait of the St. Regis experience is customized service and attention, coveted locations and luxurious design. About Starwood Hotels Starwood Hotels & Resorts Worldwide, Inc., headquartered in White Plains, New York, is a leading hotel company with approximately 900 properties in more than 100 countries. * * * As reported by the Troubled Company Reporter Standard & Poor's Ratings Services on April 30, 2009, assigned its 'BB' rating to Starwood Hotels & Resorts Worldwide's proposed $500 million senior notes issue due 2014. In addition, S&P assigned S&P's '3' recovery rating to the notes, indicating S&P's expectation of meaningful (50% to 70%) recovery for noteholders in the event of a payment default. S&P expects the company to use the notes proceeds to repay revolver balances. S&P's corporate credit rating on Starwood is 'BB' and the rating outlook is stable. S&P believes that credit measures will likely be sustained at levels appropriate for the 'BB' rating over the intermediate term. On May 4, the TCR said Moody's Investors Service assigned a Ba1 rating to Starwood Hotels's new $500 million senior unsecured notes. Moody's affirmed Starwood's Ba1 Corporate Family rating and Ba1 Probability of Default rating. Moody's also upgraded Starwood's Speculative Grade Liquidity rating to SGL-2. The note proceeds will be used to reduce borrowings under the company's revolving credit facility. STEPHEN BALDWIN: Staves Off Foreclosure Through Chapter 11 Filing ----------------------------------------------------------------- The Deal reports that Stephen Baldwin and his wife, Kennya, filed for Chapter 11 to stave off mortgage foreclosure efforts a day after a public sale had been set. Lohud.com says that a public auction on Mr. Baldwin's foreclosed Upper Grandview home had been first set for June 24, but was pushed back to July 22 at the Rockland County Courthouse in New City at the behest of the Debtor. Donna Marie Jendritza at Litton Loan Servicing, the company managing the mortgage, said that Mr. Baldwin was seeking options on paying back his defaulted mortgage, according to Lohud.com. Mr. Baldwin bought the 1.4-acre home in 1997 for $515,000 and owed Bankers Trust Co. about $824,000 for the mortgage. Mr. Baldwin's publicist, Brad Taylor, told People.com in June that Mr. Baldwin is "going through a legal situation regarding his mortgage" and that no auction would be happening. SFGate.com relates that Mr. Baldwin denied that his house was going to be auctioned off, insisting that he was simply "renegotiating" his mortgage. Actor Stephen Baldwin is known for films like "The Usual Suspects" and recently appeared on the reality television show "I'm a Celebrity Get Me Out of Here." He is the youngest of the acting Baldwin brothers, which include Alec. He and his wife Kennya lives in Upper Grandview, New York. Mr. Baldwin and his wife filed for Chapter 11 bankruptcy protection on July 21, 2009 (Bankr. S.D. N.Y. Case No. 09-23296). Bruce Weiner, Esq., at Rosenberg, Musso & Weiner, LLP, assists the Debtors in their restructuring efforts. The Debtors listed $1,000,001 to $10,000,000 in assets and $1,000,001 to $10,000,000 in debts. STONERIDGE INC: S&P Affirms 'B+' Corporate Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services said it has affirmed its 'B+' corporate credit rating on Warren, Ohio-based Stoneridge Inc. and removed it from CreditWatch with negative implications, where it had been placed on April 30, 2009. The outlook is negative. "The rating affirmation reflects S&P's assumption that the company's diversified revenue base, lack of near-term maturities, cash balances, and bank facility availability will keep liquidity adequate despite cash use in 2009," said Standard & Poor's credit analyst Lawrence Orlowski. "Still, S&P expects Stoneridge's credit ratios to fall below the minimum assumed credit ratios for the ratings in 2009 as automotive and commercial truck production in North America and Europe remains weak," he continued. The ratings on Stoneridge reflect S&P's view of its vulnerable business risk profile and aggressive financial risk profile. According to S&P's assumptions, Stoneridge's leverage would move into double digits for 2009, significantly exceeding S&P's leverage expectations of 3.5x to 4x for the rating. S&P expects EBITDA interest coverage to be below 1.0x, which is outside S&P's targeted 2.5x to 3.0x range. Nevertheless, S&P believes the company's liquidity is adequate and that credit measures will move back in line with S&P's expectations for the current rating in 2010. Stoneridge makes electrical and electronic components and systems for the light- and commercial-vehicle markets in North America (74%) and the rest of the world (26%). Its products work with the vehicle's mechanical and electrical systems to activate equipment or to display and monitor vehicle performance. The company has two reportable segments: electronics (66%) and control devices (34%). The vulnerable business risk profile reflects the highly competitive and cyclical character of Stoneridge's end markets, combined with the company's relatively small scope and scale. Together, S&P believes these factors limit the company's ability to mitigate adverse business, financial, or economic conditions. In addition, Stoneridge's customer base is somewhat concentrated; the largest single customer, Navistar International Corp., provided about 26% of revenue in 2008. The Michigan-based automakers, whose production has fallen off steeply during 2009, account for roughly 20% of revenues and a majority of the company's North American light-vehicle-related business. Credit measures have worsened. First-quarter production volumes were the lowest in six years. The company indicated it is taking actions beyond the restructuring initiatives completed in 2008 to reduce its cost structure and manage liquidity. In Europe, it is reducing staff and adjusting work weeks to match demand. The company also indicated it has reduced design and development expenses with respect to delayed customer projects, but not at the expense of future growth programs. SG&A expenses have come down as well. The company indicated that to date, the overall cost structure has decreased by an annual run rate of $80 million to $90 million. S&P views the company's liquidity as adequate for near-term needs, based on cash and bank facility availability. The negative outlook reflects the very weak outlook for automotive and commercial-truck demand. S&P could lower the rating if revenue declines or margin deterioration exceeded S&P's current expectations, leading the company to report greater-than-expected negative free operating cash flow in 2009 and thereby putting pressure on liquidity. For instance, if S&P thought cash use would exceed $40 million in 2009, S&P could review the rating. S&P could consider revising its outlook to stable if auto demand showed a sustained rebound, leading to an improvement in revenue and margin expansion that, in turn, substantially boosted credit quality. Also, S&P could revisit its ratings if it appeared that leverage would fall below 4x or if EBITDA interest coverage would rise above 2.5x for a sustained basis through 2010. SUN PRODUCTS: Moody's Upgrades Corporate Family Rating to 'B1' -------------------------------------------------------------- Moody's Investors Service upgraded The Sun Products Corporation's corporate family and probability of default ratings to B1, upgraded the company's senior secured credit facilities to Ba2 from Ba3 and upgraded the second lien term loan to B2 from B3. The rating outlook is stable. The upgrade is largely supported by the satisfactory performance of the assets acquired from Unilever relative to Moody's expectations. At the time of the transaction, which was concluded in the fourth quarter of 2008, reported financials for the relatively sizable acquisition by Sun Products (Huish Detergents, at the time) were not available. In addition, Moody's notes the attractive EBITDA profit margins and good free cash flow generation also support the upgrade to B1. The current environment continues to drive revenues for the company's private label brands and, importantly, laundry products are largely considered non-discretionary. While operating performance reflects a relatively smooth integration process, some of the brands that are associated with the Unilever portfolio appear to still be languishing thus some pressure is likely to remain on marketing expenses as the company invests in this segment. These ratings have been upgraded: -- Corporate family rating upgraded to B1 from B2; -- Probability of default rating upgraded to B1 from B2; -- $125 million senior secured revolving credit due 2013 upgraded to Ba2 (LGD2, 26%) from Ba3; -- $825 million first lien term loan due 2014 upgraded to Ba2 (LGD2, 26%) from Ba3; and -- $225 million second lien term loan due 2014 upgraded to B2 (LGD4, 62%) from B3; The rating outlook is stable. Moody's last rating action was on September 16, 2008 when Moody's concluded Sun Products' review for possible upgrade, confirmed existing ratings and changed the outlook to positive. The Sun Products Corporation, headquartered in Connecticut, is a leading manufacturer of laundry and dish detergents, fabric softeners and related household and personal care products. The company reported revenues in excess of $2 billion for the last 12 months ended March 31, 2009. TAMBURO HOLDING CO: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Tamburo Holding Co. Inc. 781 Main Street New Rochelle, NY 10804 Bankruptcy Case No.: 09-23311 Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court Southern District of New York (White Plains) Debtor's Counsel: Nathan Horowitz, Esq. 1 Water Street, Suite 425 White Plains, NY 10601 Tel: (914) 684-0551 Fax: (914) 617-0000 Email: nathanhorowitz@verizon.net Total Assets: $1,004,500 Total Debts: $780,000 The Company says it does not have unsecured creditors who are non insiders when they filed their petition. The petition was signed by Raymond R. Tamburo, president of the Company. TEMECULA VALLEY: Receives Notice from NASDAQ Confirming Delisting ----------------------------------------------------------------- Temecula Valley Bancorp Inc. in California on July 21, 2009, received a NASDAQ Staff Determination letter notifying the Company that as a result of concerns about the Company's ability to sustain compliance with all of the requirements for continued listing on NASDAQ, principally due to the closure of Temecula Valley Bank, the Company's principal operating subsidiary, NASDAQ Staff had made a determination to delist the Company's common stock and the Temecula Valley Statutory Trust VI trust preferred securities from The Nasdaq Stock Market. The Company does not intend to appeal the delisting decision. As a result, trading will continue to be halted in the Company's common stock and the Trust VI Securities until trading is suspended on July 30, 2009. A Form 25-NSE will then be filed with the Securities and Exchange Commission, which will remove the Company's common stock and the Trust VI Securities from listing and registration on The Nasdaq Stock Market. The Letter advised us that the Company's common stock would not be immediately eligible to trade on the OTC Bulletin Board or in the "Pink Sheets." TRONOX INC: Another Class Suit Filed Against Anadarko, Kerr-McGee ----------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP filed on July 21, 2009, a class action lawsuit in the United States District Court, Southern District of New York, on behalf of all persons who purchased the common stock (Class A or B) of Tronox, Inc. [OTC:TRXAQ; OTC:TRXBQ] between November 29, 2005 and January 12, 2009 against certain officers and directors of Tronox, Kerr-McGee Corporation, Anadarko Petroleum Corporation, and certain officers and directors of Kerr-McGee pursuant to Section 10(b) and 20(a) of the Exchange Act [15 U.S.C. 78j(b) and 78t(a)] and Rule 10b-5 promulgated thereunder by the SEC [17 C.F.R. 240.10b-5]. Coughlin Stoia Geller Rudman & Robbins LLP, Izard Nobel LLP and Kendall Law Group have also filed class suits as reported by the Troubled Company Reporter. The case name is styled Shi v. Kerr-McGee Corporation, et al. A full-text copy of the complaint is available from the Court, or can be viewed on the Wolf Haldenstein Adler Freeman & Herz LLP Web site at http://www.whafh.com/ The Complaint alleges that the Defendants fraudulently concealed Tronox's massive environmental liabilities and resulting financial problems causing massive losses to innocent investors while unjustly enriching themselves. Kerr-McGee spun-off Tronox into an independent entity in a two- step process. First, in November of 2005, Kerr-McGee generated $225 million in proceeds following the initial public offering of Tronox at the price of $14.00 per share (the "IPO") and retained control of 56.7% of Tronox's outstanding common stock. Next, in March of 2006, Kerr-McGee distributed its remaining 56.7% stake in Tronox to shareholders as Class B shares by way of a dividend. The Complaint further alleges that defendants, at the time of the IPO, knowingly mislead and misrepresented investors by materially understating the scope of Tronox's environmental and tort liabilities. The Registration Statement (the "Registration Statement"), and the prospectus therein, contained information that was materially false, misleading and ignored the adverse conditions facing Tronox. Tronox has put forth allegations in its bankruptcy action (Tronox, Inc. v. Anadarko Petroleum Corp., et al.) that the Registration Statement was materially misleading and greatly understated the liabilities that Tronox was burdened with. The Defendants continually misled investors throughout the Class Period by making materially false statements and concealing the true nature of Tronox's liabilities in numerous press releases and SEC filings. On June 22, 2006, Anadarko made an offer seeking to acquire Kerr- McGee for $18 billion, which included $16.4 billion in cash. On August 10, 2006, the Kerr-McGee shareholders voted to approve the offer and Kerr-McGee became a wholly-owned subsidiary of Anadarko, and as a result, Anadarko became the successor-in-interest to Kerr-McGee. Eventually, the market was able to uncover what the Defendants were attempting to conceal, Tronox's environmental and tort liabilities were in far excess of what had been represented, and, as a result, Tronox was in financial ruin and would need to seek the protection of bankruptcy laws therefore rendering the stockholders' investments virtually worthless. In ignorance of the false and misleading nature of the statements described in the complaint, and the deceptive and manipulative devices and contrivances employed by said defendants, plaintiff and the other members of the Class relied, to their detriment, on the integrity of the market price of Tronox common stock. Had plaintiff and the other members of the Class known the truth, they would not have purchased said securities, or would not have purchased them at the inflated prices that were paid. Wolf Haldenstein has roughly 70 attorneys in various practice areas; and offices in Chicago, New York City, San Diego, and West Palm Beach. About Tronox Inc. Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets: TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer of titanium dioxide pigment, with an annual production capacity of 535,000 tonnes. Titanium dioxide pigment is an inorganic white pigment used in paint, coatings, plastics, paper and many other everyday products. The Company's four pigment plants, which are located in the United States, Australia and the Netherlands, supply high-performance products to approximately 1,100 customers in 100 countries. In addition, Tronox produces electrolytic products, including sodium chlorate, electrolytic manganese dioxide, boron trichloride, elemental boron and lithium manganese oxide. Tronox has $1.6 billion in total assets, including $646.9 million in current assets, as at September 30, 2008. The Company has $881.6 million in current debts and $355.9 million in total noncurrent debts. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D. N.Y. Case No. 09-10156). The case is before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represent the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants serves as notice and claims agent. An official committee of unsecured creditors and an official committee of equity security holders have been appointed in the cases. The Creditors Committee has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel. Until September 30, 2008, Tronox Inc. was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox Inc. has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tronox Inc. and its 14 affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRUE TEMPER: Lenders Extend Forbearance Through August 17 --------------------------------------------------------- True Temper Sports, Inc., has amended its existing forbearance with the lenders in its 2006 restated credit facility, to extend the forbearance through August 17, 2009. The terms and conditions of the amended forbearance were substantially similar to those of the expiring agreement. On March 16, 2009, the Company did not make the principal payment then due on its revolving credit loans, in an aggregate amount equal to $20.0 million (including $17.0 million in borrowings and $3.0 million in outstanding letters of credit), due to the lenders under the 2006 Restated Credit Facility. The Company's failure to make the scheduled principal payment on the revolving credit loans is an Event of Default under the 2006 Restated Credit Facility, which entitles the lenders to immediately accelerate the repayment of all other amounts borrowed under the 2006 Restated Credit Facility together with accrued and unpaid interest thereon. Also on March 16, 2009, the Company did not pay interest then due to the holders of its 8-3/8% Notes. The failure to pay interest constituted an Event of Default under the Indenture, which gave the holders of the 8-3/8% Notes the right to accelerate the payment of the principal together with accrued and unpaid interest thereon. The non-payment of principal then due under the 2006 Restated Credit Facility described above also constituted an Event of Default under the Indenture, giving the holders of the 8-3/8% Notes the right to immediately accelerate the repayment of the principal of the 8-3/8% Notes together with accrued and unpaid interest thereon. The non-payment of interest under the Indenture also constituted an Event of Default under the Second Lien, giving the lenders the right to accelerate the repayment of amounts borrowed under the Second Lien together with accrued and unpaid interest thereon. The non-payment of principal under the 2006 Restated Credit Facility, if continued for 90 days after notice or if the maturity of principal of the 2006 Restated Credit Facility is accelerated, will constitute an Event of Default under the Second Lien, giving the lenders the right to accelerate the repayment of amounts borrowed under the Second Lien together with accrued and unpaid interest thereon. The Company negotiated the terms of a 90-day forbearance with all of the lenders in the Company's revolving credit facility, and a majority of the lenders in the Company's 2006 Restated Credit Facility. The lenders in the Company's revolving credit facility and 2006 Restated Credit Facility have agreed not to exercise their rights as a result of the default through June 16, 2009, provided the Company adheres to the requirements of the forbearance terms. Upon expiration of the forbearance period, the forbearance will be immediately and automatically terminated and be of no further force or effect. On June 15, 2009, the Company amended the existing forbearance to extend the forbearance through July 16. The terms and conditions of the amended forbearance were substantially similar to those of the expiring agreement. The Company has indicated its non-compliance with the covenants, decreasing revenues resulting from the current global economic downturn, and substantial annual cash interest payment requirements raise substantial doubt about its ability to continue as a going concern under its existing capital structure. The Company has retained the investment banking firm, Lazard Middle Market, to assist it in exploring alternatives to enhance the Company's capital structure. The Company is currently in ongoing discussions with certain lenders under the 2006 Restated Credit Facility, the Second Lien, and the 8-3/8% Notes to refinance or restructure its debt. In addition to addressing the Company's capital structure, management has also enacted restructuring plans to address operating costs by reducing headcount on a global basis, significantly reducing fixed costs at the Company's manufacturing facilities, renegotiating lease terms and rental rates for certain of the Company's facilities, and decreasing discretionary spending on items such as travel, entertainment, and certain marketing expenses. There can be no guarantee that any restructuring or refinancing plan will be successfully implemented. Failure to successfully implement a restructuring or refinancing plan or otherwise address compliance issues under the 2006 Restated Credit Facility, the Second Lien, or the 8-3/8% Notes within the time frame permitted may have a material adverse effect on the Company's business, results of operations, and financial position, and may materially impact the Company's ability to continue as a going concern. None of the lenders under the 2006 Restated Credit Facility or the Second Lien, nor any holders of 8-3/8% Notes have accelerated the payment of principal or interest under any of the applicable agreements. True Temper Sports, Inc., is a wholly-owned subsidiary of True Temper Corporation. The Company operates in two reportable business segments: golf shafts and performance sports. The golf shaft segment manufactures and sells steel, composite, and multi- material golf club shafts for use exclusively in the golf industry. The performance sports segment manufactures and sells high strength, tight tolerance tubular components for bicycle, hockey and other recreational sport markets. As of March 29, 2009, the Company had $190,194,000 in total assets and $316,214,000 in total liabilities, resulting in $126,020,000 stockholders' deficit. TXCO RESOURCES: Can't Provide Counsel for Board of Directors ------------------------------------------------------------ The Hon. Ronald B. King of the U.S. Bankruptcy Court for the Western District of Texas denied the proposal to retain Locke Lord Bissell & Liddell LLP as special counsel to the independent directors of TXCO Resources Inc. The Debtor's directors do not require their own attorneys during restructuring, the Court said, according to Law360. As reported by the TCR on July 20, Charles F. McVay, the U.S. Trustee for Region 7, and the Official Committee of Unsecured Creditors asked Judge King to deny the application to employ Locke Lord Bissell & Liddel LLP as special counsel to the independent directors filed by TXCO.s The U.S. Trustee and Committee assert that it is not appropriate to employ the firm as professional of the Debtors' directors. "The employment of the firm is unnecessary and duplicative," the Committee argued. "And not in the best interest of the estate." TXCO Resources Inc. is an independent oil and gas enterprise with interests in the Maverick Basin, the onshore Gulf Coast region and the Marfa Basin of Texas, and the Midcontinent region of western Oklahoma. TXCO's business strategy is to acquire undeveloped mineral interests and internally developing a multi-year drilling inventory through the use of advanced technologies, such as 3-D seismic and horizontal drilling. It accounts for its oil and gas operations under the successful efforts method of accounting and trades its common stock on Nasdaq's Global Select Market under the symbol "TXCO." The Company and its affiliates filed for Chapter 11 protection on May 17, 2009 (Bankr. W.D. Tex. Case No. 09-51807). The Debtors hired Deborah D. Williamson, Esq., and Lindsey D. Graham, Esq., at Cox Smith Matthews Incorporated, as general restructuring counsel; Fulbright and Jaworski, L.L.P., as corporate counsel & conflicts counsel; Albert S. Conly as chief restructuring officer and FTI Consulting Inc. as financial advisor; Goldman, Sachs & Co. as financial advisor for assets sale; Global Hunter Securities, LLC, as financial advisors and investment bankers; and Administar Services Group LLC as claims agent. Gardere Wynne Sewell LLP represents the Committee. As reported in Troubled Company Reporter on July 6, 2009, in their schedules of assets and liabilities, the Debtors have $357,855,952 in total assets and $331,422,792 in total liabilities. UAL CORP: Asks Court to Enter Final Decree Closing Ch. 11 Cases --------------------------------------------------------------- Pursuant to Rule 3022 of the Federal Rules of Bankruptcy Procedure, UAL Corporation and its debtor affiliates ask the U.S. Bankruptcy Court for the Northern District of Illinois to enter a final decree closing their Chapter 11 cases. Section 350(a) of the Bankruptcy Code provides that after an estate is fully administered and the court has discharged the trustee, the court will close the case. Rule 3022, which implements Section 350, further provides that after an estate is fully administered in a Chapter 11 reorganization case, the court, on its motion or on motion of a party-in-interest, will enter a final decree closing the case. Erik W. Chalut, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, relates that since the effective date of the Debtors' Confirmed Second Amended Plan of Reorganization, the Debtors have worked diligently to implement the Plan. He cites the status of matters relating to the Debtors' Chapter 11 cases and distributions made under the Plan: * General unsecured claims and priority claims. As of July 15, 2009, except with respect to Los Angeles International Airport's unsecured claims, either the Court has expunged or the Debtors have allowed all unsecured and priority claims that were filed against them. The Debtors have made distributions on all those allowed unsecured and priority claims as set forth and required under the Plan. * Administrative claims. There are two remaining categories of unresolved alleged administrative claims. The first category are administrative claims filed by the United States Equal Employment Opportunity Commission on behalf of certain claimants who filed charges of discrimination with the EEOC. Certain of the EEOC Claims remain in the investigatory stage and may never proceed to litigation; while other EEOC Claims are being litigated in the U.S. district courts. The remaining unresolved EEOC claims, to the extent that they are not settled by agreement, will either never be litigated or will be heard in the appropriate federal district courts. The second category involves a claim filed by General Services Administration. The GSA Claim is subject of a claims objection, which objection is contested by General Services. The GSA Claim will be heard in October 2009. The Debtors have made distributions on all other allowed administrative claims as set forth and required under the Plan. * Cure claim. The only remaining cure claim is the recently filed amended cure claim of Regen Capital I. The claim is subject of a claim objection to be heard on July 28, 2009. The Debtors expect its resolution at or shortly after that hearing. The Debtors have made distributions on all other allowed cure claims as required under the Plan. * Adversary Proceedings. As of July 15, 2009, three adversary proceedings remain open: Case No. 03-977; Case No. 05-1884; and Case No. 06-698. The United States Court of Appeals for the Seventh Circuit remanded the appeal relating to Case No. 03-977 to the Bankruptcy Court to determine the value of the secured claim of UMB Bank, N.A., as indenture trustee for certain special facility bonds issued in connection with the Los Angeles International Airport. With respect to Case Nos. 05-1884 and 06-698, the Bankruptcy Court will make a ruling on those adversary cases only after its ruling on the Remanded Adversary. * Appeals. As of July 15, 2009, only one claimant, Phyllis Carr is still pursuing an appeal in the United States Court of Appeals for the Seventh Circuit. In addition, Barnita Vann has files a petition for certiorari with the United States Supreme Court, which petition has not yet been ruled upon. * Distributions. The Debtors have made great progress in distributing New UAL common stock to creditors. As of July 8, 2009, the Debtors have authorized the issuance of 113,855,852 shares, which represent 99% of the 115 million shares of new UAL common stock available to the Debtors' employees and creditors. Once a final determination is made as to the LAX Unsecured Claims, the Debtors will process a final distribution consistent with the Plan. The Debtors have sufficient reserves to make distributions on the EEOC Claims, Government Claims, LAX Unsecured Claims, and the Regen Capital Claim to the extent that they are allowed. In this regard, Mr. Chalut argues that the Debtors' Chapter 11 cases have been fully-administered under Section 350, making it appropriate for the Court to enter a final decree closing the Debtors' Chapter 11 cases. He reminds the Court that the confirmation order on the Plan became final and non-appealable on February 1, 2006. He further asserts that the Plan was substantially consummated, at which time: (i) the Debtors received the property to which they were entitled under the Plan; and (ii) the Debtors assumed the business and management of that property. He stresses that the Court has expunged or the Debtors have allowed nearly all unsecured, priority, administrative, and cure claims filed against them. With the exception of the GSA Claim, the only matters that the Debtors expect that will remain unresolved as of July 29, 2009 hearing for the Motion to Close are matters that are subject to adversary proceedings, appeals, or to the jurisdiction of other courts, he points out. He notes that with respect to the GSA Claim, the Court has proposed a trial process and schedule, which process will be conducted in the same manner as an adversary proceeding. However, leaving the Debtors' bankruptcy cases open will cause the Debtors to incur substantial quarterly fees for the United States Trustee for Region 10, Mr. Chalut stresses. He notes that the quarterly fees are an inefficient use of the Debtors' resources. Accordingly, ample justification exists for entry of a final decree closing the Debtors' Chapter 11 cases at this time, he maintains. The Debtors further seek the Court's authority to waive the notice requirements under Rule 3022-1 of the Local Rules of the U.S. Bankruptcy Court for the Northern District of Illinois. There are more than 125,000 creditors in the Debtors' Chapter 11 cases and providing mail service of the Motion to Close to all those creditors would cost the Debtors $190,000. The Debtors propose to serve the Motion to Close on all persons listed in the latest version of the Rule 2002 service list; the core parties list; and all creditors with matters continuing to exist before the Court. Judge Wedoff will consider the Debtors' Motion on July 29, 2009. Objections are due July 22. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The Company filed for Chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on January 20, 2006. The company emerged from bankruptcy protection on February 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on June 12, 2009, Fitch Ratings has downgraded the issuer debt rating to 'CCC' from 'B-' for UAL Corp. and its principal operating subsidiary United Airlines, Inc. The downgrade reflects Fitch's view that the airline's credit profile is likely to weaken further, as extreme pressure in the revenue environment continues to undermine the positive cash flow impact of lower jet fuel prices in 2009. UAL CORP: Provides Financial Projections For 3rd Quarter 2009 ------------------------------------------------------------- UAL Corp, the holding company of United Air Lines, Inc., filed with the U.S. Securities and Exchange Commission on July 21, 2009, an investor update related to its financial and operational outlook for the third quarter of 2009. Capacity Kathryn A. Mikells, senior vice president and chief financial officer of UAL, discloses that the third quarter 2009 consolidated available seat miles are estimated to be down 5.6% to 6.6% year-over-year. She notes that UAL estimates full year 2009 consolidated ASMs to be down 7.5% to 8.5%, including an additional 7% reduction in international capacity for the last four months of the year. Non-Fuel Expense UAL expects third quarter 2009 mainline non-fuel unit cost per ASM, excluding profit-sharing and certain accounting charges, to be flat to up 1% year-over-year. Moreover, consolidated CASM, excluding profit sharing and certain accounting charges is expected to be flat to up 1% year-over-year. For the full-year 2009, Ms. Mikells discloses that UAL anticipates mainline CASM, excluding fuel, profit sharing and certain accounting charges to be down 0.5% to up 0.5% year-over-year. Fuel Expense UAL expects mainline fuel price, including the impact of cash settled hedges, to be $2.20 per gallon for the third quarter and $2.07 per gallon for the full year. Ms. Mikells says that UAL previously posted cash collateral with its fuel hedge counterparties and this collateral will be used to cover hedge losses as contract settle. Non-Operating Income/Expense Ms. Mikells explains that a portion of UAL's total fuel hedge impact is recorded as non-operating expense, with the rest recorded as fuel expense. Based on July 16, 2009, closing forward prices, UAL anticipates to recognize $45 million of cash losses on settled hedge contracts reported in non-operating expenses in the third quarter. Excluding hedge impacts, Ms. Mikells states that non-operating expense is estimated to be $120 million to $130 million for the third quarter and $505 million to $515 million for the full year. Income Taxes Ms. Mikells discloses that because of its net operating loss carry-forwards, UAL expects to pay minimal cash taxes for the future and is not recording incremental tax benefits at this time. UAL also expects an effective tax rate of 0% for the second quarter of 2009 and full year 2009. Capital Spending and Scheduled Debt and Capital Lease Payments Ms. Mikells says that UAL is reducing its planned capital expenditures to $300 million, a reduction of $150 million from the $450 million, which was originally planned for 2009. UAL expects scheduled debt and capital lease payments of $460 million for the remainder of the year 2009. Fuel Hedge Positions and Collateral Ms. Mikells relates that UAL expects to recognize, as restricted cash, fuel hedge collateral from fuel hedge counterparties for net-in-the-money hedges. UAL also expects to recognize $35 million for each $5 increase in the price of crude oil per barrel above $65, and $72 million for each $5 increase in the price of crude oil per barrel above $70. UAL's estimated settled hedge impacts at certain crude oil prices, based on the hedge portfolio as of July 16, 2009 are: Cash Settled Crude Oil Price Hedge Impact 3Q09 4Q09 FY09 --------------- ------------ ---- ---- ---- $90 per Barrel Mainline Fuel Price Excluding Hedge($/gal) $2.57 $2.59 $2.09 Impact to Fuel Expense($/gal) ($0.15) ($0.26) $0.11 Impact to Non- Operating Expense ($ millions) $21M $14M $211M $80 per Barrel Mainline Fuel Price Excluding Hedge($/gal) $2.33 $2.35 $1.97 Impact to Fuel Expense ($/gal) $0.01 ($0.13) $0.18 Impact to Non- Operating Expense ($ millions) $30M $25M $230M $70 per Barrel Mainline Fuel Price Excluding Hedge($/gal) $2.10 $2.11 $1.85 Impact to Fuel Expense($/gal) $0.16 $0.01 $0.25 Impact to Non- Operating Expense ($ millions) $38M $35M $250M $62.02 per Mainline Fuel Barrel Price Excluding Hedge($/gal) $1.92 $1.93 $1.77 Impact to Fuel Expense($/gal) $0.28 $0.10 $0.31 Impact to Non- Operating Expense ($ millions) $45M $44M $265M $60 per Barrel Mainline Fuel Price Excluding Hedge ($/gal) $1.86 $1.87 $1.74 Impact to Fuel Expense($/gal) $0.43 $0.20 $0.37 Impact to Non- Operating Expense ($ millions) $56M $56M $288M $50 per Barrel Mainline Fuel Price Excluding Hedge ($/gal) $1.62 $1.63 $1.62 Impact to Fuel Expense($/gal) $0.43 $0.20 $0.37 Impact to Non- Operating Expense ($ millions) $56M $56M $288M $40 per Barrel Mainline Fuel Price Excluding Hedge($/gal) $1.38 $1.39 $1.50 Impact to Fuel Expense($/gal) $0.48 $0.24 $0.39 Impact to Non- Operating Expense ($ millions) $61M $60M $297M Projected Fuel Hedge Collateral Balance at Each Quarter End 3Q09 4Q09 ---- ---- Based on July 16, 2009 Closing Forward Prices $85M $20M Change in Cash Collateral For Each $5 per Barrel change Price of Crude Oil in Crude Oil price ------------------ ----------------------------- Above $120 No Collateral Required Above $90, less than or equal to $120 $10,000,000 Above $60, less than or equal to $90 $21,000,000 Above $35, less than or equal to $60 $54,000,000 Less than or equal to $35 $29,000,000 A full-text copy of UAL's Investor Update is available for free at http://ResearchArchives.com/t/s?3fad About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The Company filed for Chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on January 20, 2006. The company emerged from bankruptcy protection on February 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on June 12, 2009, Fitch Ratings has downgraded the issuer debt rating to 'CCC' from 'B-' for UAL Corp. and its principal operating subsidiary United Airlines, Inc. The downgrade reflects Fitch's view that the airline's credit profile is likely to weaken further, as extreme pressure in the revenue environment continues to undermine the positive cash flow impact of lower jet fuel prices in 2009. UAL CORP: Releases Second Quarter 2009 Results ---------------------------------------------- UAL Corporation, the holding company whose primary subsidiary is United Airlines, reported results for the second quarter ended June 30, 2009. The company: * Reported a second quarter net loss of $323 million or $2.23 per basic share excluding non-cash, net mark-to- market hedge gains and certain accounting charges outlined in note 6 of the attached statement of consolidated operations. The company reported a GAAP net profit of $28 million or $0.19 per diluted share, including these items. * Reported a year-over-year 17.2% decline in second quarter consolidated passenger unit revenue per available seat mile (PRASM). * Continued to control costs with mainline non-fuel unit cost per available seat mile (CASM) for the quarter down 1.2% year-over-year, excluding certain accounting charges and despite a reduction in mainline capacity of 10.8% year-over-year. Mainline CASM, including fuel and excluding non-cash, net mark-to-market fuel hedge gains, impairments and certain accounting charges, was down 20.4% year-over-year. GAAP mainline CASM, including these items, was down 50.2%. * Improved its full year outlook for mainline non-fuel CASM, excluding profit sharing and certain accounting charges, to down 0.5% to up 0.5% year-over-year. This reflects a $150 million increase in full year savings, bringing the full year cost reduction to $300 million compared to the company's initial 2009 non-fuel CASM outlook provided on January 21, 2009. The company also reduced planned capital expenditures to $300 million, a reduction of $150 million from the $450 million the company originally planned for 2009. * Announced an additional international capacity reduction of 7% for the last four months of 2009. * Closed the quarter with total cash of $2.8 billion, unrestricted cash of $2.6 billion, and restricted cash of $281 million. In addition, fuel hedge collateral was $185 million. * Raised approximately $155 million in additional cash early in the third quarter through a spare parts financing transaction. * Ranked No. 1 year-to-date through May in on-time performance among the five major U.S. network carriers. To date, the company has paid $430 per person in on-time incentive payments to each of more than 40,000 front-line employees, or more than $18 million in total, under its new on-time incentive program. * Received approval from the U.S. Department of Transportation (DOT) for Continental Airlines to join the existing antitrust-immunized alliance including United and eight other Star Alliance member carriers. "This is a resilient industry, and we are a resilient company," said Glenn Tilton, UAL Corporation chairman, president and CEO. "While there is much outside our control -- including the state of the economy and the price of oil -- we are focused and executing against those things we can control. We're running a good airline, with industry-leading cost control and best-in- class operational performance." Weak Global Economy Continues To Affect Revenues For the quarter, consolidated PRASM declined 17.2%, consolidated yield declined 16.8% and consolidated load factor declined 0.4 points year-over-year. Growth in certain ancillary revenues, including bag fees and ticket change fees, improved consolidated PRASM by 1.5 percentage points year-over-year. 1Q 2009 Passenger Passenger Revenue % PRASM% ASM1% Geographic Revenue Increase/ Increase/ Increase/ Area (millions) (Decrease) (Decrease) (Decrease) ---------- ---------- ---------- ---------- ---------- Domestic $1,788 (26.0%) (14.7%) (13.2%) Pacific 518 (37.7%) (28.9%) (12.4%) Atlantic 563 (22.0%) (22.5%) (0.6%) Latin America 72 (45.4%) (34.1%) (17.2%) ---------- ---------- ---------- ---------- International $1,153 (31.6%) (25.9%) (7.7%) Mainline $2,941 (28.3%) (19.5%) (10.8%) Regional Affiliates 749 (6.0%) (12.2%) 7.1% Consolidated $3,690 (24.6%) (17.2%) (9.0%) argo revenue for the quarter decreased 49% year-over-year as a result of lower demand, softer yields, lower fuel surcharges and reduced international capacity. United's significant presence in the Pacific export markets, which have been particularly impacted by the weakness in the global economy, continues to disproportionately affect its cargo revenue. Continued Strong Cost Performance Total consolidated expense, including fuel, was down more than $1.5 billion year-over-year in the second quarter, excluding non- cash, net mark-to-market hedge gains, impairment charges and certain accounting charges. Consolidated expense, excluding fuel, impairments and certain accounting charges, was down $288 million or 8.9%, as the company continued its efforts to successfully reduce costs as capacity declined. Total GAAP consolidated expense including these items was down $4.2 billion for the quarter, reflecting lower fuel costs, decreased capacity and impairment charges that were recorded last year. Mainline CASM, excluding fuel and certain accounting charges, decreased 1.2% in the second quarter, despite a 10.8% decline in mainline capacity. This CASM reduction is about 1.5 percentage points better than the guidance provided by the company in June. Since January, the company has reduced its projected full year mainline non-fuel costs by about $300 million. Consolidated CASM, excluding fuel and certain accounting charges, increased only 0.1%, despite a 9.0% decline in consolidated capacity. GAAP mainline and consolidated CASM, including these items, were down 50.2% and 46.7% respectively, compared to the year-ago quarter, reflecting the impact of lower fuel prices and impairment charges that were recorded last year. Fuel Hedge Collateral Returns Offset Cash Hedge Losses The Company recorded $252 million in cash losses on fuel hedges that settled in the quarter. In addition, the Company also recorded non-cash, net mark-to-market gains on its fuel hedges of $440 million. The cash losses on the contracts that settled during the quarter were offset by $385 million in cash collateral that was returned during the quarter. The table below details hedge impacts for the quarter: Three Months Ending June 30, 2009 (in millions) --------------------------------- Included in Included in Non-Operating Fuel Hedge Impacts Fuel Expense Expense Total ------------------ ------------ ------------- ----- Non-Cash Net Mark-to-Market Gain/(Loss) $305 $135 $440 Cash net Gain/(Loss) on Settled Contracts (157) (95) (252) ------------ ------------- ----- Total Recorded Net Gain $148 $40 $188 ------------ ------------- ----- Return of Hedge Collateral $385 The Company continues to systematically add to its fuel hedge portfolio using call options and swaps on crude oil, heating oil and jet fuel. For the second half of 2009, the company has hedged 64% of its estimated consolidated fuel requirements. Of this 64%, approximately 48% is hedged using call and swap options at a crude equivalent cap of $65 per barrel. The remaining 16% uses a variety of hedge structures (Collars, 3-way collars and 4-way collars) entered into last year. For 2010, the company has hedged 11% of its estimated consolidated fuel requirements using call options at an average crude equivalent price of $73 per barrel and swaps at an average crude equivalent price of $75 per barrel. United Improves Liquidity The Company ended the quarter with a total cash balance of $2.8 billion, an unrestricted cash balance of $2.6 billion and restricted cash of $281 million. The company also had $185 million in cash deposits held by its fuel hedge counterparties. During the second quarter, the company generated $396 million of positive operating cash flow and $305 million of positive free cash flow, defined as operating cash flow less capital expenditures. The Company had scheduled debt and net capital lease payments of $212 million during the quarter and non-aircraft capital expenditures of $91 million. "We are taking aggressive actions to position United for recovery, including reducing our international capacity by an additional 7 percent later this year, implementing industry-leading unit cost reductions, and bolstering our liquidity," said Kathryn Mikells, United senior vice president and chief financial officer. "We have more than $1 billion in unencumbered assets, and a proven track record of leveraging those assets to raise capital." No. 1 Year-to-Date May On-Time Performance Ranking - Customer Satisfaction Improves United ranked first among the five U.S. network carriers in year- to-date May 2009 on-time performance. According to DOT statistics, 80% of United flights arrived within 14 minutes of their scheduled arrival time, representing a considerable improvement from last year. The Company also continues to improve its key customer satisfaction measure among its best customers, with a significant improvement for the third consecutive quarter. Improvements were achieved across the travel experience, including aircraft cleanliness, seat and entertainment product workability, and employee courtesy. Business Highlights * United completed conversion of all of its B767s to its new international premium class configuration. United has also completed converting 18 of 24 aircraft in its B747 fleet, with the remaining B747s scheduled to be completed by October 2009. The company will begin the conversion of its B777s in February 2010. * United is rolling out Premier Line at 50 additional airport locations. Premier Line offers customers the ability to purchase priority access to specifically reserved lines at check-in, security (where available) and boarding. 2009 Outlook In an effort to better match supply with demand, the Company will further reduce international capacity by 7% in the last four months of 2009. Despite these capacity reductions, the Company expects mainline CASM, excluding fuel, profit sharing and certain accounting charges, for the full year 2009 to be down 0.5% to up 0.5% year-over-year, an improvement of $150 million compared to the Company's April guidance, and a full $300 million compared to the Company's January guidance. The Company expects scheduled debt and capital lease payments of $460 million for the remainder of 2009. Complete details on United's outlook can be found in the Investor Update, available at: http://www.united.com/ir UAL Corporation and Subsidiary Companies Unaudited Statement of Consolidated Operations Three Months Ended June 30, 2009 (In Millions) Operating revenues: Passenger - United Airlines $2,941 Passenger - Regional Affiliates 749 Cargo 121 Other operating revenues 207 --------- Total Operating Revenues 4,018 Operating expenses: Salaries and related costs 963 Regional affiliates 708 Aircraft fuel 665 Purchased services 286 Aircraft maintenance materials and outside repairs 240 Landing fees and other rent 229 Depreciation and amortization 222 Distribution expenses 139 Aircraft rent 89 Goodwill impairment - Other impairments and special items 88 Cost of third party sales 60 Other operating expenses 222 --------- Total Operating Expenses 3,911 Earnings from operations 107 Other income (expense): Interest expense (135) Interest income 5 Interest capitalized 2 Miscellaneous, net 35 --------- (93) Earnings before income taxes and equity of affiliates 14 Income tax benefit (13) --------- Earnings before equity in loss of affiliates 27 Equity in earnings of affiliates, net of tax 1 --------- NET INCOME $28 ========= UAL Corporation and Subsidiary Companies Statements of Consolidated Cash Flows Three Months Ended June 30, 2009 (In Millions) Cash flows provided by operating activities: $396 Cash flows provided (used) by investing activities: Net sales of short-term investments - Additions to property, equipment and deferred software (91) Decrease in restricted cash 3 Proceeds from asset sale-leaseback - Proceeds from litigation on advance deposits - Proceeds from the sale 13 Other, net 1 --------- Net cash used for operating activities (74) --------- Cash flows provided (used) by investing activities: Repayment of Credit Facility - Repayment of other debt (157) Special distribution to common shareholders (55) Decrease in capital lease deposits - Increase in deferred financing costs (1) Proceeds from issuance of long-term debt - Proceeds from the issuance of common stock - Other, net - --------- Net cash used for investing activities (213) --------- Increase in cash and cash equivalents during the period 109 Cash and cash equivalents at beginning of the period 2,457 --------- Cash and cash equivalents at end of the period $2,566 ========= Trading of UAL's common stock recently rose 8.3% at $3.80 per share as UAL reported a narrower loss this quarter, according to a July 21, 2009, report by The Wall Street Journal. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The Company filed for Chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on January 20, 2006. The company emerged from bankruptcy protection on February 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on June 12, 2009, Fitch Ratings has downgraded the issuer debt rating to 'CCC' from 'B-' for UAL Corp. and its principal operating subsidiary United Airlines, Inc. The downgrade reflects Fitch's view that the airline's credit profile is likely to weaken further, as extreme pressure in the revenue environment continues to undermine the positive cash flow impact of lower jet fuel prices in 2009. UAL CORP: Reports June 2009 Traffic Results ------------------------------------------- United Airlines reported its preliminary consolidated traffic results for June 2009. The Company reported a June consolidated passenger load factor of 85.9%. Total consolidated revenue passenger miles (RPMs) decreased in June by 7.5% on a consolidated capacity decrease of 8% percent in available seat miles (ASMs) compared with the same period in 2008. 2009 2008 Percent June June Change ----- ----- ------- Revenue Passenger Miles ('000) North America 5,429,351 6,116,206 (11.2%) Pacific 1,922,266 2,205,942 (12.9%) Atlantic 1,739,578 1,721,660 1.0% Latin America 229,501 311,881 (26.4%) Total International 3,891,345 4,239,483 (8.2%) Total Mainline 9,320,696 10,355,689 (10.0%) Regional Affiliates 1,250,532 1,070,068 16.9% Total Consolidated 10,571,228 11,425,757 (7.5%) Available Seat Miles ('000) North America 6,131,660 6,985,484 (12.2%) Pacific 2,321,018 2,651,906 (12.5%) Atlantic 1,995,951 1,966,430 1.5% Latin America 293,909 379,271 (22.5%) Total International 4,610,878 4,997,607 (7.7%) Total Mainline 10,742,538 11,983,091 (10.4%) Regional Affiliates 1,564,506 1,392,778 12.3% Total Consolidated 12,307,044 13,375,869 (8.0%) Load Factor North America 88.5% 87.6% 0.9 pts Pacific 82.8% 83.2% (0.4 pts) Atlantic 87.2% 87.6% (0.4 pts) Latin America 78.1% 82.2% (4.1 pts) Total International 84.4% 84.8% (0.4 pts) Total Mainline 86.8% 86.4% 0.4 pts Regional Affiliates 79.9% 76.8% 3.1 pts Total Consolidated 85.9% 85.4% 0.5 pts Revenue passengers boarded ('000) Mainline 5,158 5,914 (12.8%) Regional Affiliates 2,275 2,018 12.7% Total Consolidated 7,433 7,932 (6.3%) Cargo ton miles ('000) Freight 111,324 149,339 (25.5%) Mail 15,108 24,496 (38.3%) Total Mainline 126,432 173,835 (27.3%) About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The Company filed for Chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on January 20, 2006. The company emerged from bankruptcy protection on February 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on June 12, 2009, Fitch Ratings has downgraded the issuer debt rating to 'CCC' from 'B-' for UAL Corp. and its principal operating subsidiary United Airlines, Inc. The downgrade reflects Fitch's view that the airline's credit profile is likely to weaken further, as extreme pressure in the revenue environment continues to undermine the positive cash flow impact of lower jet fuel prices in 2009. UAL CORP: S&P Puts 'B-' Corp. Rating on CreditWatch Negative -------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'B-' corporate credit ratings, on UAL and its United Air Lines subsidiary on CreditWatch with negative implications, due to concerns about cash flow generation and liquidity. UAL reported a second-quarter 2009 net loss of $323 million before noncash gains on fuel hedges (a $28 million profit including those gains), due to much weaker traffic and pricing, which largely offset the benefits of lower fuel prices and good nonfuel cost controls, compared with the same period last year. Unrestricted cash totaled $2.6 billion, slightly above the March 31 levels and equal to around 15% of trailing-12-month revenues (expected to be average among peer "legacy carriers"). "While this cash level is slightly above the minimum level below which S&P has stated that S&P might lower the rating on UAL, S&P expects cash to decline during the remainder of the year due to normal seasonal working capital patterns and to meeting remaining 2009 debt maturities ($460 million) and capital expenditures ($130 million)," said Standard & Poor's credit analyst Betsy R. Snynder. S&P will evaluate UAL's liquidity outlook to resolve the CreditWatch listing. "Our review of ratings on aircraft-backed debt will also consider any material changes in collateral coverage of those obligations," she continued. WEBSTER FINANCIAL: Fitch Corrects Preferred Stock Rating to 'BB' ---------------------------------------------------------------- Fitch Ratings has corrected its preferred stock rating on Webster Financial Corporation's Preferred Stock has been downgraded to 'BB' from 'BBB-'. Fitch Ratings has downgraded the ratings of Webster Financial Corporation and its subsidiaries, and has removed the ratings from Rating Watch Negative, on which they were placed May 21, 2009. The Rating Outlook is Stable. While the company has taken prudent measures to enhance its tangible common equity levels through its second quarter-2009 (2Q'09) preferred stock exchanges (which increased its TCE ratio to 4.92% from 4.05%), Fitch believes the impact of heightened credit costs will continue to hamper WBS' financial performance given the prevailing market environment, resulting in further pressure on its capital position and no longer warranting its previous rating. Total net charge-offs for 2Q'09 experienced a 65% increase to 1.66% of average loans (annualized) from 0.99% for 1Q'09, with significant increases derived from WBS' commercial, asset based lending, and equipment financing portfolios. Although total delinquencies continued their declining trend for the past two consecutive quarters, asset quality deterioration persisted, as NPAs grew to 3.30% at June 30, 2009, from 2.87% at March 31, 2009. Concurrently, however, Fitch's Stable Outlook considers WBS' solid liquidity, sound funding base, and bolstered reserve levels. Management aggressively increased its provision during the quarter to augment its allowance for credit losses to 2.72% at June 30, 2009, from 2.33% at March 31, 2009. Headquartered in Waterbury, Connecticut with approximately $17.5 billion in assets, WBS' branch office coverage is dominated by a heavy presence in Connecticut and to a lesser extent Massachusetts, Rhode Island, and New York. WBS maintains a national presence through the company's asset-based lending, equipment financing, and insurance premium financing business lines. Fitch has downgraded these: Webster Financial Corporation -- Long-term Issuer Default Rating to 'BBB-' from 'BBB'; -- Senior Unsecured to 'BBB-' from 'BBB'; -- Preferred Stock to 'BB' from 'BBB-'; -- Short-term IDR to 'F3' from 'F2'. Webster Bank, NA -- Long-term IDR to 'BBB-' from 'BBB'; -- Long-term Deposits to 'BBB' from 'BBB+'; -- Subordinated Debt to 'BB+' from 'BBB-'; -- Short-term IDR to 'F3' from 'F2'. Webster Capital Trust IV -- Preferred Stock to 'BB' from 'BBB-'. Webster Preferred Capital Corp. -- Preferred Stock to 'BB' from 'BBB-'. The Rating Outlook is Stable. In addition, Fitch has affirmed these ratings: Webster Financial Corporation -- Individual at 'C'; -- Support at '5'; -- Support Floor at 'NF'. Webster Bank, NA -- Short-term Deposits at 'F2'; -- Individual at 'C'; -- Support at '5'; -- Support Floor at 'NF'. VSEVOLOD OKHRIMOVSKI: Case Summary & 15 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Vsevolod Okhrimovski 413 Vilaggio N Palm Springs, CA 92262 Bankruptcy Case No.: 09-26518 Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Sheri Bluebond Debtor's Counsel: Blake Lindemann, Esq. 433 N Camden Dr 4th Fl Beverly Hills, CA 90210 Tel: (310) 279-5269 Fax: (310) 279-5370 Email: ecf@llgbankruptcy.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 15 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-26518.pdf The petition was signed by Vsevolod Okhrimovski. WHC LLC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: WHC, LLC 600 W. Grant Street, Ste. 1 Phoenix, AZ 85003-2407 Case No.: 09-17092 Type of Business: The Debtor operates a real estate business. Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Debtor's Counsel: Thomas G. Luikens, Esq. Ayers & Brown, P.C. 4227 N. 32nd St., 1st Fl. Phoenix, AZ 85018-4757 Tel: (602) 468-5700 Email: thomas.luikens@azbar.org Total Assets: $20,332,320 Total Debts: $15,611,702 The petition was signed by John Witt, the company's member. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Biltmore Holdings Penalty/ies and $2,000,000 Financial LLC default interest 2555 E. Camelback Road Suite 180 Phoenix, AZ 85016 Christopher Luciano Monies loaded for $150,000 Investment DFD Architecture, Inc. Property development $93,141 dba Davis services c/o Mariscal Weeks McIntyre Friedlander Maricopa County Treasurer 2008 Property $36,193 taxes Site Consultants, Inc. $28,321 David Cisiewski PLLC $12,349 Larry Lazarus & Associates Re-zoning services $10,000 Lorena Steiner Ducar $5,000 Coughlin & Horowitz Maricopa County Treasurer 2008 Property $4,674 taxes Maricopa County Treasurer 2008 Property $3,602 Taxes Maricopa County Treasurer 2008 Property $2,517 taxes Maricopa County Treasurer 2008 Property $2,024 taxes Maricopa County Treasurer 2008 Property $1,990 taxes Maricopa County Treasurer 2008 Property $1,871 taxes Maricopa County Treasurer 2008 Property $1,810 taxes Maricopa County Treasurer 2008 Property $1,715 taxes Maricopa County Treasurer 2008 Property $1,633 taxes Maricopa County Treasurer 2008 Property $1,633 taxes Maricopa County Treasurer 2008 Property $1,531 taxes Maricopa County Treasurer 2008 Property $1,502 taxes WHITEHALL JEWELERS: Can Use Cash Collateral Until September 30 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has further extended Whitehall Jewelers Holdings, Inc., et al.'s use of the term lenders' cash collateral pursuant to the terms of the final DIP Financing Order, through and including September 30, 2009, in accordance with a budget. All other terms and provisions of the DIP Financing Order dated September 24, 2008 (including, without limitation, provisions in respect of (i) the Carve-Out, (ii) the payment of professional fees, and (iii) the grant of adequate protection to the term lenders in connection with the Debtors' use of cash collateral) will remain in full force and effect. The Court also authorized and directed the Debtors to make a distribution to PWJ Lending II LLC, as agent for the term lenders, in the amount of $1,200,000 from cash on hand. About Whitehall Jewelers Headquartered in Chicago, Illinois, Whitehall Jewelers Holdings, Inc. -- http://www.whitehalljewellers.com/-- owns and operates 375 stores jewelry stores in 39 states. Whitehall is owned by hedge funds Prentice Capital Management and Millennium Partners LP, both of New York, and Holtzman Opportunity Fund LP of Wilkes- Barre, Pa. The company operates stores in regional and regional shopping malls under the names Whitehall and Lundstrom. The Debtors' retail stores operate under the names Whitehall (271 locations), Lundstrom (24 locations), Friedman's (56 locations, and Crescent (22 locations). As of June 23, 2008, the Debtors have about 2,852 workers. The company and its affiliate, Whitehall Jewelers Inc., filed for Chapter 11 protection on June 23, 2008 (Bankr. D. Del. Lead Case No. 08-11261). James E. O'Neill, Esq., Kathleen P. Makowski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, and Scott K. Rutsky, Esq., at Proskauer Rose LLP, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as their claims, noticing and balloting agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Moses & Singer LLP and Bayard, P.A., represent the Committee. WHITEHALL JEWELERS: Wants Plan Filing Period Extended to Oct. 20 ---------------------------------------------------------------- Whitehal Jewelers Holdings, Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to file a plan and solicit acceptances thereof to October 20, 2009, and December 22, 2009, respectively. This is the fourth request for the extension of the Debtors' exclusive periods. The Debtors tell the Court they require a further extension in order to continue wind-down efforts, including the pursuit of remaining estate assets (in particular, the collection on preference claims) and the reconciliation and settlement of administrative claims for the benefit of their creditors and estates. The Debtors relate that discussions are ongoing with PWJ Lending II, LLC, the agent for the prepetition lenders, and the official committee regarding a plan construct that, notwithstanding the terms of the global settlement, would provide an opportunity for unsecured creditors to realize some recovery. About Whitehall Jewelers Headquartered in Chicago, Illinois, Whitehall Jewelers Holdings, Inc. -- http://www.whitehalljewellers.com/-- owns and operates 375 stores jewelry stores in 39 states. Whitehall is owned by hedge funds Prentice Capital Management and Millennium Partners LP, both of New York, and Holtzman Opportunity Fund LP of Wilkes- Barre, Pa. The company operates stores in regional and regional shopping malls under the names Whitehall and Lundstrom. The Debtors' retail stores operate under the names Whitehall (271 locations), Lundstrom (24 locations), Friedman's (56 locations, and Crescent (22 locations). As of June 23, 2008, the Debtors have about 2,852 workers. The company and its affiliate, Whitehall Jewelers Inc., filed for Chapter 11 protection on June 23, 2008 (Bankr. D. Del. Lead Case No. 08-11261). James E. O'Neill, Esq., Kathleen P. Makowski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, and Scott K. Rutsky, Esq., at Proskauer Rose LLP, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as their claims, noticing and balloting agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Moses & Singer LLP and Bayard, P.A., represent the Committee. WILD WINGS OVER: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Wild Wings Over Tampa Bay, LLC dba Wild Wings Cafe 13176 N. Dale Mabry Hwy #126 Tampa, FL 33634 Bankruptcy Case No.: 09-15745 Chapter 11 Petition Date: July 22, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Judge: Caryl E. Delano Debtor's Counsel: J Buddy D. Ford, Esq. 115 N. MacDill Avenue Tampa, FL 33609-1521 Tel: (813) 877-4669 Fax: (813) 877-5543 Email: Buddy@tampaesq.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by J. Stanley Ross, managing member of the Company. WJL EQUITIES: Wants Access to Cash Collateral for KeyBank's Loan ---------------------------------------------------------------- WJL Equities Corporation asks the U.S. Bankruptcy Court for the Southern District of New York for authority to: -- use cash securing repayment of loans from prepetition lenders; and -- grant adequate protection to the prepetition lenders. KeyBank, National Association, the Debtor's primary secured lender, alleges that as of June 2, 2009, it is owed $1,770,278 under a note. Colonial Surety Company is also owed $1,500,000. As adequate protection for any diminution in value of their collateral, the lenders will be granted replacement liens. The Debtor also proposes to pay KeyBank $7,500 per month as adequate protection for Keybank's interest in the collateral. Eastchester, New York-based WJL Equities Corporation fka Wjl Trucking & Paving Corp. operates a Highway/Street Construction Local Trucking corporation. The Company filed for Chapter 11 on July 14, 2009 (Bankr. S. D. N.Y. Case No. 09-23248). Arlene Gordon-Oliver, Esq., at Rattet, Pasternak & Gordon-Oliver, LLP, represents the Debtor in its restructuring efforts. The Debtor said its assets and debts both range from $10,000,001 to $50,000,000. WR GRACE: June 30 Balance Sheet Upside-Down by $351.7 Million ------------------------------------------------------------- W. R. Grace & Co. reported financial results for the second quarter ended June 30, 2009. Highlights are: -- Sales for the second quarter were $711.0 million compared with $900.0 million in the prior year quarter, a 21.0% decrease (13.4% before the effects of currency translation). The sales decrease was attributable primarily to lower sales volumes and unfavorable currency translation. Sales were down 19.7% in North America, 25.4% in Europe, and 24.6% in Asia and up 10.9% in Latin America. Sales in the second quarter of 2009 were up 4.2% compared with sales in the first quarter of 2009. Excluding sales of hydroprocessing catalysts, which are subject to uneven order patterns, sales in the second quarter were up 12.7% compared with sales calculated on the same basis for the first quarter of 2009. -- Gross profit percentage for the second quarter was 33.8% compared with 30.6% in the prior year quarter and 24.7% in the first quarter of 2009. The improvement in gross profit percentage is attributable to price increases implemented primarily in the second half of 2008, the decrease in raw materials and energy costs since their peak in the fourth quarter of 2008, and lower factory overhead expenses resulting primarily from restructuring activities. -- Net income attributable to Grace (Grace net income) for the second quarter was $19.3 million, or $0.26 per diluted share, compared with $32.1 million, or $0.44 per diluted share, in the prior year quarter, a 39.9% decrease. The 2009 and 2008 results were negatively affected by Chapter 11 expenses, litigation and other matters not related to core operations. Excluding Chapter 11 expenses, the loss on noncore activities, and their tax effects, Grace net income would have been $41.7 million for the second quarter of 2009 compared with $57.5 million calculated on the same basis for the prior year quarter, a 27.5% decrease. -- Pre-tax income from core operations (Core EBIT) was $74.4 million in the second quarter compared with $101.8 million in the prior year quarter, a 26.9% decrease. Core EBIT was up $77.8 million over the first quarter of 2009, primarily due to a 9.1 point increase in gross profit percentage. This improvement in gross profit percentage is attributable to lower raw material costs and lower factory overhead expenses, primarily due to restructuring activities. -- Sales for the six months ended June 30, 2009 were $1.39 billion compared with $1.66 billion for the prior year period, a 16.0% decrease (9.1% before the effects of currency translation). Grace net loss for the six months ended June 30, 2009 was $19.6 million, or $0.27 per diluted share, compared with Grace net income of $49.8 million, or $0.69 per diluted share for the prior year period. Excluding Chapter 11 expenses, the loss on noncore activities, and their tax effects, Grace net income would have been $33.8 million for the six months ended June 30, 2009 compared with $92.8 million calculated on the same basis for the prior year period, a 63.6% decrease. Core EBIT was $71.0 million for the six months ended June 30, 2009, down 58.2% from the prior year period. -- Operating free cash flow was $147.0 million for the six months ended June 30, 2009 compared with $65.9 million in the prior year period, a 123.1% increase. The increase in operating free cash flow was attributable primarily to improvements in working capital and lower capital expenditures, partially offset by the impact of lower Core EBIT. Net cash provided by operating activities was $118.6 million in the six months ended June 30, 2009 compared to net cash used for operating activities of $85.9 million in the prior year period. At June 30, 2009, Grace had $3.81 billion in total assets and $4.16 billion in total liabilities, resulting in $351.7 million in shareholders' deficit. "We continue to experience dynamic and challenging economic conditions. We have seen some increase in customer demand but we remain cautious in our outlook," said Fred Festa, Grace's Chairman, President and Chief Executive Officer. "We are working with our customers to develop innovative new products and are taking other actions important to position our business for the future. These actions are reflected in our improving margins and stronger cash flow." Pension & Restructuring Expenses Grace implemented further cost reduction and restructuring actions in its operating segments and corporate functions during the second quarter, and recorded a pre-tax restructuring charge of $5.9 million related to these actions. In addition, Grace has contracted with IBM to manage a portion of its information technology activities with the goals of improving the scalability of its IT resources and accelerating the implementation of innovations that drive business productivity. Transition costs of $1.1 million related to this contract were recorded in selling, general and administrative expenses in the second quarter. Grace said pension expense related to core operations for the second quarter was $16.0 million compared with $11.1 million for the prior year quarter, a 44.1% increase. Pension expense for the six months ended June 30, 2009 was $34.1 million compared with $22.7 million in the prior year period, an increase of 50.2%. The increase in costs is primarily attributable to the decline in plan asset values in 2008. Grace recognized expenses of $7.0 million, including $5.9 million of restructuring expenses and $1.1 million of IT transition costs recorded in selling, general and administrative expenses, for severance and other costs related to cost reduction and restructuring programs implemented during the second quarter. Grace expects these actions, together with cost reduction and restructuring actions completed in 2008 and the first quarter of 2009, to produce over $50 million of annualized cost savings by 2010, of which approximately $35 million are expected to be realized in operating expenses and approximately $15 million are expected to be realized in cost of goods sold. 5,900 Employees to Lose Jobs by Year-End 2009 Grace expects to reduce total employment to roughly 5,900 employees by year-end 2009. Grace expects to recognize an additional $3.8 million of expense in the third quarter, including $2.2 million of restructuring expenses and $1.6 million of selling, general and administrative expenses, related to cost reduction and restructuring actions initiated in the second quarter. Expenses of $5.2 million related to the 2008 reduction in force were recorded in selling, general and administrative expenses in the second quarter of 2008 and have been reclassified to restructuring expenses to be consistent with the current presentation. Montana Trial Expenses at $10.1 Mil. Noncore activities (as reflected in the consolidated analysis of continuing operations) include events and transactions not directly related to the generation of operating revenue or the support of core operations. The pre-tax loss from noncore activities was $21.3 million in the second quarter compared with a loss of $13.1 million in the prior year quarter, and $61.2 million for the six months ended June 30, 2009 compared with $13.3 million in the prior year period. The increase in the noncore loss is primarily attributable to higher legal spending and a net difference between the change in value of non-U.S. dollar intercompany loans and the change in value of the associated currency hedge contracts. Legal spending was significantly affected by defense costs for the criminal proceeding relating to Grace's former operations in Montana. In May 2009, a Montana jury unanimously acquitted Grace and three former employees on all counts; charges against three other former employees were dismissed. Grace recorded legal expenses related to the trial in the amount of $10.1 million in selling, general and administrative expenses in the second quarter. Expenses related to the Chapter 11 proceedings, net of filing entity interest income, were $8.0 million in the second quarter compared with $18.0 million in the prior year quarter. Cash Flow and Liquidity Grace's net cash provided by operating activities for the six months ended June 30, 2009 was $118.6 million compared with $85.9 million used for operating activities for the prior year period. Capital expenditures for the six months ended June 30, 2009 were $36.5 million compared with $58.7 million for the prior year period, a 37.8% decrease. At June 30, 2009, Grace had available liquidity of approximately $799.9 million, consisting of $607.7 million in cash and cash equivalents, $14.2 million in short-term investment securities, approximately $76.7 million of available credit under various non- U.S. credit facilities and approximately $101.3 million of available credit under its $165.0 million debtor-in-possession facility. Grace believes that these sources and amounts of liquidity and cash flow from operations are sufficient to support its business operations, strategic initiatives and Chapter 11 proceedings until a plan of reorganization is confirmed and Grace emerges from bankruptcy. Grace is seeking new financing of approximately $950 million to fund the Plan, and is in advanced discussions with potential lenders regarding the terms of such financing. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. As reported by the Troubled Company Reporter on March 11, 2009, the Bankruptcy Court approved the disclosure statement explaining the First Amended Chapter 11 Joint Plan of Reorganization filed by W.R. Grace and its debtor affiliates, the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, and authorized Grace to begin soliciting plan votes. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Parties entitled to vote on the Plan must file objections to Plan confirmation, if any, no later than 4:00 p.m. Eastern time on May 20, 2009. Supplements to the Plan may be filed until May 10. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) * Bankrupt Corporate Asset Sales/Divestitures Jump by 55% --------------------------------------------------------- According to The Deal Pipeline's M&A Database, the number of corporations that have acquired or been approved to buy assets from a bankrupt seller has jumped by 55% on the same period last year. In tough times, a corporate dealmaker's margin for error is smaller, The Deal says. Effective due diligence becomes even more imperative, it adds. * FTI Appoints Khemlani and Vallerie to Finance/Restructuring Unit ------------------------------------------------------------------ FTI Consulting, Inc., appointed two senior managing directors to its Corporate Finance/Restructuring segment; Sanjeev Khemlani and James Vallerie. "In today's complex business environment, companies, boards, private equity sponsors, credit constituencies and other parties- in-interest need best in class counsel to navigate the multitude of challenges they face," said Dominic DiNapoli, FTI's Executive Vice President and Chief Operating Officer. "The addition of Jim and Sanjeev helps FTI strengthen its position as one of the preeminent restructuring practices in the world." Sanjeev Khemlani has over 15 years of experience working in the global credit markets. Mr. Khemlani has served as both an advisor and a principal investor in areas as diverse as special situations, restructuring, and mezzanine debt. Mr. Khemlani's expertise is global in nature, having worked on deals and investments ranging from North American special situations to restructuring in Asia. Mr. Khemlani most recently was a Managing Director at The Blackstone Group's GSO Capital Partners, where he was a senior member of the Asia Pacific group. During his time at Blackstone, Mr. Khemlani co-founded GSO Partners' Hong Kong office, with an aim to make investments in senior, mezzanine and distressed debt in the Asia Pacific region. Mr. Khemlani was actively involved in GSO's debt investments in Asia, analyzing over 65 potential credit investment opportunities covering a wide range of situations. Mr. Khemlani previously was at Credit Suisse and JPMorgan Chase. At Credit Suisse, Mr. Khemlani was the Head of Leveraged Finance Credit for the Asia Pacific region, where he was tasked with ensuring that complex credit transactions were correctly priced, structured and distributed. At JPMorgan Chase, where Mr. Khemlani started his career, he rose to the rank of Managing Director in the Special Credits Group and Managing Partner of the Special Situations Investing group. He was responsible for representing JPMorgan Chase on official creditors committees when clients filed for bankruptcy and he served on numerous ad-hoc creditor committees for out of court restructuring matters. In addition, he was the co-founder of Special Situations Investing, JPMorgan's proprietary North American distressed investment fund, which had an initial funding of $200 million, and oversaw the investing of this fund in secondary, bridge and rescue financing situations. Jim Vallerie brings over 10 years of experience in bankruptcy and turnaround to FTI and will be the leader of FTI's Debtor Administration Services/Claims Management practice. Mr. Vallerie has experience in both hands-on restructuring and the technological support needed to effectively manage these cases. Mr. Vallerie most recently served as a Principal in Deloitte's Analytic and Forensic Technology practice. Mr. Vallerie was responsible for the founding of a debtor administration practice and its establishment as a leader in the field. While at Deloitte, Mr. Vallerie also was responsible for building several proprietary bankruptcy administration applications, including a claims system and contract management system. Prior to his time at Deloitte, Mr. Vallerie served as part of the PricewaterhouseCoopers' Business Recovery Services (BRS) segment, which was merged into FTI's Corporate Finance segment in September of 2002. At BRS, Mr. Vallerie led several large bankruptcy cases, with work including claims management, contingency planning, and contract management. He also oversaw the development of several custom applications for data gathering and management in bankruptcy cases, and was a key member of sales teams that brought in new business. Mr. Vallerie is joining the Dallas office of the Corporate Finance/Restructuring segment. * BOOK REVIEW: Strategies for Investing in Intellectual Property - Intangible Valuations, Real Returns ------------------------------------------------------------------ Author: David S. Ruder Publisher: Beard Books Softcover: 169 pages List Price: $79.95 by Henry Berry In this age of the Internet, information technology, and the interconnectedness of the world's economies through globalization, intellectual property has grown increasingly valuable. The author, David Ruder, says it best: "whether in the form of trademark rights, patent portfolios, proprietary trade secrets, or other contractual licenses and rights, businesses are increasingly relying on their intellectual property assets for competitive edge -- and investors have taken notice." There are many kinds of intellectual property, but they all differ in important ways from tangible assets such as machinery and from other investments such as stocks or bonds. Ruder stresses, though, that an investor should not regard intellectual property as less valuable than other specialized types of investments. Ruder also advises that while "intellectual property assets are as complex as the business world in general, to lump intellectual property together as a single asset is to misunderstand the strategic role it actually plays for businesses." The value of intellectual property can vary widely: from nearly worthless to being the foundation of a company. Routine in-house business reports are examples of the former; licensing agreements for a comic-book character or a popular line of clothing exemplify the latter. In any event, the value of intellectual property should not be underestimated. The reason technological and pharmaceutical companies are favorites of knowledgeable investors is because of the intellectual property of patents on drugs and proprietary research. Microsoft and Intel are two companies whose intellectual property assets have enabled them to maintain their competitive advantage. Martha Stewart and Disney are two other companies whose success is largely a result of their intellectual properties. The key to investing in intellectual property is to understand its current and potential value, not only with respect to the company that owns or controls it, but also with respect to the overall market and social environment. Ruder tells the reader how to do this. The book begins by surveying the different kinds of intellectual properties such as trademarks and copyrights. While intellectual properties can offer favorable investment opportunities, Ruder warns that it is an illiquid property and that, unlike stocks, bonds, gold, natural resources, and other traditional investments, its monetary value is not widely agreed upon nor is it founded on something tangible such as underlying assets or a financial track record. Because of this, "[monetizing intellectual property assets is not necessarily straightforward or intuitive, and traditional investment approaches are insufficient." Nonetheless, as with traditional investments, there are strategies to minimize risk and maximize profit of intellectual property. Primary investment strategies discussed in this book are equity, arbitrage, and securitization. Ruder explains how these strategies can be applied to intellectual properties and how they can be modified to best take advantage of a particular characteristic of the property. Analytical tools are supplied as applicable. David S. Ruder comes to intellectual property from a background in investment banking, law, and entrepreneurialism. His most recent venture is the private investment firm Terrier IP Investments, which focuses on intellectual property-based investment in firms backed by private equity and venture capital. ********* 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. Danilo Munnoz, 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 **