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/raid1/www/Hosts/bankrupt/TCR_Public/090731.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 31, 2009, Vol. 13, No. 210 Headlines 460 TENNESSEE: Voluntary Chapter 11 Case Summary ABITIBI-CONSOLIDATED: S&P Changes Recovery Ratings on Debt ALBERT GENE PIZZO: Case Summary & 9 Largest Unsecured Creditors ADVANCED ENVIRONMENTAL: Capital Deficit Raises Going Concern Doubt AMBAC ASSURANCE: Loss Reserve Increase Cues Moody's Junk Rating AMBAC ASSURANCE: S&P Keeps Developing Watch on San Antonio Bonds ANN TAYLOR: Cuts 10% of Workforce to Improve Profitability APOLLO CASUALTY CO.: AM Best Assigns 'C++' Financial Strength ARCLIN CANADA: Moody's Downgrades Corporate Family Rating to 'Ca' ARCLIN CANADA: S&P Downgrades Corporate Credit Rating to 'D' ARCLIN US: Secures Court Approval of First Day Motions ARCLIN US: Critical Vendor Motion Muddles Sec. 503(b)(9) Provision ASCOT PARTNERS: Madoff Judge Freezes Remaining $10MM in Funds ASCENDANT UTAH: Files Chapter 11 in Nevada ASSOCIATED BANC-CORP: Fitch Cuts Preferred Stock Rating to 'BB+' ATLAS MINING: Independent Auditor Raises Going Concern Doubt BANK OF AMERICA: Merrill Names Executives for Canada Banking Team BERNARD MADOFF: $3.2BB in Claims Allowed, $283-Mil. Paid by SIPC BERNARD MADOFF: NY Court Freezes Remaining $10MM in Ascot Funds BERNARD MADOFF: Court Approves Sale of Interests in Private Jet BIG 10 TIRES: Court Sets Sept. 21 Bar Date for Proofs of Claim BOB'S AUTOMOTIVE: Voluntary Chapter 11 Case Summary BRUNO'S SUPERMARKETS: Panel May Employ Bracewell as Co-Counsel CAPITAL CORP: Now Hiring Bingham as Non-Bankruptcy Counsel CARABEL EXPORT: Sells Assets to Continental Tiles for $6,650,000 CIRCUIT CITY: To Auction Off Los Angeles and San Jose Locations CITIGROUP INC: S&P Downgrades Ratings on Preferred Issues to 'C' CONSECO INC: Expects to Report at Least $15.8MM Q2 Net Income CIRCUIT CITY: Bids for Intellectual Property Assets Due August 11 CITIGROUP INC: Securities Exchange A Success; $20.3-Bil. Tendered CITIGROUP INC: To Sell Ownership Interest in Nikko AM to Sumitomo COAL FINANCING: Wants Schedules Filing Extended until August 13 COAL FINANCING: Section 341(a) Meeting Scheduled for August 19 COUNTERPATH CORP: BDO Dunwoody Raises Going Concern Doubt CREATIVE LOAFING: Court to Rule on Atalaya Credit Bid on Aug. 25 CREATIVE LOAFING: President Willing to Step Down to Foil Atalaya CRUCIBLE MATERIALS: Court Sets September 30 as Claims Bar Date CRUCIBLE MATERIALS: Reaches Settlement with BofA on Assets Release DANIEL BERNHARDT: Case Summary & 13 Largest Unsecured Creditors DEBIASSE ENTREPRENEURS: Voluntary Chapter 11 Case Summary DELPHI CORP: Court Confirms Plan; Expects Closing This Quarter DELPHI CORP: Creditors May Resell Assets, Says Analyst DELPHI CORP: Wants to Stay Retirees' Suit DELPHI CORP: Obtains Approval of Modifications to D&O Deals DELTA AIR LINES: Divulges Plans to Mitigate Impact of Recession DELTA AIR LINES: Seeks to Resolve Seniority, Representation Issues DELTA AIR LINES: Suggests Govt. Control of Speculative Oil Trades DOMINGO MORALES: Case Summary & 11 Largest Unsecured Creditors EDWARD MICHAEL BOBOLA: Voluntary Chapter 11 Case Summary ENERGY PARTNERS: Plan Gets Overwhelming Support from Noteholders EVERETT MARITIME: Port of Everett Seeks Transfer of Venue FIFTH AVENUE EXCAVATING: Case Summary & 6 Largest Unsec. Creditors FLEETWOOD RETAIL: Case Summary 50 Largest Unsecured Creditors FLYING J: Seeks Court Nod to Borrow $100 Million from Pilot Travel FONTAINEBLEAU: Wants Use of Cash Collateral Until Aug. 31 FONTAINEBLEAU: Proposes Sept. 15 as Lien Claims Bar Date FONTAINEBLEAU: Amended List of 20 Largest Unsec. Creditors FOOTHILLS TEXAS: Judge Sontchi Denies Two VP Retention Payments FOREST CITY: Moody's Downgrades Ratings on Senior Debt to 'B3' FRONTIER AIRLINES: Southwest Presents $113.6MM Non-Binding Offer FULTON-HARRISON: Case Summary & 15 Largest Unsecured Creditors G&D PROPERTIES: Case Summary & 3 Largest Unsecured Creditors GARY ARD: Case Summary & 20 Largest Unsecured Creditors GENERAL GROWTH: Gets More Time to File Bankruptcy Exit Plan GENERAL MOTORS: Debtors Further Amend DIP Facility Terms GENERAL MOTORS: New GM Seeks $10 Bil. Financing From Energy Dept. GENERAL MOTORS: Debtors to File Schedules September 29 GENERAL MOTORS: Obligations to Delphi Pensions Were Met GENERAL MOTORS: Application to Hire Jones Day as Counsel GENERAL MOTORS: Application to Hire Baker as Counsel GENERAL MOTORS: Application to Employ Lowe Fell as Legal Counsel GENERAL MOTORS: Employs LFR, Brownfield & Claro GEORGIA GULF: Fitch Upgrades Issuer Default Rating to 'B-' GLOUCESTER HOLDING: Case Summary 7 Largest Unsecured Creditors GRABOW PROPERTIES: Case Summary & 20 Largest Unsecured Creditors GRAIN DEALERS MUTUAL: AM Best Rates Financial Strength at "B" HARTMARX CORP: In Dispute With Buyers, Sale Could Fall Off HCA INC: Fitch Assigns 'BB/RR1' Rating on $750 Mil. Notes HCA INC: S&P Assigns 'BB' Rating on $750 Million Senior Notes HARTMARX CORP: CEO Homi Patel to Leave Company After 30 Years HAWAIIAN TELCOM: Should Name Exit Lender, Says U.S. Trustee HELSEL LUMBER: Case Summary & 20 Largest Unsecured Creditors HILLMAN COMPANIES: Moody's Assigns 'Ba2' Ratings on Loan Tranches HILLMAN GROUP: S&P Puts 'B-' Corp. Rating on CreditWatch Positive HORIZON LINES: S&P Downgrades Corporate Credit Rating to 'B' IMPEL INC: Case Summary & 20 Largest Unsecured Creditors INDALEX HOLDINGS: DOJ Wants NC Plant Divested Under Sapa Deal JAMES STEPHENS: Taps Law Offices of Goodman as Counsel JAMES STEPHENS: Wants Schedules Filing Extended Until August 13 JAMES STEPHENS: Wants to Sell Milwaukee Property for $390,000 JEFFERY ROOT: Case Summary & 7 Largest Unsecured Creditors JOE GIBSON: Customers Want Zurich to Promptly Comply with Deal LAKE AT LAS VEGAS: Completes Repair of Two Pipelines LAKE AT LAS VEGAS: Creditors Sue Credit Suisse Over Loans LAKE BURTON: U.S. Trustee Sets Meeting of Creditors for August 12 LAKE BURTON: U.S. Trustee Sets Meeting of Creditors for August 12 LOCAL TV: Moody's Downgrades Corporate Family Rating to 'Caa2' LOU PEARLMAN: Backstreet Boys Member Opposes Return of Payouts MCJUNKIN RED: Moody's Cuts Ratings on $900 Million Loan to 'Ba1' MERITAGE HOMES: Loan Termination Won't Affect S&P's 'B+' Rating MARK IV: Court Approves Plan Outline; Ballots Due Sept. 15 MERLIE MESAR: Case Summary & 20 Largest Unsecured Creditors MICHAEL LEE BJORKMAN: Case Summary & 15 Largest Unsec. Creditors MTR GAMING: S&P Affirms Corporate Credit Rating at 'B-' NATIONAL CENTURY: Poulsen Gets 30 Years; Parrett 25 Years NATIONAL CENTURY: Hampton-Stein Sues for Conspiracy, Fraud NATIONAL CENTURY: Trustee Counters With Own Suit vs. Hampton-Stein NORTEL NETWORKS: Reaches Settlement with Testing House Mexico NORTEL NETWORKS: Settles Claims with First Communications NORTEL NETWORKS: Court Approves Crossroads Settlement NORTEL NETWORKS: Disability Benefits For Employees May Be Cut Off NORWOOD PROMOTIONAL: To Assign Art Licensing Contracts to Bic NORWOOD PROMOTIONAL: Wants Plan Filing Deadline Moved to Dec. 1 OPUS EAST: Can Continue Operations Through January 2010 OPUS WEST: Court Approves Cash Collateral Use on Final Basis OPUS WEST: Court Okays Auction for Properties, 44 SPEs OPUS WEST: Court Approves Auction for Interests in Arborwest OPUS WEST: Creditors Committee Down to Three Members PACIFIC NORTHSTAR: Files for Protection in California PLIANT CORP: Lenders Block Vote on Apollo's Chapter 11 Plan POLAROID CORP: Can Employ Bingham McCutchen as Tax Counsel POLAROID CORP: Can Sell ID Business to PCID for $1.3 Million POLAROID CORP: Can Use Cash of $1.4 Million Until August 30 PQ CORP: S&P Changes Outlook to Negative; Affirms 'B' Rating PROSPECT MEDICAL: S&P Raises Counterparty Credit Rating to 'B' PROTOSTAR LTD: Contract Dispute Leads to Chapter 11 Filing PROTOSTAR LTD: Case Summary & 19 Largest Unsecured Creditors R-C BUSINESS TRUST: Case Summary & 10 Largest Unsecured Creditors RAINBOW 215: Files for Chapter 11 Protection in Nevada RATHGIBSON INC: Files Schedules of Assets and Liabilities REFCO LLC: Ex-Lawyer Joseph Collins Found Guilty of Fraud REFCO LLC: Lead Plaintiffs Appeal Ruling in Securities Class Suit REFCO LLC: Litigation Trustee Sues Euro Brokers R.H. DONNELLEY: Files Plan and Disclosure Statement RITZ CAMERA: Shuts Down East Valley Stores SANFORD HARVEY SCHATZ: Case Summary & 4 Largest Unsec. Creditors SARATOGA RESOURCES: Unveils Results of Mid-Year Reserve Audit SB PARTNERS: Posts $6.1 Million Net Loss in Quarter Ended March 31 SPECTRUM BRANDS: Gets Court Nod for $1.3MM Sale of Orville Assets SPECTRUM BRANDS: Gets Court Nod to Pay Workers Assisting Shutdowns SPRINT NEXTEL: Posts $384 Million Net Loss in Second Quarter 2009 SPRINT NEXTEL: Virgin Mobile Deal Won't Affect S&P's 'BB' Rating SRH/CMS STERLING: Potomac Realty to Sell Collateral on August 25 STAR TRIBUNE: Wins Approval of Plan Disclosure Statement STATION CASINOS: Negotiations Fail to Bring Prepackaged Plan STATION CASINOS: To File Schedules & Statements Sept. 26 STATION CASINOS: Chapter 11 Filing Cues Moody's Rating Cut to 'D' STATION CASINOS: S&P Cuts Ratings on $900 Mil. Facilities to 'D' SUCCESSOR BORROWER: Case Summary & 20 Largest Unsecured Creditors SUNESIS PHARMA: Posts $21MM Net Loss in Six Months Ended June 30 SUSAN SLACHTA: Case Summary & 4 Largest Unsecured Creditors TEREX CORP: S&P Assigns 'BB+' Rating on $66 Mil. Incremental Loan TENNECO INC: Reports $33MM Net Loss in Q2, $290MM Deficit TUSCANY RESERVE: Can Hire Heller Draper as Counsel TUSCANY RESERVE: US Trustee Sets Meeting of Creditors for Aug. 14 TWO SPRINGS: Government's Alter Ego Claims Fail USEC INC: S&P Puts 'B-' Corp. Rating on CreditWatch Negative USG CORPORATION: Fitch Corrects Ratings; Assigns 'BB/RR1' Rating VISTEON CORP: Cash Collateral Use Authorized Until Aug. 14 VISTEON CORP: To Pay More for LERA & Maquiladora Programs VISTEON CORP: To Enter Into Indemnity Agreement with Travelers VISTEON CORP: Gets Nod Severance & Retention Programs on 2nd Try VOUGHT AIRCRAFT: Boeing Completes Acquisition of SC Operations VSS ENTERPRISE: Court Says Managers Can be Liable for Unpaid Wages WENTWORTH HILLS: Secured Party to Sell Collateral on August 25 XERIUM TECHNOLOGIES: Likely Breach Cues S&P to Junk Ratings YOUNG BROADCASTING: Court OKs Gray to Manage 7 TV Stations * PBGC Pulls Deals With BlackRock, Goldman After Bidding Probed * U.S. Properties Worth $2.2 Trillion at Default Risk * Edward Albert Joins Macquarie Capital as Managing Director * Michael McMahon Joins Houlihan Lokey as Managing Director * Three Former JPM Bankers Form Restructuring Firm CoveView * BOOK REVIEW: Rupert Murdoch: Creator of a Worldwide Empire ********* 460 TENNESSEE: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: 460 Tennessee Street, LLC 429 N. Main Street Memphis, TN 38103 Bankruptcy Case No.: 09-28169 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court Western District of Tennessee (Memphis) Debtor's Counsel: Eugene G. Douglass, Esq. 2820 Summer Oaks Drive Bartlett, TN 38134 Tel: (901) 388-5804 Fax: (901) 372-8264 Email: egdouglass@bellsouth.net Total Assets: $4,001,000 Total Debts: $3,251,806 The Company says it does not have unsecured creditors who are non insiders when it filed its petition. The petition was signed by Robert G. Williams, chief manager of the Company. ABITIBI-CONSOLIDATED: S&P Changes Recovery Ratings on Debt ---------------------------------------------------------- Standard & Poor's Ratings Services said it revised its recovery ratings on Abitibi-Consolidated Inc.'s (D/--/--) and Abitibi- Consolidated Co. of Canada's senior unsecured debt to '6' from '5'. The '6' recovery rating indicates S&P's expectation of negligible (0%-10%) recovery for debtholders at emergence from bankruptcy. The '1' recovery rating on ACCC's senior secured notes and secured 364-day loan is unchanged, indicating S&P's expectation of very high (90%-100%) recovery at emergence from bankruptcy. The long-term corporate credit rating on ACI and the issue-level ratings on ACI's and ACCC's senior secured and unsecured debt are unchanged at 'D'. The subsidiaries of AbitibiBowater Inc. (D/--/--) that comprise the business conducted by ACI and Bowater Inc. (D/--/--) have filed for protection under either Chapter 11 or Chapter 15 of the United States Code, or the Companies' Creditors Arrangements Act in Canada. According to the bankruptcy filings, the Abitibi entities have obtained their own debtor-in-possession financing in the form of a US$270 million accounts receivable securitization and a US$90 million term loan. Under the terms of the governing documents, neither AbitibiBowater, nor Bowater, nor any subsidiary of Bowater is an obligor under the Abitibi DIP financing. Similarly, none of the Abitibi entities is an obligor under the Bowater DIP facilities. "We believe reorganization and emergence, or a sale of the company as a going concern, is the more likely outcome for the Abitibi entities, and so S&P's recovery ratings reflect its valuation of the group on a going-concern basis," said Standard & Poor's credit analyst Jatinder Mall. Although, in Standard & Poor's view, the fundamentals for the North American paper industry are weak because of electronic substitution, and demand, especially for newsprint, is in a secular decline, S&P believes that the Abitibi entities' emergence is supported by their leading market position in newsprint and specialty papers in North America. That said, S&P believes the Abitibi entities face various challenges and risks in their efforts to reorganize (including potential difficulties surrounding the availability of "exit" financing) that could ultimately prove insurmountable. S&P believes the Abitibi entities' prospects for reorganization could be impaired if they are unable to improve gross and operating margins, and EBITDA remains at or below current levels. In S&P's view, it is questionable whether the Abitibi entities' going-concern value on the basis of current operating metrics would necessarily exceed their liquidation value. ALBERT GENE PIZZO: Case Summary & 9 Largest Unsecured Creditors --------------------------------------------------------------- Joint Debtors: Albert Gene Pizzo Joan Elnora Pizzo 2227 Francisco Drive Newport Beach, CA 92660 Bankruptcy Case No.: 09-17676 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court Central District of California (Santa Ana) Debtors' Counsel: Jerome S. Cohen, Esq. 3731 Wilshire Blvd, Suite 514 Los Angeles, CA 90010 Tel: (213) 388-8188 Fax: (213) 388-6188 Email: jsc@jscbklaw.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 9 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-17676.pdf The petition was signed by the Joint Debtors. ADVANCED ENVIRONMENTAL: Capital Deficit Raises Going Concern Doubt ------------------------------------------------------------------ For six months ended June 30, 2009, Advanced Environmental Recycling Technologies, Inc., posted a net loss of $287,000 compared with a net loss of $9.1 million for the same period in the previous year. The Company recorded a net income of $1.3 million in the second quarter of 2009 compared to a net loss of $7.7 million in 2008. Advanced Environmental disclosed in its Form 10-Q submitted to the Securities and Exchange Commission that there is substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the support of its creditors, investors and customers, and its ability to successfully mass produce and market its products at economically feasible levels. At June 30, 2009, the Company's balance sheet showed total assets of $59.2 million and total liabilities of $63.6 million, resulting in a stockholders' deficit of $4.4 million. At June 30, 2009, the Company had a working capital deficit of $23.5 million and a stockholders' deficit of $4.4 million. The Company incurred losses from operations of $19.8 million and $8.8 million for the years ended December 31, 2008, and 2007. The Company says it has limited additional financial resources available to support its operations and has relied over the last year on extensions of certain of its financings by its lenders. The Company will require additional financial resources in order to fund maturities of debt and other obligations as they become due. A full-text copy of the Company's Form 10-Q id available for free at http://ResearchArchives.com/t/s?404f Based in Springdale, Arizona, Advanced Environmental Recycling Tech. (NASDAQ:AERT) -- http://www.aertinc.com/-- develops, manufactures and markets composite building materials that are used in place of traditional wood or plastic products for exterior applications in building and remodeling homes and for certain other industrial or commercial building purposes. AMBAC ASSURANCE: Loss Reserve Increase Cues Moody's Junk Rating --------------------------------------------------------------- Moody's Investors Service has downgraded to Caa2 from Ba3 the insurance financial strength ratings of Ambac Assurance Corporation and Ambac Assurance UK Limited. In the same rating action, Moody's also downgraded the credit ratings of Ambac Financial Group, Inc., lowering the rating of the senior unsecured debt to Ca from Caa1. The ratings outlook for Ambac is developing, and is negative for Ambac Financial. The rating action may have implications for certain transactions wrapped by Ambac as discussed later in this press release. Rationale for Ratings And Outlooks The rating action was prompted by Ambac's recently announced large loss reserve increase and credit impairment charge estimated for 2Q2009. These losses would reduce Ambac's regulatory capital to levels below the required minimum threshold, though the company has petitioned the Wisconsin insurance regulator to approve a reclassification of statutory contingency reserves to offset the capital depletion. With the risk of regulatory intervention now elevated, Moody's believes there will be increased pressure on Ambac's counterparties to commute outstanding exposures on terms that could imply a distressed exchange. For Ambac Financial, the greater regulatory risk further reduces the likelihood in Moody's view that the holding company will be able to access operating company resources over a reasonable timeframe to satisfy its obligations. This raises the risk of distressed exchanges of outstanding debt with moderate-to-high estimated severity due to the holding company's modest cash position and limited financial flexibility. The developing outlook for Ambac reflects the possibility of either positive or negative movement on Ambac's insurance financial strength ratings, depending on the performance of the insured portfolio and including any negotiated policy terminations over the next one to two years. The negative outlook for Ambac Financial reflects Moody's view that severity of loss on senior debt could be quite high, particularly if the company's performance deteriorates further. Treatment of Wrapped Transactions Moody's ratings on securities that are guaranteed or "wrapped" by a financial guarantor are generally maintained at a level equal to the higher of these: a) the rating of the guarantor (if rated at the investment grade level); or b) the published underlying rating (and for structured securities, the published or unpublished underlying rating). Moody's approach to rating wrapped transactions is outlined in Moody's special comment entitled "Assignment of Wrapped Ratings When Financial Guarantor Falls Below Investment Grade" (May, 2008); and Moody's November 10, 2008 announcement entitled "Moody's Modifies Approach to Rating Structured Finance Securities Wrapped by Financial Guarantors". In light of the downgrade of Ambac, Moody's will position the ratings of wrapped transactions or withdraw such ratings according to these criteria. For wrapped transactions whose ratings are withdrawn based on these criteria, if the rating of Ambac should subsequently move back into the investment grade range, or if the agency should subsequently publish the underlying rating, Moody's would reinstate the rating to the wrapped instruments. List Of Rating Actions These ratings have been downgraded: * Ambac Assurance Corporation -- insurance financial strength to Caa2 from Ba3; * Ambac Assurance UK Limited -- insurance financial strength to Caa2 from Ba3; * Ambac Financial Group, Inc. -- senior unsecured debt to Ca from Caa1, junior subordinated debt to C from Caa2 and provisional rating on preferred stock to (P)C from (P)Ca. The last rating action related to Ambac was on April 13, 2009, when Moody's downgraded Ambac's financial strength ratings to Ba3 and Ambac Financial's ratings (senior debt to Caa1). Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provide financial guarantees and financial services to clients in both the public and private sectors around the world. AMBAC ASSURANCE: S&P Keeps Developing Watch on San Antonio Bonds ---------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'BBB-' ratings on the San Antonio's $129.93 million revenue empowerment zone bonds series 2005A and $78.215 million taxable contract revenue bonds series 2005B, issued for the San Antonio Convention Center Hotel Finance Corp., remain on CreditWatch with developing implications. Developing means S&P may lower or raise the ratings. This update reflects the current rating on Ambac Assurance Corp. (CC/Developing/--). All of the ratings on the issues receive enhancement in the form of DSRF surety policies with Ambac. The CreditWatch listing reflects S&P's concerns about the project's ability to complete construction as projected by management and continue to operate under temporary certificates of occupancy that expire monthly. In addition, S&P is evaluating the creditworthiness of the city's backup pledge, to determine if S&P believes it is stronger than the pledge of the hotel net revenues. According to its project finance criteria, Standard & Poor's considers whether funds deposited in the DSRF, which are generally sized in the amount of at least 12-month debt service, are invested in securities rated equal to the project's rating or higher, and will be available to pay debt service in the event of a shortfall. Because Ambac is currently rated speculative grade, the creditworthiness of the DSRF supported by the surety policy is below the creditworthiness of the bonds. ANN TAYLOR: Cuts 10% of Workforce to Improve Profitability ---------------------------------------------------------- AnnTaylor Stores Corporation is expanding its restructuring initiatives and taking further actions to reduce the Company's cost structure and improve profitability. The actions build upon the Company's multi-year strategic restructuring program that was first announced in January 2008. The actions include, among other things, further right-sizing of the Company's corporate and divisional organization, changes to the Company's field staffing, expansion of the Company's strategic non-merchandise procurement initiative, and further optimization of the Company's real estate portfolio. Citing an AnnTaylor spokesperson, John Kell at The Wall Street Journal relates that the latest cuts included 160 headquarters and non-store positions that were active or open, about 10% of that work force. Based on the expanded program, the Company now expects to generate ongoing annualized savings totaling roughly $125 million over the three-year program period ending in fiscal 2010, compared to the $85 million to $95 million in savings previously anticipated. Approximately $40 million of these savings were generated in fiscal 2008, an incremental $60 million are expected to be realized in the current fiscal year, and the remainder is expected in fiscal 2010. Kay Krill, Ann Taylor President and Chief Executive Officer stated, "Since we began our strategic restructuring program in January 2008, our goal has been to build a more effective and efficient operational foundation that supports future growth and improved profitability over the long term. In light of the current environment, and encouraged by the process improvements and efficiencies we have achieved to-date, we have now identified additional opportunities to further reduce our SG&A cost structure, while improving our efficiency and profitability. These additional steps are expected to generate approximately $30 million in incremental annualized savings over our previous range. At the same time, we continue to be focused on delivering compelling product and exceptional value to our clients." Total pre-tax restructuring costs associated with the Company's multi-year program are now expected to be in the range of $130 million to $140 million, approximately $92 million of which have already been incurred. The costs include the $95-100 million previously anticipated under the program, plus incremental one- time costs of roughly $35 million to $40 million. Of the incremental costs, the majority of which are expected to be incurred in the second quarter of 2009, approximately $20 million to $25 million are expected to be non-cash costs related to the optimization of the Company's real estate portfolio and roughly $15 million are expected to be cash costs associated primarily with the further streamlining of the organization. Update on Second Quarter Expectations The Company has provided an update on its expectations for the second quarter period ending August 1, 2009. With respect to the second quarter ended August 1, 2009, the Company indicated that it expects to report sales of roughly $470 million. Comparable store sales for the second quarter 2009 will continue to reflect weakness, primarily at the Ann Taylor division. The Company anticipates its gross margin rate for the second quarter to be in line with the gross margin rate achieved in the second quarter of 2008, while selling, general and administrative expenses are expected to reflect a slight improvement versus the previous outlook of $245 million. As a result of stronger-than-expected sales and continued cost savings related to its strategic restructuring program, the Company expects its second-quarter earnings per diluted share, excluding restructuring and non-cash impairment costs, to be slightly better than breakeven. The Company noted that it expects to close the fiscal second quarter with cash and cash equivalents totaling approximately $125 million, excluding any borrowings under its revolving credit facility, compared with the $112 million and $74 million in cash and cash equivalents reported at fiscal year-end 2008 and fiscal first quarter-end 2009, respectively, on the same basis. According to The Journal, AnnTaylor, hurt by slumping mall traffic, reported three consecutive quarterly losses. About Ann Taylor Based in New York, Ann Taylor Stores Corporation -- http://www.AnnTaylorStoresCorp.com/-- is one of the leading women's specialty retailers for fashionable clothing in the United States, operating 939 Ann Taylor, LOFT, Ann Taylor Factory, and LOFT Outlet stores in 46 states, the District of Columbia and Puerto Rico as of May 2, 2009, as well as online at AnnTaylor.com and AnnTaylorLOFT.com. APOLLO CASUALTY CO.: AM Best Assigns 'C++' Financial Strength ------------------------------------------------------------- A.M. Best Co. has assigned a financial strength rating (FSR) of C++ (Marginal) and issuer credit rating (ICR) of "b" to Apollo Casualty Company of Florida (ACCF) (Pompano Beach, FL). The outlook assigned to these ratings is negative. Concurrently, A.M. Best has affirmed the FSRs of C++ (Marginal) and ICRs of "b" of American General Holdings Group (American General), its member, Apollo Casualty Company (Apollo Casualty) (Des Plaines, IL) and American General's separately rated affiliate, Delphi Casualty Company (Delphi Casualty) (Des Plaines, IL). The outlook for these ratings is negative. The rating actions for ACCF reflect its elevated underwriting leverage, limited business profile, combined with significant premium growth since its inception in 2007. In addition, the ratings reflect the company's geographic concentration of risk, principally in the southern Florida market, limited product offerings with writings consisting predominantly of non-standard automobile coverages and ACCF's above average expense structure. Due to the marginal risk-adjusted capital position of ACCF and its parent company, Apollo Casualty, the rating outlook is negative. These negative rating factors are partially offset by ACCF's conservative investment profile and good agency relationships. About Apollo Casualty Apollo Casualty Company of Florida -- http://fl.apollocc.com/-- was created to provide convenient insurance options to Florida consumers. Its desire is to simplify the insurance process and provide clients with a superior experience. ARCLIN CANADA: Moody's Downgrades Corporate Family Rating to 'Ca' ----------------------------------------------------------------- Moody's Investors Service downgraded Arclin Canada Ltd.'s Corporate Family Rating to Ca from Caa3, and the Probability of Default Rating was lowered to D from Ca following the company's announcement that it has filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court for the District of Delaware. Arclin's Canadian companies have obtained an Initial Order from the Ontario Superior Court of Justice authorizing Arclin to reorganize under the Companies' Creditors Arrangement Act. The ratings on the company's debt issues were also downgraded. The new ratings will be Moody's final ratings for the company and the ratings will be withdrawn in the near future due to the bankruptcy. Ratings downgraded: Arclin Canada Ltd. -- Corporate Family Rating to Ca from Caa3 -- Probability of Default Rating to D from Ca -- Senior Secured Revolving Credit Facility to Ca, LGD2/29% from Caa3, LGD2/29% -- Senior Secured Term Loan Ca, LGD2/29% from Caa3, LGD2/29% Ratings affirmed: Arclin Canada Ltd. -- Senior Secured Second Lien Term Loan C, LGD5/76% The last rating action on Arclin was on May 28, 2009 when Moody's lowered the CFR to Caa3 and the PDR to Ca following the company's lack of progress in negotiating an amendment to the financial covenants in its revolver and term loans, and the failure of the sponsor to contribute additional capital. Arclin Canada Ltd., headquartered in Mississauga, ON, is a vertically integrated manufacturer of adhesive resins and overlay products for use in adhesion and surfacing applications in the construction, furniture, and general industrial businesses. ARCLIN CANADA: S&P Downgrades Corporate Credit Rating to 'D' ------------------------------------------------------------ Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on Mississauga, Ontario-based adhesive resins and overlays products manufacturer Arclin Canada Ltd. to 'D' (default) from 'CCC' after the company and its subsidiaries filed for bankruptcy protection in the U.S. and Canada. At the same time, S&P lowered the issue level ratings on Arclin's first-lien senior secured debt 'D' from 'CCC+' and on the second- lien secured debt to 'D' from 'CC'; the recovery ratings on these debts are unchanged at '2' and '6', respectively. In addition S&P removed the ratings from CreditWatch with negative implications, where they were placed Jan. 27, 2009. ARCLIN US: Secures Court Approval of First Day Motions ------------------------------------------------------ Arclin US Holdings Inc. and other U.S. based units under the Arclin Group received approval from the U.S. Bankruptcy Court for the District of Delaware on all "first day" motions. Arclin's Canadian companies earlier obtained from the Ontario Superior Court of Justice an initial order authorizing a reorganization under the Companies' Creditors Arrangement Act, which provides certain protections from creditors and restructuring powers. The approvals by the U.S. and Canadian courts allow Arclin to continue to support its customers, suppliers and employees during the restructuring process. The Courts granted Arclin interim approval to access $15 million of its US$25 million in financing. This new financing and cash generated from the Company's ongoing operations will be used to support the business during the restructuring process. The Court will convene a hearing to consider final approval of the debtor-in-possession financing on August 21. Objections are due August 18. The Company also received approval to, among other things, pay employee wages, salaries, benefits and certain other employee obligations. Additionally, the Company is authorized to pay ordinary course post-petition expenses and will continue to serve its customers in the ordinary course. Claudio D'Ambrosio, Arclin's President and Chief Executive Officer, said, "These important approvals represent a positive step forward in our financial restructuring. We are pleased with our early progress as we work to gain financial flexibility to create a stronger, healthier company, better able to compete and achieve long-term success." As previously announced, Arclin and certain of its key senior lenders have reached an agreement in principle on the terms of a financial restructuring to strengthen the Company's balance sheet and enhance its financial flexibility. Under terms of the agreement, Arclin's funded indebtedness will be reduced from US$234 million to US$60 million. A post-petition financing facility of US$25 million is also part of the financial restructuring. In order to facilitate its financial restructuring, Arclin's U.S. companies filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code and Arclin's Canadian companies filed to reorganize under the CCAA. Arclin's subsidiaries in Mexico are not included in the filings and will not be subject to the requirements of the United States Bankruptcy Code or the CCAA. About Arclin Group Based in Mississauga, Ontario, Arclin is a privately held provider of bonding and surfacing solutions for the building and construction, engineered materials and natural resource markets. Arclin provides bonding solutions for a number of applications including wood based panels, engineered wood, non-wovens and paper impregnation. As of June 30, 2009, the Debtors had assets of roughly $277.2 million and liabilities of roughly $312.0 million on a consolidated basis. As part of an agreement with lenders, Arclin commenced restructuring proceedings in Canada and the United States. Arclin's U.S. companies -- Arclin US Holdnigs, Inc.; Marmorandum LLC; Arclin Chemicals Holding Inc.; Arclin Industries U.S.A., Inc; Arclin Fort Smith Inc., Arclin U.S.A. Inc.; and Arclin Surfaces Inc. -- filed voluntary petitions for Chapter 11 on July 27, 2009 (Bankr. D. Del. Lead Case No. 09-12628). Frederick Brian Rosner, Esq., at Messana Rosner & Stern, LLP, serves as counsel for the Debtors. Dechert LLP is co-counsel while Alvarez & Marsal securities LLC is the investment banker. Kurtzman Carson Consultants LLC serves as claims and noticing agent. The petition says that Arclin US's assets and debts are between $100,000,001 and $500,000,000. Arclin's Canadian companies also made a filing with the Ontario Superior Court of Justice and have obtained an Initial Order authorizing Arclin to reorganize under the Companies' Creditors Arrangement Act. Ernst & Young serves as CCAA monitor. Arclin's subsidiaries in Mexico are not included in the filings. The Mexican affiliates -- Arclin Mexican Holdings S.A. de C.V., Arclin Mexico S.A. de C.V., and Arclin Operadora S.A. de C.V. -- are not subject to any insolvency proceedings. ARCLIN US: Critical Vendor Motion Muddles Sec. 503(b)(9) Provision ------------------------------------------------------------------ Law firm Burbage and Weddell LLC in Atlanta, Georgia, says the request of Arclin US Holdings Inc. and its six debtor-affiliates to pay so-called critical vendors illustrates: -- how dramatically the "critical vendor" concept can vary from industry to industry; and -- how a "critical vendor" motion can be used by a debtor to extract post-petition concessions from suppliers holding administrative expense claims under Section 503(b)(9). Burbage and Weddell also says the Arclin case presents an interesting situation where a debtor argues in favor of inclusion of freight costs as claims under Section 503(b)(9) of the Bankruptcy Code. Burbage and Weddell notes Arclin has given special attention to its shippers, including dedicated carriers, common carriers, rail carries, and truckers; and has created a subset of "Critical Vendors" that Arclin calls "Critical Shippers". In other industries, the law firm notes, companies providing transportation services are seldom seen as "critical vendors". If they receive special treatment at all, that treatment comes in a motion to pay potential lien claimants. $900,000 to "Critical Shippers" Arclin seeks to pay up to $900,000 to "Critical Shippers" in payment of prepetition claims. Arclin identified five elements of its reliance of shippers that put certain of them in a "Critical Vendor" category: 1. The Critical Shippers operate along established and carefully scheduled routes, providing the Debtors with an integrated mechanism for receiving incoming raw materials and delivering outgoing finished products. 2. The Critical Shippers must utilize dedicated, specialized tanker trucks and rail cars to deliver the Debtors' raw materials. Those tankers and rail cars cannot be used for other materials without being specially cleaned at the Debtors' expense. 3. The Critical Shippers that operate rail lines have exclusive control over the railroad tracks that run adjacent to the Debtors' facilities. Thus, those Critical Shippers cannot be readily replaced with a convenient or cost-effective alternative. 4. The Critical Shippers may have state law liens with respect to goods in transit as of the Petition Date. 5. Replacing the Critical Shippers would take at least three months, during which time the Debtors' operations would be effectively shut down. $9.3 Million to Other "Critical Vendors" Arclin seeks to pay $9.3 million to suppliers fitting into a more traditional category of "Critical Vendors" -- raw material suppliers -- Burbage and Weddell notes. Arclin uses four primary raw materials in its resins business: urea, methanol, phenol and melamine. Burbage and Weddell notes Arclin argued that these raw material suppliers should be considered "Critical Vendors" for 4 reasons: 1. The Debtors generally operate their business with minimal inventory levels for their Raw Materials, in most cases with less than one week of inventory on hand. Any impediment to the Debtors' ability to source Raw Materials on a competitive basis may result in higher Raw Material costs, which would impact the Debtors' profit margins. 2. The Debtors' Raw Materials arrive via railway from all over North America, resulting in lead times for new Raw Materials of up to 40 days. If the Debtors Raw Materials suppliers suspend delivery to the Debtors, one or more of Debtors' plants may be required to shutdown. 3. Because the Debtors supply their customers on a just-in- time basis, if one of the Debtors; plants is required to shutdown, a customer plant also may be forced to shutdown. Should this occur, the relationship with the customer would be damaged permanently and the customer would likely take its business to a competitor of the Debtors. 4. Critical Suppliers willing to continue providing Raw Materials to the Debtors will likely require the Debtors to accept less favorable terms than those previously made available to the Debtors. By paying the prepetition claims of the Critical Suppliers, the Debtors will be able to maintain the same or more favorable terms for the Raw Materials. According to Burbage and Weddell, compared to other industries, Arclin's criteria for "critical vendor" classification would be considered weak. The focus on the potential for increase in cost if another raw material supplier is used is not even mentioned as a criterion in other industries. Instead, the focus is on quality assurance and testing requirements if a supplier is changed. Burbage and Weddell notes roughly $7.7 million of the Critical Supplier Claims relates to goods received by the Debtors within 20 days of the Petition Date. Claims for payment of these is entitled to administrative expense status under Section 503(b)(9). All administrative expense claims must be paid as a condition to the confirmation of a plan of reorganization. Section 503(b)(9) only gives administrative expense priority for the value of "goods" received by the debtor in the 20 days prior to bankruptcy. Burbage and Weddell says Arclin muddles the distinction between 503(b)(9) Claims and Critical Vendor Claims. "This muddling likely is intentional. We can think of 2 reasons why a debtor might want to mix together these totally distinct types of claims," according to Burbage and Weddell. Burbage and Weddell cites: (A) Arclin has a genuine concern for justifying different treatment of claims within the same class. Arclin is expecting to file a plan pursuant to which existing secured lenders will convert much of their debt to equity. Under this anticipated plan there is no mention of making any payment to holders of general unsecured claims. By stressing that most of the Critical Vendor Claims would be paid in any event as administrate expense claims, Arclin may be trying to head off objections to payment of pre-petition, unsecured Critical Vendor Claims when many unsecured creditors likely will receive nothing. (B) A second possible reason for blurring 503(b)(9) and Critical Vendor Claims is a strategic one in negotiating postpetition trade credit terms. Contraction of Arclin's trade credit would severely impact its liquidity. Arclin needs some leverage to extract continued favorable payment terms from its suppliers. According to Burbage and Weddell, the bottom line is that Arclin is going to have to pay $7.7 million of the "Critical Supplier Claims" as 503(b)(9) claims in any event. According to Burbage and Weddell, the debtor strategy may be to try and get concessions from vendors in exchange for paying what Arclin already will be required to pay as a condition to confirmation of a plan of reorganization. According to Burbage and Weddell from the supplier perspective, the Arclin bankruptcy looks like a mixed bag. For those suppliers with general unsecured claims in excess of their 503(b)(9) claims, full payment hinges on either being classed as a "Critical Vendor" or playing the reclamation claim game. For suppliers whose prepetition claims all qualify as 503(b)(9) claims, the decision on whether to accept payment as a "Critical Vendor" will likely boil down to two factors: -- the level of certainty that a plan of reorganization is going to be confirmed and confirmed quickly; and -- the exposure arising out of the terms Arclin is seeking in exchange for critical vendor treatment. As reported by the Troubled Company Reporter, Arclin reached an agreement in principle with certain key senior lenders on the terms of a financial restructuring to strengthen the Company's balance sheet and enhance financial flexibility. Under terms of the agreement, Arclin's funded indebtedness will be reduced from US$234 million to US$60 million. A postpetition financing facility of US$25 million is also part of the financial restructuring. To facilitate its financial restructuring, Arclin on July 27 elected to file for court-supervised restructuring proceedings in the United States and in Canada. Arclin's U.S. companies -- Arclin US Holdnigs, Inc.; Marmorandum LLC; Arclin Chemicals Holding Inc.; Arclin Industries U.S.A., Inc; Arclin Fort Smith Inc., Arclin U.S.A. Inc.; and Arclin Surfaces Inc. -- filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (Bankr. D. Del. Lead Case No. 09-12628). Arclin's Canadian companies have made a filing with the Ontario Superior Court of Justice and have obtained an Initial Order authorizing Arclin to reorganize under the Companies' Creditors Arrangement Act. Judge Kevin J. Carey presides over the case. Frederick Brian Rosner, Esq., at Messana Rosner & Stern, LLP, in Wilmington, Delaware, serves as the Debtor's counsel. Dechert LLP serves as co-counsel. Alvarez & Marsal securities LLC serves as the Debtors' investment bankers. As of June 30, 2009, the Debtors had assets of roughly $277.2 million and liabilities of roughly $312.0 million on a consolidated basis. ASCOT PARTNERS: Madoff Judge Freezes Remaining $10MM in Funds ------------------------------------------------------------- According to Carla Main at Bloomberg News, Irving H. Picard, the trustee for the liquidation of the Bernard L. Madoff Investment Securities LLC, won an order from the U.S. Bankruptcy Court for the Southern District of New York barring J. Ezra Merkin's Ascot Partners LP funds, which lost almost $1.7 billion with Madoff, from moving its remaining assets of about $10 million. Judge Burton Lifland issued the order on July 28 in Manhattan, extending an initial injunction from last month. Mr. Picard and the receiver for Ascot, David Pitofsky, agreed on the asset freeze. Under the deal, Mr. Pitofsky can receive $350,000 from the Ascot account at Morgan Stanley. The Ascot Fund case is Irving H. Picard v. J. Ezra Merkin, 09-01182, U.S. Bankruptcy Court, Southern District of New York (Manhattan). About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC was a market maker in U.S. stocks, including all of the S&P 500 and more than 350 Nasdaq stocks. The firm moved large blocks of stock for institutional clients by splitting up orders or arranging off-exchange transactions between parties. It also performed clearing and settlement services. Clients included brokerages, banks, and other financial institutions. In addition, Madoff Securities managed assets for high-net-worth individuals, hedge funds, and other institutional investors. The firm is being liquidated in the aftermath of a fraud scandal involving founder Bernard L. Madoff. As reported by the Troubled Company Reporter on December 15, 2008, the Securities and Exchange Commission charged Mr. Madoff and his investment firm with securities fraud for a multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm. The estimated losses from Mr. Madoff's fraud were allegedly at least US$50 billion. Also on December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. Irving H. Picard, Esq., was appointed as trustee for the liquidation of BLMIS, and Baker & Hostetler LLP was appointed as counsel. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors. ASCENDANT UTAH: Files Chapter 11 in Nevada ------------------------------------------ Ascendant Utah LLC filed for Chapter 11 before the U.S. Bankruptcy Court for the District of Nevada, without stating a reason. According to Carla Main at Bloomberg, Ascendant's primary asset is real property valued at $47 million. The property was described as "750 acres in Washington County, Utah." The Company listed secured creditors with claims of $33.5 million. The largest creditor is FNBN-CMLCON-1 LLC, which holds a third mortgage in the amount of $23.1 million. The Company said it did not have unsecured creditors who were non- insiders. Ascendant Utah LLC is a Las Vegas-based single-asset real estate company. The Company filed for Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-23539). Christopher Patrick Burke, Esq., represents the Debtor. In its petition, the Company said that it has assets of $47,000,210 against debts of $33,513,303. ASSOCIATED BANC-CORP: Fitch Cuts Preferred Stock Rating to 'BB+' ---------------------------------------------------------------- Fitch Ratings has downgraded the long-term Issuer Default Rating for Associated Banc-Corp. to 'BBB' from 'BBB+' and its principal bank subsidiaries to 'BBB' from 'A-'. Fitch has also downgraded ASBC's Individual Rating to 'C' from 'B/C' and the principal subsidiaries' Individual Rating to 'C' from 'B'. The Rating Outlook remains Negative. A complete list of ratings follows at the end of this release. The rating downgrades follow ASBC's reported 56% increase in nonperforming assets in the second quarter of 2009 after a 31% increase in the first quarter of the year. NPAs now represent 5% of loans and foreclosed real estate. Net charge-offs were elevated at 1.52% of average loans in second quarter-2009 and ASBC boosted the loan loss reserve to 2.66% of loans. This led to a net loss for the quarter of -$17 million. Reserve coverage of nonperforming loans still declined to 57% due to the rapid increase in NPLs. To date, problem assets are largely real estate construction, commercial real estate, and commercial and industrial credits. Fitch believes that ASBC's credit costs will remain elevated in the near- and intermediate-term, likely resulting in quarterly losses or near breakeven performance. The liquidity position of the holding company was notably improved by the proceeds from the sale of preferred stock under the U.S. Treasury's Capital Purchase Program in late 2008. Additionally, ASBC cut its common stock dividend in April 2009. However, the lead bank's total risk-based capital ratio was just 10.64% on March 31, 2009, a relatively thin cushion above the 10% regulatory minimum for a well-capitalized bank. This underlies the downgrade of the Individual Rating in particular, as Fitch believes the holding company will likely need to downstream capital to the bank. Fitch has also widened the notching on ASBC's outstanding hybrid equity, which includes preferred stock issued under the CPP and trust preferred securities. As discussed in Fitch's press release, 'Expectations for Higher Loan Losses Driving U.S. Bank Ratings Review', dated May 7, 2009, an analysis of the notching between IDRs and hybrid equity instruments has been underway, and Fitch has taken similar action on other issuers. The Negative Outlook reflects the possibility that asset quality deterioration could escalate beyond Fitch's current expectations should the economic downturn persist longer or deeper than anticipated. While ASBC has a track record of manageable credit costs, even during periods of elevated NPAs, current economic and housing market conditions could impact that trend and challenge ASBC in remediating problem credits. Fitch notes that over the last year, the company has had some turnover in senior management which may signify internal challenges. ASBC's current ratings are supported by a good core deposit base, a sound net interest margin and management of interest rate risk, and good expense control. Fitch has downgraded these with a Negative Rating Outlook: Associated Banc-Corp -- Long-term IDR to 'BBB' from 'BBB+'; -- Subordinated debt to 'BBB-' from 'BBB'; -- Preferred stock to 'BB+' from 'BBB'; -- Individual to 'C' from 'B/C'. ASBC Capital I -- Preferred stock to 'BB+' from 'BBB'. Associated Bank, National Association -- Long-term IDR to 'BBB' from 'A-'; -- Long-term deposits to 'BBB+' from 'A'; -- Long-term senior debt to 'BBB' from 'A-'; -- Short-term IDR to 'F2' from 'F1'; -- Short-term deposits to 'F2' from 'F1'; -- Individual to 'C' from 'B'. Associated Trust Company, National Association -- Long-term IDR to 'BBB' from 'A-'; -- Short-term IDR to 'F2' from 'F1'; -- Individual to 'C' from 'B'. Fitch has affirmed these ratings: Associated Banc-Corp -- Short-term IDR at 'F2'; -- Short-term debt at 'F2'; -- Support at '5'; -- Support rating floor at 'NF'. Associated Bank, National Association Associated Trust Company, National Association -- Support at '5'; -- Support rating floor at 'NF'. ATLAS MINING: Independent Auditor Raises Going Concern Doubt ------------------------------------------------------------ PMB Helin Donovan, LLP, in Spokane, Washington, raised substantial doubt about Atlas Mining Company's ability to continue as a going concern after auditing the Company's financial results for the years ended December 31, 2008, and 2007. The auditor pointed that the Company has an accumulated deficit from operations and a net deficiency in working capital. At December 31, 2008, and 2007, the Company had accumulated deficits of $20,009,496 and $14,589,101, respectively, in addition to limited cash and unprofitable operations. For the years ended December 31, 2008, and 2007, the Company sustained net losses before discontinued operations of $6,215,745 and $4,700,135. The Company's continuation as a going concern is contingent upon its ability to obtain additional financing and to generate revenue and cash flow to meet its obligations on a timely basis. At December 31, 2008, the Company's balance sheet showed total assets of $4,506,114, total liabilities of $2,309,118 and stockholders' equity of $2,144,581. The Company posted a net loss of $5,420,395 for the year ended December 31, 2008, compared with a net loss of $1,681,716 for the same period in the previous year. A full-text copy of the Company's Form 10-K is available for free at http://ResearchArchives.com/t/s?4050 Atlas Mining Company (OTC:ALMI) is a natural resources company engaged in the development of its resource property, the Dragon Mine, located in the state of Utah. Atlas Mining operated a contract mining business under the trade name Atlas Fausett Contracting. AFC was engaged in exploration and mine development, well as preparatory work as site evaluation, feasibility studies, trouble-shooting and consultation. AFC's projects include all types of underground mine development, rehabilitation and diamond drilling. BANK OF AMERICA: Merrill Names Executives for Canada Banking Team ----------------------------------------------------------------- Bank of America Merrill Lynch has expanded its Canada Corporate Banking business with two key hires in Toronto including Christopher Impey, as managing director and head of Canada Corporate Banking. Mr. Impey will join the firm in October and report jointly to Patricia DelGrande, head of Americas Corporate Banking, and Dan Mida, head of Canada Corporate and Investment Banking. Earlier this summer, Bank of America Merrill Lynch hired Daljeet Lamba as managing director, Canada Corporate Banking. He will report to Mr. Impey. "Through the combination of Bank of America and Merrill Lynch, we have the opportunity to aggressively grow our corporate banking capabilities in support of our clients in Canada and the addition of Chris to spearhead this initiative is instrumental," said Ms. DelGrande. "This is an exciting growth area for our business in Canada, and Chris and Daljeet's local expertise and extensive client relationship management skills will be invaluable in building out our platform and presence in the region," said Mr. Mida. Mr. Impey was recently the managing director responsible for Canadian corporate clients at Citigroup and previously ran their Calgary office. During his 16-year tenure at Citigroup, Mr. Impey held various leadership roles in London, Jakarta, Beijing, Calgary and Toronto, largely covering the Energy and Power and Mining industries. He began his career at Midland Bank in the United Kingdom, where he gained experience in retail and investment banking. Over the course of his career, Mr. Impey has structured numerous complex mergers and acquisition financing transactions for large, multi-national corporations. Prior to joining Bank of America Merrill Lynch, Mr. Lamba was director, Global Banking at Citigroup in Toronto. Throughout his nine years with Citigroup, Mr. Lamba worked on numerous transactions successfully originating and delivering the full spectrum of financial solutions to Canadian multinational and domestic corporations across multiple industry sectors. Prior to Citigroup, he was with Export Development Canada in Ottawa working primarily on delivering bonding and working capital financing solutions to small and medium-sized enterprises in the telecom, media and technology sectors. Based in Charlotte, North Carolina, Bank of America -- http://www.bankofamerica.com/-- is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The Company serves more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers support to more than 4 million small business owners. The Company serves clients in more than 150 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. The bank needed the government's financial help in completing its acquisition of Merrill Lynch. Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth management, capital markets and advisory companies with offices in 40 countries and territories. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world's largest publicly traded investment management companies with more than $1 trillion in assets under management. Merrill Lynch's operations are organized into two business segments: Global Markets and Investment Banking (GMI) and Global Wealth Management (GWM). As reported by the Troubled Company Reporter on March 27, 2009, Moody's Investors Service lowered the senior debt rating of Bank of America Corporation to A2 from A1, the senior subordinated debt rating to A3 from A2, and the junior subordinated debt rating to Baa3 from A2. The preferred stock rating was downgraded to B3 from Baa1. The holding company's short-term rating was affirmed at Prime-1. BERNARD MADOFF: $3.2BB in Claims Allowed, $283-Mil. Paid by SIPC ---------------------------------------------------------------- Irving H. Picard, the trustee for the liquidation of the Bernard L. Madoff Investment Securities LLC, says that as of July 27, 2009, a total of 728 claims aggregating $3,214,978,968 have been allowed. The Securities Investor Protection Corporation has covered $283,647,234 of the total allowed claims, with a maximum payout of $500,000 per claimant, as provided by the Securities Investor Protection Act. The amount of allowed claims that exceed the statutory limits of SIPC total $2,931,331,734. The extent of recovery by customers beyond the amounts advanced by SIPC will depend upon the amount of customer property that the trustee is able to recover. The Trustee is in the process of marshalling BLMIS's assets, and the liquidation of BLMIS' assets is well underway. As of July 17, Mr. Picard said he has recovered more than $1 billion in assets. Mr. Picard has also commenced a number of lawsuits against former investors to avoid and recover transfers made by Madoff to investors during the past six years. The November 30, 2008 statements issued by BLMIS showed that the "value" of all customer accounts was $64.8 billion. According to Mr. Picard, the statements were erroneous, and, in reality, BLMIS had assets on hand worth a small fraction of that amount." The total amount of funds deposited but not withdrawn from BLMIS was less than $20 billion, Mr. Picard said in a July 17 court filing. Because those customer statements issued by BLMIS were based on fictitious profits, the Trustee has disregarded them for purposes of this determination of the amount of allowed claims. Instead, the Trustee is allowing claims in the amounts that a customer actually deposited with BLMIS, less the amounts that the customer withdrew from the account, referred to as the "cash in/cash out" approach. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC was a market maker in U.S. stocks, including all of the S&P 500 and more than 350 Nasdaq stocks. The firm moved large blocks of stock for institutional clients by splitting up orders or arranging off-exchange transactions between parties. It also performed clearing and settlement services. Clients included brokerages, banks, and other financial institutions. In addition, Madoff Securities managed assets for high-net-worth individuals, hedge funds, and other institutional investors. The firm is being liquidated in the aftermath of a fraud scandal involving founder Bernard L. Madoff. As reported by the Troubled Company Reporter on December 15, 2008, the Securities and Exchange Commission charged Mr. Madoff and his investment firm with securities fraud for a multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm. The estimated losses from Mr. Madoff's fraud were allegedly at least US$50 billion. Also on December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. Irving H. Picard, Esq., was appointed as trustee for the liquidation of BLMIS, and Baker & Hostetler LLP was appointed as counsel. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors. BERNARD MADOFF: NY Court Freezes Remaining $10MM in Ascot Funds --------------------------------------------------------------- According to Carla Main at Bloomberg News, Irving H. Picard, the trustee for the liquidation of the Bernard L. Madoff Investment Securities LLC, won an order from the U.S. Bankruptcy Court for the Southern District of New York barring J. Ezra Merkin's Ascot Partners LP funds, which lost almost $1.7 billion with Madoff, from moving its remaining assets of about $10 million. Judge Burton Lifland issued the order on July 28 in Manhattan, extending an initial injunction from last month. Mr. Picard and the receiver for Ascot, David Pitofsky, agreed on the asset freeze. Under the deal, Mr. Pitofsky can receive $350,000 from the Ascot account at Morgan Stanley. The Ascot Fund case is Irving H. Picard v. J. Ezra Merkin, 09-01182, U.S. Bankruptcy Court, Southern District of New York (Manhattan). About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC was a market maker in U.S. stocks, including all of the S&P 500 and more than 350 Nasdaq stocks. The firm moved large blocks of stock for institutional clients by splitting up orders or arranging off-exchange transactions between parties. It also performed clearing and settlement services. Clients included brokerages, banks, and other financial institutions. In addition, Madoff Securities managed assets for high-net-worth individuals, hedge funds, and other institutional investors. The firm is being liquidated in the aftermath of a fraud scandal involving founder Bernard L. Madoff. As reported by the Troubled Company Reporter on December 15, 2008, the Securities and Exchange Commission charged Mr. Madoff and his investment firm with securities fraud for a multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm. The estimated losses from Mr. Madoff's fraud were allegedly at least US$50 billion. Also on December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. Irving H. Picard, Esq., was appointed as trustee for the liquidation of BLMIS, and Baker & Hostetler LLP was appointed as counsel. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors. BERNARD MADOFF: Court Approves Sale of Interests in Private Jet --------------------------------------------------------------- Irving H. Picard, the trustee for the liquidation of the Bernard L. Madoff Investment Securities LLC, obtained approval from Judge Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York to sell his one-eighth share of a Citation X private aircraft for $753,000 to NetJets Aviation Inc. According to Judge Lifland, Mr. Picard, as the trustee for the estate of Bernard Madoff, member of BLM Air Charter, LLC, has the right to sell, transfer, compromise or dispose of the 12.5% undivided interest in the Cessna 750 aircraft to NETJETS, which is owned by Warren Buffett's Berkshire Hathaway Inc. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC was a market maker in U.S. stocks, including all of the S&P 500 and more than 350 Nasdaq stocks. The firm moved large blocks of stock for institutional clients by splitting up orders or arranging off-exchange transactions between parties. It also performed clearing and settlement services. Clients included brokerages, banks, and other financial institutions. In addition, Madoff Securities managed assets for high-net-worth individuals, hedge funds, and other institutional investors. The firm is being liquidated in the aftermath of a fraud scandal involving founder Bernard L. Madoff. As reported by the Troubled Company Reporter on December 15, 2008, the Securities and Exchange Commission charged Mr. Madoff and his investment firm with securities fraud for a multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm. The estimated losses from Mr. Madoff's fraud were allegedly at least US$50 billion. Also on December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. Irving H. Picard, Esq., was appointed as trustee for the liquidation of BLMIS, and Baker & Hostetler LLP was appointed as counsel. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors. BIG 10 TIRES: Court Sets Sept. 21 Bar Date for Proofs of Claim -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has established September 21, 2009, at 4:00 p.m. as the deadline for the filing of proofs of claim and requests for payment of administrative expenses in BT Holding III, LLC, et al.'s bankruptcy cases. The governmental bar date is September 29, at 4:00 p.m. About Big 10 Tires Headquartered in Mobile, Alabama, Big 10 Tires Stores -- http://www.big10tires.com/-- offers an array of tire products consists of performance, light truck and sport utility and all- season touring tires in Alabama, Georgia and Florida. Big 10 Tires Stores Inc. and three of its affiliates filed for protection on April 2, 2009 (Bankr. D. Del. Lead Case No. 09- 11173). Chad A. Fights, Esq., and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. When the Debtors filed for protection from their creditors, they listed assets and debts between $10 million and $50 million in their filing. The Debtor sold its business, including its name and trademarks, to New Big 10 Tire Stores, Inc., an affiliate of Sun Capital Partners, Inc. The Debtor was renamed to BT Holding III, LLC, following the sale. BOB'S AUTOMOTIVE: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Bob's Automotive Specialties, LP c/o 315 Little Hill Lancaster, PA 17602 Bankruptcy Case No.: 09-15559 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Debtor's Counsel: Barry A. Solodky, Esq. Blakinger, Byler and Thomas, P. C. 28 Penn Square Lancaster, PA 17603 Tel: (717) 299-1100 Email: bas@bbt-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Robert W. Hilliker, president of the Company. BRUNO'S SUPERMARKETS: Panel May Employ Bracewell as Co-Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Alabama has granted the official committee of unsecured creditors of Bruno's Supermarkets, LLC, permission, on an interim basis, to employ Bracewell & Giuliani LLP as its co-counsel, nunc pro tunc to June 10, 2009. Bracewell will be investigating any potential claims against the Debtor's currents and former officers and directors. Bracewell will charge its standard hourly rates, subject to a $75,000 cap for the investigation. Bracewell's hourly rates are: Ralph D. McBride, Esq., Partner $650 Samuel M. Stricklin, Esq., Partner $625 Ross D. Kennedy, Esq. Partner $575 Kristin A. McLaurin, Esq. Associate $390 Diane M. Crabtree, Esq. Associate $365 Kasia o. Olkowski Paralegal $200 Bracewell also agreed that if it is determined that the D&O claims should be pursued, and it was selected to pursue any of the claims, it would agree to do so on an as yet to be determined contingency, with the amount paid to it to conduct the investigation credited against any contingent fee it were to be paid. Ross D. Kennedy, a partner at Bracewell, assured the Court that the firm represents no entity other than the Committee in connection with the Chapter 11 case and does not hold or represent any interest materially adverse to the Debtors or their estates, or of any class of creditors or equity holders. He assured the court that Bracewell is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. A final hearing on the employment application will be heard on August 6, 2009, at 10:00 a.m. About Bruno's Bruno's Supermarkets LLC -- now known as BFW Liquidation, LLC -- is a privately held company headquartered in Birmingham, Alabama. Bruno's is the parent company of the Bruno's, Food World, and FoodMax grocery store chains, which includes 23 Bruno's, 41 Food World, and 2 FoodMax locations in Alabama and the Florida panhandle. Founded in 1933, Bruno's has operated as an independent company since 2007 after undergoing several transitions and changes in ownership starting in 1995. The current owner is Lone Star Funds, a Dallas-based investor. Bruno's filed for Chapter 11 relief on February 5, 2009 (Bankr. N.D. Ala. Case No. 09-00634). Burr & Forman LLP is the Debtor's lead counsel. Najjar Denaburg, P.C., is the Debtor's conflicts counsel. Greenberg Traurig, LLP, is the official committee of unsecured creditors' counsel. Alvarez & Marsal is the Debtor's restructuring advisor. When Bruno's filed for Chapter 11 protection from its creditors, it listed between $100 million and $500 million each in assets and debts. Bruno's has sold 56 of its stores to C&S Wholesale Grocers Inc., $45.8 million. C&S will operate 31 stores and liquidated the remainder. CAPITAL CORP: Now Hiring Bingham as Non-Bankruptcy Counsel ---------------------------------------------------------- Capital Corp of the West asks the U.S. Bankruptcy Court for the Eastern District of California for authority to employ Bingham McCutchen LLP as its non-bankruptcy counsel, under Sections 327(a) and (c) of the Bankruptcy Code. Capital Corp. submitted the request after the Bankruptcy Court denied its application to employ Bingham as special counsel under Section 327(e) of the Bankruptcy Code. As non-bankruptcy counsel, Bingham will assist the Debtor with certain bank and bank holding company regulatory matters, certain corporate and securities matters, and certain labor issues. The services to be provided by Bingham do not include acting as general or bankruptcy counsel for the Debtor. James M. Rockett, Esq., a partner at Bingham, assures the Court that the firm does not hold or represent any interest materially adverse to the interests of the estate or of any class of creditors or equity security holders and that the firm is "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Bingham's hourly fees are: James M. Rocket, Esq. Partner $690 Thomas G. Reddy, Esq. Partner $600 Maureen Young, Esq. Partner $600 David Gershon, Esq. Of Counsel $500 Walter Stella, Esq. Partner $605 Roger Ehlers, Esq. Partner $640 Hilary Sledge, Esq. Associate $400 Chester McGensy Esq. Associate $300 Legal Assistants $175 About Capital Corp of the West Incorporated on April 26, 2005, Capital Corp of the West is a bank holding company whose primary asset and source of income is County Bank. County Bank is a community bank with operations located mainly in the San Joaquin Valley of Central California with additional business banking operations in the San Francisco Bay Area. The corporate headquarters of the Company and the Bank's main branch facility are located at 550 West Main Street, Merced, California. County Bank was closed February 6, 2009, by the California Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Westamerica Bank, based in San Rafael, California, to assume all of the deposits of County Bank. As of February 2, 2009, County Bank had total assets of approximately $1.7 billion and total deposits of $1.3 billion. In addition to assuming all of the failed bank's deposits, including those from brokers, Westamerica Bank agreed to purchase all of County Bank's assets. According to Capital Corp, although County Bank made no "subprime mortgages," it had made substantial loans to developers for acquisition, development and construction of residential homes and condominiums throughout California's Central Valley. Overbuilding and an increase in foreclosures in the market resulted in rapidly declining real property values, and contributed to the rise in nonperforming loans. Capital Corp of the West filed for bankruptcy on May 11, 2009 (Bankr. E.D. Calif. Case No. 09-14298). Judge W. Richard Lee presides over the case. Paul J. Pascuzzi, Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi, serves as the Debtor's bankruptcy counsel. Hagop T. Bedoyan, Esq., serves as counsel to the official committee of unsecured creditors. As of September 30, 2008, Capital Corp of the West had $1.87 million in total assets, $1.80 million in total liabilities and shareholders' equity of $73,896. In its Chapter 11 petition, the Company disclosed $6,789,058 in total assets and $68,096,190 in total debts. CARABEL EXPORT: Sells Assets to Continental Tiles for $6,650,000 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Puerto Rico has approved the sale of certain of Carabel Export and Import, Inc.'s assets to Continental Tiles, Inc. for $6,650,000, free and clear of all liens and encumbrances. Westernbank Puerto Rico had submitted the highest and best offer for the assets through a credit bid, but thereafter negotiations were held between the Debtor, Westernbank and Continental directed to obtaining a higher offer for the assets, which resulted in a $6,650,000 offer for the assets. Proceeds of the sale, with the exception of a $300,000 carve-out for the benefit of the Debtor's creditors, will go to Westernbank. As reported in the Troubled Company Reporter on March 11, 2009, the Court approved a sale process under which Continental's $2,500,000 was the "stalking horse" bid at an auction. The assets consists of the Debtors' merchandise inventory, machinery and equipment, and all other known assets, as well as the "Italceramica", "National Ceramics" and "Caribbean Marble & Granite" Trade Name, logos and their domain. As of the petition date, the Debtors owed Westernbank $18,577,639, secured by a first priority security interest over substantially all of the Debtors' assets. Based in Caguas, Puerto Rico, Carabel Export and Import Inc., dba ItalCeramica, and its affiliates filed separate Chapter 11 petitions on December 30, 2008 (Bankr. D. P.R. Lead Case No. 08-08956). The Hon. Enrique S. Lamoutte Inclan oversees the case. Charles Alfred Cuprill, Esq., at Charles A Curpill, PSC Law Office, in San Juan, Puerto Rico, represents the Debtors. When it filed for bankruptcy, Carabel disclosed $14,544,289 in total assets, and $26,957,250 in total debts. CIRCUIT CITY: To Auction Off Los Angeles and San Jose Locations --------------------------------------------------------------- Circuit City Stores, Inc., seeks permission from the U.S. Bankruptcy Court to enter into agreements to sell properties at 1332-1406 Virgil Place, Los Angeles, California; and 4070-4080 Stevens Creek Boulevard, San Jose, California, subject to higher or better offers. NetDockets relates that pursuant to the agreement for the Los Angeles property (which is apparently unimproved), Circuit City seeks to sell the property to James Moushoul for $325,000. The Debtors want competing bids submitted no later than August 13, 2009 at 5:00 p.m. (Eastern). The Debtors will conduct an auction on August 20 if a competing bid is received. A competing bid must offer at least $360,000 to qualify. NetDockets relates the San Jose property is roughly 5.17 acres, on which Circuit City formerly operated a retail store. A portion of the property is also leased to Don Sherwood Golf Shop, Inc., and that lease is proposed to be assigned to the purchaser. Circuit City seeks to sell the property to Mathew Zaheri for $8.25 million. Circuit City proposes to pay purchaser a termination fee of up to $37,500 in the event that the agreement is terminated because Circuit City sells the property to an alternative bidder. A competing bid must offer at least $8.4 million to qualify. About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of August 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CITIGROUP INC: S&P Downgrades Ratings on Preferred Issues to 'C' ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'A/A-1' issuer counterparty credit rating on Citigroup Inc. At the same time, S&P lowered its rating on Citi's trust preferred and enhanced trust preferred issues to 'C' from 'CC' and revised the CreditWatch to positive from developing. "The downgrade reflects S&P's view that Citi's soon-to-be- completed exchange offer constitutes a distressed exchange, as defined under S&P's criteria. Based on the recent common share price, investors received less than par value for the tendered hybrid capital issues. Also, had the exchange offer not succeeded, S&P believes investors would have faced a significantly heightened risk of nonpayment over the near term. The 'C' ratings on Citi's remaining preferred stock issues are affirmed, given Citi's announced intention to suspend dividends on these issues," said Standard & Poor's credit analyst Scott Sprinzen. S&P expects to resolve its review of the trust preferred and enhanced trust preferred issues within the next few days. It is S&P's current expectation that the rating on these issues will be raised to 'B+'. While S&P believes Citi's capitalization has been significantly bolstered as a result of the exchange, hybrid bondholders still face the ongoing risk that if, contrary to S&P's current expectations, Citi's financial condition were to deteriorate, these issues could be subject to a dividend deferral or additional exchange offer. The ratings on Citi reflect a combination of extraordinary external support from the U.S. government for highly systemically important U.S. financial institutions and Citi's own credit characteristics. Over the past year, Citi has been the recipient of substantial extraordinary government support in the form of capital infusions, a risk-sharing agreement on $301 billion of loans and securities, and access to funding facilities. As a result of its participation in the exchange offer, the government will likely become Citi's largest shareholder, with a 34% ownership stake. Reflecting the potential for additional extraordinary government support, should this be necessary, the CCR continues to reflect a four-notch uplift from S&P's assessment of Citi's stand-alone credit profile. The outlook is stable. "We believe Citi will face a tough credit cycle over the next two years, which could result in weak and volatile earnings. However, S&P believes that government aid--in the form of both capital and liquidity -- would be forthcoming should Citi need it. Over the next few years, S&P will be tracking Citi's progress in implementing its strategy and adapting to the new financial landscape and regulatory environment. Ultimately, the CCR and stand-alone creditworthiness may converge at the current CCR level, the stand-alone profile level, or somewhere in between," Mr. Sprinzen added. CONSECO INC: Expects to Report at Least $15.8MM Q2 Net Income ------------------------------------------------------------- Conseco, Inc., on Tuesday announced preliminary results for second quarter of 2009. Preliminary Second Quarter 2009 Results: -- $86.7 million of income before net realized investment losses, corporate interest and taxes, up 47%, compared to $59.0 million in 2Q08; -- Net operating income of $40.8 million, up 62%, compared to $25.2 million in 2Q08; -- Net operating income per diluted share: 22 cents, up 69%, compared to 13 cents in 2Q08; -- Net income in the range of $15.8 million to $27.8 million, compared to a net loss of $488.5 million in 2Q08 (including net realized investment losses in the range of $13.0 million to $25.0 million in 2Q09 vs. $513.7 million of net realized investment losses, valuation allowance for deferred tax assets and losses related to discontinued operations in 2Q08); -- Net income per diluted share in the range of 9 cents to 15 cents, compared to a net loss per diluted share of $2.65 in 2Q08 (including net realized investment losses in the range of 7 cents to 13 cents in 2Q09 vs. $2.78 of net realized investment losses, valuation allowance for deferred tax assets and losses related to discontinued operations in 2Q08); -- Total New Annualized Premium excluding Private-Fee-For- Service: $91.8 million, down 1% from 2Q08; -- Bankers NAP excluding PFFS: $63.1 million, up 6 percent from 2Q08; -- PFFS NAP (sold through a marketing agreement with Coventry): $6.3 million in 2Q09 compared to ($6.8) million in 2Q08 (4), reflecting a change in sales recognition policy Preliminary Six-Month 2009 Results: -- $159.0 million of EBIT, up 47%, compared to $108.4 million in the first six months of 2008; -- Net operating income of $72.2 million, up 59%, compared to $45.3 million in the first six months of 2008; -- Net operating income per diluted share: 39 cents, up 56%, compared to 25 cents in the first six months of 2008; -- Net income in the range of $40.3 million to $52.3 million, compared to a net loss of $495.7 million in the first six months of 2008 (including net realized investment losses in the range of $19.9 million to $31.9 million in the first six months of 2009 vs. $541.0 million of net realized investment losses, valuation allowance for deferred tax assets and losses related to discontinued operations in the first six months of 2008); -- Net income per diluted share in the range of 22 cents to 28 cents, compared to a net loss per diluted share of $2.68 in the first six months of 2008 (including net realized investment losses in the range of 11 cents to 17 cents in the first six months of 2009 vs. $2.93 of net realized investment losses, valuation allowance for deferred tax assets and losses related to discontinued operations in the first six months of 2008); -- Total NAP excluding PFFS: $179.3 million, up 1% from the first six months of 2008; -- Bankers NAP excluding PFFS: $123.5 million, up 7 percent from the first six months of 2008; -- PFFS NAP: $40.3 million, down 30 percent, from the first Six months of 2008 reflecting changes in consumer Preference Conseco's financial statements are expected to show compliance, as of June 30, 2009, with all covenants in its credit agreement including those related to combined insurance subsidiary capital, the combined risk-based capital ratio of its insurance subsidiaries, the Company's debt to capital ratio and the Company's interest coverage ratio. "Conseco, on a preliminary basis, and consistent with its first quarter performance, expects to report continued profitability in the second quarter," CEO Jim Prieur said. "Also consistent with our expectations was an increase in second quarter earnings over the seasonally weak first quarter by our Bankers Life business, which also had a 6 percent increase over 2008 in core sales for the quarter," Prieur said, adding that, "we are issuing preliminary results in an effort to provide timely information to the investment community." The Company expects to release its final second quarter 2009 results on August 4, 2009, and host a conference call to discuss results on August 5 at 10:00 a.m. Eastern Daylight Time. About Conseco Inc. Headquartered in Carmel, Indiana, Conseco Inc. (NYSE: CNO) -- http://www.conseco.com/-- is the holding company for a group of insurance companies operating throughout the United States that develop, market and administer supplemental health insurance, annuity, individual life insurance and other insurance products. The company became the successor to Conseco Inc. (Old Conseco), in connection with its bankruptcy reorganization. CNO focuses on serving the senior and middle-income markets. The company sells its products through three distribution channels: career agents, professional independent producers and direct marketing. CNO operates through its segments, which includes Bankers Life, Conseco Insurance Group, Colonial Penn, other business in run-off and corporate operations. * * * As reported in the Troubled Company Reporter on January 6, 2009, Fitch Ratings has downgraded the ratings assigned to Conseco Inc. The rating outlook on Conseco Inc. and its subsidiaries remains negative. Fitch downgraded these ratings: (i) issuer default rating to 'BB-' from 'BB'; (ii) senior secured bank credit facility to 'BB-' from 'BB+'; and (iii) senior unsecured debt to 'B' from 'BB-'. On March 4, 2009, A.M. Best downgraded the financial strength ratings of Conseco's primary insurance subsidiaries to "B" from "B+" and such ratings have been placed under review with negative implications. Conseco reported a first quarter 2009 net income of $24.5 million compared to a net loss of $7.2 million in the year-earlier quarter. Conseco had $28.5 billion in total assets, $26.9 billion in total liabilities, and $1.59 billion in stockholders' equity as of March 31, 2009. Conseco said it has significant indebtedness which will require over $165 million in cash to service in the next 12 months (including the additional interest expense required after the modification to its Second Amended Credit Facility. Pursuant to Conseco's Second Amended Credit Facility, Conseco must maintain certain financial ratios. The levels of margin between the financial covenant requirements and the Company's financial status, both at March 31, 2009, and the projected levels for the next 12 months, are relatively small and a failure to satisfy any of the financial covenants at the end of a fiscal quarter would trigger a default under the Second Amended Credit Facility. Achievement of the Company's operating plans is a critical factor in having sufficient income and liquidity to meet debt service requirements for the next 12 months and other holding company obligations and failure to do so would have material adverse consequences for the Company. CIRCUIT CITY: Bids for Intellectual Property Assets Due August 11 ----------------------------------------------------------------- Streambank, LLC, said bids for the intellectual property assets of Circuit City Stores, Inc., may be entered until 5 p.m. EDT, Tuesday, August 11. The auction will commence Tuesday, August 18 at 10 a.m. at the office of Skadden, Arps, Slate, Meagher & Flom LLP in New York. Among the notable IP assets available for purchase are the firedog (SM) trademarks, which consist of more than 50 U.S. and international trademarks, and more than 60 URLs. Also included are the toll-free numbers 800-FIREDOG and 888-FIREDOG. Firedog, Circuit City's installation and technical support service, was the number two installation brand in the country, serving more than 800,000 customers per year. Also for sale are the trademarks and related URLs for TradingCircuit.com, Circuit City's proprietary auction platform for managing returned and exchanged merchandise, along with Circuit City's 800.com URL. Also available are dozens of registrations in multiple categories, and numerous international registrations including Sens, Verge, Anika, Liquid Video, IQ Crew and ESA. In addition, Circuit City's house file and transaction database are for sale. The database contains information on roughly 30 million contacts, collected from 2003 through 2009. Streambank was retained in April to assist in the marketing and sale of select Circuit City intellectual property assets. In a May 11 auction, Systemax, Inc. acquired certain Circuit City assets related to the company's e-commerce business. "We are seeing a number of retailers invest in service brands, and the firedog name will give its new owner a leg up in recognition," said Gabe Fried, Managing Member and Founder, Streambank. "Bidders now have the opportunity to purchase this nationally- recognized leader in technical support services for a fraction of the cost to build such a prominent brand from scratch." Interested parties may contact Streambank at 781.444.4940 to receive a copy of the Asset Purchase Agreement and Bid Procedures, or request additional information about the assets for sale. About Streambank Streambank LLC -- http://www.streambankllc.com/-- is a financial advisory firm, specializing in intellectual asset valuation and disposition. The firm's experience spans a broad range of industries including apparel, automotive, consumer products, food, manufacturing, medical technologies, retail and textiles. Through partnerships with brand consultancies, turnaround management firms, attorneys, and finance professionals, Streambank provides advice on value maximization strategies and liquidity options. Streambank is headquartered in Needham, MA. About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of August 31, 2008. Circuit City announced in January 2009 it would liquidate its remaining U.S. stores. At the time of liquidation, the company was the second largest U.S. electronics retailer, with 567 stores nationwide. The store closings were completed in March. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CITIGROUP INC: Securities Exchange A Success; $20.3-Bil. Tendered ----------------------------------------------------------------- Citigroup Inc. has disclosed the final results of its offers to exchange its publicly held convertible and non-convertible preferred and trust preferred securities for newly issued shares of its common stock and the completion of the previously announced further matching exchange offer with the U.S. Government. Approximately $20.3 billion in aggregate liquidation value of publicly held convertible and non-convertible preferred and trust preferred securities were validly tendered and not withdrawn in the public exchange. This represents 99% of the total liquidation value of securities that Citi was offering to exchange. Citi has accepted for exchange all publicly held convertible and non- convertible preferred and trust preferred securities that were validly tendered and not withdrawn and has issued 5,834,126,284 common shares in the public exchange offer. In the matching exchange, the U.S. Government exchanged an additional $12.5 billion in aggregate liquidation preference of preferred stock for interim securities, while the remaining $27.059 billion aggregate liquidation preference of preferred stock held by the U.S. Government was exchanged for an equal liquidation amount of new trust preferred securities bearing an annual coupon of 8 percent. With the expiration of the public exchange offers, the completion on July 23, 2009 of exchange offers with the U.S. Government and certain private holders and the completion of today's further exchange with the U.S. Government, Citi has completed exchanges of approximately $58 billion in aggregate liquidation value of preferred and trust preferred securities into common stock and interim securities that will convert into common stock and interim securities. The interim securities will convert into common stock upon authorization of the increase in Citi's authorized common stock. As a result of these exchanges, Citi Tier 1 Common will increase by approximately $64 billion and its Tangible Common Equity (TCE) will increase by approximately $60 billion. TCE and Tier 1 Common are non-GAAP financial measures. The liquidation preference of securities in each series of publicly held convertible and non-convertible preferred and trust preferred securities accepted by Citi in the public exchange offers: Percentage of Title of Series of Outstanding Public Preferred Liquidation Liquidation CUSIP Stock Preference Tendered Preference Tendered ----- ------------------ ------------------- ------------- 8.500% Non-Cumulative Preferred Stock, Series 172967556 F $1,968,415,775 96.49% 8.400% Fixed Rate/Floating Rate Non-Cumulative Preferred 172967ER8 Stock, Series E $5,878,745,846 97.98% 8.125% Non-Cumulative Preferred Stock, Series 172967572 AA $3,618,241,750 97.40% 6.500% Non-Cumulative Convertible Preferred 172967598 Stock, Series T $3,145,950,950 99.28% Acceptance Title of Trust Percentage of Priority Preferred Liquidation Liquidation Level CUSIP/ISIN Securities Issuer Amount Amount Tendered Tendered Citigroup Capital 1 173094AA1 8.300% XXI $1,154,199,000 32.98% E-TRUPS(R) Citigroup Capital 2 173085200 7.875% XX $344,754,650 43.78% E-TRUPS(R) Citigroup Capital 3 17311U200 7.250% XIX $655,700,800 53.53% E-TRUPS(R) Citigroup Capital 4 17309E200 6.875% XIV $259,317,975 45.90% E-TRUPS(R) Citigroup Capital 5 17310G202 6.500% XV $554,731,675 46.81% E-TRUPS(R) Citigroup Capital 6 17310L201 6.450% XVI $646,276,325 40.39% E-TRUPS(R) Citigroup Capital 7 17311H209 6.350% XVII $398,801,825 36.25% E-TRUPS(R) Citigroup Capital 8 XS0306711473 6.829% XVIII (GBP)400,099,000 80.02% E-TRUPS(R) Citigroup Capital 9 17305HAA6 7.625% III $5,947,000 2.97% TRUPS(R) Citigroup Capital 10 17306N203 7.125% VII $252,852,550 21.99% TRUPS(R) Citigroup Capital 11 17306R204 6.950% VIII $308,710,075 22.05% TRUPS(R) Citigroup Capital 12 173064205 6.100% X $131,054,425 26.21% TRUPS(R) Citigroup Capital 13 173066200 6.000% IX $253,129,675 23.01% TRUPS(R) Citigroup Capital 14 17307Q205 6.000% XI $140,321,800 23.39% TRUPS(R) Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com/-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. Citigroup had $2.0 trillion in total assets on $1.9 trillion in total liabilities as of September 30, 2008. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. As part of the agreement, the U.S. Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CITIGROUP INC: To Sell Ownership Interest in Nikko AM to Sumitomo ----------------------------------------------------------------- Citigroup Inc. has reached a definitive agreement to sell its entire ownership interest in Nikko Asset Management to The Sumitomo Trust and Banking Co., Ltd., as part of a transaction that values the unit at JPY120 billion, or US$1.26 billion. The transaction is expected to close in the fourth calendar quarter of 2009, subject to regulatory approvals and customary closing conditions, and is not expected to have a material impact on Citi's net income. "With the previously announced sales of our brokerage and trust banking businesses in Japan, this transaction marks another milestone in the implementation of our Citicorp/Citi Holdings strategy. We remain committed to Japan, where we have proudly served clients for more than a century. We can now shift our focus from reshaping our franchise in this very important market to building our core businesses and better serving clients," said Citi CEO Vikram Pandit. "This transaction positions our franchise to deliver Citi's best global capabilities in Japan," added Nikko Citi Holdings CEO Douglas Peterson. Under the terms of the transaction, Citi will sell to Sumitomo Trust its entire 64% beneficial ownership interest in Nikko AM, including the beneficial ownership interest that it holds through Nikko Principal Investments, for all-cash consideration to Citi of JPY75.6 billion, after certain deal-related expenses and adjustments. Sumitomo Trust is also expected to acquire the beneficial ownership interests in Nikko AM held by various minority investors in Nikko AM, bringing Sumitomo Trust's total ownership stake in Nikko AM to about 98.5% at closing. The remaining 1.5% ownership interest will continue to be held by an employee stock ownership plan maintained on behalf of Nikko AM employees. Citi's Institutional Clients Group advised Citi on this transaction. Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com/-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. At June 30, 2009, Citigroup had total assets of $1.84 trillion and total liabilities of $1.69 trillion. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. As part of the agreement, the U.S. Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. COAL FINANCING: Wants Schedules Filing Extended until August 13 --------------------------------------------------------------- Coal Financing, LLC, asks the U.S. Bankruptcy Court for the Southern District of California to extend until August 13, 2009, its time to file its schedules of assets and liabilities and statement of financial affairs. Royal Palm Beach, Florida-based Coal Financing, LLC filed for Chapter 11 on July 13, 2009 (Bankr. S.D. Fla. Case No. 09-24183). Norman L. Schroeder II, Esq., represents the Debtor in its restructuring efforts. In its petition, the Debtor listed assets ranging from $50,000,001 to $100,000,000 and debts ranging from $10,000,001 to $50,000,000. COAL FINANCING: Section 341(a) Meeting Scheduled for August 19 -------------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of creditors in Coal Financing, LLC's Chapter 11 case on August 19, 2009, at 10:30 a.m. The meeting will be held at Flagler Waterview Bldg., 1515 N Flagler Drive Room 870, West Palm Beach, Florida. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Royal Palm Beach, Florida-based Coal Financing, LLC filed for Chapter 11 on July 13, 2009 (Bankr. S.D. Fla. Case No. 09-24183). Norman L. Schroeder II, Esq., represents the Debtor in its restructuring efforts. In its petition, the Debtor listed assets ranging from $50,000,001 to $100,000,000 and debts ranging from $10,000,001 to $50,000,000. COUNTERPATH CORP: BDO Dunwoody Raises Going Concern Doubt ---------------------------------------------------------- BDO Dunwoody LLP Vancouver, Canada raised substantial doubt about Counterpath Corporation's ability to continue as a going concern after auditing the Company's financial results for the fiscal years ended April 30, 2009, and 2008. The auditor noted that the Company had an accumulated deficit of $34,318,195 at April 30, 2009, and incurred a net loss for the year then ended. At April 30, 2009, the Company's balance sheet showed total assets of $15,839,165, total liabilities of $4,496,868 and stockholders'' equity of $11,342,297. For the fiscal year ended April 30, 2009, the Company posted a net loss of $15,838,712 compared with a net loss of $12,534,919 for the same period in the previous year. As of April 30, 2009, the Company had $2,931,932 in cash. The Company's working capital was $1,566,483 at April 30, 2009, compared with $7,645,909 at the same point last year. A full-text copy of the Company's Form 10-K is available for free at http://ResearchArchives.com/t/s?4051 Counterpath Corporation focuses on the design, development, marketing and sales of desktop and mobile application software, conferencing server software, gateway server software and related professional services, as pre and post sales, technical support and customization services. The Company's software products are sold into the telecommunications sector, specifically the voice over Internet protocol (VoIP), unified communications and fixed- mobile convergence markets. CREATIVE LOAFING: Court to Rule on Atalaya Credit Bid on Aug. 25 ---------------------------------------------------------------- Michael Hinman at Tampa Bay Business Journal reports that the Hon. Caryl E. Delano of the U.S. Bankruptcy Court for the Middle District of Florida said that she would decide during an August 25 confirmation hearing whether equity fund Atalaya Capital Management can submit the "highest and best" offer at an upcoming auction for Creative Loafing Inc. As reported by the Troubled Company Reporter on July 24, 2009, Atalaya Capital and Creative Loafing agreed on a plan that would put the Company up for auction in August. Under the agreement, Atalaya Capital 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. Atalaya Capital said that it handed Creative Loafing about $31 million in 2007 to buy alternative papers Washington City Paper and Chicago Reader. According to Business Journal, Creative Loafing President Ben Eason asked Judge Delano to reject the bidding rules that the Company had approved, saying that the rules would give Atalaya Capital a non-cash advantage in the bidding war to see who gets control of the Company. Citing Creative Loafing reporter Wayne Garcia, Business Journal relates that Mr. Eason said that he would be willing to step down temporarily from his role as president if necessary to help solidify a bidding team that includes his family interests and one of the other creditors, BIA Digital Partners, As a hedge fund, Atalaya Capital was more interested in regaining its investment rather than continuing Creative Loafing as a media company, Business Journal states, citing Judge Delano. Atalaya Capital argued that it would want to continue running Creative Loafing's publishing operations and make an additional $1 million available for operational costs, according to Business Journal. 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. CREATIVE LOAFING: President Willing to Step Down to Foil Atalaya ---------------------------------------------------------------- Creative Loafing Inc. president Ben Eason has told Judge Caryl E. Delano he's willing to step down temporarily from his role in the Company if necessary to help solidify a bidding team that includes his family interests and one of the Company's other creditors, BIA Digital Partners, Atlanta Business Chronicle reports, citing Creative Loafing reporter Wayne Garcia. Mr. Eason has objected to bidding procedures proposed by the Debtors, Atlanta Business Chronicle says, arguing the rules would give Atalaya Capital Management a non-cash advantage in the bidding war for Creative Loafing. Atlanta Business Chronicle says Mr. Eason told the Court that as a hedge fund, Atalaya was more interested in regaining its investment rather than continuing Creative Loafing as a media company. Atalaya, however, said it not only would want to continue running the publishing operations, it was willing to make an additional $1 million available for operational costs. Atalaya and Creative Loafing have agreed on a plan that would put the Company up for auction in August. Atalaya has tried to gain control of Creative Loafing since the Company filed for Chapter 11 bankruptcy in September 2008, the Troubled Company Reporter said on July 24, citing Michael Hinman at Washington Business Journal. Washington Business Journal said the Debtors and Atalaya agreed the hedge fund 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, Washington Business Journal said. Atlanta Business Chronicle reports Judge Delano said late Wednesday she'll wait until an August 25 confirmation hearing to decide whether Atalaya will be able to submit the "highest and best" offer for Creative Loafing. Atlanta Business Chronicle notes Atalaya and BIA Digital Partners are owed more than $40 million for loans they offered Creative Loafing back in 2007 to buy alternative publications Washington City Paper and Chicago Reader. Atalaya called in its loan late last year, forcing Creative Loafing to seek out Chapter 11 bankruptcy reorganization in September. Headquartered in Tampa, Florida, Creative Loafing, Inc. -- http://www.creativeloafing.com/-- publishes alternative weekly 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. CRUCIBLE MATERIALS: Court Sets September 30 as Claims Bar Date -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware set deadlines for parties-in-interest to file proofs of claim against Crucible Materials Corporation and its affiliates. Holders of prepetition general unsecured claims must file their proofs of claim by September 30, 2009 at 5:00 p.m. (Eastern). Governmental units have until November 2, 2009 at 5:00 p.m. (Eastern). As reported by the Troubled Company Reporter on July 10, 2009, Crucible Materials filed its schedules of assets and liabilities showing creditors being owed $130 million and property on the books for $165 million. Affiliate Crucible Development Corp.'s schedules show assets at $17 million against debt totaling $70 million. When they filed for bankruptcy, the Debtors listed assets and debts both ranging from $100 million to $500 million. Crucible, according to Bloomberg News, indicated $64.5 million was owed to the secured lenders. Based in Syracuse, New York, Crucible Materials Corporation -- http://www.crucible.com/-- aka Crucible Specialty Metals, Crucible Service Centers, Crucible Compaction Metals, Crucible Research and Trent Tube makes stainless and alloy steel for use in the aircraft, automotive, petrochemical, and other industries. The Company sold its trent tubes unit to Plymouth Tube in 2007. The Company and its affiliate, Crucible Development Corporation, filed for Chapter 11 protection on May 6, 2009 (Bankr. D. Del. Lead Case No. 09-11582). Mark Minuti, Esq., at Saul Ewing LLP represents the Debtors in their restructuring efforts. The Debtors propose to employ Duff & Phelps Securities LLP as investment banker; RAS Management Advisors LLC as business advisor; and Epiq Bankruptcy Solutions LLC as claims agent. Roberta A. DeAngelis, United States Trustee for Region 3, appointed five creditors to serve on the Official Committee of Unsecured Creditors. CRUCIBLE MATERIALS: Reaches Settlement with BofA on Assets Release ------------------------------------------------------------------ Judge Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware approved an agreement entered into by Crucible Materials Corp., with Bank of America regarding a release of assets the bank held in trust. According to Carla Main at Bloomberg News, the trust assets consist of a certain amount of cash and life insurance policies relating to the lives of certain former and present executives of Crucible held by the trust as owner and beneficiary. The assets were held subject to the claims of creditors. Based in Syracuse, New York, Crucible Materials Corporation -- http://www.crucible.com/-- aka Crucible Specialty Metals, Crucible Service Centers, Crucible Compaction Metals, Crucible Research and Trent Tube makes stainless and alloy steel for use in the aircraft, automotive, petrochemical, and other industries. The Company sold its trent tubes unit to Plymouth Tube in 2007. The Company and its affiliate, Crucible Development Corporation, filed for Chapter 11 protection on May 6, 2009 (Bankr. D. Del. Lead Case No. 09-11582). Mark Minuti, Esq., at Saul Ewing LLP represents the Debtors in their restructuring efforts. The Debtors engaged Duff & Phelps Securities LLP as investment banker; RAS Management Advisors LLC as business advisor; and Epiq Bankruptcy Solutions LLC as claims agent. Roberta A. DeAngelis, United States Trustee for Region 3, appointed five creditors to serve on the Official Committee of Unsecured Creditors. The Debtors listed assets and debts both ranging from $100 million to $500 million. DANIEL BERNHARDT: Case Summary & 13 Largest Unsecured Creditors --------------------------------------------------------------- Joint Debtors: Daniel S. Bernhardt Vicki L. Bernhardt Po Box 11776 Prescott, AZ 86304-1776 Bankruptcy Case No.: 09-17904 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Debtors' Counsel: Robert M. Cook, Esq. Law Offices of Robert M. Cook PLLC 219 W Second St Yuma, AZ 85364 Tel: (928) 782-7771 Fax: (928) 782-7778 Email: robertmcook@yahoo.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 13 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/azb09-17904.pdf The petition was signed by the Joint Debtors. DEBIASSE ENTREPRENEURS: Voluntary Chapter 11 Case Summary --------------------------------------------------------- Debtor: DeBiasse Entrepreneurs, Inc. 4 Park Avenue Madison, NJ 07940 Bankruptcy Case No.: 09-29662 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court District of New Jersey (Newark) Debtor's Counsel: Kenneth J. Rosellini, Esq. Hallock & Cammarota, LLP 600 Valley Road, Suite 101 Wayne, NJ 07470 Tel: (973) 692-0001 Fax: (973) 692-0011 Email: krosellini@halcamlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Stephen De Biasse, president of the Company. DELPHI CORP: Court Confirms Plan; Expects Closing This Quarter -------------------------------------------------------------- Delphi Corp. said July 30 it received approval of its First Amended Joint Plan of Reorganization, as modified, during the two- day confirmation hearing held in the U.S. Bankruptcy Court for the Southern District of New York. The Plan provides for the restructured company to emerge from Chapter 11 as soon as remaining steps are completed, including regulatory approvals. As reported by the TCR on July 28, JPMorgan Chase Bank, N.A., - in its capacity as administrative agent to lenders who provided $4 billion of debtor-in-possession financing, emerged as the winning bidder for Delphi's assets. General Motors Company affiliate GM Components Holdings LLC and DIP Holdco 3, LLC, a newly-formed entity by the DIP Lenders, will acquire substantially all of the assets and liabilities of Delphi through a credit bid. An earlier proposal by Platinum Equity Capital Partners, L.P., and GM serves as back-up bid. The Court has approved the sale, but the sale has not yet been closed. "We expect closing to occur during the current calendar quarter. The Company is grateful for the support of its customers, suppliers, employees, governments, communities, and other constituents during a time of dramatic change for both the company and the global automotive industry. We expect to emerge as a well-capitalized, strong and resilient company, with a clear focus on remaining a premier global supplier to the world's OEMs, the aftermarket and our medical industry customers," Delphi said. Under the Credit Bid, the consideration provided by GM Components includes: * the assumption of GM Assumed Liabilities, and the assumption or payment of the applicable cure amounts associated with the contracts and leases to be assigned to GM; * the waiver by each of New GM and Old GM of its prepetition claims, administrative claims and future claims in the Debtors' bankruptcy cases, including any claims pursuant to a Global Settlement Agreement, as amended, effective as of September 29, 2008, and each of the GM-Delphi Liquidity Agreements; * the payment to JP Morgan of an amount equal to $291 million plus DIP Priority Payments pursuant to the Master Disposition Agreement; * the payment to Delphi of up to $50 million to cover certain expenses consistent with a wind down budget attached as an exhibit to the Master Disposition Agreement; and * up to $15 million in professional fees, plus the costs of solicitation of approval for the Modified Plan not exceeding $12 million; provided that the sum of (x) those fees, plus (y) applicable cure amounts paid or assumed by the GM Buyers will not exceed $148 million; In addition, the consideration to be provided by DIP Holdco 3 includes: * the assumption of the Company Assumed Liabilities; * the assumption or payment of the applicable Cure Amounts associated with the contracts and leases to be assigned to DIP Holdco 3; * the Credit Bid; * up to $15 million of professional fees; and * deferred cash consideration, to the extent payable following the effective date of the Modified Plan and pursuant to the DIP Holdco 3 operating agreement, to the holders of allowed general unsecured claims, in an amount not to exceed $300 million. A summary of the principal differences between the GM-Platinum Master Disposition Agreement and the DIP Holdco Master Disposition Agreement is available for free at: http://bankrupt.com/misc/Delphi_MasterDispositionAgrSummary.pdf The lenders taking part in the purchase include Elliott Management Corp, Monarch Alternative Capital and Silver Point Capital LP, Reuters said. 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: Creditors May Resell Assets, Says Analyst ------------------------------------------------------ Creditors proposing to buy Delphi Corp.'s assets out of bankruptcy probably will try to resell the company rather than run it for the long term, James Gillette, an auto-parts supplier consultant at CSM Worldwide Inc., told Bloomberg News. Lenders such as Elliott Management Corp. and Silver Point Capital LP will look to recoup their investment of at least $3.5 billion in bankruptcy financing through a sale, Mr. Gillete said. Gillette noted that "these are purely financial firms." As reported by the TCR on July 28, JPMorgan Chase Bank, N.A., - in its capacity as administrative agent to lenders who provided $4 billion of debtor-in-possession financing, emerged as the winning bidder for Delphi's assets. General Motors Company affiliate GM Components Holdings LLC and DIP Holdco 3, LLC, a newly-formed entity by the DIP Lenders, will acquire substantially all of the assets and liabilities of Delphi through a credit bid. An earlier proposal by Platinum Equity Capital Partners, L.P., and GM served as back-up bid. The Court has approved the sale, but the sale has not yet been closed. A summary of the principal differences between the GM-Platinum Master Disposition Agreement and the DIP Holdco Master Disposition Agreement is available for free at: http://bankrupt.com/misc/Delphi_MasterDispositionAgrSummary.pdf The lenders taking part in the purchase include Elliott Management Corp, Monarch Alternative Capital and Silver Point Capital LP, Reuters said. 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: Wants to Stay Retirees' Suit ----------------------------------------- Dennis Black and Charles Cunningham and the Delphi Salaried Retirees Association filed with the U.S. District Court for the Eastern District of Michigan Southern Division, on July 16, 2009, a complaint for equitable relief against Craig G. Naylor, David N. Farr, Martin E. Welch, and James P. Whitson, in their capacities as named fiduciaries of the Delphi Retirement Program for Salaried Employees. By this motion, the Debtors ask the Court to enforce the automatic stay, or extend the automatic stay under Section 362 of the Bankruptcy Code, to stay all litigation associated with the DSRA Complaint. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, argues that the automatic stay applies to the District Court Action because there is a strong identity of interest between the Debtors and the Delphi Director and Officers. The Debtors allege that DSRA is trying to indirectly enjoin them from consummating a settlement agreement they entered with the Pension Benefit Guaranty Corporation that would result in the termination of the Salaried Plan. Mr. Butler maintains that although the assets of the Salaried Plan are not assets of the Debtors' estates, the Debtors' rights as Plan Administrator are property of the Debtors' estates. Similarly, the right of the Debtors to decide whether the Delphi Directors and Officers should remain named fiduciaries under the Salaried Plan is also the property of the Debtors' estates. Accordingly, Mr. Butler asserts that the automatic stay applies to the District Court Action to the extent it seeks to enjoin the Delphi-PBGC Settlement Agreement or replace the Delphi Directors and Officers. Moreover, the automatic stay applies to the remainder of the Complaint, which seeks a broad injunction against any act or practice that violates the Employee Retirement Income Security Act or the Salaried Plan, Mr. Butler adds. Aside from being inappropriate because an injunction would merely require compliance with applicable law, the intimidating and harassing effect of that injunction would interfere with the Debtors' operation of their business and create a situation where the conduct of the individuals through which the Debtors act would be subject to conflicting orders of different courts, he asserts. In the event the Michigan District Court rules in favor of the DSRA, the Debtors' already tight timetable for executing an emergence transaction would be jeopardized, he stresses. Thus, in the event the Court finds that the automatic stay does not apply to the District Court Action, the automatic stay should be extended because unusual circumstances exist in that the Debtors are the real party defendant and a judgment against the Delphi Directors and Officers would in effect be a judgment or finding against the Debtors, Mr. Butler maintains. Salaried Retirees' Letter On behalf of Messrs. Black and Cunningham and the DSRA, Joseph T. Moldovan, Esq., at Morrison Cohen LLP, in New York, relates that the parties were unable to agree on an order or stipulation that would resolve all pending issues. Moreover, he reveals, the Salaried Retirees had voluntarily dismissed their District Court Action. Similarly, hearing on the motion of restraining order and preliminary injunction against Delphi's directors and officers scheduled for July 27, 2009 is mooted. Mr. Moldovan explains that the Salaried Retirees have retracted their complaint because on July 22, 2009, the PBCG filed a complaint for Pension Plan Termination against Delphi as Plan Administrator for the Salaried Plan in the United States District Court for the Eastern District of Michigan Southern Division. The Salaried Retirees aver that until the time as the PBGC Action is resolved, they neither can nor will initiate or pursue any claims concerning the Salaried Plan except in the PBGC Action. According, the Salaried Retirees believe that those events have mooted the need for a determination by the Court on the Debtors' Motion to Stay. 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: Obtains Approval of Modifications to D&O Deals ----------------------------------------------------------- Delphi Corp. and its affiliates obtained approval from the Bankruptcy Court for proposed modifications to two stipulated settlements in the multidistrict litigation against Delphi Corporation, certain Delphi affiliates, and certain current and former directors and officers of Delphi under the federal securities laws and the Employee Retirement Income Security Act of 1974 in the United States District Court for the Eastern District of Michigan. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, told Bankruptcy Court Judge Robert Drain that on May 28, 2009, the Michigan District Court conducted a chambers conference attended by the Debtors, the Securities Lead Plaintiffs, the ERISA Named Plaintiffs, and a number of other settling parties. At the chambers conference, the District Court received an update regarding the Debtors' reorganization process and the negotiations among the parties. The District Court then provided guidance as to the proper procedures with respect to notice and the District Court's consideration of any changes to the MDL Settlements. The parties continued to engage in negotiations, and on July 10, 2009, entered into the Second Securities Stipulation Modification and the Amended ERISA Stipulation Modification -- MDL Settlements -- subject to approval by the District Court and the Bankruptcy Court. Mr. Butler notes that the three principal changes to the MDL Settlements are: (i) the classification and treatment of the allowed claims and interests granted to the Securities Class and the ERISA Class; (ii) the elimination of the Debtors' obligation to pay to the Securities Class $15 million in cash pursuant to an agreement with a third party; and (iii) streamlining of the conditions to the effective date of the MDL Settlement. Specifically, Mr. Butler reminds the Bankruptcy Court that the Final MDL Settlements Order granted to the Securities Lead Plaintiffs, as representatives of the Securities Class, an allowed claim for $179 million. Similarly, under the Final MDL Settlement Approval Order, the ERISA Named Plaintiffs, as representatives of the ERISA Class, were allowed an interest for $24.5 million. However, under the Modifications, the Debtors will have no obligation to propose any particular treatment to the Securities Allowed Claim and ERISA Allowed Interest under the Confirmed First Amended Joint Plan of Reorganization, as modified. Under the Modifications, the Securities Allowed Claim and ERISA Allowed Interest will have the same priority as general unsecured claims in the event that the Debtors' Modified Plan provides for a par plus accrued recovery for general unsecured creditors. Moreover, under the Securities Stipulation Modification, the Debtors had an obligation to cause to be paid to the Securities Lead Plaintiffs' escrow agent $15 million pursuant to an agreement with a certain third party. The $15 million payment was due within 10 days after the substantial consummation of the Debtors' Confirmed Plan and was a condition to the effective date of the settlement. However, given the Debtors' current financial condition, the parties agreed to eliminate the $15 million payment and the corresponding condition to the effective date of the settlement. Mr. Butler further notes that one of the conditions set forth in Final MDL Settlement Order requires distribution of the Delphi Net Consideration, pursuant to the Securities Stipulation, as soon practicable after satisfaction of certain conditions or the Bankruptcy Effective Date. Given that the Debtors have not substantially consummated the Confirmed Plan, the Bankruptcy Effective Date has not occurred and the MDL Settlements have not become effective. Against this backdrop, the releases provided in the stipulations will have not taken effect, leaving the Debtors without the paramount benefit of the settlement bargain. Thus, for the settlement to become effective, the Modifications eliminate the conditions related to the Debtors' distribution of the Delphi Net Consideration, if any, to the Securities Class and the Delphi Consideration, if any, to the ERISA Class following the Bankruptcy Effective Date. Once those conditions are satisfied, the MDL Settlements, including the releases of the Debtors, will become effective, without regard to the substantial consummation of a plan of reorganization. Accordingly, Mr. Butler emphasizes, the modified treatment of the Securities Allowed Claim and the ERISA Allowed Interest will make it easier for the Debtors to obtain the Court's approval of changes to the Confirmed Plan. Absent the Modifications, he points out, that the general unsecured creditors might object to the Modified Plan due to the treatment given to the Securities Allowed Claim and the ERISA Allowed Interest. He further notes that those objections would be more difficult to resolve given that the modifications to the Confirmed Plan would provide general unsecured creditors and others with only a partial recovery. The Modifications remove an obstacle to the approval of changes to the Confirmed Plan and the Debtors' emergence from Chapter 11 as soon as practicable, he asserts. Similarly, Mr. Butler says, the Modifications are beneficial to the Debtors and their estates because the Debtors will not have to choose from a range of unattractive options that includes paying the $15 million from their own limited and dwindling cash reserves or potentially breaching the provision of the Securities Stipulation Modification that required the Debtors to cause the payment of the $15 million. Mr. Butler also notes that a third settlement agreement, and Insurance Stipulation, will be affected by the Modifications because the effective date of the Insurance Stipulation is tied to the effective date of the MDL Settlements. The Insurance Stipulation will be deemed effective upon the effective date of the MDL Settlements. A full-text copy of the Modified MDL Settlements is available for free at http://bankrupt.com/misc/Delphi_ModMDLSettlements.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) DELTA AIR LINES: Divulges Plans to Mitigate Impact of Recession --------------------------------------------------------------- In its Form 10Q filed with the Securities and Exchange Commission, Delta Air Lines, Inc., provided updates on the management's discussions and analysis of its financial condition and results of operations and responses to global economic recession. Delta Senior Vice President and Chief Financial Officer Hank Halter said that in an effort to lessen the impact of the global recession, Delta will reduce international capacity by 15%, compared to the prior year on a combined basis, beginning in September 2009 to align its capacity with declining demand in the marketplace. Delta remains committed to diversifying its international network and has added more than 20 new international markets this year. As of June 30, 2009, Delta owns a total of 686 aircraft consisting of 553 passenger aircraft, 3 freighter aircraft and 130 regional aircraft. To reduce fleet costs, Delta plans to remove 30 to 40 mainline passenger aircraft from the fleet during 2009. In addition, the Company will retire its entire fleet of B-747-200F freighter aircraft by the end of 2009 due to that fleet's age and inefficiency. Furthermore, Delta anticipates removing over 30 regional jets from its network over the next 18 months. Delta believes it has flexibility in its network and fleet to remove additional capacity if the environment warrants, Mr. Halter disclosed. Delta's combined workforce was 10% lower year-over-year, reflecting reductions from normal attrition, as well as voluntary workforce reduction programs offered to align workforce with reduced capacity as of the Reporting Period. As of June 30, 2009, Delta had 777,644,595 shares of common stock outstanding. Financial Condition and Liquidity According to Mr. Halter, Delta expects to meet cash needs for the next 12 months from cash flows from operations, cash and cash equivalents, short-term investments and financing arrangements. Delta's cash and cash equivalents and short-term investments were $4.9 billion at June 30, 2009. In addition, the Company has an undrawn $500 million revolving credit facility. Northwest Airlines Corporation is also a party to a $904 million senior corporate credit facility, which was fully drawn at June 30, 2009. With respect to aircraft order commitments at June 30, 2009, Delta has financing commitments from third parties, cancellation rights or definitive agreements to sell certain aircraft to third parties immediately following delivery of those aircraft to Delta by the manufacturer. Delta intends to refinance the total amounts of both the Bank Credit Facility and $500 Million Revolving Credit Facility prior to, or at the time of, their final maturity dates. "There can be no assurance, however, that we will be able to refinance these facilities in light of current credit market conditions or for other reasons. In the event that we are not able to refinance these facilities, we believe that we have sufficient liquidity to fund the maturities," Mr. Halter disclosed. To integrate the operations of Delta and Northwest, Delta must obtain a single operating certificate for the two airlines from the Federal Aviation Administration. Elected Board of Directors Mr. Halter outlined the results of elections for the Delta's Board of Directors, which was conducted during the Company's Annual Meeting of Stockholders held on June 22, 2009, in New York. The newly elected Board of Directors garnered these votes: NOMINEES FOR AGAINST ABSTENTIONS -------- --- ------- ----------- Richard H. Anderson 531,727,863 118,311,886 2,170,310 Roy J. Bostock 488,936,271 159,022,082 4,251,706 John S. Brinzo 529,981,027 117,284,613 4,944,420 Daniel A. Carp 529,986,132 117,393,125 4,830,802 John M. Engler 529,715,855 118,151,763 4,342,442 Mickey P. Foret 510,707,316 138,163,560 3,339,183 David R. Goode 530,445,964 117,126,387 4,637,708 Paula Rosput Reynolds 528,085,987 119,928,693 4,185,380 Kenneth C. Rogers 531,028,316 116,780,870 4,390,873 Rodney E. Slater 529,583,392 118,515,347 4,101,320 Douglas M. Steenland 515,556,788 134,334,122 2,319,149 Kenneth B. Woodrow 530,162,044 117,435,517 4,612,498 Delta stockholders also ratified the appointment of Ernst & Young as independent auditors for the year ending December 31, 2009, by a vote of: FOR AGAINST ABSTENTIONS --- ------- ----------- 640,367,524 9,320,583 2,521,952 The Stockholders also defeated the stockholder proposal regarding cumulative voting in the election of directors by a vote of: FOR AGAINST ABSTENTIONS --- ------- ----------- 137,892,524 391,796,114 1,859,819 There were 120,661,602 broker non-votes. Update on Legal Proceedings Mr. Halter further updated the SEC of pending legal proceedings relating to employment practices, environmental issues, bankruptcy matters and other matters concerning the Company's business, specifically relating to the First Bag Fee Antitrust Litigation and the Cincinnati Airport settlement. In May, June and July, 2009, a number of purported class action antitrust lawsuits were filed in the U.S. District Courts for the Northern District of Georgia, the Middle District of Florida, and the District of Nevada against Delta and AirTran Airways. The plaintiffs allege that Delta and AirTran engaged in collusive behavior in violation of Section 1 of the Sherman Act in November 2008, based upon certain public statements made in October 2008 by AirTran's CEO at an analyst conference concerning fees for the first checked bag, Delta's imposition of a fee for the first checked bag on November 4, 2008, as well as AirTran's imposition of a similar fee on November 12, 2008. The plaintiffs seek to assert claims on behalf of an alleged class consisting of passengers who paid the first bag fee after December 5, 2008, and seek injunctive relief and unspecified treble damages. Delta contends that the claims in the cases are without merit and are vigorously defending these lawsuits. Motions are pending to transfer and consolidate all pending cases at the Georgia District Court, Mr. Halter said. Mr. Halter further noted that a small group of bondholders challenged Delta's settlement agreement with the Kenton County Airport Board and UMB Bank, N.A., as trustee for the Series 1992 Bonds, to restructure certain of Delta's lease and other obligations at the Cincinnati-Northern Kentucky International Airport. The Objecting Bondholders appealed to the U.S. Court of Appeals for the Second Circuit. In February 2009, the Court of Appeals upheld the decision of the District Court for the Southern District of New York, which affirmed the Settlement Agreement. The Court of Appeals subsequently denied the Objecting Bondholders' petition for a rehearing en banc. As a result, the Objecting Bondholders have filed a petition for a writ of certiorari with the U.S. Supreme Court. A full-text copy of Delta's Second Quarter Financial Results is available for free at http://ResearchArchives.com/t/s?4037 DELTA AIR LINES, INC. Unaudited Consolidated Balance Sheets As of June 30, 2009 ASSETS Current Assets: Cash and cash equivalents $4,851,000,000 Short-term investments 91,000,000 Restricted cash and cash equivalents 361,000,000 Accounts receivable, net 1,410,000,000 Hedge margin receivable - Expendable parts & supplies inventories, net 372,000,000 Deferred income taxes, net 316,000,000 Prepaid expenses and other 898,000,000 ---------------- Total Current Assets 8,299,000,000 Property and Equipment, Net 20,916,000,000 Other Assets Goodwill 9,737,000,000 Identifiable intangibles, net 4,888,000,000 Other noncurrent assets 640,000,000 ---------------- Total Other Assets 15,265,000,000 ---------------- Total Assets $44,480,000,000 ================ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current maturities of long-term debt $1,824,000,000 Air traffic liability 3,852,000,000 Accounts payable 1,580,000,000 Frequent flyer deferred revenue 1,580,000,000 Accrued salaries and related benefits 1,019,000,000 Hedge Derivatives liability 150,000,000 Taxes payable 673,000,000 Other accrued liabilities 471,000,000 ---------------- Total Current Liabilities 11,149,000,000 Noncurrent Liabilities: Long-term debt and capital leases 14,774,000,000 Pension, postretirement & related benefits 11,101,000,000 Frequent flyer deferred revenue 3,367,000,000 Deferred income taxes, net 1,886,000,000 Other noncurrent liabilities 1,223,000,000 ---------------- Total noncurrent liabilities 32,351,000,000 Commitments and Contingencies Stockholders' Equity: Common stock: Common stock at $0.00001 par value, 1,500,000,000 shares authorized, 781,148,627 shares issued June 30, 2009 - Additional paid-in capital 13,765,000,000 Accumulated deficit (9,659,000,000) Accumulated other comprehensive loss (2,963,000,000) Treasury stock, at cost, 9,504,032 shares at June 30, 2009 (163,000,000) ---------------- Total Stockholders' Equity 980,000,000 ---------------- Total Liabilities and Stockholders' Equity $44,480,000,000 ================ DELTA AIR LINES, INC. Unaudited Consolidated Statements of Cash Flow Six Months Ended June 30, 2009 Net Cash Provided by Operating Activities $1,477,000,000 Cash Flows from Investing Activities: Property and equipment additions: Flight equipment (498,000,000) Ground property and equipment (113,000,000) Redemption of short-term investments 121,000,000 Proceeds from sales of flight equipment 76,000,000 Decrease in restricted cash & cash equivalents 10,000,000 Other, net - ---------------- Net Cash used in Investing Activities (404,000,000) Cash Flows from Financing Activities: Payments on long-term debt (853,000,000) Proceeds from long-term obligations 390,000,000 Other, net (14,000,000) ---------------- Net Cash used in Financing Activities (477,000,000) Net Increase (Decrease) in Cash & Equivalents 596,000,000 Cash & cash equivalents at beginning of period 4,255,000,000 ---------------- Cash & cash equivalents at end of period $4,851,000,000 ================ About Delta Air Lines With its acquisition of Northwest Airlines, Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- is now the world's largest airline. From its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its Northwest subsidiary and Delta Connection carriers offer service to more than 376 destinations worldwide in 66 countries and serves more than 170 million passengers each year. Delta's marketing alliances allow customers to earn and redeem either SkyMiles or WorldPerks on more than 16,000 daily flights offered by SkyTeam and other partners. The merger closed on October 29, 2008. Prior to the merger, Delta was the world's second-largest airline in terms of passengers carried and Northwest was the world's fourth largest airline. Northwest and 12 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington, represented the Northwest Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors retained Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., as its bankruptcy counsel. When the Northwest Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. (Northwest Airlines Bankruptcy News Issue No. 114; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). Delta and 18 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provided the Delta Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provided the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, served as the Committee's financial advisors. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on September 26, 2007. (Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). As reported by the TCR on June 29, 2009, Fitch Ratings has downgraded the debt ratings of Delta Air Lines, Inc., and its wholly owned subsidiary Northwest Airlines, Inc. -- (i) DAL's Issuer Default Rating to 'B-' from 'B', First-lien senior secured credit facilities to 'BB-/RR1' from 'BB/RR1', and Second-lien secured credit facility to 'B-/RR4' from 'B/RR4', and (ii) NWA's IDR to 'B-' from 'B'; and Secured bank credit facility to 'BB- /RR1' from 'BB/RR1'. The downgrade of DAL's ratings reflects the continued erosion of the airline's near-term cash flow generation potential that has resulted from extremely weak business travel demand and large year-over-year declines in passenger revenue per available seat mile. DELTA AIR LINES: Seeks to Resolve Seniority, Representation Issues ------------------------------------------------------------------ As widely reported, Delta Air Lines is geared toward settling the union representation and seniority issues hounding the airline's flight attendant workgroup. In a statement dated July 27, 2009, the Association of Flight Attendants-CWA said it had asked the National Mediation Board, a federal institution that resolves labor issues, to declare that the merger of Delta and its acquired subsidiary Northwest Airlines Corporation, which was completed in October 2008, has "created a single transportation system that requires the NMB to conduct a representation election for the carriers' flight attendants." Northwest's 8,000 pre-merger flight attendants are currently represented by AFA-CWA, while those at Delta are not represented by a union. Upon the NMB's declaration, an election will be held to determine if AFA-CWA will be the exclusive bargaining agent for the airline's 20,000 FAs, according to the statement. The election -- which will be among the largest ever conducted by the NMB -- could be scheduled this fall, reports the Atlanta-Journal Constitution. "With AFA-CWA representation, [Delta and Northwest] flight attendants will work alongside management in negotiating what is best for their careers," Patricia Friend, AFA-CWA International President stated. A full-text copy of AFA-CWA's statement is available for free at: http://bankrupt.com/misc/AFA-CWA_DeltaFAStatement0727.pdf In a memo addressed to its flight attendants, Delta emphasized that participating in the election is one of the biggest decisions of their career, AJC adds. Concurrent with the AFA-CWA's statement, Robert Roach, Jr., general vice president of the International Association of Machinists and Aerospace Workers -- which represents pre-merger Northwest ground workers -- asked Delta CEO Richard Anderson for a meeting "to discuss various issues which will help facilitate [IAM's] determination of single carrier status." In response, Mike Campbell, executive vice president of Human Resources and Labor Relations at Delta, has agreed to a "productive" meeting with the Union within August 3 and August 5, 2009, in Washington, D.C. "In view of this history, the IAM is now the only union that has not filed to resolve its post-merger representation status. We are available to discuss whatever subjects you want to raise, but in the end, we want to make clear that the continued post-merger status of the various NWA crafts or classes represented by the IAM pre-merger needs to be resolved," Mr. Campbell wrote in a letter to IAM. IAM's possible designation of Delta and Northwest as a single transportation system would effectively trigger a process for a union representation vote among non-union pre-merger Delta and unionized pre-merger Northwest ground workers, notes the Atlanta Business Chronicle. A full-text copy of Delta's letter to IAM is posted at Delta's Web site at http://ResearchArchives.com/t/s?404a The NMB has already recognized Delta as a single entity in labor negotiations. Delta is meshing its post-merger employees to obtain a single operating certificate from the Federal Aviation Administration by the end of 2009. Combined, AFA-CWA and IAMAW represent 16,000 pre-merger Northwest employees at Delta, The Detroit News has said. About Delta Air Lines With its acquisition of Northwest Airlines, Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- is now the world's largest airline. From its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its Northwest subsidiary and Delta Connection carriers offer service to more than 376 destinations worldwide in 66 countries and serves more than 170 million passengers each year. Delta's marketing alliances allow customers to earn and redeem either SkyMiles or WorldPerks on more than 16,000 daily flights offered by SkyTeam and other partners. The merger closed on October 29, 2008. Prior to the merger, Delta was the world's second-largest airline in terms of passengers carried and Northwest was the world's fourth largest airline. Northwest and 12 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington, represented the Northwest Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors retained Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., as its bankruptcy counsel. When the Northwest Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. (Northwest Airlines Bankruptcy News Issue No. 114; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). Delta and 18 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provided the Delta Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provided the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, served as the Committee's financial advisors. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on September 26, 2007. (Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). As reported by the TCR on June 29, 2009, Fitch Ratings has downgraded the debt ratings of Delta Air Lines, Inc., and its wholly owned subsidiary Northwest Airlines, Inc. -- (i) DAL's Issuer Default Rating to 'B-' from 'B', First-lien senior secured credit facilities to 'BB-/RR1' from 'BB/RR1', and Second-lien secured credit facility to 'B-/RR4' from 'B/RR4', and (ii) NWA's IDR to 'B-' from 'B'; and Secured bank credit facility to 'BB- /RR1' from 'BB/RR1'. The downgrade of DAL's ratings reflects the continued erosion of the airline's near-term cash flow generation potential that has resulted from extremely weak business travel demand and large year-over-year declines in passenger revenue per available seat mile. DELTA AIR LINES: Suggests Govt. Control of Speculative Oil Trades ----------------------------------------------------------------- On behalf of the Air Transport Association, Delta Air Lines general counsel Ben Hirst disclosed that U.S. airlines support government regulation to curb speculative trading, reports CNNMoney.com. Position limits should be set for "noncommercial traders" -- or those who don't depend on locking in future oil prices to manage business costs -- to ensure that no individual trader holds, in the spot month, an unduly large percentage of the spot-month delivery supply, Mr. Hirst told the Commodity Futures Trading Commission at a meeting in Washington D.C., on July 28, 2009. The CFTC already has the authority to set position limits for designated contract markets to prevent excessive speculation, Mr. Hirst noted, according to the report. Mr. Hirst disclosed that Delta ranks second to the U.S. government as the largest consumer of jet fuel in the world, using up four billion gallons of jet fuel annually. "In 2008, as oil prices and volatility peaked, fuel expense, including the cost of hedging, consumed 40% of our total revenues, directly resulting in the need to reduce our [seat] capacity by more than 10%, and eliminate nearly 10,000 jobs," Mr. Hirst noted, according to CNNMoney.com. About Delta Air Lines With its acquisition of Northwest Airlines, Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- is now the world's largest airline. From its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its Northwest subsidiary and Delta Connection carriers offer service to more than 376 destinations worldwide in 66 countries and serves more than 170 million passengers each year. Delta's marketing alliances allow customers to earn and redeem either SkyMiles or WorldPerks on more than 16,000 daily flights offered by SkyTeam and other partners. The merger closed on October 29, 2008. Prior to the merger, Delta was the world's second-largest airline in terms of passengers carried and Northwest was the world's fourth largest airline. Northwest and 12 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington, represented the Northwest Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors retained Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., as its bankruptcy counsel. When the Northwest Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. (Northwest Airlines Bankruptcy News Issue No. 114; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). Delta and 18 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provided the Delta Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provided the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, served as the Committee's financial advisors. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on September 26, 2007. (Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). As reported by the TCR on June 29, 2009, Fitch Ratings has downgraded the debt ratings of Delta Air Lines, Inc., and its wholly owned subsidiary Northwest Airlines, Inc. -- (i) DAL's Issuer Default Rating to 'B-' from 'B', First-lien senior secured credit facilities to 'BB-/RR1' from 'BB/RR1', and Second-lien secured credit facility to 'B-/RR4' from 'B/RR4', and (ii) NWA's IDR to 'B-' from 'B'; and Secured bank credit facility to 'BB- /RR1' from 'BB/RR1'. The downgrade of DAL's ratings reflects the continued erosion of the airline's near-term cash flow generation potential that has resulted from extremely weak business travel demand and large year-over-year declines in passenger revenue per available seat mile. DOMINGO MORALES: Case Summary & 11 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Domingo A. Morales 3145 Washington Street Jamaica Plain, MA 02130 Bankruptcy Case No.: 09-17130 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: Joan N. Feeney Debtor's Counsel: Herbert Weinberg, Esq. Rosenberg & Weinberg, 805 Turnpike St., Suite 201 North Andover, MA 01845 Tel: (978) 683-2479 Fax: (978) 682-3041 Email: hweinberg@jrhwlaw.com Patrick Martin, Esq. Rosenberg & Weinberg 805 Turnpike Street, Suite 201 North Andover, MA 01845 Tel: (978) 683-2479 Email: pmartin@jrhwlaw.com Total Assets: $1,545,527 Total Debts: $2,222,856 A full-text copy of the Debtor's petition, including a list of its 11 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mab09-17130.pdf The petition was signed by Mr. Morales. EDWARD MICHAEL BOBOLA: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Joint Debtors: Edward Michael Bobola aka E. Michael Bobola Joanne Bobola 93 Laurel Street Fairhaven, MA 02719 Bankruptcy Case No.: 09-17134 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: William C. Hillman Debtors' Counsel: Neil D. Warrenbrand, Esq. Law Offices of Neil D. Warrenbrand One McKinley Square Boston, MA 02109 Tel: (617) 720-2286 Email: neil@warrenbrandlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtors did not file a list of their 20 largest unsecured creditors when they filed their petition. The petition was signed by the Joint Debtors. ENERGY PARTNERS: Plan Gets Overwhelming Support from Noteholders ---------------------------------------------------------------- NetDockets relates Energy Partners Ltd. on Monday announced the results of voting on its chapter 11 plan of reorganization. NetDockets says Epiq Bankruptcy Solutions, LLC, the Debtor's claims and noticing agent, disclosed that a majority of the two classes of claims and interests entitled to submit votes voted in favor of the plan: -- Plan Class 7 - Senior Note Claims * 99.95% of claimholders voted in favor by amount ($367.3 million in favor vs. $190,000 against) * 98.90% of claimholders voted in favor by number (90 claimholders in favor vs. 1 against) -- Plan Class 8 - EPL Common Stock Interests * Holders of 52.11% of shares voted in favor (6,757,433 shares in favor vs. 6,209,250 against) * The ballots of two shareholders (collectively holding 4,647 shares) were not tabulated because the ballots did not indicate a vote in favor or against. As reported by the Troubled Company Reporter on July 27, 2009, Secured lenders Fortis Capital Corp. and BNP Paribas object to the reorganization plan for Energy Partners Ltd., claiming the Plan does not provide adequate assurance the oil and gas producer would receive $125 million in exit financing and incorrectly indicates secured creditors would be fully repaid, Law360 reports. The United States Bankruptcy Court for the Southern District of Texas, Houston Division, approved in June the Disclosure Statement filed in connection with Energy Partners' pre-negotiated Joint Plan of Reorganization and authorized EPL to begin soliciting votes on the Plan. Confirmation hearing on the Plan was scheduled for July 29, 2009. The Plan is supported by a committee that represents the Company's senior unsecured noteholders. The TCR on May 19, 2009, said the Plan is supported by an ad hoc committee of the Company's senior noteholders comprised of more than 66.6% of the outstanding aggregate principal amount of the Company's 9.75% Senior Unsecured Notes due 2014 and the Company's Senior Floating Notes due 2013. The Plan provides for: -- Conversion of the Company's three series of outstanding Senior unsecured notes, representing approximately $455 million of indebtedness, into 100% of the outstanding common stock in the reorganized Company upon its emergence from bankruptcy; -- Current stockholders of the Company would receive warrants Exercisable for 12.5% of the common stock of the reorganized Company; -- Secured debt obligations under the Credit Agreement, Representing approximately $83 million of indebtedness, will be satisfied in full; -- Obligations owed to the MMS will be handled in the manner Previously described by the Company; and -- 100% cash recovery for unsecured creditors to be paid in accordance with the terms set forth in the Plan. The TCR said the Company is seeking a new first lien working capital facility to fund the Company's ongoing operations and pay obligations under the Plan. The Disclosure Statement filed on May 15, 2009, contains a historical profile of the Company, a description of proposed distributions to creditors, as well as many of the technical matters required for the solicitation process. About Energy Partners Ltd. 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. EVERETT MARITIME: Port of Everett Seeks Transfer of Venue --------------------------------------------------------- The Port of Everett asks the U.S. Bankruptcy Court for the Northern District of Illinois to transfer venue of the bankruptcy case of Everett Maritime, LLC, to the Western District of Washington for the convenience of parties-in-interest and in the interests of justice. According to NetDockets, the Port of Everett acknowledges that venue is likely proper in the Northern District of Illinois, but asserts that venue would also be proper in the Western District of Washington. According to NetDockets, the Port of Everett argues that Everett Maritime is a Washington limited liability company and that its principal assets are located in Washington. Port of Everett notes the Debtor's owners and managers "appear" to be located in Chicago, which would cause Everett Maritime's "principal place of business" to be located in Chicago under Seventh Circuit precedent. Port of Everett, according to NetDockets, also asserts that "the clear majority of unsecured creditors -- whether viewed in terms of number of creditors or claim amounts -- are located" in Washington, the "essence of this case" is an option agreement between the Port and the debtor, all of the witnesses related to that agreement reside in Washington, and the cases would be more economically administered in Washington. Everett Maritime LLC is the developer of the Port Gardner Wharf real estate development project in Everett, Washington. Everett Maritime filed for Chapter 11 on May 20, 2009 (Bankr. N.D. Ill. Case No. 09-18224). David K. Welch, Esq., at Crane Heyman Simon Welch & Clar, represents the Debtor as counsel. The Debtor disclosed $76,517,033 in total assets and $22,155,482 in total debts. FIFTH AVENUE EXCAVATING: Case Summary & 6 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Fifth Avenue Excavating LLC 2572 5th Ave. N Seattle, WA 98109 Bankruptcy Case No.: 09-17522 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Larry B. Feinstein, Esq. Vortman & Feinstein 500 Union St., Suite 500 Seattle, WA 98101 Tel: (206) 223-9595 Email: lbf@chutzpa.com Total Assets: $1,142,100 Total Debts: $1,163,320 A full-text copy of the Debtor's petition, including a list of its 6 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/wawb09-17522.pdf The petition was signed by Gary Ard, owner/partner of the Company. FLEETWOOD RETAIL: Case Summary 50 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Fleetwood Retail Corp. of Arizona 3125 Myers Street P.O. Box 7638 Riverside, CA 92513-7638 Bankruptcy Case No.: 09-27248 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court Central District of California (Riverside) Debtor's Counsel: Craig Millet, Esq. 3161 Michelson Dr, Suite 1200 Irvine, CA 92612 Tel: (949) 451-3986 Fax: (949) 475-4651 Email: cmillet@gibsondunn.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,001 to $100,000 A list of the Company's 50 largest unsecured creditors is available for free at: http://bankrupt.com/misc/cacb09-27248.pdf The petition was signed by Andrew M. Griffiths, senior V.P. and chief financial officer of the Company. FLYING J: Seeks Court Nod to Borrow $100 Million from Pilot Travel ------------------------------------------------------------------ Flying J Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware for authority to obtain postpetition financing from Pilot Travel Centers LLC on a superpriority administrative claim and first priority lien basis, in accordance with a budget. The Debtors relate that they have a need for the DIP Facility to provide replacement surety bonds, ensure adequate liquidity to continue operations, prevent anticipated cash flow shortages and bridge to an anticipated merger or other transaction with the DIP Lender that will inure to the benefit of all Flying J stakeholders. As explained by the Debtors, more than $22 million in surety bonds issued by Great American Insurance Company will terminate on August 4, 2009. The prepetition surety bonds secure various obligations, including state workers' compensation obligations and obligations to fund fuel tax licenses. The Debtors' inability to secure postpetition financing for Flying J likely will trigger demands to collateralize other existing surety bonds that the Debtors will not be able to meet and still continue to have sufficient liquidity to satisfy their operational and other postpetition demands. The Debtors also ask the Court to authorize Flying J to execute a letter of intent with Pilot, to sell the certain assets pursuant to an acquisition agreement. Pilot's obligation to close on the DIP Facility is conditioned on the Court's approval, by July 31, 2009, of the Letter of Intent. The Debtors have filed a motion asking the Bankruptcy Court to authorize them to file the unreadacted letter of intent under seal. Specifically, Flying J seeks to sell, in return for consideration consisting of cash and equity, its travel center and trucking operations, corporate headquarters building, certain excess land adjacent to Flying J's travel plazas and certain other Flying J business operations. As further described in the Letter of Intent, Flying J will be obligated not to encourage or solicit bids or interest from other potential interested third parties for an initial exclusivity period, the length of which is dependent upon the achievement of certain milestones. The consideration for the acquired assets shall consist of a combination of cash and equity in Pilot (a) based on an enterprise value of Flying J's business operations of not less than $1.189 billion, (b) in any event including a cash portion to be p[id to Flying J at the closing of the Transaction of between, at Flying J's option, $300 million and $500 million and (c) for purposes of determining the equity portion of consideration to be issued to Flying J at closing of the Transaction, based on an enterprise value of Pilot of $3.291 billion. The respective enterprise values of Flying J, for purposes of determining the total consideration, and Pilot, for purposes of determining the equity portion of the consideration to be paid to Flying J shall be subject to customary net debt and customary working capital adjustments. Debtors anticipate that the transaction with Pilot would pay all Flying J creditors in full in cash, provide value to Flying J's shareholders, and allow Flying J to exit bankruptcy protection as a stronger, healthier business. The proposed DIP Facility was negotiated primarily as a material inducement to Flying J's execution of the Letter of Intent. The principal terms of the DIP Facility are: Borrower : Flying J Inc. Guarantors : Flying J Transportation LLC, AFJ and the other direct and indirect subsidiaries of Flying J. Amount and Type of Facility : a) a revolving line of credit in the maximum principal amount of $55 million. b) letters of credit/bond facility up to a maximum aggregate amount of $45 million. DIP Facility Termination Date : The earliest to occur of: a) June 30, 2010; b) July 31, 2009, if the Court does not enter an order approving the Letter of Intent by that date; c) September 30, 2010, if the Acquisition Agreement has been executed and delivered, and is thereafter terminated on March 31, 2010, because the waiting period under the HSR Act shall not have expired on or prior to such date; d) acceleration of the DIP Obligations due to the occurrence and continuation of an Event of Default; e) the "effective date" of any confirmed plan of reorganization; and f) the date of closing of the Transaction. Non-Default Interest Rate/Fees and Payment Terms : a) Line of Credit: 12% p.a. b) LC/Bond Facility: 5% p.a. of the aggregate face amount of all LC/Bonds issued under the LC/Bond Facility. Default Interest Rate : Applicable non-default rate plus 200 bps. Loan Payments : All unpaid principal and interest on the DIP Facility will be due and payable, and all LC/Bonds shall be cash collateralized in full on the Termination Date. Liens : The DIP Facility shall be secured by valid, first priority liens on (i) all equity and and membership interests in (a) Flying J Transportation LLC, (b) AFJ LLC and (c) certain other entities set forth on Schedule 1 of the DIP Term Sheet; (ii) the real property set forth on Schedule 1 of the DIP Term Sheet; (iii) Flying J's and AFJ's leasehold interests in all plazas/truck stops; (iv) Flying J's rights in that certain intercompany receivable owed to it by AFJ in the outstanding principal amount of approximately $50 million; (v) all proceeds of the Transaction; and (vi) all products and proceeds of the foregoing. About Flying J Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/-- is among the 20 largest private companies in America, with 2007 sales exceeding $16 billion. The fully integrated oil company employs approximately 14,700 people in the U.S. and Canada through its interstate operations, transportation, refining and supply, exploration and production, as well as its financial services and communications, divisions. Flying J and six of its affiliates filed for bankruptcy on December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Flying J sought Chapter 11 protections after a precipitous drop in oil prices and disruption in the credit markets brought to bear significant short-term pressure on the company's liquidity position. Attorneys at Kirkland & Ellis LLP represent the Debtors as counsel. Young, Conaway, Stargatt & Taylor LLP is the Debtors' Delaware Counsel. Blackstone Advisory Services L.P. is the Debtors' investment banker and financial advisor. Epiq Bankruptcy Solutions LLC is the Debtors' notice, claims and balloting agent. In its formal schedules submitted to the Bankruptcy Court, Flying J listed assets of $1,433,724,226 and debts of $640,958,656. An official committee of unsecured creditors has been appointed in the case. Pachulski Stang Ziehl & Jones LLP has been tapped as counsel for the creditors' panel. FONTAINEBLEAU: Wants Use of Cash Collateral Until Aug. 31 --------------------------------------------------------- Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC and Fontainebleau Las Vegas Capital Corp. seek further authority from the Court to use Cash Collateral through the earliest to occur of: (a) August 31, 2009, or (b) the occurrence and continuation of a "Termination Event" as the term is defined in the Proposed Third Interim Cash Collateral Order. The Debtors also seek a Court order: -- allowing them to providing related adequate protection; -- providing for the payment of the Debtors' professionals and other general and administrative expenses associated with the Chapter 11 cases; and -- setting the time for a final hearing and objection deadline with respect to the Cash Collateral Motion. Pursuant to a proposed third interim cash collateral order the Debtors intend to use the Cash Collateral solely and exclusively for the disbursements set forth in the Budget for the period of time from July 20, 2009, until the earliest to occur of (i) the date that the Proposed Third Interim Cash Collateral Order or the Final Order -- when applicable -- ceases to be in full force and effect or (ii) the occurrence and continuation of a Termination Date through the earliest to occur of September 3, 2009. The Proposed Third Interim Cash Collateral Order contains terms that are otherwise identical in every material aspect to those previously approved in the First Interim Cash Collateral Order, the Debtors tell the Court. Moreover, under the proposed Third Interim Cash Collateral Order, the Prepetition Secured Parties will have a senior lien on the Cash Collateral, and have the right under the Prepetition Loan Documents to apply the Cash Collateral to repay the Obligations. Under the Prior Cash Collateral Orders, the Prepetition Secured Parties were granted Adequate Protection Obligations, including Adequate Protection Liens and Superpriority Claims, as protection for the use of Cash Collateral thereunder. The Term Lender Steering Group is unwilling to consent to use of the Cash Collateral unless any Cash Collateral utilized since the Petition Date under the Prior Cash Collateral Orders, and the proposed Third Interim Cash Collateral Order, is deemed to have been repaid to the Prepetition Secured Parties in satisfaction of payment Obligations under the Prepetition Loan Documents and further deemed to have been reborrowed by the Debtors as postpetition debt, pursuant to Section 364(d), secured by the Adequate Protection Liens. A full-text copy of the Proposed Third Interim Cash Collateral Order can be accessed at no charge at: http://bankrupt.com/misc/FB_2ndPThirdInterimCashCollOrd.pdf The Debtors also submitted to the Court a cash budget for the weeks ending August 9, 16, 23, and 30, 2009, a copy of which is available for free at: http://bankrupt.com/misc/FB_Budget_Aug3to30.pdf Objections (a) Bank of America, N.A. Bank of America, N.A., as Administrative Agent under a Credit Agreement dated June 6, 2007 with Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas II, LLC, and the lenders party thereto, objects to the Proposed Third Interim Cash Collateral Order to the extent that lenders potentially holding a majority of the total outstanding Obligations under the Credit Agreement have not consented to the Debtors' use of cash collateral and to the extent that all lenders are not provided with adequate protection of their interests under the Credit Agreement. BofA believes that even if the Proposed Third Interim Cash Collateral Order were found to adequately protect the Term Lenders, the Revolving Lenders are not adequately protected because of certain unequal treatment. The Revolving Lenders have outstanding exposure to the Debtors in the form of letters of credit and other financial accommodations, and this exposure cannot be simply disregarded by the Debtors, BofA says. BofA also reiterated its objection to the First Cash Collateral Motion. (b) Creditors Committee The Official Committee of Unsecured Creditors asserts that the Proposed Third Interim Cash Collateral Order continues to impermissibly impair its ability to perform its duties pursuant to Section 1103(c) and specifically discriminates against the Committee's professionals by providing solely for the payment of the fees and expenses of the Debtors' professionals. Given this overwhelmingly disparate and discriminatory treatment of the Committee through the Proposed Third Interim Cash Collateral Order, the Committee avers that the Term Lender Steering Group clearly seeks to prevent the Committee from discharging its fiduciary duties pursuant to Section 1103(c). Additionally, the Committee asserts that the Proposed Third Interim Cash Collateral Order radically and impermissibly changes the relief sought by the Debtors and the Term Lender Steering Group from the use of cash collateral to a fictional dip loan with priming liens. The Committee argues that these DIP Loan provisions are a tortured attempt by the Term Lender Steering Group to bootstrap and improve their lien positions at the expense of other creditors. However, the provisions violate established 11th Circuit authority prohibiting cross-collateralization of prepetition debt and post petition debt. (c) Desert Fire Protection, et al. Desert Fire Protection, a Nevada Limited Partnership, Bombard Mechanical, LLC, Bombard Electric, LLC, Warner Enterprises, Inc. doing business as Sun Valley Electric Supply Co., Absocold Corporation doing business as Econ Appliance, Austin General Contracting, and Powell Cabinet and Fixture Co., Safe Electronics, Inc., argue that the Debtors are attempting to acquiesce to the demands of the Term Lenders for superiority, priming liens that would be senior to and prime all of other liens encumbering the property "inclusive of mechanic's and materialmens' liens" merely by "deeming" their prepetition lending under the various prepetition loan facilities as "postpetition financing." The Contractor Claimants assert that the Debtors' new accommodation to "deem" the Lenders is unlawful under binding 11th Circuit law because the terms of the Proposed Third Interim Order attempt to bless the unlawful granting of postpetition liens against prepetition debt that is radically undersecured, and the terms of the Proposed Third Interim Cash Collateral Order violate Sections 364(d)(1)(B) and 364(d)(2) because the mechanic's lien claimants assert liens against the Project that are senior to all other liens under Nevada Law, and for which the Contractor and other mechanics' lien claimants will receive no form of adequate protection under the terms of the Proposed Third Interim Cash Collateral Order. (d) Aurelius Capital Management, LP Aurelius Capital Management, LP says that the Motion purports to seek use of cash collateral on a consensual basis, but the proposed use of cash collateral does not have the consent of Aurelius, whose funds hold claims secured by the very cash collateral the Debtors seek court authority to use. Aurelius notes that it is axiomatic that a debtor may not use cash collateral unless either (i) each party with an interest in the cash collateral consents or (ii) the court authorizes the use in accordance with the provisions of Section 363. Aurelius notes that it does not consent to the use of cash collateral on the terms described in the Motion. Unless it is provided with suitable adequate protection, Aurelius says the Motion must be denied. The M&M Lienholders Architectural Materials, Inc., Collings Interiors, Door-Ko, Inc., Door & Hardware Management, Inc., Eberhard/Southwest Roofing, Inc., EIDS Steel Company, LLC, Eugenio Painting Co., Gallagher-Kaiser Corp., Marnell Masonry, Inc., Midwest Drywall Co., Inc., Midwest Pro Painting, Inc., Mechanical Insulation Specialists, Modernfold of Nevada, LLC, Southern Nevada Paving, Inc., Universal Piping, Inc., West Edna & Associates, doing business as Mojave Electric, W&W Steel LLC of Nevada; and Colasanti Specialty Services, Inc. support, in part and in whole, the objections raised by the Committee and the Contractor Claimants. Fisk Electric Company and Aderholt Specialty Company, Inc. support the objections raised by the Contractor Claimants. Turnberry, et al., Objects to Second Interim Order Prior to the Court's filing of its request for approval of a Third Interim Cash Collateral Order, Jeffrey Soffer, Turnberry Residential Limited Partner, L.P., and Turnberry West Construction, Inc., complained that the Second Interim Order contains release language that could be interpreted to apply to affiliates of the Debtors, potentially including them, who may be considered "affiliates" of the Debtors and arguably apply to all claims rather than as intended, to be limited to claims and defenses as to the extent, validity and perfection of affiliates' liens and claims and defenses under Chapter 5 of the Bankruptcy Code. Turnberry, et al., said it objects to the Cash Collateral Motion, as amended by the requirements of the Lenders as a condition to their consent to permit the Debtors' continued use of cash collateral, to the extent that the Second Interim Order works to release all claims that Turnberry, et al., may have against the Released Parties, or in anyway releases the claims that Turnberry, et al., may have against the property, the Debtors, or the Lenders. Turnberry, et al., notes, is that its understanding was that the release was limited to claims relating to the extent, validity and priority of liens to the extent the claims were not asserted on or before July 14, 2009, and to claims and defenses under Chapter 5. To the extent the intent of the Lenders was otherwise, Turnberry, et al., object. About Fontainebleau Las Vegas Fontainebleau Las Vegas Holdings, LLC -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Judge A. Jay Cristol presides over the Debtors' cases. Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represents the Debtors in their restructuring efforts. The Debtors' Financial Advisor are Moelis & Company LLC and Citadel Derivatives Group LLC. The Debtors' Special Litigation Counsel is David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors' Claims Agent is Kurtzman Carson Consulting LLC. An official committee of unsecured creditors has been appointed in the Chapter 11 cases. As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FONTAINEBLEAU: Proposes Sept. 15 as Lien Claims Bar Date -------------------------------------------------------- Fontainebleau Las Vegas Holdings, LLC, and its affiliates seek the Court's entry of an order: (a) establishing September 15, 2009, as the bar date for filing claims by prepetition Mechanic's Lien Claimants under NRS 108.221; (b) approving the proof of claim form for Mechanic's Lien Claims, and (c) approving the form and manner of notice of the Liens Bar Date. At the first day hearing in their Chapter 11 cases, the Debtors apprised the Court that the validity, priority and extent of the Mechanic's Lien Claims against the Debtors' estates will require resolution. Moreover, by the Second Interim Cash Collateral Order, the Term Lenders imposed a deadline upon Turnberry West Construction, Inc. to commence an adversary proceeding to challenge the validity, priority and extent of the liens and claims of the senior lenders against the Debtors' estates. Accordingly, the Debtors seek to implement the first step of a process utilizing the procedures governing proofs of claim, and objections to the claims to streamline the process of determining the validity, priority and extent of the Mechanic's Lien Claims. The Debtors also seek approval of a customized proof of claim for Mechanic's Lien Claims. The Debtors further propose that for any Mechanic's Lien POC to be validly and properly filed, a signed original of the completed Mechanic's Lien POC, with accompanying documentation to substantiate the Mechanic's Lien Claim as required in the POC, must be filed by no later than September 15, 2009, with the Debtors' Noticing and Claims Agent, Kurtzman Carson Consultants LLC at this address: Fontainebleau Las Vegas Processing Center c/o Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245 KCC will not accept Mechanic's Lien POCs sent by facsimile, telecopy or electronic transmission. Each Mechanic's Lien POC must (i) be written in the English language, (ii) be denominated in lawful currency of the United States, (iii) and conform substantially with the Mechanic's Lien POC approved by the Court. Any entity that fails to file a Mechanic's Lien POC by the Bar Date established under the Bar Date Order will be forever barred, estopped and enjoined from: (a) asserting any Mechanic's Lien Claim against the Debtors and (b) voting upon or receiving distributions under any plans of reorganization on account of the Mechanic's Lien Claim. Scott L. Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, in Miami, Florida, says that this Bar Date will create the necessary structure to enable the Debtors to timely seek entry of a case management order or claims resolution procedures for "gateway" objections in respect of each of the Mechanic's Lien Claims. Given the number of Mechanic's Lien Claims against the Project and the technical requirements to qualify as a first priority Lien Claimant under Nevada law, the claims filing and objection procedures create an opportunity for the Debtors to better manage the process of the resolution of Mechanic's Lien Claims, Mr. Baena explains. Most importantly, he notes, the process proposed by the Debtors averts the necessity for holders of Mechanic's Lien Claims to intervene in or commence adversary proceedings to determine the validity, priority and extent of their lien claims. A full-text copy of the Proposed Mechanic's Liens POC is available for free at: http://bankrupt.com/misc/FB_MechanicsLiensPOC.pdf Objections (a) Safe Electronics, et al. Contractor claimants Safe Electronics, Inc., Warner Enterprises, Inc., doing business as Sun Valley Electric Supply Company, Bombard Electric, LLC, Bombard Mechanical, LLC, Desert Fire Protection Company, a Nevada Limited Partnership, Powell Cabinet and Fixture Co., Austin General Contracting, Inc., and Absocold Corporation, doing business as Econ Appliance, object to the Motion arguing that the Debtors seek to stonewall them, and other, similarly situated construction lien claimants by delaying resolution of their lien claims, while attempting to chip away at their first lien rights in the Project with a series of interim cash collateral orders. The Contractor Claimants argue that the Proof of Claim Form is unnecessary for secured creditors like the Contractor Claimants. The Contractor Claimants complain that the Proposed Claim Form, much like any form, ignores the flexibility that the Nevada courts, including the Nevada Supreme Court, have read into the statute, and is a poor substitute for the due process protections afforded by an adversary proceeding under Rule 7001. The Contractor Claimants note that the questions set forth in the Proof of Claim Form appended may be an excellent basis for discovery requests to be served in the adversary proceeding filed by Turnbury West Construction, Inc. against the Debtors and their Lenders, but the form, and the information it seeks to elicit cannot serve as a "gateway" to the allowance of construction lien claims outside the context of an adversary proceeding. (b) M&M Lienholders The M&M Lienholders assert that the Motion appears benign on their faces, but are contrary to requirements of Nevada lien law and the due process protections imbedded therein, and are without authority under the Bankruptcy Code and the Federal Rules of Bankruptcy Rules. The M&M Lienholders aver that the Debtors cloak their request under the guise of expediting, streamlining and eliminating redundancy in resolving the issues with Mechanic's Lien Claimants. However, the Debtors' Motion and the proposed procedures create an artificial deadline, impose increased and unnecessary burdens on Mechanic's Lien Claimants and bring chaos to an otherwise manageable process for the resolution of mechanic's lien set forth in Nevada mechanic lien laws. Colasanti Specialty Services, Inc., and Aderholt Specialty Company, Inc. support the objections raised by the Contractor Claimants and the M&M Lienholders. Fisk Electric Company supports the objections raised by the Contractor Claimants. About Fontainebleau Las Vegas Fontainebleau Las Vegas Holdings, LLC -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Judge A. Jay Cristol presides over the Debtors' cases. Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represents the Debtors in their restructuring efforts. The Debtors' Financial Advisor are Moelis & Company LLC and Citadel Derivatives Group LLC. The Debtors' Special Litigation Counsel is David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors' Claims Agent is Kurtzman Carson Consulting LLC. An official committee of unsecured creditors has been appointed in the Chapter 11 cases. As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FONTAINEBLEAU: Amended List of 20 Largest Unsec. Creditors ---------------------------------------------------------- Fontainebleau Las Vegas Holdings, LLC, and its affiliates submitted to the Bankruptcy Court an amended list of their creditors holding the 20 largest unsecured claims. The list is prepared in accordance with Rule 1007(d) of the Federal Rules of Bankruptcy Procedures for filing in a chapter 11 case. The list does not include (1) persons who come within the definition of "insider" set forth in Section 101, or (2) secured creditors unless the value of the collateral is that the unsecured deficiency places the creditor among the holders of the 20 largest unsecured claims. Entity Nature of Claim Claim Amount ------ --------------- ------------ Corporate Express Inc. trade debt $3,370,405 PO Box 95708 Chicago, IL 60695 Tel: (858) 602-2461 HPG International LLC trade debt $1,934,783 2121 N. California Blvd. Suite 625 Walnut Creek, CA 94596 Tel: (925) 949-5700 Minibar North America Inc. trade debt $1,824,094 7340 Westmore Road Rockville, MD 20850 Tel: (301) 354-5055 Infinium trade debt $1,817,869 36549 Eagle Way Chicago, IL 60678 Kelley Technologies trade debt $1,617,019 5625 Arville Street #E Las Vegas, NV 89118 Tel: (702) 889-8777 DWI Holdings, Inc. trade debt $1,392,921 902 Oothcalooga Street Calhoun, GA 30701 Tel: (770) 644-6302 Griffin trade debt $1,375,112 2902 Nebraska Avenue Santa Monica, CA 90404 Tel: (310) 586-6891 Global Surveillance Assoc. trade debt $1,005,952 3853 Silvestri Lane Las Vegas, NV 89102 Tel: (702) 897 8400 MVD Communications LLC trade debt $1,005,583 11690 Groom Road Cincinnati, OH 45242 Tel: (513) 444 1044 Ward & Howes Associates trade debt $993,060 3351 Highland Drive South Suite 203 Las Vegas, NV 89109 Tel: (702) 893 2992 Paul Steelman Design Group trade debt $979,665 3330 W. Desert Inn Road Las Vegas, NV 89102 Tel: (702) 873 0221 Milliken & Company trade debt $956,469 201 Lukken Industrial Drive Lagrange, GA 30240 Tel: (702) 236 6535 Decca Hospitality trade debt $858,803 Seven Piedmont Center #205 Atlanta, GA 30305 Tel: (404) 262 4330 Arnell trade debt $757,542 7 World Trade Center New York, NY 10007 Tri Power Group trade debt $575,334 2301 Armstrong Street #101 Livermore, CA 94551 Tel: (925) 583 8200 Valley Forge Fabrics trade debt $510,831 2981 Gateway Drive Pompano Beach, FL 33068 International Bedding Co. trade debt $498,737 6434 NW 5th Way Fort Lauderdale, FL 33309 Tel: (404) 394 3980 Gaming Partners International trade debt $481,559 1700 Industrial Road Las Vegas, NV 89102 Tel: (702) 384 2425 Hoshizaki Western, DC, Inc. trade debt $479,137 790 Challenger Street Brea, CA 92821 Tel: (714) 989 2411 Roncelli, Inc. trade debt $431,594 6471 Metro Parkway Sterling Heights, MI 48312 Tel: (586) 264 2060 The Debtors have included creditors Infinium, Arnell, and Valley Forge Fabrics to the list of their 20 largest creditors. Creditors Project Light, JL Furnishings, LLC, and Bally Technologies have been stricken from the list. MVD Communications LLC, Paul Steelman Design Group, Milliken & Company, Tri Power Group, and Valley Forge Fabrics may have mechanics or materialmen lien rights but have not asserted them as of the Petition Date. About Fontainebleau Las Vegas Fontainebleau Las Vegas Holdings, LLC -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Judge A. Jay Cristol presides over the Debtors' cases. Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represents the Debtors in their restructuring efforts. The Debtors' Financial Advisor are Moelis & Company LLC and Citadel Derivatives Group LLC. The Debtors' Special Litigation Counsel is David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors' Claims Agent is Kurtzman Carson Consulting LLC. An official committee of unsecured creditors has been appointed in the Chapter 11 cases. As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FOOTHILLS TEXAS: Judge Sontchi Denies Two VP Retention Payments --------------------------------------------------------------- WestLaw reports that employees who both held the title of "vice president," even though they supervised few, if any, other workers in the Chapter 11 debtor's ten-employee oil and gas exploration, acquisition and development business, and who each held positions of critical importance in managing the business enterprise, in overseeing the debtor's oil and gas leases and ensuring that the debtor remained in compliance with both state and federal law, or in overseeing the debtor's oil and gas production, evaluation of reserves, technical reporting and development of capital spending projects, were "officers" of the debtor in fact as well as in name. Thus, they qualified as statutory "insiders," to whom the debtor's ability to pay retention bonuses was limited by statute. In re Foothills Texas, Inc., --- B.R. ----, 2009 WL 2241747, http://is.gd/1UcS3(Bankr. D. Del.) (Sontchi, J.). "A person holding the title of an officer, including vice president, is presumptively what he or she appears to be -- an officer and, thus, an insider," Judge Sontchi's opinion says. "Nonetheless, this presumption can be rebutted by evidence sufficient to establish that the person does not participate in the management of the debtor. [Vice Presidents] Drennan and Moustakis are presumptively officers and the Debtors have failed to submit evidence sufficient to rebut that presumption. "A retention payment may only be made to an insider if the standard under section 503(c)(1) has been satisfied. As there is no evidence that section 503(c)(1) has been met, the retention payment cannot be made. Since the Debtors' sole reason for filing and prosecuting the motion is to obtain authorization to make the retention payments, the motion to assume those agreements will be denied." Foothills Texas, Inc. -- http://www.foothills-resources.com/-- sought protection under chapter 11 (Bankr. D. Del. Case No. 09- 10452) on February 11, 2009. Charles R. Gibbs, Esq., David F. Staber, Esq., and Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in Dallas, Tex., and Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Wilmington, Del., represent the Debtor. In its chapter 11 petition, the Debtor disclosed $89.5 million in assets and $78.8 million in liabilities, of which $71.2 million is owed to secured lenders. Regiment Capital Special Situations Fund III LP provided $2.5 million of postpetition financing. FOREST CITY: Moody's Downgrades Ratings on Senior Debt to 'B3' -------------------------------------------------------------- Moody's Investors Service lowered the senior unsecured debt ratings of Forest City Enterprises, Inc., to B3 from B1, and maintained the rating outlook on negative. This rating action was driven by the continuing weakness in Forest City's credit metrics, particularly its fixed charge coverage (at 1.2x for Q1'09) and net debt/EBITDA (at 16.8x in Q1'09), as well as by persistent challenges in both the real estate market and the credit environment. The current rating reflects the slowdown in Forest City's core portfolio performance in tandem with the broad economic deterioration: its retail and residential sectors posted negative same property NOI growth of -1.0% and -1.8%, respectively, in the first quarter of 2009. Its office portfolio; however, performed better with same property NOI growth of 4.4%, buoyed by long-term leases and strong results from its life sciences assets. Forest City also faces a significant, although materially curtailed, development pipeline in excess of $2 billion with $777 million in remaining costs. Positively, construction financing is in place for all except $6.4 million, with a portion of the remaining financing ($158.5M) subject to certain leasing hurdles. In addition, Forest City will need to re-finance $159 million of secured debt in its fiscal 2009, which is a reduction from $242 million at YE08. Nevertheless, Forest City's portfolio continues to benefit from well-laddered lease expirations and no significant tenant exposures. Also, the firm's largely non-recourse borrowing strategy allows it a measure of flexibility when addressing upcoming maturities. Positively, Forest City raised $330 million of equity in May 2009, which allowed the firm to pay down most of its outstandings under the line of credit and meaningfully enhanced its liquidity. The negative rating outlook reflects the deterioration in debt protection measures experienced by Forest City, as well as Moody's expectation of further weakness in the company's credit profile and earnings over the next several quarters due to the recessionary economic environment and very constrained capital markets. The rating outlook is likely to return to stable once Forest City's fixed charge coverage has stabilized at above 1.2x and debt/EBITDA is closer to 14x. Maintaining sound liquidity would also be important for the outlook to be stabilized. A downgrade would be precipitated by continued earnings deterioration and resulting further pressure on leverage and coverage metrics, as well as any breach of covenants or liquidity challenges. Moody's last rating action with respect to Forest City was on December 19, 2008, when the ratings were lowered to B1 from Ba3 and the rating outlook was maintained on negative. These ratings were lowered with a negative outlook: * Forest City Enterprises, Inc. -- Senior unsecured debt to B3 from B1, senior unsecured shelf to (P)B3 from (P)B1, senior subordinate shelf to (P)Caa2 from (P)B3, subordinate shelf to (P)Caa2 from (P)B3, junior subordinate shelf to (P)Caa2 from (P)B3, and preferred shelf to (P)Caa2 from (P)B3. Forest City Enterprises, Inc., is a national real estate company that is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate and land throughout the United States. At April 30, 3009, its assets totaled $12.6 billion. FRONTIER AIRLINES: Southwest Presents $113.6MM Non-Binding Offer ---------------------------------------------------------------- Frontier Airlines Holdings, Inc., and Southwest Airlines Co. confirmed in separate statements that Southwest submitted an initial non-binding proposal to acquire Frontier under the auction procedures established in Frontier's Chapter 11 bankruptcy cases and approved by the U.S. Bankruptcy Court. Southwest's bid is worth a minimum of $113.6 million, which is in excess of the bid currently filed by Republic Airways Holdings, Inc. Submission of a nonbinding proposal gives Southwest an opportunity to engage with Frontier in the due diligence required to determine the scope of a binding proposal to be submitted by the court's August 10, 2009, deadline. On July 13, 2009, the judge presiding over Frontier's Chapter 11 bankruptcy cases in the U.S. Bankruptcy Court for the Southern District of New York approved a proposed investment agreement between Frontier and Republic Airways. Pursuant to the investment agreement, Republic agreed to purchase 100% of the stock of Frontier Holdings upon its emergence from bankruptcy for $108.75 million, so long as certain conditions are met. Frontier Airlines Holdings would become a wholly owned subsidiary of Republic, an airline holding company that owns Chautauqua Airlines, Republic Airlines and Shuttle America. The Republic investment agreement provides for an auction period, during which Frontier may seek higher or otherwise better competing bids. If Frontier identifies such a bid, it can terminate the Republic investment agreement and accept the other offer. Under the auction procedures approved by the Court, interested bidders must submit an initial proposal by August 3, 2009, and a final proposal by August 10, 2009. Frontier and its advisors, in consultation with the Unsecured Creditors' Committee appointed in Frontier's Chapter 11 cases, will conduct an auction, if necessary, on August 11, 2009, to consider all qualified proposals and determine the highest or otherwise best proposal. Frontier currently expects to emerge from Chapter 11 this autumn. "We are excited about the opportunity to submit a bid," said Gary Kelly, Southwest's Chairman of the Board, President, and CEO. "We see a strong fit between our Company cultures, a mutual commitment to high quality Customer Service, and similar entrepreneurial roots." A successful acquisition of Frontier Airlines will allow Southwest to expand its network with its legendary low fares, add jobs into Southwest, and boost competition in Denver and other cities. Southwest is a qualified investor and is still preparing its proposal; therefore, it is premature to comment on the specifics at this point. 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) FULTON-HARRISON: Case Summary & 15 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Fulton-Harrison, L.L.C. 128 East Seventh Street Plainfield, NJ 07060 Bankruptcy Case No.: 09-29666 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- South Harrison, L.L.C. 09-29667 Cypress House, L.L.C. 09-29668 South Harrison Associates, L.L.C. 09-29669 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court District of New Jersey (Newark) Debtor's Counsel: Richard D. Trenk, Esq. Trenk, DiPasquale, Webster, Della Fera & Sodono, P.C. 347 Mt. Pleasant Avenue, Suite 300 West Orange, NJ 07052 Tel: (973) 243-8600 Email: rtrenk@trenklawfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A full-text copy of Fulton-Harrison's petition, including a list of its 15 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/njb09-29666.pdf The petition was signed by David Connolly. G&D PROPERTIES: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: G&D Properties, Inc. 1260 E. Oakland Park Blvd. Ft. Lauderdale, FL 33334 Bankruptcy Case No.: 09-25507 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: Raymond B. Ray Debtor's Counsel: Julie E. Hough, Esq. 2450 Hollywood Blvd # 706 Hollywood, Fl 33020 Tel: (954) 239-4760 Email: jhough@hkrlegal.com Total Assets: $1,301,715 Total Debts: $769,822 A full-text copy of the Debtor's petition, including a list of its 3 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flsb09-25507.pdf The petition was signed by Glenn M. Gallant, vice president of the Company. GARY ARD: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Joint Debtors: Gary S. Ard Rowena M. Ard 2572 5th Ave. N Seattle, WA 98109 Bankruptcy Case No.: 09-17521 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Philip H. Brandt Debtors' Counsel: Larry B. Feinstein, Esq. Vortman & Feinstein 500 Union St., Suite 500 Seattle, WA 98101 Tel: (206) 223-9595 Email: lbf@chutzpa.com Total Assets: $9,903,359 Total Debts: $20,113,023 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/wawb09-17521.pdf The petition was signed by the Joint Debtors. GENERAL GROWTH: Gets More Time to File Bankruptcy Exit Plan ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved a request by General Growth Properties Inc. for an extension of the deadlines for its Chapter 11 plan. The Bankruptcy extended until Feb. 26, 2010, General Growth's exclusive period to file a plan, and until April 23, 2010, its exclusive period to solicit acceptances of that plan. In General Growth's request for an extension, Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New York, said that although the Debtors' Chapter 11 cases are less than three months, the Debtors have already made substantial progress towards reorganization: * The Debtors' focus during the first 60 days of their Chapter 11 cases was to stabilize their business, and obtain relief with respect to DIP Financing and authority to use cash collateral, the cash management system, employee compensation and benefits, insurance programs, among others. The Debtors completed a competitive DIP Financing and obtained use of cash collateral in one of the most challenging economic climates in history. * The Debtors have spent significant resources to managing the impact of filing 388 entities. Given the interconnectivity among the 388 Debtors and the 362 non- debtors, this process involved the implementation of an extensive compliance system to ensure that the Debtors meet the requirements set forth in the Court's orders. * The Debtors have expended a significant amount on the litigation relating to motions to dismiss filed in their Chapter 11 cases. * The Debtors have worked diligently on time-consuming tasks for the administration of their Chapter 11 cases, including managing project level litigation; preparing schedules of assets and liabilities and statements of financial affairs; dealing with issues related to leases; working towards resolving material lawsuits; working with the U.S. Trustee for Region 2 to provide financial information; and complying with reporting requirements under the Bankruptcy Code. According to Mr. Holtzer, despite the progress, the Debtors still need time to (i) complete their analysis of their contracts and leases, and (ii) complete their schedules and statements. Once the schedules are filed, the Debtors can begin assessing their prepetition claims, an essential element for an effective Chapter 11 plan. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly ] 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Debtors Further Amend DIP Facility Terms -------------------------------------------------------- Motors Liquidation Company, formerly General Motors Corporation, and its debtor affiliates, notified Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York that they expect, on July 29, 2009, to enter into further amendments to their Amended and Restated DIP Facility dated July 10, 2009, with the U.S. Department of the Treasury and Export Development Canada as lenders and certain domestic subsidiaries of the Debtors as guarantors. The Debtors have previously amended their DIP Facility to include the DIP Lenders' agreement to provide a facility up to $950 million to finance working capital needs and other general corporate purposes incurred in connection with the Wind-Down, including the payment of expenses associated with the administration of the Debtors' cases. Stephen Karotkin, Esq., at Weil Gotshal & Manges LLP, in New York, says the amendments essentially provide, among other things, that: (1) Securities issued by the U.S. Government may have maturities of two years or less from the date of acquisition. (2) The Amendment will become effective upon the date on which each Lender will have received the Amendment, executed and delivered by a duly authorized officer of the Borrower and the Required Lenders. (3) The Amendment, the Acknowledgment and Consent and the Credit Agreement constitute a legal, valid and binding obligation of, and is enforceable against, each Loan Party party in accordance with their terms. (4) After giving effect to the Amendment, no Default or Event of Default has occurred and is continuing, or will result from the consummation of the transactions contemplated by the Amendment. (5) The amendments, consents and waivers contained herein will not be construed as a waiver or amendment of any other provision of the Credit Agreement or the other Loan Documents. A full-text copy of the first amendment to the Amended and Restated DIP Facility is available for free at: http://bankrupt.com/misc/GMAmendedDIP_1stAmendment.pdf About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: New GM Seeks $10 Bil. Financing From Energy Dept. ----------------------------------------------------------------- General Motors Co. has applied for more than $10 billion in financing from the United States Department of Energy, the automaker's company treasurer, Walter Borst, said during the July 27 hearing with the Congressional Oversight Panel on Federal Government Assistance to the Auto Industry. Mr. Borst noted that DOE's funding is expected as a result of GM becoming a "viable" company, the Wall Street Journal reported. Mr. Borst told the Journal that the DOE financing is critical to GM's shorter-term liquidity assumptions, and necessary to meet the Company's capital requirements in the future. GM expects to receive most, but not all of the requested funding, according to the Journal. According to the report, the DOE has offered as much as $25 billion in assistance to automakers trying to build and develop more fuel-efficient products. Ford Motor Co. and other automakers, except GM and Chrysler LLC, have been granted those funds, the report added. In its viability plan submitted to the Obama administration's auto task force in February 2009, GM said more than $6 billion in DOE funding is needed for its viability. Mr. Borst told the Journal that GM "is not dependent" on the DOE Funds. Mr. Borst also apprised the Congressional Oversight Panel regarding the future plans of GM. He cited that New GM's focus will be: * Focus on four core brands in the U.S. -- Chevrolet, Cadillac, Buick and GMC -- with fewer nameplates and a more competitive level of marketing support per brand. By reducing brands and reducing nameplates to 34 from 48, we can concentrate all of our talent and resources on vehicles that do not merely compete, but lead their respective segments; * Effectively close the competitive gap in active worker labor costs compared with transplant auto manufacturers; * More efficiently utilize U.S. capacity, while increasing over time the percentage of U.S. sales manufactured domestically; * Feature lower structural costs, enabling our North American region to break even at a U.S. total industry volume of approximately 10 million vehicles. This rate is substantially below the 15 to 17 million annual vehicle sales rates recorded from 1995 through 2007; * Achieve lower structural costs in part by further reducing 2009 salaried employment in North America from its year-end total of 35,100 to approximately 27,200, cutting executive ranks by 35% and continuing to improve GM's balance sheet by reducing retiree benefits for salaried retirees and non-UAW hourly retirees; * Provide a higher level of customer service through a more focused U.S. network of approximately 3,600 dealers; * Continue and increase GM's investment and leadership in fuel economy and advanced propulsion technologies. For example, GM will launch the Chevy Volt extended range electric vehicle in 2010 and will assemble its advanced batteries in the U.S. We also expect to have 14 hybrid models in production by 2012 and, by 2014, 65 percent of GM vehicles will be alternative fuel-capable. In a separate statement, Presidential Auto Task Force Senior Adviser Ron Bloom clarified that despite offering GM and Chrysler with $70 million in financing to restructure in bankruptcy through the U.S. Treasury, the U.S. Government "is a reluctant shareholder" in the companies, Reuters reported. "Given the emergence of the new GM and the new Chrysler, the involvement of the auto task force with the companies will now change," Mr. Bloom said during a July 27 hearing with the congressional oversight committee for the Troubled Asset Relief Program, the Journal quoted. "The companies are now being run as commercial enterprises by their management teams, and they will report to new, independent boards of directors." "In a better world, the choice to intervene would not have had to be made," Reuters quoted Mr. Bloom as saying. He added that the success of the efforts to save the Companies will be judged by payback for taxpayers, during an initial public offering of stock in the restructured GM that is slated for 2010. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Debtors to File Schedules September 29 ------------------------------------------------------ Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York extended the period within which the Motors Liquidation CO. and its affiliates must file their (i) schedules of assets and liabilities, (ii) schedules of executory contracts and unexpired leases, and (iii) statements of financial affairs, to September 29, 2009. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Obligations to Delphi Pensions Were Met ------------------------------------------------------- Delphi Corp. announced on July 21, 2009, that it has entered into an agreement with the Pension Benefit Guaranty Corporation regarding the settlement of PBGC's claims from the termination of the Delphi pension plans. In the event of termination, PBGC will become statutory trustee of the plans and will pay benefits in accordance with federal law. There have been questions about General Motors Company's responsibility toward Delphi's pension plans, given that many of those covered were GM employees prior to GM spinning off Delphi in 1999. General Motors Corporation made appropriate provisions for the plans at the time of the spin-off, and Delphi became responsible for the plans from that point forward. As a result of bargaining at the time of the spin-off, General Motors Corporation did agree to top-up pension benefits for certain limited groups of hourly employees and retirees in the event that the Delphi hourly pension plan was terminated. As with other union agreements that it has assumed from the old GM, General Motors Company will honor these commitments. General Motors Company and PBGC have reached a preliminary agreement whereby the 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 Delphi assets upon resolution of its bankruptcy. GM expects to receive distributions in return for capital contribution to the new company. Details will be communicated after the Delphi bankruptcy agreement is finalized. This is a very difficult situation, and we understand the personal sacrifices that Delphi employees, retirees, and many others, including GM employees and retirees, have made and continue to make during this industry-wide crisis, GM said in a statement. However, GM has met and continues to meet its obligations toward the Delphi pensions, and General Motors Company continues to support Delphi's emergence from bankruptcy at considerable cost to the company. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Application to Hire Jones Day as Counsel ------------------------------------------------------- Motors Liquidation Co. and its affiliates seek the Court's authority to employ Jones Day as their special counsel, nunc pro tunc to the Petition Date. The Debtors relate that Jones Day has previously represented them in connection with legal matters, making the firm uniquely familiar with the related aspects of the Debtors' business operations. Accordingly, the Debtors believe that Jones Day's extensive familiarity with and knowledge on legal matters qualifies the firm to be the Debtors' special counsel. As special counsel, Jones Day will represent the Debtors in connection with (i) commercial litigation defense, (ii) pre-merger notification work, (iii) competition law filings, (iv) ERISA and labor work and (v) tax work. The Special Counsel Matters only constitute a small portion of the Debtors' ongoing legal work, the Debtors disclose. Jones Day will work closely with other professionals retained by the Debtors to ensure that the firm performs specific, complementary and non-duplicative tasks in the Debtors' cases. Jones Day will be paid in accordance with these hourly rates: Professional Hourly Rate ------------ ----------- Partners $427 to $832 Counsel $427 to $675 Associates $225 to $562 Paraprofessionals $157 to $175 Other staff $112 to $270 The firm will also be reimbursed for out-of-pocket expenses. As of May 31, 2009, Jones Day received an aggregate of $5,558,457 from the Debtors as payment for fees and reimbursement of expenses for prepetition services. Jones Day asserts prepetition a claim totaling $769,370 on account of outstanding disbursements, retainer fees and unbilled legal fees. Andrew Kramer, Esq., a partner at Jones Day, affirms that Jones Day does not hold or represent an interest adverse to the Debtors with respect to the Special Counsel Matters, as required by Section 327(e) of the Bankruptcy Code. The Court will convene a hearing on August 3, 2009, to consider approval of the application. Objections, if any, must be filed on July 29. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Application to Hire Baker as Counsel ---------------------------------------------------- Pursuant to Sections 327(e) and 1107(b) of the Bankruptcy Code, Motors Liquidation Co. and its affiliates seek the Court's authority to employ Baker & McKenzie as their special counsel, nunc pro tunc to the Petition Date. The Debtors selected Baker as special counsel because of the firm's extensive knowledge, experience and expertise as one the world's largest law firms. Moreover, Baker has rendered prepetition legal services to the Debtors. The Debtors are seeking to retain Baker with respect to these representative matters: * Representing and advising the Debtors through identification and resolution of all tax claims and exposures in the United States and jurisdictions outside of the United States in which the company has operations, in the Debtors' cases and otherwise; * Representing and advising the Debtors in connection with coordination and contingency planning relating to global financing in the Asia Pacific region, including advice relating to regulatory requirements and contract rights; * Representing and advising the Debtors in connection with certain defined strategic alternatives and aspects of potential sales and purchases of assets, including any transaction involving Delphi Corporation, its assets and affiliates; and * Representing and advising the Debtors and their European affiliates in connection with the negotiation and implementation of potential investments and funding arrangements in Europe. The Debtors clarify that Baker's postpetition work is comprised only of the Representative Matters, none of which involves the conduct of the Chapter 11 cases. Furthermore, Baker will coordinate with the Debtors' other professionals to ensure that its services are, to the maximum extent possible, consistent with and complimentary to other professionals' services. The Debtors will pay Baker in accordance with these hourly rates: Professional Hourly Rate ------------ ----------- Partners $325 to $925 Of Counsel $200 to $700 Associates $150 to $540 Paraprofessionals $60 to $250 The Debtors will also reimburse the firm's out-of-pocket expenses. Baker asserts that it is owed approximately $250,000 in unpaid fees and expenses from the Debtors as of the Petition Date for services unrelated to the Chapter 11 cases. A. Duane Webber, Esq., a partner at Baker & McKenzie, assures Judge Gerber that the firm does not hold or represent any interest adverse to the Debtors or the Debtors' estates. The Court will convene a hearing on August 3, 2009, to consider approval of the application. Objections, if any, must be filed on July 29. GENERAL MOTORS: Application to Employ Lowe Fell as Legal Counsel --------------------------------------------------------------- Motors Liquidation Co. and its affiliates ask the Court to allow them to employ Lowe, Fell, & Skogg, LLC, as their legal counsel, nunc pro tunc to the Petition Date. According to the Debtors, several attorneys from Lowe Fell have provided services to them for more than 15 years in major projects including restructuring of the Debtors' dealer network, dealership acquisitions and dispositions through their Motors Holding Division, as well as the acquisition, disposition, leasing and development of GM's dealership real estate portfolio. Accordingly, Lowe Fell has extensive experience in corporate, real estate, banking, condemnation and general commercial litigation, which qualify the firm to render postpetition services to the Debtors. Lowe Fell will provide services to the Debtors in relation to these matters: (a) counsel, advise and assist the Debtors in matters related to (i) dealership arrangements including preparation of form Wind-Down Agreements for all applicable Chevrolet, Buick, Cadillac, Pontiac, GMC and Medium Duty Chevrolet and GMC Truck dealers, (ii) Participation Agreements and the Participation Agreement Amendment for all applicable Chevrolet, Buick, Cadillac and GMC dealers, (iii) Deferred Termination Agreements for all Saturn, Saab and Hummer dealers and all cover letters for each form of agreement; (b) counsel, advise and assist the Debtors in briefing and training their employees and representatives on the Agreements and the circumstances surrounding the Wind-Down Agreements and Participation Agreements; (c) support, guide and counsel the Debtors' call center personnel dealing with dealer relations; and (d) perform services relating to corporate, real estate and other defined and finite matters which may arise. The Debtors relate that Lowe Fell's postpetition work is comprised substantially of the Representative Matters, which do not involve the conduct of the Chapter 11 cases. Accordingly, the services to be rendered and functions to be performed by Lowe Fell will not be duplicative of any bankruptcy-related work performed by other law firms retained by the Debtors. Furthermore, LFS will coordinate with the Debtors' other professionals to ensure that its services are, to the maximum extent possible, complementary to other professionals' services. The Debtors will pay Lowe Fell's individual professionals in accordance with these hourly rates: Professional Hourly Rate ------------ ----------- Henry I. Lowe $275 David W. Fell $275 Kenneth K. Skogg $256 Curtis L. Clay $190 Karen L. Brody $206 Robert H. Patterson $275 Kirsten J. Pedersen $161 Dana B. Baggs $161 Tiffany C. Hung $161 Donna M. Prete $133 Michael F. Drummy $104 Lori A. Hovey $104 Carol Ann Ortiz $90 Jenna Skogg $45 The Debtors will also reimburse the firm's out-of-pocket expenses. Lowe Fell is owed approximately $85,625 in unpaid fees and expenses from the Debtors as of the Petition Date for services unrelated to the Debtors' bankruptcy cases. Lowe Fell, does not hold or represent any interest adverse to the Debtors or the Debtors' estates, David W. Fell, Esq., the firm's managing member, assured the Court. Judge Gerber will convene a hearing on August 3, 2009, to consider approval of the application. Objections, if any, must be filed on July 29. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Employs LFR, Brownfield & Claro ------------------------------------------------ In separate applications, Motors Liquidation Co. and its affiliates ask the Court to allow them to employ LFR, Inc., Brownfield Partners, LLC, and The Claro Group as their environmental management and consulting services providers, nunc pro tunc to the Petition Date. LFR is an experienced professional services firm that is well- recognized in the field of environmental management and consulting. Brownfield Partners is a leading real estate development company specializing in the acquisition, master planning, entitlement, and redevelopment of urban infill and environmentally impaired real estate. Claro Group is a privately owned, financial and management consulting firm. The Debtors believe that LFR and Brownfield possess extensive environmental management and consulting expertise useful in their Chapter 11 cases. By separate engagement letters with the Debtors, LFR and Brownfield will assist the Debtors in: * determining the costs of actual or potential environmental liabilities arising from the Debtors' prepetition, historic operations; * strategic planning related to optimization of asset value net of environmental costs and disposition of environmentally impaired assets; and * management support of environmental management or compliance activities. Specifically, as the Debtors' environmental consultants, LFR and Brownfield will: (a) review the Debtors' existing remedial or environmental and real estate site files, including but not limited to engineering reports, remedial action plans, agency correspondence, financial accounting reserve, site location information, tax records and regulatory financial assurance information and other information; (b) evaluate existing regulatory actions and pending litigation associated with the Debtors' sites; (c) develop future cost estimates using appropriate methodologies, including but not limited to probabilistic and deterministic estimating techniques; (d) determine the potential for reuse of certain of the Debtors' sites and ensure that potential reuse opportunities are considered in determining cost estimates; (e) assist with strategic planning related to optimization of asset value net of environmental costs and disposition of environmentally impaired assets; (f) assist with the management and support of environmental Management and compliance activities, including but not limited to: -- evaluating existing information regarding plant sites, ongoing investigations and remediation; -- coordinating the work of other consultants in developing technical summaries and cost estimates; -- determining the potential and options for disposition and reuse of certain of the Debtors' sites, whether as "brownfield" sites or otherwise; -- advising and assisting the Debtors with the potential to integrate remediation with redevelopment; -- assisting in the determination of appropriate remedial options and technologies in light of potential redevelopment plans; -- advising and assisting the Debtors with risk management strategies with respect to the Debtors' sites, including, as appropriate, the use of insurance and other financial products; and -- structuring transactions with respect to the Debtors' sites. (g) report to the Debtors verbally from time to time, and at the Debtors' direction, on the progress of the work and preliminary findings; (h) prepare a final written report on such forms as directed By the Debtors, if requested by the Debtors; and (i) perform other work as requested by the Debtors from time to time in furtherance of assisting the Debtors in its determination of the costs of actual or potential environmental liabilities arising from the Debtors' sites. LFR will be paid in accordance with these hourly rates: LFR Professional Hourly Rate ---------------- ----------- Corporate Officer $335 Principal $200 Senior Associate $184 Senior $168 Senior Project $152 Project $137 Senior Staff $115 Staff II $102 Staff I $89 Reproduction/Admin $54 Information Systems/ Database Specialist $64 to $100 Field and Technical Support $57 to $98 Engineering Design/CADD $67 to $94 Project Assistant/ Admin Support $62 to $94 Construction Engineering $87 to $92 Technical Editor $70 to $91 The Debtors will pay Brownfield with these hourly rates: Brownfield Professional Hourly Rate ----------------------- ----------- Partner $275 Partner $250 Senior Associate $220 Associate $165 Staff Associate $145 Administrative/Clerical $55 Claro Group's fees will be paid pursuant to these hourly rates: Claro Group Professional Hourly Rate ------------------------ ------------ Managing Director $400 to $500 Principal $330 to $395 Senior Manager $275 to $320 The Debtors will also reimburse LFR and Brownfield's out-of-pocket expenses. The Debtors have also agreed to maintain property insurance for LFR and Brownfield to cover the material and other property delivered to project sites, which are to become a part of the permanent construction or are to be consumed on the sites in the process of completing the Services. LFR informed the Debtors that as of July 10, 2009, the Debtors owe it $200,000 for postpetition services. Claro Group is owed approximately $174,000 by the Debtors as of July 14, on account of postpetition services. The Debtors do not owe LFR, Brownfield and Claro Group any prepetition amounts. In connection with the Applications, these officers assure the Court that each of their firms is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code: * Frank Lorincz, Chief Executive Officer at LFR * Stuart L. Miner, a member at Brownfield * Douglas H. Deems, General Counsel and managing director at Claro Group The Court will convene a hearing on August 3, 2009, to consider approval of the applications. Objections, if any, must be filed on July 29. 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) GEORGIA GULF: Fitch Upgrades Issuer Default Rating to 'B-' ---------------------------------------------------------- Fitch Ratings has upgraded Georgia Gulf Corp.'s Issuer default Rating to 'B-' from 'RD' following the closing of its exchange offer. The exchange comprised of $91.0 million, $486.8 million and $158.1 million of the $100 million, $500 million and $200 million in principal amount of the 2013 notes, 2014 notes and 2016 notes. An aggregate of approximately 30.2 million shares of convertible preferred stock and 1.3 million shares of common stock will be issued in exchange for the tendered notes. Fitch upgrades the ratings: -- Senior secured credit facility to 'BB-/RR1'from 'B-/RR1'; -- Senior unsecured notes to 'CCC/RR5' from 'C/RR6'; and -- Senior subordinated notes to 'CCC/RR5' from 'C/RR6'. Pro forma total debt at March 31, 2009, was $707 million and pro forma leverage was 4.2 times (x). The Rating Outlook is Negative given persistent weakness in residential construction. Fitch has decided to withdraw the ratings and will no longer provide ratings or analytical coverage of this issuer. Georgia Gulf had cash on hand of roughly $61.8 million pro forma for the payment of accrued interest on the notes that have not been tendered and $35.9 million available under its revolver at March 31, 2009. Based in Atlanta, Georgia Gulf is a commodity chemicals producer. Its product portfolio includes VCM, PVC resin, vinyl compounds, cumene, acetone, phenol, window and door profiles and moldings as well as outdoor building products. Georgia Gulf earned approximately $174 million of EBITDA from continuing operations on sales of $2.9 billion in 2008. GLOUCESTER HOLDING: Case Summary 7 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Gloucester Holding Company, LLC 11-29 Clinton Avenue Brooklyn, NY 11205 Bankruptcy Case No.: 09-46432 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Dennis E. Milton Debtor's Counsel: Kevin J. Nash, Esq. Goldberg Weprin Finkel Goldstein LLP 1501 Broadway, 22nd Floor New York, NY 10036 Tel: (212) 301-6944 Fax: (212) 422-6836 Email: KJNash@finkgold.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 7 largest unsecured creditors is available for free at http://bankrupt.com/misc/nyeb09-46432.pdf The petition was signed by Aaron Hanasab, manager/member of the Company. GRABOW PROPERTIES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Grabow Properties, LLC. dba Quality Inn Hotel 43824 Highway 27 Davenport, FL 33837 Bankruptcy Case No.: 09-16388 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) 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: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flmb09-16388.pdf The petition was signed by Richard Grabow, manager of the Company. GRAIN DEALERS MUTUAL: AM Best Rates Financial Strength at "B" ------------------------------------------------------------- A.M. Best Co. has placed the financial strength rating of B (Fair) and issuer credit rating of "bb" of Grain Dealers Mutual Insurance Company (Grain Dealers) (Indianapolis, IN) under review with developing implications. These rating actions follow the announcement that Grain Dealers and Main Street America Group, Inc. (Main Street) (Jacksonville, FL) have entered into an affiliation agreement that has been approved by both companies' boards of directors. This agreement is subject to regulatory approval from the Indiana Department of Insurance. The companies' anticipate the affiliation to be finalized in early fourth quarter 2009. The ratings and outlook for Main Street and its subsidiaries are unchanged. Grain Dealers' ratings will remain under review pending the close of the affiliation agreement. Prior to placing Grain Dealers' ratings under review, the outlook was negative, reflecting A.M. Best's concerns that operating results remain subject to both weather-related and pension charges that could further negatively impact Grain Dealers' risk-adjusted capitalization. In the event that the affiliation is not fully executed, Grain Dealers' ratings may be downgraded due its declining capitalization and continued weak operating results. However, Grain Dealers' ratings will likely be positively affected if the affiliation agreement closes. About Grand Dealers Grain Dealers Mutual underwrites a variety of commercial and personal property/casualty insurance. Its product lines include automobile, businessowner, and homeowners policies. The Company does business in Arizona, Arkansas, Indiana, Mississippi, North Carolina, New Mexico, Oklahoma, Tennessee, and Virginia. Some 450 independent agencies represent the company. Grain Dealers Mutual was established in 1902, primarily to protect the assets of commercial grain elevator operators. * * * As reported in the Troubled Company Reporter on March 16, 2009, A.M. Best Co. has downgraded the financial strength rating (FSR) to B (Fair) from B+ (Good) and the issuer credit rating (ICR) to "bb" from "bbb-" of Grain Dealers Mutual Insurance Company (Grain Dealers) (Indianapolis, IN). The outlook for both ratings is negative. HARTMARX CORP: In Dispute With Buyers, Sale Could Fall Off ---------------------------------------------------------- James Quinn at Telegraph reports that Hartmarx Corp.'s deal with Emerisque and S Kumars Nationwide Ltd. could fall apart. As reported by the Troubled Company Reporter on July 22, 2009, the U.S. Bankruptcy Court for the Northern District of Illinois approved the sale of substantially all of the assets of Hartmarx Corporation to Emerisque Brands UK and SKNL North America, B.V., for a total transaction value of roughly US$119 million. Emerisque Brands and SKNL expected the transaction to close July 7, 2009. But the closing was postponed, as the buyers hadn't been able to finalize the financial details. According to Telegraph, the deal was still not complete as of Wednesday, as Hartmarx's advisers are arguing about who should pay the costs to wind down the parts of the business that aren't subject to Emerisque's takeover. The New York Post says that advisers of Emerisque and Hartmarx are in dispute over the costs, with financial restructuring experts FTI Consulting and law firm Skadden Arps maintaining that it is usual practice for the buyer to foot the costs. Telegraph relates that Emerisque said that if it were to do so, it would take the cost of the deal above the agreed price. Based in Chicago, Illinois, Hartmarx Corporation -- http://www.hartmarx.com/-- produces and markets business, casual and golf apparel under its own brands, including Hart Schaffner Marx, Hickey-Freeman, Palm Beach, Coppley, Monarchy, Manchester Escapes, Society Brand, Racquet Club, Naturalife, Pusser's of the West Indies, Brannoch, Sansabelt, Exclusively Misook, Barrie Pace, Eye, Christopher Blue, Worn, One Girl Who . . . and b.chyll. In addition, the company has certain exclusive rights under licensing agreements to market selected products under a number of premier brands such as Austin Reed, Burberry men's tailored clothing, Ted Baker, Bobby Jones, Jack Nicklaus, Claiborne, Pierre Cardin, Lyle & Scott, Golden Bear, Jag and Dr. Martens. The Company's broad range of distribution channels includes fine specialty and leading department stores, value-oriented retailers and direct mail catalogs. Hartmarx and certain affiliates filed for bankruptcy protection on January 23, 2009 (Bankr. N.D. Ill. Lead Case No. 09-02046). George N. Panagakis, Esq., Felicia Gerber Perlman, Esq., and Eric J. Howe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed $483,108,000 in total assets and $261,220,000 in total debts as of August 31, 2008. HCA INC: Fitch Assigns 'BB/RR1' Rating on $750 Mil. Notes --------------------------------------------------------- Fitch Ratings has assigned a rating of 'BB/RR1' to HCA Inc.'s proposed offering of $750 million in senior secured first lien notes due 2020. Fitch currently rates HCA: -- Issuer Default Rating 'B'; -- Secured Bank Credit Facility 'BB/RR1'; -- First Lien Notes 'BB/RR1'; -- Second Lien Notes 'B+/RR3'; -- Senior Unsecured Notes 'CCC/RR6'. The Rating Outlook is Stable. Total rated debt as of March 31, 2009, was approximately $26.6 billion. Fitch expects the proceeds of the debt offering to be used to reduce outstanding indebtedness under HCA's secured term loan facilities, as required by the terms of the senior secured credit facilities. One of Fitch's key concerns regarding the credit is the large amount of debt maturing between 2010 and 2013, including approximately $10 billion in secured term loan borrowings that mature in 2012 and 2013. However, HCA has issued more than $1.8 billion in new first- and second-lien secured notes in 2009 and used the proceeds to repay term loan borrowings, and Fitch believes HCA may undertake similar activity in the future. However, if HCA were unable to proactively address these maturities and Fitch believes the company would be unable to either refinance or retire the obligations when due, a negative ratings action would result. HCA's ratings reflect the company's significant leverage and challenging industry environment, partially offset by improvements in its operations and debt levels. HCA has reduced outstanding debt by more than $1.8 billion since its leveraged buy-out (LBO) in 2006 while leverage (total debt/EBITDA) has declined to approximately 5.4 times (x) at March 31, 2009, from 6.6x at December 31, 2006. In addition, HCA's operations have continued to improve as a result of cost management efforts, strong same- facility admissions growth (including its seventh consecutive quarter of positive same-facility adjusted admissions growth reported for the second quarter of 2009), and new emergency room coding efforts. Key rating concerns include the large amount of debt maturing in the next several years, as well as an uncertain industry environment. Industry uncertainty stems from the potential for the economic recession to lead to pressure on bad debt expense as well as the potential for health care reform, which could have profound (positive or negative) impact on the sector. Finally, Fitch notes that an exit by HCA's private equity sponsors through, for example, an initial public offering (IPO) could have a significant impact on the credit. HCA INC: S&P Assigns 'BB' Rating on $750 Million Senior Notes ------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned an issue- level rating of 'BB' and a recovery rating of '1' to HCA Inc.'s proposed $750 million senior secured notes due 2020. All other ratings are unchanged. The '1' recovery rating indicates the expectation for very high (90%-100%) recovery of principal in the event of default. Ratings List HCA Inc. Corporate Credit Rating B+/Stable/-- New Rating HCA Inc. Senior Secured $750 mil. notes due 2020 BB Recovery Rating 1 HARTMARX CORP: CEO Homi Patel to Leave Company After 30 Years ------------------------------------------------------------- Joe Barrett at The Wall Street Journal reports that Hartmarx Corp. said that Homi B. Patel, its chairman and CEO and who had been with the Company for 30 years, will step down on July 31. According to The Journal, Mr. Patel said that he is discussing an advisory role with Emerisque, which is set to acquire Hartmarx, and would devote more of his time as special adviser to the Z Capital Special Situations Private Equity Fund and to other for- profit and not-for-profit opportunities. Based in Chicago, Illinois, Hartmarx Corporation -- http://www.hartmarx.com/-- produces and markets business, casual and golf apparel under its own brands, including Hart Schaffner Marx, Hickey-Freeman, Palm Beach, Coppley, Monarchy, Manchester Escapes, Society Brand, Racquet Club, Naturalife, Pusser's of the West Indies, Brannoch, Sansabelt, Exclusively Misook, Barrie Pace, Eye, Christopher Blue, Worn, One Girl Who . . . and b.chyll. In addition, the company has certain exclusive rights under licensing agreements to market selected products under a number of premier brands such as Austin Reed, Burberry men's tailored clothing, Ted Baker, Bobby Jones, Jack Nicklaus, Claiborne, Pierre Cardin, Lyle & Scott, Golden Bear, Jag and Dr. Martens. The Company's broad range of distribution channels includes fine specialty and leading department stores, value-oriented retailers and direct mail catalogs. Hartmarx and certain affiliates filed for bankruptcy protection on January 23, 2009 (Bankr. N.D. Ill. Lead Case No. 09-02046). George N. Panagakis, Esq., Felicia Gerber Perlman, Esq., and Eric J. Howe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed $483,108,000 in total assets and $261,220,000 in total debts as of August 31, 2008. HAWAIIAN TELCOM: Should Name Exit Lender, Says U.S. Trustee ----------------------------------------------------------- Carla Main at Bloomberg News reports that the U.S. Trustee says Hawaiian Telcom Communications Inc. should, among other things, name the source of the $300 million senior loan that would fund its proposed Chapter 11 plan. The U.S. Trustee made those comments in its response to Hawaiian Telcom's request for approval of the disclosure statement explaining the proposed plan. Hawaiian Telcom has filed a plan which converts $940 million in debt into equity in the reorganized company. Hawaiian Telcom, however, has lost its exclusive rights to file a proposed plan, thus, other parties are allowed to file competing plans. Sandwich Isles Communications, Inc. had sought denial of an exclusivity extension, saying it would be able to produce a superior Chapter 11 plan. Sandwich Isles has offered to purchase substantially all of Hawaiian Telcom's assets for $250 million in cash and $150 million in a Hawaiian Telcom-financed note, subject to purchase price adjustments and due diligence. About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telcom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection on December 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). As reported by the TCR on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of September 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc., and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HELSEL LUMBER: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Helsel Lumber Mill, Inc. 3446 Johnstown Road Duncansville, PA 16635 Bankruptcy Case No.: 09-70917 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court Western District of Pennsylvania (Johnstown) Debtor's Counsel: Robert O. Lampl, Esq. 960 Penn Avenue, Suite 1200 Pittsburgh, PA 15222 Tel: (412) 392-0330 Fax: (412) 392-0335 Email: rol@lampllaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/pawb09-70917.pdf The petition was signed by Charles E. Salyards Jr., president of the Company. HILLMAN COMPANIES: Moody's Assigns 'Ba2' Ratings on Loan Tranches ----------------------------------------------------------------- Moody's Investors Service assigned Ba2 ratings on the new revolving credit and term loan tranches to be incorporated under The Hillman Companies, Inc.'s secured credit facility via amendment. The ratings on the existing tranches were raised to Ba2. Hillman's B2 Corporate Family Rating and Probability of Default Rating were affirmed. Concurrently, Hillman's ratings outlook was revised to stable from negative, and its Speculative Grade Liquidity rating was raised to SGL-3 from SGL-4. The ratings are subject to receipt and review of final documentation. The proposed amendment is designed to extend the revolver and term loan maturities and to address the stepped-up term loan amortization. Under the terms of the amendment, consenting lenders will have their commitments moved to new Revolver R-2 and Term Loan B-2 with final maturity dates of March 31, 2012. These new loans will rank pari passu with the existing Revolver R-1 and Term Loan B-1, where the commitments of any non-consenting lenders will remain. The existing revolver and term loan maturity dates will remain unchanged at March 31, 2010 and March 31, 2011, respectively. The company has also proposed a new, delayed draw term Loan B-3, to be made available solely to repay any remaining Term Loan B-1 amortization, if needed. Hillman has also proposed to amend its financial covenants, including an increase in the Debt/EBITDA test, its tightest covenant. The upgrade to SGL-3 reflects the expectation for adequate near term liquidity, given that the extension of maturity dates significantly eases near term refinancing risk. Liquidity is further supported by the expectation for positive free cash flow, unrestricted cash and availability under its revolving credit facilities over the intermediate term, and improved covenant cushion. The upgrade of Hillman's secured credit facilities reflects the company's improving credit profile, and Moody's belief that a one notch over ride which was used in the past, is no longer applicable. The stable outlook reflects Hillman's improved liquidity stemming from the proposed amendments, its stable and predictable revenue and cash flow, and the expectation that credit metrics will remain at or near current, improved levels. These ratings were affirmed: -- Corporate Family Rating at B2; -- Probability of Default Rating at B2; These ratings were assigned: -- Senior secured revolving credit facility R-2 due 3/31/2012 at Ba2 (LGD2, 17%); -- Senior secured term loan B-2 due 3/31/2012 at Ba2 (LGD2, 17%); -- Delayed draw, senior secured term loan B-3 due 3/31/2012 at Ba2 (LGD2, 17%); These ratings were upgraded: -- Senior secured revolving credit facility R-1 due 3/31/2010 to Ba2 (LGD2, 17%) from Ba3 (LGD2, 23%); -- Senior secured term loan B-2 due 3/31/2011 at Ba2 (LGD2, 17%) from Ba3 (LGD2, 23%); -- Speculative grade liquidity rating to SGL-3 from SGL-4 The last rating action on Hillman was on November 26, 2008, when Moody's affirmed the company's B2 CFR and changed the Speculative Grade Liquidity rating to SGL-4 from SGL-3. The Hillman Companies, Inc., provides hardware-related products and related merchandising services to retail markets in North America. The company reported revenue of nearly $490 million for the LTM period ending March 31, 2009. HILLMAN GROUP: S&P Puts 'B-' Corp. Rating on CreditWatch Positive ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed its 'B-' corporate credit rating and 'B+' bank loan rating on Cincinnati, Ohio-based Hillman Group Inc., on CreditWatch with positive implications. The bank facility is rated two notches higher than the corporate credit rating, with a recovery rating of '1', indicating very high (90%-100%) recovery for senior secured lenders in a payment default. In the event that the company amends and refinances its credit facility as planned, S&P expects to raise the corporate credit rating to 'B' and the senior secured bank loan rating to 'BB-'. "The CreditWatch placement and potential upgrade reflects S&P's view that the receipt of lender approval on Hillman's proposed bank amendment and corresponding completion of the proposed refinancing transaction would help mitigate S&P's ongoing concerns related to near-term liquidity risk," said Standard & Poor's credit analyst Mark Salierno. S&P's current liquidity concerns on Hillman, a leading provider of hardware related products to retail markets in North America, stem from its tight covenant cushion, significant stepped up amortization requirements on the company's term loan facility starting in June 2010, and near-term maturity on the company's existing $40 million revolving credit facility due March 2010. Under the proposed terms and conditions, the transaction would split the revolver and term loans into consenting and nonconsenting tranches, based on requisite lender consent. Within the consenting lender tranches, the transaction would allow Hillman to extend its revolver and term loan maturities to March 2012 and modify its term loan amortization requirements to 1.25% per quarter to maturity, compared with quarterly term amortization of 24.8% commencing June 2010. Lenders would receive increased pricing and an amendment fee in exchange for the maturity date extensions and modified amortization schedule. The proposed transaction would also include a new $30 million delayed draw term loan due 2012, which could only be drawn on to fund amortization payments related to term loan commitments of nonconsenting lenders. Despite the ongoing weakness in the housing market and the downturn of the U.S. economy, Hillman's operating performance has been fairly stable, in part because lower price-point products at the home improvement retailers have performed better than the big- ticket more discretionary merchandise. S&P expects that the company's operating performance and overall profitability will continue to remain relatively stable under adverse market conditions. Hillman's operating margins remain at about 17% as it was largely able to offset such rising product input costs in 2008 with price increases. Although S&P remains concerned that a prolonged recession could affect the company's ability to continue to take additional price increases, Hillman has reduced its workforce and has implemented other restructuring initiatives aimed at streamlining its cost structure to preserve its operating margins. At the same time, free operating cash flow generation has remained positive (approximately $24 million in fiscal 2008). Standard & Poor's will monitor developments related to Hillman's proposed transaction and review final amended terms of the credit facility before resolving the CreditWatch listing. If the company completes the transaction as proposed, S&P expects to raise the corporate credit and bank loan ratings. Raising all ratings would be limited to one notch, and the outlook would be stable. S&P would reassess the current ratings and CreditWatch listing if the planned transaction does not close. HORIZON LINES: S&P Downgrades Corporate Credit Rating to 'B' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its long-term corporate rating on Horizon Lines Inc., to 'B' from 'B+', and removed the ratings from CreditWatch, where S&P had placed them with negative implications on June 12, 2009. At the same time, S&P lowered the rating on the senior secured debt to 'BB-', two notches above the new corporate credit rating, from 'BB', while leaving the recovery rating on this debt unchanged at '1', indicating expectations of very high (90%-100%) recovery in the event of a payment default. In addition, S&P lowered the rating on the senior unsecured notes to 'CCC+' from 'B-', two notches below the new corporate credit rating, while leaving the recovery rating on this debt unchanged at '6', indicating expectations of a negligible (0%-10%) recovery in the event of a payment default. The outlook is negative. The downgrade reflects Horizon Lines' weaker-than-expected financial profile due to earnings pressures stemming from significantly reduced shipping volumes and the lower cushion under the company's financial covenants. "The negative outlook reflects S&P's expectations that there could be further material weakening in the company's financial profile over the next year, if shipping volumes continue to fall, due to the effects of the U.S. recession," said Standard & Poor's credit analyst Funmi Afonja. If that occurred, causing debt to EBITDA to approach 9x, or causing a further tightening in the company's financial covenant cushion, S&P would likely lower ratings. S&P's current ratings do not incorporate any material potential liquidity events or negative outcome that could result from the DOJ investigation. If the investigation resulted in a material fine or negative outcome, S&P might lower the ratings further. "We could revise the outlook to stable if earnings and credit metrics strengthen as a result of improved market conditions, although S&P does not anticipate such an improvement over the near term," she continued. IMPEL INC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Impel, Inc. 14642 Barney Dr. Mint Hill, NC 28227 Bankruptcy Case No.: 09-32017 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court Western District of North Carolina (Charlotte) Judge: J. Craig Whitley Debtor's Counsel: R. Keith Johnson, Esq. 1275 South Hwy 16 Stanley, NC 28164 Tel: (704) 827-4200 Fax: (704) 827-4477 Email: rkjpa@bellsouth.net Total Assets: $7,037,600 Total Debts: $3,171,559 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/ncwb09-32017.pdf The petition was signed by Mirko Djuranovic. INDALEX HOLDINGS: DOJ Wants NC Plant Divested Under Sapa Deal ------------------------------------------------------------- The Department of Justice has reached a settlement that will require Sapa Holding AB and Indalex Holdings Finance Inc. to divest a North Carolina aluminum sheathing facility in order to proceed with Sapa's proposed $150 million acquisition of Indalex. The Department said that the transaction, as originally proposed, would substantially lessen competition for the manufacture and sale of aluminum sheathing (coiled extruded aluminum tubing) used in the manufacture of high frequency coaxial cable in the United States, resulting in increased prices and reduced quality, service and innovation. The Department said that the companies must divest either Sapa's Catawba, N.C. aluminum sheathing manufacturing plant or Indalex's aluminum sheathing facility at its Burlington, N.C., plant in order to proceed with the deal. The Department's Antitrust Division filed a civil antitrust lawsuit in U.S. District Court in Washington, D.C., to block the proposed transaction. At the same time, the Department filed a proposed settlement that, if approved by the court, would resolve the lawsuit and the Department's competitive concerns. "The original proposed transaction threatened to deprive consumers of the benefits of competition," said Christine A. Varney, Assistant Attorney General in charge of the Department's Antitrust Division. "Without the divestiture required by the Department, purchasers of aluminum sheathing in the United States likely would have faced higher prices and reduced quality and innovation." According to the complaint, Sapa and Indalex are the only two manufacturers of aluminum sheathing in the United States. Indalex is currently involved in bankruptcy proceedings. Aluminum sheathing is used to make coaxial cables that are purchased by cable television companies in the United States and abroad for use in transmitting high frequency broadband signals to their subscribers. Aluminum sheathing is made to exacting specifications to provide protection for the components of the cables to prevent the loss of the transmission signal to subscribers. Under the proposed settlement, in the event the companies are unable to sell either the Catawba, N.C. or Burlington, N.C. facility promptly to a viable purchaser acceptable to the Department, they must sell Indalex's entire Burlington, N.C. extruded aluminum plant, which produces fabricated aluminum products, such as conduit and aluminum shapes, in addition to aluminum sheathing. Sapa is a Swedish corporation with its principal place of business in Stockholm, Sweden. Sapa sells fabricated aluminum products throughout the world, including in the United States, where it is the largest aluminum extrusion fabricator. In 2008, its sales of the product were about $30.7 million. Sapa is owned by Orkla ASA, a Norwegian public limited company whose offices are located in Skoyen, Oslo in Norway. Orkla is a large, diversified international company with operations throughout the world. Indalex is a Delaware corporation with its principal place of business in Lincolnshire, Ill. Indalex sells fabricated aluminum products in Canada and the United States. Indalex is the second largest aluminum extrusion fabricator in the United States. In 2008, its sales of the product were about $12 million. As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Maribeth Petrizzi, 450 Fifth Street N.W., Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest. Indalex Holdings 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. As reported in the TCR on July 28, 2009, the Bankruptcy Court has authorized Indalex to sell its business to Sapa Holding AB. Sapa offered to pay (i) $90.1 million in cash and for the Debtors' U.S. assets; and (ii) $31.7 million in cash for the Canadian assets. JAMES STEPHENS: Taps Law Offices of Goodman as Counsel ------------------------------------------------------ James C. Stephens asks the U.S. Bankruptcy Court for the Eastern District of Wisconsin for permission to employ the Law Offices of Jonathan V. Goodman as his counsel to provide legal advice with respect to his power and duties as debtor-in-possession on the management of his properties. Jonathan V. Goodman, Esq., bills $390 per hour for his engagement while his associates charge $225 per hour and law clerks charge $150 per hour. To the best of the Debtor's knowledge, the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Milwaukee, Wisconsin-based James C. Stephens, aka Cass Stephens, filed for Chapter 11 on July 14, 2009 (Bankr. E. D. Wis. Case No. 09-29970). Jonathan V. Goodman, Esq., represents the Debtor in his restructuring efforts. The Debtor, in his petition, said that both its assets and debts range from $10,000,001 to $50,000,000. JAMES STEPHENS: Wants Schedules Filing Extended Until August 13 --------------------------------------------------------------- James C. Stephens asks the U.S. Bankruptcy Court for the Eastern District of Wisconsin to extend until August 13, 2009, the time to file his schedules and statements of affairs. Milwaukee, Wisconsin-based James C. Stephens, aka Cass Stephens, filed for Chapter 11 on July 14, 2009 (Bankr. E. D. Wis. Case No. 09-29970). Jonathan V. Goodman, Esq., represents the Debtor in his restructuring efforts. The Debtor, in his petition, said that both its assets and debts range from $10,000,001 to $50,000,000. JAMES STEPHENS: Wants to Sell Milwaukee Property for $390,000 --------------------------------------------------------------- James C. Stephens is asking the U.S. Bankruptcy Court for the Eastern District of Wisconsin for authority to sell a real property located at 1726-28 E. North Avenue in Milwaukee, Wisconsin, to Tan Lo for $390,000, free and clear of all liens and encumbrances. The Debtor tells the Court that the property has been appraised at $370,000, as of March 12, 2009. The Debtor assures the Court that it has no relationship with the buyer. Milwaukee, Wisconsin-based James C. Stephens, aka Cass Stephens, filed for Chapter 11 on July 14, 2009 (Bankr. E. D. Wis. Case No. 09-29970). Jonathan V. Goodman, Esq., represents the Debtor in his restructuring efforts. The Debtor, in his petition, said that both its assets and debts range from $10,000,001 to $50,000,000. JEFFERY ROOT: Case Summary & 7 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Jeffery Lynn Root dba Tally Ho dba Dana's Grill & Bar fdba Root Enterprises 9311 Curvue Road Eau Claire, WI 54703 Bankruptcy Case No.: 09-15022 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court Western District of Wisconsin (Eau Claire) http://www.wiw.uscourts.gov Judge: Thomas S. Utschig Debtor's Counsel: Erwin H. Steiner, Esq. 2522 Golf Road, Suite 3 Eau Claire, WI 54701 Tel: (715) 832-2040 Email: steinerwright@charterinternet.com Total Assets: $1,675,500 Total Debts: $1,631,095 A full-text copy of Ms. Root's petition, including a list of her 7 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/wiwb09-15022.pdf The petition was signed by Ms. Root. JOE GIBSON: Customers Want Zurich to Promptly Comply with Deal -------------------------------------------------------------- Joe Gibson's Auto World Inc. in June obtained approval from the U.S. Bankruptcy Court for the District of South Carolina of a global settlement with customers duped by fraudulent advertising and financing methods of the Company. The settlement, which was incorporated in a liquidating plan that the Court approved, allows customers to divide the majority of the expected $3 million in settlement proceeds that are directed to a trust fund. Customers will split $2.7 million in funds established by "contributing parties," which includes the American Suzuki Motor Corp., participating lenders, and Joe Gibson's insurance carrier. Leftover funds will be used for administrative claims, unsecured trade claims and priority claims. Craig Peters at Spartanburg Herald-Journal said July 29 that that Zurich American Insurance Co., which owns Universal Underwriters Insurance Co., is the only party that has not yet delivered its share of the settlement. Zurich American attorney Brad Martin has argued against the language of the release in the settlement agreement. Herald-Journal reports that McCarthy Law Firm -- which represents Joe Gibson's Auto World -- and consumer attorneys Rodney Pillsbury, Pat Knie and David Alford have sought sanctions against Zurich for burdens caused by the delay. Pillsbury said the former customers are being further punished because they can't trade in their vehicles or be relieved of contracts they can't afford until several days after the trust fund is complete. In that light, bankruptcy Judge Helen Burris has directed parties to promptly resolve their dispute. Absent a resolution, Judge Burris will rule on Joe Gibson's the motion to compel Zurich to perform under the settlement. The lawyers want Zurich American to pay $600,000, minus attorney fees and costs, as part of the settlement. About Joe Gibson's Joe Gibson's Auto World, Inc., and Joe Gibson Automotive, Inc., filed separate voluntary petitions under Chapter 11 on July 16, 2008 (Bankr. D. S.C. Case Nos. 08-04215 and 08-04216). G. William McCarthy, Jr., Esq., represents the Debtors in their restructuring efforts. When Joe Gibson's Auto World, Inc., filed for protection from its creditors, it listed assets of between $1,000,0000 and $10,000,000, and debts of between $10,000,0000 and $50,000,000. LAKE AT LAS VEGAS: Completes Repair of Two Pipelines ---------------------------------------------------- The Associated Press reports that work to repair two long pipelines underneath Lake Las Vegas has been completed. Repair work started nine months ago, when the pipes showed an unusual amount of wear and tear after 18 years, says The AP. The pipes are two miles long and seven feet wide and should last for about 20 years, The AP says, citing Kirk Brynjulson, vice president of land development for Lake Las Vegas. The AP states that Henderson, the bedroom suburb of Las Vegas, owns the pipelines, but Lake Las Vegas is responsible for maintenance and paid for the work. According to The AP, completion of the work was two months late and cost about $3 million, exceeding the budget by $50,000. The AP relates that officials said that storms in November and December 2008 shut down work for several days. Lake Las Vegas is located in Henderson, Nevada. It refers to both a man made 320 acres lake and to the 3,592 acres area built around the lake. The area is sometimes referred to as the Lake Las Vegas Resort. Lake Las Vegas is being developed by five companies including Lake at Las Vegas Joint Venture, LLC. Headquartered in Henderson, Nevada, Lake at Las Vegas Joint Venture, LLC and 14 of its debtor-affiliates -- http://www.lakelasvegas.com/-- are owners and developers of 3,592-acre residential and resort destination Lake Las Vegas Resort in Las Vegas, Nevada. Centered around a 320-acre man-made lake, Lake Las Vegas contains more than 9,000 residential units, and also includes two luxury resort hotels (a Loews and a Ritz- Carlton), a casino, a specialty retail village shopping area, marinas, three signature golf courses and related clubhouses, and other real property. The Debtors filed separate petitions for Chapter 11 relief on July 17, 2008 (Bankr. D. Nev. Lead Case No. 08-17814). When Lake at Las Vegas Joint Venture, LLC filed for protection from its creditors, it listed assets of $100 million to $500 million, and debts of $500 million to $1.0 billion. Courtney E. Pozmantier, Esq., Martin R. Barash, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, Jason D. Smith, Esq., at Santoro, Driggs, Walch, Kearney, Holley & Thompson, Jeanette E. McPherson, Esq., Lenard E. Schwartzer, Esq., at Schwartzer & McPherson Law Firm, represent the Debtors as counsel. Kaaran E. Thomas, Esq., and Ryan J. Works, Esq., at McDonald Carano Wilson LLP, represent the official committee of unsecured creditors as counsel. LAKE AT LAS VEGAS: Creditors Sue Credit Suisse Over Loans --------------------------------------------------------- Carla Main at Bloomberg News reports that unsecured creditors of Lake Las Vegas Joint Venture LLC sued a unit of Credit Suisse Group AG over claims the bank made loans that left the residential development and resort short of cash to pay its bills. The creditors asked the Bankruptcy Court to disallow the lender's $307 million claim unless it relinquishes its mortgages and other liens on the resort property. According to Ms. Main, at least seven other luxury developments funded by Zurich-based Credit Suisse in the western U.S., Florida and the Caribbean either went into default or declared bankruptcy. Credit Suisse made the loans and then sold them to investors who, in turn, put them into mutual funds or packaged them into securities called collateralized loan obligations. About Lake at Las Vegas Headquartered in Henderson, Nevada, Lake at Las Vegas Joint Venture, LLC and 14 of its debtor-affiliates -- http://www.lakelasvegas.com/-- are owners and developers of 3,592-acre residential and resort destination Lake Las Vegas Resort in Las Vegas, Nevada. Centered around a 320-acre man-made lake, Lake Las Vegas contains more than 9,000 residential units, and also includes two luxury resort hotels (a Loews and a Ritz- Carlton), a casino, a specialty retail village shopping area, marinas, three signature golf courses and related clubhouses, and other real property. The Debtors filed separate petitions for Chapter 11 relief on July 17, 2008 (Bankr. D. Nev. Lead Case No. 08-17814). When Lake at Las Vegas Joint Venture, LLC filed for protection from its creditors, it listed assets of $100 million to $500 million, and debts of $500 million to $1.0 billion. Courtney E. Pozmantier, Esq., Martin R. Barash, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, Jason D. Smith, Esq., at Santoro, Driggs, Walch, Kearney, Holley & Thompson, Jeanette E. McPherson, Esq., Lenard E. Schwartzer, Esq., at Schwartzer & McPherson Law Firm, represent the Debtors as counsel. Kaaran E. Thomas, Esq., and Ryan J. Works, Esq., at McDonald Carano Wilson LLP, represent the official committee of unsecured creditors as counsel. LAKE BURTON: U.S. Trustee Sets Meeting of Creditors for August 12 ----------------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of creditors in Lake Burton Development LLC's Chapter 11 case on Aug. 12, 2009, at 10:00 a.m. The meeting will be held at Third Floor - Room 363, Richard B. Russell Bldg., 75 Spring Street, SW, Atlanta, Georgia. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Clayton, Georgia-based Lake Burton Development LLC filed for Chapter 11 on July 10, 2009 (Bankr. N. D. Ga. Case No. 09-22830). Patrick D. Jaugstetter, Esq., at Power, Cooper & Jaugstetter, P.C., represents the Debtor in its restructuring efforts. In its petition, the Debtor listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. LAKE BURTON: U.S. Trustee Sets Meeting of Creditors for August 12 ------------------------------------------------------------------ The U.S. Trustee for Region 21 will convene a meeting of creditors in Lake Burton Development LLC's Chapter 11 case on August 12, 2009, at 10:00 a.m. The meeting will be held at Third Floor - Room 363, Richard B. Russell Bldg., 75 Spring Street, SW, Atlanta, Georgia. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Clayton, Georgia-based Lake Burton Development LLC filed for Chapter 11 on July 10, 2009 (Bankr. N. D. Ga. Case No. 09-22830). Patrick D. Jaugstetter, Esq., at Power, Cooper & Jaugstetter, P.C., represents the Debtor in its restructuring efforts. In its petition, the Debtor listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. LOCAL TV: Moody's Downgrades Corporate Family Rating to 'Caa2' -------------------------------------------------------------- Moody's Investors Service has downgraded Local TV Finance LLC's Corporate Family Rating and Probability of Default Rating, each to Caa2 from Caa1. Additionally, Moody's downgraded the company's senior secured debt ratings to B3 from B2. The downgrades largely reflect Moody's concern that Local TV's growing debt burden may become unsustainable over the relatively near term (exceeding a 15 times multiple of average EBITDA by the end of 2010), although Moody's anticipate only a still relatively modest (albeit correspondingly higher) likelihood of default on its scheduled debt payments or covenants. Moody's has taken these rating actions: * Corporate Family Rating -- downgraded to Caa2 from Caa1 * Probability of Default Rating -- downgraded to Caa2 from Caa1 * $30 million Senior Secured Revolving Credit Facility due 2013 -- downgraded to B3 from B2, LGD 2, 29% * $275 million Senior Secured Term Loan due 2013 -- downgraded to B3 from B2, LGD 2, 29% * $190 million PIK Toggle Senior Notes due 2015 -- affirmed Caa3, LGD 5, 84% The rating outlook remains negative. The rating downgrades largely reflect Moody's concerns that continuing weak advertising spending in Local TV's served markets will result in depressed EBITDA levels and increasing leverage over the near-to-intermediate term, rendering the company's overly leveraged capital structure unsustainable over the medium-to-long term. Over the next twelve-to-eighteen months, Moody's expects average debt-to-EBITDA leverage could exceed 15x, assuming the company continues to PIK interest on its senior notes (which will increase debt by approximately $19 million annually through June 2011), increasing the probability that management will consider a balance sheet restructuring. At the end of March 2009, Local TV recorded approximately $30 million of cash and undrawn revolver availability of $30 million, representing an adequate liquidity profile sufficient to cover near-term funding requirements (assuming management elects to continue paying interest on the toggle notes in-kind rather than in cash through June 2011). Moreover, Moody's anticipates that Local TV will be able to supplement liquidity through modest free cash flow generation, especially during 2010 which Moody's expect will be a relatively strong political advertising year. Nonetheless, Moody's is concerned that the company is reliant upon the PIK toggle feature of its senior unsecured notes to cover interest expense and avoid free cash flow losses during 2009, and that a potential recovery of core local and national advertising (and the benefit of political spending) in 2010 will be insufficient to meaningfully improve the company's financial metrics. Additionally, Moody's expects that increasing debt levels (from the PIK accretion) and decreasing EBITDA will conspire to exhaust covenant-compliant revolver availability by the end of 2009, absent an amendment. The last rating action occurred on October 29, 2008, when Moody's downgraded Local TV's CFR and PDR, each to Caa1 from B2. Local TV Finance, LLC, headquartered in Fort Wright, Kentucky, owns nine television broadcasting stations in eight mid-sized markets. LOU PEARLMAN: Backstreet Boys Member Opposes Return of Payouts -------------------------------------------------------------- Howie Dorough, one of the members of pop group Backstreet Boys, has filed an objection fighting lawsuits by Soneet R. Kapila, the trustee for former pop manager Lou Pearlman's Chapter 11 bankruptcy case, that seek to recover funds transferred by the pop manager to investors. As reported by the Troubled Company Reporter on July 22, 2009, the trustee in charge of Mr. Pearlman's bankruptcy estate is seeking to recover payments that the Debtor or his related business entities transferred in the four years before the bankruptcy. Lawsuits were filed against the investors bilked by the Ponzi scheme and seek to recover all transferred funds on the grounds that the investors knew or should have known it was a Ponzi scheme. The recovered funds will be distributed to Mr. Pearlman's creditors. Investors are fighting the lawsuits, arguing that they are the victims. Mr. Dorough, along with Paula Dorough and Sweet D, Inc., were among those more than 700 investors sued by Ms. Kapila. The defendants filed an objection to the trustee's motion for order approving case management procedures and discovery protocol, and a proposal to stay adversary proceedings, pending the outcome of test suits commenced by the trustee. Jacqueline Palank posted at The Wall Street Journal blog, Bankruptcy Beat, that Mr. Dorough was sued for more than $73,000. Bankruptcy Beat says that the trustee's lawsuits would preclude Mr. Dorough from launching an investigation to help defend himself. According to Bankruptcy Beat, Mr. Dorough denied having any knowledge of Mr. Pearlman's Ponzi scheme as the Debtor was carrying it out. Lou Pearlman created the Backstreet Boys and 'N Sync. He is currently behind bars after bilking investors out of more than $300 million. He was forced into Chapter 11 protection in 2007 by creditors and in 2008, he was sentenced to 25 years in prison after pleading guilty to conspiring to commit an offense against the U.S. and money laundering. A federal judge ordered him to pay a total of $310.1 million in restitution to investors and lenders. MCJUNKIN RED: Moody's Cuts Ratings on $900 Million Loan to 'Ba1' ---------------------------------------------------------------- Moody's Investors Service downgraded McJunkin Red Man Holding Corp.'s $900 million senior secured asset-based revolving credit facility to Ba1 from Baa3. The rating action was prompted by the increased size and usage of the facility in 2009. Moody's also downgraded the senior secured term loan facility to B2 from B1. Since the ABL facility constitutes the largest debt class in the capital structure, the estimated relative recovery of the term loan decreased, resulting in a one notch downgrade. The B3 rating on the Holdco term loan was affirmed because of its structural subordination to the other debt classes in the capital structure. Moody's believes the B1 corporate family rating continues to reflect MRMH's modest operating margins typical of distributors, an assumed slowdown in the inherently volatile energy sector, modest tangible asset coverage, and the potential for acquisitions. Consolidated leverage is expected to be relatively high for the energy sector, approaching 4.0x adjusted EBITDA in the near term. At the same time, the ratings recognize the company's favorable operating performance in 2008 and solid credit metrics on an adjusted basis. Moody's also favorably views MRMH's stable operating margins and cash flows primarily due to margin based and cost-plus customer contracts, the countercyclical nature of working capital, and modest capital expenditures. Furthermore, the ratings reflect MRMH's favorable size, geographic coverage, and diversification across the upstream, midstream, and downstream energy sectors. The exploration and production sector has substantially reduced its capital spending, which will likely drive weaker earnings for MRMH over the rating horizon. Additional industry challenges include low utilization rates and weak commodity pricing. Nonetheless, the stable outlook reflects Moody's view that the expected increase to leverage is appropriate for a B1 corporate family rating. Moody's believes MRMH will generate a significant amount of free cash flow in 2009 due to the counter-cyclical nature of its working capital during this downturn. Factors that could negatively impact the ratings include softening of the energy sector, deterioration in liquidity, a weakening of working capital metrics, and additional debt-financed acquisitions. Ratings Downgraded: McJunkin Red Man Corp. * Senior secured term loan facility to B2 (LGD4, 63%) from B1 * Senior secured asset-based revolving credit facility to Ba1 (LGD2, 25%) from Baa3 Ratings affirmed: McJunkin Red Man Holding Corp. * Corporate family rating at B1 * Term loan facility (LGD6, 91%) at B3 The last rating action was on May 6, 2008, when Moody's assigned a B1 corporate family rating to McJunkin Red Man Holding Corp. MRMH's ratings were assigned by evaluating factors Moody's believes are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of MRMH's core industry and MRMH's ratings are believed to be comparable to those of other issuers of similar credit risk. McJunkin Red Man Holding Corporation, headquartered in Houston, Texas, is a large distributor of pipes, valves, and fittings, serving the major end markets in the process industry; downstream (petroleum refinery and chemical processing), midstream (gas distribution & transmission) and upstream (natural gas and oil exploration and production). MERITAGE HOMES: Loan Termination Won't Affect S&P's 'B+' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings and outlook on Meritage Homes Corp. (B+/Negative/--) were not immediately affected by the company's recent announcement that it intends to terminate its $150 million unsecured revolving credit facility, due in May 2011. Meritage has no borrowings under the credit facility but has approximately $22 million of letters of credit outstanding. S&P expects that the company will obtain new credit commitments to support its letters of credit. The company stated that it is currently in compliance with all of the financial covenants governing the credit facility. Although Meritage will no longer be subject to those particular restrictive covenants, the company remains subject to less-restrictive financial covenants under the indentures governing its senior and subordinated unsecured notes. Scottsdale, Ariz.-based Meritage is a regional public homebuilder operating in Arizona, Texas, California, Nevada, Colorado, and Florida. The company generated $40 million of operating cash flow in its second quarter ended June 30, 2009 and maintains sufficient liquidity to fund debt service and operations in the near term, in S&P's view, with $385 million of cash at quarter-end. However operating conditions remain challenging. Home closings were down 36% in the quarter and Meritage reported a $73 million loss after recording $66 million of impairments and other non-cash charges. MARK IV: Court Approves Plan Outline; Ballots Due Sept. 15 ---------------------------------------------------------- Mark IV Industries, Inc., said the U.S. Bankruptcy Court for the Southern District of New York in Manhattan has ruled that the Company's Disclosure Statement contains adequate information for the purpose of soliciting creditor approval for the Plan of Reorganization. The Company's senior lenders and the official committee for the unsecured creditors have already indicated that they are supportive of the Plan and the new capital structure for the reorganized company. The Court's approval paves the way for Mark IV to begin soliciting votes with respect to its Plan of Reorganization. It is anticipated that the Plan materials and ballots will be mailed by shortly. In accordance with the Bankruptcy Court's order the deadline for returning ballots is September 15, 2009. A hearing to confirm the Plan is scheduled for September 22, 2009. Under the Plan, it is anticipated that the Company's senior secured lenders will receive an 88 percent equity stake in the reorganized company and pro rata participation in the Restructured Debt Term Loan Agreement. The remaining 12% would be shared by the Company's unsecured creditors. Current equity in Mark IV will be cancelled and no distribution will be provided to current equity holders under the Plan. "We are very pleased to have reached this important milestone less than three months after we commenced our Chapter 11 proceedings," said Interim Chief Executive Officer of Mark IV Industries, Jim Orchard. "Mark IV is on track to emerge from Chapter 11 with a significantly deleveraged balance sheet and a more rational capital structure, positioned to excel in today's difficult economic environment." About Mark IV Mark IV Industries, Inc., headquartered in Amherst, New York -- http://www.mark-iv.com/-- is a privately held diversified manufacturer of highly engineered systems and components for vehicles, transportation infrastructure and equipment. The Company's systems and components 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 filed voluntary petitions for reorganization on April 30, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-12795). Mark IV's International and IVHS operations were not included in the filing and will continue their business operations without supervision from the U.S. courts. 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 assets and more than $1 billion in debts when they filed for bankruptcy. MERLIE MESAR: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Joint Debtors: Merlie Mesar Felizardo Sanchez 13101 Da Vinci Dr Bakersfield, CA 93314 Bankruptcy Case No.: 09-17147 Chapter 11 Petition Date: July 28, 2009 Court: United States Bankruptcy Court Eastern District of California (Fresno) Judge: W. Richard Lee Debtors' Counsel: Nadia Taghizadeh, Esq. 1630 Oakland Rd #A110 San Jose, CA 95131 Tel: (408) 565-8562 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/caeb09-17147.pdf The petition was signed by the Joint Debtors. MICHAEL LEE BJORKMAN: Case Summary & 15 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Michael Lee Bjorkman 21077 Placerita Canyon Newhall, CA 91321 Bankruptcy Case No.: 09-19550 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Maureen Tighe Debtor's Counsel: Louis J. Esbin, Esq. 27201 Tourney Rd., Suite 122 Valencia, CA 91355-1804 Tel: (661) 254-5050 Fax: (661) 254-5252 Email: Esbinlaw@sbcglobal.net Total Assets: $1,126,500 Total Debts: $1,825,013 A full-text copy of Mr. Bjorkman's petition, including a list of his 15 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-19550.pdf The petition was signed by Mr. Bjorkman. MTR GAMING: S&P Affirms Corporate Credit Rating at 'B-' ------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Chester, West Virginia-based MTR Gaming Group Inc., including the 'B-' corporate credit rating. S&P removed the corporate credit and issue-level ratings from CreditWatch, where they were placed with negative implications July 15, 2009, except for the 'B' rating on the company's 12.625% secured notes, which was not previously on CreditWatch. The rating outlook is stable. S&P will withdraw the ratings on the company's 9.75% senior unsecured notes (rated 'B' with a recovery rating of '2') upon the repayment in full of the outstanding obligation, in accordance with the terms of the previously announced tender offer. The ratings affirmation reflects MTR's recent announcement of the required receipt of tenders and consents for the repurchase of its outstanding 9.75% senior notes due 2010 and the issuance of 12.625% senior secured notes due 2014, priced at 95.248% of principal. The note offering and repurchase of a portion of the company's outstanding indebtedness extend the near-term maturity of a portion of the company's debt obligations, and also require the repayment in full of the company's revolving credit commitment and the reduction of the commitment to $20 million. As S&P were previously concerned about the near-term maturity of these obligations, their refinancing has served to somewhat improve the company's financial risk profile. "The 'B-' corporate credit rating reflects MTR Gaming's limited geographic diversity and the ongoing and additional competitive threats that the Pennsylvania gaming market poses to the company's largest gaming property, Mountaineer Casino," said Standard & Poor's credit analyst Michael Listner. S&P expects that MTR will face further competitive challenges beginning next month when the Rivers Casino opens in Pittsburgh, Pa. (the property is located about an hour drive from Mountaineer Casino in Chester, W.Va.). Given the increased interest expense from the financing, as well as S&P's expectation for some weakness in operating results due to the additional gaming capacity in the region, S&P expects that credit measures will weaken and that interest coverage in 2010 will be just below 1.5x. On July 13, 2009, the governor of Ohio signed an executive order directing the Ohio Lottery to implement video lottery terminals (VLTs) at Ohio's seven horse tracks, including Scioto Downs, which is owned by MTR Gaming. While it is unclear at this time whether the implementation of VLTs will require a voter referendum, MTR's amended credit facility permits the company to pay $13.0 million to the State of Ohio in September 2009 for a portion of the proposed $65 million licensing fee in the state. In addition, the order requires an investment of $80 million over a five-year period for the expansion of the property and the implementation of VLTs at the site. Given the fluid nature of the licensing process and the time it would require to equip and offer such amenities, at this time S&P has not factored in the potential revenue that the company could realize (or conversely, the competitive impact that VLTs would have on Mountaineer and Presque Isle Downs) or the financing that would need to be incurred for slot gaming in the state. However, S&P does expect that the company will need to issue a combination of debt or equity in order to fund such an expansion. NATIONAL CENTURY: Poulsen Gets 30 Years; Parrett 25 Years --------------------------------------------------------- Lance K. Poulsen, one of the founders and former CEO of National Century Financial Enterprises, Inc., was sentenced to 30 years in prison and three years of supervised release following the prison term, according to a statement released by the U.S. Department of Justice. Rebecca S. Parrett, former vice chairman, secretary, treasurer, director and owner of NCFE was sentenced to 25 years in prison and three years of supervised release. As widely reported, Ms. Parrett has fled after being convicted by a federal jury, and remains at large. U.S. District Court Judge Algenon L. Marbley also ordered Mr. Poulsen and Ms. Parrett to forfeit $1.7 billion of property representing the proceeds of the NCFE conspiracy, and to pay restitution of $2.3 billion, jointly and severally with other defendants. "Corporate executives who violate the law, as well as investors' trust, can and will be held accountable for their illegal actions," the statement quoted acting assistant Attorney General Rita M. Glavin. "The Department of Justice will continue to seek appropriate punishment, including jail time, for individuals who participate in financial frauds to the detriment of the investing public." "Evidence showed that Poulsen knew the business model NCFE presented to the investing public differed drastically from the way NCFE did business within its own walls," said Gregory G. Lockhart, U.S. Attorney General for the Southern District of Ohio. "Their actions were designed to hide a financial house of cards from investors, eventually costing investors $2 billion." "When corporate officers elect to betray the public's trust for personal gain, the very core of how and why our corporate system operates is immediately and negatively impacted," Special Agent in Charge of the Internal Revenue Service's Criminal Investigation Division, Jose A. Gonzalez was quoted as saying. "As signified by today's NCFE sentences, the IRS gives priority to investigations involving the alleged breach of the public trust by corporate officials at any level." FBI Cincinnati Special Agent in Charge Keith L. Bennett noted the significant sentences imposed on both Mr. Poulsen and Ms. Parrett. "This should serve as a warning to those who might be tempted to manipulate the complexities of our financial systems to defraud others. The FBI stands ready to root out those who would do so, bring them to the judicial system and ensure they lose both their ill-gotten wealth and their freedom." Witnesses testified at both trials that Mr. Poulsen, Ms. Parrett and other NCFE executives engaged in a scheme from 1995 until the collapse of the company to deceive investors and rating agencies about the financial health of NCFE and how investors' money would be used. NCFE bought accounts receivable from healthcare providers using money NCFE obtained through the sale of asset- backed notes to institutional investors, including pension funds, insurance companies and churches. Evidence at both trials showed that NCFE misused investors' money and made unsecured loans to health care providers, including those owned in whole or in part by Mr. Poulsen, Ms. Parrett and another owner of NCFE, Donald H. Ayers. Former employees testified that Mr. Poulsen, Ms. Parrett and other NCFE executives covered up the fraud by lying to investors and rating agencies. The government presented evidence that Mr. Poulsen and others created investor reports containing fabricated data and moved money back and forth between programs in order to make it appear that NCFE was in compliance with its own governing documents. Evidence showed that Mr. Poulsen and Ms. Parrett knew the business model NCFE presented to the investing public differed significantly from the way NCFE actually conducted business. Other NCFE executives have also been convicted in connection with the NCFE fraud. Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- was the largest issuer of medical accounts receivable asset backed securities in the United States before it collapsed in bankruptcy in November 2002 amid allegations of widespread fraud and misappropriation of assets. To date, 10 senior executives of the company have been convicted or pled guilty to federal charges of conspiracy, securities fraud, wire fraud, and money laundering arising out of the NCFE securitization program. NCFE -- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust -- is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represented the Debtors. NATIONAL CENTURY: Hampton-Stein Sues for Conspiracy, Fraud ---------------------------------------------------------- Tracey Hampton-Stein filed a complaint in the Circuit Court for Palm Beach County, in Florida, for invasion of privacy, slander of title, malicious prosecution, fraud, breaches of contract and settlement, intentional infliction of emotional distress, extortion, tortuous interference with her contractual relationships, defamation per se and conspiracy to commit all of those acts against Erwin I. Katz Ltd., trustee of the Unencumbered Assets Trust, successor-in-interest to National Century Financial Enterprises, Inc.; Erwin I. Katz; Jones Day Reavis & Pogue; Matthew Kairis; John Does 1 to 10; Jane Does 1 to 10; and XYZ Companies. Jacob Arthur Armpriester, Jr., Esq., at Armpriester Law Offices, in Dearfield Beach, Florida, contends that Ms. Hampton-Stein's Florida Lawsuit is a case of outrageous and vindictive extra judicial actions and other violations of law by the Defendants all acting in a conspiracy designed specifically and with malice aforethought to damage Ms. Hampton-Stein economically and otherwise. He notes that while Ms. Hampton-Stein is an African- American woman, she does not currently have any information that the misconduct toward her has been racially motivated. She reserves the right to amend the complaint should she ascertain that the Defendants' motives were racial in nature. The Defendants' sole intention in initiating their undisputed acts of malice toward Ms. Hampton-Stein was and continues to be their intention of emotionally and economically injuring and hurting her, who has experienced economic injuries in excess of $100,000,000 directly due to the Defendants' conspiratorial acts and emotional injuries in a sum according to proof at the time of trial, Mr. Armpriester alleges. He adds that the abuses against Ms. Hampton-Stein were and continue to be done by Messrs. Katz and Kairis and Jones Day for two reasons: (1) a continuing and ongoing desire to injure her, and an equally strong desire to "bill their time"; and (2) obtain the money the Defendants can get whilst involved in their billing frenzy. Mr. Armpriester further alleges that the purposes of the Defendants' conspiracy are to breach contracts between National Century and Ms. Hampton-Stein, to rob her of her consideration under written contracts, and to extra-judicially invade her privacy, among others. He points out that in her settlement agreement with the Debtors and others, National Century made numerous contractual commitments to her and others to induce her to provide ongoing consideration to National Century for the company to perfect its interest in a $100,000,000 asset she previously purchased from the company. "Had Plaintiff known NCFE did not intend to honor the settlement agreement, Plaintiff would have never entered into the agreement," Mr. Armpriester asserts. "Plaintiff's sole purpose in entering into the settlement agreement was to be done with Defendants NCFE and Kairis, whom Plaintiff did not wish to be involved in any further," he adds. Ms. Hampton-Stein demands trial by jury on all matters and judgment in her Florida Lawsuit: -- on malicious prosecution, for damages against National Century, Messrs. Katz and Kairis, and Jones Day in the principal amount of $5,000,000 plus interest and costs; -- on breach of contract, for damages against National Century, Messrs. Katz and Kairis, and Jones Day in the principal amount of $100,000,000 plus interest and costs; -- on invasion of privacy, for damages against National Century, Messrs. Katz and Kairis, and Jones Day in the principal amount of $1,000,000 plus interest and costs; -- on intentional infliction of emotional distress, for damages against all Defendants in the principal amount of $1,000,000 plus interest and costs; -- on slander of title, for damages against National Century, Messrs. Katz and Kairis, and Jones Day in the principal amount to be proven at trial, plus interest, costs and attorney fees consistent with Glusman v. Lieberman, 2S5 So.2d 29, 31 (Fla. 4th DCA 1973): -- on tortious interference with business relationship, for damages against all Defendants in the principal amount of $2,000,000 plus interest and costs; and -- on any and all counts as permitted by law, for reasonable attorney's fees incurred and to be incurred in prosecuting the action. Ms. Hampton-Stein subsequently amended her complaint to add certain defendants, including Barbara Poulsen, NCFE's founder and former CEO. Court Denies Remand of Florida Lawsuit Defendants Erwin I. Katz, Ltd., Erwin I. Katz, Jones Day and Matthew Kairis, pursuant to Sections 1332, 1441 and 1446 of the Judiciary and Judicial Procedures Code, have notified parties of the removal of the Florida Lawsuit from the Circuit Court to the U.S. Bankruptcy Court for the Southern District of Florida and subsequently to the U.S. District Court for the Southern District of Florida, citing among other things, diversity of citizenship amongst the parties. Florida District Court Judge James I. Cohn denied a request filed by Ms. Hampton-Stein to remand the Florida Lawsuit back to the Circuit Court. In a separate order, Judge Cohn transferred the Florida Lawsuit to the U.S. Bankruptcy Court for the Southern District of Ohio. All pending motions in the Florida District Court were, hence, denied as moot, and the case closed. Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- was the largest issuer of medical accounts receivable asset backed securities in the United States before it collapsed in bankruptcy in November 2002 amid allegations of widespread fraud and misappropriation of assets. To date, 10 senior executives of the company have been convicted or pled guilty to federal charges of conspiracy, securities fraud, wire fraud, and money laundering arising out of the NCFE securitization program. NCFE -- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust -- is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represented the Debtors. NATIONAL CENTURY: Trustee Counters With Own Suit vs. Hampton-Stein ------------------------------------------------------------------ The Ohio bankruptcy professionals of National Century Financial Enterprises, Inc.'s bankruptcy cases -- the Unencumbered Assets Trust, Erwin I. Katz Ltd., Erwin I. Katz, Jones Day, and Matthew A. Kairis, Esq. -- commenced an adversary proceeding against Tracey Hampton-Stein seeking to enjoin her from prosecuting a lawsuit in Florida against the Ohio Bankruptcy Professionals, less the UAT. On April 27, 2009, Ms. Hampton-Stein filed a complaint in the Circuit Court for Palm Beach County, in Florida, alleging that the Ohio Bankruptcy Professionals, less the UAT -- the Florida Defendants -- committed numerous torts and breached a prepetition settlement agreement among the Debtors, Ms. Hampton-Stein, her husband Mitchell Stein and others. The Florida Defendants subsequently removed the Florida Lawsuit to the Florida Bankruptcy Court because the Florida Lawsuit arises in, under and related to the bankruptcy cases. Eventually, they removed the Florida Lawsuit to the U.S. District Court for the Southern District of Florida, and filed a motion to transfer venue from the Florida Court to the U.S. Bankruptcy Court for the Southern District of Ohio. Shawn J. Organ, Esq., at Jones Day, in Columbus, Ohio, contends that the Florida Lawsuit against the Florida Defendants plainly violates the Supreme Court's doctrine in Barton v. Barbour, 104 U.S. 126, 26 L.Ed. 672 (1881). Under the Barton Doctrine, he asserts, Ms. Hampton-Stein was required to ask the Bankruptcy Court for leave before bringing any action against the Florida Defendants, and she did not. Consequently, the Florida Lawsuit should be enjoined, he continues. At bottom, Mr. Organ alleges, the Florida Lawsuit relates solely to the Ohio Bankruptcy Professionals' prosecution of a $3.5 million preference action against Ms. Stein and others in the Bankruptcy Court, and the Ohio Bankruptcy Professionals' ongoing attempts to collect that judgment for the benefit of certain creditors in the bankruptcy cases. Mr. Organ further contends that the Florida Lawsuit will irreparably harm, and threaten the integrity of, the Debtors' bankruptcy estates by, among other things, complicating and burdening the administration of the estates, threatening to drain the estate of its resources, and creating the risk of inconsistent judgment. Accordingly, the Ohio Bankruptcy Professionals ask the Ohio Bankruptcy Court to enter judgment: (a) enjoining Ms. Hampton-Stein from prosecuting the Florida Lawsuit against the Ohio Bankruptcy Professionals; (b) awarding the Ohio Bankruptcy Professionals damages incurred as a result of the Florida Lawsuit, including attorneys' fees, costs and interest; and (c) a declaration that the Ohio Bankruptcy Court retained jurisdiction over the Florida Lawsuit in the Debtors' confirmed plan of liquidation. Ohio Bankruptcy Professionals Seek TRO The Ohio Bankruptcy Professionals ask the Ohio Bankruptcy Court to issue an expedited temporary restraining order and preliminary injunction enjoining Ms. Hampton-Stein from pursuing the Florida Lawsuit in the Ohio Bankruptcy Court, and the Ohio Bankruptcy Professionals' ongoing attempts to collect the judgment against Mr. Stein and SWAB Financial, LLC, for the benefit of certain creditors in the bankruptcy cases. The Ohio Bankruptcy Professionals also asked for an expedited hearing on their request, which the Ohio Bankruptcy Court denied finding that no good cause has been established for the necessity of conducting an expedited hearing. The Ohio Bankruptcy Court, finding consideration of the matter to be premature in light of the removal of the Florida Lawsuit, deferred a ruling on the TRO Motion. Plaintiffs Seek Preliminary Injunction In direct response to the Ohio Bankruptcy Court's deferral of ruling on the TRO Motion, the Ohio Bankruptcy Professionals relate that that Ms. Hampton-Stein and her counsel have brazenly filed a second lawsuit in Florida state court, effectively thumbing her nose at the Ohio Bankruptcy Court's exclusive jurisdiction. They note that her latest lawsuit names two new defendants -- Lisa Hill Fenning, apparently for her representation of certain plaintiffs in the adversary proceeding, and Charles Throckmorton, another attorney representing the UAT. "This wasteful and vexatious conduct must be stopped," Mr. Organ contends. Hence, the Ohio Bankruptcy Professionals ask the Ohio Bankruptcy Court to issue an immediate temporary restraining order and preliminary injunction enjoining Ms. Hampton-Stein from pursuing the Second Lawsuit, which seeks, among other things, "an order setting aside the entire NCFE Bankruptcy proceeding." * * * The Ohio Bankruptcy Court granted the second TRO Motion, and enjoined Ms. Hampton-Stein from prosecuting the Second Lawsuit. "The Court finds that the Plaintiffs have demonstrated that irreparable injury -- injury that would not be fully compensable by monetary damages -- is likely in the absence of a preliminary injunction," Judge Hoffman said. He noted that the Second Lawsuit would require the Florida Defendants to defend the actions they have taken on behalf of the bankruptcy estates, thus, there is a risk that the Florida Defendants will be distracted by the Second Lawsuit from their duties to the creditors of the Debtors' estates. He added that if the Florida District Court were to grant her what she seeks, Ms. Hampton-Stein's Second Lawsuit could lead to "an order setting aside the entire NCFE Bankruptcy proceeding . . . ." In his 12-page memorandum and order, Judge Hoffman maintained that by asking a court other than the Ohio Bankruptcy Court to revoke the Debtors' Plan, Ms. Hampton-Stein "threatens to directly contravene the Confirmation Order and transactions effectuated thereunder. Such harm would be an affront to this Court's jurisdiction and would not be compensable with monetary damages." "Finally, the Court concludes that the public interest would be served by the issuance of a preliminary injunction," Judge Hoffman said. "The public interest is served by allowing bankruptcy courts to retain control over the administration of the bankruptcy estates. Preliminary injunctive relief here will allow the Court to retain control over the administration of NCFE Debtors' bankruptcy estates," he added. Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- was the largest issuer of medical accounts receivable asset backed securities in the United States before it collapsed in bankruptcy in November 2002 amid allegations of widespread fraud and misappropriation of assets. To date, 10 senior executives of the company have been convicted or pled guilty to federal charges of conspiracy, securities fraud, wire fraud, and money laundering arising out of the NCFE securitization program. NCFE -- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust -- is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represented the Debtors. NORTEL NETWORKS: Reaches Settlement with Testing House Mexico ------------------------------------------------------------- Nortel Networks Inc. and its affiliated debtors ask the U.S. Bankruptcy Court for the District of Delaware to approve a settlement of claims with Testing House de Mexico S de RL de CV. Testing House is a Mexican company that provides test fixtures to NNI and its manufacturers, which are being used to test Nortel products. Under the deal, Testing House will be granted a general unsecured claim for $171,080, and an administrative expense claim for $66,390 for goods and services it provided to NNI before the Petition Date. In return, Testing House will released certain testing fixtures which it previously refused to deliver to NNI, and will perform engineering adjustments to other fixtures purchased by NNI. 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 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: Settles Claims with First Communications --------------------------------------------------------- Nortel Networks Inc. and its affiliated debtors ask the U.S. Bankruptcy Court for the District of Delaware to approve a settlement agreement it entered into with First Communications Inc. The Parties seek to enter into the Accord to settle First Communications' claims for indemnification under the agreements inked by the stockholders of First Communications and GCI Globalcom Holdings Inc. NNI is one of the corporate stockholders of GCI Globalcom. First Communications asserted an indemnification claim, alleging damages of $15 million related to installation and implementation errors in GCI's billing system, and another claim related to an employment dispute with Erick Heinz for termination without proper notice or severance pay. NNI's potential liability is about $10 million. Under the settlement deal, NNI is required to pay $155,400 to First Communication and will receive $77,700 from the escrow, which was put up under the agreements to indemnify First Communication against liabilities. NNI and First Communications also agree to release each other from all claims. The Court will convene a hearing on the proposed settlement on July 28, 2009. Creditors and other concerned parties have until July 21 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 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: Court Approves Crossroads Settlement ----------------------------------------------------- Before the Petition Date, Nortel Networks Inc. entered into a number of agreements with Crossroads Wireless, Inc., and Crossroads Holding, LLC. The contracts include a purchase and license agreement dated June 30, 2008, with Crossroads Holding, and a security agreement dated August 13, 2008, with both Crossroads Entities. Under the Agreements, Crossroads Wireless and Crossroads Holding granted NNI interest in certain equipment they ordered from NNI as well as in some of their spectrum licenses to further secure their obligations to NNI. As a result, NNI holds secured claims against the Crossroads Entities that are secured by property in which the Crossroads Entities assert an interest. On February 13, 2009, Crossroads Holding became the subject of an involuntary petition under Chapter 7 of the Bankruptcy Code. The case was eventually converted to one under Chapter 11 pursuant to an order issued by the U.S. Bankruptcy Court for the Western District of Oklahoma. In the same month, Crossroads Wireless filed a voluntary petition under Chapter 11. In its schedules of assets and liabilities, Crossroads Wireless disputed NNI's security interests in spectrum licenses. In light of their Chapter 11 bankruptcy cases, the Crossroads Entities held negotiations with the Debtors to discuss the resolution of their dispute and have subsequently entered into a stipulation. Under the stipulation, Crossroads Wireless and Crossroads Holding agree to: (i) transfer to NNI all rights, title and interest in the Equipment, free and clear of any interest of any entity other than the Norte1 companies; (ii) ask the U.S. Bankruptcy Court for the District of Delaware to order immediate delivery to NNI of the equipment held by any party; and (iii) release all claims they have or may have against NNI. In exchange, NNI agree to release all claims it has or may have against the Crossroad Entities, including its claims to a security interest in any spectrum licenses, and to accept and acknowledge the transfer as full satisfaction of its claims against the Crossroads Entities. Andrew Remming, Esq. at Morris Nichols Arsht & Tunnell LLP, in Wilmington, Delaware, relates that while NNI is prepared to litigate the dispute, litigation costs can be expensive and there is no assurance it would achieve a better result for NNI than the one achieved under the stipulation. "The anticipated costs to NNI in pursuing a claim are high in light of the limited additional upside that could be gained from pursuing the claim compared to the stipulation. Litigation to pursue the issues otherwise resolved by the stipulation would result in the expenditure of substantial legal fees," Mr. Reming says. The Bankruptcy Court has approved the stipulation. 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 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: Disability Benefits For Employees May Be Cut Off ----------------------------------------------------------------- Employees on long-term disability are among the latest victims of Nortel Networks Corporation, whose benefits may be cut off if the company does not emerge intact from bankruptcy protection, the Financial Post reported. News that their benefits are not insured by an insurance company but are instead being paid through Nortel's own trust came as a shock to more than 400 Nortel employees, who are entitled to receive long-term disability or LTD payments. Susan Kennedy, a Nortel employee who formed a committee to seek representation at the hearings, told the Financial Post that her benefits were not insured by Sun Life Assurance Co. of Canada, the insurance company issuing her checks, and that payments for her long-term disability have been made from a Nortel Health and Welfare Trust. She said that Sun Life was simply administering benefits on Nortel's behalf. Ms. Kennedy said that although Nortel has always had a self-insurance policy, it was never made clear to her that the company had no insurance to cover its liabilities. The Financial Post relates that Nortel's benefits package has put the spotlight the problem of "administrative services only" arrangements. Under these arrangements, companies can create their own trusts to provide benefits directly to employees and use insurance companies to simply administer those benefits. The practice serves as a way for companies to reduce the cost of providing benefits, but puts employees at risk when the companies are in financial trouble, the news source points out. If Nortel is liquidated, the employees will be deemed unsecured creditors and will have to wait in line with bondholders to get a distribution of their claims, the Financial Post notes. 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 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: To Assign Art Licensing Contracts to Bic ------------------------------------------------------------- NPPI Holdings Inc., formerly known as Norwood Promotional Products Holdings Inc., asked the U.S. Bankruptcy Court for the District of Delaware for permission to assign and allow the buyer of its business to take over licensing contracts to certain portfolios of rights in art. NPPI had sold its business for $123 million Brickyard Acquisition, LLC, a unit of pen and lighter maker Societe Bic SA. Norwood Promotional Products -- http://www.norwood.com/-- was an industry leading supplier of imprinted promotional products. The Company offered 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 Products Holdings Inc. changed its formal name to NPPI Holdings Inc. following the sale of its assets. Norwood sold its business, including its name, for $123 million to a unit of pen and lighter maker Societe Bic SA. NORWOOD PROMOTIONAL: Wants Plan Filing Deadline Moved to Dec. 1 --------------------------------------------------------------- NPPI Holdings Inc., formerly known as Norwood Promotional Products Holdings Inc., has sold its assets. Now it is asking the U.S. Bankruptcy Court for the District of Delaware to extend its exclusive period to file a Chapter 11 plan until Dec. 1, 2009, and the period to solicit acceptances of that plan until Jan. 28, 2010. NPPI said that given that the closing to the sale has closed, "there is no reason to believe that the Debtors will not be able to efficiently conclude the Chapter 11 cases." An extension, however, will provide them time to negotiate the terms of a Chapter 11 plan with the official committee of unsecured creditors and other stakeholders. Norwood Promotional Products -- http://www.norwood.com/-- was an industry leading supplier of imprinted promotional products. The Company offered 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 Products Holdings Inc. changed its formal name to NPPI Holdings Inc. following the sale of its assets. Norwood sold its business, including its name, for $123 million to a unit of pen and lighter maker Societe Bic SA. OPUS EAST: Can Continue Operations Through January 2010 ------------------------------------------------------- Opus East LLC and its affiliates got Court approval, through their Chapter 7 Trustee, to continue to operate their businesses through and including January 8, 2010, subject to an earlier termination or extension upon request of the Chapter 7 Trustee or Bank of America, N.A. BofA is the successor in interest to LaSalle Bank National Association as administrative agent and certain lenders who extended a $68 million loan to the Opus East Entities in 2006 for the construction and development of certain improvements in an urban office-retail building located at 100 M Street SE, in Washington, D.C. The Office Building Project is primarily developed by Opus East affiliate, 100 M St. SE, L.L.C. By virtue of the Construction Loan, BofA holds a first priority claim secured by a lien on all of Opus East's property, including the Office Building Project. The Chapter 7 Trustee is also authorized to use BofA's Cash Collateral through August 15, 2009, subject to further extensions. In exchange for BofA's consent for the use of its Cash Collateral, the Court granted BofA adequate protection by directing the Chapter 7 Trustee to engage Douglas Wilson Companies as the sole manager of the Office Building Project. The Project Manager is granted access and will take possession of the Construction Assets related to the Project; and is tasked to manage, preserve, protect and maintain the Office Building Property in a reasonable manner. Opus East LLC and five of its affiliates commenced Chapter 7 liquidation proceedings in the U.S. Bankruptcy Court for the District of Delaware on July 1, 2009. Opus Corp. is the parent company of the Opus East Entities. Bizjournals.com quoted Opus Corp. Chairman and CEO Mark Rauenhorst as saying that "declining real estate values and tight credit markets continue to impede the refinancing of assets and restructuring of lending agreements" and thus, they have decided to "liquidate Opus East's portfolio." According to Bizjournals.com, Opus East's finances have been dragged down by its $35 million investment in constructing the National Oceanic and Atmospheric Administration Center for Climate and Weather Prediction project in College Park. Opus East, Bizjournals.com relates, said that it hasn't been paid by the General Services Administration and has abandoned the unfinished federal building. Citing Opus Corp., Bizjournals.com says that Opus East encountered problems with its finished 100 M St. SE offices project when failed to close a deal with its contracted buyer, MayfieldGentry Realty Advisors LLC. The report quoted Opus Corp. spokesperson Winston Hewett as saying, "100 M St. is part of the bankruptcy filing as it stands. That means MayfieldGentry was not able to have resolution with their lender." The Opus East affiliates that also filed for liquidation are 100 M St. SE, L.L.C.; APG I, L.L.C.; APG II, L.L.C.; Apple Valley II, L.L.C.; Mercer Corporate Center, L.L.C. Jeoffrey L. Burtch is the appointed Chapter 7 Trustee of the Opus East liquidation proceedings. Rockville-based Opus East LLC has developed more than 13.3 million square feet of space since starting operations in 1994. In its Schedules filed together with its Chapter 7 petition, Opus East LLC listed $237.9 million in assets and $501.7 million in liabilities. Specifically, the Company scheduled $386 million in secured claims, $114 million in unsecured non-priority claims, and $328,000 in unsecured priority claims. Opus East also filed a 200+ page list of creditors with the Court, which include CB Richard Ellis Inc. in Baltimore; Century Engineering; the Economic Alliance of Greater Baltimore; KLNB LLC; American Office Equipment Co. Inc.; Miles & Stockbridge; Ober, Kaler, Grimes & Shriver; Rummel, Klepper & Kahl LLP; Johns Hopkins University; Colliers Pinkard; the Greater Baltimore Committee; and Citizens Bank of Pennsylvania. Opus East is represented by Sandra G.M. Selzer, Esq., and Scott D. Cousins, of Greenberg Traurig LLP; and John D. McLaughlin, Jr., Esq., of Young, Conaway, Stargatt & Taylor LLP. In mid-July 2009, the Chapter 7 Trustee notified the Court that he has discovered assets of the Opus East Debtors and thus, clarified that the cases are "Asset Cases." From these assets, a dividend might possibly be paid to creditors. Moreover, at the behest of the Chapter 7 Trustee, the Clerk of the Bankruptcy Court has notified creditors that they have until October 14, 2009, to file a proof of claim in order to share in any distribution of the Opus East assets. The U.S. Trustee for Region 3 concluded a meeting of the Opus East Entities' creditors on July 22, 2009. The meeting, as required under Section 341(a) of the Bankruptcy Code, offered the one opportunity for the creditors to question a responsible office of the Debtors under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Rockville-based Opus East LLC has developed more than 13.3 million square feet of space since starting operations in 1994. It filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the District of Delaware. Opus East LLC listed $100 million to $500 million in debts, against $50 million to $100 million in assets in its Chapter 7 petition. OPUS WEST: Court Approves Cash Collateral Use on Final Basis ------------------------------------------------------------ Judge Harlin DeWayne Hale of the U.S. Bankruptcy Court for the District of Northern Texas grants Debtor Opus West LP, on a final basis, access to the cash collateral of Guaranty Bank with respect to OWLP's real estate project commonly known as 121 Lakepointe Project. OWLP is permitted to use the Cash Collateral for ordinary course of business expenses in accordance with the prepared budget. The proposed adequate protection for Guaranty Bank's benefit is also approved in its entirety. A full-text copy of the Final Cash Collateral Order is available for free at: http://bankrupt.com/misc/OPUSWEST_finalcashcollorder.pdf About Opus West Corporation Based in Phoenix, Arizona, Opus West Corporation is a full-service real estate development firm that focuses on acquiring, constructing, operating, managing, leasing and/or disposing of real estate development projects primarily located in the western United States. Opus West and its affiliates filed for Chapter 11 on July 6, 2009 (Bankr. N.D. Tex. Case No. 09-34356). Clifton R. Jessup, Jr., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. Franklin Skierski Lovall Hayward, LLP, is co-counsel to the Debtors. Pronske & Patel, P.C. is conflicts counsel. Chatham Financial Corp. is financial advisor. BMC Group is the Company's claims and notice agent. As of May 31, Opus West -- together with its non-debtor affiliates -- had $1,275,334,000 in assets against $1,462,328,000 in debts. In its bankruptcy petition, Opus West said it had assets and debts both ranging from $100 million to $500 million. Opus West joins affiliates that previously filed for bankruptcy. Opus East LLC, a real estate operator from Rockville, Maryland, commenced a Chapter 7 liquidation on July 1 in Delaware. Opus South Corp., a Florida condominium developer based in Atlanta, filed a Chapter 11 petition April 22 in Delaware. OPUS WEST: Court Okays Auction for Properties, 44 SPEs ------------------------------------------------------ In separate orders, Judge Harlin DeWayne Hale approved the proposed bidding procedures to govern the sale of the Opus West Corp. and its affiliates' seven properties and interests in 44 special purpose entities. list of the Properties and Entities is available for free at: http://bankrupt.com/misc/OpusPropsEnts.pdf The Debtors will solicit bids for the Properties and Interests individually and may solicit bids for groups of the Properties and Interests, provided that any Group Bid made by a qualified bidder will detail the allocation of the gross bid price among the individual Property or individual Interest covered by the Group Bid. The Bid Deadline for the Assets to be sold is August 21, 2009. If more than one Qualified Bid is received, the Debtors will conduct an auction on August 26, 2009. The Debtors are authorized to reject any bid or offer made by a potential bidder in the exercise of their reasonable business judgment. The Debtors contemplate a closing of the sales no later than August 31, 2009. About Opus West Corporation Based in Phoenix, Arizona, Opus West Corporation is a full-service real estate development firm that focuses on acquiring, constructing, operating, managing, leasing and/or disposing of real estate development projects primarily located in the western United States. Opus West and its affiliates filed for Chapter 11 on July 6, 2009 (Bankr. N.D. Tex. Case No. 09-34356). Clifton R. Jessup, Jr., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. Franklin Skierski Lovall Hayward, LLP, is co-counsel to the Debtors. Pronske & Patel, P.C. is conflicts counsel. Chatham Financial Corp. is financial advisor. BMC Group is the Company's claims and notice agent. As of May 31, Opus West -- together with its non-debtor affiliates -- had $1,275,334,000 in assets against $1,462,328,000 in debts. In its bankruptcy petition, Opus West said it had assets and debts both ranging from $100 million to $500 million. Opus West joins affiliates that previously filed for bankruptcy. Opus East LLC, a real estate operator from Rockville, Maryland, commenced a Chapter 7 liquidation on July 1 in Delaware. Opus South Corp., a Florida condominium developer based in Atlanta, filed a Chapter 11 petition April 22 in Delaware. OPUS WEST: Court Approves Auction for Interests in Arborwest ------------------------------------------------------------ Judge Harlin DeWayne Hale approves the proposed bidding procedures to govern the sale of Opus West Corporation's interests in Arbowest LLC, subject to higher and better bids. The Court's order is also subject to reconsideration of the Break-Up Fee under Section 328 of the Bankruptcy Code. Under the Debtor's Motion to Sell, the Break-Up Fee proposed to be entitled to the stalking horse bidder is equal to 3% of the purchase price. Any party interested in making bids for the Arbowest Interests have until August 21, 2009, to file a competing bid. If more than one Qualified Bid is received, the Debtor will conduct an auction on August 27, 2009. The Court will convene a final hearing on the Debtor's request on August 31, 2009. Objections to the request must be filed no later than August 28. About Opus West Corporation Based in Phoenix, Arizona, Opus West Corporation is a full-service real estate development firm that focuses on acquiring, constructing, operating, managing, leasing and/or disposing of real estate development projects primarily located in the western United States. Opus West and its affiliates filed for Chapter 11 on July 6, 2009 (Bankr. N.D. Tex. Case No. 09-34356). Clifton R. Jessup, Jr., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. Franklin Skierski Lovall Hayward, LLP, is co-counsel to the Debtors. Pronske & Patel, P.C. is conflicts counsel. Chatham Financial Corp. is financial advisor. BMC Group is the Company's claims and notice agent. As of May 31, Opus West -- together with its non-debtor affiliates -- had $1,275,334,000 in assets against $1,462,328,000 in debts. In its bankruptcy petition, Opus West said it had assets and debts both ranging from $100 million to $500 million. Opus West joins affiliates that previously filed for bankruptcy. Opus East LLC, a real estate operator from Rockville, Maryland, commenced a Chapter 7 liquidation on July 1 in Delaware. Opus South Corp., a Florida condominium developer based in Atlanta, filed a Chapter 11 petition April 22 in Delaware. OPUS WEST: Creditors Committee Down to Three Members ---------------------------------------------------- William T. Neary, the United States Trustee for Region 6, has reduced the four-member Official Committee of Unsecured Creditors in the Chapter 11 cases of Opus West Corporation and its debtor affiliates to three members. The three Committee members are: (1) Rob Jones Ennis Steel Industries, Inc. 204 Metro Park Blvd. Ennis, TX 75119 Tel no.: (972)878-0400 Fax no.: (972) 878-9563 rob@ennissteel.com (2) Nelson R. Braddy, Jr. King of Texas Roofing Company, L.P. 307 E. Gilbert Circle Grand Prairie, TX 75050-6579 Tel no.: (972) 399-0003 Fax no.: (972) 313-1421 nelson@kingoftexas.com (3) Rick L. Murphey R. L. Murphey Commercial Roof Systems, L.P. 5699 N. Dardeman Road P.O. Box 36 Justin, TX 76247 Tel no.: (940) 648-9617 Fax no.: (940) 648-9627 rmurphey@rlmurphey.com The Creditors Committee has the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. It may investigate the Debtors' business and financial affairs. Importantly, the Creditors Committee serves as fiduciaries to the general population of creditors it represents. The Creditors Committee may also 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 Creditors Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the panel concludes reorganization of the Debtor is impossible, it may urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Opus West Corporation Based in Phoenix, Arizona, Opus West Corporation is a full-service real estate development firm that focuses on acquiring, constructing, operating, managing, leasing and/or disposing of real estate development projects primarily located in the western United States. Opus West and its affiliates filed for Chapter 11 on July 6, 2009 (Bankr. N.D. Tex. Case No. 09-34356). Clifton R. Jessup, Jr., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. Franklin Skierski Lovall Hayward, LLP, is co-counsel to the Debtors. Pronske & Patel, P.C. is conflicts counsel. Chatham Financial Corp. is financial advisor. BMC Group is the Company's claims and notice agent. As of May 31, Opus West -- together with its non-debtor affiliates -- had $1,275,334,000 in assets against $1,462,328,000 in debts. In its bankruptcy petition, Opus West said it had assets and debts both ranging from $100 million to $500 million. Opus West joins affiliates that previously filed for bankruptcy. Opus East LLC, a real estate operator from Rockville, Maryland, commenced a Chapter 7 liquidation on July 1 in Delaware. Opus South Corp., a Florida condominium developer based in Atlanta, filed a Chapter 11 petition April 22 in Delaware. PACIFIC NORTHSTAR: Files for Protection in California ----------------------------------------------------- Pacific Northstar Property Group LLC filed for Chapter 11 protection before the U.S. Bankruptcy Court for the Central District of California, in Los Angeles, without giving a reason. The Debtor has $1 million to $10 million in assets and $10 million to $50 million in debts, according to the petition. On top of its list of 20 largest unsecured creditor is Auckland, New Zealand-based Fiduciaire Gestion Trust, which is owed $5.8 million for a loan. Other creditors include individuals in Switzerland, law and accounting firms, and automobile leasing companies, the filing said. Pacific Northstar Property Group LLC is a Beverly Hills, California, real estate company. It is a Pacific Northstar Holdings Inc. Pacific Northstar Property Group, LLC, filed for Chapter 11 on July 28, 2009 (Bankr. C.D. Calif. Case No. 09-29495). David B. Golubchik, Esq., at Levene Neale Bender Rankin & Brill LLP, represents the Debtor. PLIANT CORP: Lenders Block Vote on Apollo's Chapter 11 Plan ----------------------------------------------------------- Pliant Corp.'s senior lenders have pushed back at unsecured creditors' and Apollo Management's efforts to go ahead with a vote on Apollo's reorganization plan for the Debtors, arguing that the case should be stayed while Pliant appeals the termination of its exclusivity period, according to Law360. Headquartered in Schaumburg, Illinois, Pliant Corporation produces polymer-based films and flexible packaging products for food, beverage, personal care, medical, agricultural and industrial applications. The Company has operations in Australia, New Zealand, Germany, and Mexico. Pliant and 10 of its affiliates filed for Chapter 11 protection on January 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq., at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represented the Debtors in their restructuring efforts. The Debtors tapped McMillan Binch Mendelsohn LLP, as Canadian counsel. As of September 30, 2005, the Company had $604.3 million in total assets and $1.19 billion in total debts. The Debtors emerged from Chapter 11 on July 19, 2006. Pliant Corp. and its affiliates again filed for Chapter 11 after reaching terms of a pre-packaged restructuring plan. The voluntary petitions were filed February 11, 2009 (Bank. D. Del. Case Nos. 09-10443 through 09-10451). The Hon. Mary F. Walrath presides over the cases. Jessica C.K. Boelter, Esq., at Sidley Austin LLP, in Chicago, Illinois, and Edmon L. Morton, Esq., at Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, provide bankruptcy counsel to the Debtors. Epiq Bankruptcy Solutions LLC acts as claims and noticing agent. The U.S. Trustee for Region 3 appointed five creditors to serve on an official committee of unsecured creditors. The Creditors Committee selected Lowenstein Sandler PC as its counsel. As of September 30, 2008, the Debtors had $688.6 million in total assets and $1.03 billion in total debts. POLAROID CORP: Can Employ Bingham McCutchen as Tax Counsel ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Minnesota has granted PBE Corporation, formerly known as Polaroid Corporation, and its affiliated debtors, authority to employ Bingham McCutchen as ordinary course tax counsel for the Debtors, effective January 1, 2009. Bingham's services will include finalizing an appeal of federal income tax assessments that the Debtors believe will result in a refund paid to the estates and will likely resolve a pending income tax appeal before the Massachusetts Department of Revenue in favor of the Debtors. The Debtors are authorized to pay 80% of Bingham's fees and 100% of Bingham'e expenses. The Debtors believe that neither Bingham nor any of its employees have any adverse connection with the Debtors, the United States Trustee and andy employees of the United States Trustee, creditors of the Debtors or any other party in interest. To the best of the Debtors' knowledge, Bingham is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Polaroid Corporation Polaroid Corporation -- http://www.polaroid.com/-- makes and sells films, cameras, and other imaging products. The Company and 20 of its affiliates first filed for bankruptcy protection on October 12, 2001 (Bankr. D. Del. Lead Case No. 01-10864). Skadden, Arps, Slate, Meagher & Flom LLP represented the Debtors in their previous restructuring efforts. At that time, the Company blamed steep decline in its revenue and the resulting impact on its liquidity. On June 28, 2002, the U.S. Bankruptcy Court for the District of Delaware approved the purchase of substantially all of Polaroid's business by One Equity Partners. The bid provides for cash consideration of $255 million plus a 35% interest in the new company for unsecured creditors. Polaroid Corp., together with 11 affiliates, filed its second voluntary petition for Chapter 11 on December 18, 2008 (Bankr. D. Minn., Lead Case No. 08-46617). Judge Gregory F. Kishel handles the Chapter 22 case. George H. Singer, Esq., James A. Lodoen, Esq., and Sandra S. Smalley-Fleming, Esq., at Lindquist & Vennum P.L.L.P, are counsel to the Debtors. Cass Weil, Esq., James A. Rubenstein, Esq., and Sarah E. Doerr, Esq., at Moss & Barnett, have been tapped as special counsel. The law firms of Baker & McKenzie and C&A Law represent the Debtors as special foreign legal counsel. Paul Hastings, Janofsky & Walker LLP, and Faegre & Benson LLP represent the Committee. According to the Company, the financial structuring process and the second bankruptcy filing are the result of events at Petters Group Worldwide, which has owned Polaroid since 2005. About Petters Group Worldwide Based in Minnetonka, Minn., Petters Group Worldwide LLC is named for founder and chairman Tom Petters. The group is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Petters formed the Company in 1988. Petters Company, Inc., is the financing and capital-raising unit of Petters Group Worldwide, LLC. Petters Company, Inc., Petters Group Worldwide, LLC, and eight other debtor-affiliates filed separate petitions for Chapter 11 relief on Oct. 11, 2008 (Bankr. D. Minn. Lead Case No. 08-45257). James A. Lodoen, Esq., at Lindquist & Vennum P.L.L.P., represents the Debtors as counsel. In its petition, Petters Company, Inc. listed debts of between $500 million and $1 billion, while its parent, Petters Group Worldwide, LLC, listed debts of not more than $50,000. As reported in the Troubled Company Reporter on October 7, 2008, Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed separate petitions for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the District of Minnesota on Oct. 6, 2008 (Case Nos. 08-45136, 08-35197 and 08- 35198). Petters Aviation, LLC, is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Inc., Sun Country's parent company. POLAROID CORP: Can Sell ID Business to PCID for $1.3 Million ------------------------------------------------------------ The U.S. Bankrupty Court for the District of Minnesota has granted PBE Corporation, formerly known as Polaroid Corporation, and its affiliated debtors, authority to sell all assets related to the their commercial ID business to PCID, LLC, an Indiana limited liability company. The Debtors' commercial ID business is as division of PBE Corporation and operates from facilities in Fort Wayne, Indiana. According to the Debtors, commercial ID products are used for various identification needs, including employee ID's, student ID's, voter programs, and national ID's. Commercial ID products also include producing gift/loyalty cards, membership cards, employee time cards and visitor badges. In consideration of the ID assets and in addition to assumption of the assumed liabilities, PCID will pay to the Debtors an initial payment of $1,341,650, plus or minus an adjustment amount. About Polaroid Corporation Polaroid Corporation -- http://www.polaroid.com/-- makes and sells films, cameras, and other imaging products. The Company and 20 of its affiliates first filed for bankruptcy protection on October 12, 2001 (Bankr. D. Del. Lead Case No. 01-10864). Skadden, Arps, Slate, Meagher & Flom LLP represented the Debtors in their previous restructuring efforts. At that time, the Company blamed steep decline in its revenue and the resulting impact on its liquidity. On June 28, 2002, the U.S. Bankruptcy Court for the District of Delaware approved the purchase of substantially all of Polaroid's business by One Equity Partners. The bid provides for cash consideration of $255 million plus a 35% interest in the new company for unsecured creditors. Polaroid Corp., together with 11 affiliates, filed its second voluntary petition for Chapter 11 on December 18, 2008 (Bankr. D. Minn., Lead Case No. 08-46617). Judge Gregory F. Kishel handles the Chapter 22 case. George H. Singer, Esq., James A. Lodoen, Esq., and Sandra S. Smalley-Fleming, Esq., at Lindquist & Vennum P.L.L.P, are counsel to the Debtors. Cass Weil, Esq., James A. Rubenstein, Esq., and Sarah E. Doerr, Esq., at Moss & Barnett, have been tapped as special counsel. The law firms of Baker & McKenzie and C&A Law represent the Debtors as special foreign legal counsel. Paul Hastings, Janofsky & Walker LLP, and Faegre & Benson LLP represent the Committee. According to the Company, the financial structuring process and the second bankruptcy filing are the result of events at Petters Group Worldwide, which has owned Polaroid since 2005. About Petters Group Worldwide Based in Minnetonka, Minn., Petters Group Worldwide LLC is named for founder and chairman Tom Petters. The group is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Petters formed the Company in 1988. Petters Company, Inc., is the financing and capital-raising unit of Petters Group Worldwide, LLC. Petters Company, Inc., Petters Group Worldwide, LLC, and eight other debtor-affiliates filed separate petitions for Chapter 11 relief on October 11, 2008 (Bankr. D. Minn. Lead Case No. 08-45257). James A. Lodoen, Esq., at Lindquist & Vennum P.L.L.P., represents the Debtors as counsel. In its petition, Petters Company, Inc., listed debts of between $500 million and $1 billion, while its parent, Petters Group Worldwide, LLC, listed debts of not more than $50,000. As reported in the Troubled Company Reporter on October 7, 2008, Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed separate petitions for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the District of Minnesota on October 6, 2008 (Case Nos. 08-45136, 08-35197 and 08- 35198). Petters Aviation, LLC, is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Inc., Sun Country's parent company. POLAROID CORP: Can Use Cash of $1.4 Million Until August 30 ----------------------------------------------------------- The U.S. Bankrupty Court for the District of Minnesota has granted PBE Corporation, formerly known as Polaroid Corporation, and its affiliated debtors, authority to use cash, including cash collateral in which potentially Petters Company, Inc., Petters Capital LLC, Petters Company, LLC, each claim an interest, through and including August 30, 2009, and additionally, are authorized to utilize letters of credit deposit refunds and miscellaneous cash in the amount of $1.4 million. The Debtors are not authorized to use cash collateral other than the LC deposit refunds and miscellaneous cash. In papers filed with the Court, the Debtors said it will use the cash collateral to further wind-down operations, sell remaining assets, preserve corporate records and documents and administer these estates. As adequate protection, and solely to the extent of the Debtors' use of cash collateral in which Petters Creditors, as well as Acorn Capital Group, LLC, PAC Funding, LLC, RWB Services, LLC and Ritchie Capital Management, L.L.C., Ritchie Special Credit Investments, Ltd., Rhone Holdings II, Ltd., Yorkville Investments I, L.L.C., and Ritchie Capital Structure Arbitrage Trading, Ltd., claim or may claim an interest, including the Debtors' previous use of Settlement Proceeds in the amount of approximately $700,000 in which Acorn was previously granted a postpetition replacement lien as adequate protection of its interests, said parties are granted replacement liens in all assets of the Debtors, including but not limited to avoidance causes of action under chapter 5 of the Bankruptcy Code. About Polaroid Corporation Polaroid Corporation -- http://www.polaroid.com/-- makes and sells films, cameras, and other imaging products. The Company and 20 of its affiliates first filed for bankruptcy protection on October 12, 2001 (Bankr. D. Del. Lead Case No. 01-10864). Skadden, Arps, Slate, Meagher & Flom LLP represented the Debtors in their previous restructuring efforts. At that time, the Company blamed steep decline in its revenue and the resulting impact on its liquidity. On June 28, 2002, the U.S. Bankruptcy Court for the District of Delaware approved the purchase of substantially all of Polaroid's business by One Equity Partners. The bid provides for cash consideration of $255 million plus a 35% interest in the new company for unsecured creditors. Polaroid Corp., together with 11 affiliates, filed its second voluntary petition for Chapter 11 on December 18, 2008 (Bankr. D. Minn., Lead Case No. 08-46617). Judge Gregory F. Kishel handles the Chapter 22 case. George H. Singer, Esq., James A. Lodoen, Esq., and Sandra S. Smalley-Fleming, Esq., at Lindquist & Vennum P.L.L.P, are counsel to the Debtors. Cass Weil, Esq., James A. Rubenstein, Esq., and Sarah E. Doerr, Esq., at Moss & Barnett, have been tapped as special counsel. The law firms of Baker & McKenzie and C&A Law represent the Debtors as special foreign legal counsel. Paul Hastings, Janofsky & Walker LLP, and Faegre & Benson LLP represent the Committee. According to the Company, the financial structuring process and the second bankruptcy filing are the result of events at Petters Group Worldwide, which has owned Polaroid since 2005. About Petters Group Worldwide Based in Minnetonka, Minn., Petters Group Worldwide LLC is named for founder and chairman Tom Petters. The group is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Petters formed the Company in 1988. Petters Company, Inc., is the financing and capital-raising unit of Petters Group Worldwide, LLC. Petters Company, Inc., Petters Group Worldwide, LLC, and eight other debtor-affiliates filed separate petitions for Chapter 11 relief on Oct. 11, 2008 (Bankr. D. Minn. Lead Case No. 08-45257). James A. Lodoen, Esq., at Lindquist & Vennum P.L.L.P., represents the Debtors as counsel. In its petition, Petters Company, Inc. listed debts of between $500 million and $1 billion, while its parent, Petters Group Worldwide, LLC, listed debts of not more than $50,000. As reported in the Troubled Company Reporter on October 7, 2008, Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed separate petitions for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the District of Minnesota on Oct. 6, 2008 (Case Nos. 08-45136, 08-35197 and 08- 35198). Petters Aviation, LLC, is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Inc., Sun Country's parent company. PQ CORP: S&P Changes Outlook to Negative; Affirms 'B' Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said that it revised its outlook on PQ Corp. to negative from stable. S&P affirmed all ratings on the company, including the 'B' corporate credit rating. "The outlook revision reflects S&P's expectation that debt leverage will remain high at year-end 2009 when leverage-based financial covenants become applicable," said Standard & Poor's credit analyst Paul Kurias. "Consequently, S&P expects the EBITDA cushion under the company's senior secured leverage covenant, in particular, to be low in the single-digit percentage levels." S&P also believes credit metrics will remain weak in 2009 relative to expectations at the current ratings. Although S&P expects EBITDA to improve on a sequential basis in 2009 relative to the $47 million achieved in the first quarter, S&P does not expect this EBITDA growth to be sufficient to improve credit metrics to levels appropriate for the rating at year-end. S&P's expectation is for year-end leverage to still be high at approximately 9x and for the key credit metric of funds from operations (FFO) to total debt to be at about 5%. S&P also notes that the company's liquidity, which consists mainly of about $70 million of cash balances as of March 31, 2009, is lower than levels achieved in the recent past, though the company's operations are not typically subject to major working capital swings. "S&P's concerns are somewhat offset by S&P's expectation that the company's business strengths, including its pricing capability, will offset some of the weakness in the operating environment and result in continuing growth in earnings beyond 2009," said Mr. Kurias. "This could improve cushions under covenants beginning mid-2010, following expected low points at year-end 2009 and early 2010." S&P's ratings on PQ reflect the company's highly leveraged financial profile, including a very aggressive financial policy, and a fair business position. Malvern, Pa.-based PQ is a specialty chemical producer with more than $1 billion in sales in 2008. PROSPECT MEDICAL: S&P Raises Counterparty Credit Rating to 'B' -------------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its counterparty credit rating on Los Angeles-based Prospect Medical Holdings Inc. and removed it from CreditWatch, where it was placed on April 6, 2009. Standard & Poor's also said that the outlook on Prospect Medical is stable. "The upgrade reflects Prospect Medical's improved liquidity following the issuance of five-year $160 million senior secured notes due July 2014," said Standard & Poor's credit analyst Hema Singh. Prospect Medical used the proceeds primarily to refinance pre-existing lending arrangements. The rating action also reflects the company's improved core operating performance on a trailing-12-month basis through March 31, 2009. The rating on Prospect Medical reflects its geographic and client concentrations, evolving business profile, and limited financial flexibility. Offsetting factors include its established competitive position in its Southern California marketplace, improving cash-flow profile, and enhanced liquidity. Prospect Medical is a hospital and health care services organization that conducts business exclusively in Southern California (Los Angeles, Orange, and San Bernardino Counties), which constitutes a concentrated geographic presence in a relatively competitive market. The company maintains a reasonably well-established competitive position, but its sources of revenue are very concentrated. "The stable outlook reflects S&P's expectation for sustained underlying financial profile development commensurate with operating income performance development through the first six months of the current fiscal year," Ms. Singh added. For the fiscal years ended 2009 and 2010, S&P expects that Prospect Medical's revenue will be $380 million-$400 million and $470 million-$490 million, respectively. S&P also expects that adjusted EBITDA and pretax income will be $50 million-$60 million (a 13% margin) and $15 million-$25 million (a 5% ROR), respectively, for fiscal 2009 and $65 million-$75 million (a 14% margin) and $35 million-$45 million (an 8% ROR) for fiscal 2010. If the company were to achieve these performance metrics, debt to capital, debt to EBITDA, and interest coverage would likely be 60%-70%, 3.0x-3.5x, and 2.0x-3.0x, respectively, which S&P would likely view as adequate for the company's credit profile and the rating category. Prospect Medical Holdings Inc. has completed a $160 million debt offering, which has meaningfully improved the company's liquidity position. Prospect Medical's financial profile is benefiting from improving underlying core operating performance. As a result, S&P has raised the counterparty credit rating to 'B' from 'B-' and removed it from CreditWatch. The stable outlook our expectation that the company will able to sustain the improvements in its operating performance. PROTOSTAR LTD: Contract Dispute Leads to Chapter 11 Filing ---------------------------------------------------------- ProtoStar Ltd. has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware, listing $463 million in debt against $528 million in assets. Bob Van Voris at Bloomberg News reports that ProtoStar said that it will sell one or both of its satellites -- ProtoStar I and ProtoStar II. According to Bloomberg, ProtoStar said that it had to stop operating ProtoStar I after it received a termination notice in April from the Intersputnik International Organization of Space Communications, which has the rights to the satellite's orbital slot. Intersputnik claimed that ProtoStar I was interfering with a nearby satellite, ProtoStar Vice President Cynthia Pelini said in court documents. "ProtoStar disputes the validity of the Intersputnik termination notice," Ms. Pelini stated in court documents. Ms. Pelini said that the true cause of the termination may have been a conflict between Intersputnik and Belarus, one of Intersputnik's sponsoring governments, Bloomberg relates. Due to the termination of the contract, the satellite is currently unable to generate any revenue for the ProtoStar, Bloomberg says, citing the Company. ProtoStar said that it had $3.1 million in revenues in 2008. According to court documents, ProtoStar Chief Financial Officer Cynthia M. Pelini said that lenders demanded ProtoStar pay off its debt. ProtoStar said in court documents that there will be funds to pay unsecured creditors, which includes the Philippine Long Distance Telephone Co. as the Company's largest unsecured creditor with a $27.5 million claim. Kristina Doss posted on the Wall Street Journal blog, Venture Capital Dispatch, that ProtoStar was able to negotiate an arrangement under which the lenders would provide enough financing to keep the Company's operations going until it sells one or both of the satellites. ProtoStar, according to Bloomberg, said that it has secured $16 million in debtor-in-possession financing for ProtoStar I and $2 million for ProtoStar II. Venture Capital Dispatch says that the loan will come from a group of lenders led by Wells Fargo. Venture Capital Dispatch relates that ProtoStar will also use cash collateral securing claims from secured noteholders and enter into a multiple draw term loan agreement with lenders led by Credit Suisse, Cayman Islands Branch. ProtoStar said that it, along with three subsidiaries are also filing a related bankruptcy petition in Bermuda, Bloomberg reports. Venture Capital Dispatch states that ProtoStar urged the bankruptcy court to issue an order spelling out the protections it's entitled to now that it's in Chapter 11, saying that creditors and counterparties to leases and other contracts "may not be well-versed" with the U.S. Bankruptcy Code. ProtoStar operates in foreign jurisdictions such as Bermuda, Indonesia, Korea, and Singapore. Acording to Venture Capital Dispatch, creditors may be unaware that they can't confiscate ProtoStar assets located outside the U.S. or terminate accords while the Company is in bankruptcy. ProtoStar Ltd. -- http://www.protostarsat.com/-- is a private company incorporated in Bermuda, with U.S. operations based in San Francisco, California and Asian operations based in Singapore. It operates two satellites providing digital television and broadband Internet to Asia. Formed in 2005, ProtoStar is owned by MHR Fund Management LLC, New Enterprise Associates and Vantage Point Venture Partners. PROTOSTAR LTD: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: ProtoStar Ltd. Canon's Court 22 Victoria Street Hamilton, HM EX, Bermuda Bankruptcy Case No.: 09-12659 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- ProtoStar Satellite Systems, Inc. 09-12658 ProtoStar I Ltd. 09-12660 ProtoStar II Ltd. 09-12661 ProtoStar Development Ltd. 09-12662 ProtoStar Asia Pte. Ltd. 09-12663 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Mary F. Walrath Debtors' Counsel: Matthew S. Barr, Esq. Glenn S. Gerstell, Esq. Peter K. Newman, Esq. Milbank, Tweed, Hadley & McCloy LLP 1 Chase Manhattan Plaza New York, NY 10005 T: 212-530-5000 F: 212-530-5219 http://www.milbank.com/en Debtor's Delaware Counsel: Laura Davis Jones, Esq. Email: ljones@pszjlaw.com James E. O'Neill, Esq. Kathleen P. Makowski, Esq. Pachulski Stang Ziehl & Jones LLP 919 N. Market Street, 17th Floor Wilmington, DE 19899-8705 Tel: (302) 652-4100 Fax: (302) 652-4400 Debtors' Bermuda Counsel: Law firm of Appleby Debtors' Financial Advisor & Investment Banker: UBS Securities LLC Debtors' Claims and Noticing Agent: Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245 T: (866) 381-9100 Estimated Assets: $100,000,001 to $500,000,000 Total Debts: $100,000,001 to $500,000,000 As of Dec. 31, 2008, ProtoStar's consolidated financial statements, which include non-debtor affiliates, showed total assets of $463,000,000 against debts of $528,000,000. Consolidated List of Creditors Holding 18 Largest Unsecured Claims: Entity Nature of Claim Claim Amount ------ --------------- ------------ Philippine Long Distance Trade (Disputed) $27,500,000 Telephone Company Ramon Cojuangco Building Maxati Ave., Makati City Philippines Tel: (63)(02)8446654 Agrani Satellite Services Trade (Disputed) $8,100,000 Limited Malad Link Rd. Mumbai 400064 India Tel: (91)228235111 ILS International Launch Trade (Disputed) $5,719,524 Services, Inc. 1875 Explorer Street, Suite 700 Reston, VA 20190 Tel: (571) 633-7400 Boeing Satellite Systems Trade (Disputed) $5,474,421 P.O. Box 92919 Los Angeles, CA 90009 Tel: (310) 364-7017 PT Media Citra Indostar Trade (Disputed) $5,000,000 & PT MNC Skyvision (Indovision) Jalan Raya Ranjan Blok Z II Jakarta 11520, Indonesia Tel: (62)(21)5828000 Arianespace Trade (Disputed) $4,000,000 Space Systems/Loral Trade (Disputed) $3,629,096 Integral Systems Inc. Trade (Disputed) $2,470,392 SingTel Trade (Disputed) $1,045,022 Aon Risk Services Trade (Disputed) $349,287 Videocon Trade (Disputed) $315,030 Linklaters Allen & Gledhi Services (Disputed) $106,904 Cox Hallett Wilkinson Trade (Disputed) $100,000 Logitech Trade (Disputed) $75,600 Sidley Austin LLP Services (Disputed) $55,000 Steven Dorfman Trade (Disputed) $28,000 Jun Shen Trade (Disputed) $20,034 Venable LLP Services (Disputed) $10,634 Trianz Services (Disputed) $5,466 A list of ProtoStar Ltd.'s petition and 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/deb09-12659.pdf The petition was signed by Cynthia M. Pelini, chief financial officer of the Company. R-C BUSINESS TRUST: Case Summary & 10 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: R-C Business Trust an irrevocable trust dtd 1-1-2009 39572 Avenida Bonita Murrieta, CA 92562 Bankruptcy Case No.: 09-27182 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Peter Carroll Debtor's Counsel: Vance F. Van Kolken, Esq. PO Box 390696 Anza, CA 92539 Tel: (951) 763-2114 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 10 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-27182.pdf The petition was signed by Barry Blythe, trustee of the Company. RAINBOW 215: Files for Chapter 11 Protection in Nevada ------------------------------------------------------ Rainbow 215 LLC filed for Chapter 11 before the U.S. Bankruptcy Court for the District of Nevada. Real property owned by Rainbow 215 is worth $16 million. The primary asset is a 43,000-square-foot shopping center located at 6870 South Rainbow in Las Vegas. Secured claims on the estate total $10,4 million court files revealed, according to Carla Main at Bloomberg News. Rainbow 215 LLC is a single-asset real estate company. Alireza Kevah Family Trust and JPA Investments LLP, each holds a 50% equity interest. The Company filed for Chapter 11 on July 27, 2009 (Bankr. D. Nev. Case No. 09-23414). David Mincin, Esq., at Law Offices Of Richard Mcknight, P.C., serves as counsel. A court filing says it has assets of $16,883,500 against debts of $11,327,730. RATHGIBSON INC: Files Schedules of Assets and Liabilities --------------------------------------------------------- RathGibson, Inc., et al., filed with the U.S. Bankruptcy Court for the District of Delaware, their schedules of assets and liabilities, disclosing: Name of Debtor Assets Liabilities -------------- ------------ ------------ RathGibson, Inc. $106,577,888 $285,932,128 Greenville Tube Company $22,911,438 $264,943,626 RGCH Holdings Corp. Unknown $205,499,752 RG Tube Holdings LLC $721,235 Unknown Copies of RathGibson, Inc., et al.'s schedules of assets and liabilities are available at: http://bankrupt.com/misc/rathgibsoninc.SAL.pdf http://bankrupt.com/misc/greenvilletubecompany.SAL.pdf http://bankrupt.com/misc/rgchholdings.SAL.pdf http://bankrupt.com/misc/rgtubeholdings.SAL.pdf About RathGibson Based in Lincolnshire, Illinois, RathGibson, Inc. -- http://www.RathGibson.com/,http://www.GreenvilleTube.com/and http://www.ControlLine.com/-- is a worldwide manufacturer of highly engineered stainless steel, nickel, and titanium tubing for diverse industries such as chemical, petrochemical, energy -- power generation, energy -- oil and gas, food, beverage, pharmaceutical, biopharmaceutical, medical, biotechnology, and general commercial. Manufacturing locations include: Janesville, Wisconsin, North Branch, New Jersey, Clarksville, Arkansas (Greenville Tube), and Marrero, Louisiana (Mid-South Control Line). In addition to the sales offices in Janesville, North Branch, and Marrero, RathGibson has also strategically placed sales offices in Houston, Texas, USA; Shanghai, China; Manama, Bahrain; Melbourne, Australia; Seoul, Republic of Korea; Mumbai, India; Singapore; Vienna, Austria; and Buenos Aires, Argentina. RathGibson, Inc., together with three affiliates, filed for Chapter 11 on June 13, 2009 (Bankr. D. Del. Case No. 09-12452). Attorneys at Young, Conaway, Stargatt & Taylor and Willkie Farr & Gallagher LLP serve as co-counsel. Jefferies & Company Inc. and Mesirow Financial Consulting LLC have been hired as financial advisors. Kelley Drye & Warren LLP serves as special corporate counsel. The petition says that Rathgibson has assets and debts of $100 million to $500 million. Attorneys at Stroock & Stroock & Lavan LLP and Richards, Layton & Finger P.A., represent an ad hoc committee of certain holders of Senior Notes. Scott Welkis, Esq., at Stroock & Stroock & Lavan also represents Wilmington Trust FSB, as administrative agent. REFCO LLC: Ex-Lawyer Joseph Collins Found Guilty of Fraud --------------------------------------------------------- After a nine-week trial, Joseph P. Collins, Refco Inc.'s principal outside counsel and former senior partner at Mayer Brown LLP, in Chicago, Illinois, was convicted by a federal jury in the U.S. District Court for the Southern District of New York (Manhattan) for his role in the massive scheme to defraud investors of $2.4 billion. The decision, entered on July 10, 2009, found Mr. Collins guilty of five of the 14 counts with which he was charged, including two counts of securities fraud, one count of conspiracy and two counts of wire fraud. A mistrial was declared on nine other counts, according to the Wall Street Journal. According to the report, the jury was deadlocked 11-1 on the remaining nine counts, and the juror who complained to the Court was the holdout. To recall, Mr. Collins was accused of conspiracy, securities fraud, bank fraud, wire fraud and lying to the Securities and Exchange Commission for concealing Refco's financial condition in connection with the company's bankruptcy. He was said to have helped former Refco Chief Executive Phillip R. Bennett and other individuals hide the commodity broker's dismal financial picture, including hundreds of millions of dollars of undisclosed debt. The government specifically charged Mr. Collins of assisting Mr. Bennett engage in transactions that transferred losses and certain expenses off Refco's books to Refco Group Holdings Inc., a company controlled by Mr. Bennett and others. As a result, the Company's banks, auditors and investors didn't have a true financial picture of the company, including private- equity firm Thomas H. Lee Partners, which engaged in a leveraged buyout of Refco in 2004. Refco sought bankruptcy protection in 2005, soon after the Company had discovered $430 million in debt owed to Refco Group Holdings. Mr. Collins made $40 million for his law firm as Refco's outside lawyer and that gave him incentive to lie, starting in 1997, the government had noted. Mr. Bennett pleaded guilty to securities fraud and other charges in 2008, and was sentenced to 16 years in prison over a 20-count indictment. Collins, however, pleaded not guilty. Mr. Collins is facing up to 20 years in prison, and is scheduled to be sentenced on November 3, 2009. About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/ -- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The company has operations in Bermuda. The company and 23 of its affiliates filed for Chapter 11 protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05- 60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on December 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Refco Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) REFCO LLC: Lead Plaintiffs Appeal Ruling in Securities Class Suit ----------------------------------------------------------------- To recall, Judge Gerard E. Lynch of the U.S. District Court for the Southern District of New York dismissed, on March 17, 2009, the allegations in the federal securities law class action styled In re Refco Securities Litigation as it pertains to Joseph P. Collins, Esq., and his firm, Mayer Brown LLP. Pacific Investment Management Company LLC and RH Capital Associates LLC, lead plaintiffs in the Class Action, added Mr. Collins and Mayer Brown as defendants in October 2007, over allegations of aiding and abetting in the alleged securities fraud in Refco. From 1994 until Refco's collapse, Mayer Brown was Refco's outside counsel and Refco was Mr. Collins' largest client. Mayer Brown and Mr. Collins thus had a close relationship with Refco, by which they provided the company with a broad range of legal services and through which Mayer Brown collected about $5,000,000 per annum in legal fees. On July 1, 2009, the Lead Plaintiffs filed a brief with the U.S. Court of Appeals for the Second Circuit seeking to appeal Judge Lynch's decision dismissing their allegations under the Securities Exchange Act of 1934. In their Appeal, the Lead Plaintiffs asked the Second Circuit to review: (1) whether a lawyer and law firm commit a primary violation of the securities laws, or are merely "aiders and abettors" of a corporate client's violations of those laws, when they design, structure, and implement sham loan transactions for the purpose of concealing their corporate client's true financial condition, and then ensure that the sham loans will be concealed from investors by drafting false securities offering documents; (2) whether investors can satisfy the reliance element of a securities fraud claim against a lawyer and law firm who intentionally draft false securities offering documents on their client's behalf, if the documents identify the law firm as counsel but do not explicitly credit the lawyer or law firm with authorship; and (3) whether investors can satisfy the reliance element of a securities fraud claim against a corporation's lawyers when the corporation publicly reports phantom "customer receivables" that are in fact the product of sham loans devised and effectuated by its lawyers. About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/ -- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The company has operations in Bermuda. The company and 23 of its affiliates filed for Chapter 11 protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05- 60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on December 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Refco Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) REFCO LLC: Litigation Trustee Sues Euro Brokers ----------------------------------------------- Marc S. Kirschner, in his capacity as trustee for the Refco Litigation Trust, commenced in the U.S. Bankruptcy Court for the Southern District of New York, a complaint to: (a) avoid and recover certain preference transfers totaling $373,433 made by the Debtors to Euro Brokers, a division of BGC Financial, L.P., formerly known as BGC Financial, Inc., and Maxcor Financial Inc.; (b) object to the allowance of any claims asserted by the Euro Brokers pending return of the Transfers. The Transfers -- which relate to an interest in the property of one or more of the Transfer Debtors -- were made on August 30, 2005 and received by Euro Brokers within 90 days prior to the Petition Date. The Debtors received less than reasonably equivalent value in exchange for the Transfers, Christopher P. Johnson, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, said, on behalf of Mr. Kirschner. Mr. Johnson asserts that the Debtors: -- were insolvent on the date that the Transfers were made; -- were engaged in business or a transaction, or about to engage in business or a transaction, for which any property remaining with the Debtor was an unreasonably small capital; or -- intended to incur, or believed would incur, debts that would be beyond their ability to pay as the debts matured. Thus, the Transfers constitute avoidable fraudulent conveyances, thereby entitling Mr. Kirschner to an order and judgment avoiding the Transfers pursuant to Sections 544(b) and 548(a)(1) of the Bankruptcy Code, Mr. Johnson contends. Furthermore, Mr. Kirschner asserts that under Section 550(a) of the Bankruptcy Code, once the Transfers are avoided, he is entitled to recover the Transfers as successor-in-interest to the estates of the Debtors. Mr. Kirschner emphasizes that absent a return of the Transfers, any claim asserted by Euro Brokers in the Debtors' Chapter 11 cases -- whether previously or subsequently scheduled, filed or otherwise asserted or paid -- should be disallowed in their entirety. Mr. Kirschner further seeks "an award of prejudgment interest at the maximum legal rate as of the filing of the Complaint, and an award of post-judgment interest at the maximum legal rate," as well as an award of the costs of the lawsuit. About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/ -- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The company has operations in Bermuda. The company and 23 of its affiliates filed for Chapter 11 protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05- 60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on December 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Refco Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) R.H. DONNELLEY: Files Plan and Disclosure Statement --------------------------------------------------- R.H. Donnelley Corp. on July 27 filed a proposed Chapter 11 plan, which sets forth terms negotiated with majority of lenders and bondholders prepetition. The plan would cut debt by $6.4 billion, eliminate approximately $500 million in annual interest expense, and extend the company's bank maturities out to 2014. The approximately $6.0 billion of unsecured bond indebtedness would be exchanged for 100% of the equity in the restructured company and $300.0 million of unsecured notes issued by the company; all existing equity in the Company would be extinguished. The Disclosure Statement provides details of the proposed Plan. The Disclosure Statement, however, leaves blank the estimated recovery of holders of general unsecured claims and other impaired creditors. Copies of the Plan and Disclosure Statement are available at: http://bankrupt.com/misc/RHD_Ch11_Plan.pdf http://bankrupt.com/misc/RHD_DiscStatement.pdf About R.H. Donnelley Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/-- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc. and Local Launch, Inc. are the company's only direct wholly owned subsidiaries. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC and Dex Media West LLC, filed for Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-11833 through 09-11852), after missing a $55 million interest payment on its senior unsecured notes due April 15. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, Illinois represent the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' financial advisor is Deloitte Financial Advisory Services LLP while its investment banker is Lazard Freres & Co. LLC. The Garden City Group, Inc. is claims and noticing agent. As of March 31, 2009, the Company had $929,829,000 in total assets and $1,023,526,000 in total liabilities, resulting in $93,697,000 in total shareholders' deficit. Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of R.H. Donnelley Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) RITZ CAMERA: Shuts Down East Valley Stores ------------------------------------------ Donna Hogan at East Valley Tribune reports that Ritz Camera shut down its East Valley locations, near Phoenix, Arizona, without warning over the weekend. East Valley Tribune relates that stores in these locations were closed: -- upscale Casa Paloma shopping center in Chandler, -- Superstition Springs Center, -- Power Road, -- U.S. 60 in Mesa, -- Crossroads Towne Center, -- Gilbert Road, and -- the Santan Freeway section of Loop 202 in Gilbert. According to East Valley Tribune, three Valley units were added to the list of Ritz Camera's closed stores. East Valley Tribune says that a unit at 1928 E. Highland Avenue in Phoenix will handle all the unfinished business for Ritz Camera's Valley clients. Citing Ritz Camera Marketing Vice President Bob DeVita, East Valley Tribune states that the store shutdowns are part of a slimming-down process that scrapped 65 unprofitable stores nationwide. Headquartered in Beltsville, Maryland, Ritz Camera Centers, Inc. - - http://www.ritzcamera.com/-- sells digital cameras and accessories, and electronic products. The Company filed for Chapter 11 protection on February 22, 2009 (Bankr. D. Del. Case No. 09-10617). Irving E. Walker, Esq., Gary H. Leibowitz, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Baltimore, are bankruptcy counsel to the Debtor. Norman L. Pernick, Esq., and Karen M. Mckinley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, serve as local counsel. Thomas & Libowitz, P.A., is Debtor's special corporate counsel and conflicts counsel. Marc S. Seinsweig, at FTI Consulting, Inc, acts as the Debtor's chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and noticing agent. Attorneys at Cooley Godward Kronish LLP represent the official committee of unsecured creditors as lead counsel. The Committee selected Bifferato LLC as Delaware counsel. In its schedules, the Debtor listed total assets of $277 million and total debts of $172.1 million. SANFORD HARVEY SCHATZ: Case Summary & 4 Largest Unsec. Creditors ---------------------------------------------------------------- Joint Debtors: Sanford Harvey Schatz Joan Ardith Schatz 6220 Cumberland Drive Goleta, CA 93117 Bankruptcy Case No.: 09-12971 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court Central District of California (Santa Barbara) Judge: Robin Riblet Debtors' Counsel: Peter Susi, Esq. 7 W Figueroa 2nd Fl Santa Barbara, CA 93101-3191 Tel: (805) 965-1011 Fax: (805) 965-7351 Email: cheryl@msmlaw.com Total Assets: $3,869,101 Total Debts: $363,628 A full-text copy of the Debtors' petition, including a list of their 4 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-12971.pdf The petition was signed by the Joint Debtors. SARATOGA RESOURCES: Unveils Results of Mid-Year Reserve Audit ------------------------------------------------------------- Saratoga Resources, Inc., announced increases to its reserve base, resulting from ongoing full field studies and development activities. Collarini Associates, the Company's independent reserve engineers, estimated Saratoga's net proved reserves, as of July 1, 2009 using June 30, 2009 NYMEX strip pricing and Society of Petroleum Engineering methodology, to be 6.0 million barrels of oil -- MMBO -- and 51.3 billion cubic feet of gas -- MMCFG -- or 87.6 billion cubic feet of gas equivalent -- BCFE -- with a net present value of future cash flow, discounted at 10% -- PV10 -- of $373 million. Over 40% of the total proved reserves are developed with proved developed producing reserves of 2.2 MMBO and 4.5 BCFG, or 17.7 BCFE with PV10 of $78 million. Saratoga's internal reserve estimates are significantly greater than those stated. Saratoga has a development inventory of 71 proved developed non- producing -- PDNP -- and 61 proved undeveloped -- PUD -- opportunities, as of July 1, 2009. In addition, the Company's independently audited probable reserves are 3.0 MMBO and 43.7 BCFG, or 61.8 BCFE, with PV10 of $194 million, and possible reserves of 12.3 MMBO and 84.1 BCFG, or 157.7 BCFE, with PV10 of $312 million. In summary, Saratoga's 3P net reserves amount to 307.1 BCFE with PV10 of $880 million. Thomas F. Cooke, Saratoga's Chairman/CEO, said "We continue to increase production and reserves through select development activities and ongoing full field studies We have reached our goal of reducing operating costs by more than 20% in the last 12 months through improving operating efficiencies. This is especially significant as we have realized operating cost reductions while simultaneously increasing production. Our aggressive efforts to control costs and improve efficiencies have also resulted in marked improvements in the scope of our windstorm insurance coverage with essentially no increase in annual premium, which improvement was achieved in a market otherwise characterized by a marked deterioration in program cost and wind retention. I want to thank our operations group for their responsiveness and stellar efforts in meeting these operating cost goals." Andy C. Clifford, Saratoga's President added "Further reserve additions are expected in the third quarter of 2009 as a result of the full field studies at Grand Bay and Vermilion 16 supplemented by ongoing interpretation. Particularly exciting is our Zeus Prospect, which covers over 5,000 acres of closure that are held by shallow production and could hold up to 3 TCF of gas in Miocene Big Hum sands between 18,000-20,000' in the heart of Grand Bay, a world class oilfield that has produced more than 300 MMBO from shallower intervals, adjacent to existing infrastructure, with multiple development bailouts in overlying Cib Carst (25 thru 30 sands) and Tex W (43 sand) above the Big Hum. The Zeus Prospect has been mapped using our proprietary 3D seismic data, tied to nearby Big Hum production. With the advent of lower drilling costs and multiple low risk, bailout zones in shallower sands, the economics of a well targeting the Big Hum are outstanding with a third-party dry hole cost estimate of $18.5 million." About Saratoga Resources Saratoga Resources Inc. is an independent exploration and production company with offices in Houston and Covington. Saratoga engages in the acquisition and development of oil and gas producing properties that allow the Company to grow through low- risk development and risk-managed exploration. Saratoga operates 14 fields in Louisiana and Texas with 106 active producing wells. Current net production is approximately 3,000 barrels of oil equivalent per day -- BOEPD -- with 70% oil versus gas. Principal holdings cover 37,756 gross (34,246 net) acres, mostly held-by- production, located in the state waters offshore Louisiana. Saratoga Resources, Inc., and certain operating subsidiaries filed on March 31, 2009, voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Western District of Louisiana in Lafayette, Louisiana. Saratoga is being advised by its legal counsel, Adams & Reese LLP; its investment banker, Pritchard Capital Partners LLC; and its financial advisor, Ambrose Consulting LLC. The case is In Re Harvest Oil and Gas, LLC (Bankr. W.D. La. Lead Case No. 09-50397). Robin B. Cheatham, Esq., at Adams & Reese LLP, represents the Debtors in their restructuring efforts. The Debtors listed between $100 million and $500 million each in assets and debts. SB PARTNERS: Posts $6.1 Million Net Loss in Quarter Ended March 31 ------------------------------------------------------------------ SB Partners posted a net loss of $6,105,852 for the three months ended March 31, 2009, compared with a net loss of $1,989,837 for the same period in the previous year. At March 31, 2009, the Company's balance sheet showed total assets of $56,179,048, total liabilities of $39,720,691 and partners' capital of $16,458,357. As of March 31, 2009, the Company had cash and cash equivalents of $709,000. These balances are $164,000 higher than cash and cash equivalents held on Dec. 31, 2008. Operating activities increased cash and cash equivalents by $219,000 during the three months ended March 31, 2009, due to lower interest costs. An increase in accrued operating expenses paid after the quarter end did not effect cash balances. Total outstanding debt at March 31, 2009, consisted of $16,754,000 of long-term non-recourse first mortgage notes, secured by real estate owned by the Company and $22,000,000 under an unsecured credit facility. The Company has no other debt except normal trade accounts payable and accrued management fees. On July 1, 2009 Company received written notice from the holder of the loan which makes demand for the immediate payment of the loan. The Company's unsecured credit facility matured Oct. 1, 2008. The holder of the unsecured debt formally extended the maturity to Feb. 28, 2009. The holder entered into discussions with Company as to terms for extending the loan on a longer term basis. There can be no assurance that the holder will offer the extension or that Company will be able to comply with the terms offered and conditions imposed by the holder in exchange for the extension. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?404d On May 27, 2009, Dworken, Hillman, LaMorte & Sterczala, P.C., in Shelton, Connecticut raised substantial doubt about SB Partners' ability to continue as a going concern after auditing the Company's financial results of the years ended December 31, 2008, and 2007. The auditor pointed that the partnership's unsecured credit facility matured on February 28, 2009, and the partnership has not been able to arrange a replacement loan, extension or refinancing. About SB Partners SB Partners is a New York limited partnership engaged in acquiring, operating and holding for investment a varying portfolio of real estate interests. 1971, the year it began operations. As of December 31, 2008, the Company owns an industrial flex property in Maple Grove, Minnesota, and warehouse distribution properties in Lino Lakes, Minnesota and Naperville, Illinois. In addition, the Company has a 30% interest in Sentinel Omaha, LLC, an affiliate of the Company's general partner. SPECTRUM BRANDS: Gets Court Nod for $1.3MM Sale of Orville Assets ---------------------------------------------------------------- Spectrum Brands Inc. and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Western District of Texas to dispose of real and personal property interests with respect to their facilities located in Orville, Ohio. Specifically, the Debtors seek the Court's authority to sell the Orville Assets, free and clear of all claims, liens, interests or other encumbrances, substantially in accordance with the Term Sheet to The Scotts Company LLC for approximately $1,360,000. The Debtors also asked the Court for authority to reject three unexpired leases of non residential real property related to the Orville Assets: Damage Rejection Claim Name Landlord Date Amount ---- -------- --------- --------- Orville I Insite Orville, LLC 06/30/09 $854,914 Orville II Insite Orville (Schrock) 07/31/09 3,756,571 Orville III Insite Orville (Crown) 06/30/09 368,025 Judge King granted the Debtors' motion to sell its Orville, Ohio assets and authorized the Landlords to retain security deposits, the set off of which have been reflected in the Rejection Damage Claims: * For Orville I Lease : $35,980 * For Orville II Lease : 81,909 * For Orville III Lease : 13,649 The Debtors also sought the Court's authority to abandon to the Landlords all Abandoned Property on the Applicable Rejection Date and to authorize the Landlords, in their sole discretion and without further notice, to dispose of Abandoned Property without liability to the Debtors or any third parties claiming interest in the Abandoned Property. The Debtors assure the Court that they will remain current on the Leases as to their monthly recurring lease obligations. D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, narrates that in mid-November 2008, the Debtors determined to shut down their fertilizer and growing media business. From December 2001 through April 2009, the FGM Business had sold fertilizers, enriched soils, mulch and grass seed to customers like as Lowe's, Wal*Mart and The Home Depot. The Orrville Properties, which consist of the three properties, are part of the FGM Business. The Debtors formerly utilized the Orrville Properties for fertilizer production, growing media production, or regional distribution of FGM Business products. The Debtors have determined that the Orrville Properties are no longer necessary for their operations. The Debtors recognized that their best hope of selling the Orrville Assets rested in finding a replacement lessee for the Orrville Properties who would use the properties for a purpose similar to the one for which the Debtors utilized them and would, thus, have a need for the Orrville Assets. After significant inquiry and diligence including meeting with the management of top fertilizer and growing media producers, the Debtors determined that Scotts was the only market participant that would have those needs. Against this backdrop, the Debtors approached Scotts to gauge their interest in not only leasing the Orrville Properties from the Landlords but also purchasing the Orrville Assets. After engaging in extensive, arms-length negotiations, the Debtors ultimately reached an agreement to sell the Orrville Assets to Scotts on the terms set forth in the term sheet. Scotts and the Debtors have agreed, wherein Scotts would purchase the Assets from the Debtors for a price of approximately $1,360,000. Significantly, if the Contingencies are satisfied, the Orrville Assets will remain at the Orrville Properties and Scotts will enter into new leases with the Landlords to lease the Orrville Properties once the Debtors vacate the properties. Additionally, the Debtors have determined to abandon any other property located at the Orrville Properties once the assets are sold because these are either of inconsequential value or the cost of removing and storing the property exceeds its value to the Debtors' estates, Mr. Baker relates. According to Mr. Baker, the Debtors believe they can sell the Orrville Property free and clear of claims, liens and interest because they have met the requirements pursuant to Section 363(f) of the Bankruptcy Code by satisfying at least one of these conditions: -- applicable non-bankruptcy law permits the sale of the property free and clear of interest; -- the entity consents; -- the interest is a lien and the price at which the property is to be sold is greater than the aggregate value of all liens on the property; -- the interest is in bona fide dispute; or -- the entity could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of the interest. The Debtors proposed that the liens on the Assets be attached to the net proceeds from the sale of the assets, subject to any claims and defenses that the Debtors may possess with respect to the sale. About Spectrum Brands Based in Cibolo, Texas, Spectrum Brands, Inc. -- http://www.spectrumbrands.com/-- supplies consumer batteries, lawn and garden care products, specialty pet supplies, shaving and grooming products, household insect control products, personal care products, and portable lighting. Spectrum Brands' business is operated in three reportable segments: (a) Global Batteries and Personal Car; (b) Global Pet Supplies; and (c) Home and Garden. Spectrum Brands has roughly 5,960 employees worldwide, with about 2,700 of those employees working within the United States. In addition, Spectrum Brands holds a 50% interest in a domestic entity; minority interests (less than 25% each) in a domestic entity and a foreign entity; a limited partnership interest in a foreign entity; and a 100% interest in a foreign trust. Spectrum Brands, Inc., and 13 subsidiaries filed separate Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No. 09-50455). The Hon. Ronald B. King presides over the cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman, Esq., in San Antonio, serve as the Debtors' counsel. Sutherland Asbill & Brennan LLP acts as special counsel; Perella Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as tax consultant; and Logan & Company Inc. as claims and noticing agent. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. An official committee of equity security holders -- composed of Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and the Peter and Karen Locke Living Trust -- was appointed by the U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009. The Equity Committee has tapped Alston & Bird LLP as its bankruptcy counsel. Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spectrum Brands Inc. and its various subsidiaries. (http://bankrupt.com/newsstand/or 215/945-7000) SPECTRUM BRANDS: Gets Court Nod to Pay Workers Assisting Shutdowns ------------------------------------------------------------------ Spectrum Brands Inc. and its affiliates obtained approval from the Bankruptcy Court to make payments to certain employees involved in the shutdown of their Bridgeton, Missouri distribution center, the Pendergras, Georgia distribution center, the San Bernardino, California distribution facility, the Orville, Ohio facilities, and the partial shutdown of the Edwardsville, Illinois distribution center. Specifically, the Debtors ask the Court to allow them to implement a program providing for payments to be made to certain necessary, non-insider employees in exchange for these employees remaining employed and assisting the Debtors with an orderly exit from the entirety of the "shutdown Payment Program." The amount the Debtors propose to pay these employees is $136,500. The Debtors formerly used the Bridgeton, Pendergrass, and San Bernardino Facilities, and a portion of the Edwardsville Facility as distribution centers in connection with the "Controls" portion of their Home & Garden Business. To streamline their product distribution system and better control their distribution costs for the H&G Business, the Debtors have determined to shut down all or a portion of these distribution centers. The Debtors formerly utilized the Orrville Facilities primarily in connection with their fertilizer and growing media business, though a small portion of one of the Orrville Facilities was, and is currently used in connection with the "Controls" portion of the H&G Business. As part of the Debtors' prepetition determination to shut down the FGM Business, the Debtors concluded that the Orrville Facilities are no longer necessary for the Debtors' operations. The Debtors contemporaneously filed motions seeking authorization to, among other things, reject the real property leases related to the Bridgeton, Pendergrass and San Bernardino Facilities. The Debtors do not intend to file a motion to reject the lease for the Edwardsville Facility, but anticipate exiting the portion of that facility that relates to the H&G Business on or about January 15, 2010. According to Mark A. McDermott, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, the Debtors designated certain Employees who they believed were essential to an efficient shutdown of each the Facility. The rationale behind the Shutdown Payment Program is that the Debtors' cost savings attributable to the efficient shutdown of all or a portion of the Facilities will inure directly to the Debtors' benefit and the program will assist the Debtors in maintaining a stable workforce and achieving an orderly exit from the Facilities. Pursuant to the Shutdown Payment Program, the Debtors propose to make Payments to 107 Employees ranging from $750 to $5,000 per Employee. Of the 107 Employees eligible to participate in the program, only approximately 25 Employees are entitled to receive Payments in excess of $750. None of the Employees are insiders. The Debtors propose to distribute this amount to: No. of Proposed Proposed Facility Employees Amount Payment date -------- --------- -------- ------------ Bridgeton 33 $36,500 Jan. 15, 2010 Pendergrass 30 35,500 Nov. 30, 2009 San Bernardino 16 26,750 Oct. 31, 2009 Orrville 11 14,250 Aug. 15, 2009 Edwardsville 17 24,000 Jan. 31, 2010 A schedule of the proposed Payments to be made under the Shutdown Payment Program will be provided to the United States Trustee. If the Debtors were unable to retain the Employees participating in the Shutdown Payment Program through the agreed date, the Debtors would be left to suffer the disarray and lost efficiencies resulting from unplanned departures or would be forced to hire new employees to assist in the winding down of all or a portion of the Facilities, Mr. McDermott stresses. Because any new employees would not have the same knowledge and expertise with respect to the Debtors' operations at the respective Facilities as do the current Employees, the efficient shutdown of the Facilities would be compromised, increasing the Debtors' costs associated therewith. The Debtors believe that the Shutdown Payment Program is ordinary course and could be implemented during the pendency of these cases. Nevertheless, the Debtors seek the Court's approval, with respect to the first-day order governing payments to employees, which require the Debtors to seek court approval prior to making payments under these programs, Mr. McDermott says. About Spectrum Brands Based in Cibolo, Texas, Spectrum Brands, Inc. -- http://www.spectrumbrands.com/-- supplies consumer batteries, lawn and garden care products, specialty pet supplies, shaving and grooming products, household insect control products, personal care products, and portable lighting. Spectrum Brands' business is operated in three reportable segments: (a) Global Batteries and Personal Car; (b) Global Pet Supplies; and (c) Home and Garden. Spectrum Brands has roughly 5,960 employees worldwide, with about 2,700 of those employees working within the United States. In addition, Spectrum Brands holds a 50% interest in a domestic entity; minority interests (less than 25% each) in a domestic entity and a foreign entity; a limited partnership interest in a foreign entity; and a 100% interest in a foreign trust. Spectrum Brands, Inc., and 13 subsidiaries filed separate Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No. 09-50455). The Hon. Ronald B. King presides over the cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman, Esq., in San Antonio, serve as the Debtors' counsel. Sutherland Asbill & Brennan LLP acts as special counsel; Perella Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as tax consultant; and Logan & Company Inc. as claims and noticing agent. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. An official committee of equity security holders -- composed of Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and the Peter and Karen Locke Living Trust -- was appointed by the U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009. The Equity Committee has tapped Alston & Bird LLP as its bankruptcy counsel. Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spectrum Brands Inc. and its various subsidiaries. (http://bankrupt.com/newsstand/or 215/945-7000) SPRINT NEXTEL: Posts $384 Million Net Loss in Second Quarter 2009 ----------------------------------------------------------------- Sprint Nextel Corp. reported second quarter 2009 financial results that included consolidated net operating revenues of $8.1 billion, a net loss of $384 million, and a diluted loss per share of 13 cents. The Company generated Free Cash Flow of $676 million in the quarter and $1.5 billion in the first half of 2009. As of June 30, 2009, the Company had $4.6 billion of cash and cash equivalents and $1.5 billion of borrowing capacity available under its revolving bank credit facility, for a total liquidity of $6.1 billion. "In the second quarter, we made further progress on the Company's efforts to enhance financial stability, improve the customer experience and reinvigorate the brand," said Dan Hesse, Sprint Nextel CEO. "The widespread visibility surrounding the Company's record-breaking June launch of the Palm(R) Pre(TM) handset gave us an unprecedented opportunity to showcase these improvements to customers as 'a new Sprint.' They saw a 3G network described by PC World magazine as the most reliable among competitors, key satisfaction and performance metrics in customer care improving for 18 straight months, advertising that won the top international award in Cannes, and a stable balance sheet with 2009 long-term debt maturities paid and enough cash on hand to cover maturities through 2011. "In the quarter, we saw the best retail net add performance in the past seven quarters. We also saw the best quarterly sequential change in CDMA net add performance in two years, ARPU that has been stable for six consecutive quarters, continued prepaid growth, and improved sequential Adjusted Operating Income Before Depreciation and Amortization (Adjusted OIBDA)," Mr. Hesse said. "However, we are not satisfied that we lost a quarter of a million customers in the quarter." Sprint also built on its history of innovation in the second quarter, with the launch of MiFi cards and continued growth in its award-winning Unified Communications solution for business mobility. Additionally, the Company prepared for the August launch of 4G service in Las Vegas, Atlanta and Portland, with at least six more markets in its national network expected to follow in 2009, and announced the July launch of the Blackberry(R) Tour(TM) world phone. Consolidated Results Selected Unaudited Financial Data (dollars in millions, except per share data) Quarter Ended Year To Date ----------------- ---------------------- June 30, June 30, % June 30, June 30, % Financial Data 2009 2008 2009 2008 -------------- ------- -------- ------ ---------- ---------- ----- Net operating revenues $ 8,141 $ 9,055 (10) % $ 16,350 $ 18,389 (11)% Adjusted OIBDA* 1,769 2,096 (16) % 3,492 4,105 (15)% Adjusted OIBDA margin* 23.1% 24.4% 22.7% 23.7% Net loss (384) (344) (12) % (978) (849) (15)% Diluted loss per common share $(0.13) $ (0.12) (8) % $ (0.34) $ (0.30) (13)% Capital Expenditures (1) $ 321 $ 646 (50) % $ 612 $ 2,006 (69)% Free cash flow* $ 676 $ 11 NM $ 1,472 $ 181 NM NM - Not Meaningful -- Consolidated net operating revenues of $8.1 billion for the quarter were 1% lower than the first quarter of 2009 and 10% lower than in the second quarter of 2008. The year-over- year decline is primarily due to a lower contribution from post-paid wireless service and lower wireline voice and legacy data revenues, partially offset by an increase in prepaid revenues. -- Adjusted OIBDA* was $1.8 billion for the quarter, compared to $1.7 billion for the first quarter of 2009 and $2.1 billion for the second quarter of 2008. Sequentially, Adjusted OIBDA* improved as continued improvement in SG&A expenses offset the decline in net operating revenues. Included in second quarter 2008 Adjusted OIBDA* is approximately $75 million in non-recurring operating expenses associated with the company's WiMAX efforts prior to the closing of the Clearwire transaction in 2008. -- Capital expenditures were $321 million in the quarter, compared to $291 million in the first quarter of 2009 and $646 million in the second quarter of 2008. Included in second quarter 2008 capital expenditures is approximately $100 million in non-recurring capital expenditures related to the deployment of WiMAX prior to the closing of the Clearwire transaction. -- Free Cash Flow* was $676 million for the quarter, compared to $796 million for the first quarter of 2009 and $11 million for the second quarter of 2008. The year-over- year improvement reflects the Company's improved cash from operating activities, primarily resulting from reduced operating costs and a decrease in capital expenditures. -- Net Debt* decreased by approximately $700 million from the end of the first quarter, to $16.4 billion. Wireless Results Selected Unaudited Financial Data (dollars in millions) Quarter Ended Year To Date --------------------- ---------------------- June 30, June 30, % June 30, June 30, % Financial Data 2009 2008 2009 2008 Net operating revenues $ 7,004 $ 7,736 (9)% $ 14,039 $ 15,699 (11)% Adjusted OIBDA* 1,413 1,868 (24)% 2,862 3,669 (22)% Adjusted OIBDA margin* 21.7% 25.7% 21.9% 25.1% Capital Expenditures (1) $ 227 $ 393 (42)% $ 424 $ 1,311 (68) % Wireless Churn Post-paid churn in the quarter was 2.05% compared to 2.25% in the first quarter and 1.98% in the year-ago period. The sequential decrease is due to seasonality, along with improved credit quality of the Company's customer base and better retention performance; and the year-over-year increase in churn is primarily driven by deactivations on business lines due to current economic conditions. Boost churn in the second quarter of 2009 was 6.38%, compared to 6.86% in the first quarter of 2009 and 7.36% in the year-ago period. The sequential and year-over-year improvement in churn are due to fewer deactivations and a larger subscriber base of national Boost Monthly Unlimited subscribers. Wireless Service Revenues Wireless service revenues for the quarter were flat sequentially at $6.4 billion as revenue growth from Boost Monthly Unlimited subscribers offset revenue declines from post-paid subscribers. Year-over-year, wireless service revenues declined 9% as a result of fewer wireless subscribers. Wireless post-paid ARPU has been stable for the past six quarters at around $56 primarily due to continued growth in fixed-rate bundled plans such as Simply Everything, offset by declines in usage and roaming. As a result of the company's focus on improving the customer experience and 18 consecutive months of improvement in customer care satisfaction, post-paid ARPU benefited from reduced credits to customer bills. Data revenues contributed greater than $15.50 to overall post-paid ARPU in the second quarter, led by growth in CDMA data ARPU. CDMA data ARPU increased more than 3% from the first quarter of 2009, to greater than $18.50, an industry-best that now represents greater than 32% of total CDMA ARPU. Prepaid ARPU in the quarter was approximately $34 compared to $31 in the first quarter of 2009, and $30 in the year-ago period. The sequential and year-over-year increases reflect a growing contribution from prepaid subscribers on unlimited plans. Wholesale, affiliate and other revenues were down 13% sequentially and down 44% compared to the year-ago period. The sequential and year-over-year decline is primarily due to subscriber losses from one of the Company's large carrier customers. Wireless Operating Expenses and Adjusted OIBDA* Total operating expenses, after normalizing for special items, were $7.3 billion in the second quarter, compared to $7.3 billion in the first quarter of 2009 and $7.9 billion in the year-ago period. Adjusted OIBDA* of $1.4 billion in the second quarter of 2009 compares to $1.4 billion in the first quarter of 2009 and $1.9 billion in the second quarter of 2008. Sequentially, Adjusted OIBDA* was flat as the improvement in SG&A expenses offset the revenue decline. The year-over-year decline in Adjusted OIBDA* was primarily due to fewer wireless subscribers, offset by an improvement of $350 million in SG&A expenses. Equipment subsidy was almost $850 million (equipment revenue of approximately $500 million, less cost of products of $1.34 billion) as compared to almost $850 million in the first quarter of 2009 and about $700 million a year ago. The year-over- year increase in subsidy is primarily due to the increase in the number and timing of prepaid handsets shipped as a result of the national Boost Monthly Unlimited offer, and the increase in average cost per handset sold as the Company continues to sell a greater number of higher-functionality handsets. SG&A expenses declined 4% sequentially from the first quarter of 2009 and 14% year-over-year from the second quarter of 2008. On a sequential basis, the decline reflects lower marketing and customer care expenses. The year-over-year improvement is due to lower selling, bad debt, customer care, and labor expenses. Wireless Capital Spending Wireless capital expenditures were $227 million in the second quarter of 2009, compared to almost $200 million in the first quarter of 2009 and almost $400 million spent in the second quarter of 2008. The year-over-year decrease in wireless capital spending reflects reduced capacity needs due to fewer subscribers. The Company continues to invest capital in the quality and performance of its networks. At the end of the second quarter of 2009, Sprint's networks continue to operate at best-ever levels and, according to third-party data, Sprint has the most dependable+ 3G network in the country. Wireline Results Selected Unaudited Financial Data (dollars in millions) Quarter Ended Year To Date --------------------- ---------------------- June 30, June 30, % June 30, June 30, % Financial Data 2009 2008 2009 2008 Net operating revenues $ 1,428 $ 1,605 (11)% $ 2,893 $ 3,235 (11)% Adjusted OIBDA* 352 299 18% 638 586 9% Adjusted OIBDA margin* 24.6% 18.6% 22.1% 18.1% Capital Expenditures (1) $ 47 $ 113 (58)% $ 124 $ 261 (52)% -- Wireline revenues of $1.4 billion for the quarter were 3% lower sequentially and 11% lower year-over-year as legacy voice and data declines offset Internet revenue growth. -- Internet revenues for the second quarter of 2009 increased 1% sequentially and 10% from the year-ago period. The year- over-year increase reflects strong enterprise demand for Global MPLS services and the increased base of cable subscribers who utilize the Company's VoIP services. -- Internet revenues as a percent of wireline revenue have increased from 33% in the second quarter of 2008 to 41% in the second quarter of 2009. At the end of the second quarter of 2009, the company supported approximately 4.7 million users of cable partner VoIP services. These services are currently available to almost 31 million MSO households. -- Legacy voice revenues for the quarter declined 2% sequentially and 18% year-over-year. -- Legacy data revenues are impacted in part by customer transitions to IP services. These legacy services declined 14% sequentially and 32% compared to the second quarter of 2008. -- Adjusted OIBDA* was $352 million compared to $286 million reported for the first quarter of 2009 and $299 million in the second quarter of 2008. Total operating expenses, after normalizing for special items, were $1.2 billion in the second quarter, 7% lower sequentially and 15% lower year- over-year. The sequential and year-over-year improvements are due to the declines in costs of service and improvement in SG&A expenses. -- Wireline capital expenditures were $47 million in the second quarter of 2009, compared to $77 million in the first quarter of 2009 and $113 million in the second quarter of 2008. The Company made significant capital investments in prior years to build out its IP network, and less capital was required sequentially and year-over-year as the pace of the Company's IP growth rate has slowed. Forecast Sprint Nextel continues to expect that both post-paid and total subscriber full-year losses should improve in 2009 as compared to 2008. In addition, the Company expects that full-year capital expenditures in 2009 will be less than 2008 levels, excluding WiMAX. The Company expects to continue to generate positive Free Cash Flow during the remainder of 2009. June 30, December 31, 2009 2008 --------- ---------------- Assets Current assets Cash and cash equivalents $ 4,592 $ 3,691 Marketable securities 17 28 Accounts and notes receivable, net 3,202 3,361 Device and accessory inventory 575 528 Deferred tax assets 98 93 Prepaid expenses and other current assets 614 643 ------- --------- Total current assets 9,098 8,344 Investments 3,882 4,241 Property, plant and equipment, net 20,143 22,373 FCC licenses and trademarks 19,657 19,320 Customer relationships, net 1,105 1,932 Other intangible assets, net 1,542 1,634 Other assets 458 408 ------- --------- Total $ 55,885 $ 58,252 ------- --------- Liabilities and Shareholders' Equity Current liabilities Accounts payable $ 2,061 $ 2,138 Accrued expenses and other current liabilities 3,479 3,525 Current portion of long-term debt and capital lease obligations 1,373 618 ------- --------- Total current liabilities 6,913 6,281 Long-term debt, financing and capital lease obligations 19,618 20,992 Deferred tax liabilities 6,613 7,196 Other liabilities 4,023 4,178 ------- --------- Total liabilities 37,167 38,647 ------- --------- Shareholders' equity Common shares 5,872 5,902 Paid-in capital 47,095 47,314 Treasury shares, at cost (1,282) (1,939) Accumulated deficit (32,473) (31,148) Accumulated other comprehensive loss (494) (524) ------- --------- Total shareholders' equity 18,718 19,605 ------- --------- Total $ 55,885 $ 58,252 ======= ========= Net Debt (Non-GAAP) (Unaudited) (Millions) June 30, December 31, 2009 2008 --------- ---------------- Total Debt $ 20,991 $ 21,610 Less: Cash and cash equivalents (4,592) (3,691) Less: Marketable securities (17) (28) ------- --------- Net Debt $ 16,382 $ 17,891 ======= ========= About Sprint Nextel Sprint Nextel Corporation is a communications company offering a comprehensive range of wireless and wireline communications products and services that are designed to meet the needs of individual consumers, businesses and government subscribers. Sprint Nextel is the third largest wireless communications company in the United States based on the number of wireless subscribers. Sprint Nextel is also one of the largest providers of wireline long distance services and one of the largest carriers of Internet traffic in the nation. * * * As reported by the Troubled Company Reporter on April 7, 2009, Standard & Poor's Rating Services revised its outlook on Sprint Nextel and its subsidiaries to negative from stable. At the same time, S&P affirmed all other ratings on the company, including the 'BB' corporate credit rating. SPRINT NEXTEL: Virgin Mobile Deal Won't Affect S&P's 'BB' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Overland Park, Kansas-based wireless carrier Sprint Nextel Corp. (BB/Negative/--) are not affected by the company's definitive agreement to acquire Virgin Mobile USA Inc. (B-/Stable/--) in a deal valued at $688 million: $483 million of equity, which includes Sprint Nextel's 13.1% fully diluted ownership stake, and net debt of $205 million. Sprint Nextel is going to use existing cash to retire Virgin Mobile's outstanding net debt at transaction close. S&P expects the transaction to be completed in the fourth quarter of 2009 or in early 2010. S&P does not expect the acquisition of Virgin Mobile USA to materially change Sprint Nextel's business or financial risk profile. Virgin Mobile USA is a reseller of Sprint Nextel's network and its 5.25 million subscribers are reported as wholesale subscribers by Sprint Nextel on a consolidated basis. The transaction, which will not materially change Sprint Nextel's current 4.0x leverage, will be modestly free cash flow accretive and will allow the company to expand its presence in the growing pre-paid wireless business. SRH/CMS STERLING: Potomac Realty to Sell Collateral on August 25 ---------------------------------------------------------------- Potomac Realty Capital, LLC, secured party under a certain loan dated December 15, 2005, in the original amount of $1,900,000, will hold a public sale of the collateral securing the loan of SRH/CMS Sterling Limited Partnership, on August 25, 2009, at 3:15 p.m. at 305 Broadway, Suite 200, New York, NY 10007. The collateral to be sold consists of: (A) (i) all of Debtor's right, title and interest, whether now owned and existing or hereafter acquired or arising, as a limited partner of Sterling Property Holder Limited Partnership, a Delaware limited partnership, and Sterling Property Management Limited Partnership, a Delaware limited partnership; (ii) all of Debtor's deposit accounts, accounts, general intangibles, contract rights, chattel paper, instruments, letter of credit rights, fees and all rights to payment of Debtor which in any way relate to Debtor's interest in the partnerships, and all books, records, electronically stored data and information; (iii) all rights to receive all income, gain, profit, loss or other times allocated or distributed to the Debtor; and (B) (i) all of David. M. Rosenberg's right, title and interest, whether now owned and existing or hereafter acquired or arising, as the sole shareholder of SRH Sterling Management Corporation, a Delaware corporation; (ii) all of Mr. Rosenberg's deposit accounts, accounts, general intangibles, contract rights, chattel paper, instruments, letter of credit rights, fees and all rights to payment of Rosenberg which in any way relate to Rosenberg's interest in the corporation; and all books, records, electronically stored data and information; and (iii) all rights to receive all income, gain, profit, loss or other forms allocted or distributed to Rosenberg Inc. by the corporation. The Debtor says Sterling Property Holder Limited Partnership is believed to own the Sterling Golf Course in Worcester County, Massachusetts, and that TD Bank North, N.A. has a first mortgage on the golf course. It is also believed that Mr. Rosenberg and/or Sterling Property Management Limited Partnership and/or SRH Sterling Management Corporation may have valuable contract rights or other interests relating to the operation of the golf course. STAR TRIBUNE: Wins Approval of Plan Disclosure Statement -------------------------------------------------------- According to Carla Main at Bloomberg News, Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York approved the disclosure statement explaining its proposed Chapter 11 plan, subject to changes. The Court, however, has not yet entered a formal order approving the Disclosure Statement. Judge Drain said the document needs revisions to address an exit loan and legal releases. He added that the Plan must make clear that its confirmation isn't contingent on an exit loan -- that "the company thinks it has enough cash" -- and clarify legal releases it provides. Approval of the Disclosure Statement will allow the Debtors to begin soliciting votes on, then seek confirmation of, the Plan. Prior to the hearing scheduled for July 29, the Company filed an amended Disclosure Statement, a copy of which is available at: http://bankrupt.com/misc/StarTribune_Amended_DS.pdf After careful review of their current business operations, their prospects as ongoing business enterprises and the estimated recoveries of creditors in various liquidation scenarios, Star Tribune and its affiliates have concluded that the recovery of holders of allowed claims will be maximized by the Debtors' continued operation as a going concern. The Official Committee of Unsecured Creditors is supporting the Plan. According to the Disclosure Statement, the Plan offers a 29.8% to 36.1% recovery to first-lien lenders in the form of new common stock and secured notes. Unsecured creditors will recover between 0.5% and 1.3% of their claims with cash or stock and warrants. Holders of convenience claims will be paid 0.9% of the allowed amount of their claims. Holders of administrative and priority tax claims and holders of other priority claims and other secured claims will be paid in full. The first lien lenders and unsecured creditors will be entitled to vote on the Plan. Holders of equity interests will not receive any distributions under the Plan and will be deemed to reject the Plan. Headquartered in Minneapolis, Minnesota, The Star Tribune Company -- http://www.startribune.com/-- operates the largest newspaper in the state of Minnesota and published seven days each week in an edition for the Minneapolis-Saint Paul metropolitan area. The Company and its affiliate, Star Tribune Holdings Corporation, filed for Chapter 11 protection on January 15, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-10244). Marshall Scott Huebner, Esq., James I. McClammy, Esq., and Lynn Poss, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Blackstone Advisory Services L.P. is the Debtors' financial advisor. The Garden City Group, Inc., serves as noticing and claims agent. Scott Cargill, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC, represent the official committee of unsecured creditors. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. The Court has extended the Debtors' exclusive periods to file a plan of reorganization until August 13, 2009. STATION CASINOS: Negotiations Fail to Bring Prepackaged Plan ------------------------------------------------------------ Declining real estate values, generalized credit market dislocations, significant contraction in available liquidity globally, volatility in debt and equity markets, declining business and consumer confidence and increased unemployment, have precipitated the worst economic recession since the Great Depression, and Las Vegas has not been immune to its impact, Thomas M. Friel, executive vice president, chief accounting officer, and treasurer of Station Casinos Inc., states. On November 7, 2007, SCI completed its merger with FCP Acquisition Sub, pursuant to which Merger Sub merged with and into SCI with SCI continuing as the surviving corporation. As a result of the merger, SCI's non-voting common stock is owned by Fertitta Partners LLC and FCP Holding, Inc. In connection with the Merger, SCI entered into the Prepetition Loan Agreement, which included a Revolving Credit Facility and the Term Loan Facility. The Term Loan Facility requires quarterly principal payments of $625,000 that began on March 31, 2008. The Revolving Credit Facility contains no principal amortization. SCI, however, was not able to make the scheduled payment of interest of $14.6 million to holders of the 6-1/2% Senior Subordinated Notes due 2014, which was due February 1, 2009. In addition, SCI has not made any other subsequent interest payment due on the Notes. SCI and the Prepetition Agent and certain of the Prepetition Lenders subsequently entered into forbearance agreements, one on March 2, 2009, and another one on July 28, 2009, pursuant to which the Prepetition Agent and the Prepetition Lenders have agreed to (i) forbear from exercising their default-related rights, remedies, powers and privileges against the Guarantors, and (ii) amend certain provisions of the Prepetition Loan Agreement. The June 28 Forbearance Agreement remains in full force and effect. While SCI has reduced and delayed investments and capital expenditures, Mr. Friel says, its Prepetition Loan Agreement and the Indentures impose limitations on the company's ability to dispose of assets, use the proceeds from dispositions of assets, and refinance its indebtedness. As a result of a recent decline in SCI's operating results and its inability to access the capital markets on acceptable terms, SCI faces substantial liquidity challenges, Mr. Friel avers. Consequently, SCI and 17 of its affiliates filed voluntary petitions under Chapter 11 of the Bankruptcy Code on July 28, 2009, in the U.S. Bankruptcy Court for the District of Nevada. SCI has engaged in extensive restructuring efforts for more than 10 months prior to the Petition Date, according to Mr. Friel. During that time, SCI had discussions and negotiations with its creditors concerning a restructuring of the entire capital structure, including all debts and obligations of SCI, its subsidiaries, and affiliates. Mr. Friel believes significant progress has been made, including reaching tentative agreement with the senior lenders on a restructuring of the Mortgage Loan Agreement and unsecured PropCo debt, the Prepetition Loan Agreement, the Land Loan, and other obligations. SCI also believes that its Notes debt will be restructured into equity to facilitate SCI's restructuring. Unfortunately, Mr. Friel notes, there remains several hurdles to completing those restructuring efforts, including: -- the goal of reaching final agreement or dealing with the holders of the Notes and the Mezzanine Lenders; -- the task of structuring and pricing an appropriate rights offering to raise needed capital to facilitate the restructuring; and -- the issue of dealing with several material leases. These hurdles, according to Mr. Friel, require the initiation of the Chapter 11 cases. The Debtors have in place an agreement with their senior secured lenders that, subject to Bankruptcy Court approval, permits it to borrow, as needed, up to $150 million of cash from one of the Debtors' non-operating subsidiaries. The $150 million postpetition financing is in addition to cash generated from the Debtors' operating subsidiaries and affiliates. After months of negotiations with no formal pact, Mr. Friel, in an interview with the Wall Street Journal, says, "we feel it's helpful to have the formal court process to resolve some of the issues. You've got a whole bunch of different constituencies who have a bunch of agendas on how they want the world to be. This will hopefully help us move closer to getting a deal done." SCI expects to capitalize on the good progress made in its prepetition restructuring efforts and continue working with its creditors to resolve impediments to the reorganization. SCI, Mr. Friel says, hopes to move quickly to a point where it can propose a comprehensive plan of reorganization. About Station Casinos Station Casinos, Inc., is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. Station Casinos Inc., together with its affiliates, filed for Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No.: 09-52477). Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as legal counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck, LLP as regulatory counsel; and Lewis and Roca LLP as local counsel. The Debtor is also hiring Lazard Freres & Co. LLC as investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent. In its bankruptcy petition, Station Casinos said that it had assets of $5,725,001,325 against debts of $6,482,637,653 as of June 30, 2009. About 4,378,929,997 of its liabilities constitute unsecured or subordinated debt securities. STATION CASINOS: To File Schedules & Statements Sept. 26 -------------------------------------------------------- Station Casinos Inc. and its affiliates ask the Bankruptcy Court for interim and final orders, pursuant to Section 521 of the Bankruptcy Code, Sections 101-1532, Rule 1007 of the Federal Rules of Bankruptcy Procedure and Rule 1007 of the Local Rules of Bankruptcy Procedure for the District of Nevada, extending the time for the Debtors to file their schedules of assets and liabilities and statements of financial affairs required under Section 521(a)(1) until September 26, 2009. Paul S. Aronzon, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Los Angeles, California, relates that the Debtors are requesting an extension of the 15-day period to file the Schedules to a 60- day period pursuant to Bankruptcy Rule 1007(c) and Local Rule 1007(d), without prejudice to the Debtors' ability to request additional time should it become necessary. According to the Mr. Aronzon, due to the large number of pressing matters present in the early stages of the Chapter 11 cases, the Debtors anticipate that they will be unable to complete the Schedules in the 15-day time period. Further, in view of the amount of work entailed in completing the Schedules and the competing demands upon the Debtors' employees and professionals during the initial postpetition period, the Debtors will not be able to properly and accurately complete the Schedules within the time period. About Station Casinos Station Casinos, Inc., is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. Station Casinos Inc., together with its affiliates, filed for Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No.: 09-52477). Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as legal counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck, LLP as regulatory counsel; and Lewis and Roca LLP as local counsel. The Debtor is also hiring Lazard Freres & Co. LLC as investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent. In its bankruptcy petition, Station Casinos said that it had assets of $5,725,001,325 against debts of $6,482,637,653 as of June 30, 2009. About 4,378,929,997 of its liabilities constitute unsecured or subordinated debt securities. STATION CASINOS: Chapter 11 Filing Cues Moody's Rating Cut to 'D' ----------------------------------------------------------------- Moody's Investors Service downgraded Station Casinos, Inc.'s Probability of Default Rating to D from Ca following its announcement that it had voluntarily filed for Chapter 11 bankruptcy. The ratings on the company's senior secured revolver and term loan were downgraded to Caa3 from B3. All other existing ratings were affirmed. These ratings were downgraded: * Probability of Default Rating to D from Ca * $250 million senior secured term loan due 2012 to Caa3 (LGD 2, 21%) from B3 (LGD 2, 11%) * $650 million senior secured revolving credit facility expiring 2012 to Caa3 (LGD 2, 21%) from B3 (LGD 2, 11%) These ratings were affirmed and LGD assessments updated: * Corporate Family Rating at Ca * Senior unsecured notes at Ca (LGD 4, 63%) from (LGD 3, 49%) * Senior subordinated notes at C (LGD 6, 90%) from (LGD 5, 84%) * Speculative Grade Liquidity rating at SGL-4 Moody's plans to withdraw all ratings of Station in the near future. Given the severe challenges faced by the gaming industry and by Station in particular, Moody's used a fundamental distressed EBITDA valuation (6 times multiple) to estimate loss-give-default rather than the 50% mean family recovery rate. The previous rating action related to Station occurred on February 17, 2009, when Moody's commented that the company's failure to make its February 15, 2009 scheduled interest payment on its 7.75% senior notes due 2016 did not affect its ratings. Station Casinos, Inc., wholly owns and operates 13 gaming and entertainment facilities located in Las Vegas, Nevada. The company also holds a 50% joint venture interest in five casinos and manages several Native American gaming facilities. Station generates approximately $1.4 billion in annual net revenues. STATION CASINOS: S&P Cuts Ratings on $900 Mil. Facilities to 'D' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its issue-level rating on Las Vegas-based Station Casinos Inc.'s $900 million senior secured bank facilities to 'D' from 'CCC'. S&P removed these ratings from CreditWatch, where S&P placed them with negative implications on December 15, 2008. In addition, S&P revised its recovery rating on the company's senior unsecured notes to '5' from '4'. The '5' recovery rating indicates S&P's expectation of modest (10%-30%) recovery for lenders in the event of a payment default. S&P had previously lowered all other ratings on Station, including the corporate credit rating, to 'D' following missed interest payments on each of the company's five senior unsecured and senior subordinated notes earlier this year. The issue-level ratings downgrade follows yesterday's filing for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Nevada by Station Casinos Inc. and various of its affiliates. Pursuant to an agreement with the company's senior secured lenders, none of Station's casino operating subsidiaries or affiliates were included in the Chapter 11 filings. This rating action follows S&P's February 4, 2009, research report in which S&P lowered its corporate credit rating on Station and S&P's issue-level rating on its 6.5% senior subordinated notes to 'D' following the missed February 1, 2009, interest payment on the 6.5% senior subordinated notes. At that time, Station also announced a solicitation for votes from eligible institutional holders of its senior unsecured and senior subordinated notes for a restructuring plan under Chapter 11 of the U.S. Bankruptcy Code. S&P also subsequently lowered its rating on Station's 7.75% senior notes, 6.875% senior subordinated notes, 6.625% senior subordinated notes, and 6% senior notes to 'D', following missed February 15, March 1, March 15, and April 1 interest payments on those notes, respectively. SUCCESSOR BORROWER: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Successor Borrower Services, LLC 1231 Delaware Avenue Buffalo, NY 14209 Bankruptcy Case No.: 09-13505 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court Western District of New York (Buffalo) Debtor's Counsel: Daniel F. Brown, Esq. Damon Morey LLP The Avant Building 200 Delaware Avenue, Suite 1200 Buffalo, NY 14202-2150 Tel: (716) 856-5500 Email: dbrown@damonmorey.com Total Assets: $3,509,526 Total Debts: $13,430,312 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/nywb09-13505.pdf The petition was signed by Gregory A. Stranger, manager of the Company. SUNESIS PHARMA: Posts $21MM Net Loss in Six Months Ended June 30 ---------------------------------------------------------------- Sunesis Pharmaceuticals, Inc., disclosed in a Form 10-Q filing with the Securities and Exchange Commission its financial results for three and six months ended June 30, 2009. At June 30, 2009, the company's balance sheet showed total assets of $9,785,803, total liabilities of $3,959,868 and a stockholders' equity of $5,825,935. For three months ended June 30, 2009, the Company posted a net loss of $20,952,469 compared with a net loss of $199 for the same period in the previous year. For six months ended June 30, 2009, the Company posted a net loss of $21,070,126 compared with a net income of $472 for the same period in the previous year. The Company's cash, cash equivalents and marketable securities totalled $7.3 million as of June 30, 2009, as compared to $10.6 million as of December 31, 2008. The decrease of $3.3 million was due to $12.4 million of net cash used in operating activities, partially offset by net proceeds of $8.8 million from the Private Placement. No debt was outstanding. Going Concern The Company related that the recurring operating losses raise substantial doubt as to its ability to continue as a going concern. The Company incurred significant losses and negative cash flows from operations since its inception. As of June 30, 2009, the Company had an accumulated deficit of $347.4 million. The Company needs to raise substantial additional funds to continue operations, fund additional clinical trials of voreloxin and bring future products to market. Management plans to finance the Company's operations with equity issuances, including the initial closing and potential additional closings of the sale of units and common stock, debt arrangements, a possible partnership or license of development or commercialization rights to voreloxin and, in the long term, roduct sales and royalties. Form 10-Q is available for free at: http://ResearchArchives.com/t/s?4053 About Sunesis Pharmaceuticals Based in South San Francisco, California, Sunesis Pharmaceuticals, Inc., -- http://www.sunesis.com/-- is a biopharmaceutical company focused on the development and commercialization of new oncology therapeutics for the treatment of solid and hematologic cancers. Sunesis has built a highly experienced cancer drug development organization committed to advancing its lead product candidate, voreloxin, in multiple indications to improve the lives of people with cancer. SUSAN SLACHTA: Case Summary & 4 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Susan M. Slachta, Trustee of the MFT Land Trust dated February 4, 2002, as amended and supplemented, 1120 E. Oleander Street Lakeland, FL 33801 Bankruptcy Case No.: 09-16389 Chapter 11 Petition Date: July 29, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Tanya M. Comparetto, Esq. 114 N. Tennessee Ave., Suite 204 Lakeland, FL 33801 Tel: (863) 686-6883 Email: tmcpa1259@cs.com Total Assets: $2,079,515 Total Debts: $1,365,511 A full-text copy of the Debtor's petition, including a list of its 4 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flmb09-16389.pdf The petition was signed by Susan M. Slachta. TEREX CORP: S&P Assigns 'BB+' Rating on $66 Mil. Incremental Loan ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB+' issue-level rating to Terex Corp.'s (BB-/Negative/--) proposed $66 million incremental term loan due 2013. The recovery rating on this debt is '1', indicating S&P's expectation of very high (90%-100%) recovery in the event of a default. Terex is using the incremental term loan to finance a portion of the EUR155 million acquisition of the Fantuzzi and Noell port equipment businesses. The ratings on Westport, Connecticut-based Terex reflect the company's participation in the highly cyclical and competitive construction equipment industry and its aggressive financial profile. The company's satisfactory business position as a major provider of construction equipment and its good geographic and product diversity mitigate these factors. Terex manufactures a broad range of equipment for the construction, infrastructure, and mining industries. Its business strengths include well-known brands, low-cost products, and good aftermarket parts sales. It has geographic diversity, with more than half of its sales coming from outside the U.S. Through a number of acquisitions, Terex has grown to become a sizable global construction equipment company. Terex has funded acquisitions with a combination of debt and equity to temper leverage. The outlook is negative. S&P could lower the ratings if headroom under covenants is limited and the company is delayed in obtaining adequate relief. In addition, if Terex's operating performance continues to deteriorate or if credit measures do not appear likely to rebound in 2010, S&P could lower the ratings. If, for instance, FFO were likely to become negative and there were no significant excess cash balances, S&P could lower the ratings. Rating List Terex Corp. Corporate Credit Rating BB-/Negative/-- New Rating Terex Corp. $66 Mil. Term Loan Due 2013 Sr Secured BB+ Recovery Rating 1 TENNECO INC: Reports $33MM Net Loss in Q2, $290MM Deficit --------------------------------------------------------- Tenneco Inc. reported a shareholders' deficit of $290 million as of June 30, 2009. Tenneco had $2.76 billion in total assets and these liabilities: Short-term debt $65 million Accounts payable $701 million Accrued taxes $47 million Accrued interest $23 million Other current liabilities $262 million Long-term debt $1,455 million Deferred income taxes $33 million Deferred credits and other liabilities $444 million Tenneco also had Redeemable Non-controlling Interests of $4 million, and Non-controlling Interests of $23 million at June 30, 2009. Tenneco reported a net loss of $33 million for the second quarter ended June 30, 2009, or 72-cents per diluted share, compared with net income of $13 million, or 26-cents per diluted share, in second quarter 2008. Tenneco said earnings before interest, taxes and noncontrolling interests was $17 million, compared with $75 million a year ago. Adjusted EBIT was $25 million, versus $88 million in second quarter 2008. The company's cost reduction efforts and the benefits from restructuring actions helped offset a portion of the $89 million negative impact on EBIT from lower OE production volumes worldwide and related manufacturing fixed cost absorption. Unfavorable currency exchange rates compared with a year ago also negatively impacted EBIT by $9 million. EBITDA including noncontrolling interests (EBIT before depreciation and amortization) was $72 million compared with $132 million a year ago. Adjusted EBITDA including noncontrolling interests was $79 million, versus $145 million in second quarter 2008. Tenneco said it collected substantially all of its pre-petition receivables from General Motors Corp. and Chrysler LLC. Other than the impact from production shut-downs, Tenneco incurred no economic loss from the bankruptcies of these two customers. "Our cost reduction, restructuring and cash generation actions continue to take hold and are delivering the results we need to manage through this very challenging production environment," said Gregg Sherrill, chairman and CEO, Tenneco. "Although our revenue and profitability continue to be negatively impacted by the global industry downturn, we are pleased with our strong cash flow performance this quarter as well as our gross margin improvement." Tenneco generated $112 million in cash from operations in the quarter, compared with cash from operations of $58 million in second quarter 2008, despite a $60 million year-over-year decline in EBITDA including noncontrolling interests. The cash performance was driven by working capital improvements, particularly inventory and accounts receivable reductions. Cash flow from accounts receivable improved $58 million year-over-year even though the company's sale of receivables generated $21 million less in cash compared with a year ago. An intense focus on reducing inventories generated $33 million in cash versus a cash use of $4 million in second quarter 2008. Tenneco continues to hold down capital spending without sacrificing the spending needed for technology development and new program launches. Capital spending in the quarter was $24 million, a 58% decrease from $57 million in second quarter 2008. The company now estimates that its capital spending will be approximately $140 million in 2009, down from the previous guidance of $160 million. At June 30, 2009, Tenneco's leverage ratio under its senior credit facility was 5.77, below the maximum level of 7.35. The interest coverage ratio was 2.21, above the minimum of 1.85. At the end of the quarter, Tenneco had an EBITDA cushion of $40 million and a debt cushion of $392 million against its tightest covenant. Tenneco Inc. is a $5.9 billion global manufacturing company with headquarters in Lake Forest, Illinois, and roughly 21,000 employees worldwide. Tenneco is one of the world's largest designers, manufacturers and marketers of emission control and ride control products and systems for the automotive original equipment market and the aftermarket. Tenneco markets its products principally under the Monroe(R), Walker(R), Gillet(TM) and Clevite(R)Elastomer brand names. TUSCANY RESERVE: Can Hire Heller Draper as Counsel -------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Louisiana authorized Tuscany Reserve LLC to employ Heller, Draper, Hayden, Patrick & Horn, L.L.C., as its counsel. Among other things, the firm is expected to: a) advise the Debtor with respect to its rights, powers and duties as debtor and debtor-in-possession in the continued operation and management of its business and property; b) prepare and pursue confirmation of a plan of reorganization and approval of a disclosure statement; c) prepare on behalf of the Debtor all necessary applications, motions, answers, proposed orders, other pleadings, notices, schedules and other documents, and reviewing all financial and other reports to be filed; d) advise the Debtor concerning and preparing responses to applications, motions, pleadings, notices and other documents which may be filed by other parties herein; and e) appear in Court to protect the interests of the Debtor before this Court. The firm's professionals are expected to have primary responsibility for providing services to the Debtor with current applicable rates: Professional Hourly Rate ----------- ----------- Douglas S. Draper, Esq. $400 Barry Miller, Esq. $325 Constant G. Marquer, III, Esq. $325 Leslie Collins, Esq. $325 Designation Hourly Rate ----------- ----------- Attorneys $250-$400 Associates $250 Paralegals $90 The Debtor assured the Court that the firm does not hold any interest adverse to its estate and creditors, and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Tuscany Reserve filed a Chapter 11 petition on July 10, 2009 (Bankr. M.D. La. Case No. 09-11027). Douglas S. Draper, Esq., serves as the Debtor's counsel. Its petition says that assets and debts are between $10,000,001 and $50,000,000. TUSCANY RESERVE: US Trustee Sets Meeting of Creditors for Aug. 14 ----------------------------------------------------------------- The U.S. Trustee for Region 5 will convene a meeting of creditors in Tuscany Reserve LLC's Chapter 11 case on August 14, 2009, at 1:00 p.m. The meeting will be held at the Middle District of Louisiana, 707 Florida Street, Room 324, Baton Rouge, Louisiana. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Tuscany Reserve LLC owns a 274-unit apartment project in Baton Rouge, Louisiana. The project was completed in 2008. It is 65% percent occupied. Tuscany Reserve filed a Chapter 11 petition on July 10, 2009 (Bankr. M.D. La. Case No. 09-11027). Douglas S. Draper, Esq., serves as the Debtor's counsel. Its petition says that assets and debts are between $10,000,001 and $50,000,000. TWO SPRINGS: Government's Alter Ego Claims Fail ----------------------------------------------- WestLaw reports that the mere fact that a judgment lien creditor might be judicially estopped, in a lien priority dispute between itself and the federal government, from taking the position that the corporations that the government sought to hold liable for a tax debt were not alter egos of the taxpayer did not mean that it could not benefit from the bankruptcy court's determination that the taxpayer and the corporations were not alter egos based on the government's failure to make out a prima facie case for application of alter ego doctrine. Judicial estoppel did not relieve the government of its burden of proof, but merely prevented the judgment lien creditor from presenting argument to the contrary. In re Two Springs Membership Club, --- B.R. ----, 2009 WL 2192291 (Bankr. N.D. Ohio). Following the $2.6 million sale of a campground located in North Palm Springs, Calif., owned by Two Springs Membership Club free and clear of all interests, with such interests to attach to the sales proceeds, the Chapter 7 trustee brought an adversary proceeding (Bankr. N.D. Ohio Adv. Pro. No. 06-4112) for a determination of the validity, priority and extent of liens on proceeds. The Honorable Kay Woods, 400 B.R. 601, determined that the Internal Revenue Service had not satisfied its burden of proof on alter ego claims, and the government moved to alter or amend that judgment. Judge Woods declined the government's invitation to alter or amend her earlier decision. Two Springs Membership Club filed a chapter 11 voluntary petition (Bankr. N.D. Ohio Case No. 04-44837) on October 4, 2004, and converted to a chapter 7 liquidation proceeding on June 30, 2005. USEC INC: S&P Puts 'B-' Corp. Rating on CreditWatch Negative ------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on USEC Inc., including its 'B-' corporate credit rating, on CreditWatch with negative implications. The CreditWatch listing follows the company's announcement that the U.S. Department of Energy denied USEC's application for a $2 billion loan guarantee to complete construction of its $3.5 billion American Centrifuge Plant, a uranium enrichment plant project, in Piketon, Ohio. Noting that the project has promise, but that it was neither technically or financially ready to move forward, DOE officials asked USEC to withdraw its application and resubmit it in 12 to 18 months for reconsideration. As a result, the company has begun to initiate steps to demobilize the project and has engaged outside advisors to evaluate strategic alternatives for raising the funds necessary to complete the project, which could be extremely challenging given the current state of the economy and capital markets. In resolving the CreditWatch listing, S&P will meet with the company and assess its competitive market position, its ability to move forward with the project without a DOE guarantee, and its current operating and liquidity situation. In addition, S&P will also discuss with management its short- and intermediate-term business and financial strategies. USG CORPORATION: Fitch Corrects Ratings; Assigns 'BB/RR1' Rating ---------------------------------------------------------------- Fitch Ratings expects to assign a 'BB/RR1' rating to USG Corporation's proposed private offering of $250 million of senior unsecured notes. The new issue will be guaranteed on a senior unsecured basis by certain of USG's domestic subsidiaries. The company intends to use the net proceeds from the sale of the notes for general corporate purposes, which may include the repayment of indebtedness, working capital, capital expenditures and acquisitions. As a result of the proposed new debt issuance, the Recovery Rating (RR) on USG's existing senior unsecured notes that are not guaranteed by the company's subsidiaries are being downgraded: -- Senior unsecured notes to 'B/RR4' from 'B+/RR3'; -- Convertible senior unsecured notes to 'B/RR4' from 'B+/RR3'. Fitch currently rates USG: -- Issuer Default Rating (IDR) 'B'; -- Secured bank credit facility 'BB/RR1'. The Rating Outlook is Negative. Fitch's '1' RR on USG's $500 million secured revolving credit facility and the proposed $250 million unsecured notes issuance indicates outstanding recovery prospects for holders of this debt issue. Although the proposed senior unsecured notes are effectively subordinated to the company's secured debt, including the $500 million secured revolving credit facility, the recovery prospects for both of these debt classes are similar given USG's strong asset coverage. Fitch's '4' RR on USG's senior unsecured notes indicates average recovery prospects for holders of these debt issues. As noted earlier, the company's existing senior unsecured notes are not guaranteed by USG's subsidiaries. Fitch applied a liquidation analysis for these RRs. The rating for USG is based on the company's leading market position in all of its business segments, strong brand recognition, low cost structure, its large manufacturing network and sizeable gypsum reserves. Risks include the cyclicality of the company's end markets, excess capacity currently in place in the U.S. wallboard industry, and volatility of wallboard pricing and shipments. The Negative Outlook for USG reflects a more challenging outlook for housing, the home improvement and non-residential construction sectors during the balance of 2009. Net sales of $829 million for the second quarter (ended June 30, 2009) declined 33.7% year-over-year as the housing, home improvement and commercial markets continued to deteriorate. Gross margins for the quarter were relatively flat at 6.15% compared with 6.08% during the second quarter of 2008. During the current quarter, selling, general and administrative expenses decreased by $22 million year-over-year but increased as a percentage of sales by 120 basis points to 8.7%. The company reported a pre-tax loss of $76 million, compared with a pre-tax loss of $59 million during the same period last year. For the first half of 2009, net sales of $1.69 billion are down 29.9% compared to the same period last year. Gross margins year-to-date are up 80 bps to 5.85% while SG&A as a percentage of sales increased 90 bps to 9%. USG reported a pre-tax loss of $150 million during the June 2009 year-to-date period compared with a pre-tax loss of $133 million during the first six months of 2008. Despite weak demand, USG has been able to increase wallboard prices for the third consecutive quarter (on a year- over-year basis) after prices declined for seven straight quarters starting in the first quarter of 2007. Management indicated that it has announced a 10% price increase for the month of August. While the company has been successful in modestly raising wallboard prices, further pricing increases may be difficult to achieve given the continued low demand. USG's average wallboard price declined slightly on a sequential basis in the June 2009 quarter compared with the March 2009 quarter. The company currently has good liquidity, with approximately $495 million of cash and undrawn committed credit facilities as of June 30, 2009, comprised of $302 million in cash, availability of $167 million under its $500 million secured revolving credit facility and $26 million (U.S. dollar equivalent) of borrowing capacity under its newly negotiated CAD$30 million credit agreement. Proceeds from the new debt issuance will further improve the USG's liquidity and provide the company with added flexibility to fund its operations and navigate through the currently difficult operating environment. Established in 1902, USG Corporation is a vertically integrated manufacturer and distributor of building materials that are used in new residential, new commercial and repair & remodel construction as well as certain industrial products. VISTEON CORP: Cash Collateral Use Authorized Until Aug. 14 ---------------------------------------------------------- Judge Christopher S. Sontchi entered a fifth interim order allowing Visteon Corporation and its debtor affiliates access to cash collateral through August 14, 2009, or the expiration date in any notice of an event of default. The Court conditions the Debtors' use of the cash collateral pursuant to a three-week budget covering from July 31, 2009 through August 14, 2009. A full-text copy of the Budget is available for free at: http://bankrupt.com/misc/Visteon_814Budget.pdf A full-text copy of the Fifth Interim Cash Collateral Order is available for free at: http://bankrupt.com/misc/Visteon_5thInterimCashColl.pdf A hearing to consider final approval of the Cash Collateral Motion will be held on August 13, 2009. Parties-in-interest have until August 10, 2009, to file any objection. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The Company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. About Visteon Corp Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: To Pay More for LERA & Maquiladora Programs --------------------------------------------------------- To recall, the Bankruptcy Court authorized Visteon Corp. and its affiliates to pay prepetition obligations owing to foreign affiliates on account of the Legal Equity Restructuring Program and the Maquiladora Program up to an aggregate of $92,000,000. The Debtors relate after further reconciliation, they have discovered that prepetition payables totaling $114,000,000 were owing to the LERA participants as of the Petition Date, not $80,000,000 as previously sought. With respect to the Maquiladora Program, the Debtors have determined they underestimated the liquidity needs of the Maquiladora participants. Accordingly, the Debtors sought and obtained permission from Judge Sontchi to pay an additional $34,000,000 on account of the LERA Program and an additional $12,000,000 on account of the Maquiladora Program. Under the LERA Program, Debtor Visteon Electronics Corporation serves as a counterparty to and manages customer relationships and financial transactions for sales to certain of the Debtors' European customers. Five of the Debtors' European affiliates participate in the LERA Program as contract manufacturers. They are: (a) Visteon Portuguesa Ltd.; (b) Cadiz Electronica S.A.U.; (c) Visteon Sistemas Interiores Espana S.L.U.; (d) Visteon Hungary KFT; and (e) Visteon Autopal S.R.O. The LERA Participants require payment of the outstanding prepetition amounts to continue to fund their working capital needs in the ordinary course of business. "By maintaining the LERA Program, the Debtors will maintain relations with the customers who are relying on the timely shipment of those goods from the LERA Participants," Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones, LLP, in Wilmington, Delaware, relates. "Moreover, the profits and savings generated by the LERA Program will continue to flow up to the Debtors' estates," he adds. Mr. Billion told the Court that maintaining the LERA Program will likely reduce any run on the European cash pool by the LERA Participants, each of which participates in the European Cash Pool. The European Cash Pool involves Visteon Corporation and various Foreign Affiliates making revolving loans to and, in the case of the Foreign Affiliates, borrowing from Visteon Netherlands Holdings B.V., which acts as an internal banker for those transactions. On the other hand, the Maquiladora Program is a similar program for the benefit of Visteon's foreign affiliates in Mexico. The participants in the Macquiladora Program are: * Coclisa S.A. de C.V; * Carplastic S.A. de C.V.; * Altec Electronica Chihuahua, S.A. de C.V.; * Aeropuerto Sistemas Automotrices S. de R.L. de C.V.; * Climate Systems Mexicana, S.A. de C.V.; * Visteon Mexico S. de R.L.; and * Grupo Visteon S. de R.L. de C.V. Mr. Billion stated that without payments to the Maquiladora Program, the Maquiladora participants may not be able to satisfy their obligations owing to customers, which would have a direct negative impact on the Debtors' global enterprise. He added that failure to honor the Debtors' obligations under the Maquiladora Program could result in the insolvency of one or more of the Maquiladora participants under applicable Mexico law. About Visteon Corp Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: To Enter Into Indemnity Agreement with Travelers -------------------------------------------------------------- Visteon Corp. and its affiliates use surety bonds to secure a variety of obligations incurred in the ordinary course of business like customs duties and excise taxes imposed by U.S. and Canadian authorities. Prior to the Petition Date, the Debtors maintained surety bond programs with two providers, Travelers Casualty and Surety Company of America and Western Surety. Travelers issued seven surety bonds on the Debtors' behalf to various U.S. and Canadian customs authorities and to the state of Indiana. Pursuant to a Prepetition Indemnity Agreement, the Debtors agreed to indemnify and reimburse Travelers in the event bond beneficiaries obtained payment from Travelers on account of Prepetition Travelers Bonds. The Debtors relate that as of July 27, 2009, the outstanding face value of the seven Prepetition Travelers Bonds is $3,800,000. According to the Debtors, Travelers' obligations under those Bonds are fully secured by the letter of credit amounting to $3,800,000. Moreover, as of July 27, 2009, no beneficiaries under the Prepetition Travelers Bonds have drawn down on their bonds and Travelers has not drawn on the letter of credit. The Debtors, however, anticipate that they will need Travelers to issue new surety bonds between September 2009 and March 2010 for an aggregate total of approximately $3,700,000. However, the Debtors note, Travelers said it will not renew or issue new surety bonds until the Debtors agree to enter into the Postpetition Indemnity Agreement. Accordingly, by this motion, the Debtors seek the Court's authority to enter into a general contract of indemnity with Travelers for the issuance of additional surety bonds, renewals, or reinstatements of any prepetition Travelers Bonds and to maintain their surety bond program with Travelers. The parties' Postpetition Indemnity Agreement affirms the Debtors' obligations pursuant to the Prepetition Indemnity Agreement with respect to preexisting and new surety bonds issued by Travelers. The Postpetition Indemnity Agreement provides, in relevant part, that the Debtors agree to: (a) pay all premiums for each new bond issued by Travelers until each bond has been fully discharged; (b) indemnify and exonerate Travelers from and against any and all losses and expenses, including interest, court costs, and counsel fees; and (c) promptly reimburse Travelers for all sums paid on account of losses and expenses and deposit with Travelers on demand funds sufficient to meet all of Travelers' liabilities arising from any bonds issued whether or not any payment for that loss has been made. The Postpetition Indemnity Agreement also allows Travelers to retain the proceeds of any letter of credit issued by the Debtors until Travelers has received a written release from the Debtors in form and substance satisfactory to Travelers with respect to all surety bonds. A full-text copy of the Travelers Postpetition Indemnity Agreement is available for free at: http://bankrupt.com/misc/679_MoTravelersIndemnity.pdf About Visteon Corp Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Gets Nod Severance & Retention Programs on 2nd Try ---------------------------------------------------------------- Representing Visteon Corp. and its affiliates, Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, noted in a counsel certification that the Bankruptcy Court issued oral rulings at a July 16, 2009 hearing, denying the Debtors' request for the implementation of Severance and Retention Programs. Mr. Billion said the Court specifically: -- denied the Non-Insider Retention Program, without prejudice; and -- denied that part of the Severance Program pertaining to "insiders," with prejudice, and denied that part of the Severance Program pertaining to "non-insiders," without prejudice. Accordingly, the Debtors submitted a proposed order to reflect the Court's oral rulings. The Court has not signed the proposed order. Moreover, Mr. Billion relates that the Debtors presented evidence to support their Severance and Retention Programs Motion at the July 16 hearing. The Debtors offered the testimony of William Quigley, Visteon Corporation's Executive Vice President and CFO, and of Douglas Friske, a managing principal of Towers Perrin who advised the Debtors regarding their proposed Severance and Non- Insider Retention Programs. In summary, Mr. Quigley testified that the Debtors developed the proposed Severance and Retention Programs in response to various negative economic developments, including substantial reductions in force, reduced compensation, shortened work schedules and other efforts to restructure their business culminating in the pending Chapter 11 proceedings. The proposed programs, as Mr. Quigley testified, are intended to address anxiety among the Debtors' employees regarding their financial security, to encourage them to focus on the company's business and its reorganization and, with respect to critical employees identified by senior management, to incentivize them to remain at Visteon throughout the restructuring process. On the other hand, Mr. Friske testified, based on his analysis of market data, that the proposed Severance Program, in terms of the structure of benefit levels and tiering of employees based on their positions in the organization, was consistent with market practices and reasonable. Mr. Friske further testified that the proposed Retention Program, in terms of its benefit levels, timing of payments, number of individuals covered, and total projected payout, was also consistent with market practices. The Official Committee of Unsecured Creditors stated on the record at the hearing that they carefully studied the proposed Programs and fully support Court approval of them. Only the UAW made an objection, saying there may be other employees of the Debtors who satisfy the Section 101(31)(B) definition of "insider." The UAW, however, offered no evidence to support its arguments. In its oral ruling, the Court indicated that the Debtors had submitted uncontradicted evidence that their proposed Severance and Retention Programs were within the scope of their business judgment. The Court also indicated in its oral ruling that it would allow for a subsequent record to be developed on who is insider and who is not an insider and specifically whether under the proposed programs no one else is included as an officer. Accordingly, the Debtors filed a renewed motion on July 22, 2009, for authority to implement the proposed Severance and Retention Programs. In response to the Court's oral ruling and its comments regarding the need for further evidence demonstrating that the 12 "insiders" identified in the Debtors' Motion to Implement Severance and Retention Programs are "insiders" only for the purposes of Section 101(31)(B) of the Bankruptcy Code, the Debtors undertook a searching examination of the nature and scope of the duties and responsibilities of approximately 66 of their most senior employees. The results of that examination are summarized in a declaration Visteon Corporation Vice President of Human Resources Dorothy Stephenson presented to the Court, a full-text copy of which is available for free at: http://bankrupt.com/misc/Visteon_StephensonDecl.pdf Ms. Stephenson avers that the 12 board-elected officers of Visteon are, individually or together, solely responsible for setting overall corporate policy governing all phases of the Debtors' business. The Officers' discretion in making policy and disposing of corporate assets is carefully circumscribed in order to ensure that those officers elected by the board remain fully and finally responsible for the company's affairs. The Debtors identified their 12 board-elected officers as "insiders": Officer Designation ------- ----------- Donald Stebbins Chairman and CEO William Quigley Executive Vice President and CFO Dorothy Stephenson Senior Vice President, Human Resources John Donofrio Senior Vice President, General Counsel Steven Meszaros Vice President and President, Electronics Product Group Joy Greenway Vice President, Corporate Controller and Chief Accounting Officer Michael Widgren Vice President, Corporate Controller and Chief Accounting Officer James Sistek Vice President, Information Technology Eric Sachs Vice President, Treasurer and Chief Tax Officer Julie Fream Vice President, North American Customer Groups and Communications Michael Lewis Assistant Treasurer Heidi Sepanik Corporate Secretary The Debtors tell the Court that as a result of their evaluation, they have determined that none of their 10 employees at the Executive Leader Incentive Level is an "insider." The Executive Leader Incentive Level Employees are: 1. Randall Sanders as VP of the Ford Customer Group; 2. Glenda Minor as VP and Controller for the Interiors Product Group; 3. Asaf Farashuddin as VP for Corporate Strategy; 4. in-house counsel Janet Witkowski; 5. in-house counsel Michael Sharnas; 6. in-house counsel Sherisse Fiorvento 7. Sunil Bilolikar as director of the Electronics Product Group Operation; 8. Barbara Quilty as director for Global Compensation and Benefits; 9. Daniel Linder as director for Interior Product Group, Electronics Product Group and Lighting in Asia; and 10. Robert Pyle as general manager of Yanfeng Visteon, a 50-50 joint venture between Visteon and Shanghai Industry Automotive Corporation. The Debtors also aver that that none of their 44 Senior Director and Director Incentive Level Employees is an "insider." A complete list of the Debtors' 44 Senior Directors is available for free at http://bankrupt.com/misc/Visteon_44Directors.pdf * * * Accordingly, Judge Sontchi permits the Debtors to honor their obligations under the Non-Insider Severance and Retention Programs provided that: (a) no "insider" will be eligible to participate in either Programs; (b) the severance benefits of the Debtors' executive leaders will be capped at nine months' base salary; (c) any payments made under the Non-Insider Retention Program will be credited against any amounts otherwise payable to the same employee under the Key Employee Incentive Plan by an equal amount; and (d) the Non-Insider Severance Program as it relates to employees assigned to Automotive Component Holdings LLC is subject to Ford Motor Company remaining committed to, and financially capable of, reimbursing the Debtors for those severance obligations. Judge Sontchi directs the Debtors to provide five business days' notice to the Official Committee of Unsecured Creditors and the Office of the U.S Trustee for the District of Delaware in advance of allocating currently unallocated Non-Insider Retention Program amounts to employees. About Visteon Corp Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VOUGHT AIRCRAFT: Boeing Completes Acquisition of SC Operations -------------------------------------------------------------- The Boeing Company yesterday announced the completion of the acquisition of the business and operations conducted by Vought Aircraft Industries at its South Carolina facility, where a key structure for the 787 Dreamliner is built. The acquisition agreement was announced originally on July 7. The newly acquired facility, located in North Charleston, will be called Boeing Charleston. Boeing Charleston will be managed by the 787 program as a wholly owned subsidiary. Boeing Charleston will continue to perform fabrication, assembly and systems installation for 787 aft fuselage sections, which are made primarily of composite materials. As reported by the Troubled Company Reporter on July 9, 2009, Moody's Investors Service affirmed Vought's B2 Corporate Family and Probability of Default ratings but placed the ratings for certain debt instruments under review for possible upgrade. The rating actions follow announcement of the deal. Moody's noted that the transaction is subject to lender approval for the release of collateral assets and determination of the extent of debt paydown. However, if completed as contemplated, proceeds from transaction should facilitate a meaningful reduction of senior secured indebtedness. It could also relieve Vought of the requirement for additional investment in working capital for the Dreamliner program, thereby improving its liquidity profile. The need to fund the working capital requirements for the 787 program, in conjunction with weaker overall earnings and cash flow, would likely have resulted in continued liquidity pressure over the coming quarters. The sale of the 787 operations and termination of the 787 Supply Agreement could reduce a major long-term revenue and earnings generating prospect for Vought. As part of the agreement Vought will enter into new long-term supply agreements pursuant to which it will be awarded additional volumes in Boeing's 737, 777, and for certain components in the 787 aircraft programs. These activities should help to mitigate downside risks, according to Moody's. Moody's believes that the company's B2 CFR and PDR ratings appropriately reflect the net balance of benefits and risks of the proposed transaction. Upon concluding the review of the instrument ratings, Moody's expects that the company's rating outlook could be negative until greater certainty about future earnings and cash flow prospects from the ongoing businesses are more clearly visible. Vought Aircraft Industries, Inc., headquartered in Dallas Texas and owned by The Carlyle Group, is one of the largest independent developers and producers of structural assemblies for commercial, military, and business jet aircraft. Vought had revenues of $1.8 billion in 2008. VSS ENTERPRISE: Court Says Managers Can be Liable for Unpaid Wages ------------------------------------------------------------------ Judy Greenwald at Businessinsurance.com reports that the 9th U.S. Circuit Court of Appeals in San Francisco ruled that managers can be held responsible for workers' unpaid wages under federal law, and that VSS Enterprises LLC's bankruptcy won't affect that obligation. Businessinsurance.com relates that three former Castaways Hotel, Casino and Bowling Center employees filed a lawsuit against the Company's CEO, chief financial officer, and labor relations manager for unpaid wages. According to the report, the CEO and chief financial officer were the casino's co-owners. Court documents say that the defendants, who didn't dispute their status as employers under the federal Fair Labor Standards Act, claimed that they had no duty to pay the wages when the casino converted from a Chapter 11 bankruptcy proceeding to Chapter 7 liquidation in February 2004. Businessinsurance.com states that the appeals court disagreed, saying that it "cannot see how it makes a difference one way or the other whether the Castaways was in Chapter 11 or Chapter 7. The Castaways is not a defendant, and the defendants are not debtors." The court said that previous case law "leaves no doubt" that "the Castaways bankruptcy has no effect on the claims against the individual managers at issue here." According to the court, the managers are "independently liable under the FLSA," as they were considered employers due to their exercise of "control over the nature and structure of the employment relationship." According to Businessinsurance.com, the case was remanded for further proceedings, and the appeals court affirmed the lower court's ruling that the managers weren't liable under Nevada state law. VSS Enterprises LLC dba The Castaways Hotel, Casino and Bowling Center filed for chapter 11 protection (Bankr. D. Nev. Case No. 03-17939) on June 26, 2003, represented by the law firm of Gordon & Silver, Ltd., in Las Vegas. The Debtor's Amended Schedules of Assets and Liabilities filed on July 25, 2003 -- see http://docs.bmcgroup.com/vss/docs/0115.pdf-- showed $67.5 million in assets and $33.9 million in liabilities. Station Casino purchased The Castaways' 26-acre site in 2004 for $33.7 million, and demolished the structures on the property in 2005. WENTWORTH HILLS: Secured Party to Sell Collateral on August 25 -------------------------------------------------------------- Potomac Realty Capital, LLC, secured party under a certain loan dated March 24, 2006, in the original amount of $1,143,000, will hold a public sale of the collateral securing the loan of Wentworth Hills Member, LLC, on August 25, 2009, at 3:00 p.m. at 305 Broadway, Suite 200, New York, NY 1007. The collateral to be sold consists of: (A) (i) all of Debtor's right, title and interest, whether now owned and existing or hereafter acquired or arising, as a member of (a) Wentworth Hills, LLC, a Massachusetts limited liability company, and (b) Wentworth Hills Property, LLC, a Massachusetts limited liability company, as set forth in the Operating Agreement of each LLC; (ii) all of Debtor's deposit accounts, accounts, general intangibles, contract rights, chattel paper, investment property, instruments, letter credit rights, fees and all rights to payment of Debtor which in any way relate to Debtor's interest in the LLCs, and all books, records, electronically stored data and information; (iii) all rights to receive all income, gain, profit, loss or other times allocated or distributed to the Debtor; and (B) (i) all of Sawyer Manager, Inc.'s right, title and interest, whether now owned and existing or hereafter acquiring or arising, as the sole shareholder of Wentworth Hills Manager, Inc., a Massachusetts corporation; (ii) all of Sawyer Manager, Inc.'s deposit accounts, accounts, general intangibles, contract rights, chattel paper, investment property, instruments, letter of credit rights, fees and all rights to payment of Sawyer Manager, Inc. which in any way relate to Sawyer Manager, Inc.'s interest in the corporation; and all books, records, electronically stored data and information; and (iii) all rights to receive all income, gain, profit, loss or other forms allocated or distributed to Sawyer Manager, Inc. by the corporation. Secured party says that Wentworth Hills LLC is believed to own the Wentworth Hills Golf Course in Plainville, Massachusetts, and that Mansfield Cooperative Bank has a first mortgage on the golf course. In addition, Wentforth Hills Property Operator, LLC, and/or Sawyer Manager, Inc., may have valuable contract rights or other interests relating to the operation of the golf course. XERIUM TECHNOLOGIES: Likely Breach Cues S&P to Junk Ratings ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Xerium Technologies Inc., including the long-term corporate credit rating, to 'CCC+' from 'B-'. The '3' recovery rating on the senior secured debt, indicating expectations of meaningful (50%- 70%) recovery in a default scenario, is unchanged. The outlook is negative. "The ratings downgrade is based on S&P's expectation of declining headroom under the company's leverage covenant and the increased likelihood of a breach in 2009," said Standard & Poor's credit analyst Sarah Wyeth. Xerium's covenants step down in 2009 and 2010. The company achieved a fifth amendment in May 2008 that allowed increased flexibility in its minimum interest coverage, fixed-charge, and total leverage ratio covenants, along with the ability to exclude certain exchange-rate fluctuations in calculating the total leverage ratio. However, S&P believes deteriorating end markets have affected the company's earnings and resulted in declining headroom. Xerium's debt (adjusted for operating leases) to EBITDA was about 6.1x as of March 31, 2009. "We could lower the rating further if the company cannot achieve an amendment to relieve pressure under its covenant, or if the company appears likely to initiate a restructuring or exchange of some kind, which S&P would view as tantamount to default," she continued. YOUNG BROADCASTING: Court OKs Gray to Manage 7 TV Stations ---------------------------------------------------------- Gray Television, Inc., said it has been selected to be a management advisor for seven television stations currently operated by Young Broadcasting, Inc.: -- WKRN-TV, Nashville, TN -- WTEN, Albany, NY (also includes WCDC-TV, North Adams, MA) -- WRIC-TV, Richmond, VA -- WBAY-TV, Green Bay, WI -- KWQC-TV, Davenport, IA -- KELO-TV, Sioux Falls, SD (also includes KCLO-TV, Rapid City, SD and KDLO-TV, Florence, SD and KPLO-TV, Reliance, SD) -- KLFY-TV, Lafayette, LA Gray will provide operational management services for the stations. "We anticipate promptly entering into a definitive management agreement for these services," Gray said. The Bankruptcy Court has already approved the agreement. The definitive agreement will provide Gray with a $2.2 million per year management fee and further provide Gray an opportunity to earn additional specified incentive fees if certain performance targets are exceeded. The management services are currently expected to be provided through December 31, 2012. Gray is looking forward to working with the management and employees of the Young Broadcasting TV stations. About Gray Television Gray Television, Inc. -- http://www.gray.tv/-- is a television broadcast company headquartered in Atlanta, GA. Gray currently operates 36 television stations serving 30 markets. Each of the stations are affiliated with either CBS (17 stations), NBC (10 stations), ABC (8 stations) or FOX (1 station). In addition, Gray currently operates 38 digital second channels including 1 ABC, 4 Fox, 7 CW, 16 MyNetworkTV and 1 Universal Sports Network affiliates plus 8 local news/weather channels and 1 "independent" channel in certain of its existing markets. About Young Broadcasting Young Broadcasting, Inc. -- http://www.youngbroadcasting.com/-- owns 10 television stations and the national television representation firm, Adam Young, Inc. Five stations are affiliated with the ABC Television Network (WKRN-TV -Nashville, TN, WTEN-TV - Albany, NY, WRIC-TV - Richmond, VA, WATE-TV - Knoxville, TN, and WBAY-TV - Green Bay, WI), three are affiliated with the CBS Television Network (WLNS-TV - Lansing, MI, KLFY-TV - Lafayette, LA and KELO-TV - Sioux Falls, SD), one is affiliated with the NBC Television Network (KWQC-TV - Davenport, IA) and one is affiliated with MyNetwork (KRON-TV - San Francisco, CA). In addition, KELO- TV- Sioux Falls, SD is also the MyNetwork affiliate in that market through the use of its digital channel capacity. The Company and its affiliates filed for Chapter 11 protection on February 13, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-10645). Jo Christine Reed, Esq., at Sonnenschein Nath & Rosenthal LLP, represents the Debtors in their restructuring efforts. Andrew N. Rosenberg, Esq., at Paul Weiss Rifkind Wharton & Harrison LLP, represents the official committtee of unsecured creditors as counsel. The Debtors selected UBS Securities LLC as consultant; Ernst & Young LLP as accountant; Epiq Bankruptcy Solutions LLC as claims agent; and David Pauker chief restructuring officer. The Debtors listed total assets of $575,600,070 and total debts of $980,425,190. * PBGC Pulls Deals With BlackRock, Goldman After Bidding Probed --------------------------------------------------------------- The U.S. Pension Benefit Guaranty Corp. has revoked fund- management contracts with BlackRock Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co.. The PBGC terminated the contracts as the former head of the agency, Charles E.F. Millard, a Bush administration appointee, is being investigated by Congress over his relationships with money managers, Carla Main at Bloomberg News said. The PBGC, which oversees pension plans of bankrupt companies, selected the three firms to manage $2.5 billion in private equity and real-estate assets. In December 2008, the PBGC announced that it has selected investment firms BlackRock, Goldman Sachs and J.P. Morgan as strategic partners to manage $2.5 billion in assets and provide support to PBGC's in-house investment staff. The PBGC's strategic partners will manage the PBGC's allocations to private equity and real estate, asset classes added to its portfolio under the diversified investment policy adopted February 2008 by the PBGC Board of Directors. "These new strategic partners will do much more than manage assets," said Director Charles Millard, in a December 2008 release. "Our strategic relationships will be long-term in nature, and will add tremendous value for the PBGC going forward." Eric Lipton at the New York Times reported that the PBGC permanently revoked the contracts with the three money-management firms after questions arose surrounding Mr. Millard's actions during the formal bidding process for contracts with the PBGC. A selection committee of three, including Mr. Millard, chose JPM, Goldman and BlackRock from among 16 bidders. However, according to Holly Rosenkrantz at Bloomberg, a draft report by the PBGC inspector general alleges that Millard had inappropriate communications with eight of 16 Wall Street firms that submitted bids. The New York Times relates that BlackRock and Goldman extensively wooed Mr. Millard into selecting them. The NYT said that BlackRock, assigned a high school classmate of Mr. Millard's to stay in close contact with him, and it made sure to place him next to its legendary founder, Laurence D. Fink, at a charity dinner at Chelsea Piers. A top executive at Goldman Sachs frequently called and sent e-mail messages, inviting Mr. Millard out to the Mandarin Oriental and the Ritz-Carlton in Washington, even helping him hunt for his next Wall Street job. According to Bloomberg, in response to the contract terminations, Bobbie Collins, a spokeswoman for BlackRock, said, "We are confident that neither the company nor any of its employees did anything improper or illegal." Goldman Sachs's research and analysis provided to the PBGC before the formal bidding process "were appropriate and encouraged under FAR 15.201," Andrea Raphael, a spokeswoman for the Company, stated, referring to Federal Acquisition Regulations. * U.S. Properties Worth $2.2 Trillion at Default Risk ----------------------------------------------------- Real Capital Analytics said that about $2.2 trillion of properties acquired or refinanced after this point in early 2004 have lost value since the transaction. Many of these properties, typically leveraged 70% to 80%, would face significant refinancing hurdles even if prices held firm, RCA said. It added that few lenders now are willing advance more than 50% to 60% of value. Robert M. White, Jr., in RCA's Capital Trends Monthly July '09, said that the equity in $1.3 trillion of properties is at great risk if not already wiped out since properties acquired or refinanced in 2006-2008 have seen prices declines of 25% or more. The analysis includes only office, industrial, apartment and retail properties of significant size. Hotels, land, other property types and smaller properties would add billions more to the total. Mr. White, president of RCA, added that property sales in so far in 2009 equates to just 7% of volume achieved at the peak in the first half of 2007. While sales volume this year barely registers on the graph, the jump in activity in June is clearly visible and may be an early signal that buyers are returning, lured by lower prices. According to Mr. White, the value of distressed properties has more than doubled so far in 2009. A total of $93 billion of office, industrial, retail, and apartment properties in the US have fallen into default, foreclosure or bankruptcy this cycle. Troubled hotels and other commercial property types add at least another $31 billion to the total. RCA also said that loans originated in 2007, the market peak, are seeing the highest levels of default although loans dating from 2004-2006 are also problematic and are likely to remain so as they reach maturity over the next few years. RCA is New York-based research firm. * Edward Albert Joins Macquarie Capital as Managing Director ------------------------------------------------------------ Edward Albert has joined Macquarie Capital (USA) Inc. as a Managing Director and co-New York office chief of Macquarie's Restructuring and Special Situations (RASS) Group. In his role, Mr. Albert will be a senior member of Macquarie's US restructuring team at a time when the group sees significant opportunities across a spectrum of industry sectors. Mr. Albert will work closely with Michael Bruder, co-New York office head, Mick Solimene in the team's Chicago practice and David Miller in Atlanta. The Group is active across a number of mandates advising companies, sponsors, creditors and other stakeholders on restructuring and related issues. Macquarie's RASS team comprises 35 executives in Chicago, New York, Los Angeles and Atlanta. This is augmented by Macquarie Capital's extensive global and regional presence, with 11 US locations and offices in all major global financial centers. Macquarie's RASS group advises companies, sponsors, creditors and other stakeholders regarding balance sheet restructurings, corporate finance transactions, strategic alternatives and mergers and acquisitions. Before joining Macquarie, Mr. Albert was a Managing Director at Fortress Investment Group in their Drawbridge Special Opportunities Fund. During his time at Fortress and in previous roles, Mr. Albert has led restructurings and negotiations or made investment decisions in over $50 billion of transactions both in and out of court. Before his employment at Fortress, he led the restructuring practice for Milestone Merchant Partners, held various positions in the restructuring practice at Ernst & Young Corporate Finance and also worked in the chief financial office of Marriott International. Mr. Albert holds an MBA from the University of Maryland and a BS from Rowan College of New Jersey. * Michael McMahon Joins Houlihan Lokey as Managing Director ----------------------------------------------------------- Houlihan Lokey said Michael McMahon has joined the firm as a Managing Director and head of the Financial Institutions Group. Prior to joining the firm, Mr. McMahon was a managing director and co-head of Diversified Financials at Morgan Stanley where he focused on specialty finance and alternative asset management companies. Mr. McMahon joins the existing team which is based in the New York office and will report to Bob Hotz and Scott Adelson, global co-heads of Investment Banking. Mr. McMahon's hire is the most recent of a number of high profile bankers that have joined Houlihan Lokey's Investment Banking business. While at Morgan Stanley, Mr. McMahon was one of the senior team leaders who advised the U.S. Treasury on the conservatorships of Fannie Mae and Freddie Mac. In addition, he advised Morgan Stanley on the sale of its own structured products business. Commenting on the hire, Mr. Hotz said, "In such a dynamic environment for financial institutions, it is crucial that clients have access to top advisors. Michael has a proven track record in this space and we are pleased to have him join our team and lead this effort. Michael has already established his presence at Houlihan Lokey, working with our Financial Restructuring Group in advising the Steering Committee of the Ad Hoc Noteholders on the $3.0bn rescue financing for CIT." Mr. McMahon added, "Today's clients require a full range of expertise and independent advice and Houlihan Lokey is a brand that is recognized as a leader in M&A, financial advisory and restructuring. In this challenging economic environment for financial institutions, this platform and its unique product set will allow me to provide our clients with exceptional service. I am excited to join the firm." Before Morgan Stanley, Mr. McMahon spent nearly ten years with the Global Financial Institutions Group at Credit Suisse/Donaldson, Lufkin & Jenrette, which has populated a number of firms on Wall Street with significant FIG talent. While at Credit Suisse, Mr. McMahon advised Westcorp/WFS Financial on its $4.3bn sale to Wachovia and Ford Motor Credit Corp. on the sale of its non-prime auto finance business. Prior to that, he was in the fixed income division of NatWest Securities/Greenwich Capital Markets. Mr. McMahon is a graduate of the University of Kentucky. He is registered with FINRA as a General Securities Representative (Series 7 and 63). About Houlihan Lokey Houlihan Lokey -- http://www.HL.com/-- an international investment bank, provides a wide range of advisory services in the areas of mergers and acquisitions, financing, financial restructuring, and valuation. The firm was ranked the No. 1 M&A advisor for U.S. transactions under $2 billion in 2008 and the No. 1 U.S. fairness opinion advisor over the past 10 years by Thomson Reuters. In addition, the firm advised in 11 of the 15 largest corporate bankruptcies and on over 500 restructuring transactions valued in excess of $1.25 trillion in the past 10 years. The firm has over 800 employees in 14 offices in the United States, Europe and Asia. * Three Former JPM Bankers Form Restructuring Firm CoveView ----------------------------------------------------------- Three finance professionals and former J.P. Morgan bankers -- Daniel P. Tredwell, Douglas V. Traver and Thomas M. Canning -- announced that they have formed CoveView Advisors LLC, a new "special situations" advisory firm established to provide corporate finance and restructuring advice to companies dealing with operational and financial difficulties. CoveView also intends to advise creditor groups. After taking over leadership of Heartland Industrial Partners, Dan Tredwell engineered the restructuring of Heartland's portfolio companies. With 23 years of private equity and capital markets experience, he has executed over 30 acquisitions, divestitures, and recapitalizations and currently sits on the boards of four companies in three continents. Doug Traver brings 27 years of experience with J.P. Morgan and its predecessor firms. Most recently, he was Co-Head of J.P. Morgan's Syndicated and Leveraged Finance Group where he focused on originating, structuring and underwriting loans and high yield securities. Before that he was Co-Chairman of the Financial Sponsor Group, responsible for senior investment banking coverage of large and mid-size private equity firms. Also a 27-year J.P. Morgan veteran, Tom Canning served as a Managing Director in the Restructuring Group and, before that, Co- Head of European Credit Risk Management and has extensive experience in capital markets transactions, including DIP financings, for stressed, distressed and Chapter 11 clients. These three CoveView executives will apply their complementary skills in complex finance, private equity, principal investing and restructuring to advise CoveView's clients and help them evaluate and optimize assets, access capital markets and navigate through all stages of restructuring if needed. "It's great to once again team up with Doug and Tom who each bring complementary and important skill sets to CoveView," said Dan Tredwell. "The entire team we have put together have hard-won experience that enables us to expertly address the issues facing both public and private companies in this challenging environment. We have the unique ability to provide management expertise, strategic guidance, and capital markets and restructuring advice to help companies capitalize on evolving market dynamics and deliver greater returns to stakeholders." "We will deliver our broad experience in capital markets and our complex situation skill set to clients," said Doug Traver. "We have a team of professionals that can understand a company's situation from each stakeholder's perspective and can tailor an appropriate solution." "We like to get involved early so that we can develop an out-of- court solution for a client," added Tom Canning. "If bankruptcy is the only answer, we have vast experience in guiding clients through that process as well." CoveView Advisors LLC -- http://www.coveviewadvisors.com-- is headquartered in Stamford, CT. * BOOK REVIEW: Rupert Murdoch: Creator of a Worldwide Empire ------------------------------------------------------------ Author: Jerome Tuccille Publisher: Beard Books Softcover: 304 pages List Price: $34.95 With his recent purchase of the Dow Jones Company, parent company of the Wall Street Journal, Rupert Murdoch added another piece to his global communications empire and again showed why he is the preeminent media mogul in the world. While many books have been written about Murdoch, Rupert Murdoch: Creator of a Worldwide Empire, is among the most enlightening because it was written in 1989 and chronicles Murdoch's activities during the 1980s, a critical period of time when he built his empire in the United States. It was a time when Murdoch "bought and sold properties with dizzying speed," notes the author. Two of the most notable acquisitions were his purchase of Twentieth Century Fox from Marvin Davis and the purchase of Triangle Publications from Walter Annenberg, but many other acquisitions are recounted in this fascinating book. It was also a time when Murdoch fiercely battled regulators, legislators, labor unions, competitors, and even public opinion. These battles are recounted also. In writing Rupert Murdoch: Creator of a Worldwide Empire, the author had access to a multitude of sources inside and outside the Murdoch organization, including Murdoch himself. Tucille demonstrates Murdoch's mastery at taking advantage of tax and financing techniques to borrow more than his rivals without diluting the value of his holdings. Murdoch's business acumen allowed him to continually outbid and outmaneuver the competition to compile a media conglomerate that, in the United States, includes The Boston Herald and The New York Post newspapers; New York, TV Guide, and Seventeen magazines; the HarperCollins publishing house, 20th Century Fox Film Corporation; the Fox television network, and numerous Fox television stations around the country. Murdoch's international assets include the Times of London newspaper and dozens of newspapers and magazines in his native Australia. Murdoch has often been compared to William Randolph Hearst, but Tucille counters that Murdoch is his own man and, in point of fact, has achieved a larger measure of success. At the time of this book's writing, Murdoch controlled a media empire of $12 billion. Hearst's holdings, adjusted to 1989 dollars, would be approximately $700 million. With the acquisition of The Wall Street Journal, Murdoch's combined news, entertainment and Internet enterprises (he also recently added the MySpace web site to his holdings) are now valued at $68 billion. Tucille dispels many of the myths about the man. The author finds Murdoch to be in the mold of the old publishing barons, who are motivated to construct an empire through savvy acquisitions and then by building readership and viewership. Murdoch does not acquire assets with the intent of breaking them down, disposing of them, and quickly turning a profit. He is a "builder" entrepreneur who makes his assets stronger and more valuable. Murdoch is also a risk-taker or, as some have characterized him, as a gambler extraordinaire who, through a combination of luck and good timing, has been able to build an empire although seemingly overpaying for assets. The author notes, however, that ". . . no one's luck lasts that long.Murdoch -- like most successful people -- makes his own luck through hard work and effort, by hiring the right people to do the job and replacing them quickly when they fail." Jerome Tuccille has written more than 20 books, including a biography of Alan Greenspan. ********* 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 **