/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090818.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, August 18, 2009, Vol. 13, No. 228 Headlines 10TH & VERMONT JOINT: Case Summary & 13 Largest Unsec. Creditors ACCREDITED HOME: Court Sets October 6 General Claims Bar Date ACCREDITED HOME: Wants Plan Filing Period Extended to October 30 ACCREDITED HOME: Panel Can Retain Elliott Greenleaf as Co-Counsel ACCREDITED HOME: Panel Can Retain Weiser LLP as Financial Advisors AGY HOLDING: S&P Puts 'B' Corp. Rating on CreditWatch Negative ALL AMERICAN PLAZAS: Closes Milton Unit After Bankruptcy Filing ALTRA NEBRASKA: Files for Chapter 11 to Sell Ethanol Facility AMERICAN COMMUNITY: Bank of Montreal Prefers Case Conversion AMERICAN INT'L: Board Amends By-laws on Appointment of Chairman AMERICAN INT'L: Discloses Stake in Various Companies AMERICAN INT'L: SEC Questioned Inconsistency on European Pacts ASARCO LLC: Parent's New Offer Guarantees 100 Cents on Dollar BALLY TOTAL: Amends Plan to Adjust Treatment of Voting Creditors BALLY TOTAL: Plan Gets Overwhelming Support From Creditors BELL DEVELOPMENT: Case Summary & 6 Largest Unsecured Creditors BLOCKBUSTER INC: Posts $36.9 Million Net Loss for July 5 Quarter BRANCIFORTE CREEK: Case Summary & 3 Largest Unsecured Creditors CONTINENTAL SOUTHERN: Case Summary & 20 Largest Unsec. Creditors COOPER-STANDARD: Opposes Cooper Tire Action in Canadian Case BANKUNITED FSB: $24MM Assets vs. $5.2BB Debts in Receivership BB&T CORP: Fitch Affirms 'B' Individual Rating After Colonial Buy BEARINGPOINT INC: Terminates CEO Edwin Harbach's Employment BIO-KEY INTERNATIONAL: June 30 Balance Sheet Upside-Down by $3MM BNY CONVERGEX: S&P Affirms 'B-' Local Currency Rating CADENCE INNOVATION: Seeks October 20 Extension to File Plan CANWEST MEDIA: Noteholder Group Extends Forbearance to August 28 CAPMARK FINANCIAL: Halts Voluntary Filings with SEC CAPMARK FINANCIAL: Inks Letter Agreement with CFO & EVP Arnold CEDAR FUNDING: Ch. 11 Trustee Probing for Claims Against Advisors CHRYSLER LLC: Creditors' Panel Seeks Billions From Daimler CIT GROUP: Has $1.68-Bil. Q2 Loss; Pushes Out-of-Court Plan CIT GROUP: Tender Offer Expires, Meets Minimum Condition CITIZENS REPUBLIC: Fitch Downgrades Issuer Default Rating to 'B+' COLONIAL BANCGROUP: Fitch Downgrades Issuer Default Rating to 'D' COMMERCECONNECT MEDIA: Taps Curtis Mallet-Prevost as Attorneys COMMERCECONNECT MEDIA: Proposes Richard Layton as Co-Counsel COMMERCECONNECT MEDIA: Selects Miller Bucker as Investment Banker COOPER-STANDARD: Opposes Cooper Tire Action in Canadian Case COOPER-STANDARD: Proposes A&M as Restructuring Adviser COOPER-STANDARD: Sec. 341 Meeting Of Creditors on Sept. 10 COOPER-STANDARD: U.S. Trustee Forms 7-Member Creditors Committee CUSTOM WOODWORKS: Case Summary & 2 Largest Unsecured Creditors CYTOMEDIX INC: PwC Says Recurring Losses Cued Going Concern Doubt CYTORI THERAPEUTICS: June 30 Balance Sheet Upside-Down by $880,000 DELPHI CORP: Enters Into Liquidity Pact Amendment with GM DELPHI CORP: Exhaust Business Sale to Bienes Turgon Completed DELPHI CORP: Non-Material Changes to GM Master Disposition Pact DELPHI CORP: Proposes to Sell Interest in PBR Joint Venture DELPHI CORP: Reports $603 Million Net Loss in Second Quarter DETROIT PUBLIC SCHOOL: Buckles Under $260 Million Deficit DOLE FOOD: Second Quarter Income Drops to $21.2 Million DOLE FOOD: Fitch Gives Positive Outlook on $500 Mil. Offering DOVER MOTORSPORTS: Seeks Waiver from Q3 Covenants Violations E*TRADE FINANCIAL: S&P Puts Junk Ratings on CreditWatch EDDIE BAUER: Panel Taps ASK Financial to Do Preference Analysis EDDIE BAUER: Hires Brent Kugman as Chief Restructuring Officer ELIZABETH ARDEN: S&P Downgrades Corporate Credit Rating to 'B+' EMISPHERE TECH: Available Cash to Last Only Through August 2009 ESCADA AG: S&P Downgrades Corporate Credit Rating to 'D' ESCADA AG: U.S. Unit Wants Schedules Deadline Moved to Sept. 28 ESCADA AG: U.S. Unit Proposes O'Melveny as Ch. 11 Counsel ESCADA AG: U.S. Unit Proposes Kurtzman as Claims Agent FAIRFAX FINANCIAL: Fitch Assigns 'BB+' Rating on Senior Notes FORTRESS INVESTMENT: Posts $171MM Net Loss in Qrtr. Ended June 30 FRIEDMAN'S INC: Crescent Jewelers Name Will be Sold by CONSOR GENERAL MOTORS: Finalizes Deal to Sell Swedish Unit Saab GENERAL MOTORS: Loan Guarantees Conditional on Opel Sale to Magna GEORGIA GULF: Cures Going Concern Doubt, Complies with Covenant GEORGIA-PACIFIC LLC: S&P Puts 'BB-' Rating on CreditWatch Positive GLOBAL SHIP: To Default on Loan Facility Aug. 31 Absent Waiver GOODY'S LLC: Plan Admin Seeks to Recover $17 Mil. From CIT Group GUARANTY FINANCIAL: No Longer Expects to Continue as Going Concern GRUBB & ELLIS: Posts $32 Million Net Loss in Quarter Ended June 30 HAGERSTOWN HOTEL: Files for Chapter 11 to Dodge Foreclosure HAIGHTS CROSS: Extends Private Exchange Offer Until August 21 HEIDTMAN MINING: Court Sets October 15 General Claims Bar Date HEIDTMAN MINING: Gets Final Nod to Obtain $600,000 Loan from R & R HEIDTMAN MINING: U.S. Trustee Forms 5-Member Creditors' Panel HEIDTMAN MINING: Files Schedules of Assets and Liabilities HERBST GAMING: May Emerge From Chapter 11 Bankruptcy This Year HEXION SPECIALTY: S&P Cuts Ratings on Various Debentures to 'D' HYTHIAM INC: Discloses Going Concern Doubt Due to Neg. Cash Flows INDALEX HOLDINGS: Court Extends Plan Filing Period to October 16 INN OF THE MOUNTAIN: Moody's Downgrades Default Rating to 'Ca/LD' INTERLAKE MATERIAL: Court Approves Private Sale of JDM Business INTERLAKE MATERIAL: Court Confirms 2nd Amended Liquidating Plan INTERMET CORP: Lenders Extend Sale Deal Deadline to Aug. 24 INTERMET CORP: Proposes Dissolution Beyond Plan Effective Date INTERMET CORP: Asks Court to Approve Settlement with PBGC I/OMAGIC CORP: June 30 Balance Sheet Upside-Down by $2 Million JEFFERIES GROUP: S&P Affirms BB+ Preferred Stock Rating JEFFREY ROBERT QUACKENBUSH: Voluntary Chapter 11 Case Summary JER INVESTORS: Posts $27 Million Net Loss in Quarter Ended June 30 KENNETH HUEY FAMILY: Case Summary & 15 Largest Unsecured Creditors LAW OFFICES OF MASRY: Case Summary & 15 Largest Unsec. Creditors LEAR CORP: Releases 2nd Quarter Results on Form 10-Q LEAR CORP: Terms of Proposed Chapter 11 Plan LEAR CORP: To Seek Confirmation of Plan in November LEAR CORP: Treatment of Claims Under Chapter 11 Plan LEHMAN BROTHERS: U.K. Unit Had $48.8 Billion at Insolvency LEHMAN BROTHERS: FSA Findings in Structured Products Probe Delayed LEHMAN RE: Court Schedules Chapter 15 Hearing on September 9 LOUISIANA FILM: Misses Deadline to Answer Involuntary Bankr. Suit LOU PEARLMAN: Ponzi Victims Won't Face Clawback Suits LPL HOLDINGS: S&P Affirms B+ Counterparty Credit Rating MMC ENERGY: To Present Financials on Liquidation Basis NEW JERSEY HEALTHCARE: S&P Withdraws BB+ Rating on $11.94MM Bonds NII CAPITAL: S&P Affirms 'BB-' Rating on Senior Unsecured Notes NOVASTAR FINANCIAL: Posts $48.5 Million Net Loss for June 30 Qtr NPC INTERNATIONAL: Decline in Sales Won't Affect S&P's 'B' Rating NYC OFF-TRACK BETTING: Faces Insolvency, State Comptroller Says OPUS WEST: Files Schedules of Assets & Liabilities OPUS WEST: Files Statement of Financial Affairs OPUS WEST: Opus West LP Files Schedules of Assets & Debts OPUS WEST: Opus West LP Files Statement of Financial Affairs PARMALAT SPA: Four Deutsche Bank Execs to Stand at Italy Trial PARMALAT SPA: Judge Drain Extends U.S. Injunction Until Sept. 23 PARMALAT SPA: Multidistrict Litigation to Commence Oct. 13 PARMALAT SPA: Records EUR228.6 Million Profit in 1H of 2009 PEMGROUP: Offshore Entity Must be Under Receivership, Court Says PILGRIM'S PRIDE: Court OKs $100MM Reduction of DIP Facility PILGRIM'S PRIDE: Court OKs Syndication of $1.65 Bil. Exit Pact PILGRIM'S PRIDE: Members of Fee Review Committee Named PRIMUS TELECOM: Reports $25.47-Mil. Net Income for Q2 PROPEX INC: Proposes Expedited Settlement with PBGC RANDA LUGGAGE: Launches New Men's Lines & Distribution Center READER'S DIGEST: To Implement Equity-for-Debt Plan Through Ch. 11 REPROS THERAPEUTICS: May Need to Seek Bankruptcy Protection RIVER ROAD: Sends InterContinental Chicago O'Hare in Ch. 11 RIVIERA HOLDINGS: June 30 Balance Sheet Upside-Down by $73 Million RUTH JONES: Case Summary & 20 Largest Unsecured Creditors SCHOLL FOREST: Case Summary & 20 Largest Unsecured Creditors SEAQUEST DIVING: Circuit Court Approves $2.7MM Claim Subordination SIMMONS CO: Bank Lenders, Noteholders Move Forbearance to Aug. 31 SKINS INC: Files for Chapter 7 Liquidation in Delaware SPANSION INC: Court Won't Force Opening of Books to Tessera SPANSION INC: Suspends Memorandum of Understanding With ASE SPORTSMAN'S WAREHOUSE: Emerges From Chapter 11 Bankruptcy STAMFORD INDUSTRIAL: Defers $1-Mil. Payment on Credit Agreement TEMECULA VALLEY BANCORP: May Delay Ch. 7 Filing to Next Month TERPHANE HOLDING: Moody's Withdraws All 'Caa3' Ratings UBS AG: U.S. Extends Tax Probe to Hong Kong UCBH HOLDINGS: Fitch Downgrades Issuer Default Rating to 'CC' VISTEON CORP: Court OKs Cash Collateral Until September 9 VISTEON CORP: Creditors Committee Supports Retiree Benefits Halt VISTEON CORP: Proposes Alston & Bird AS Litigation Counsel VISTEON CORP: Proposes to Settle Avoidance Claims vs. Alston WAVE SYSTEMS: June 30 Balance Sheet Upside-Down by $5.69 Million WCI COMMUNITIES: Proposes Chetrit as Lead Bidder for Pompano Condo WILLIAMS COAL: Has Distributable Income of $1.68MM for Q2 YRC WORLDWIDE: S&P Affirms 'CCC' Corporate Credit Rating * Chinese Auto Suppliers Likely to Emerge as Global Consolidators * Farm Values Rebound in Central U.S., Kansas City Fed Says * Station Casinos, Cooper-Standard Led Bankruptcies Since Mid-July * CSC Launches Bankruptcy Tracking Service to Help Limit Losses * Ellsworth Joins Kurtzman as Part of Administar Consolidation * Former Greenberg Taurig Shareholder Joins Alston & Bird * Margolis and Marcum to Join Forces Effective September 1 * Large Companies With Insolvent Balance Sheets ********* 10TH & VERMONT JOINT: Case Summary & 13 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: 10th & Vermont Joint Venture Limited Partnership 6000 Laurel Bowie Road, Suite 100 Bowie, MD 20715 Bankruptcy Case No.: 09-00700 Chapter 11 Petition Date: August 14, 2009 Court: United States Bankruptcy Court United States Bankruptcy Court for the District of Columbia (Washington, D.C.) Judge: Bankruptcy Judge S. Martin Teel, Jr. Debtor's Counsel: Keith R. Havens, Esq. Havens & Associates, LLC 2401 Research Boulvard, Suite 308 Rockville, MD 20850 Tel: (301) 947-3330 Fax: (301) 947-4497 Email: KRHEsq@aol.com Total Assets: $1,200,055 Total Debts: $1,165,699 A full-text copy of the Debtor's petition, including a list of its 13 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/dcb09-00700.pdf The petition was signed by Aaron B. Ruderman. ACCREDITED HOME: Court Sets October 6 General Claims Bar Date ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has established October 6, 2009, at 5:00 p.m. as the general bar date for the filing of proofs of claim in Accredited Home Lenders Holding Co., et al.'s bankruptcy cases, and October 28, 2009, at 5:00 p.m., as the bar date for the filing of proofs of claim with respect to governmental units. Proofs of claim must be filed so as to be received on the applicable bar dates, by either mail or by hand, courier, or overnight service, addressed to AHL Claims Processing Center c/o Kurtzman Carson Consultants LLC, 2335 Alaska Avenue, El Segundo, CA 90245. Accredited Home Lenders Holding Co. -- http://www.accredhome.com/ -- was a mortgage banker servicing U.S. markets for conforming and non-prime residential mortgage loans operating throughout the U.S. and in Canada. Founded in 1990, the Company is headquartered in San Diego. The Company was acquired by Lone Star Funds for $300 million in October 2007. Lone Star also owns Bruno's Supermarkets LLC and Bi-Lo LLC, two grocery retailers in Chapter 11. Accredited Home and its affiliates filed for Chapter 11 on May 1, 2009 (Bankr. D. Del. Lead Case No. 09-11516). Gregory G. Hesse, Esq., Lynnette R. Warman, Esq., and Jesse T. Moore, Esq., at Hunton & William LLP, represent the Debtors as counsel. Laura Davis Jones, Esq., James E. O'Neill, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as Delaware counsel. Kurtzman Carson Consultants is the Debtors' claims agent. Andrew I Silfen, Esq., Schuyler G. Carroll, Esq., Robert M. Hirsch, Esq., at Arent Fox LLP in New York, and Jeffrey N. Rothleder, Esq., at Arent Fox LLP in Washington, DC, represent the official committee of unsecured creditors as co-counsel. Neil R. Lapinski, Esq., and Shelley A. Kinsella, Esq., at Elliott Greenleaf, represent the Committee as Delaware and conflicts counsel. According to its bankruptcy petition, Accredited Home's assets range from $10 million to $50 million and its debts from $100 million to $500 million. ACCREDITED HOME: Wants Plan Filing Period Extended to October 30 ---------------------------------------------------------------- Accredited Home Lenders Holding Co. and its affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive period to file a plan to October 30, 2009, and their exclusive period to solicit acceptances thereof to December 31, 2009. The Debtors tell the Court that they have not had sufficient time to work with the present official committee of unsecured creditors on negotiating a plan. Additionally, the Debtors relate that the Committee was only appointed on June 16, 2009, and its composition has changed twice since it was formed. About Accredited Home Accredited Home Lenders Holding Co. -- http://www.accredhome.com/ -- was a mortgage banker servicing U.S. markets for conforming and non-prime residential mortgage loans operating throughout the U.S. and in Canada. Founded in 1990, the company is headquartered in San Diego. The Company was acquired by Lone Star Funds for $300 million in October 2007. Lone Star also owns Bruno's Supermarkets LLC and Bi-Lo LLC, two grocery retailers in Chapter 11. Accredited Home and its affiliates filed for Chapter 11 on May 1, 2009 (Bankr. D. Del. Lead Case No. 09-11516). Gregory G. Hesse, Esq., Lynnette R. Warman, Esq., and Jesse T. Moore, Esq., at Hunton & William LLP, represent the Debtors as counsel. Laura Davis Jones, Esq., James E. O'Neill, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as Delaware counsel. Kurtzman Carson Consultants is the Debtors' claims agent. Andrew I Silfen, Esq., Schuyler G. Carroll, Esq., Robert M. Hirsch, Esq., at Arent Fox LLP in New York, and Jeffrey N. Rothleder, Esq., at Arent Fox LLP in Washington, DC, represent the official committee of unsecured creditors as co-counsel. Neil R. Lapinski, Esq., and Shelley A. Kinsella, Esq., at Elliott Greenleaf, represent the Committee as Delaware and conflicts counsel. According to its bankruptcy petition, Accredited Home's assets range from $10 million to $50 million and its debts from $100 million to $500 million. ACCREDITED HOME: Panel Can Retain Elliott Greenleaf as Co-Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted the official committee of unsecured creditors of Accredited Home Lenders Holding Co., and its affiliates, permission to retain Elliott Greenleaf as co-counsel, nunc pro tunc to May 1, 2009. Elliott Greenleaf will serve as the Committee's Delaware counsel and conflicts counsel. Hourly rates of the firm are: Rates ----- Rafael X. Zahralddin-Aravena $575 Henry F. Siedzikowski $565 Brian R. Elias $260 Neil R. Lapinski $375 William M. Kelleher $400 Shelley A. Kinsella $385 Jeffrey M. Rigby $225 Elizabeth A. Williams $210 Kristin A. McCloskey $200 Aron M. Pillard $200 Jessi A. Adkins $200 Phillip Giordano $175 About Accredited Home Accredited Home Lenders Holding Co. -- http://www.accredhome.com/ -- was a mortgage banker servicing U.S. markets for conforming and non-prime residential mortgage loans operating throughout the U.S. and in Canada. Founded in 1990, the company is headquartered in San Diego. The Company was acquired by Lone Star Funds for $300 million in October 2007. Lone Star also owns Bruno's Supermarkets LLC and Bi-Lo LLC, two grocery retailers in Chapter 11. Accredited Home and its affiliates filed for Chapter 11 on May 1, 2009 (Bankr. D. Del. Lead Case No. 09-11516). Gregory G. Hesse, Esq., Lynnette R. Warman, Esq., and Jesse T. Moore, Esq., at Hunton & William LLP, represent the Debtors as counsel. Laura Davis Jones, Esq., James E. O'Neill, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as Delaware counsel. Kurtzman Carson Consultants is the Debtors' claims agent. Andrew I Silfen, Esq., Schuyler G. Carroll, Esq., Robert M. Hirsch, Esq., at Arent Fox LLP in New York, and Jeffrey N. Rothleder, Esq., at Arent Fox LLP in Washington, DC, represent the official committee of unsecured creditors as co-counsel. Neil R. Lapinski, Esq., and Shelley A. Kinsella, Esq., at Elliott Greenleaf, represent the Committee as Delaware and conflicts counsel. According to its bankruptcy petition, Accredited Home's assets range from $10 million to $50 million and its debts from $100 million to $500 million. ACCREDITED HOME: Panel Can Retain Weiser LLP as Financial Advisors ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has granted the official committee of unsecured creditors of Accredited Home Lenders Holding Co., and its affiliates, permission to retain Weiser LLP as its financial advisors, nunc pro tunc to June 23, 2009. Weiser is conducting financial investigations that are necessary and appropriate to the Chapter 11 proceedings and is providing assistance, including, but not limited to, analyzing the Debtors' assets and liabilities, analyzing asset sales proposed by the Debtors, and analyzing the Debtors' prepetition and postpetition financing. The billing rates for services rendered by Weiser's professionals are: Partners/Directors $350-$550 Senior Managers/Managers $240-$420 Seniors/Assistants $120-$300 Paraprofessionals $70-$140 About Accredited Home Accredited Home Lenders Holding Co. -- http://www.accredhome.com/ -- is a mortgage banker servicing U.S. markets for conforming and non-prime residential mortgage loans operating throughout the U.S. and in Canada. Founded in 1990, the company is headquartered in San Diego. The Company was acquired by Lone Star Funds for $300 million in October 2007. Lone Star also owns Bruno's Supermarkets LLC and Bi-Lo LLC, two grocery retailers in Chapter 11. Accredited Home and its affiliates filed for Chapter 11 on May 1, 2009 (Bankr. D. Del. Lead Case No. 09-11516). Gregory G. Hesse, Esq., Lynnette R. Warman, Esq., and Jesse T. Moore, Esq., at Hunton & William LLP, represent the Debtors as counsel. Laura Davis Jones, Esq., James E. O'Neill, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as Delaware counsel. Kurtzman Carson Consultants is the Debtors' claims agent. Andrew I Silfen, Esq., Schuyler G. Carroll, Esq., Robert M. Hirsch, Esq., at Arent Fox LLP in New York, and Jeffrey N. Rothleder, Esq., at Arent Fox LLP in Washington, DC, represent the official committee of unsecured creditors as co-counsel. Neil R. Lapinski, Esq., and Shelley A. Kinsella, Esq., at Elliott Greenleaf, represent the Committee as Delaware and conflicts counsel. According to its bankruptcy petition, Accredited Home's assets range from $10 million to $50 million and its debts from $100 million to $500 million. AGY HOLDING: S&P Puts 'B' Corp. Rating on CreditWatch Negative -------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including its 'B' corporate credit rating, on AGY Holding Corp. on CreditWatch with negative implications. As of March 31, 2009 the company had about 205 million of adjusted debt (including the capitalized present value of operating leases). "The CreditWatch placement takes into account the meaningful deterioration in AGY's earnings in the second quarter in addition to heightened uncertainties about its business prospects over the next several quarters," said Standard & Poor's credit analyst Paul Kurias. S&P's concerns are based on preliminary second-quarter earnings recently announced by the company. The company reported negative EBITDA of $6 million for the second quarter, a significant deterioration from about $15 million of EBITDA achieved in the second-quarter of 2008. The company also reported a 51% decline in revenue relative to the second quarter of 2008. Revenues and earnings declined as a result of weakness in demand across all market segments. S&P is also concerned that liquidity has declined. Cash balances and availability under the revolving credit facility added up to $16 million as of June 30, 2009, down from $21 million as of March 31, 2009. In addition, S&P's CreditWatch placement follows the company's announcement that it expects to request a five-day extension from the SEC for filing its second quarter form 10-Q. The company expects to file its 10- Q by Aug. 19, 2009. Aiken, S.C.-based AGY and its operating subsidiaries manufacture glass yarns with varying degrees of specialization and technological complexity. The company's products are geared to niche, and sometimes customized, applications in end markets that include aerospace, defense, construction, and electronics. S&P will resolve the CreditWatch in the next few days when the company files its consolidated second-quarter financial results, including details of its recent $20 million acquisition of 70% of the shares of China-based E-glass manufacturer, Main Union Industrial Ltd, which closed in June 2009. S&P's review will include an assessment of AGY's earnings prospects in 2009 and beyond, including potential earnings from the acquisition; liquidity; and an evaluation of management's actions to offset the impact of a weak operating environment on earnings and liquidity. S&P will also weigh potential acquisition-related benefits to the business profile (including geographic diversification and additional earnings) against potential liabilities assumed, if any. S&P could lower its ratings if S&P expects EBITDA to weaken meaningfully from the levels of approximately $50 million achieved in 2008, or if S&P anticipate that liquidity will decline from the current $16 million level. S&P could also lower ratings if leverage (total debt to EBITDA) appears likely to increase to the high-single-digits or beyond at year-end 2009, from the current 4x, with no near-term prospects for improvement. In addition, S&P could lower ratings if S&P determines that the acquisition will result in higher debt, which offsets potential earnings benefits and contributes to an increase in leverage. ALL AMERICAN PLAZAS: Closes Milton Unit After Bankruptcy Filing --------------------------------------------------------------- Wayne Laepple at The Daily Item reports that All American Plazas, Inc., has closed its Milton All American truck stop, after the Company filed for bankruptcy. According to The Daily Item, more than 100 workers were laid off. The Daily Item relates that one of the laid-off employees at the Milton site said that they were notified by telephone not to report to work until told otherwise. A security guard at the Milton plaza said that he was directed to tell workers and customers the truck stop would reopen in a week and that company officials had been meeting at the Valley site to develop a plan, the report states. The Daily Item notes that All American has closed nine similar truck stops in Pennsylvania, New York, and Virginia. New York-based All American Plazas, Inc. -- aka Doswell All American, Gables of Harrisburg, Milton All American, Clark Ferry All American, Gables of Carlisle, Belmont All American, Carneys Point All American, Strattanville All Amercican, Gables of Frytown, Breezewood All American, and Frystown All American -- filed for Chapter 11 bankruptcy protection on April 6, 2009 (Bankr. S.D. N.Y. Case No. 09-11809). Its debtor-affiliates -- Clarks Ferry Properties, Inc., and Frystown All American Properties Inc. -- filed separate Chapter 11 petitions on March 4, 2009. Robert R. Leinwand, Esq., at Robinson Brog Leinwand Greene Genovese & Gluck, assists the Debtors in their restructuring efforts. All American listed $1,000,001 to $10,000,000 in debts when it filed for bankruptcy. It didn't disclose its assets. ALTRA NEBRASKA: Files for Chapter 11 to Sell Ethanol Facility ------------------------------------------------------------- Altra Nebraska LLC filed for Chapter 11 before the U.S. Bankruptcy Court in Lincoln, Nebraska on August 13. According to Erik Larson at Bloomberg, Altra is planning to sell its half-finished ethanol facility after failing to get new financing. The Company listed debt of $86.3 million and assets worth as much as $50 million. Altra Nebraska LLC was building a $220 million ethanol production plant near Carleton, Nebraska, prior to its Chapter 11 filing. Alta Nebraska was a former unit of a former unit of biofuels firm Altra Inc. Lender Fourth Third LLC took over the unit following a foreclosure action. AMERICAN COMMUNITY: Bank of Montreal Prefers Case Conversion ------------------------------------------------------------ According to Carla Main at Bloomberg News, the Bank of Montreal, Chicago Branch, has objected to a request to dismiss American Community Newspapers LLC's Chapter 11 bankruptcy case. Bank of Montreal argues that dismissal of the Chapter 11 case is not in the best interests of the approximately 3% of remaining general unsecured creditors, who would benefit more from "conversion rather than dismissal" of the Debtor's case. As reported by the TCR on August 6, 2009, the official committee of unsecured creditors of American Community Newspapers has asked the Bankruptcy Court to dismiss the Chapter 11 case. The Committee argues that "the [D]ebtors' cases were never commenced with the intention or purpose of pursuing a Chapter 11 plan process." American Community had earlier asked the Court to convert its bankruptcy case to a liquidation under Chapter 7. The Debtor says that it has no funds to maintain its Chapter 11 case. American Community sold its assets in June. The secured lenders, owed $107 million on a term loan and revolving credit, acquired the assets for a $32 million credit against the loan. They also agreed to pay the cost of curing defaults on contracts they took over plus whatever was outstanding on the $5 million credit for Chapter 11 case that required a quick sale. Headquartered in Addison, Texas, American Community Newspapers LLC -- http://www.americancommunitynewspapers.com/-- had 86 newspapers, 14 other publications, and 85 Web sites serving Minneapolis-St. Paul, Dallas, suburban Washington and Columbus, Ohio. The Company's award winning group of 86 newspapers and fourteen niche publications reached approximately 1.4 million households in the suburban communities surrounding these major cities and enjoys market leading circulation penetration in all of its markets. The Company and four of its affiliates filed for Chapter 11 protection on April 28, 2009 (Bankr. D. Del. Lead Case No. 09-11446). Landis Rath & Cobb LLC and Lowenstein Sandler PC represents the Debtors in their restructuring efforts. The Debtors proposed Carl Marks & Co. Inc. as financial advisor, and Graubard Miller as special corporate counsel. When the Debtors filed for protection from their creditors, they listed assets between $50 million and $100 million, and debts between $100 million and $500 million. AMERICAN INT'L: Board Amends By-laws on Appointment of Chairman --------------------------------------------------------------- Effective August 10, 2009, the Board of Directors of American International Group, Inc., amended the By-laws of AIG to provide that the Chairman of the Board must be a director who is independent under the New York Stock Exchange listing standards, and to remove the position of Lead Independent Director. A full-text copy of AIG's Amended By-laws is available at no charge at http://ResearchArchives.com/t/s?420e As reported by the Troubled Company Reporter, AIG on August 3, said its Board elected Robert H. Benmosche as President, Chief Executive Officer and a Director of AIG. Mr. Benmosche assumed his new roles on August 10, when the current Chairman and CEO Edward M. Liddy retired. Also on August 3, Paula R. Reynolds informed AIG that she would resign as Vice Chairman and Chief Restructuring Officer of AIG effective late in the third quarter of 2009. On August 7, AIG reported net income attributable to AIG of $1.8 billion for the second quarter ended June 30, 2009. This includes net income attributable to AIG common shareholders of $311 million or $2.30 per diluted common share. AIG posted a net loss of $5.4 billion or $41.13 per diluted share in the second quarter of 2008. Second quarter 2009 adjusted net income was $2.0 billion, compared with an adjusted net loss of $1.3 billion in the second quarter of 2008. As of June 30, 2009, AIG had $830.4 billion in total assets and $767.2 billion in total liabilities. As of June 30, 2009, total equity was $62.1 billion, an $8.9 billion increase from $53.2 billion at March 31, 2009. The increase includes $1.8 billion of net income attributable to AIG, $5.7 billion of unrealized appreciation of investments, $1.2 billion from the drawdown of the Treasury Commitment related to the Series F Fixed Rate Non- Cumulative Preferred Stock, and $2.5 billion related to the implementation of FSP FAS 115-2, partially offset by a $3.3 billion reduction in non-controlling interests. During the first six months of 2009 and through July 31, 2009, AIG entered into agreements to sell or completed the sale of operations and assets, excluding AIGFP assets, that had aggregate assets and liabilities with carrying values of $31.2 billion and $23.8 billion, respectively, at June 30, 2009 or the date of sale or in the case of Transatlantic Holdings, Inc. (Transatlantic), deconsolidation. Aggregate net proceeds from the sale transactions, including proceeds applied to repay intercompany loan facilities, are expected to be roughly $8.0 billion. The transactions are expected to generate roughly $4.6 billion of aggregate net cash proceeds to repay outstanding borrowings and reduce the amount of FRBNY Facility, after taking into account taxes, transaction expenses and capital required to be retained for regulatory or ratings purposes. At July 29, 2009, AIG had outstanding net borrowings of $40.0 billion under its financing facility with the Federal Reserve Bank of New York, with a remaining borrowing capacity of $20.0 billion, and accrued compounding interest and fees totaled $4.8 billion. A full-text copy of AIG's quarterly report on Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?420f Based in New York, American International Group, Inc., is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received, and continues to seek buyers of its assets. The Troubled Company Reporter reported on March 4, 2009, that Moody's Investors Service confirmed the A3 senior unsecured debt and Prime-1 short-term debt ratings of American International Group. AIG's subordinated debt rating has been downgraded to Ba2 from Baa1. The rating outlook for AIG is negative. This rating action follows AIG's announcement of net losses of $62 billion for the fourth quarter and $99 billion for the full year of 2008, along with a revised restructuring plan supported by the U.S. Treasury and the Federal Reserve. This concludes a review for possible downgrade that was initiated on September 15, 2008. AMERICAN INT'L: Discloses Stake in Various Companies ---------------------------------------------------- American International Group filed with the Securities and Exchange Commission a Form 13F disclosing its holdings in various companies. AIG holds shares in companies like 1-800-FLOWERS.COM Inc., 3M Co., Ford Motor, American Express, and Citigroup Inc. A full-text copy of the report is available at no charge at http://ResearchArchives.com/t/s?420c Headquartered in New York, AIG Global Real Estate has $24.3 billion of assets under management in 50 countries around the world. Based in New York, American International Group, Inc., is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received, and continues to seek buyers of its assets. The Troubled Company Reporter reported on March 4, 2009, that Moody's Investors Service confirmed the A3 senior unsecured debt and Prime-1 short-term debt ratings of American International Group. AIG's subordinated debt rating has been downgraded to Ba2 from Baa1. The rating outlook for AIG is negative. This rating action follows AIG's announcement of net losses of $62 billion for the fourth quarter and $99 billion for the full year of 2008, along with a revised restructuring plan supported by the U.S. Treasury and the Federal Reserve. This concludes a review for possible downgrade that was initiated on September 15, 2008. AMERICAN INT'L: SEC Questioned Inconsistency on European Pacts -------------------------------------------------------------- Hugh Son at Bloomberg News reports that the U.S. Securities and Exchange Commission asked the American International Group Inc. in December to justify statements in a regulatory filing in November about an "apparent inconsistency" in its description of derivative contracts with European banks. Bloomberg quoted the SEC as saying, "You indicate that these contracts provide credit protection but not risk mitigation to the counterparties. Please explain this apparent inconsistency." Bloomberg relates that the SEC questioned about AIG's statement that most of the trades would be terminated within 18 months. The risk of losses on the derivatives may last "longer than anticipated", AIG said in SEC filing months later. AIG said in a filing with the SEC on June 2009 that valuation declines on $192.6 billion in the European swaps as of March 31 could have a "material adverse effect" on the Company's results. According to the report, AIG said that it didn't expect it will have to make payments under contractual agreements tied to the regulatory relief swaps, most of which will be terminated over the next year. AIG said that due to accounting changes, benefits to banks from the contracts will diminish after December 31, the report states. AIG spokesperson Christina Pretto said in a statement that the book of European swaps "continues to perform as expected and is winding down on schedule." The swaps were characterized as "risk factors" at the request of the SEC, the report says, citing Ms Pretto. According to the report, AIG said this month that its maximum risk on the European contracts narrowed to $177.5 billion as of June 30, 2009. According to Bloomberg, the letters from the SEC also include requests for AIG to improve disclosure about retention bonuses, corporate loans, and the departure of Edmund Tse as leader of the non-U.S. life insurance business. Bloomberg says that SEC letters to three AIG CEOs, dating back to at least April 2008, signal that the SEC was concerned the Company wasn't disclosing enough to investors. Headquartered in New York, AIG Global Real Estate has $24.3 billion of assets under management in 50 countries around the world. Prior to joining AIG, Mr. Glasgow served as the Chief Operating Officer of Scanlan Kemper Bard Companies, LLC, the real estate private equity firm. Previously, he held various senior positions at PacifiCorp, including Chief Financial Officer. Mr. Glasgow also served as Chairman, President and CEO of PacifiCorp Holdings, which included PacifiCorp Financial Services, NERCO, Inc., and Pacific Telecom. His career also includes leadership positions in venture capital management, including BCN Data Systems, and international joint venture controlled by Bechtel, and he has served as a director of numerous public and private companies. Mr. Glasgow earned a bachelor's degree in economics, magna cum laude, from the Wharton School of Business at the University of Pennsylvania and a law degree, magna cum laude, from Harvard University. Based in New York, American International Group, Inc., is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received, and continues to seek buyers of its assets. At March 31, 2009, AIG had $819.75 billion in total assets and $765.53 billion in total liabilities. At September 30, 2008, AIG had $1.022 trillion in total assets and $950.9 billion in total debts. The Troubled Company Reporter reported on March 4, 2009, that Moody's Investors Service confirmed the A3 senior unsecured debt and Prime-1 short-term debt ratings of American International Group. AIG's subordinated debt rating has been downgraded to Ba2 from Baa1. The rating outlook for AIG is negative. This rating action follows AIG's announcement of net losses of $62 billion for the fourth quarter and $99 billion for the full year of 2008, along with a revised restructuring plan supported by the U.S. Treasury and the Federal Reserve. This concludes a review for possible downgrade that was initiated on September 15, 2008. ASARCO LLC: Parent's New Offer Guarantees 100 Cents on Dollar ------------------------------------------------------------- According to Steven Church at Bloomberg News, Grupo Mexico SAB has raised its offer for ASARCO LLC to $2.2 billion in cash. Grupo Mexico says that its beefed-up offer guarantees full payment for creditors. Because the creditors are no longer impaired, voting in favor of the Parent Plan is no longer required as the creditors can be deemed to accept the Plan. ASARCO LLC and Grupo Mexico, through unit ASARCO Inc., have filed competing Plan's of reorganization for ASARCO LLC. Judge Richard Schmidt began on August 10 hearings to choose between the competing plans, which originally included a third plan, sponsored by investors led by Harbinger Capital Partners Master Fund I Ltd. Grupo Mexico previously offered to purchase ASARCO LLC, in exchange for $1.72 billion in cash plus a note for $280 million for unsecured creditors. ASARCO LLC's plan is built upon an agreement to sell assets to Vedanta unit Sterlite Industries Inc. Sterlite has agreed to provide a $770 million promissory note, pay $1.59 billion in cash and assume certain liabilities as part of its consideration in exchange for ASARCO's assets. ASARCO Inc. and AMC early this year lost a lawsuit filed against it for intentional fraudulent conveyance of ASARCO LLC's crown jewel -- its stock in Southern Peru Copper Company, now known as Southern Copper Corporation. The U.S. District Court for the Southern District of Texas concluded that AMC is the transferee of an avoidable transfer, and ordered AMC to return the SPCC Shares to ASARCO LLC and to pay ASARCO LLC $1.38 billion in money damages. ASARCO Inc. and AMC, however, are appealing the ruling. The recovery by creditors from the SPCC Litigation may depend on the outcome of the litigation and which Chapter 11 plan is selected by the Bankruptcy Court. According to Bloomberg, under the ASARCO LLC Plan, creditors may collect money from the judgement against Grupo Mexico. The Parent Plan, however, would limit any payments related to the judgement. According to Bloomberg, Kenneth N. Klee, a professor at the University of California, Los Angeles, School of Law, testified before the Bankruptcy Court on August 17 that Grupo Mexico may be forced to pay as much as $2.94 billion in connection with the SPCC Litigation. "There is a 51% chance of Asarco prevailing," said Mr. Klee, a lead author of the U.S. Bankruptcy Code when Congress overhauled the law in the late 1970s. Mr. Klee was hired by ASARCO LLC to determine how much its parent, Grupo Mexico, may have to pay creditors in connection with the SPCC Litigation -- the last major issue for Judge Schmidt to decide before he chooses between two competing plans, Bloomberg said. Judge Schmidt will make a final decision on August 31. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for Chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for Chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its Chapter 11 case. On October 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) BALLY TOTAL: Amends Plan to Adjust Treatment of Voting Creditors ---------------------------------------------------------------- Bally Total Fitness Holding Corporation and its 42 debtor- affiliates submitted to Judge Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York their Second Amended Chapter 11 Joint Plan of Reorganization on August 14, 2009. The Second Amended Plan primarily adjusts the treatment of claims asserted by classes of creditors who are entitled to vote to accept or reject the Plan. In this regard, the Second Amended Plan provides that: (1) Each holder of an Allowed Priority Tax Claim will receive, at the sole option of the Reorganized Debtors, after consultation with the Exit Term Loan Lenders, in full satisfaction, settlement, release, and discharge, of and in exchange for the Priority Tax Claim: * payment in full in cash as soon as practicable after the Effective Date; * payment equal to the principal amount of the Priority Tax Claim plus statutory interest on any outstanding balance from the Effective Date, calculated at the prevailing rate under applicable non-bankruptcy law for each taxing authority (i) in full within 30 days after the Priority Tax Claim becomes an Allowed Priority Tax Claim; or (ii) in equal Cash installments made on a quarterly basis in accordance with Section 1129(a)(9)(C) of the Bankruptcy Code, over a period not to exceed 60 months following the Petition Date. In the event that an Allowed Priority Tax Claim is not paid in accordance with the Plan, the holder of the Allowed Priority Tax Claim may provide the Reorganized Debtors with written notice of default in accordance with the Plan. (2) Allowed Other Secured Claims will be treated as Allowed Priority Tax Claims, provided, however, that these will be satisfied in full if the holder of the Allowed Other Secured Claim receives cash equal to the principal amount of the Claim, plus statutory interest on any outstanding balance accruing from the Petition Date rather than the Effective Date. (3) Intercompany Claims that are not specifically reinstated by the Debtors on or before the Effective Date will be deemed eliminated in full on the date following the Effective Date through contribution or distribution of the Intercompany Claim. (4) Confirmation of the Second Amended will not (i) affect, impair, limit or in any way prejudice the rescission claims or any defenses that may be available to ACE American Insurance Company and Fireman's Fund Insurance Company in the litigation captioned Great American Insurance Company v. Bally Total Fitness Holding Corporation, Case No. 06-cv-4554, in the United States District Court for the Northern District of Illinois, or (ii) affect, impair, limit or in any way prejudice the Debtors' claims and defenses in the Coverage Litigation. In addition, under the Second Amended Plan, the Management Incentive Plan provides among other things, that 3% of the shares of the New Bally Common Stock, subject to dilution from the New Bally Warrants and the Management Options, will be reserved for issuance and distribution to management with respect to the grant of restricted stock units. A full-text copy of Bally's Second Amended Plan is available at no charge at http://bankrupt.com/misc/BallyII_2ndAmendedPlan.pdf Plan Supplements Filed Prior to the filing of their Second Amended Plan, the Debtors submitted to Judge Lifland these supplements to the Plan: (a) a summary of the Exit Facility among the Debtors, Anchorage Capital Master Offshore, Ltd., JPMorgan Chase Bank, N.A., and other lenders and Wells Fargo Foothill, LLC as credit agent, a full-text copy of which is available for free at http://bankrupt.com/misc/BallyII_ExitFacilities.pdf (b) An amended list of the initial directors and officers of Reorganized Bally, specifying Gene Davis as the Chairman of the Board. Other directors include Michael Sheehan; Kevin Corgan; Michael Kerrane; Aaron N. Rosenstein; and Daniel Allen. Independent appointees to the Chair Audit and the Chair Compensation Committees are yet to be determined. (c) a summary of the Management Incentive Plan, a full-text copy of which is available for free at: http://bankrupt.com/misc/BallyII_ManagementIncentivePlan.pdf (d) a summary of Corporate Personnel Incentive Plan, a full- text copy of which is available for free at: http://bankrupt.com/misc/BallyII_CorporatePersonnelIncentivePlan.p df The Debtors also filed with the Court a supplemental list of executory contracts that they intend to reject as of the Effective Date of the Plan. The Rejected Executory Contracts are: Counterparty Contract Name ------------ ------------- Nicole Kimbrough Employment Agreement 645 Jersey Ave. dated July 1, 2004, Jersey City, NJ 07032 as amended Russell Reynolds Agreement re CFO Search Associates, Inc. dated July 8, 2008 225 South Sixth St. Suite 2550 Minneapolis, MN 55402 An Amended Shareholders Agreement to reflect immaterial changes was subsequently submitted to Judge Lifland, a full-text copy of which is available for free at: http://bankrupt.com/misc/BallyII_AmendedShareholdersPact.pdf Macro 4 Objects to Software License Assumption Macro 4, Inc., an Information Technology vendor, had argued that the assumption and assignment of its software licenses for use, support and maintenance from the Debtors to a prospective assignee is not permissible in the absence of (i) a mutually agreed-upon new license agreement, or (ii) an agreed-upon transfer payment as the underlying software licenses. Debtors Address Confirmation Objections In a separate memorandum filed in Court, the Debtors submitted a summary of the Objections they received with respect to the confirmation of the Plan. The Debtors specified that most of the Objections have been resolved pursuant to consensually reached agreements, essentially providing: * that the order confirming the Second Amended Plan will not prejudice the rescission claims or any defenses that may be available to certain insurers; and * for an adjusted treatment of Allowed Priority Tax claims asserted by various tax authorities under the Second Amended Plan; and * for the withdrawal of certain objections following negotiations with other objecting parties. The Debtors also noted that Confirmation objections raised by certain claimants have not been resolved because these do not articulate grounds for denying the confirmation of the Plan. A complete list of the Confirmation Objections, with corresponding disclosures on their status, is available for free at: http://bankrupt.com/misc/BallyII_ResolvedPlanObjSummary.pdf The Second Amended Plan will come before the Court for confirmation at a hearing on August 19, 2009, at 10:00 a.m., Eastern Standard Time. About Bally Total Fitness Based in Chicago, Illinois, Bally Total Fitness Holding Corp. (Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates fitness centers in the U.S., with over 375 facilities located in 26 states, Mexico, Canada, Korea, China, and the Caribbean under the Bally Total Fitness(R), Bally Sports Clubs(R), and Sports Clubs of Canada (R) brands. Bally Total and its affiliates filed for Chapter 11 protection on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after obtaining requisite number of votes in favor of their pre- packaged Chapter 11 plan. Joseph Furst, III, Esq., at Latham & Watkins, L.L.P., represents the Debtors in their restructuring efforts. As of June 30, 2007, the Debtors had US$408,546,205 in total assets and US$1,825,941,54627 in total liabilities. The Debtors filed their Joint Prepackaged Plan & Disclosure Statement on July 31, 2007. The Court confirmed the Plan in September 2007. The Plan was declared effective October 1, 2007. Bally Total Fitness Holding Corp. and its debtor-affiliates and subsidiaries again filed voluntary petitions under Chapter 11 on December 3, 2008 (Bankr. S.D.N.Y., Lead Case No. 08-14818). Their counsel is Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York. As of September 30, 2008, the Company (including non-debtor affiliates) had consolidated assets totaling approximately $1.376 billion and recorded consolidated liabilities totaling approximately $1.538 billion. Bally Total Fitness Holding and its 42 debtor-affiliates delivered their Joint Plan of Reorganization and Disclosure Statement with the U.S. Bankruptcy Court for the Southern District of New York on June 10, 2009. Bankruptcy Creditors' Service, Inc., publishes Bally Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings of Bally Total Fitness Holding Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/or 215/945-7000) BALLY TOTAL: Plan Gets Overwhelming Support From Creditors ---------------------------------------------------------- Bally Total Fitness Holding Corp. and its affiliates received overwhelming creditor support for their First Amended Joint Plan of Reorganization, with the voting results from the voting classes reflecting broad-based support. Of the more than 840 ballots cast, 710 or 84.3% of all voting creditors aggregated across classes voted to accept the Plan. Based on total dollar amount of claims voted, 69.04% of the total claims, or $460,806,248, aggregated across classes, voted to accept the Plan. Kurtzman Carson Consultants LLC, the Debtors' voting and claims agent, certified the voting results to the Court on August 13, 2009. Total Ballots Received ============================================================== ACCEPT | REJECT ============================================================== Number | Amount | Number | Amount -------------------------------------------------------------- Class 3 Prepetition Revolver Facility Claims -------------------------------------------------------------- 2 | $50,000,000 | 0 | $0 (100%) | (100%) | (0%) | (0%) -------------------------------------------------------------- Class 4 Prepetition Swap Claim -------------------------------------------------------------- 1 | $7,606,872 | 0 | $0 (100%) (100%) | (0%) | (0%) -------------------------------------------------------------- Class 5 Prepetition Term Loan Secured Claims -------------------------------------------------------------- 11 | $159,590,082 | 0 | $0 (100%) | (100%) | (0%) | (0%) -------------------------------------------------------------- Class 6 Prepetition Term Loan Deficiency -------------------------------------------------------------- 10 | $72,774,962 | 0 | $0 (100%) | (100%) | (0%) | (0%) -------------------------------------------------------------- Class 7 Senior Note Claims -------------------------------------------------------------- 23 | $106,597,879 | 3 | $16,467,676 (88.46%) | (86.62%) | (11.54%) | (13.38%) -------------------------------------------------------------- Class 8 General Unsecured Claims -------------------------------------------------------------- 24 | $94,727,930 | 14 | $23,087,769 (63.16%) | (80.40%) | (36.84%) | (19.60%) -------------------------------------------------------------- Class 9 Convenience Class Claims -------------------------------------------------------------- 574 | $13,870,257 | 115 | $4,097,227 (83.31%) | (77.20%) | (16.67%) | (22.80%) -------------------------------------------------------------- Class 10 Subordinated Note Claims -------------------------------------------------------------- 56 | $5,588,266 | 12 | $162,929,702 (82.35%) | (17.65%) | (3.32%) | (96.68%) According to KCC Senior Managing Consultant Alison M. Tearnen, KCC relied on a list of holders and outstanding amounts provided by the Prepetition Administrative Agent in order to identify these holders of claims in classes that are entitled to vote to accept or reject the Plan: (i) holders of the Debtors' Prepetition Revolver Facility Claims in Class 3; (ii) holders of Prepetition Swap Claims in Class 4; (iii) holders of Prepetition Term Loan Secured Claims in Class 5; and (iv) holders of Prepetition Term Loan Deficiency Claims in Class 6. KCC also relied on a Security Position Report from the Depository Trust Company in order to identify the holders of Senior Note Claims entitled to vote to accept or reject the Plan in Class 7, and Senior Subordinated Note Claims in Class 10. Furthermore, in order to identify the holders of General Unsecured Claims in Class 8 and holders of Convenience Class Claims in Class 9, KCC relied on the Schedules of Assets and Liabilities filed by the Debtors in January 2009, as amended in March 2009. A complete schedule of the Tabulated Ballots, consisting of votes from Voting Classes 8 and 9, is available for free at: http://bankrupt.com/misc/BallyII_TabulatedBallots.pdf Additionally, certain sets of ballots have not been tabulated because they did not satisfy the requirements for a valid ballot, in accordance with the Disclosure Statement approved by the Court. Ballots that are not tabulated include those that were: (v) cast on account of expunged claims, (w) for Classes 7 and 10, submitted by parties other than the record holder identified, as listed by the Depository Trust Company, (x) submitted by an Insider, as defined in the Disclosure Statement, (y) not received on or before the Voting Deadline established on August 7, 2009, and (z) received from creditors on account of claims subject to a pending objection. A complete list of the Non-Tabulated Ballots is available for free at http://bankrupt.com/misc/BallyII_NonTabulatedBallots.pdf About Bally Total Fitness Based in Chicago, Illinois, Bally Total Fitness Holding Corp. (Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates fitness centers in the U.S., with over 375 facilities located in 26 states, Mexico, Canada, Korea, China, and the Caribbean under the Bally Total Fitness(R), Bally Sports Clubs(R), and Sports Clubs of Canada (R) brands. Bally Total and its affiliates filed for Chapter 11 protection on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after obtaining requisite number of votes in favor of their pre- packaged Chapter 11 plan. Joseph Furst, III, Esq., at Latham & Watkins, L.L.P., represents the Debtors in their restructuring efforts. As of June 30, 2007, the Debtors had US$408,546,205 in total assets and US$1,825,941,54627 in total liabilities. The Debtors filed their Joint Prepackaged Plan & Disclosure Statement on July 31, 2007. The Court confirmed the Plan in September 2007. The Plan was declared effective October 1, 2007. Bally Total Fitness Holding Corp. and its debtor-affiliates and subsidiaries again filed voluntary petitions under Chapter 11 on December 3, 2008 (Bankr. S.D.N.Y., Lead Case No. 08-14818). Their counsel is Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York. As of September 30, 2008, the Company (including non-debtor affiliates) had consolidated assets totaling approximately $1.376 billion and recorded consolidated liabilities totaling approximately $1.538 billion. Bally Total Fitness Holding and its 42 debtor-affiliates delivered their Joint Plan of Reorganization and Disclosure Statement with the U.S. Bankruptcy Court for the Southern District of New York on June 10, 2009. Bankruptcy Creditors' Service, Inc., publishes Bally Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings of Bally Total Fitness Holding Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/or 215/945-7000) BELL DEVELOPMENT: Case Summary & 6 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Bell Development LLC, A Nevada Limited Liability Company 7251 W. Sahara Avenue Las Vegas, NV 89117 Bankruptcy Case No.: 09-24896 Chapter 11 Petition Date: August 14, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: David A. Riggi, Esq. 5550 Painted Mirage Road #320 Las Vegas, NV 89149 Tel: (702) 808-0359 Email: darnvbk@gmail.com Estimated Assets: $0 to $50,000 Estimated Debts: $10,000,001 to $50,000,000 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/nvb09-24896.pdf The petition was signed by Tim Deters, managing member of the Company. BLOCKBUSTER INC: Posts $36.9 Million Net Loss for July 5 Quarter ---------------------------------------------------------------- Blockbuster Inc. reported a net loss of $36.9 million for the 13 weeks ended July 5, 2009, compared to a net loss of $41.9 million for the same period ended July 6, 2008. Blockbuster reported a net loss of $9.2 million for the 26 weeks ended July 5, 2009, from net income of $3.5 million for the same period ended July 6, 2008. Total revenues for the second quarter of 2009 were $1.02 billion, compared to total revenues of $1.30 billion for the same period one year ago. During the second quarter Blockbuster completed the refinancing and funding of its amended and extended credit facility. Due to the timing of funding, which occurred on May 11, 2009, the Company preserved liquidity and maximized cash for a majority of the second quarter, resulting in over 25 percent lower unit availability and approximately 20 percent lower advertising spend. Additionally, revenues reflect a $61.3 million negative impact from foreign currency exchange and a decrease in the company-operated store base worldwide. As of July 5, 2009, the Company had $1.93 billion in total assets and $1.71 billion in total liabilities. Blockbuster ended the second quarter of 2009 with $99.0 million in cash and cash equivalents. The Company also recorded $123.9 million in restricted cash, which primarily represents the cash collateral for Blockbuster's letters of credit. Cash provided by operating activities during the quarter was $114.2 million, compared with $63.4 million of cash used for operating activities in the second quarter of 2008. Second quarter free cash flow (net cash used for operating activities less capital expenditures) was positive $108.7 million in the second quarter of 2009, compared with negative FCF of $84.1 million in the same period in 2008. "During the second quarter we managed the business towards maximizing cash and liquidity. As a result, we improved operational efficiencies and recorded meaningful reductions in total SG&A expenses, resulting in a year-over-year increase in adjusted EBITDA by over 30 percent. We also generated cash from operating activities and recognized positive free cash flow," stated Jim Keyes, Chairman and Chief Executive Officer of Blockbuster Inc. "Although market dynamics remain challenging, we expect improvements during the second half of the year will be driven by a favorable title slate and increased unit availability. Mr. Keyes further commented, "We continue to serve over 50 million customers annually through whatever distribution channel they prefer, recognizing that the same customer may choose different ways to access media entertainment on different nights. Whether they select traditional stores, by-mail, vending or digital download, Blockbuster is uniquely positioned as the only provider to deliver entertainment content across all channels -- today and into the future. Our recent strategic alliances with TiVo and Samsung represent our continued development of digital delivery offerings for our customers, and we anticipate similar opportunities to position Blockbuster as a leader in the distribution of digital entertainment." "As the capital markets improve we hope to extend our debt maturities and reduce our cost of capital in an effort to accelerate our growth initiatives and return to profitability," stated Tom Casey, Executive Vice President and Chief Financial Officer of Blockbuster Inc. "Due to ongoing challenging trends and market dynamics, combined with continued softness in top line performance and conservative comparables assumptions for the remainder of the year, we currently expect full year adjusted EBITDA to range between $270 million and $290 million, which corresponds to a GAAP range of a net loss of $15 million to net income of $5 million. The updated full year adjusted EBITDA guidance compares to the previously provided range of $305 million to $325 million." Blockbuster said it is actively pursuing refinancing its debt to extend the availability of capital beyond the current debt maturity dates. If its efforts are successful, the Company will be able to prepay the amended credit facility and replace it without penalties. On April 2, 2009, the Company amended its revolving credit facility, Term A loan facility and Term B loan facility to include commitments from certain of its lenders and certain new lenders to (a) replace the prior revolving credit facility with a $250 million revolving credit facility with a maturity date of September 30, 2010, and (b) amend certain financial covenants, other covenants and other terms in the prior revolving credit facility, Term A loan facility and Term B loan facility. Blockbuster also disclosed that as part of ongoing efforts to better manage working capital and work within liquidity constraints, it has and may continue to lengthen the cycle of payables to certain vendors. As of July 5, 2009, its accounts payable balance was $243.8 million, compared to its accounts payable balance of $427.3 million at January 4, 2009, and $433.2 million at July 6, 2008. Blockbuster also notes that its amended credit facility requires significant amortization payments beginning in December 2009. "If we are unable to generate sufficient cash flow from operations or if we cannot generate sufficient additional liquidity through the anticipated divestiture of certain non-core assets to service our indebtedness and remain in compliance with our financial covenants, we would be in default under one or more of our debt agreements, which if not cured or waived, could result in the acceleration of all of our debt due to cross-default provisions contained in such agreements and in certain of our leases. In such event, we would be required to search for alternative sources of liquidity to refinance our debt, which may not be available to us on acceptable terms, if at all. Our ability to obtain alternative financing would likely be adversely affected by unfavorable conditions in the worldwide credit markets, because substantially all of our domestic and Canadian assets have been secured as collateral for our existing debt and because our financial results, substantial indebtedness and credit ratings could each adversely affect the availability and terms of any such financing. If we were unable to make scheduled amortization payments, or if we are unable to repay our debt upon acceleration, we could be forced to file for protection under the U.S. Bankruptcy Code." A full-text copy of Blockbuster's quarterly report on Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?4212 About Blockbuster Blockbuster, Inc., headquartered in Dallas, Texas, is a leading global provider of in-home movie and game entertainment with approximately 7,400 stores throughout the Americas, Europe, Asia, and Australia. Revenues are about $5.3 billion. As reported by the Troubled Company Reporter, in April 2009, Moody's Investors Service downgraded Blockbuster's Probability of Default Rating to Caa3 from Caa1 and its Corporate Family Rating to Caa2 from Caa1. In addition, Moody's affirmed Blockbuster's speculative grade liquidity rating at SGL-4 and it secured bank credit facilities rating at B1. Moody's also rated the proposed $250 million revolving credit facility, which expires in September 2010, a senior secured rating of B1. The rating outlook is stable. Standard & Poor's Ratings Services lowered its corporate credit rating on Blockbuster to 'CCC' from 'B-'. S&P removed the ratings from CreditWatch with negative implications, where they were placed on March 4, 2009. At the same time, S&P lowered the issue- level ratings on both its secured debt to 'CCC+' from 'B' and its subordinated debt to 'CC' from 'CCC'. The outlook is negative. Fitch Ratings affirmed Blockbuster's long-term Issuer Default Rating at 'CCC' and said it expects to rate the amended $250 million bank credit facility at 'B/RR2'. In addition, Fitch took these rating actions ($450 million bank credit facility upgraded to 'B/RR2' from 'CCC+/RR3'; $100 million term A loan upgraded to 'B/RR2' from 'CCC+/RR3'; $550 million term B loan upgraded to 'B/RR2' from 'CCC+/RR3'; and $300 million senior subordinated notes downgraded to 'C/RR6' from 'CC/RR6'. The Rating Outlook is Stable. The company had approximately $818 million of debt outstanding as of Jan. 4, 2009. BRANCIFORTE CREEK: Case Summary & 3 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Branciforte Creek, LLC 2-A Kite Hill Santa Cruz, CA 95060 Bankruptcy Case No.: 09-56772 Chapter 11 Petition Date: August 14, 2009 Court: United States Bankruptcy Court Northern District of California (San Jose) Judge: Arthur S. Weissbrodt Debtor's Counsel: Charles B. Greene, Esq. Law Offices of Charles B. Greene 84 W Santa Clara St. #770 San Jose, CA 95113 Tel: (408) 279-3518 Email: cbgattyecf@aol.com Total Assets: $4,701,239 Total Debts: $3,810,981 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/canb09-56772.pdf The petition was signed by William Arkley, managing member of the Company. CONTINENTAL SOUTHERN: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Continental Southern Industries, Inc dba CSI dba CSI Plastics PO Box 4650 Greenville, SC 29608 Bankruptcy Case No.: 09-05988 Chapter 11 Petition Date: August 14, 2009 Court: United States Bankruptcy Court District of South Carolina (Spartanburg) Judge: Helen E. Burris Debtor's Counsel: Randy A. Skinner, Esq. Skinner and Associates Law Firm, LLC P.O. Box 1843 Greenville, SC 29602 Tel: (864) 232-2007 Fax: (864) 232-8496 Email: 1ras@bellsouth.net Estimated Assets: $100,000 to $500,000 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/scb09-05988.pdf The petition was signed by Robert R. McGowan Sr., president, treasurer and director of the Company. COOPER-STANDARD: Opposes Cooper Tire Action in Canadian Case ------------------------------------------------------------ Cooper-Standard Holdings Inc. and its affiliated debtors ask the Bankruptcy Court to deny Cooper Tire & Rubber Company's bid to file an action in the insolvency case of their Canadian unit. Attorney for the Debtors, Drew Sloan, Esq., at Richards Layton & Finger P.A., in Wilmington, Delaware, says that Cooper Tire does not have a claim against Cooper-Standard Automotive Canada Ltd., and does not have ownership interest in the tax refunds. Mr. Sloan describes Cooper Tire's move as an attempt to "leapfrog" ahead of every other creditor. "Cooper Tire is seeking to gain an unfair advantage over all of the Debtors' creditors and is seeking a remedy that will significantly harm the Debtors and their estates," Mr. Sloan says, pointing out that funds that would otherwise be available for the operations of CSA Canada and the Debtors, and for distribution to creditors would be frozen for the sole benefit of one unsecured creditor. "Any claim of Cooper Tire should be addressed in the claims resolution process together with all other unsecured claims against the individual Debtors," he further says. About Cooper-Standard Cooper-Standard Automotive Inc., headquartered in Novi, Mich., is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. For more information, visit the Company's Web site at: http://www.cooperstandard.com/ Cooper-Standard is a privately-held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Fr� res & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) BANKUNITED FSB: $24MM Assets vs. $5.2BB Debts in Receivership ------------------------------------------------------------- Brian Bandell at South Florida Business Journal reports that the Federal Deposit Insurance Corp. held $24 million in assets from BankUnited FSB in receivership as of June 30. After BankUnited's collapse in May 2009, most of the bank's $12.8 billion in assets were handed over to a consortium of private equity groups that put them into a new BankUnited. According to Business Journal, the FDIC filing didn't say what type of assets it held in receivership for the old BankUnited. The report states that the receivership listed $5.2 billion in liabilities, with most being the cost of the FDIC covering the insured deposits at BankUnited. About BankUnited, FSB BankUnited, FSB, Coral Gables, Florida, was closed by regulators on May 20, 2009, and the Federal Deposit Insurance Corporation was appointed receiver. BankUnited, a newly chartered federal savings bank, acquired the banking operations, including all of the nonbrokered deposits, of BankUnited, in an FDIC-facilitated transaction. BankUnited, the successor institution, is the largest independent bank in Florida, as was its predecessor. The management team is headed by John Kanas, a veteran of the banking industry and former head of North Fork Bank. Bank United, FSB, had assets of $12.80 billion and deposits of $8.6 billion as of May 2, 2009. The new BankUnited assumed $12.7 billion in assets and $8.3 billion in nonbrokered deposits. The FDIC and BankUnited entered into a loss-share transaction and Agreed to share in the losses on approximately $10.7 billion in assets covered under the agreement. BB&T CORP: Fitch Affirms 'B' Individual Rating After Colonial Buy ----------------------------------------------------------------- Fitch has affirmed the long-term and short-term Issuer Default Ratings of BB&T Corporation and its bank subsidiary, Branch Banking & Trust Company at 'A+' and 'F1', respectively, following its acquisition of the banking operations of Colonial BancGroup through an FDIC assisted transaction. The Rating Outlook remains Negative. The acquisition of CNB's banking operations significantly augments BB&T's considerable deposit franchise in the Southeast U.S. and extends its reach into the Texas and Nevada markets. BB&T will be acquiring the majority of the deposits of Colonial Bank, as well as most of the assets of CNB. Despite BB&T acquiring CNB's problematic loan book, which has a sizeable concentration of real estate exposure in Florida, Fitch believes there is adequate risk mitigation that will limit the risk of loss to the company. From a strategic perspective, Fitch views the transaction as favorable for BB&T, as the company should be able to leverage its banking prowess across an enhanced banking franchise with minimal risk. Additionally, the company should benefit from some moderate cost savings overtime. The maintenance of the Negative Outlook considers the prospect that the current negative trends in asset quality and earnings performance, separate from the CNB transaction, could materially worsen given Fitch's expectation for higher loss rates across various loan categories, particularly for commercial real estate. That said, BB&T's conservative underwriting and highly granular loan portfolio should contain credit deterioration, with problem assets and credit losses expected to remain at manageable levels. Further, while Fitch has concerns about the company's real estate exposure, BB&T's real estate portfolio, at approximately 20% of the loan book, is not substantially larger than its peers. BB&T is among the largest banking companies in the U.S. with over $140 billion in assets and 1,500 branches, spanning the Southeast and Mid-Atlantic states. The company's operations also include a sizeable insurance agency franchise, as well as an investment banking company and a national finance company. These ratings have been affirmed: BB&T Corporation -- Long-term IDR at 'A+'; -- Short-term IDR at 'F1'; -- Senior Debt at 'A+'; -- Subordinated debt at 'A'; -- Short-term debt at 'F1'; -- Individual at 'B' -- Support at '5' -- Support Floor at 'NF' Branch Banking & Trust Company -- Long-term IDR at 'A+'; -- Short-term IDR at 'F1 ' -- Subordinated debt at 'A' -- Short-term debt at 'F1' -- Long-term deposits at 'AA-' -- Short-Term deposit at 'F1+' -- Individual at 'B' -- Support at '4' -- Support Floor at 'B' BB&T Financial, FSB -- Long-term IDR at 'A+' -- Short-term IDR at 'F1' -- Individual at 'B' -- Support at '4' -- Support Floor at 'B' BB&T Capital Trust I BB&T Capital Trust II BB&T Capital Trust IV BB&T Capital Trust V -- Preferred Stock 'A-' This rating has been assigned: BB&T Capital Trust VI -- Preferred Stock 'A-' BEARINGPOINT INC: Terminates CEO Edwin Harbach's Employment ----------------------------------------------------------- BearingPoint, Inc., and F. Edwin Harbach, the Company's Chief Executive Officer, agreed on August 10, 2009, that Mr. Harbach will be terminated as an employee of the Company effective as of the close of business on August 31. The Company believes that this determination is consistent with the Company's plans regarding the liquidation of its business in connection with its bankruptcy proceedings. Mr. Harbach will continue to serve as a director of the Company. Asset Sales On March 23, 2009, BearingPoint and certain of its subsidiaries entered into an Asset Purchase Agreement to sell a significant portion of their assets related to BearingPoint's North American Public Services business to Deloitte LLP. On April 17, the Bankruptcy Court approved this sale. The closing of this transaction occurred on May 8. In connection with the closing, BearingPoint received net proceeds of roughly $329.3 million. On April 2, BearingPoint International Bermuda Holdings Limited, BearingPoint's indirect subsidiary, entered into a Share Sale Agreement with PwC Advisory Co., Ltd., the Japanese member firm of the PricewaterhouseCoopers global network of firms, for the sale of BearingPoint's consulting business in Japan to PwC Japan for roughly $45 million. In addition, PwC Japan assumed the intercompany debt owed by certain non-debtor subsidiaries of BearingPoint to BearingPoint Co., Ltd. (Chiyoda-ku). The closing of the PwC Japan Transaction occurred on May 11. On April 17, BearingPoint and certain of its subsidiaries entered into an Asset Purchase Agreement with PricewaterhouseCoopers LLP pursuant to which BearingPoint agreed to sell a substantial portion of its assets related to its North American Commercial Services business unit, including Financial Services, to PwC and PwC agreed to assume certain liabilities associated with the assets. In addition, affiliates of PwC also entered into definitive agreements to purchase the equity interests of BearingPoint Information Technologies (Shanghai) Limited, a subsidiary of BearingPoint that operates a global development center in China, and certain assets of a separate global development center in India. On April 27, the Bankruptcy Court approved bidding procedures in connection with an auction of all or substantially all of the assets of the CS Business and BearingPoint China GDC. The Auction was held on May 27 and concluded on May 28. At a hearing May 28, the Bankruptcy Court approved PwC as the winning bidder at the Auction. The aggregate purchase price for the PwC Commercial Services Transaction was $44 million (subject to certain contractual adjustments). The closing of the PwC U.S. Transaction occurred on June 15, and, as a result, PwC acquired the CS Business. The purchase price for the PwC U.S. Transaction was $39 million. BearingPoint anticipates that the PwC China Transaction and the PwC India Transaction will close within the next several months; however, there can be no assurance that the transactions will be completed. On July 9, BearingPoint and certain of its subsidiaries entered into a Stock Purchase Agreement with CSC Brazil Holdings LLC and Computer Sciences Corporation for the sale of BearingPoint's consulting business in Brazil. Pursuant to the Brazil Stock Purchase Agreement, CSC agreed to purchase BearingPoint, S.A., a wholly owned subsidiary of BearingPoint, through the purchase of all issued and outstanding shares of common stock of BearingPoint Brazil, for a purchase price of US$7.9 million. The Bankruptcy Court approved the Brazil Transaction on July 23. The consummation of the Brazil Transaction is expected to occur on or prior to August 7 and is subject to customary closing conditions. There can be no assurance that the Brazil Transaction will be completed. As reported by the Troubled Company Reporter on August 14, 2009, Tiffany Kary at Bloomberg News said Judge Robert Gerber authorized BearingPoint to sell its European division and intellectual property for $69 million to BE Partners B.V., a newly formed company established by a significant majority of the managing directors of BearingPoint's EMEA practice. About BearingPoint BearingPoint, Inc. -- http://www.BearingPoint.com/-- was one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. Based in McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP - - has approximately 15,000 employees focusing on the Public Services, Commercial Services and Financial Services industries. The Company's service offerings are designed to help clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next- generation" technology. BearingPoint, Inc., fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 protection on February 18, 2009 (Bankr. S.D.N.Y., Case No. 09-10691). Alfredo R. Perez, Esq., at Weil Gotshal & Manges LLP, in Houston; Marcia J. Goldstein, Esq., Ronit J. Berkovich, Esq., and Jose R. Alcantar, Esq., at Weil Gotshal & Manges LLP, in New York, represent the Debtors as restructuring counsel. AlixPartners, LLP, is the Debtors' restructuring advisors. Greenhill & Co., LLC, is the Debtor's financial advisor & investment banker. Jeffrey S. Sabin, Esq., at Bingham McCutchen LLP represents the Creditors' Committee as counsel. BearingPoint disclosed total assets of $1,762,689,000, and debts of $2,231,839,000 as of September 30, 2008. BIO-KEY INTERNATIONAL: June 30 Balance Sheet Upside-Down by $3MM ---------------------------------------------------------------- BIO-key International Inc.'s balance sheet at June 30, 2009, showed total assets of $10.12 million and total liabilities of $12.91 million, resulting in a stockholders' deficit of $2.79 million. For three months ended June 30, 2009, the Company reported a net income of $139,770 compared with a net income of $168,256 for the same period in 2008. For six months ended June 30, 2009, the Company reported a net income of $361,819 compared with a net loss of $747,413 for the same period in 2008. The Company's independent auditors, CCR LLP, raised substantial doubt about its ability to continue as a going concern after auditing the Company's financial statements for the fiscal years ended Dec. 31, 2008, and 2007. The auditors noted the Company's history of losses and limited revenue. The Company stated that its long-term viability and growth will depend upon the successful commercialization of its technologies and its ability to obtain adequate financing. In addition, the financial crisis in the worldwide capital markets and the negative worldwide economic trends have had an adverse impact on market participants including, among other things, volatility in security prices, diminished liquidity, and limited access to financing. These events could, therefore, affect its efforts to commercialize its technology and to obtain adequate financing. The Company added that if available financing is insufficient or it fails to continue to generate meaningful revenue, the Company may be required to further reduce operating expenses, delay the expansion of operations, be unable to pursue merger or acquisition candidates, or continue as a going concern. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?41e4 About BIO-key International Headquartered in Wall, New Jersey, BIO-key International Inc. (OTC BB: BKYI) -- http://www.bio-key.com/-- develops and delivers advanced identification solutions and information services to law enforcement departments, public safety agencies, government and private sector customers. BNY CONVERGEX: S&P Affirms 'B-' Local Currency Rating ----------------------------------------------------- Standard & Poor's Ratings Services said that it completed its review of its counterparty credit ratings on eight independent U.S. brokerage firms. As a result of this review, S&P placed the ratings on E*TRADE Financial Corp. and its subsidiary, E*TRADE Bank, on CreditWatch with positive implications and affirmed the ratings on the other seven companies. The CreditWatch action on E*TRADE was based on the application of S&P's criteria for distressed exchange offerings and a review of the company's financial position, which has faced unique challenges from asset quality problems at its banking unit. "The CreditWatch listing reflects S&P's belief that the debt exchange no longer meets S&P's criteria for a distressed exchange offering, because the value to the investors is unlikely to be less than what it promised on the original securities," said Standard & Poor's credit analyst Charles D. Rauch. "We based S&P's affirmation of ratings on the other brokers on S&P's review of the impact of industrywide developments such as market conditions and, in the case of the retail firms, investor participation," said Standard & Poor's credit analyst Robert B. Hoban. "We also assessed company-specific measures such as liquidity and capitalization, and near-term debt service capacity." The ongoing downturn has pressured these companies. Nonetheless, so far, they have mostly fared considerably better than large banks and universal bank brokerage peers, despite their inherently less diversified business profiles and generally less substantial resources. Primary advantages are lower credit and market risk exposures, flexible cost bases, and less-capital-intensive businesses. S&P believes the brokerage industry's near-term prospects will remain less than ideal as long as the broader economy remains depressed. However, S&P also sees those brokers that are not facing specific structural issues as largely well positioned to keep enduring these less-than-optimal operating conditions. Most of the companies covered in this review are maintaining defensive financial profiles, with reduced leverage and/or higher degrees of liquidity, which should provide some cushion if operating conditions turn sour again. Regardless of future operating conditions, S&P believes the survivors will benefit from the culling of U.S. brokerage firms over the past year and a half. In particular, the independent retail brokers have taken advantage of disarray at the warehouse firms to poach financial advisers from them. Ratings List Ratings Affirmed BNY ConvergEx Group LLC Counterparty Credit Rating B+/Stable/-- Senior Secured B+ Subordinated Local Currency B- Recovery Rating 6 Charles Schwab Corp. Counterparty Credit Rating A/Stable/A-1 Senior Unsecured A Commercial Paper A-1 Charles Schwab & Co. Inc. Counterparty Credit Rating A+/Stable/-- Schwab Capital Trust I Preferred Stock BBB+ IBG LLC Counterparty Credit Rating BBB+/Stable/-- Jefferies Group Inc. Counterparty Credit Rating BBB/Negative/-- Senior Unsecured BBB Preferred Stock BB+ LPL Holdings, Inc. Counterparty Credit Rating B+/Stable/-- Senior Secured B+ Subordinated B- Raymond James Financial, Inc. Counterparty Credit Rating BBB/Negative/A-2 Senior Unsecured BBB TD AMERITRADE Holding Corp. Counterparty Credit Rating Local Currency BBB+/Stable/-- Senior Secured BBB+ Ratings Placed On CreditWatch E*TRADE Financial Corp. To From -- ---- Counterparty Credit Rating CC/Watch Pos/-- CC/Negative/-- Senior Unsecured CC/Watch Pos CC Senior Unsecured CCC-/Watch Pos CCC E*TRADE Bank To From -- ---- Counterparty Credit Rating CCC+/Watch Pos/C CCC+/Negative/C Certificate Of Deposit Local Currency CCC+/Watch Pos/C CCC+/C CADENCE INNOVATION: Seeks October 20 Extension to File Plan ----------------------------------------------------------- Cadence Innovation LLC asked the Bankruptcy Court to extend its exclusive period to file a plan to October 20, 2009, and its exclusive period to solicit acceptances of that Plan to December 20, 2009. According to Carla Main at Bloomberg News, lawyers for Cadence certified to the Bankruptcy Court that no one has objected to Cadence's request. Headquartered in Troy, Michigan, Cadence Innovation LLC -- http://www.cadenceinnovation.com/-- manufactures and sells auto parts to its customers GM and Chrysler. The company has at least 4,200 employees in the United States and Europe, including Hungary and Czech Republic. The company and its debtor-affiliate, New Venture Real Estate Holdings, LLC, filed for Chapter 11 reorganization on Aug. 26, 2008 (Bankr. D. Del. Lead Case No. 08- 11973). Norman L. Pernick, Esq. and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, represent the Debtors as counsel. When the Debtors filed for protection from their creditors, they listed assets of between US$10 million and US$50 million, and debts of between US$100 million and US$500 million. CANWEST MEDIA: Noteholder Group Extends Forbearance to August 28 ---------------------------------------------------------------- Canwest Global Communications Corp. said its subsidiary, Canwest Media Inc., is continuing discussions with the members of an ad hoc committee of 8% noteholders of CMI regarding a recapitalization transaction. The holders of the 12% senior secured notes of CMI and Canwest Television Limited Partnership as well as CIT Business Credit Canada Inc., the provider of a senior secured revolving asset- based loan facility to CMI, have agreed to extend to August 28, 2009 certain milestones that were to be have been achieved by August 14. The date by which CMI must enter into an agreement in respect of a recapitalization transaction has been extended to August 28. CMI and the members of the Ad Hoc Committee have also entered into a further extension agreement and forbearance to August 28, 2009. As reported by the Troubled Company Reporter on May 26, 2009, Canwest Media and Canwest Television and certain parties entered into an agreement, pursuant to which the parties will purchase the U.S. dollar equivalent of C$105 million principal amount of 12% senior secured notes of CMI and CTLP for an aggregate purchase price of the U.S. dollar equivalent of C$100 million. CIT agreed to provide a senior secured revolving ABL facility for C$75 million to CMI. Both transactions were expected to close May 21, 2009. Canwest has kept the identity of the Purchasers confidential. Moreover, the Note Purchase Agreement provides that in the event Canwest Media or Canwest Television seeks creditor protection under the Companies' Creditors Arrangement Act or comparable legislation, the Notes will be converted into a debtor-in- possession financing arrangement. The Purchasers also suggested FTI Consulting to be appointed as monitor in the event of a CCAA filing. Canwest also said in May that the senior lenders under the CMI existing credit facility extended their waiver agreement until June 2, 2009, and also agreed to defer certain payments aggregating approximately $10 million until June 2, which would allow completion of the new facilities. Additionally, Canwest also said CMI and the members of the Ad Hoc Committee entered into a further agreement and forbearance until June 15, subject, among other things, to closing of the issuance of the Senior Secured Notes. Under the terms of the new financing arrangements, CMI originally agreed to satisfy certain milestones within certain time frames: * On or before June 15, 2009, reaching an agreement in principle with members of the Ad Hoc Committee in respect of a recapitalization transaction. * On or before July 15, 2009, entering into a definitive agreement with members of the Ad Hoc Committee with respect to the recapitalization transaction. CMI used proceeds from the issue and sale of the Senior Secured Notes and from CIT's ABL facility to, among other things, repay the current lenders all amounts owing under CMI's existing senior credit facility and settle related obligations. About Canwest Global Communications Corp. Canwest Global Communications Corp. -- http://www.canwest.com/-- (TSX: CGS and CGS.A,) an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and/or holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey,Indonesia, Singapore, the United Kingdom and the United States. * * * As reported in the Troubled Company Reporter on June 9, 2009, Moody's Investors Service downgraded Canwest Limited Partnership's probability of default rating to Ca/LD and its corporate family to Caa3 on news the company decided to not make payments totaling $10 million due under its senior secured credit facility on May 29, 2009, the end of the company's fiscal quarter. This suggests that CLP has chosen to force the issue with its bank lenders, and is also likely an indication that ongoing negotiations with the bank lenders were not going well, according to Moody's. Given the recent experience of CLP's parent company, Canwest Media Inc., this step was likely unavoidable. Since the payment includes a principal component and there is no cure period, the bank credit facility is now in default. The lenders have not accelerated repayment. The TCR on June 2, 2009, said Standard & Poor's Ratings Services lowered its ratings on Canwest LP, including the corporate credit and senior secured ratings to 'D' (default) from 'CCC' and the rating on the C$75 million senior subordinated credit facility due 2015 to 'D' from 'CC'. S&P also lowered the rating on the company's US$400 million senior subordinated notes due 2015 to 'C' from 'CC'. The recovery ratings on the debt obligations are unchanged. CAPMARK FINANCIAL: Halts Voluntary Filings with SEC --------------------------------------------------- Capmark Financial Group Inc. filed with the Securities and Exchange Commission a Form 15-15D to provide notice of the statutory suspension of their filing obligation and indicate their intention to cease voluntarily filing reports with the Commission under Section 15 of the Exchange Act. In May 2007, Capmark issued the Floating Rate Senior Notes due 2010, the 5.875% Senior Notes due 2012 and the 6.300% Senior Notes due 2017 in a Rule 144A private offering. In April 2008, Capmark exchanged all of the Old Notes for identical notes registered under the Securities Act of 1933, as amended, pursuant to a Form S-4 declared effective by the Commission. Pursuant to Section 15(d) of the Securities Exchange Act of 1934, as amended, the duty of Capmark to file reports under Section 15 of the Exchange Act was suspended commencing with the fiscal year beginning January 1, 2009, because the New Notes were held of record by less than 300 persons as of that date. Capmark has nevertheless continued to file Exchange Act reports with the Commission on a voluntary basis. Capmark noted that, as confirmed by guidance published by the Commission staff, the automatic suspension is granted by statute and is not contingent upon the filing of the Form 15, whether within 30 days after the beginning of the fiscal year as set forth in Rule 15d-6 or otherwise. About Capmark Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- is a diversified company that provides a broad range of financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. * * * As reported by the TCR on April 30, 2009, Moody's Investors Service downgraded the senior unsecured ratings of Capmark Financial Group Inc. to 'Caa1' from 'B2', with the rating remaining under review for possible downgrade. The rating action reflects the explanatory note in Capmark's 10-K filing in which its auditors raise doubt about the company's ability to continue as a going concern, as well as the still unresolved nature of Capmark's efforts to modify the terms of its bridge loan agreement and senior credit facility, which could have implications for its liquidity and funding. CAPMARK FINANCIAL: Inks Letter Agreement with CFO & EVP Arnold -------------------------------------------------------------- Capmark Financial Group Inc., on August 6, 2009, entered into a letter agreement with Frederick Arnold, its Chief Financial Officer and Executive Vice President. As reported by the Troubled Company Reporter on August 10, 2009, the Company's board of directors appointed Mr. Arnold as CFO and EVP effective September 1. The Employment Agreement provides for this compensation: (i) an annual base salary of $750,000; (ii) a signing bonus of $500,000; and (iii) a minimum target bonus of $250,000 under the Company's Discretionary Bonus Plan for 2009. Although the bonus for 2009 is not guaranteed, it is understood that Mr. Arnold will receive a bonus if his performance meets the standards generally expected of a Chief Financial Officer of a comparable entity. Mr. Arnold will also be eligible for a discretionary annual bonus for subsequent years. If Mr. Arnold's employment is terminated by the Company with Cause or by Mr. Arnold other than for Good Reason, in either case, during the first six months following August 6, 2009, Mr. Arnold must reimburse the Company for one-half of the signing bonus. The Company will also provide Mr. Arnold and his eligible dependents with coverage under all retirement and welfare benefit programs, plans and practices which it makes available to its full-time executive committee members, including severance in an amount equal to his annual base pay, but not in excess of $500,000 if he is eligible for severance during the first 12 months of employment. Mr. Arnold's employment is at will and may be terminated by Mr. Arnold or the Company for any or no reason. About Capmark Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- is a diversified company that provides a broad range of financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. * * * As reported by the TCR on April 30, 2009, Moody's Investors Service downgraded the senior unsecured ratings of Capmark Financial Group Inc. to 'Caa1' from 'B2', with the rating remaining under review for possible downgrade. The rating action reflects the explanatory note in Capmark's 10-K filing in which its auditors raise doubt about the company's ability to continue as a going concern, as well as the still unresolved nature of Capmark's efforts to modify the terms of its bridge loan agreement and senior credit facility, which could have implications for its liquidity and funding. CEDAR FUNDING: Ch. 11 Trustee Probing for Claims Against Advisors ----------------------------------------------------------------- Court documents say that Todd Neilson, the trustee in the Cedar Funding Inc. bankruptcy, is requesting information from a San Francisco law firm, a Salinas accounting firm, and the state Department of Corporations about their dealings with the Company. According to Larry Parsons at MontereyHerald.com, Mr. Neilson is also seeking documents from: -- the Hayashi and Wayland accounting firm, which provided accounting services to Cedar Funding from 2004 to 2007. Mr. Neilson said in court documents that the information is needed to determine "the nature and extent of any claims" that Cedar Funding's debtors would have against the Company; and -- law firm of Stein & Lubin, which provided legal services to the Company for its offering of mortgage pool investments. MontereyHerald.com relates that Mr. Neilson is also seeking information about insurance policies held by the legal and accounting firms, raising a possibility that he could press claims against them on behalf of hundreds of Cedar Funding investors. MonteryHerald.com quoted Mr. Neilson as saying, "We think it's a wise course of action -- to see what kind of advice they gave and the job they did auditing, and determine whether they could be considered culpable for any of the outcome." Citing Mr. Neilson, MontereyHerald.com reports that David Nilsen ran Cedar Funding as a Ponzi scheme, in which more senior investors were paid off with money put in by newer investors. According to the report, state and federal authorities are probing Mr. Nilsen, who has maintained that the meltdown of Cedar Funding resulted from the real estate market collapse and aggressive lawyers hired by some investors. MontereyHerald.com relates that the Hon. Marilyn Morgan of the Northern District of California approved Mr. Neilson's request for documents and information from the state Department of Corporations, which cancelled Cedar Funding's permit in April 2008 to sell investments in its mortgage pool. Stein & Lubin, according to MontereyHerald.com, opposes the trustee's request for more information about its dealings with Cedar Funding and insurance policies. Law firm attorney Dennis D. Miller said in court documents that the trustee previously told the firm that he believed Mr. Nielsen "ran his Ponzi scheme on his own without any attorney." Stein & Lubin said that it already has turned over more than 2,800 pages of documents to Mr. Neilson, MontereyHerald.com states. MontereyHerald.com relates that Mr. Miller said that the wide-ranging request for more information amounts to a "fishing expedition" with "few procedural safeguards" for the law firm. MontereyHerald.com reports that Mr. Neilson said he has a right to the firm's client file on Cedar Funding because "the debtors paid for this information. It belongs to them, not the attorneys." Monterey, California-based Cedar Funding Inc. -- http://www.cedarfundinginc.com/-- is a mortgage lender. It filed a Chapter 11 petition on May 26, 2008 (Bankr. N.D. Calif. Case No. 08-52709). Judge Marilyn Morgan presides over the case. Cecily A. Dumas, Esq., at Friedman, Dumas and Springwater, in San Francisco, represents the Debtor, and R. Todd Neilson serves as the Chapter 11 Trustee. Cedar Funding, Inc., accepted many millions of dollars from hundreds of individuals who believed they were acquiring fractional interests in loans that were secured by real property. Many more invested with CFI through a related entity, Cedar Funding Mortgage Fund LLP, that acquired fractional interests in the name of the Fund. CFI failed to record assignments of its deeds of trust that would have provided security interests to most of its investors, including the Fund. The Debtor estimated assets of less than $50,000 and debts of $100 million to $500 million in its Chapter 11 petition. CHRYSLER LLC: Creditors' Panel Seeks Billions From Daimler ---------------------------------------------------------- The official committee of unsecured creditors in the Chapter 11 cases of Chrysler LLC, now known as Old CarCo LLC, has filed a lawsuit seeking to hold Daimler AG accountable for "billions" of dollars in assets that it unlawfully extracted from Chrysler. In 2007, immediately before the sale of a controlling interest in Chrysler to Cerberus Capital Management LP, Daimler engineered a restructuring of Chrysler's business. "As part of this restructuring, Daimler stripped away Chrysler's most valuable assets in exchange for assets that were worth considerably less, and sometimes for no consideration at all," the Committee alleges in its August 17 complaint filed as part of Chrysler's Chapter 11 proceedings. Daimler acquired Chrysler in 1998. In 2006, Daimler came to the conclusion that its merger with Chrysler was a failure, as sales deteriorated, and Chrysler was burdened with debt. Daimler, according to the Committee's 10-count complaint, knew that, as Chrysler's corporate parent and guarantor of Chrysler's debt, it faced a very real risk that it would be forced to make good on many billions of dollars of Chrysler's obligations. Daimler decided to avoid that risk by severing itself from Chrysler. Before ridding itself of its potential obligations to Chrysler's creditors, Daimler determined to wrest as much value as possible from the Chrysler companies, the Committee said. To do that, Daimler orchestrated a complex restructuring primarily during the spring of 2007, shortly before Daimler sold a controlling interest in Chrysler to Cerberus. During this restructuring, valuable assets that had been held by Chrysler were passed up the corporate chain to Daimler-owned entities. Other assets were taken from Chrysler and transferred to newly Created holding company wholly owned by Daimler which was used as the vehicle for the sale to Cerberus. "In both types of transfers, Chrysler received inadequate value in exchange for the assets taken away." The Complaint asserts claims against Daimler and its affiliates for intentional and constructive fraudulent transfers. According to the Committee, following the transfers, Chrysler (a) was insolvent, (b) was engaged in a business for which its remaining assets or capital were unreasonably small, and (c) incurred debt beyond its ability to pay as they became due. The Committee wants to void the transfers pursuant to Section 550 of the Bankruptcy Code. The Creditors Committee wants a jury trial to determine damages for what it alleges was a 48-step fraud. The Creditors Committee also asserts claims for breach of fiduciary duty against certain of Chrysler's former directors and against Daimler directly for authorizing, or, in Daimler's case, causing the directors to authorize, these fraudulent transfers. U.S. Bankruptcy Judge Arthur Gonzalez at an August 13 hearing approved the Creditors Committee's request to pursue claims on behalf of Chrysler LLC's estate against Daimler. A redacted copy of the Complaint is available for free at: http://bankrupt.com/misc/Chrysler_CreditorsvsDaimler.pdf The Committee is represented by: SUSMAN GODFREY L.L.P. Stephen D. Susman, Esq. E-mail: ssusman@susmangodfrey.com Jacob W. Buchdahl E-mail: jbuchdahl@susmangodfrey.com Suyash Agrawal E-mail: sagrawal@susmangodfrey.com 654 Madison Ave., 5th Floor New York, NY 10065 (212) 336-8330 STUTZMAN, BROMBERG, ESSERMAN & PLIFKA, p.e. Sander L. Esserman, Esq. E-mail: esserman@sbep-law.com Robert T. Brousseau, Esq. E-mail: brousseau@sbep-law.com Peter D'Apice E-mail: dapice@sbep-law.com 2323 Bryan Street, Suite 2200 Dallas, TX 75201 (214) 969-4900 About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The Company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan, and Australia. In 2007, Cerberus Capital Management LP acquired an 80.1% stake in Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Kramer Levin Naftalis & Frankel LLP serves as counsel to the Creditors Committee. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIT GROUP: Has $1.68-Bil. Q2 Loss; Pushes Out-of-Court Plan ----------------------------------------------------------- CIT Group Inc. filed its Form 10-Q with the Securities and Exchange Commission, disclosing $1,679,400,000 loss for the second quarter of 2009, compared with $2,084,400,000 loss in the year-ago period. CIT in early August announced a restructuring of its liabilities to provide additional liquidity and further strengthen its capital position. CIT said in yesterday's Form 10-Q that it intends to pursue its restructuring plan outside of the Bankruptcy Court. The Company's restructuring plan includes various scenarios, some of which reflect possible asset or business sales. As part of its restructuring plan, the Company obtained a $3 billion loan and commenced a cash tender offer for its $1 billion outstanding floating-rate senior notes due August 17, 2009. CIT yesterday said that the tender offer met minimum requirements as 59.81% of the total notes outstanding were tendered. CIT offered $875 per $1,000 principal amount of the notes. The Company admitted it may need to seek relief under the U.S. Bankruptcy Code if its restructuring plan is unsuccessful, or if the steering committee of bondholders is unwilling to agree to an out-of-court restructuring. This relief may include (i) seeking bankruptcy court approval for the sale of most or substantially all of our assets pursuant to Section 363(b) of the Bankruptcy Code; (ii) pursuing a plan of reorganization; or (iii) seeking another form of bankruptcy relief, all of which involve uncertainties, potential delays and litigation risks. As of June 30, 2009, CIT Group had total assets of $71,019,200,000 against total debts of $64,901,200,000. A copy of the Company's second quarter report on Form 10-Q is available for free at http://researcharchives.com/t/s?4211 About CIT Group CIT Group Inc. -- http://www.cit.com/-- is a bank holding company with more than $60 billion in finance and leasing assets that provides financial products and advisory services to small and middle market businesses. Operating in more than 50 countries across 30 industries, CIT provides an unparalleled combination of relationship, intellectual and financial capital to its customers worldwide. CIT maintains leadership positions in small business and middle market lending, retail finance, aerospace, equipment and rail leasing, and vendor finance. Founded in 1908 and headquartered in New York City, CIT is a member of the Fortune 500. As reported by the TCR on July 24, Standard & Poor's Ratings Services said that its ratings on CIT Group Inc. (CC/Negative/C) are not immediately affected by the company's announcement that it had initiated a recapitalization plan and entered into a $3 billion loan facility provided by a group of major bondholders. "The current rating level continues to reflect a significantly heightened risk of bankruptcy," S&P said. As part of the restructuring, CIT commenced a cash tender offer for its outstanding floating-rate senior notes due August 17, 2009. Noting that the price offered is less than face value, S&P said that, in accordance with criteria, upon completion of the offer, it will lower its counterparty credit rating on the company to 'SD' (selective default) and lower the ratings on the affected debt issue to 'D'. As reported by the TCR on July 20, Moody's Investors Service lowered CIT Group's senior unsecured rating to Ca from B3 and issuer rating to Ca from B3. The downgrade follows CIT's announcement that that it expects no additional support from the U.S. government and that it is evaluating alternatives, which Moody's believes includes a high probability of a near-term bankruptcy filing. CIT GROUP: Tender Offer Expires, Meets Minimum Condition -------------------------------------------------------- CIT Group Inc. on Monday announced the expiration and successful completion of its tender offer for its $1 billion of Floating Rate Senior Secured Notes due August 17, 2009. The Offer expired at 12:00 midnight, New York City time, at the end of August 14, 2009. The completion of this tender offer is another important milestone as the Company continues to make progress on the development and execution of a comprehensive restructuring plan. As of the expiration date, 59.81% of the total Notes outstanding were validly tendered and not withdrawn, an amount in excess of the minimum condition. In accordance with the terms and conditions of the Offer, CIT will accept tendered Notes for payment on August 17, 2009, the settlement date, at a purchase price of $875 per $1,000 principal amount of Notes. CIT will pay amounts due on Notes that have matured but were neither tendered in, nor subject to the Offer in accordance with the terms of those Notes. Morgan Stanley & Co. Incorporated and BofA Merrill Lynch are the Dealer Managers for the Offer. D.F. King & Co., Inc. is the Depositary and Information Agent. Persons with questions regarding the Offer should contact Morgan Stanley & Co. Incorporated toll free at (800) 624-1808 or collect at (212) 761- 5384 or BofA Merrill Lynch at (980) 388-4813, Attn. Debt Advisory Services. Requests for documents should be directed to D.F. King & Co., Inc. toll free at (800) 758-5880 or collect at (212) 269-5550. The terms and conditions of the Offer are set forth in the Offer to Purchase dated July 20, 2009, the Supplement dated July 23, 2009, copies of which are available from the Information Agent. Restructuring Plan CIT said July 15 that it has been advised that there is no appreciable likelihood of additional government support being provided over the near term. The Company's Board of Directors and management, in consultation with its advisors, are evaluating alternatives. CIT later announced a restructuring of its liabilities to provide additional liquidity and further strengthen its capital position. CIT obtained a $3 billion loan and commenced a cash tender offer for its outstanding floating-rate senior notes due August 17, 2009. The price offered is less than face value, and the Company has indicated that without a successful tender offer it may have to file for bankruptcy protection. CIT has more than $1 billion of unsecured notes maturing in both third- and fourth-quarter 2009. Payments for these notes could become increasingly difficult to make if borrower draws increase significantly and CIT does not win regulatory approval of its strategic initiatives, Standard & Poor's said. CIT applied for access to government aid before $1 billion in bonds mature in August. Since Nov. 25 the Federal Deposit Insurance Corp. has backed $274 billion in bond sales under its Temporary Liquidity Guarantee Program. However, the FDIC was apprehensive to approve the application because of CIT's worsening credit quality. This led to reports that CIT, which serves as lender to 950,000 businesses, is preparing for a bankruptcy filing. According to the Wall Street Journal, CIT Group hired Skadden, Arps, Slate, Meagher & Flom, LLP, to prepare for a bankruptcy filing. About CIT Group CIT Group Inc. -- http://www.cit.com/-- is a bank holding company with more than $60 billion in finance and leasing assets that provides financial products and advisory services to small and middle market businesses. Operating in more than 50 countries across 30 industries, CIT provides an unparalleled combination of relationship, intellectual and financial capital to its customers worldwide. CIT maintains leadership positions in small business and middle market lending, retail finance, aerospace, equipment and rail leasing, and vendor finance. Founded in 1908 and headquartered in New York City, CIT is a member of the Fortune 500. CIT Group reported $75.7 billion in assets and $68.2 billion in liabilities, including $3 billion in deposits, at the end of the first quarter. As reported by the TCR on July 24, Standard & Poor's Ratings Services said that its ratings on CIT Group Inc. (CC/Negative/C) are not immediately affected by the company's announcement that it had initiated a recapitalization plan and entered into a $3 billion loan facility provided by a group of major bondholders. "The current rating level continues to reflect a significantly heightened risk of bankruptcy," S&P said. As part of the restructuring, CIT commenced a cash tender offer for its outstanding floating-rate senior notes due August 17, 2009. Noting that the price offered is less than face value, S&P said that, in accordance with criteria, upon completion of the offer, it will lower its counterparty credit rating on the company to 'SD' (selective default) and lower the ratings on the affected debt issue to 'D'. As reported by the TCR on July 20, Moody's Investors Service lowered CIT Group's senior unsecured rating to Ca from B3 and issuer rating to Ca from B3. The downgrade follows CIT's announcement that that it expects no additional support from the U.S. government and that it is evaluating alternatives, which Moody's believes includes a high probability of a near-term bankruptcy filing. CITIZENS REPUBLIC: Fitch Downgrades Issuer Default Rating to 'B+' ----------------------------------------------------------------- Fitch Ratings has downgraded the long-term and short-term Issuer Default Ratings for Citizens Republic Bancorp, Inc., to 'B+' and 'B', respectively. In addition, Fitch has downgraded the long- term and short-term IDRs of CRBC's principal bank subsidiaries, including lead bank Citizens Bank, to 'BB-' and 'B', respectively. The ratings have been placed on Rating Watch Negative. Fitch's downgrade of CRBC's ratings reflects the company's current level of credit deterioration and the impact on core earnings (excluding goodwill writedowns), as well as Fitch's expectation of continued credit pressure given CRBC's concentration in the state of Michigan. Although CRBC has been aggressive in addressing its problem assets and has increased reserve levels, the downgrade indicates Fitch's belief that prolonged credit stress will continue to hamper the company's performance and erode capital. To date, the most severe credit pressure has occurred in the land hold, land development, and construction loan books, but Fitch anticipates that CRBC will feel increased stress and provisioning needs will remain high due to other portions of the commercial real estate loan portfolio and the retail book in particular. Consequently, Fitch believes the company will operate at a loss in 2009 and likely in 2010. CRBC has publicly announced pending debt exchange offers and its application for the U.S. Treasury's Capital Assistance Program to bolster Tier I equity in light of the current credit outlook. Fitch believes that CRBC will need to issue preferred stock through the CAP to help offset the capital erosion over the next two years. A resolution of the Negative Rating Watch hinges upon CRBC's receipt of the additional capital including the CAP funding and the stabilization of asset quality deterioration, and in this case, current ratings would likely be affirmed. Conversely, should the company fail to raise the necessary capital through the CAP and significant credit quality deterioration persists, downgrades would result. Citizens Republic Bancorp, Inc. is a $12.3 billion bank holding company headquartered in Flint, MI that operates more than 230 offices and 260 ATMS in the Midwest. It serves markets in Michigan, Ohio, Wisconsin, and Indiana as Citizens Bank, and operates F&M Bank in Iowa. CB Wealth Management, National Association is a limited-purpose trust charter. Fitch has taken these rating actions and placed the ratings on Rating Watch Negative: Citizens Republic Bancorp, Inc. -- Long-term Issuer Default Rating downgraded to 'B+' from 'BBB-'; -- Subordinated debt downgraded to 'B-/RR6' from 'BB+'; -- Preferred stock downgraded to 'CCC/RR6' from 'BB-'; -- Short-term IDR downgraded to 'B' from 'F3'; -- Individual downgraded to 'D/E' from 'C'; -- Support affirmed at '5'; -- Support floor affirmed at 'NF'. Citizens Bank F&M Bank-Iowa -- Long-term deposits downgraded to 'BB' from 'BBB'; -- Long-term IDR downgraded to 'BB-' from 'BBB-'; -- Short-term deposits downgraded to 'B' from 'F2'; -- Short-term IDR downgraded to 'B' from 'F3'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support floor affirmed at 'NF'. CB Wealth Management, National Association -- Long-term IDR downgraded to 'BB-' from 'BBB-'; -- Short-term IDR downgraded to 'B' from 'F3'; -- Individual downgraded to 'D' from 'C'; -- Support affirmed at '5'; -- Support floor affirmed at 'NF'. Citizens Funding Trust I -- Preferred stock downgraded to 'CCC/RR6' from 'BB+'. COLONIAL BANCGROUP: Fitch Downgrades Issuer Default Rating to 'D' ----------------------------------------------------------------- Subsequent to the Federal Deposit Insurance Corp's action of placing the Colonial Bancgroup's banking subsidiary, Colonial Bank, into receivership, Fitch has downgraded the Issuer Default Ratings to 'D' from 'C'. Following the bank's closure, the FDIC will sell the majority of Colonial's deposits to BB&T Corporation. As a result, Fitch has placed Colonial's deposit ratings on Rating Watch Evolving. Those deposits being assumed by BB&T would eventually be aligned with BB&T's current deposit rating levels. The ratings of any potential deposits not included in the transaction would be further reviewed by Fitch. It is anticipated that parent company CNB will file for bankruptcy in the very near future. BB&T is not assuming any bank level subordinated debt or holding company obligations. A $25 billion banking company headquartered in Montgomery, Alabama, CNB was a Florida concentrated institution, with the majority of the company's deposits and assets (including mortgage warehouse) located within the state. In addition to Florida and Alabama, Colonial also maintained a presence in the states of Georgia, Texas and Nevada. Fitch has downgraded these ratings: The Colonial BancGroup, Inc. -- Long-term Issuer Default Rating to 'D' from 'C'; -- Short-term IDR to 'D' from 'C'; -- Individual to 'F' from 'E'. Colonial Bank -- Long-term IDR to 'D' from 'C'; -- Short-term IDR to 'D' from 'C' -- Individual to 'F' from 'E'. These ratings are unaffected by the action: The Colonial BancGroup, Inc. -- Subordinated debt'C/RR6'. Colonial Bank -- Subordinated debt 'C/RR6'. Colonial Capital Trust IV -- Preferred stock 'C/RR6'. CBG Florida REIT -- Preferred stock 'C/RR6'. In addition, Fitch has withdrawn these ratings: The Colonial BancGroup, Inc. -- Support '5'; -- Support Floor 'NF'. Colonial Bank -- Support '5'; -- Support Floor 'NF'. Fitch has placed these ratings on Rating Watch Evolving: Colonial Bank -- Long-term deposits 'CC/RR3'; -- Short-term deposits 'C'. COMMERCECONNECT MEDIA: Taps Curtis Mallet-Prevost as Attorneys -------------------------------------------------------------- Commerceconnect Media Holdings Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Curtis, Mallet-Prevost, Colt & Mosel LLP as their attorneys. The firm has agreed to, among other things: a) advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their businesses and properties; b) attend meetings and negotiate with representatives of creditors and other parties-in-interest; c) take all necessary actions to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors and representing the Debtors' interests in negotiations concerning litigation in which the Debtors are or become involved, including objections to claims filed against the Debtors' estates; d) prepare all motions, applications, answers, orders, reports and papers necessary to the administration of the Debtors ' estates; and e) take any necessary action on behalf of the Debtors to obtain approval of a disclosure statement and confirmation of a chapter 11 plan. The firm's standard hourly rates are: Designation Hourly Rate ----------- ----------- Partners $675-$785 Counsel $525-$595 Associates $290-$575 Paraprofessionals $170-$210 The Debtors assure the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About CommerceConnect CommerceConnect Media, doing business as Cygnus, is a business-to- business publisher and communications company. CommerceConnect's brands include Qualified Remodeler, Firehouse, Equipment Today, Kitchen and Bath Design News, and the CPA Technology Advisor. In total, CommerceConnect publishes 42 trade publications in 13 markets, with total circulation of more than 3 million. CommerceConnect also operates 38 Web sites which generated more than 180 million page views in 2008. CommerceConnect also produces more than 30 trade shows and events each year. CommerceConnect Media Holdings, Inc., together with affiliates, including Cygnus Business Media Inc., filed for Chapter 11 on August 3, 2009 (Bankr. D. Del. Case No. 09-12765). Attorneys at Richards, Layton & Finger, P.A., and Curtis, Mallet-Prevost, Colt & Mosle LLP, serve as counsel to the Debtors. Garden City Group Inc. serves as noticing and claims agent. Miller Buckfire & Co., LLC, is the Debtors' financial advisor. Attorneys at Sidley Austin represent General Electric Capital Corp., the first lien agent, while attorneys at Paul, Hastings, Janofsky & Walker LLP serve as counsel to Barclays Bank PLC, the second lien agent. Judge Brendan Linehan Shannon presides over the case. The petition says CommerceConnect has $100,000,001 to $500,000,000 in assets and debts. COMMERCECONNECT MEDIA: Proposes Richard Layton as Co-Counsel ------------------------------------------------------------ Commerceconnect Media Holdings Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Richard Layton & Finger P.A. as their co- counsel. The firm has agreed to: a) advise the Debtors of their rights, powers and duties as debtors and debtors-in-possession; b) take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; c) prepare on behalf of the Debtors all necessary motions, applications, answers, orders, reports and papers in connection with the administration of the Debtors' estates; and d) perform all other necessary legal services in connection with the Chapter 11 Cases. The firm's professionals and their standard hourly rates are: Professional Hourly Rate ------------ ----------- John H. Knight, Esq. $600 Jason M. Madron, Esq. $345 Lee E. Kaufman, Esq. $275 Zachary 1. Shapiro, Esq. $245 Janel Gates $195 The Debtors assure the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About CommerceConnect CommerceConnect Media, doing business as Cygnus, is a business-to- business publisher and communications company. CommerceConnect's brands include Qualified Remodeler, Firehouse, Equipment Today, Kitchen and Bath Design News, and the CPA Technology Advisor. In total, CommerceConnect publishes 42 trade publications in 13 markets, with total circulation of more than 3 million. CommerceConnect also operates 38 Web sites which generated more than 180 million page views in 2008. CommerceConnect also produces more than 30 trade shows and events each year. CommerceConnect Media Holdings, Inc., together with affiliates, including Cygnus Business Media Inc., filed for Chapter 11 on August 3, 2009 (Bankr. D. Del. Case No. 09-12765). Attorneys at Richards, Layton & Finger, P.A., and Curtis, Mallet-Prevost, Colt & Mosle LLP, serve as counsel to the Debtors. Garden City Group Inc. serves as noticing and claims agent. Miller Buckfire & Co., LLC, is the Debtors' financial advisor. Attorneys at Sidley Austin represent General Electric Capital Corp., the first lien agent, while attorneys at Paul, Hastings, Janofsky & Walker LLP serve as counsel to Barclays Bank PLC, the second lien agent. Judge Brendan Linehan Shannon presides over the case. The petition says CommerceConnect has $100,000,001 to $500,000,000 in assets and debts. COMMERCECONNECT MEDIA: Selects Miller Bucker as Investment Banker ----------------------------------------------------------------- Commerceconnect Media Holdings Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Miller Buckfire & Co. LLC as their financial advisor and investment banker. The firm has agreed to: a) familiarize itself with the business, operations, properties, financial condition and prospects of the Debtors; b) provide general financial advisory and investment services, including, if the Debtors determine to undertake a "restructuring", "financing" and "sale", advising and assisting the Debtors in structuring and effecting the financial aspects of such a transaction or transactions; c) provide financial advice and assistance to the Debtors in developing and seeking approval of a plan of reorganization; d) provide financial advice and assistance to the Debtors in structuring any new securities to be issued under a plan of reorganization; and e) assist the Debtors and participate in negotiations with entities or groups affected by a plan of reorganization. The firm charges $150,000 per month for this engagement. The Debtors assure the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About CommerceConnect CommerceConnect Media, doing business as Cygnus, is a business-to- business publisher and communications company. CommerceConnect's brands include Qualified Remodeler, Firehouse, Equipment Today, Kitchen and Bath Design News, and the CPA Technology Advisor. In total, CommerceConnect publishes 42 trade publications in 13 markets, with total circulation of more than 3 million. CommerceConnect also operates 38 Web sites which generated more than 180 million page views in 2008. CommerceConnect also produces more than 30 trade shows and events each year. CommerceConnect Media Holdings, Inc., together with affiliates, including Cygnus Business Media Inc., filed for Chapter 11 on August 3, 2009 (Bankr. D. Del. Case No. 09-12765). Attorneys at Richards, Layton & Finger, P.A., and Curtis, Mallet-Prevost, Colt & Mosle LLP, serve as counsel to the Debtors. Garden City Group Inc. serves as noticing and claims agent. Miller Buckfire & Co., LLC, is the Debtors' financial advisor. Attorneys at Sidley Austin represent General Electric Capital Corp., the first lien agent, while attorneys at Paul, Hastings, Janofsky & Walker LLP serve as counsel to Barclays Bank PLC, the second lien agent. Judge Brendan Linehan Shannon presides over the case. The petition says CommerceConnect has $100,000,001 to $500,000,000 in assets and debts. COOPER-STANDARD: Opposes Cooper Tire Action in Canadian Case ------------------------------------------------------------ Cooper-Standard Holdings Inc. and its affiliated debtors ask the Bankruptcy Court to deny Cooper Tire & Rubber Company's bid to file an action in the insolvency case of their Canadian unit. Attorney for the Debtors, Drew Sloan, Esq., at Richards Layton & Finger P.A., in Wilmington, Delaware, says that Cooper Tire does not have a claim against Cooper-Standard Automotive Canada Ltd., and does not have ownership interest in the tax refunds. Mr. Sloan describes Cooper Tire's move as an attempt to "leapfrog" ahead of every other creditor. "Cooper Tire is seeking to gain an unfair advantage over all of the Debtors' creditors and is seeking a remedy that will significantly harm the Debtors and their estates," Mr. Sloan says, pointing out that funds that would otherwise be available for the operations of CSA Canada and the Debtors, and for distribution to creditors would be frozen for the sole benefit of one unsecured creditor. "Any claim of Cooper Tire should be addressed in the claims resolution process together with all other unsecured claims against the individual Debtors," he further says. About Cooper-Standard Cooper-Standard Automotive Inc., headquartered in Novi, Mich., is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. For more information, visit the Company's Web site at: http://www.cooperstandard.com/ Cooper-Standard is a privately-held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Fr� res & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) COOPER-STANDARD: Proposes A&M as Restructuring Adviser ------------------------------------------------------ Cooper-Standard Holdings Inc. and its affiliated debtors seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Alvarez & Marsal North America LLC as their restructuring adviser effective August 3, 2009. Allen Campbell, vice-president and chief financial officer of Cooper-Standard Holdings, says the firm is well-qualified for the job given its extensive experience in providing advisory services in the restructuring and reorganization of companies involved in complex Chapter 11 cases. Mr. Campbell says that A&M's managing director, Robert Campagna, is well-suited to provide the restructuring support services and to lead the assignment required by the Debtors. As restructuring adviser, A&M is tasked to: (1) assist the Debtors in preparing and developing short-term cash flow forecasts and liquidity plans; (2) assist the Debtors' management team and counsel focused on the coordination of resources related to the ongoing reorganization effort; (3) assist in preparing financial information for distribution to creditors and other concerned parties; (4) attend meetings and assist the Debtors in their discussions with potential investors, banks and other secured lenders, any official committee appointed in their cases and the U.S. Trustee, as requested; (5) assist the Debtors in analyzing information required under the proposed debtors-in-possession financing; (6) analyze creditor claims and assist the Debtors in developing database to track those claims; (7) assist the debtor in preparing financial-related disclosures required by the Court; and (8) assist in identifying executory contracts and leases, and conduct evaluation with respect to their assumption or rejection. A&M will be paid for its services at these hourly rates: Managing Directors $625 - $850 Directors $450 - $625 Associates $300 - $450 Analysts $225 - $300 The firm will also be reimbursed of the expenses incurred in connection with its employment as restructuring adviser. A&M has already received various retainers in connection with the preparation of the Debtors' bankruptcy filing. The unapplied remaining retainer for $200,000, will constitute a general retainer for postpetition services, will not be segregated by A&M in a separate account, and will be held until the end of the Debtors' cases and applied to the firm's fees approved by a final court order. Robert Campagna, managing director of A&M, assures the Court that his firm does not hold or represent any interest adverse to the Debtors and their estates, and that it is a "disinterested person" as that term is defined under Section 101(14) of the Bankruptcy Code. COOPER-STANDARD: Sec. 341 Meeting Of Creditors on Sept. 10 ---------------------------------------------------------- Roberta De Angelis, Acting United States Trustee for Region 3, proposes to convene a meeting of the creditors of Cooper-Standard Holdings Inc. and its affiliated debtors on September 10, 2009, 2:00 p.m., at Room 2112 of J. Caleb Boggs Federal Building, 2nd Floor, in Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases. Attendance by the Debtors' creditors at the meeting is welcome, but not required. The Sec. 341(a) meeting offers the creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. The meeting may be continued or adjourned from time to time by notice at the meeting, without further written notice to the creditors. About Cooper-Standard Cooper-Standard Automotive Inc., headquartered in Novi, Mich., is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. For more information, visit the Company's Web site at: http://www.cooperstandard.com/ Cooper-Standard is a privately-held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Fr� res & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) COOPER-STANDARD: U.S. Trustee Forms 7-Member Creditors Committee ---------------------------------------------------------------- Pursuant to Section 1102 of the Bankruptcy Code, Roberta De Angelis, Acting United States Trustee for Region 3, appointed seven creditors to serve on the Official Committee of Unsecured Creditors in the Chapter 11 cases of Cooper-Standard Holdings Inc. and its affiliated debtors: (1) Wilmington Trust Company, as Indenture Trustee Attn: Patrick Healy, Rodney Square North, 1100 N. Market Street Wilmington, DE 19890 Phone: 302-636-6391 Fax: 302-636-4149 (2) Pioneer High Yield Fund Attn: Christopher J. Kelley 60 State Street Boston, MA 02109 Phone: 617-422-4952 Fax: 617-422-4223 (3) U.S. Bank National Association as Successor Indenture Trustee Attn: Timothy Sandell Corporate Trust Services 60 Livingston Avenue St. Paul, MN 55107-2292, Phone: 651-495-3959 Fax: 651-495-8100 (4) TD High Yield Income Fund Attn: Greg Kocik 161 Bay Street, 33rd Floor Toronto, ON M5J 3T2 Phone: 416-983-8898/6933 Fax: 416-982-4298 (5) United Steelworkers Attn: David R. Jury Five Gateway Center, Room 807 Pittsburgh, PA 15222 Phone: 412-562-2546 Fax: 412-562-2429 (6) EMS-CHEMIE (North America) Inc. Attn: Tom Herbster, PO Box 1717 Sumter, SC 29151-1717 Phone: 803-481-6154 Fax: 803-481-3820 (7) Pension Benefit Guaranty Corporation Attn: Dana Cann 1200 K Street, N.W. Washington, DC 20005-4026 Phone: 202-326-4070 x 3810 Fax: 202-842-2643 Wilmington Trust holds the largest claim in the Debtors' list of their 30 largest unsecured creditors. Wilmington Trust asserts a $313,350,000 claim against the Debtors' estate. The Official Creditors Committees 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 Official Committee serves as fiduciary to the general population of creditors it represents. The Committee may also attempt to negotiate the terms of a consensual Chapter 11 plan, which is almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the bankruptcy court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, it may urge the bankruptcy court to convert the Chapter 11 cases to a liquidation proceeding. About Cooper-Standard Cooper-Standard Automotive Inc., headquartered in Novi, Mich., is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. For more information, visit the Company's Web site at: http://www.cooperstandard.com/ Cooper-Standard is a privately-held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Fr� res & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) CUSTOM WOODWORKS: Case Summary & 2 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Custom Woodworks, Inc. 4188 Hwy. 57 W. Ramer, TN 38367 Bankruptcy Case No.: 09-13355 Chapter 11 Petition Date: August 14, 2009 Court: United States Bankruptcy Court Western District of Tennessee (Jackson) Judge: G. Harvey Boswell Debtor's Counsel: C. Jerome Teel Jr., Esq. 425 East Baltimore Street Jackson, TN 38301 Tel: (731) 424-3315 Email: beth@tennesseefirm.com Total Assets: $2,465,900 Total Debts: $718,643 A full-text copy of the Debtor's petition, including a list of its 2 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/tnwb09-13355.pdf The petition was signed by Ron Newcomb, secretary/treasurer of the Company. CYTOMEDIX INC: PwC Says Recurring Losses Cued Going Concern Doubt ----------------------------------------------------------------- Cytomedix, Inc. posted a net loss of $7.66 million for the fiscal year ended Dec. 31, 2008, compared with a net loss of $5.07 million for the same period in 2008. At Dec. 31, 2008, the Company's balance sheet showed total assets of $4.79 million, total liabilities of $1.65 million and stockholders' equity of $3.14 million. On March 31, 2009, PricewaterhouseCoopers LLP in McLean, Virginia expressed substantial doubt about Cytomedix, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal years ended Dec. 31, 2008, and 2007. The auditor noted that the Company suffered recurring losses from operations and has insufficient liquidity to fund its ongoing operations. The Company filed an Amendment No. 1 on Form 10-K/A to its Annual Report on Form 10-K for the year ended Dec. 31, 2008, which was originally filed with the SEC on March 31, 2009. The amendment was for the sole purpose of including a signed copy of the report of the Company's independent accounting firm of PwC. A full-text copy of the Company's Form 10-K/A is available for free at http://ResearchArchives.com/t/s?41fa A full-text copy of the Company's original Form 10-K is available for free at http://ResearchArchives.com/t/s?41f9 Cytomedix, Inc. (AMEX:GTF) is a biotechnology company that develops, sells and licenses regenerative biological therapies to primarily address the areas of wound care, inflammation and angiogenesis. The Company markets the AutoloGel System, a device for the production of platelet rich plasma gel derived from the patient's own blood. The Company is also engaged in the development of other product candidates in its pipeline. Cytomedix sells its products primarily to health care providers in the United States and licenses its patents to surgical medical device suppliers in the U.S. CYTORI THERAPEUTICS: June 30 Balance Sheet Upside-Down by $880,000 ------------------------------------------------------------------ Cytori Therapeutics, Inc.'s balance sheet at June 30, 2009, showed total assets of $25.68 million and total liabilities of $26.56 million, resulting in a stockholders' deficit of $880,000. For three months ended June 30, 2009, the Company posted a net loss of $826,000 compared with a net loss of $8.41 million for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $6.29 million compared with a net loss of $16.68 million for the same period in 2008. The Company said that there is substantial doubt about its ability to continue as a going concern. The Company had an accumulated deficit of $166.21 million as of June 30, 2009. Additionally, the Company had used net cash of $12.05 million and $18.18 million to fund its operating activities for the six months ended June 30, 2009 and 2008, respectively. To date these operating losses have been funded from outside sources of invested capital. The Company added that if it is unsuccessful in its efforts to raise outside capital in the near term, it will be required to further reduce its research, development, and administrative operations, including reduction of its employee base, in order to offset the lack of available funding. The Company is pursuing financing opportunities in both the private and public debt and equity markets well as through strategic corporate partnerships. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?41f7 Cytori Therapeutics Inc. (FRA:XMP) -- http://www.cytoritx.com/-- develops, manufactures, and sells medical technologies to enable the practice of regenerative medicine. The Company's commercial activities are focused on cosmetic and reconstructive surgery in Europe and Asia-Pacific, and stem and regenerative cell banking in worldwide. Its product pipeline includes the development of new treatments for cardiovascular disease, spinal disc degeneration, gastrointestinal disorders, liver and renal disease and pelvic health conditions. DELPHI CORP: Enters Into Liquidity Pact Amendment with GM --------------------------------------------------------- Delphi Corporation on August 13, 2009, entered into a further amendment to its existing liquidity agreement between Delphi and General Motors Company (as assignee of Motors Liquidation Company, formerly known as General Motors Corporation). The effect of the Ninth Amendment was to extend the deadline for Delphi to satisfy certain milestones, which if not met, would prevent Delphi from continued access to the facility. The GM Advance Agreement was amended and restated on June 1, 2009 to provide Delphi with an additional $250 million credit facility -- Tranche C Facility -- subject to Delphi's continued satisfaction of certain conditions and milestones. Delphi's continued ability to request advances under the Tranche C Facility is conditioned on progress in achieving the transactions contemplated by the confirmed First Amended Joint Plan Reorganization as modified, as filed with the U.S. Bankruptcy Court for the Southern District of New York on June 16, 2009. Specifically, prior to the Ninth Amendment, the ability of Delphi to request advances on or after August 13, 2009 was conditioned on the entry by the Court of an order, in form and substance reasonably acceptable to GM, approving the Modified Plan or an implementation agreement pursuant to which the parties to the Master Disposition Agreement, dated June 1, 2009, as revised and amended, among Delphi, GM Components Holdings, LLC, GM and Parnassus Holdings II, LLC, would perform their obligations thereunder pursuant to Section 363 of the Bankruptcy Code, independent of and not pursuant to or contingent on the effectiveness of the Modified Plan. The Ninth Amendment extends the August 13, 2009 date until 8:00 p.m. (Eastern time) on August 18, 2009. All other terms of the GM Advance Agreement remain in effect. Amendment to Accommodation Agreement On August 13, Delphi also entered into a further amendment, to its accommodation agreement, with the lenders under its existing debtor-in-possession financing agreement, consisting of a $1.1 billion first priority revolving credit facility -- Tranche A Facility; a $500 million first priority term loan -- Tranche B Term Loan; and a $2.75 billion second priority term loan -- Tranche C Term Loan. The effect of the Twenty-Eighth Amendment is to extend the term of the Accommodation Agreement to 8:00 p.m. (Eastern time) on August 18, 2009. Pursuant to the Accommodation Agreement, as in effect through the Twenty-Seventh Amendment, the lenders agreed, among other things, to allow Delphi to continue using the proceeds of the Amended and Restated DIP Credit Facility and to forbear from the exercise of certain default-related remedies, in each case until August 13, 2009, subject to the continued satisfaction by Delphi of a number of covenants and conditions. The Twenty-Eighth Amendment further extends that date until 8:00 p.m. (Eastern time) on August 18, 2009. There currently remains approximately $230 million outstanding under the Tranche A Facility, $311 million outstanding under the Tranche B Term Loan and $2.75 billion outstanding under the Tranche C Term Loan under the Amended and Restated DIP Credit Facility. The remaining provisions in the Accommodation Agreement are materially unchanged. 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 confirmed Delphi's plan on January 25, 2008. The Plan was not 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. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. 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: Exhaust Business Sale to Bienes Turgon Completed ------------------------------------------------------------- Delphi Corporation has closed the sale to Mexican company Bienes Turgon of assets and shares related to the company's global exhaust business in Shanghai, China and Gurgaon, India. Bienes Turgon officially begins operation of this business in China and India on August 1, 2009, under the name Katcon Global. Bienes Turgon had previously purchased assets and shares related to the company's global exhaust business in Blonie, Poland; Clayton, Australia; Port Elizabeth, South Africa; joint venture interests in Monterrey, Mexico; technical centers in Auburn Hills, Mich. USA; and Bascharage, Luxembourg. As announced in December 2008, Delphi received approval from the U.S. Bankruptcy Court for the Southern District of New York for the sale of assets related to the company's global exhaust business to Bienes Turgon. Although the company is divesting its exhaust business, Delphi Powertrain Systems continues to provide full engine management systems (EMS) -- including air and fuel management, combustion and valve train technology -- through its gas EMS product business unit. 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 confirmed Delphi's plan on January 25, 2008. The Plan was not 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. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. 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: Non-Material Changes to GM Master Disposition Pact --------------------------------------------------------------- Delphi Corporation informed the Court that on July 31, 2009, they executed non-material modifications to the Master Disposition Agreement they entered into with Motors Liquidation Company, formerly known as General Motors Corporation, General Motors Company, GM Components Holdings LLC, and DIP Holdco 3 LLC, a newly created entity by certain DIP Lenders. A full-text copy of Master Disposition Agreement dated July 30, 2009, is available for free at: http://bankrupt.com/misc/Delphi_Jul30MasterDispAgr.pdf The Debtors note that certain schedules have been revised in a manner consistent to the changes made to the Master Disposition Agreement. The Debtors relate that those additional revised schedules contain highly confidential information. Accordingly, the Debtors sought and obtained the Court's permission to file the Revised Schedules under seal. 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 confirmed Delphi's plan on January 25, 2008. The Plan was not 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. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. 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: Proposes to Sell Interest in PBR Joint Venture ----------------------------------------------------------- PBR Automotive Knoxville Inc. and PBR Automotive Tennessee Inc. formed a joint venture called PBR Automotive USA L.L.C. pursuant to a Limited Liability Company Agreement. PBR Automotive Knoxville Inc. owned 51% of the joint venture, while PBR Automotive Tennessee Inc. owned the remaining 49%. PBR Automotive Knoxville Inc. changed its name to PBR Tennessee Inc. By May 1999, Delphi Automotive Systems Tennessee, Inc., or DAST acquired PBR Automotive Tennessee Inc.'s 49% and has continued to own such interest. The LLC Agreement allows each member of the joint venture to participate in managing the company. The joint venture is primarily financed through member contributions, cash flow from operations, and a recent loan provided by Robert Bosch Finance LLC, an affiliate of Robert Bosch LLC. The LLC Agreement also contains a prohibition on the transfer of membership interests, and DAST and PBR Tennessee are generally restricted from transferring their membership interests without the other member's consent. Accordingly, the Debtors ask the Court to authorize DAST's entry into an letter agreement dated July 30, 2009, with Bosch. The Letter Agreement provides that DAST will sell its 49% membership interest to Bosch, an affiliate of PBR Tennessee, free and clear of all liens, for $1.75 million. The Letter Agreement also provides that the period for repayment of amounts owing under the Joint Venture Loan would continue until the earlier of the closing of the sale under the Agreement or August 31, 2009. Bosch may extend the closing deadline under certain circumstances up to September 15, 2009. Moreover, PBR Knoxville, a related PBR entity, and PBR Tennessee and the Debtors entered into stipulations resolving the PBR parties' proofs of claim. John Wm. Butler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, notes that the continued ownership of the Membership Interest would potentially require DAST to make further capital investments in PBR Knoxville under the LLC Agreement. Moreover, the Debtors have ascertained in connection with their Transformation Plan that the manufacture of brake parts as those produced by the joint venture is no longer a core business. In light of the potential restrictions on transfer of the Membership Interest, an August 31, 2009 expiration of the period for repayment of amounts outstanding under the Joint Venture Loan, and the fact that there is no ready market for the Membership Interests, DAST believes that it has sound business reason for entering into the Letter Agreement and consummating the sale of its Membership Interest to Bosch. Judge Drain will consider the Debtors' Motion on August 20, 2009. Objections were due August 13. 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 confirmed Delphi's plan on January 25, 2008. The Plan was not 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. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. 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: Reports $603 Million Net Loss in Second Quarter ------------------------------------------------------------ Delphi Corp. reported its financial results for the second quarter of 2009 with the U.S. Securities and Exchange Commission in a Form 10-Q filing on August 12, 2009. The Company reported net sales of $2.77 billion for the quarter period ended June 30, 2009, and a net loss of $603 million for the same period. Delphi Chief Accounting Officer and Controller Thomas Timko notes that Delphi's global revenue and production volumes have continued to decline due to continued substantial reductions in vehicle production as well as economic and credit market impacts. Delphi's non-General Motors Company sales from continuing operations declined by 40%. In addition, GM North America sales decreased due to a reduction of 53% in production by GM North America for the quarter ended June 30, 2009, which includes the impact of the consumer trends and market conditions. GM sales from continuing operations in the second quarter of 2009 decreased 50% compared to the same period a year ago, and represented 24% of total net sales from continuing operations for the second quarter of 2009. Other customer sales for the second quarter of 2009 decreased 40% and represented 76% of Delphi's total sales. Other customer sales decreased due to decreased volume as a result of the impact of recent consumer trends and market conditions, as well as the impact of unfavorable foreign exchange rates. The Company's net loss for the second quarter of 2009, Mr. Timko relates, was favorably impacted by: -- $1.2 billion due to the impact of the termination of health care and life insurance benefits in retirement to salaried employees, retirees and surviving spouses effective Mar. 31, 2009 recorded during the six months ended June 30, 2009; -- $100 million and $253 million due to the impact of the Amended Global Settlement Agreement or GSA and the Master Restructuring Agreement or MRA recognized in the three and six months ended June 30, 2009; -- the absence of $168 million goodwill impairment charges related to out Electrical/Electronic Architecture segment recorded during the three and six months ended June 30, 2008; -- $116 million and $213 million of decreased selling, general and administrative expenses in the three and six months ended June 30, 2009, primarily due to headcount reductions, temporary layoffs, and lower operating and restructuring costs to support information technology systems; -- the absence of $79 million of previously capitalized fees paid to potential Investors and their affiliates recorded as expense in the six months ended June 30, 2008, as a result of the termination of the Equity Purchase and Commitment Agreement; -- $15 million and $48 million of workforce transition program charges recorded during the three and six months ended June 30, 2008; and -- $30 million related to the loss on sale of Delphi's global bearings business recorded during the six months ended June 30, 2008 within loss on discontinued operations. These favorable items, Mr. Timko avers, were offset by decreases to gross margin primarily attributable to a 53% decrease in GM North America volume, as well as the impact of certain plant closures and divestitures in the Automotive Holdings Group, and recent consumer trends and market conditions, including $96 million due to the unfavorable impact for foreign exchange rates for the second quarter of 2009. Delphi's income loss from discontinued operations was $28 million for the second quarter of 2009 compared to $10 million from the same period in 2008. The loss from discontinued operations includes the losses related to the operations and assets held for sale of the Steering Business and Automotive Holdings Group. Net cash used in Delphi's operating activities totaled $260 million for the six months ended June 30, 2009, compared to $599 million for the six months ended June 30, 2008. Cash flow from the Company's operating activities continues to be negatively impacted by operating challenges due to lower North American production volumes, related pricing pressures stemming from increasingly competitive markets, and the overall slowdown in the global economy, Mr. Timko explains. Delphi expects its operating activities to continue to use, not generate, cash. Reorganization Efforts Delphi avers that it continues to work with its stakeholders, including GM, the DIP Lenders, and other interested parties to consummate the Confirmed First Amended Joint Plan of Reorganization, as modified, including the Master Disposition Agreement entered among Delphi, Motors Liquidation Company, formerly known as General Motors Corporation, General Motors Company, GM Components Holdings, LLC, and DIP Holdco 3, LLC, a newly created entity by certain DIP Lenders. Until the Modified Plan has been consummated, liquidity is expected to remain constrained and Delphi must continue implementing and executing its cash savings initiatives to preserve liquidity in the current economic environment, Mr. Timko notes. Similarly, he says, until the transactions under the Master Disposition Agreement have been consummated, the Master Disposition Agreement is terminated, or unless waived by the Buyers, Delphi is subject to certain restrictions on its activities that could hinder its ability to compensate for any liquidity shortfall. In addition, failure to the milestones and other covenants under the DIP Accommodation Agreement will be an event of default under the DIP Accommodation Agreement and absent receipt of a waiver will result in a termination of the accommodation period. Against this backdrop, there can be no assurances that the interim financing to be provided to Delphi prior to consummation of the Modified Plan will be sufficient to compensate for the liquidity shortfall anticipated as a result of the customer production cuts, Mr. Timko states. Delphi anticipates continued lower production volumes throughout the third quarter of 2009 as compared to prior years given the continued production shutdowns by both GM and Chrysler, which will likely result in significantly lower receivables, earnings and a subsequent reduction in cash flow toward the beginning of the third quarter of 2009. A full-text copy of Delphi's Quarterly Report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?41c9 Delphi Corporation, et al. Unaudited Consolidated Balance Sheets As of June 30, 2009 (In Millions) ASSETS Current assets: Cash and cash equivalents $823 Restricted cash 327 Accounts receivable, net: General Motors and affiliates 533 Other customers 1,621 Inventories, net: 1,053 Other current assets 456 Assets held for sale 680 -------- TOTAL CURRENT ASSETS 5,493 Long-term assets: Property, net 3,102 Investment in affiliates 275 Other long-term assets 459 -------- TOTAL LONG-TERM ASSETS 3,836 -------- TOTAL ASSETS $9,329 ======== LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Short-term debt $4,250 Accounts payable 1,568 Accrued liabilities 2,269 Liabilities held for sale 463 -------- TOTAL CURRENT LIABILITIES 8,550 Long-term liabilities: Employee benefit plan obligations 602 Other long-term liabilities 981 -------- TOTAL LONG-TERM LIABILITIES 1,583 Liabilities subject to compromise 13,466 -------- TOTAL LIABILITIES $23,599 -------- Stockholders' deficit: Common stock 6 Additional paid-in capital 2,747 Accumulated deficit (12,115) Accumulated other comprehensive loss (5,030) Treasury stock (6) Noncontrolling interest 128 -------- TOTAL STOCKHOLDERS' DEFICIT (14,270) -------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $9,329 ======== Delphi Corporation, et al. Unaudited Consolidated Statement of Operations Three Months Ended June 30, 2009 (In Millions) Net sales: General Motors and affiliates $664 Other customers 2,111 -------- Total net sales 2,775 -------- Operating expenses: Cost of sales 2,686 Depreciation and amortization 206 Goodwill impairment charges - Selling, general and administrative 240 -------- Total operating expenses 3,132 -------- Operating loss (357) Interest expense (168) Other income, net - Reorganization items (18) -------- Income (loss) from continuing operations before income taxes and equity income (535) Income tax benefit (expense) (25) -------- Income (loss) from continuing operations before equity income (560) Equity (loss) income, net of tax (4) -------- Loss from continuing operations (564) Loss from discontinued operations, net of tax (28) -------- Net income (loss) (592) Net income attributable to non-controlling interest 11 -------- NET LOSS ($603) ======== Delphi Corporation, et al. Unaudited Consolidated Statement of Cash Flows Three Months Ended June 30, 2009 (In Millions) Cash flows from operating activities: Net loss ($36) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 339 Long-lived asset impairment charges 37 Goodwill impairment charges - Pension and other postretirement benefit expenses 255 Equity loss (income) 11 Reorganization items (1,126) U.S. employee workforce transition program - Loss on extinguishment of debt - (Gain) loss on assets held for sale 9 Deferred income taxes (79) Change in operating assets and liabilities: Accounts receivable, net 28 Inventories, net 168 Other assets 162 Accounts payable (28) Accrued and other long-term liabilities (83) Other, net 161 U.S. employee workforce transition program payments (22) Pension contributions (60) Other postretirement benefit payments (30) Other, net (37) Discontinued operations 71 -------- Net cash used in operating activities (260) -------- Cash flows from investing activities: Capital expenditures (239) Proceeds from divestitures and sale of property 12 Cost of acquisitions - Proceeds from sale of non-U.S. trade bank notes 88 Proceeds from divestitures, net 16 Decrease in restricted cash 76 Other, net 14 Discontinued operations (7) -------- Net cash used in investing activities (40) -------- Cash flows from financing activities: Net (repayments) borrowings under refinanced DIP facility (242) Proceeds from amended and restated DIP Facility - Repayments of borrowings from refinanced DIP facility - Net (repayments) borrowings under the debt agreements (272) Issuance costs related to the Accommodation Agreement (38) Net borrowings under GM liquidity support agreements 700 Dividend payments of consolidated affiliates to minority shareholders - Discontinued operations 6 -------- Net cash provided by financing activities 154 -------- Effect of exchange rate fluctuations on cash & cash equivalents 10 -------- Decrease in cash and cash equivalents (136) -------- Cash and cash equivalents at beginning of period 959 -------- Cash and cash equivalents at end of period $823 ======== 2009 Second Quarter Financial Data Delphi Corp. and its affiliates submitted to the Bankruptcy Court on August 13, 2009, a consolidated operating report for the quarter ended June 30, 2009. The Debtors clarify that financial data on the non-debtor entities, principally non-U.S. affiliates, are excluded from their 2009 2nd quarter financial report. Delphi Corporation, et al. Quarterly Operating Report Condensed Combined DIP Balance Sheet As of June 30, 2009 (in millions) Assets: Cash and cash equivalents $96 Restricted cash 288 Accounts receivable, net: General Motors affiliates 334 Other third parties 312 Non-Debtor affiliates 302 Notes receivable from non-Debtor affiliates 116 Inventories, net 415 Other current assets 115 Assets held for sale 372 -------- Total current assets 2,350 Long-term assets: Property, net 1,002 Investments in affiliates 226 Investment in non-Debtor affiliates 1,003 Notes receivable from non-Debtor affiliates 1,429 Other 214 -------- Total long-term assets 3,874 -------- Total assets $6,224 ======== Liabilities and Stockholders' deficit Current liabilities not subject to compromise: Short-term debt 4,006 Accounts payable 356 Accounts payable to non-Debtor affiliates 501 Accrued liabilities 1,395 Liabilities held for sale 155 -------- Total current liabilities not subject to compromise 6,413 Long-term liabilities not subject to compromise: Employee benefit plan obligations and other 663 -------- Total long-term liabilities not subject to compromise 663 Liabilities subject to compromise 13,546 -------- Total liabilities 20,622 Stockholder's deficit: Total stockholders' deficit (14,398) -------- Total liabilities and stockholders' deficit $6,224 ======== Delphi Corporation, et al. Condensed Combined DIP Statement of Operations Three Months Ended June 30, 2009 (in millions) Net sales: General Motors and affiliates $402 Other customers 539 Non-Debtor affiliates 58 -------- Total net sales 999 Operating Expenses: Cost of sales 1,138 Depreciation and amortization 104 U.S. Employee workforce transition 127 -------- Total operating expenses 1,369 Operating loss (370) Interest expense (163) Other expense, net (3) Reorganization items, net (3) Income tax benefit 5 Equity (loss) from non-consolidated affiliates, net of tax (3) -------- Loss from continuing operations before income taxes (537) Loss from discontinued operations, net of tax (56) Equity loss from non-Debtor affiliates, net of tax (10) -------- Net loss (603) Net income attributable to noncontrolling interest - -------- Net income (loss ) attributable to Delphi ($603) ======== Delphi Corporation, et al. Condensed Combined DIP Statement of Cash Flows Three Months Ended June 30, 2009 (in millions) Cash flows from operating activities: Net cash used in operating activities ($207) Cash flows from investing activities: Capital expenditures (18) Proceeds from sale of property 1 Decrease in restricted cash 122 other, net (1) Discontinued operations 10 -------- Net cash provided by investing activities 114 -------- Cash flows from financing activities: Net repayments of borrowings under DIP facility (96) Repayments of borrowings under other debt agreements (1) Issuance costs related to the Accommodation Agreement (22) Net borrowings under GM liquidity support agreements 247 -------- Net cash provided by financing activities 128 -------- Increase in cash and cash equivalents 35 -------- Cash and cash equivalents at beginning of period 61 -------- Cash and cash equivalents at end of period $96 ======== 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 confirmed Delphi's plan on January 25, 2008. The Plan was not 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. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. 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) DETROIT PUBLIC SCHOOL: Buckles Under $260 Million Deficit --------------------------------------------------------- According to Law360, with Detroit Public Schools mulling municipal bankruptcy as a way to tackle a runaway deficit, officials for the district maintain that evidence of rampant corruption in the public school system will not affect a possible Chapter 9 filing. The Wall Street Journal reported last week that Robert Bobb, emergency financial manager for Detroit Public Schools, is expected to decide this month whether the school district should file for Chapter 9 bankruptcy. DPS has an estimated budget deficit of $259 million. In addition, five employees of the Detroit public school system were charged last week with multiple felonies as part of a probe into alleged corruption and the loss of tens of millions of dollars in school funds. Detroit Public Schools is a school district that covers all of the city of Detroit, Michigan, United States. The district had 194 schools as of 2008. DOLE FOOD: Second Quarter Income Drops to $21.2 Million ------------------------------------------------------- Dole Food Company, Inc., has filed with the U.S. Securities and Exchange Commission its second quarter 2009 report on Form 10-Q. For the quarter ended June 20, 2009, Dole Food reported $21.12 million net income, compared to $181.41 million net income in the same period last year. For the six months ended June 20, 2009, the Company reported $ 124.84 million net income, compared to $153.14 million net income in the same period last year. Dole Food reduced its total net debt outstanding by $145 million during the second quarter of 2009. Total net debt is defined as total debt less cash and cash equivalents. Over the last five quarters, Dole reduced its total net debt outstanding by $480 million, or 20%, as a result of monetizing non-core assets, cost cutting initiatives and improved earnings. Net debt at the end of the second quarter of 2009 was $1.9 billion and there were no amounts outstanding under the asset based revolving credit facility. Cash flows provided by operating activities for the first half of 2009 were $209.3 million compared to cash flows used in operating activities of $2.6 million. Cash flows provided by operating activities increased primarily due to higher operating income and better working capital management. Net revenues for the second quarter of 2009 were $1.7 billion compared to $2 billion in the second quarter of 2008. The primary reasons for the decrease were the sale of the Company's JP Fresh and Dole France ripening and distribution subsidiaries, and unfavorable foreign currency exchange movements in selling locations. Excluding the net impact of unrealized hedging activity and gains on asset sales, operating income totalled $107.1 million in the second quarter of 2009, an improvement of $5.8 million, or 6%, over the second quarter of 2008. Excluding the net impact of unrealized hedging activity and gains on asset sales, operating income totalled $200.8 million for the first half of 2009, an increase of 29% over the first half of 2008. During the second quarter of 2009, fresh fruit earnings excluding unrealized hedging activity and gains on asset sales were $103 million, an improvement of approximately $1 million compared to strong 2008 operating results. Favorable market pricing worldwide offset increases in costs due to unfavorable weather conditions in Latin America. Excluding the net impact of unrealized hedging activity, packaged foods operating performance improved by $9.5 million during the second quarter of 2009. Earnings grew due to improved pricing and lower product and distribution costs. Packaged salads operating results in the second quarter of 2009 improved over the prior year as improved utilization and more efficient distribution were offset by increased marketing, general and administrative expenditures. Commodity vegetables earnings decreased over the prior year mainly due to lower pricing for celery and strawberries. During the third quarter of 2009, Dole signed letters of intent to sell certain operating properties in Latin America for approximately $68 million. Dole Food anticipates that the sales of these properties will not have a significant impact on ongoing earnings. Possible Bankruptcy Dole Food said, "Our substantial indebtedness could adversely affect our operations, including our ability to perform our obligations under the notes and our other debt obligations." The indentures governing Dole Food's senior notes due 2010, Dole Food's senior notes due 2011, the Company's debentures due 2013 and the Company's senior secured notes due 2014, and the Company's senior secured credit facilities, contain various restrictive covenants that limit the Company's and its subsidiaries' ability to take certain actions. Dole Food said, "We are subject to a 'springing covenant' in our asset based lending revolving credit facility, which would only become effective if the availability under our revolving credit facility were to fall below $35 million for any eight consecutive business days, which it has never done during the life of such facility. As of the last day of the fiscal quarter ending June 20, 2009, we had approximately $244 million of availability under our revolving credit facility. In the event that such availability were to fall below $35 million for such eight consecutive business day period, the "springing covenant" would require that our fixed charge coverage ratio, defined as (x) consolidated EBITDA for the four consecutive fiscal quarters then most recently ended, divided by (y) consolidated fixed charges for such four fiscal quarter period, equal or exceed 1.00:1.00. The most recent calculation of the fixed charge coverage ratio was performed as of June 20, 2009, at which time the ratio equaled 2.05:1.00. "With respect to limitations on asset sales, we are permitted by our senior secured credit facilities and our note and debenture indentures to sell up to $100 million of any of our assets in any fiscal year, and we are permitted to sell an unlimited amount of additional assets that are not material to the operations of Dole Food Company, Inc., and its subsidiaries, so long as we comply, on a pro forma basis, with the first priority senior secured leverage ratio test set forth in the following paragraph, as of the last day of the most recently completed four fiscal quarter test period for which financial statements are available. In general, 75% of any asset sale proceeds must be in the form of cash, cash equivalents or replacement assets, and the proceeds must be reinvested in the business within 12 months (pending which they may be used to repay revolving debt) or used to permanently pay down term debt or revolving debt under our senior secured credit facilities." In addition, pursuant to the amendments adopted in March 2009 to Dole Food's senior secured term credit facility, the Company must keep its first priority senior secured leverage ratio at or below: 3.25 to 1.00 as of the last day of the fiscal quarters ended March 28, 2009, through October 10, 2009; 3.00 to 1.00 as of the last day of the fiscal quarters ending January 2, 2010 through March 26, 2011; 2.75 to 1.00 as of the last day of the fiscal quarters ending June 18, 2011 through March 24, 2012; and 2.50 to 1.00 as of the last day of the fiscal quarters ending June 16, 2012 through March 23, 2013. The first priority senior secured leverage ratio, for each such date, is the ratio of the Company's Consolidated First Priority Secured Debt to our Consolidated EBITDA for the four consecutive fiscal quarter period most recently ended on or prior to such date. At June 20, 2009, the first priority senior secured leverage ratio would have been less than 2.25 to 1.00. Upon the occurrence of an event of default under the senior secured credit facilities or any other debt instrument, lenders representing more than 50% of Dole Food's senior secured term credit facility or more than 50% of its senior secured revolving credit facility, or the indenture trustees or holders of at least 25% of any series of its debt securities could elect to declare all amounts outstanding to be immediately due and payable and, with respect to the revolving credit and letter of credit components of its senior secured credit facilities, terminate all commitments to extend further credit. "If we were unable to repay those amounts, the lenders could proceed against the collateral granted to them, if any, to secure the indebtedness. If the lenders under our current or future indebtedness were to so accelerate the payment of the indebtedness, we cannot assure you that our assets or cash flow would be sufficient to repay in full our outstanding indebtedness, in which event we likely would seek reorganization or protection under bankruptcy or other, similar laws," Dole Food said. Dole Food said that it may be unable to generate sufficient cash flow to service its debt obligations. Dole Food's ability to generate cash, make scheduled payments or refinance its obligations depends on its successful financial and operating performance. Dole Food's financial and operating performance, cash flow and capital resources depend upon prevailing economic conditions and various financial, business and other factors, including: changes in laws and regulations; operating difficulties, increased operating costs or pricing pressures we may experience; and delays in implementing any strategic projects. Dole Food stated, "If our cash flow and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell material assets or operations, obtain additional capital or restructure our debt. If we are required to take any actions referred to above, it could have a material adverse effect on our business, financial condition and results of operations. In addition, we cannot assure you that we would be able to take any of these actions on terms acceptable to us, or at all, that these actions would enable us to continue to satisfy our capital requirements or that these actions would be permitted under the terms of our various debt agreements, in any of which events the default and cross-default risks set forth in the immediately preceding risk factor would become relevant." In connection with Dole Food's March 2009 refinancing of Dole Food's 2009 senior notes, the Company amended its senior secured credit facilities in order to be able to grant liens under the senior secured notes due 2014. Such amendments, among other things, did the following: (i) increase the applicable margin for (x) the term loan facilities to LIBOR plus 5.00% or the base rate plus 4.00% subject to a 50 basis points step down if the priority senior secured leverage ratio is less than or equal to 1.75 to 1.00 and (y) for the revolving credit facility, to a range of LIBOR plus 3.00% to 3.50% or the base rate plus 2.00% to 2.50% and (ii) provide for a LIBOR floor of 3.00% per annum for our term loan facilities. The resulting increase in the interest rates under the senior secured credit facilities, as well as the increased interest rate of the 2014 notes as compared to the 2009 notes, will have a material effect upon Dole Food's cash available to fund operations, make capital expenditures or repay our debt, as compared to prior periods. Dole Food's 7.25% senior notes are due on June 15, 2010. At present, $363 million in principal amount of these senior notes are outstanding. Although Dole Food is analyzing different refinancing and repayment alternatives and expect to refinance the bulk of the outstanding 2010 notes in the near future, if they are not sufficient to refinance and/or repay all of the 2010 notes, and some of the 2010 notes remain outstanding after the maturity date, an event of default would occur under the indenture governing the 2010 notes. If such an event of default were to occur, it would constitute an event of default under the cross- default provisions of the Company's other senior notes and debentures indentures and of its senior secured credit facilities, in which event the indenture trustee or holders of at least 25% of the senior notes or debentures of any series, or lenders representing more than 50% of its senior secured term credit facility or more than 50% of its senior secured revolving debt facility could give notice of acceleration with respect to such series or facility, as appropriate, in which event the Company likely would seek reorganization or protection under bankruptcy or other, similar laws. A breach of a covenant or other provision or failure to repay, extend or refinance under loan agreements of Dole Food's parent -- DHM Holding Company, Inc. -- and an affiliate of its majority stockholder may also result in a default under it senior secured credit facilities. More information is available at no charge at: http://ResearchArchives.com/t/s?4203 As of June 20, 2009, Dole Food reported $4.22 billion in total assets, against $1.34 billion in total current liabilities, $1.58 billion in long-term debt, $257.51 million in deferred income tax liabilities, $495.56 million in other long-term liabilities. The Company reported $555.46 million in total shareholders' equity. Public Offering Lynn Cowan at The Wall Street Journal reports that Dole Food presented its plans for an initial public offering of stock, registering Friday with the SEC to raise as much as $500 million. The report says that Dole Food is aiming to list on New York Stock Exchange under the trading symbol DOLE. Dole Food has been closely held since 2003 by investor David Murdock, The Journal relates. Dole Food, according to The Journal, hasn't set a price or timing for the IPO, and the size of the deal could differ from the $500 million in registration. About Dole Food Based in Westlake Village, California, Dole Food Company Inc. -- http://www.dole.com/-- is the world's largest producer and marketer of high-quality fresh fruit, fresh vegetables and fresh- cut flowers. Dole markets a growing line of packaged and frozen foods and is a produce industry leader in nutrition education and research. As reported by the Troubled Company Reporter on August 10, 2009, Fitch Ratings removed its Negative Outlook from these ratings of Dole Food Company, Inc.: -- Long-term Issuer Default Rating at 'CCC'; -- Secured asset-based revolver at 'B+/RR1'; -- Secured term loan B at 'B+/RR1'; -- Third-lien secured notes at 'CCC/RR4'; -- Senior unsecured debt at 'C/RR6'. The TCR reported on March 27, 2009, that Standard & Poor's Ratings Services said that it revised its outlook on Westlake Village, California-based Dole Food Co. Inc. to stable from negative. S&P also affirmed the existing ratings on the company, including the 'B-' corporate credit rating. According to the TCR on March 23, 2009, Moody's Investors Service changed the rating outlook of Dole Food Company, Inc., to stable from negative, following the issuance of 3rd lien notes that will refinance much of a bond maturing on May 1st. Moody's upgraded the rating on the recently issued 3rd lien notes to B2 from B3 based on a change within the LGD assessment. Moody's affirmed Dole's other ratings, including its corporate family rating of B3 and its probability of default rating of Caa1. DOLE FOOD: Fitch Gives Positive Outlook on $500 Mil. Offering ------------------------------------------------------------- Fitch Ratings views Dole Food Company, Inc.'s proposed initial public offering of up to $500 million in common stock and proposed $325 million secured note issuance positively. Fitch currently rates Dole and its subsidiary Solvest Ltd: Dole Food Company, Inc. (Operating Company) -- Long-term Issuer Default Rating 'CCC'; -- Secured asset-based revolver 'B+/RR1'; -- Secured term loan B 'B+/RR1'; -- Third-lien secured notes 'CCC/RR4'; -- Senior unsecured debt 'C/RR6'. Solvest Ltd. (Bermuda-based Subsidiary) -- Long-term IDR 'CCC'; -- Secured term loan C 'B+/RR1'. At June 20, 2009, Dole had approximately $2 billion in consolidated debt. On Aug. 6, 2009, Fitch removed its Negative Ratings Outlook for Dole due to the company's announcement on Aug. 4 that it planned to offer senior secured notes during the third quarter of 2009 and use proceeds from the issuance, together with cash and/or borrowings under its revolver, to redeem the bulk of its $383 million 7.25% notes due June 15, 2010. Significant improvement in Dole's operating performance over the past 18 months and improvement in capital markets is providing the company more flexibility to address its upcoming maturities. Dole commenced an offering of $325 million privately placed senior secured notes due 2016. Upon the completion of the issuance and the anticipated refinancing of its 2010 notes a one notch upgrade is likely. Dole also filed an S1 Registration Statement stating that the company and David H. Murdock plan to issue, via an IPO, up to $500 million of common stock and that a portion of the proceeds received by Dole will be used to pay down debt. Prior to the consummation of the offering, Dole intends to complete transactions which will result in the elimination of the current cross-default provisions that exist between its senior secured facilities and certain indebtedness of its parent, DHM Holding Co., Inc., and its affiliates. In addition, the company is exploring certain structuring alternatives involving DHM Holdings, which could be completed prior to the IPO, in order to more efficiently operate as a public company. Such alternatives could include a merger or other combination with DHM Holdings; however, in connection with any such combination, a transfer of interest and liabilities in its Westlake Wellbeing Properties and non-core land, including land in Hawaii, to affiliates of David H. Murdock could occur. Fitch views this potential equity offering as a credit positive, given that it could result in a meaningful reduction in the company's debt and reduce its overall financial leverage. Completion of the IPO, of which timing is uncertain, and subsequent use of proceeds to repay indebtedness, could result in additional upgrade(s) to the company's ratings. Recovery prospects for the company's 13 7/8% $350 million third-lien notes issued on March 18, 2009 and unsecured notes, which totaled $738 million at June 20, 2009, could also improve given increased equity loss absorption. Dole has been private since March 28, 2003 when David H. Murdock of DHM Holding Co., Inc., completed a leveraged buy-out of the 76% of the company he did not already own with $1.5 billion in debt and an estimated $125 million of cash equity. Based on an average enterprise value market multiple of 7.5 times (x) for Dole's closest peers and the company's current latest twelve month operating EBITDA (excluding gains related to asset sales) of $418.5 million, Fitch estimates that the $500 million IPO represents a material portion of the company's net worth. During the most recent LTM period ended June 20, 2009, Dole's leverage (defined as total debt-to-operating EBITDA) was 4.8x, down significantly from a peak of 8.3x for the fiscal year ended Dec. 29, 2007. The improvement has been driven by better cash flow generation and debt reduction. The company generated $164.5 million of free cash flow (defined as cash flow from operations less capital expenditures and dividends), after producing negative free cash flow annually since 2005. Operating cash flow has benefited from significant improvements in working capital and higher operating income. Continued free cash flow generation would be positive for the ratings. At June 20, 2009, Dole's liquidity included $107.9 million of cash and $243.6 million available under its ABL revolver due April 12, 2011. In addition to the first priority secured leverage maintenance covenant, terms of the agreement subject Dole to a springing fixed charge coverage ratio of 1.0x should availability under the revolver fall below $35 million. At June 20, 2009, the borrowing base for this facility was $320 million. Dole Food Company, Inc., is the world's leading producer, marketer and distributor of fresh fruit and fresh vegetables, including a growing line of value-added products. The company holds the number one or number two market share position in the primary markets and categories for which it competes. Dole's three business segments and their respective contribution to its $7.6 billion of annualized revenue and $378 million of annualized operating EBIT (excluding corporate expenses) in 2008 were Fresh Fruit (71% and 81%), Fresh Vegetables (14% and 0%) and Packaged Foods (15% and 19%). Approximately 60% of Dole's revenue is generated in international markets. DOVER MOTORSPORTS: Seeks Waiver from Q3 Covenants Violations ------------------------------------------------------------ Dover Motorsports, Inc., said in a filing with the Securities and Exchange Commission that the projected noncompliance with its revolving credit facility raised substantial doubt about its ability to continue as a going concern. As of June 30, 2009, the Company had $34.80 million outstanding under its primary revolving credit facility which expires in July 2011. Based on its projected future results, its ability to maintain compliance with the financial covenants in its revolving credit facility will likely be impacted in the third quarter. The Company is working with the lenders to amend the provisions of the credit agreement including the revision of the financial covenants to levels that the Company believes it will be able to maintain compliance with for at least the next twelve months. While the Company are negotiating an amendment to the credit facility based on a draft commitment letter from its lenders, the amendment has not been executed. The Company said that the amendment will be finalized within the next few days; however, without the formal amendment being executed there is no assurance that the projected financial covenant violations projected in the third quarter based upon the pre-amendment financial covenants will not result in the acceleration of all of its outstanding debt which would have a material adverse effect on its liquidity and financial position. At June 30, 2009, the Company's balance sheet showed total assets of $154.66 million, total liabilities of $88.29 million and stockholders' equity of $66.37 million. For six months ended June 30, 2009, the Company posted a net loss of $800,000 compared with a net income of $1.69 million for the same period in 2008. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?41e5 Dover Motorsports, Inc. (NYSE:DVD) is a public holding company that is a marketer and promoter of motorsports entertainment in the United States. The Company's motorsports subsidiaries operate four motorsports tracks in three states and t promoted 15 major events during the year ended Dec. 31, 2008, under the auspices of three of the premier sanctioning bodies in motorsports: the National Association for Stock Car Auto Racing, the Indy Racing League and the National Hot Rod Association. It owns and operates Dover International Speedway in Dover, Delaware; Gateway International Raceway near St. Louis, Missouri; Memphis Motorsports Park in Memphis, Tennessee, and Nashville Superspeedway near Nashville, Tennessee. E*TRADE FINANCIAL: S&P Puts Junk Ratings on CreditWatch ------------------------------------------------------- Standard & Poor's Ratings Services said that it completed its review of its counterparty credit ratings on eight independent U.S. brokerage firms. As a result of this review, S&P placed the ratings on E*TRADE Financial Corp. and its subsidiary, E*TRADE Bank, on CreditWatch with positive implications and affirmed the ratings on the other seven companies. The CreditWatch action on E*TRADE was based on the application of S&P's criteria for distressed exchange offerings and a review of the company's financial position, which has faced unique challenges from asset quality problems at its banking unit. "The CreditWatch listing reflects S&P's belief that the debt exchange no longer meets S&P's criteria for a distressed exchange offering, because the value to the investors is unlikely to be less than what it promised on the original securities," said Standard & Poor's credit analyst Charles D. Rauch. "We based S&P's affirmation of ratings on the other brokers on S&P's review of the impact of industrywide developments such as market conditions and, in the case of the retail firms, investor participation," said Standard & Poor's credit analyst Robert B. Hoban. "We also assessed company-specific measures such as liquidity and capitalization, and near-term debt service capacity." The ongoing downturn has pressured these companies. Nonetheless, so far, they have mostly fared considerably better than large banks and universal bank brokerage peers, despite their inherently less diversified business profiles and generally less substantial resources. Primary advantages are lower credit and market risk exposures, flexible cost bases, and less-capital-intensive businesses. S&P believes the brokerage industry's near-term prospects will remain less than ideal as long as the broader economy remains depressed. However, S&P also sees those brokers that are not facing specific structural issues as largely well positioned to keep enduring these less-than-optimal operating conditions. Most of the companies covered in this review are maintaining defensive financial profiles, with reduced leverage and/or higher degrees of liquidity, which should provide some cushion if operating conditions turn sour again. Regardless of future operating conditions, S&P believes the survivors will benefit from the culling of U.S. brokerage firms over the past year and a half. In particular, the independent retail brokers have taken advantage of disarray at the warehouse firms to poach financial advisers from them. Ratings List Ratings Affirmed BNY ConvergEx Group LLC Counterparty Credit Rating B+/Stable/-- Senior Secured B+ Subordinated Local Currency B- Recovery Rating 6 Charles Schwab Corp. Counterparty Credit Rating A/Stable/A-1 Senior Unsecured A Commercial Paper A-1 Charles Schwab & Co. Inc. Counterparty Credit Rating A+/Stable/-- Schwab Capital Trust I Preferred Stock BBB+ IBG LLC Counterparty Credit Rating BBB+/Stable/-- Jefferies Group Inc. Counterparty Credit Rating BBB/Negative/-- Senior Unsecured BBB Preferred Stock BB+ LPL Holdings, Inc. Counterparty Credit Rating B+/Stable/-- Senior Secured B+ Subordinated B- Raymond James Financial, Inc. Counterparty Credit Rating BBB/Negative/A-2 Senior Unsecured BBB TD AMERITRADE Holding Corp. Counterparty Credit Rating Local Currency BBB+/Stable/-- Senior Secured BBB+ Ratings Placed On CreditWatch E*TRADE Financial Corp. To From -- ---- Counterparty Credit Rating CC/Watch Pos/-- CC/Negative/-- Senior Unsecured CC/Watch Pos CC Senior Unsecured CCC-/Watch Pos CCC E*TRADE Bank To From -- ---- Counterparty Credit Rating CCC+/Watch Pos/C CCC+/Negative/C Certificate Of Deposit Local Currency CCC+/Watch Pos/C CCC+/C EDDIE BAUER: Panel Taps ASK Financial to Do Preference Analysis --------------------------------------------------------------- The official committee of unsecured creditors of Eddie Bauer Holdings, Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware for permission to retain ASK Financial as its special counsel. As special counsel, ASK will perform a preference analysis of all transactions that occurred within the 90-day period prior to the petition date. As compensation, ASK will be paid a $50,000 flat fee for services rendered in connection with its preference analysis. The flat fee includes 10 hours of consulting time to be provided by ASK subsequent to its completion of the preference analysis. Jospeh L. Steinfeld, Jr., a co-managing principal of ASK Financial, tells the Court that the firm does not have any connection with the Debtors, their creditors, equity security holders, or any other party in interest in the bankruptcy cases or their respective attorneys or accountants, and that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Eddie Bauer Established in 1920 in Seattle, Washington, Eddie Bauer is a specialty retailer that sells outerwear, apparel and accessories for the active outdoor lifestyle. The Eddie Bauer brand is a nationally recognized brand that stands for high quality, innovation, style and customer service. Eddie Bauer products are available at 371 stores throughout the United States and Canada, through catalog sales and online at http://www.eddiebauer.com/. Eddie Bauer participates in a joint venture in Japan and has licensing agreements across a variety of product categories. Eddie Bauer, Inc., was a subsidiary of Spiegel, Inc. Eddie Bauer Inc. emerged from Spiegel's 2003 Chapter 11 case as a separate, reorganized entity under the control and ownership of Eddie Bauer Holdings, Inc. Eddie Bauer Holdings, Inc., and eight affiliates filed for bankruptcy on June 17, 2009 (Bankr. D. Del. Lead Case No. 09-12099). Judge Mary F. Walrath presides over the case. David S. Heller, Esq., Josef S. Athanas, Esq., and Heather L. Fowler, Esq., at Latham & Watkins LLP, serve as the Debtors' general counsel. Kara Hammond Coyle, Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor LLP, serve as local counsel. The Debtors' restructuring advisors are Alvarez and Marsal North America LLC. Their financial advisors are Peter J. Solomon Company. Kurtzman Carson Consultants LLC acts as claims and notice agent. As of April 4, 2009, Eddie Bauer had $525,224,000 in total assets and $448,907,000 in total liabilities. Eddie Bauer Canada, Inc., and Eddie Bauer Customer Services filed for protection from their creditors in Canada on June 17, 2009, the same day the U.S. Debtors filed for protection from their creditors. The Canadian Debtors have obtained an initial order of the Canadian Court staying the proceedings against the Canadian Debtors and their property in Canada. RSM Richter Inc. was appointed as monitor in the Canadian proceedings. EDDIE BAUER: Hires Brent Kugman as Chief Restructuring Officer -------------------------------------------------------------- Eddie Bauer Holdings, Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware for emergency authority to employ Kugman Partners, Inc., and to designate Brent I. Kugman as chief restructuring officer and corporate secretary for each of the Debtors. As CRO and corporate secretary, Mr. Kugman will: (i) review the budgets that will provide the Company and its board of directors and investors with a detailed financial summary of the Company's expected performance throughout the bankruptcy process; (ii) oversee the activities of the Company's (i) contractors, vendors and other service providers, including activities of counsel and financial advisors, and (ii) subsidiaries; (iii) advise, consult and settle matters relating to the collection of amounts due to the Company; (iv) provide periodic reports to the board of directors and investors regarding overall progress; and (v) provide consultation information and data retention. The Debtors have agreed to pay Kugman Partners, Inc., a monthly fee of $35,000, payable in advance of each month. Brent I. Kugman, the founder and president of Kugman Partners, tells the Court that his firm does not have any adverse interest to the Debtors' estates, and as a result, is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Eddie Bauer Established in 1920 in Seattle, Washington, Eddie Bauer is a specialty retailer that sells outerwear, apparel and accessories for the active outdoor lifestyle. The Eddie Bauer brand is a nationally recognized brand that stands for high quality, innovation, style and customer service. Eddie Bauer products are available at 371 stores throughout the United States and Canada, through catalog sales and online at http://www.eddiebauer.com/. Eddie Bauer participates in a joint venture in Japan and has licensing agreements across a variety of product categories. Eddie Bauer, Inc., was a subsidiary of Spiegel, Inc. Eddie Bauer Inc. emerged from Spiegel's 2003 Chapter 11 case as a separate, reorganized entity under the control and ownership of Eddie Bauer Holdings, Inc. Eddie Bauer Holdings, Inc., and eight affiliates filed for bankruptcy on June 17, 2009 (Bankr. D. Del. Lead Case No. 09-12099). Judge Mary F. Walrath presides over the case. David S. Heller, Esq., Josef S. Athanas, Esq., and Heather L. Fowler, Esq., at Latham & Watkins LLP, serve as the Debtors' general counsel. Kara Hammond Coyle, Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor LLP, serve as local counsel. The Debtors' restructuring advisors are Alvarez and Marsal North America LLC. Their financial advisors are Peter J. Solomon Company. Kurtzman Carson Consultants LLC acts as claims and notice agent. As of April 4, 2009, Eddie Bauer had $525,224,000 in total assets and $448,907,000 in total liabilities. Eddie Bauer Canada, Inc., and Eddie Bauer Customer Services filed for protection from their creditors in Canada on June 17, 2009, the same day the U.S. Debtors filed for protection from their creditors. The Canadian Debtors have obtained an initial order of the Canadian Court staying the proceedings against the Canadian Debtors and their property in Canada. RSM Richter Inc. was appointed as monitor in the Canadian proceedings. ELIZABETH ARDEN: S&P Downgrades Corporate Credit Rating to 'B+' --------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its corporate credit rating on Elizabeth Arden Inc. to 'B+' from 'BB-'. The outlook is stable. Standard & Poor's also lowered the issue-level rating on the company's senior subordinated debt one notch to 'B' from 'B+', and the recovery rating remains a '5'. The ratings were removed from CreditWatch, where they were placed with negative implications on May 8, 2009, following the company's downward earnings revision for the quarter ended June 2009. "Our downgrade is based on the company's higher leverage and weaker EBITDA margins, which S&P estimates were about 4.9x and 6.4% at June 2009, compared with 3.4x and 10.1%, respectively, a year ago," said Standard & Poor's credit analyst Susan H. Ding. The ratings on Elizabeth Arden Inc. reflect the company's sales concentration in the highly competitive fragrance category, the seasonal nature of its core businesses, and its relatively weak operating margins. The company benefits from its portfolio of well-known brands, solid market position in fragrance, and its diverse distribution channels. S&P believes the beauty industry is highly competitive, and Elizabeth Arden--which competes with The Estee Lauder Cos. Inc. (A/Negative/A-1), L'Oreal (--/--/A-1+)Coty Inc.,(unrated) and Inter-Parfums Inc. (unrated)--has a solid position in fragrances and maintains diverse channels of distribution, selling through the mass retail channel and department stores. The company also sells via the travel retail channel, which includes airport boutiques and duty-free shops. Nevertheless, reduced traffic and inventory destocking in these two channels has weakened operating performance in recent periods. Elizabeth Arden generates about 35% of its sales outside of North America, providing some geographic diversity. Standard & Poor's considers the seasonality in the company's core business to be a negative rating factor. Sales and EBITDA are weighted toward the first half of its fiscal year ending June 30, as retailers increase purchases in advance of the holiday season. The company's product portfolio is highly concentrated in fragrances, which S&P estimates in fiscal 2009 to be about 75% of total sales, but also includes skin care (about 17% of sales) and cosmetics (about 7% of sales). S&P expects additional licensing of Liz Claiborne fragrance brands (including Juicy Couture, Usher, and Curve) following a June 2008 agreement should provide further revenue growth and also contribute to margin enhancements. S&P believes new product launches across its key distribution channels and expansion in international emerging markets should be the primary drivers of growth in fiscal 2010. For the fiscal year ended June 2009, Elizabeth Arden's reported sales declined by about 6% (3% excluding foreign currency impact), as compared with the previous fiscal year. A significant portion of the shortfall was due to weaker sales at the U.S. department store channel and the negative currency effect of the company's international business. EBITDA margin remains pressured, and for the fiscal year ended June 2009, declined to about 6.3% from 9.1% a year ago. Although S&P believes the slowdown in consumer spending and deteriorating global economic conditions will continue to affect performance, Elizabeth Arden should benefit from the greater proportion of sales from the mass channel versus the department store channel, the latter of which continues to experience weakness in the current economic environment. The outlook is stable. Despite challenging operating conditions, S&P expects the company to sustain credit protection measures close to current levels over the near term and then improve somewhat. However, if Elizabeth Arden's operating performance continues to weaken, and the company's leverage does not decline toward 4.5x after the peak borrowing season, S&P could revise the outlook to negative. S&P's assumptions indicate that even if fiscal 2010 sales grew by 2.5% and EBITDA margin remain unchanged, adjusted leverage would trend toward 4.5x, outside of seasonal working capital needs. If the company is able to improve its leverage and EBITDA margins in the next 12-18 months, and business trends improve, S&P would consider a positive outlook. EMISPHERE TECH: Available Cash to Last Only Through August 2009 --------------------------------------------------------------- Emisphere Technologies Inc. disclosed with the Securities and Exchange Commission its financial results for three months and six months ended June 30, 2009. As of June 30, 2009, the Company had $1.5 million in cash and restricted cash, $15.8 million in working capital deficiency, a stockholders' deficit of $44.8 million and an accumulated deficit of $442.5 million. The Company's net loss and operating loss for the three months ended June 30, 2009, were $3.7 million and $3.0 million, respectively, and $8.8 million and $7.7 million, respectively for the six months ended June 30, 2009. The Company anticipates that it will continue to generate significant losses from operations for the foreseeable future, and that its business will require substantial additional investment that it has not yet secured. The Company anticipates that its existing cash resources will enable it to continue operations only through approximately August 2009. Further, the Company has significant future commitments and obligations. The Company is pursuing new well as enhanced collaborations and exploring other financing options, with the objective of minimizing dilution and disruption. The Company's plan is to raise capital and to pursue product partnering opportunities. The Company's failure to raise capital will have a serious adverse affect on its business, financial condition and results of operations, and would force it to cease operations. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?4201 On March 16, 2009, PricewaterhouseCoopers LLP in New York City expressed substantial doubt about its ability to continue as a going concern after auditing the Company's financial results for the fiscal years ended Dec. 31, 2008, and 2007. The auditor noted that the Company experienced recurring operating losses, has limited capital resources and has significant future commitments. About Emisphere Technologies Inc. Based in Cedar Knolls, New Jersey, Emisphere Technologies Inc., (NasdaqGM: EMIS) -- http://www.emisphere.com/-- is a biopharmaceutical company that focuses on a unique and improved delivery of therapeutic molecules using its eligen(R) technology. These molecules and compounds could be currently available or are under development. The molecules are usually delivered by injection; in many cases, their benefits are limited due to poor bioavailability, slow on-set of action or variable absorption. The eligen(R) technology can be applied to the oral route of administration as well other delivery pathways, like buccal, rectal, inhalation, intra-vaginal or transdermal. Emisphere reported a net loss of $5.1 million for the three months ended September 30, 2008, compared to net income of $3.0 million for the three months ended September 30, 2007, which included $11.9 million income (net) from the settlement of the lawsuit between Eli Lilly and the company. Emisphere reported a net loss of $16.7 million for the nine months ended September 30, 2008, compared to a net loss of $13.0 million for the nine months ended September 30, 2007, which included $11.9 million income (net) from the settlement of the lawsuit between Eli Lilly and the company. Cash, cash equivalents, and investments as of September 30, 2008 were $11.0 million compared to $13.9 million at December 31, 2007. At September 30, 2008, the company's balance sheet showed total assets of $15.6 million, total liabilities of $45.0 million and stockholders' deficit of about $29.4 million. Going Concern Doubt PricewaterhouseCoopers LLP expressed substantial doubt about Emisphere Technologies Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended December 31, 2007. The auditing firm reported that the company has experienced sustained operating losses, has limited capital resources, and has significant future commitments. The Company has limited capital resources and operations to date have been funded primarily with the proceeds from collaborative research agreements, public and private equity and debt financings and income earned on investments. ESCADA AG: S&P Downgrades Corporate Credit Rating to 'D' -------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its long- term corporate credit rating on German high-end women's fashion designer and retailer ESCADA AG to 'D' (Default) from 'CC'. At the same time, the issue rating on ESCADA's EUR200 million senior unsecured notes due 2012 was also lowered to 'D'. The recovery rating of '3' on the Notes is unchanged, indicating S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default. On April 30, 2009, ESCADA reported net debt of EUR199 million. The rating action follows ESCADA's announcement that on Aug. 13, 2009, it filed an insolvency petition with the insolvency court within the Municipal Court of Munich. On the same day, the court decreed the preliminary administration of ESCADA's assets and appointed a preliminary insolvency administrator. On April 24, 2009, Standard & Poor's lowered its corporate credit rating on ESCADA to 'CC' with a negative outlook after ESCADA made a public offer for the conversion of the Notes into new obligations. On Aug. 11, 2009, ESCADA's management announced that it would seek bankruptcy protection if the offer did not get at least 80% bondholder acceptance. On expiry, the offer secured less than 50% acceptance, prompting the action by ESCADA. ESCADA AG: U.S. Unit Wants Schedules Deadline Moved to Sept. 28 --------------------------------------------------------------- Section 521 of the Bankruptcy Code and Rule 1007 of the Federal Rules of Bankruptcy Procedure require that a debtor to file its Schedules of Assets and Liabilities and Statements of Financial Affairs within 15 days after the Petition Date. Escada (USA) Inc.'s current Schedules filing deadline is August 29, 2009. The Debtor anticipates that it will be unable to complete its Schedules and Statements in the 15 days provided under Bankruptcy Rule 1007(c). The Debtor notes that to prepare its Schedules and Statements, it must compile information from books, records, and documents relating to a myriad of claims, assets, and contracts. The Debtor avers that this information is voluminous and is located in numerous places throughout its organization. Collecting the necessary information would require it and its employees to expend an enormous amount of time and effort at a time when there are numerous other demands on them. The Debtor tells the Court that while it is mobilizing its employees to work diligently and expeditiously to prepare the Schedules and Statements, its resources are limited. The Debtor thus asks the Court to extend the 15-day period to file Schedules and Statements by an additional 30 days, or through and including September 28, 2009. About Escada AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009 the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. ESCADA AG filed of an insolvency petition in Munich, Germany, on August 13, 2009. The competent Municipal Court of Munich has appointed Dr. jur. Christian Gerloff as preliminary insolvency administrator. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Judge Stuart M. Bernstein handles the case. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. A copy of Escada US's Chapter 11 petition and list of largest unsecured creditors is available for free at http://bankrupt.com/misc/sdny09-15008.pdf ESCADA AG: U.S. Unit Proposes O'Melveny as Ch. 11 Counsel --------------------------------------------------------- Escada (USA) Inc. seeks the U.S. Bankruptcy Court for the Southern District of New York's permission to employ O'Melveny and Myers LLP as its general counsel to file and prosecute its Chapter 11 Case and all related matters, effective as of the Petition Date. Before the Petition Date, OMM was retained by Escada AG and other Escada Entities around the world in their respective restructuring efforts. OMM has thus become familiar with the Debtor's business and affairs and many of the potential legal issues that may arise in the context of the Chapter 11 Case, according to Escada USA Executive Vice President, Chief Financial Officer and Treasurer Christian D. Marques. In this light, he believes OMM is both well-qualified and uniquely able to represent the Debtor in the Chapter 11 Case in an efficient and timely manner. Generally, OMM will render legal services to the Debtor as needed throughout the course of its Chapter 11 case, including bankruptcy, corporate, employee benefits, finance, labor and employment, litigation, asset disposition, real estate and tax advice. Specifically, but not exclusively, OMM will render these legal services: (a) Advise the Debtor generally regarding matters of bankruptcy law in connection with its chapter 11 case; (b) Advise the Debtor of the requirements of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules for the Southern District of New York, and U.S. Trustee Guidelines related to the reorganization of its businesses and the administration of the estate; (c) Prepare motions, applications, answers, proposed orders, reports and papers in connection with the administration of the estate; (d) Negotiate with creditors, prepare and seek confirmation of a chapter 11 plan and related documents, and assist the Debtor with implementation of the plan; (e) Assist the Debtor in the analysis, negotiation and disposition, if necessary, of its assets for the benefit of its estate and its creditors; (f) Advise the Debtor regarding bankruptcy related litigation matters; and (g) Render other necessary advice and services as the Debtor may require in connection with its case. The Debtor proposes to pay for Mom's services according to the firm's customary hourly rates: Partners $695 to $950 per hour Associates/Counsel $365 to $670 per hour Paraprofessionals $200 to $335 per hour The firm will also be reimbursed for its reasonable and necessary out-of-pocket expenses. As of the Petition Date, the Debtor does not owe OMM for legal services rendered before the Petition Date. Gerald C. Bender, Esq., a partner at OMM, assures the Court that his firm does not have any connection with or any interest adverse to the Debtor, its creditors or other parties-in- interest. He maintains that OMM is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by section 1107(b) of the Bankruptcy Code. He nevertheless relates that OMM has in the past represented, currently represents or may in the future represent, in matters wholly unrelated to the Debtor or its Chapter 11 case, Deutsche Bank, Bank of New York, JPMorgan Chase, Bank of America, Bank of Hawaii, HSBC Bank USA, Mellon (HVB) Bank, PNC Bank, SunTrust Bank, Union Bank of California, Wachovia Bank, PriceWaterhouseCoopers, Con Edison, General Growth Properties, Inc. and United HealthCare. As to Deutsche Bank and Bank of New York, they are secured lenders to the Parent and unsecured creditors of the Debtor pursuant to guarantees issued by the Debtor. The remaining parties disclosed are either creditors with de minimis amounts owed, institutions with a retail banking relationship with the Debtor, or professionals of the Debtor. In addition, Howard A. Blaustein, a consultant at Kurtzman Carson Consultants LLC, the proposed claims and noticing agent, was an attorney at OMM from 2002-2004, but no longer has any connection to the firm, Mr. Bender discloses. The Debtor has been informed that OMM will conduct an ongoing review of its files to ensure that no disqualifying circumstances arise, and that if any new relevant facts or relationships are discovered, OMM will supplement its disclosure to the Court. About Escada AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009 the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. ESCADA AG filed of an insolvency petition in Munich, Germany, on August 13, 2009. The competent Municipal Court of Munich has appointed Dr. jur. Christian Gerloff as preliminary insolvency administrator. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Judge Stuart M. Bernstein handles the case. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. A copy of Escada US's Chapter 11 petition and list of largest unsecured creditors is available for free at http://bankrupt.com/misc/sdny09-15008.pdf ESCADA AG: U.S. Unit Proposes Kurtzman as Claims Agent ------------------------------------------------------ Escada (USA) Inc. seeks the U.S. Bankruptcy Court for the Southern District of New York's permission to hire Kurtzman Carson Consultants LLC as its official claims and notice agent. The Debtor aver that in light of the anticipated large number of creditors and parties-in-interest in its case, the appointment of KCC as claims against is both necessary and in its best interest. KCC, at the request of the Debtor or the Clerk of the Court's office, may perform claims agent and related administrative services for the Debtor and will undertake these services: (a) Notify all potential creditors of the filing of the bankruptcy petition and of the setting of the first meeting of creditors, pursuant to section 341(a) of the Bankruptcy Code; (b) Prepare and serve required notices in this chapter 11 case, including (i) a notice of the commencement of the Debtor's Chapter 11 case and the initial meeting of creditors under Section 341(a); (ii) notices of objections to claims; (iii) notices of any hearings on a disclosure statement and confirmation of a plan or plans of reorganization; and (iv) other miscellaneous notices as the Debtor or Court may deem necessary; (c) Maintain an official copy of the Debtor's schedules of assets and liabilities and statement of financial affairs, and listing the Debtor's known creditors and the amounts owed; (d) Provide access to the public for examination of copies of the proofs of claim or proofs of interest filed in the Chapter 11 case without charge during regular business Hours, if necessary; (e) Furnish a notice of the last date for the filing of proofs of claims and a form for the filing of a proof of claim, after notice and form are approved by the Court; (f) File with the Clerk an affidavit or certificate of service which includes a copy of the notice, a list of persons to whom it was mailed, and the date mailed, within three days of service; (g) Docket all claims received by the Clerk's Office, maintain the official claims register for the Debtor on behalf of the Clerk, and provide the Clerk with certified duplicate, unofficial Claims Registers on a monthly basis, unless otherwise directed; (h) Record all transfers of claims, pursuant to Bankruptcy Rule 3001(e), and provide any notices of those transfers required by Bankruptcy Rule 3001(e); (i) Specify, in the applicable Claims Register, the following information for each claim docketed: (i) the claim number assigned, (ii) the date received, (iii) the name and address of the claimant and agent, if applicable, who filed the claim, and (iv) the classification(s) of the claim; (j) Relocate, by messenger, all of the actual proofs of claim filed with the Court to KCC, not less than weekly; (k) Upon completion of the docketing process for all claims received to date by the Clerk's Office for the case, turn over to the Clerk copies of the claims register for the Clerk's review; (l) Make changes in the Claims Registers pursuant to Court Order; (m) Maintain the official mailing list for the Debtor of all entities that have filed a proof of claim, which list will be available upon request by a party-in-interest or the Clerk; (n) Assist with, among other things, solicitation and calculation of votes and distribution as required in furtherance of the confirmation of a plan of reorganization; (o) Provide other claims processing, noticing, and administrative services as may be requested from time to time by the Debtor; (p) File with the Court the final version of the Claims Register immediately before the closing of the Debtor's Chapter 11 case; and (q) At the close of the case, box and transport all original documents, in proper format, as provided by the Clerk's Office, to the Federal Archives Record Administration, located at Central Plains Region, 200 Space Center Drive, Lee's Summit, MO 64064. In addition to these tasks, KCC will assist the Debtor with, among other things: (a) maintaining and updating the master mailing list of creditors; (b) to the extent necessary, gathering data in conjunction with the preparation of the Schedules and Statements; (c) tracking and administration of claims; and (d) performing other administrative tasks pertaining to the administration of this Chapter 11 case as may be requested by the Debtor or the Clerk's Office in accordance with the terms of the KCC Agreement. The Debtor will pay KCC for its services, expenses and supplies at rates set by the firm. KCC agrees to submit its invoices to the Debtor monthly, provided that where the total fees and expenses are expected to exceed $10,000 in a single month, KCC may require advance payment. Fees and expenses for KCC will constitute administrative expenses for the Debtor's Chapter 11 case. The Debtor will entitle KCC to receive a $40,000 retainer for services to be performed and expenses to be incurred due on the execution of the parties' Engagement Letter. Michael J. Frishberg, vice president of Corporate Restructuring Services of KCC, relates that to the best of his knowledge, his firm does not hold nor represent any interest adverse to the Debtor's estate. He assures the Court that KCC is a "disinterested person," as referenced in Section 327(a) of the Bankruptcy Code and as defined in Section 101(14) of the Bankruptcy Code. About Escada AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009 the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. ESCADA AG filed of an insolvency petition in Munich, Germany, on August 13, 2009. The competent Municipal Court of Munich has appointed Dr. jur. Christian Gerloff as preliminary insolvency administrator. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Judge Stuart M. Bernstein handles the case. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. A copy of Escada US's Chapter 11 petition and list of largest unsecured creditors is available for free at http://bankrupt.com/misc/sdny09-15008.pdf FAIRFAX FINANCIAL: Fitch Assigns 'BB+' Rating on Senior Notes ------------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to Fairfax Financial Holdings Limited's CDN$400 million issue of unsecured senior notes due 2019. The Rating Outlook is Stable. The ratings of Fairfax's holding companies and insurance company subsidiaries are not affected by this action. Fairfax intends to use the net proceeds of the offering to augment its cash position, to increase short-term investments and marketable securities held at the holding company level, to retire outstanding debt and other corporate obligations from time to time, and for general corporate purposes. Fairfax's debt-to-total-capital ratio is down to approximately 22.5% at June 30, 2009, compared with 23.4% at Dec. 31, 2008. Following the CDN$400 million issuance, pro forma debt-to-total- capital at June 30, 2009 increases to approximately 26%, in line with Fitch's expected range of 25%-30%. Earnings-based interest coverage (excluding realized gains) improved to 3.6 times (x) in the first six months 2009 from negative coverage in 2008. Fairfax also continues to maintain a sizable amount of holding company cash, short-term investments and marketable securities of $880 million at June 30, 2009. Fitch assigns this rating with a Stable Rating Outlook: Fairfax Financial Holdings Limited -- CDN$400 million 7.5% due 2019 at 'BB+'. These ratings remain unchanged by Fitch with a Stable Rating Outlook: Fairfax Financial Holdings Limited -- Issuer Default Rating 'BBB-'; -- Senior debt 'BB+'; -- $182 million 7.75% due April 15, 2012 'BB+'; -- $91 million 8.25% due Oct. 1, 2015 'BB+'; -- $283 million 7.75% due June 15, 2017 'BB+'; -- $144 million 7.375% due April 15, 2018 'BB+'; -- $92 million 8.3% due April 15, 2026 'BB+'; -- $91 million 7.75% due July 15, 2037 'BB+'. Fairfax, Inc. -- IDR 'BBB-'. Odyssey Re Holdings Corp. -- IDR 'BBB'; -- $50 million series A unsecured due March 15, 2021 'BBB-'; -- $50 million series B unsecured due March 15, 2016 'BBB-'; -- $40 million series C unsecured due Dec. 15, 2021 'BBB-'; -- $225 million 7.65% due Nov. 1, 2013 'BBB-'; -- $125 million 6.875% due May 1, 2015 'BBB-'; -- $50 million series A preferred shares 'BB+'; -- $47 million series B preferred shares 'BB+'. Odyssey America Reinsurance Corporation -- Insurer Financial Strength 'A-'. Crum & Forster Holdings Corp. -- IDR 'BB+'; -- $330 million 7.75% due May 1, 2017 'BB'. Crum & Forster Insurance Group: Crum and Forster Insurance Company Crum & Forster Indemnity Company The North River Insurance Company United States Fire Insurance Company -- IFS 'BBB'. Northbridge Financial Insurance Group: Commonwealth Insurance Company Commonwealth Insurance Company of America Federated Insurance Company of Canada Lombard General Insurance Company of Canada Lombard Insurance Company Markel Insurance Company of Canada Zenith Insurance Company (Canada) -- IFS 'BBB+'. FORTRESS INVESTMENT: Posts $171MM Net Loss in Qrtr. Ended June 30 ----------------------------------------------------------------- Fortress Investment Group LLC posted a net loss of $171.33 million for three months ended June 30, 2009, compared with a net loss of $249.96 million for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $458.01 million compared with a net loss of $527.15 million. The Company's balance sheet showed total assets of $1.49 billion, total liabilities of $1.02 billion and stockholders' equity of $474.96 million. The Company said there is substantial doubt about its ability to continue as a going concern. The Company noted that in the event that Fortress private equity funds or hybrid PE funds are unable to obtain committed debt financing for potential acquisitions or can only obtain debt at an increased rate, this may prevent those funds from completing otherwise profitable acquisitions or may lower the profit that the funds would otherwise have achieved from the transactions, either of which could lead to a decrease in the incentive income earned. Similarly, the portfolio companies owned by the Fortress private equity funds regularly utilize the debt markets in order to obtain efficient financing for their operations. In addition, to the extent that the current markets make it difficult or impossible to refinance debt that is maturing in the near term, the relevant portfolio company may face substantial doubt as to its status as a going concern or be unable to repay the debt at maturity and may be forced to sell assets, undergo a recapitalization or seek bankruptcy protection. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?41fd Fortress Investment Group LLC (NYSE:FIG) is a worldwide alternative asset manager that raises, invests and manages private equity funds and hedge funds. Fortress earns management fees based on the size of its funds, incentive income based on the performance of the Company's funds, and investment income from its principal investments in those funds. Its offering of alternative investment products includes private equity funds and hedge funds. FRIEDMAN'S INC: Crescent Jewelers Name Will be Sold by CONSOR ------------------------------------------------------------- JCK Online reports that CONSOR Intellectual Asset Management will sell the names Friedman's and Crescent Jewelers. According to JCK Online, the intellectual property portfolio being sold includes U.S. registered trademarks "Friedman's Jewelers" and "Say it with Diamonds", and domain names friedmans.com and crescentjewelers.com, among other related, intangible assets. About Friedman's Inc. Addison, Texas-based Friedman's Inc. -- http://www.friedmans.com/ -- and -- http://www.crescentonline.com/-- comprised a leading specialty jewelry retail company. Friedman's operated 388 stores in 20 states with over 2,890 employees while Crescent Jewelers operated 85 stores in 3 states with over 600 employees. Friedman's and Crescent Jewelers filed for chapter 11 protection on January 28, 2008 (Bankr. D. Del. Case Nos. 08-10161 and 08- 10179). David M. Green, Esq., Jocelyn Keynes, Esq., and Nicholas F. Kajon, Esq., at Stevens & Lee, P.C., in New York; and John D. Demmy, Esq., at Stevens & Lee, P.C., in Wilmington, Delaware, serve as counsel to the Debtors. The Debtors' professionals also include Rothschild, Inc., as investment banker and financial advisor; Retail Consulting Services, Inc. as real estate and lease consultants; ASK Financial as special counsel to review, analyze, and prosecute preference claims; Grant Thornton LLP as Tax Advisors; and KZC Services, LLC's Salvatore LoBiondo, Jr., as Chief Restructuring Officer, and Charles Carnaval as Director of Restructuring. The Official Committee of Unsecured Creditors appointed in the Debtors' cases is represented by Christopher J. Caruso, Esq., Alan Kolod, Esq., Lawrence L. Ginsburg, Esq., at Moses & Singer LLP in New York; and Charlene D. Davis, Esq., at Bayard, P.A., in Wilmington, Delaware. The Committee also retained Consensus Advisors as its financial advisors. On April 10, 2008, the Court approved the sale to Whitehall Jewelers, Inc., and a joint venture led by Great American Group LLC to sell to Whitehall the inventory and related property at 78 of the Debtors' stores, and to assume and assign to Whitehall the leases with respect to those 78 stores. On June 30, 2008, the liquidation of the balance of the Debtors' assets through store closing sales were concluded. At a confirmation hearing conducted on April 20, 2009, Friedman's and Crescent Jewelers attained confirmation of their liquidating plan in their chapter 11 cases. GENERAL MOTORS: Finalizes Deal to Sell Swedish Unit Saab -------------------------------------------------------- Andrew Ward at The Financial Times reports that General Motors Co. has finalized an agreement to sell its Swedish unit Saab Automobile to Koenigsegg Automotive. Citing people close to the deal, the FT discloses GM and Koenigsegg are expected to announce the signing of a binding agreement today, subject to approval of a loan guarantee from the Swedish government and other financing. The FT says the memorandum of understanding agreed in June was conditional on US$600 million of funding from the European Investment Bank, underwritten by Sweden. As reported in the Troubled Company Reporter-Europe on Aug. 13, 2009, Bloomberg News said Saab may be able to get state guarantees for loans from the EIB that exceed the US$600 million originally sought. Creditor Protection The Troubled Company Reporter Europe, citing Bloomberg News, reported on Feb. 23, 2009, Saab filed for protection from creditors after parent GM said it will cut ties with the Swedish carmaker following two decades of losses. The Trollhaettan, Sweden-based company filed for reorganization with a Swedish district court to separate itself from GM and bring resources back to Sweden. On June 25, 2009, Troubled Company Reporter, citing The Wall Street Journal, reported creditors of Saab approved the automakers' proposal for settling its debts by paying a quarter of what it originally owed. Saab proposed to settle its debts by paying 25% of about US$1.34 billion it owed to more than 600 creditors, including auto suppliers and the Swedish government. The vast majority of the debt, almost SEK10 billion, was owed to GM. 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: Loan Guarantees Conditional on Opel Sale to Magna ----------------------------------------------------------------- Rainer Buergin at Bloomberg News reports that Dieter Althaus, state premier of Thuringia, told Handelsblatt Germany will only provide state guarantees for the purchase of General Motors Co.'s Opel division if GM sells to Magna International Inc. According to Bloomberg, Althaus told the newspaper in an interview Chancellor Angela Merkel's government and the four German states where Opel factories are based want an accord between GM and any Opel buyer before national elections on Sept. 27. Bloomberg relates Mr. Althaus said plans for the Opel factory in the city of Eisenach, Thuringia, are more favorable than those presented by RHJ International. No Agreement Angela Cullen at Bloomberg News reports GM has not reached an agreement with Magna and Russia's Sberbank on the sale of its Opel unit. According to Bloomberg, GM's chief negotiator John Smith said on GM Europe's official blog Friday the U.S. carmaker is reviewing Magna's revised offer and said it will update the comparisons it made to an "attractive" proposal submitted by RHJ International on July 20. On August 17, 2009, the Troubled Company Reporter-Europe, citing Bloomberg News, reported GM received a revised bid from Magna and Sberbank. Bloomberg disclosed Siegfried Wolf, co-chief executive officer of Magna, said Thursday the the Canadian car-parts manufacturer and Sberbank are offering to pay about EUR500 million (US$714 million) for a combined 55% stake in Opel. Bloomberg says each of the partners would own 27.5%, leaving GM with 35% and Opel workers holding the remaining 10%. Mr. Wolf, as cited by Bloomberg said Magna's revised bid addresses cooperation with GM's Chevrolet division and answers any intellectual property questions. According to Bloomberg Christopher Preuss, a spokesman for GM, said the U.S. carmaker requested an "outline of the financing package" that Germany and other European governments are prepared to offer under the revised proposal. Support Lyubov Pronina at Bloomberg News, citing a Kremlin official, reports that Russian President Dmitry Medvedev will offer political support for Magna's bid for GM's Opel division in talks with German Chancellor Angela Merkel. Bloomberg relates the two leaders met Friday at Bocharov Ruchei, or Cooper's Creek, Medvedev's official residence in the Black Sea resort of Sochi. 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: Cures Going Concern Doubt, Complies with Covenant --------------------------------------------------------------- Georgia Gulf Corporation disclosed in a quarterly filing with the Securities and Exchange Commission that the factors that gave rise to the substantial doubt about the Company's ability to continue as a going concern have been remediated. As of June 30, 2009, the Company is in compliance with all required debt covenants. On July 29, 2009, it completed its debt for equity exchange offers and a long-term bank amendment to its senior secured credit facility. The management said that the effect of the senior secured credit facility amendment, the exchange offers, cash flow from operations, together with its cash and cash equivalents of $104.3 million and the availability to borrow an additional $7.7 million under the revolving credit facility at June 30, 2009, will be adequate for the foreseeable future to make required payments of principal and interest on its debt and fund its working capital and capital expenditure requirements, meet the restrictive covenants and comply with the financial ratios of the senior secured credit facility. The Company also disclosed its financial results for three and six months ended June 30, 2009. For three months ended June 30, 2009, the Company posted a net loss of $2.95 million compared with a net income of $27.94 million for the same period in 2008. For six months ended June 30, 2009, the Company reported a net income of $45.33 million compared with a net loss of $41.55 million for the same period in 2008. At June 30, 2009, the Company's balance sheet showed total assets of $1.62 billion and total $1.70 billion, resulting in a stockholders' deficit of $85.46 million. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?4202 About Georgia Gulf Georgia Gulf Corporation is a manufacturer and international marketer of two integrated chemical product lines, chlorovinyls and aromatics. The Company's primary chlorovinyls products are chlorine, caustic soda, vinyl chloride monomer (VCM), vinyl resins and vinyl compounds. Its aromatics products are cumene, phenol and acetone. The Company has four business segments: chlorovinyls; window and door profiles, and moldings products; outdoor building products, and aromatics. At March 31, 2009, the Company had $1.56 billion in total assets and $1.66 billion in total liabilities, resulting in $97.3 million stockholders' deficit. As reported in the Troubled Company Reporter on June 19, 2009, Standard & Poor's Ratings Services lowered its issue rating on Georgia Gulf Corp.'s $100 million 7.125% senior notes due 2013 to 'D' from 'C' and retained the '6' recovery rating, indicating S&P's expectation of negligible recovery (0%-10%) on the notes. At the same time, S&P kept its corporate credit rating on Georgia Gulf at 'D'. S&P had lowered its corporate credit rating and these issue ratings on Georgia Gulf to 'D' on May 21, 2009, following a missed interest payment of $34.5 million on these notes. As reported by the TCR on August 3, Moody's Investors Service upgraded the Corporate Family Rating of Georgia Gulf Corporation to B2 from Caa2 as a result of the completion of the private debt- for-equity exchange offer and an amendment to its credit facility that substantially improves the company's liquidity. GEORGIA-PACIFIC LLC: S&P Puts 'BB-' Rating on CreditWatch Positive ------------------------------------------------------------------ Standard & Poor's Ratings Services placed all of its ratings on Georgia-Pacific LLC, including its 'BB-' corporate credit rating, on CreditWatch with positive implications. "The CreditWatch placement acknowledges the greater-than-expected progress GP has made in strengthening its credit measures as prices have held up better than S&P had anticipated and its cost- reduction efforts, particularly in building products, have been more robust," said Standard & Poor's credit analyst Pamela Rice. "The rating action also reflects S&P's expectations that additional improvement in the company's financial risk profile is possible if the economy exits the recession and housing markets begin to recover gradually in 2010 as S&P currently believe." Pro forma for the repayment of $750 million of debt in July 2009, GP's adjusted debt to EBITDA for the 12 months ended June 30, 2009, was in the mid-4x area, stronger than the 5x to 6x range S&P consider to be acceptable for the current ratings. Earnings in the first half of 2009 increased by about 30% compared to the first half of 2008. GP's recession-resistant consumer products continued to perform well despite lower volumes in its professional business. The communication papers and packaging businesses are benefiting from lower raw material and energy costs, helping to offset cyclically lower volumes. The company's building products business continues to suffer from the severe residential downturn; however, EBITDA is currently slightly positive and should improve meaningfully when housing starts rise. Free cash flow for the same period improved by about $1 billion because of stronger earnings, a material benefit from working capital, and significantly lower capital spending. As a result, GP reduced debt by $1.2 billion since Dec. 31, 2008, and liquidity improved by $1 billion as well. S&P plans to meet with management to discuss its business and financial strategies and prospects for the next few years. In particular, S&P will review any updates to its growth plans, including any potential acquisitions; any other potential changes to its business portfolio; debt reduction goals; financial policies regarding liquidity and liability management; plans for refinancing its remaining debt maturities over the next three years; potential shareholder distributions; and financial projections. S&P could raise the corporate credit rating on GP to 'BB' if S&P believed, among other considerations, that the company could sustain leverage in the 4x to 5x range. GLOBAL SHIP: To Default on Loan Facility Aug. 31 Absent Waiver -------------------------------------------------------------- Global Ship Lease, Inc. disclosed its unaudited results for the three months ended June 30, 2009. The Company's normalized net earnings totalled $6.1 million for the three months ended June 30, 2009, excluding the $16.7 million non-cash interest rate derivative mark-to-market gain. Including the mark-to-market gain, net income was $22.8 million. Normalized net earnings was $13.0 million for the six months ended June 30, 2009, excluding the $21.0 million non-cash interest rate derivative mark-to-market gain. Including the mark-to-market gain, net income was $33.9 million. On April 29, 2009, due to current challenges in the ship valuation environment, Global Ship Lease agreed with its lenders under its $800.0 million credit agreement, to waive for two months the requirement under the credit facility to submit vessel valuations and undertake the consequent loan-to-value test. Valuations were otherwise due by April 30, 2009. In June, the waiver was extended to July 31, 2009, and was further extended to Aug. 31, 2009, to allow the Company to finalize discussions with its lenders on an amendment to the credit facility to address loan to value. The facility bears an interest margin of 2.75% over LIBOR during this waiver period and no dividend to common shareholders may be declared or paid. Management expects that an agreement will be reached with the Company's lenders. If the Company does not successfully amend the facility agreement by Aug. 31, 2009, or a4gree a further waiver of the need to perform loan to value tests, and its loan to value ratio is above 100%, the lenders may declare an event of default and accelerate some or all of the debt or require the company to provide additional security which would raise substantial doubt about its ability to continue as a going concern. On June 30, 2009, the Company's balance sheet showed total assets of $966.1 million, total liabilities of $647.9 million and stockholders' equity of about $318.2 million. A full-text copy of the Company's Form 6-K is available for free at http://ResearchArchives.com/t/s?41fe About Global Ship Lease Global Ship Lease (NYSE:GSL, GSL.U and GSL.WS) is a containership charter owner. Incorporated in the Marshall Islands, Global Ship Lease commenced operations in December 2007 with a business of owning and chartering out containerships under long-term, fixed- rate charters to world class container liner companies. Global Ship Lease currently owns 16 vessels and has contracted to purchase an additional three vessels. The Company has a contract in place to acquire by Sept. 30, 2009, an additional vessel for $82 million from CMA CGM, contingent on financing. The Company also has contracts in place to purchase two newbuildings from German interests for roughly $77 million each which are scheduled to be delivered in the fourth quarter of 2010. Once all of the contracted vessels have been delivered by the end of 2010, Global Ship Lease will have a 19 vessel fleet with total capacity of 74,797 TEU and a weighted average age at that time of 6.1 years and an average remaining charter term of roughly eight years. All of the vessels including those contracted for future delivery are fixed on long-term charters. GOODY'S LLC: Plan Admin Seeks to Recover $17 Mil. From CIT Group ---------------------------------------------------------------- The liquidating plan administrator for Goody's Family Clothing Inc. has filed an adversary suit seeking to recover more than $17 million in transfers from the retailer to financial services firm CIT Group Inc., according to Law360. The plan administrator, report says, said that CIT provided factoring services to several vendors and suppliers. About Goody's LLC Headquartered in Wilmington, Delaware, Goody's LLC, successor to Goody's Family Clothing Inc., operates a chain of clothing stores. Goody's Family Clothing Inc., and 19 of its affiliates filed for Chapter 11 protection on June 9, 2008 (Bankr. D. Del. Lead Case No. 08-11133). Gregg M. Galardi, Esq., and Marion M. Quirk, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Paul G. Jennings, Esq., at Bass, Berry & Sims PLC, represented the Debtors. The Company emerged from bankruptcy October 20, 2008, after closing more than 70 stores. The reorganized entity was named Goody's LLC, and headquartered in Wilmington, Delaware. Goody's subsequently announced plans to liquidate in January 2009 when it was unable to restructure terms with creditors. Goody's LLC and 13 of its affiliates filed for Chapter 11 protection on January 13, 2009 (Bankr. D. Del. Lead Case No. 09-10124). M. Blake Cleary, Esq., at Young, Conaway, Stargatt & Taylor, LLP; Paul G. Jennings, Esq., Gene L. Humphreys, Esq., Edward C. Meade, Esq., and Kristen C. Wright, Esq., at Bass Berry & Sims PLC represent the Debtors as counsel. Skadden, Arps, Slate Meagher & Flom, LLP, is the Debtors' special counsel; FTI Consulting Inc. is the Debtors' financial advisor. Goody's has closed its 282 stores and liquidated its inventory and other assets. In its schedules, Goody's LLC listed assets of $542,231,601 and liabilities of $510,471,005. GUARANTY FINANCIAL: No Longer Expects to Continue as Going Concern ------------------------------------------------------------------ Guaranty Financial Group Inc. said August 17 its financial statements will be prepared on the assumption that it is no longer unable to continue as a going concern. The Company previously submitted preliminary financial data on Form 12b-25 filed for the year ended December 31, 2008, and the quarter ended March 31, 2009, which were based on the assumption that the Company would continue as a going concern. The Company has not yet completed financial statements as of and for the periods ended December 31, 2008 and March 31, 2009. The Company will record substantial asset write-downs in the financial statements as of and for the periods ended December 31, 2008 and March 31, 2009. The write-downs result in the Bank having negative capital ratios and being deemed critically undercapitalized, the Company said. "The Company no longer believes that it will be able to continue as a going concern. Therefore, the earnings statement to be included in the subject report will be prepared based on the assumption that the Company is unable to continue as a going concern and thus it is anticipated that there will be a significant change in results of operations." Cease and Desist Orders On April 6, 2009, Guaranty Financial Group Inc. and its wholly owned subsidiary, Guaranty Bank each consented to the issuance of an Order to Cease and Desist by the Office of Thrift Supervision. The Orders require that the Bank meet and maintain both a core capital ratio equal to or greater than 8.0% and a total risk-based capital ratio equal to or greater than 11.0%. Simultaneous to the effective date of the Orders, the Company and the Bank advised the OTS that management believes, based upon presently available unaudited financial information, that the Bank does not meet the required capital ratios. On June 29, 2009, the Company said that the only remaining means by which it might possibly raise sufficient capital for it and its wholly-owned subsidiary, Guaranty Bank, to comply with the Orders of the OTS is through a plan for open bank assistance. The Open Assistance plan would involve a significant equity capital infusion from private investors, including the Company's current principal stockholders, and an agreement under which the FDIC would absorb a portion of any losses associated with a pool of certain of the Company's assets. An Open Assistance plan must be approved by the Federal Deposit Insurance Corporation. On July 17, 2009, at the direction of OTS, the Bank filed an amended Thrift Financial Report as of and for the three months ended March 31, 2009. This filing reflected substantial asset write downs, which resulted in the Bank having negative capital reflected in the TFR as of that date. The Company said July 23 that it believes that these write downs foreclosed the possibility of applying for open bank assistance. "Our primary stockholders have not affirmed their willingness to commit to a capital infusion in support of such an application." As a result, the Company stated it will no longer be possible to comply with the Cease and Desist Orders, and hence, it is probable that it will not be able to continue as a going concern. About Guaranty Financial Guaranty Financial Group Inc. (Guaranty) is a unitary savings and loan holding company. The Company's primary operating entities are Guaranty Bank and Guaranty Insurance Services, Inc. Guaranty Bank conducts consumer and business banking activities through a network of over 150 bank branches located in Texas and California, and provides commercial banking products and services to diverse geographic markets throughout the United States. Guaranty Insurance Services, Inc. is a full-service insurance agency engaged in property and casualty insurance, as well as fixed annuities. The insurance agency operates through 17 offices located in both Texas and California. The Company had said in March that it expects to report a loss of $444 million, or a loss of $8.84 per diluted share, for the year ended December 31, 2008, compared to earnings of $78 million, or $2.20 per diluted share, for the year ended December 31, 2007. The Company had assets of $15,391,000,000 against debts of $14,390,000,000 as of September 30, 2008. GRUBB & ELLIS: Posts $32 Million Net Loss in Quarter Ended June 30 ------------------------------------------------------------------ Grubb & Ellis Company posted a net loss of $32.61 million for three months ended June 30, 2008, compared with a net loss of $5.23 million for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $75.89 million compared with a net loss of $11.53 million for the same period in 2008. The Company's balance sheet showed total assets of $360.83 million, total liabilities of $357.11 million and stockholders' equity of $3.72 million. The Company entered into a Third Amendment to its Credit Facility that requires the Company to comply with the approved budget that has been agreed to by the Company and the lenders, subject to agreed upon variances. The Company is also required under the Third Amendment to effect "recapitalization plan" on or before Sept. 30, 2009, and in connection therewith to effect a Partial Prepayment on or before Sept. 30, 2009. Among other things, in the event the Company does not complete the recapitalization plan or make the Partial Prepayment, the Credit Facility will terminate on Jan. 15, 2010. In light of the current state of the financial markets and economic environment, there is risk that the Company will be unable to meet the terms of the Credit Facility which would result in the entire balance of the debt becoming due and payable. If the Credit Facility were to become due and payable on the alternative due date of Jan. 15, 2010, there can be no assurances that the Company will have access to alternative funding sources, or if the sources are available to the Company, that they will be on favorable terms and conditions to the Company, which at that time could create substantial doubt about the Company's ability to continue as a going concern after Jan. 15, 2010. A full-text copy of the Company's Form-Q is available for free at: http://ResearchArchives.com/t/s?41ff About Grubb & Ellis Grubb & Ellis Company (NYSE: GBE) -- http://www.grubb-ellis.com/ -- is one of the largest commercial real estate services and investment companies. With more than 130 owned and affiliate offices worldwide, Grubb & Ellis offers property owners, corporate occupants and investors comprehensive integrated real estate solutions, including transaction, management, consulting and investment advisory services supported by proprietary market research and extensive local market expertise. Grubb & Ellis and its subsidiaries are leading sponsors of real estate investment programs that provide individuals and institutions the opportunity to invest in a broad range of real estate investment vehicles, including tax-deferred 1031 tenant-in- common exchanges; public non-traded real estate investment trusts (REITs) and real estate investment funds. As of September 30, 2008, more than $3.8 billion in investor equity has been raised for these investment programs. Grubb & Ellis and its subsidiaries currently manage a growing portfolio of more than 225 million square feet of real estate. In 2007, Grubb & Ellis was selected from among 15,000 vendors as Microsoft Corporation's Vendor of the Year. HAGERSTOWN HOTEL: Files for Chapter 11 to Dodge Foreclosure ----------------------------------------------------------- Hagerstown Hotel Associates, LLC, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Maryland. Robert Rand at Gazette.net reports that Hagerstown Hotel said that it has been hit hard by the slowdown in the hospitality industry. The report says that the bankruptcy filing has allowed the Company to stave off foreclosure. Officials with hotel owner Watchwood LLC had negotiated a tentative accord with its major lender, BB&T, which had otherwise planned to foreclose and have the property sold at auction on Monday, Gazette.net states, citing Hagerstown Hotel sales director Roy Arnold. Hagerstown Hotel general manager Farhad Jabberi said that the deal collapsed and the hotel had to file for Chapter 11 to avoid foreclosure, Gazette.net relates. Court documents say that Watchwood owes BB&T about $5.5 million. According to court documents, Watchwood listed up to $50,000 in assets, against $1 million to $10 million in debts owed to 100 to 199 creditors. Citing Mr. Arnold, Gazette.net reports that Hagerstown Hotel's troubles began in 2008, when the owner "decided to go without a franchise flag" and operate as an independent hotel. Mr. Arnold said that the hotel was previously branded as a Sheraton Four Points, going independent cut into its Internet bookings, Gazette.net states. According to Gazette.net, Mr. Arnold said that new hotels have also been constructed in the area, and that "there are way more hotel rooms than a year ago." Mr. Arnold also mentioned gasoline prices that peaked almost $4 a gallon in 2008, along with a "tanking" economy that has put a damper on personal and business travel, the report states. Occupancy at Hagerstown Hotel has been below the market average, which runs in the range of 60% to 70%, the report says, citing Mr. Arnold. Hagerstown Hotel Associates, LLC, dba Clarion Hotel & Conference Center Antietam Creek, is based in Hagerstown, Maryland. HAIGHTS CROSS: Extends Private Exchange Offer Until August 21 ------------------------------------------------------------- Haights Cross Communications, Inc. said the expiration date for its private exchange offer and consent solicitation to qualified investors to exchange HCC's 12-1/2% Senior Discount Notes Due 2011 for shares of common stock of HCC has been extended until 11:59 p.m., New York City time, on August 21, 2009, unless terminated or further extended. The Company has not paid and is currently taking advantage of the applicable 30-day grace period with respect to payment of the semi-annual interest on its Senior Discount Notes that was due on August 3, 2009. Similarly, the Company also intends to take advantage of the applicable 30-day grace period for making the semi-annual interest payment on its 11-3/4% Senior Notes due 2011 due August 17, 2009. The Company's current forbearance agreement and credit agreement for its senior secured term loan prohibits the Company from making interest payments on the Senior Discount Notes while the Company remains in default under the Credit Agreement. The cure of such default will require, among other things, the successful completion of the Exchange Offer. Under the applicable indenture relating to each of the Senior Discount Notes and Senior Notes, use of the 30-day grace period does not constitute a default that permits acceleration of such Notes. The Company is seeking to extend its Forbearance Agreement, which expires on August 17, 2009, to provide the Company with further time to complete the Exchange Offer (as extended) and other restructuring transactions. The Company also has commenced discussions with holders of its Senior Notes to discuss alternative restructuring plans should the Exchange Offer not be consummated, including the possibility of the commencement of a chapter 11 case and plan of reorganization. As of the close of business on August 14, 2009, the Company was advised by the information and exchange agent for the Exchange Offer that approximately $100 million (at maturity), or 74%, of Senior Discount Notes had been tendered and not validly withdrawn. Senior Discount Notes which have been validly tendered to the Exchange Offer to date and not withdrawn remain tendered and subject to the Exchange Offer. Eligible Holders who have already tendered Senior Discount Notes need not take any additional actions to tender their Senior Discount Notes. The consummation of the Exchange Offer is conditioned upon the satisfaction or waiver of a number of conditions including, among others: (i) at least 90% of the aggregate principal amount of the Senior Discount Notes being validly tendered for exchange and not revoked, and Eligible Holders representing such Senior Discount Notes delivering their consents to the proposed amendments to the indenture governing the Senior Discount Notes; and (ii) the execution of a satisfactory amendment to the Credit Agreement. In the event that HCC is not able to successfully complete the restructuring, including the Exchange Offer, HCC intends to explore all other restructuring alternatives available to it at that time, which may include an alternative out-of-court restructuring or the commencement of a chapter 11 case and plan of reorganization. There can be no assurance that any alternative restructuring arrangement or plan could be accomplished. Moreover, if the Company seeks such bankruptcy relief, holders of Senior Discount Notes may receive consideration that is less than what is being offered in the Exchange Offer, and it is possible that such holders may receive no consideration at all for their Senior Discount Notes. The Exchange Offer is being made, and the new shares of Common Stock are being offered, only to Eligible Holders, who consist of accredited investors, or persons other than U.S. persons, in a transaction that is exempt from the registration requirements of the Securities Act of 1933. Any such securities may not be offered or sold absent registration or an applicable exemption from the registration requirements of the Securities Act. About Haights Cross Founded in 1997 and based in White Plains, NY, Haights Cross Communications -- http://www.haightscross.com/-- is a premier educational and library publisher dedicated to creating the finest books, audio products, periodicals, software and online services, serving the following markets: K-12 supplemental education, public and school libraries, and consumers. Haights Cross companies include: Triumph Learning, Buckle Down Publishing and Options Publishing, and Recorded Books. HEIDTMAN MINING: Court Sets October 15 General Claims Bar Date -------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Arkansas has established October 15, 2009, at 5:00 p.m. as the deadline for all non-governmental parties to file proofs of claims in Heidtman Mining, LLC's bankruptcy case, and December 9, 2009, at 5:00 p.m. as the deadline to file proofs of claim with respect to all governmental units. Toledo, Ohio-based Heidtman Mining, LLC, filed for Chapter 11 on June 12, 2009 (Bankr. W.D. Ark. Case No. 09-72912). George H. Tarpley, Esq., Marcus Jermaine Watson, Esq., at Cox Smith Matthews Incorporated; and Mark W. Hodge, Esq., at Chisenhall, Nesturd & Julian, represent the Debtor in its restructuring efforts. The Debtor estimated $10 million to $50 million in assets and $50 million to $100 million in debts in its bankruptcy petition. HEIDTMAN MINING: Gets Final Nod to Obtain $600,000 Loan from R & R ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Arkansas has authorized, on a final basis, Heidtman Mining, LLC to obtain a line of credit with R & R Partners Limited partnership at 8% annual compounding interest, to fund the Debtor's post-petition operations. As security, lender will have a lien on the all unencumbered property, assets or interests in property or assets of the Debtor. The loan will mature at the earliest of (a) the expiration of the first 180 days of the Chapter 11 case; (b) the date of the closing of a sale of all or substantially all of the Debtor's assets; (c) the effective date of a plan of reorganization in the Chapter 11 case; (d) conversion of the Chapter 11 case to a case under Chapter 7 of the Bankruptcy Code; or (e) the appointment of an examiner or trustee in the Chapter 11 case. Toledo, Ohio-based Heidtman Mining, LLC filed for Chapter 11 on June 12, 2009 (Bankr. W.D. Ark. Case No. 09-72912). George H. Tarpley, Esq., Marcus Jermaine Watson, Esq., at Cox Smith Matthews Incorporated; and Mark W. Hodge, Esq., at Chisenhall, Nesturd & Julian, represent the Debtor in its restructuring efforts. The Debtor estimated $10 million to $50 million in assets and $50 million to $100 million in debts in its bankruptcy petition. HEIDTMAN MINING: U.S. Trustee Forms 5-Member Creditors' Panel ------------------------------------------------------------- Nancy J. Gargula, United States Trustee for Region 13, appointed five creditors to serve on the official committee of unsecured creditors in Heidtman Mining, LLC's bankruptcy case. The Creditors Committee members are: a) Mr. T. Arthur Palm Post Office Box 861 Price, UT 84505-0861 Tel: (435) 650-1122 Fax: (435) 637-3270 E-mail: artpalm@aol.com b) Mr. Steve Fair Continental Crushing & Conveying Post Office Box 400 Winfield, AL 35594-0400 Tel: (205) 487-1968 Fax: (205) 487-4521 E-mail: sfair@continental-cc.com c) Mr. Paul K. McClure Wilkem, Inc. 8700 Trail Lake Drive West, Suite 300 Memphis, TN 38125 Tel: (901) 346-8800 Fax: (901) 507-1184 E-mail: pmcclure@kwilson.com d) Mr. David M. Sivadon GROCO Agricultural Marketing Incorporated 2106 West 181st Street South Mounds, OK 74047 Tel: (918) 837-6765 Fax: (918) 827-2641 E-mail: davidsivadon@tds.net e) Mr. Allen D. Owen, Jr. JRT Trucking, Inc. 11891 Pine Street Cameron, OK 74932 Tel: (918) 649-5455 Fax: (918) 654-3167 E-mail: jrttrucking@indstream.net Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Toledo, Ohio-based Heidtman Mining, LLC, filed for Chapter 11 on June 12, 2009 (Bankr. W.D. Ark. Case No. 09-72912). George H. Tarpley, Esq., Marcus Jermaine Watson, Esq., at Cox Smith Matthews Incorporated; and Mark W. Hodge, Esq., at Chisenhall, Nesturd & Julian, represent the Debtor in its restructuring efforts. The Debtor estimated $10 million to $50 million in assets and $50 million to $100 million in debts in its bankruptcy petition. HEIDTMAN MINING: Files Schedules of Assets and Liabilities ---------------------------------------------------------- Heidtman Mining, LLC, has filed with the U.S. Bankruptcy Court for the Western District of Arkansas its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $31,320,251 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $4,498,637 E. Creditors Holding Unsecured Priority Claims $1,618,938 F. Creditors Holding Unsecured Non-priority Claims $85,919,852 ----------- ----------- TOTAL $31,320,251 $92,037,428 A copy of Heidtman Mining's schedules of assets and liabilities is available for free at http://bankrupt.com/misc/heidtman.sal.pdf Toledo, Ohio-based Heidtman Mining, LLC filed for Chapter 11 on June 12, 2009 (Bankr. W.D. Ark. Case No. 09-72912). George H. Tarpley, Esq., Marcus Jermaine Watson, Esq., at Cox Smith Matthews Incorporated; and Mark W. Hodge, Esq., at Chisenhall, Nesturd & Julian, represent the Debtor in its restructuring efforts. The Debtor estimated $10 million to $50 million in assets and $50 million to $100 million in debts in its bankruptcy petition. HERBST GAMING: May Emerge From Chapter 11 Bankruptcy This Year -------------------------------------------------------------- Las Vegas Review-Journal reports that Herbst Gaming, Inc., is preparing to emerge from Chapter 11 bankruptcy protection as early as this year. As reported by the Troubled Company Reporter on August 17, 2009, the U.S. Bankruptcy Court for the District of Nevada entered on August 10, 2009, an order approving a second amended disclosure statement related to the first amended joint plan of reorganization filed by Herbst Gaming, Inc., and certain of its subsidiaries. The Court will hold a hearing to consider confirmation of the Plan on October 28, 2009, at 10:00 a.m. (PDT), and October 29. The Debtors mailed the Disclosure Statement, the Plan and ballots on August 12. The deadline for submitting ballots been established as September 15, 2009. Headquartered in Reno, Nevada, Herbst Gaming Inc. -- http://www.herbstgaming.com/-- is a diversified gaming company. The Company and its subsidaries focuses on two business lines, slot route operations and casino operations. The slot route business involves the exclusive installation and operation of slot machines in non-casino locations, such as grocery stores, drug stores, convenience stores, bars and restaurants throughout Nevada. As of March 31, 2009, the slot route Debtors operated approximately 6,900 slot machines machines through Nevada. The casino business consists of 12 casinos in Nevada, and two in Missouri and one in Iowa. As of the petition date, the Nevada casinos had an aggregate of roughly 5,082 hotel rooms, 329 recreational vehicle spaces/hookups, 6,800 slot machines and 138 table games. As of the petition date, the non-Nevada casinos had an aggregate of roughly 2,300 slot machines and 47 table games. The Iowa casino also offers roughly 60 all-suite hotel rooms and 65 RV spaces with utility hookups. The Company and 17 of its affiliates filed for Chapter 11 protection on March 22, 2009 (Bankr. D. Nev. Lead Case No. 09-50752). Thomas H. Fell, Esq., and Gerald M. Gordon, Esq., at Gordon Silver, represent the Debtors in their restructuring efforts. Herbst Gaming had $919.1 million in total assets; and $33.5 million in total liabilities not subject to compromise and $1.24 billion in liabilities subject to compromise, resulting in $361.0 million in stockholders' deficiency as of March 31, 2009. HEXION SPECIALTY: S&P Cuts Ratings on Various Debentures to 'D' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its issue-level ratings on Hexion Specialty Chemicals Inc.'s 9.2% debentures due 2021, 7.875% debentures due 2023, and 8.375% debentures due 2016 to 'D' from 'CCC'. The recovery ratings on these debt issues remain at '5', indicating expectations modest recovery (10%-30%) in the event of a payment default. At the same time, S&P affirmed its ratings on all other debt issues (see list below). S&P also affirmed its corporate credit rating at 'CCC+'. The outlook is negative. "Our rating action follows the company's recent announcement that it purchased a total of $71 million in face value of these debentures for a cash consideration of $31 million," said Standard & Poor's credit analyst Paul Kurias. The 'D' ratings on the debentures reflect S&P's view that the exchange was distressed as the debenture holders received significantly less than the original price. S&P affirmed its corporate credit rating in keeping with S&P's criteria (General Criteria article referenced below) to lower the corporate credit rating to 'SD' (selective default) on the completion of the first repurchase. According to its criteria, S&P subsequently raise the corporate rating so that it reflects the risk of a conventional default-i.e., not focusing on any ongoing restructuring associated with multiple buybacks. The current repurchase follows previous debt buybacks by Hexion. On April 21, 2009, S&P lowered its corporate credit rating on Hexion to 'SD' from 'CCC+' after the company announced it had bought back $196 million in face value of debt for $26 million. Subsequently, on June 29, 2009, S&P raised the corporate credit rating to 'CCC+' after a reassessment of credit quality. The negative outlook reflects S&P's concerns about the ongoing deterioration in operating performance, including earnings, without near-term prospects for a meaningful improvement. S&P expects leverage to remain at the current high levels above 10x in 2009, constraining Hexion's ability to comply with financial covenants. Still, S&P's ratings factor in a modest improvement in earnings from current low levels, committed liquidity from its owners, and S&P's expectation that Hexion might be able to obtain equity cures to enable temporary compliance with financial covenants. S&P will lower ratings in the near term if demand for the company's products remains low and offsets management's cost cutting efforts, driving down earnings further or causing liquidity to deteriorate from current levels. S&P could also lower ratings if the company is unable to obtain equity cures or liquidity support from its owners if required or if this becomes necessary. HYTHIAM INC: Discloses Going Concern Doubt Due to Neg. Cash Flows ----------------------------------------------------------------- Hythiam, Inc., said in a quarterly filing on Form 10-Q with the Securities and Exchange Commission that there is substantial doubt as to its ability to continue as a going concern. The Company had incurred significant operating losses and negative cash flows from operations since its inception. At June 30, 2009, cash, cash equivalents and current marketable securities amounted to $3.00 million and its had a working capital deficit of $1.9 million. The Company's working capital deficit is impacted by $10.4 million of auction-rate securities that are illiquid. During the three and six months ended June 30, 2009, its cash and cash equivalents used in operating activities amounted to $3.10 million and $9.40 million, respectively. The Company's ability to fund its ongoing operations and continue as a going concern is dependent on raising additional capital, signing and generating revenue from new contracts for its Catasys managed care programs and the success of management's plans to increase revenue and continue to decrease expenses. In the fourth quarter of 2008, management took actions that it expects will result in reducing annual operating expenses by $10.2 million compared to the third quarter of 2008 and the Company took further actions in the first and second quarters of 2009 that resulted in additional annual savings of approximately $4.5 million. At June 30, 2009, the Company's balance sheet showed total assets of $18.22 million, total liabilities of $16.20 million and stockholders' equity of $2.02 million. For three months ended June 30, 2009, the Company posted a net loss of $4.92 million compared with a net loss of $14.09 million for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $1.87 million compared with a net loss of $24.80 million for the same period in 2008. A full-text copy of the Company's 10-Q is available for free at: http://ResearchArchives.com/t/s?41f1 Hythiam Inc. (NASDAQ:HYTM) is a healthcare services management company, providing through its Catasys subsidiary behavioral health management services for substance abuse to health plans. Catasys is focused on offering integrated substance dependence solutions, including its PROMETA Treatment Program, for alcoholism and stimulant dependence. It also researches, develops, licenses and commercializes and physiological, nutritional, and behavioral treatment programs. INDALEX HOLDINGS: Court Extends Plan Filing Period to October 16 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has extended Indalex Holdings Finance Inc., et al.'s exclusive period to file a plan until October 16, 2009, and their exclusive period to solicit acceptances thereof until December 15, 2009. In their motion for the extension of their exclusive periods, the Debtors said they had not had sufficient time to commence substantive negotiations with their major creditor constituencies with respect to a consensual plan based on adequate information as they had primarily focused on the sale of substantially all of their assets. As reported in the TCR on August 4, 2009, Sapa Holding AB completed its acquisition of Indalex Holdings Finance Inc. on August 3, 2009. As reported by the Troubled Company Reporter on July 31, 2009, the Department of Justice reached a settlement that would require Sapa and Indalex to divest a North Carolina aluminum sheathing facility in order to proceed with Sapa's proposed $150 million acquisition of Indalex. The sale includes eleven active plants -- six in the U.S. and five in Canada -- with two cast houses and 29 presses. 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. INN OF THE MOUNTAIN: Moody's Downgrades Default Rating to 'Ca/LD' ----------------------------------------------------------------- Moody's Investors Service lowered Inn of the Mountain Gods Resort and Casino's probability of default rating to Ca/LD from Ca. The corporate family rating and the senior unsecured notes rating were affirmed at Ca. The Ca/LD probability of default rating recognizes a payment default under the $200 million 12% senior unsecured notes due November 2010. IMGRC reported in its 10K that it failed to make its scheduled May 15, 2009 interest payment by the end of the 30- day grace period (June 15, 2009), which was allowed by the notes indenture. Rating lowered: -- Probability of default rating to Ca/LD from Ca Ratings affirmed: -- Corporate family rating at Ca -- Senior unsecured notes rating at Ca (LGD 4, 67%) The last rating action was on March 20, 2009, when Moody's lowered IMGRC's corporate family rating to Ca from Caa2. IMGRC includes all of the gaming and resort enterprises of the Mescalero Apache Tribe, a federally recognized Indian tribe located in south-central New Mexico. The company's net revenues were approximately $117 million for the fiscal year ended April 30, 2009. INTERLAKE MATERIAL: Court Approves Private Sale of JDM Business --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has approved the private sale of J&D Company, LLC's manufacturing division to Interlake Mecalux, Inc., for $350,000. Interlake Mecalux, Inc., was also the winning bidder at the June 23, 2009 auction for J&D's retail service solutions division. Interlake Mecalux's winning bid for the RSS business was $1.275 million plus the assumption of certain liabilities. J&D's manufacturing division makes vertical storage and carousel systems, as well as rack and shelving for industrial applications. J&D Company, LLC, is a wholly owned subsidiary of United Fixtures Company, Inc., which, in turn, is a wholly owned subsidiary of UFC Interlake Material Handling, Inc. About Interlake Material Headquatered in Naperville, Illinois, Interlake Material Handling, Inc. -- http://www.interlake.com/-- makes steel storage racks in the United States. The Company, United Fixtures Company, Inc., UFC Interlake Holding Co., and Conco-Tellus, Inc. filed for Chapter 11 relief on January 5, 2009, with the U.S. Bankruptcy Court for the District of Delaware. On May 30, 2009, J&D Company, LLC, a wholly owned subsidiary of United Fixtures Company, Inc., filed for Chapter 11 protection with the same Court. The original Debtors' cases together with J&D's Chapter 11 case are being jointly administered under Case No. 09-11751. Winston & Strawn LLP represents the Debtors in their restructuring efforts. Young, Conaway, Stargatt & Taylor LLP is the Debtors' local counsel. Lake Pointe Partners, LLC, is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the claims agent for the Debtors. Lowenstein Sandler PC represents the official committee of unsecured creditors as counsel. Stevens & Lee, P.C., represents the Committee as Delaware counsel. When the original Debtors filed for protection from their creditors, they listed between $50 million and $100 million in assets, and between $100 million and $500 million in debts. In its petition, J&D listed between $1 million and $10 million each in assets and debts. The original Debtors sold their business for $30 million to Mecalux SA, Spain's largest maker of warehouse equipment. The sale closed on March 9, 2009. INTERLAKE MATERIAL: Court Confirms 2nd Amended Liquidating Plan --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware confirmed on August 11, 2009, Interlake Material Handling, Inc., et al's second amended liquidating Chapter 11 plan dated August 11, 2009. The Debtors have liquidated substantially all of their assets other than the business of J&D Company, LLC, which Debtors anticipate will be sold prior to the consummation of the Plan. The Plan calls for unsecured creditors with $60 million in claims to split up $350,000 cash and whatever is recovered from lawsuits in the future. Interlake Material has sold its business for $30 million to Mecalux SA, Spain's largest maker of warehouse equipment. A full-text copy of the Debtors' second amended chapter 11 liquidating plan is available for free at: http://bankrupt.com/misc/interlake.2ndamendedliquidatingplan.pdf About Interlake Material Headquatered in Naperville, Illinois, Interlake Material Handling, Inc. -- http://www.interlake.com/-- makes steel storage racks in the United States. The Company, United Fixtures Company, Inc., UFC Interlake Holding Co., and Conco-Tellus, Inc. filed for Chapter 11 relief on January 5, 2009, with the U.S. Bankruptcy Court for the District of Delaware. On May 30, 2009, J&D Company, LLC, a wholly owned subsidiary of United Fixtures Company, Inc., filed for Chapter 11 protection with the same Court. The original Debtors' cases together with J&D's Chapter 11 case are being jointly administered under Case No. 09-11751. Winston & Strawn LLP represents the Debtors in their restructuring efforts. Young, Conaway, Stargatt & Taylor LLP is the Debtors' local counsel. Lake Pointe Partners, LLC, is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the claims agent for the Debtors. Lowenstein Sandler PC represents the official committee of unsecured creditors as counsel. Stevens & Lee, P.C., represents the Committee as Delaware counsel. When the original Debtors filed for protection from their creditors, they listed between $50 million and $100 million in assets, and between $100 million and $500 million in debts. In its petition, J&D listed between $1 million and $10 million each in assets and debts. The original Debtors sold their business for $30 million to Mecalux SA, Spain's largest maker of warehouse equipment. The sale closed on March 9, 2009. INTERMET CORP: Lenders Extend Sale Deal Deadline to Aug. 24 ----------------------------------------------------------- Intermet Corporation and its affiliated debtors have filed a second emergency motion with the U.S. Bankruptcy Court for the District of Delaware for the approval of: (i) a second stipulation dated August 14, 2009, further extending Intermet's use of the prepetition lenders' cash collateral until August 24, 2009, and (ii) the further extension until August 24, 2009, of the Plan APA Deadline under the provisions of the Chapter 11 Plan. The Chapter 11 Plan provides for the contingency that if no sale is consummated within 10 business days of the confirmation of the Plan (i.e., the Plan APA Deadline), Intermet's assets will be transferred on the Plan's Effective Date to the Lender Liquidating Trust. As last extended by the Court, the Plan APA Deadline was set to expire on August 17, 2009,. The first lien prepetition lenders have agreed to the cash collateral extension, as well as the requested extension of the Plan APA Deadline. The Debtors relate that the requested extension of the Plan APA Deadline provides a substantial benefit to Intermet's estates and creditors and does not harm or prejudice any party in interest. As reported in the TCR on July 15, 2009, the Bankruptcy Court approved the proposed liquidation plan of Intermet Corp. and the sale of substantially all of its assets to Revstone Industries LLC. Intermet Corp. declared Revstone to be the winner of the auction for its cast metals auto parts business with a bid of $11 million, subject to adjustments. Under the Plan, holders of administrative expense claims under Sec. 503(b)(9) of the Bankruptcy Code, estimated at $6 million, are to recover 35% to 50% of their allowed claims. The second- lien lenders owed $107 million and unsecured creditors with $93 million in claims are expected to recover not more than 2%. Equity holders are out of the money. A full-text copy of the disclosure statement explaining the Debtors' Joint Chapter 11 Plan, dated May 28, 2009, is available at http://bankrupt.com/misc/intermet.DS.pdf As reported in the TCR on August 10, 2009, Intermet's sale to Revstone Industries LLC may have been stalled, says The Lake Gazette. Based in Fort Worth, Texas, Intermet Corp. designs and manufactures machine precision iron and aluminum castings for the automotive and industrial markets. The Company and its debtor- affiliates filed for Chapter 11 protection on August 12, 2008 (D. Del. Case Nos. 08-11859 to 08-11866 and 08-11868 to 08-11878). Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Michael E. Comerford, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as the Debtors' counsel. James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' co-counsel. Kurtzman Carson Consultants LLC serves as the Debtors' claims, notice and balloting agent. An official committee of unsecured creditors has been formed in this case. In its petition, Intermet Corp. listed assets of $50 million to $100 million and debts of $100 million to $500 million. This is the Debtors' second bankruptcy filing. Intermet Corp., along with its debtor-affiliates, filed for Chapter 11 protection on September 29, 2004 (Bankr. E.D. Mich. Case Nos. 04-67597 through 04-67614). Salvatore A. Barbatano, Esq., at Foley & Lardner LLP, represented the Debtors. In their previous bankruptcy filing, the Debtors listed $735,821,000 in total assets and $592,816,000 in total debts. Intermet Corporation emerged from its first bankruptcy filing in November 2005. INTERMET CORP: Proposes Dissolution Beyond Plan Effective Date -------------------------------------------------------------- Intermet Corporation and its affiliated debtors ask the U.S. Bankruptcy Court for the District of Delaware to approve a non- material modification of their Chapter 11 Plan, extending the time for the dissolution of the Debtors beyond the Plan's Effective Date, to a future date in accordance with the provisions of the Lender Liquidating Trust Agreement. The Debtors tell the Court without a modification of the Chapter 11 Plan, pursuant to Article IV.D. of the Plan, on the Plan's Effective Date the Debtors will be dissolved. Intermet and the First Lien Agent, in consultation with the official committee of unsecured creditors, have determined that the Lender Liquidating Trust may want to maintain the corporate existence of each of the Debtors beyond the Effective Date, to assist it in connection with the liquidation of the estates. The Debtors add that the requested modification to the Plan will help facilitate operating the Lender Liquidation Trust and that the continued existence of the Debtors beyond the Effective Date will not impact distributions under the Plan. As reported in the TCR on July 15, 2009, the Bankruptcy Court approved the proposed liquidation plan of Intermet Corp. and the sale of substantially all of its assets to Revstone Industries LLC. Intermet Corp. declared Revstone to be the winner of the auction for its cast metals auto parts business with a bid of $11 million, subject to adjustments. Under the Plan, holders of administrative expense claims under Sec. 503(b)(9) of the Bankruptcy Code, estimated at $6 million, are to recover 35% to 50% of their allowed claims. The second- lien lenders owed $107 million and unsecured creditors with $93 million in claims are expected to recover not more than 2%. Equity holders are out of the money. A full-text copy of the disclosure statement explaining the Debtors' Joint Chapter 11 Plan, dated May 28, 2009, is available at http://bankrupt.com/misc/intermet.DS.pdf As reported in the TCR on August 10, 2009, Intermet's sale to Revstone Industries LLC may have been stalled, says The Lake Gazette. Based in Fort Worth, Texas, Intermet Corp. designs and manufactures machine precision iron and aluminum castings for the automotive and industrial markets. The Company and its debtor- affiliates filed for Chapter 11 protection on August 12, 2008 (D. Del. Case Nos. 08-11859 to 08-11866 and 08-11868 to 08-11878). Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Michael E. Comerford, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as the Debtors' counsel. James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' co-counsel. Kurtzman Carson Consultants LLC serves as the Debtors' claims, notice and balloting agent. An official committee of unsecured creditors has been formed in this case. In its petition, Intermet Corp. listed assets of $50 million to $100 million and debts of $100 million to $500 million. This is the Debtors' second bankruptcy filing. Intermet Corp., along with its debtor-affiliates, filed for Chapter 11 protection on September 29, 2004 (Bankr. E.D. Mich. Case Nos. 04-67597 through 04-67614). Salvatore A. Barbatano, Esq., at Foley & Lardner LLP, represented the Debtors. In their previous bankruptcy filing, the Debtors listed $735,821,000 in total assets and $592,816,000 in total debts. Intermet Corporation emerged from its first bankruptcy filing in November 2005. INTERMET CORP: Asks Court to Approve Settlement with PBGC --------------------------------------------------------- Intermet Corporation and its affiliated debtors ask the U.S. Bankruptcy Court for the District of Delaware to approve its settlement agreement with Pension Benefit Guaranty Corporation, which will resolve Intermet's outstanding obligations under certain defined benefit pensions plans, and settle all of the PBGC's claims against Intermet's estates. Pursuant to the settlement agreement: (i) Intermet will affirmatively support action by PBGC with respect to termination of the (a) Ganton Technologies LLC Pulaski Hourly Employment Retirement Plan and (b) Ganton Technologies LLC Salaried Employees Retirement Plan and appointment of PBGC as statutory trustee of said ongoing plans, (ii) PBGC will have an allowed administrative claim in the amount of $650,000, and (iii) all of PBGC's remaining claims filed in the bankruptcy cases will be treated as an allowed general unsecured claim. The Debtors say that the settlement agreement is of substantial benefit to Intermet and its retirees since the Chapter 11 Plan is a liquidating plan and Intermet will no longer have an operating business in which to fund the ongoing plans. Said obligations are not being assumed by Revstone Industries, LLC, the purchaser of substantially all of Intermet's assets. Based in Fort Worth, Texas, Intermet Corp. designs and manufactures machine precision iron and aluminum castings for the automotive and industrial markets. The Company and its debtor- affiliates filed for Chapter 11 protection on August 12, 2008 (D. Del. Case Nos. 08-11859 to 08-11866 and 08-11868 to 08-11878). Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Michael E. Comerford, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as the Debtors' counsel. James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' co-counsel. Kurtzman Carson Consultants LLC serves as the Debtors' claims, notice and balloting agent. An official committee of unsecured creditors has been formed in this case. In its petition, Intermet Corp. listed assets of $50 million to $100 million and debts of $100 million to $500 million. This is the Debtors' second bankruptcy filing. Intermet Corp., along with its debtor-affiliates, filed for Chapter 11 protection on September 29, 2004 (Bankr. E.D. Mich. Case Nos. 04-67597 through 04-67614). Salvatore A. Barbatano, Esq., at Foley & Lardner LLP, represented the Debtors. In their previous bankruptcy filing, the Debtors listed $735,821,000 in total assets and $592,816,000 in total debts. Intermet Corporation emerged from its first bankruptcy filing in November 2005. I/OMAGIC CORP: June 30 Balance Sheet Upside-Down by $2 Million -------------------------------------------------------------- I/OMagic Corporation's balance sheet showed total assets of $2.99 million and total liabilities of $5.04 million, resulting in a stockholders' deficit of $2.05 million. For three months ended June 30, 2009, the Company reported a net income of $257,218 compared with a net loss of $2.16 million for the same period in 2008. For six months ended June 30, 2009, the Company reported a net income of $185,512 compared with a net loss of $3.02 million for the same period in 2008. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?41fb On April 15, 2009, Simon & Edward, LLP in City of Industry, California expressed substantial doubt about I/OMagic Corporation's ability to continue as a going concern after auditing the Company's financial results for the fiscal years ended Dec. 31, 2008, and 2007. The auditor noted that the Company incurred significant operating losses, serious liquidity concerns and may require additional financing in the foreseeable future. About I/OMagic Corp. Headquartered in Irvine, California, I/OMagic Corporation (OTC BB: IOMG) -- http://www.iomagic.com/-- sells data storage products, televisions, most of which are high-definition televisions, or HDTVs, utilizing liquid crystal display, or LCD, technology, and other consumer electronics products. JEFFERIES GROUP: S&P Affirms BB+ Preferred Stock Rating ------------------------------------------------------- Standard & Poor's Ratings Services said that it completed its review of its counterparty credit ratings on eight independent U.S. brokerage firms. As a result of this review, S&P placed the ratings on E*TRADE Financial Corp. and its subsidiary, E*TRADE Bank, on CreditWatch with positive implications and affirmed the ratings on the other seven companies. The CreditWatch action on E*TRADE was based on the application of S&P's criteria for distressed exchange offerings and a review of the company's financial position, which has faced unique challenges from asset quality problems at its banking unit. "The CreditWatch listing reflects S&P's belief that the debt exchange no longer meets S&P's criteria for a distressed exchange offering, because the value to the investors is unlikely to be less than what it promised on the original securities," said Standard & Poor's credit analyst Charles D. Rauch. "We based S&P's affirmation of ratings on the other brokers on S&P's review of the impact of industrywide developments such as market conditions and, in the case of the retail firms, investor participation," said Standard & Poor's credit analyst Robert B. Hoban. "We also assessed company-specific measures such as liquidity and capitalization, and near-term debt service capacity." The ongoing downturn has pressured these companies. Nonetheless, so far, they have mostly fared considerably better than large banks and universal bank brokerage peers, despite their inherently less diversified business profiles and generally less substantial resources. Primary advantages are lower credit and market risk exposures, flexible cost bases, and less-capital-intensive businesses. S&P believes the brokerage industry's near-term prospects will remain less than ideal as long as the broader economy remains depressed. However, S&P also sees those brokers that are not facing specific structural issues as largely well positioned to keep enduring these less-than-optimal operating conditions. Most of the companies covered in this review are maintaining defensive financial profiles, with reduced leverage and/or higher degrees of liquidity, which should provide some cushion if operating conditions turn sour again. Regardless of future operating conditions, S&P believes the survivors will benefit from the culling of U.S. brokerage firms over the past year and a half. In particular, the independent retail brokers have taken advantage of disarray at the warehouse firms to poach financial advisers from them. Ratings List Ratings Affirmed BNY ConvergEx Group LLC Counterparty Credit Rating B+/Stable/-- Senior Secured B+ Subordinated Local Currency B- Recovery Rating 6 Charles Schwab Corp. Counterparty Credit Rating A/Stable/A-1 Senior Unsecured A Commercial Paper A-1 Charles Schwab & Co. Inc. Counterparty Credit Rating A+/Stable/-- Schwab Capital Trust I Preferred Stock BBB+ IBG LLC Counterparty Credit Rating BBB+/Stable/-- Jefferies Group Inc. Counterparty Credit Rating BBB/Negative/-- Senior Unsecured BBB Preferred Stock BB+ LPL Holdings, Inc. Counterparty Credit Rating B+/Stable/-- Senior Secured B+ Subordinated B- Raymond James Financial, Inc. Counterparty Credit Rating BBB/Negative/A-2 Senior Unsecured BBB TD AMERITRADE Holding Corp. Counterparty Credit Rating Local Currency BBB+/Stable/-- Senior Secured BBB+ Ratings Placed On CreditWatch E*TRADE Financial Corp. To From -- ---- Counterparty Credit Rating CC/Watch Pos/-- CC/Negative/-- Senior Unsecured CC/Watch Pos CC Senior Unsecured CCC-/Watch Pos CCC E*TRADE Bank To From -- ---- Counterparty Credit Rating CCC+/Watch Pos/C CCC+/Negative/C Certificate Of Deposit Local Currency CCC+/Watch Pos/C CCC+/C JEFFREY ROBERT QUACKENBUSH: Voluntary Chapter 11 Case Summary ------------------------------------------------------------- Debtor: Jeffrey Robert Quackenbush aka Jeff Quackenbush PO Box 161945 Big Sky, MT 59716 Case No.: 09-61618 Chapter 11 Petition Date: August 14, 2009 Court: United States Bankruptcy Court District of Montana (Butte) Judge: Ralph B. Kirscher Debtor's Counsel: Gary S. Deschenes, Esq. P.O. Box 3466 Great Falls, Mt 59403-3466 Tel: (406) 761-6112 Email: descheneslaw@dslawoffices.net Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. JER INVESTORS: Posts $27 Million Net Loss in Quarter Ended June 30 ------------------------------------------------------------------ JER Investors Trust Inc. posted a net loss of $8.70 million for three months ended June 30, 2009, compared with a net income of $28.99 million. For six months ended June 30, 2009, the Company posted a net loss of $27.03 million compared with a net loss of $37.85 million for the same period in 2008. The Company's balance sheet showed total assets of $261.18 million, total liabilities of $240.81 million and stockholders' equity of $20.37 million. In the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2008, filed with the Securities and Exchange Commission, the Company disclosed that there was substantial doubt regarding its ability to continue as a going concern. In response, the Company has undertaken or expects to commence certain efforts to reduce expenses and preserve liquidity including; (i) discontinuing payment of quarterly dividends and replacing the quarterly dividends with payment of an annual dividend to the extent required to satisfy REIT dividend requirements, (ii) seeking to reduce operating costs, primarily our general and administrative costs; (iii) seeking to restructure terms of our recourse indebtedness including extension of scheduled maturity dates or modification of near-term interest payment requirements; and (iv) if necessary, pursue sales of selected assets. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?41fc JER Investors Trust Inc. (OTC Bulletin Board: JERT) -- http://www.jer.com/-- is a specialty finance company that invests in commercial real estate structured finance products. JER's target investments include commercial mortgage backed securities, mezzanine loans and B-Note participations in mortgage loans, commercial mortgage loans and net leased real estate investments. JER Investors Trust Inc. is organized and conducts its operations so as to qualify as a real estate investment trust ("REIT") for federal income tax purposes. KENNETH HUEY FAMILY: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: The Kenneth Huey Family Trust 3493 French Road Clinton, WA 98236 Bankruptcy Case No.: 09-18302 Chapter 11 Petition Date: August 16, 2009 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Zeshan Q. Khan, Esq. ZQKahnlaw 3211 Beacon Ave. S, No. 67 Seattle, WA 98144 Tel: (206) 324-3547 Fax: (206) 763-0109 Email: zqkhanlaw@gmail.com Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A full-text copy of the Debtor's petition, including a list of its 15 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/wawb09-18302.pdf The petition was signed Quintessa Huey and Carynl L. Fong, trustees of the Company. LAW OFFICES OF MASRY: Case Summary & 15 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Law Offices of Masry & Vititoe 5705 Corsa Avenue, 2nd Floor Westlake Village, CA 91362 Case No.: 09-20447 Type of Business: The Debtor operates a law firm. Chapter 11 Petition Date: August 14, 2009 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Maureen Tighe Debtor's Counsel: Leslie A. Cohen, Esq. Leslie Cohen Law PC 506 Santa Monica Bl Ste 200 Santa Monica, CA 90401 Tel: (310) 394-5900 Fax: (310) 394-9280 Email: leslie@lesliecohenlaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by James Vititoes. Debtor's List of 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Joseph DiNardo Personal Loan $650,000 The DiNardo Law Firm 6400 Main Street #120 Williamsville, NY 14221 California Lit Funding Settlement $1,000,000 c/o Richard Schwartz, Esq. Jackie Masry Settlement $1,000,000 877 Emerson Street Thousand Oaks, CA 91362 Louis Masry & Luann Masry Settlement Estate of Edward Masry Employment Agreement $19,000 c/o Loius Masry per month (Expires Jan, 2011) Estate of Edward Masry Employment Agreement Deferred compensation from substantial case fees (Expires Jan, 2011) Paul Taing Lawsuit $50,000 claimed Chen Shih Settlement $75,000 Law Offices of Parker Attorney fees $566,965 Milliken 555 S. Flower Street Los Angeles, CA 90071 (213) 683-6500 Law Offices of McCurdy Loan/Advance $200,000 & McCurdy AT&T Advertising & Publishing Advertising $20,811 Yellowbook Advertising $13,413 Idearc Media LLC Advertising $17,743 JKK Past due rent $35,000 LexisNexis/lawyers.com Advertising $9,000 LEAR CORP: Releases 2nd Quarter Results on Form 10-Q ---------------------------------------------------- On August 13, 2009, Lear Corporation and its subsidiaries filed with the U.S. Securities and Exchange Commission their financial results for the quarter ended July 4, 2009. A full-text copy of Lear's 2nd Quarter Financial Results is available for free at http://ResearchArchives.com/t/s?41bd Lear Corporation and Subsidiaries Condensed Consolidated Balance Sheets As of July 4, 2009 ASSETS Current Assets: Cash and cash equivalents $1,133,500,000 Accounts receivable 1,406,900,000 Inventories 432,400,000 Other 328,500,000 -------------- Total current assets 3,301,300,000 Long-term Assets: Property, plant and equipment, net 1,112,300,000 Goodwill, net 1,487,200,000 Other 471,000,000 -------------- Total long-term assets 3,070,500,000 -------------- TOTAL ASSETS $6,371,800,000 ============== LIABILITIES AND EQUITY(DEFICIT) Current Liabilities: Short-term borrowings $34,600,000 Prepetition primary credit facility 2,177,000,000 Senior notes 1,287,600,000 Accounts payable and drafts 1,308,500,000 Accrued liabilities 985,400,000 Current portion of long-term debt 7,900,000 -------------- Total current liabilities 5,801,000,000 Long-Term Liabilities: Long-term debt 5,600,000 Other 735,100,000 -------------- Total long-term liabilities 740,700,000 EQUITY (DEFICIT): Common stock 800,000 Additional paid-in capital 1,370,200,000 Common stock held in treasury (170,100,000) Retained deficit (1,256,600,000) Accumulated other comprehensive loss (155,500,000) -------------- Lear Corporation stockholders' equity(deficit) (211,200,000) Noncontrolling interests 41,300,000 -------------- Equity (deficit) (169,900,000) -------------- TOTAL LIABILITIES AND EQUITY(DEFICIT) $6,371,800,000 ============== Lear Corporation and Subsidiaries Condensed Consolidated Statement of Operations For the Three Months Ended July 4, 2009 Net Sales $2,281,000,000 Cost of sales 2,245,900,000 Selling, general and administrative expenses 121,500,000 Interest expense 62,300,000 Other (income) expense, net 5,700,000 -------------- Consolidated income(loss) before provision for income taxes (154,400,000) Provision for income taxes 14,000,000 -------------- Consolidated net income (loss) (168,400,000) Less: Net income attributable to noncontrolling interests 5,200,000 -------------- Net income (loss) attributable to Lear ($173,600,000) ============== Lear Corporation and Subsidiaries Condensed Consolidated Statement of Cash Flows For the Six Months Ended July 4, 2009 Cash Flows from Operating Activities: Consolidated net income (loss) ($431,200,000) Adjustments to reconcile consolidated income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 134,500,000 Net change in recoverable customer engineering and tooling (5,500,000) Net change in working capital items (37,000,000) Net change in sold accounts receivable (138,500,000) Other, net 81,200,000 -------------- Net cash provided by (used in) operating activities (396,500,000) -------------- Cash Flows from Investing Activities: Additions to property, plant and equipment (42,100,000) Other, net 9,200,000 -------------- Net cash used in investing activities (32,900,000) -------------- Cash Flows from Financing Activities: Repayment of senior notes 0 Other long-term debt repayments, net (2,600,000) Short-term debt repayments, net (9,000,000) Payment of financing fees (21,200,000) Repurchase of common stock 0 Dividends paid to noncontrolling interests (15,400,000) Decrease in drafts (300,000) -------------- Net cash used in financing activities (48,500,000) -------------- Effect of foreign currency translation 19,300,000 Net Change in Cash and Cash Equivalents (458,600,000) Cash and Cash Equiv. as of Beginning Period 1,592,100,000 -------------- Cash and Cash Equivalents as of End of Period $1,133,500,000 ============== About Lear Corp. Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India, and Mexico, among others. Lear Corporation and its affiliates filed for Chapter 11 on July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Affiliates part of the Chapter 11 filing include Lear South Africa Limited, Lear Corporation (Germany) Ltd., Lear Corporation Canada Ltd., Lear Mexican Holdings Corporation, and Lear South American Holdings Corporation. Attorneys at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. McCarthy Tetrault LLP has been engaged as CCAA counsel. Bodman LLP has been hired as special Michigan counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also been tapped as special counsel. Alvarez & Marsal North America LLC, is the Debtors' restructuring advisors. Ernst & Young LLP is the Debtors' auditors and tax advisors. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. Simpson Thacher & Bartlett LLP represents JP Morgan, as admin. agent for senior secured lenders and DIP lenders. As of May 30, 2009, Lear has assets of $1,270,800,000 against debts of $4,536,000,000. Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000) LEAR CORP: Terms of Proposed Chapter 11 Plan -------------------------------------------- Lear Corporation and its 23 debtor affiliates delivered to the U.S. Bankruptcy Court for the Southern District of New York their Joint Plan of Reorganization and accompanying Disclosure Statement on August 14, 2009. Matthew J. Simoncini, senior vice president and chief financial officer of Lear Corporation, relates that as a result of extensive good faith prepetition negotiations, the Plan is supported by Prepetition Credit Agreement Lenders and Noteholders holding a majority of the Prepetition Indebtedness and debt under the Debtors' Unsecured Notes. The Plan contemplates these restructuring transactions: * The Lenders will convert $1.6 billion in Prepetition Credit Agreement Secured Claims into the New Term Loans and preferred and common equity in the Reorganized Debtors; * The Debtors' Other General Unsecured Claims -- including, but not limited to, the Prepetition Credit Agreement Deficiency Claim amounting to $737 million and the Unsecured Notes Claims in the amount of $1.3 billion -- will be converted, in part, into common equity in the Reorganized Debtors and warrants to acquire common equity in the Reorganized Debtors; * the Unsecured Ongoing Operation Claims will be paid in full in Cash or receive other treatment as to render that Holder Unimpaired; and * the Reorganized Debtors will enter into the Exit Facility. The Debtors ask the Court to set November 2, 2009, as the hearing date to consider confirmation of their Chapter 11 Plan, and October 23 as the deadline for filing objections to the Plan. Claims and Interests Under the Plan, the Debtors are classified into Groups A and B. Group A Debtors consist of those Debtors that are borrowers and guarantors under the Prepetition Secured Credit Facilities and the Unsecured Notes, while Group B Debtors consist of those Debtors that are not borrowers or guarantors under the Prepetition Secured Credit Facilities and the Unsecured Notes. Group A Debtors refer to Lear Corporation, Lear Canada, Lear Automotive Dearborn, Inc., Lear Corporation (Germany) Ltd., Lear Corporation EEDS and Interiors, Lear Operations Corporation and Lear Seating Holdings Corp. #50. Group B Debtors refer to Lear #50 Holdings, LLC, Lear Argentine Holdings Corporation #2, Lear Automotive Manufacturing, LLC, Lear Canada Investments Ltd., Lear Corporation Canada Ltd., Lear Corporation Global Development, Inc., Lear EEDS Holdings, LLC, Lear European Operations Corporation, Lear Holdings, LLC, Lear Investments Company, LLC, Lear Mexican Holdings Corporation, Lear Mexican Holdings, LLC, Lear Mexican Seating Corporation, Lear South Africa Limited, Lear South American Holdings Corporation, Lear Trim L.P. and Renosol Seating, LLC. Substantive Consolidation According to Mr. Simoncini, the Plan will serve as a motion by the Debtors to substantively consolidate all of the Estates of the Group A Debtors into a single consolidated Estate and all of the Estates of the Group B Debtors into a separate, single consolidated Estate for all purposes, including voting, Confirmation and distribution pursuant to the Plan. If substantive consolidation of the Group A Debtors' Estates and the Group B Debtors' Estates is ordered, then on and after the effective date of the Plan, all assets and liabilities of the Group A Debtors and the Group B Debtors will be treated as though they were merged into one Estate of the Group A Debtors and one Estate of the Group B Debtors for all purposes, Mr. Simoncini says. He clarifies that substantive consolidation will not affect the legal and organizational structure of the Reorganized Debtors or their separate corporate existences or any prepetition or postpetition guarantees, Liens, or security interests that are required to be maintained under the Bankruptcy Code, under the Plan, or, in connection with contracts or leases that were assumed or entered into during the Chapter 11 cases. However, in the event that the Bankruptcy Court does not order substantive consolidation of the Group A Debtors' Estates and the Group B Debtors' Estates, then: (1) nothing in the Plan or the Disclosure Statement will constitute or be deemed to constitute an admission that one of the Group A Debtors or the Group B Debtors is subject to or liable for any Claim against any other Group A Debtor or Group B Debtor; (2) Claims against multiple Debtors will be treated as separate Claims with respect to each Debtor's Estate for all purposes, and those Claims will be administered as provided in the Plan; (3) the Debtors will not resolicit votes with respect to the Plan, nor will the failure of the Bankruptcy Court to approve substantive consolidation of the Group A Debtors' Estates and the Group B Debtors' Estates alter the distributions; and (4) the Debtors may file a plan of reorganization for each Debtor and the confirmation requirements of Section 1129 of the Bankruptcy Code must be satisfied separately with respect to each Debtor. The Debtors' inability to confirm any Plan or the Debtors' election to withdraw any Plan will not impair the confirmation of any other Plan. Cancellation of Agreements, Unsecured Notes and Equity Interests On the Plan Effective Date, all notes, stock, instruments, certificates, and other documents evidencing the Unsecured Notes and Equity Interests in Lear Corporation will be canceled and of no further force, whether surrendered for cancellation or otherwise, and the obligations of the Debtors thereunder or in any way related thereto will be discharged. Any Indentures relating to any of the foregoing will be deemed to be canceled, and the obligations of the Debtors will be discharged; provided that, the Unsecured Notes and the Indentures will continue in effect to (a) allow Holders of the Unsecured Claims to receive distributions; and (b) preserve the right of the Indenture Trustees to the reimbursement of the Indenture Trustees' Fees. The transfer register or ledger maintained by Indenture Trustees for the Unsecured Notes will be closed, and there will be no further changes in the record holders of any Unsecured Notes. The Prepetition Credit Agreement will be deemed to be cancelled, and the obligations of the Debtors under the Agreement will be discharged; provided that, the Prepetition Credit Agreement will continue in effect solely for the purpose to: (a) allow Holders of the Prepetition Credit Agreement Claims to receive the distributions; (b) allow the Prepetition Administrative Agent to receive distributions from the Debtors and to make further distributions to the Holders of Prepetition Credit Agreement Claims on account of the Claims; and (c) preserve the Prepetition Administrative Agent's right to indemnification from the Debtors pursuant and subject to the terms of the Prepetition Credit Agreement in respect of any claim or cause of action asserted against the Prepetition Administrative Agent by a Person or Entity that is not party to the Prepetition Credit Agreement. Reorganized Company Equity Interests The Plan provides that Reorganized Lear Corporation's equity interests will consist of New Common Stock, Series A Preferred Stock and Warrants. On the Effective Date, the Reorganized Debtors will issue or reserve for issuance all Securities to be issued pursuant to the terms of the Plan and the Amended and Restated Certificate of Incorporation, without need for any further corporate or shareholder action. Shares of New Common Stock will be issued to: (a) Holders of Allowed Prepetition Credit Agreement Secured Claims, (b) Holders of Allowed Other General Unsecured Claims, (c) holders of the Series A Preferred Stock upon conversion of the Securities, (d) holders of Warrants upon exercise of the Warrants, and (e) holders of equity-based awards issued under the Management Equity Plan. Following the Effective Date, Reorganized Lear Corporation will as soon as reasonably practicable file with the Commission a registration statement for the New Common Stock on Form 8-A or Form 10 under the Securities Exchange Act of 1934. Following the Effective Date, Reorganized Lear Corporation will use reasonable best efforts to list the New Common Stock on the NASDAQ or The New York Stock Exchange as soon as reasonably practicable. Shares of Series A Preferred Stock will be issued to Holders of Allowed Prepetition Credit Agreement Secured Claims. The Series A Preferred Stock will not be publicly listed. Other General Unsecured Claims Warrants will be issued to Holders of Allowed Other General Secured Claims. DIP Facility Warrants will be issued to the DIP Lenders, if applicable. Certain holders of New Common Stock will be entitled to registration rights pursuant to the Registration Rights Agreement. Exit Financing On the Effective Date, the Reorganized Debtors will consummate the Exit Facility. In accordance with the Exit Financing Agreement, the Reorganized Debtors will use proceeds of the Exit Financing Agreement to pay or refinance the DIP Facility Claims. Reorganized Lear Corporation will make payments of principal and interest in accordance with the terms and conditions of the Exit Financing Agreement. In the event Reorganized Lear Corporation has Minimum Liquidity determined on a normalized basis in excess of $1.0 billion on the Effective Date, Reorganized Lear Corporation will, to the extent of the excess and without penalty or premium, prepay: (a) first, the Series A Preferred Stock in an aggregate stated value of up to $50 million; (b) second, the loans under the New Term Loans Agreement in an aggregate principal amount of up to $50 million; and (c) third, the loans under the Exit Facility. From and after the Effective Date, the Reorganized Debtors, subject to any applicable limitations set forth in any post- Effective Date financing, will have the right and authority without further order of the Bankruptcy Court to raise additional capital and obtain additional financing as the boards of directors of the applicable Reorganized Debtors deem appropriate. New Term Loans On the Effective Date, Reorganized Lear Corporation will issue the New Term Loans. The New Term Loans will be guaranteed by Reorganized Lear Corporation's domestic direct and indirect subsidiaries pursuant to the New Term Loans Agreement. On or before the Effective Date, the Reorganized Debtors and each Holder of an Allowed Prepetition Credit Agreement Secured Claim will execute the New Term Loans Agreement. Executory Contracts and Unexpired Leases Each of the Debtors' Executory Contracts and Unexpired Leases will be deemed assumed as of the Effective Date unless that Executory Contract or Unexpired Lease: (a) was assumed or rejected previously by the Debtors; (b) is identified on the list of Executory Contracts and Unexpired Leases to be rejected filed pursuant to the Plan Supplement, which list will be filed on or before the Contract or Lease Schedule Date and will not be modified by the Debtors after the Contract or Lease Schedule Date; (c) is the subject of a separate motion or notice to reject filed by the Debtors on or before the Contract or Lease Schedule Date; provided that the Debtors will not file any separate motions or notices to reject Executory Contracts or Unexpired Leases after the Contract or Lease Schedule Date if the Plan is still pending or has been consummated; or (d) previously expired or terminated pursuant to its own terms. Valuation Analysis and Financial Projections Mr. Simoncini relates that each of the "Consenting Lenders" and "Consenting Noteholders", working with their financial advisors, conducted extensive negotiations in the weeks leading up to the Petition Date. The Consenting Lenders and Consenting Noteholders represent in excess of 75 sophisticated financial institutions that are familiar with the Debtors' operations and the automotive supplier industry. Furthermore, the Debtors and their advisors provided substantial operational information to the Consenting Noteholders and Consenting Lenders, which informed the negotiations and provided the basis for an agreed valuation. For purposes of the Plan of Reorganization and the Disclosure Statement, the Debtors, the Consenting Lenders and the Consenting Noteholders have agreed upon a distributable value of the Reorganized Debtors, as of the Petition Date, of approximately $3.054 billion, implying a net equity value of approximately $1.909 billion. "This agreed upon reorganization value is without prejudice to the rights of creditors and any party in interest, including the Debtors and the Reorganized Debtors to assert that the distributable value is higher or lower than $3.054 billion in the event the Plan is not confirmed and consummated," Mr. Simoncini says. As of the Petition Date ----------------------- Distributable Value $3.054 billion Less: Post-emergence Debt 1.145 billion New Equity Value 1.909 billion The Debtors believe that the Plan meets the feasibility requirement set forth in Section 1129(a)(11) of the Bankruptcy Code, as Confirmation is not likely to be followed by liquidation or the need for further financial reorganization of the Reorganized Debtors. In connection with developing the Plan, and for purposes of determining whether the Plan satisfies feasibility standards, the Debtors' management has, through the development of financial projections for the years of 2009 through 2012, analyzed the Reorganized Debtors' ability to meet their obligations under the Plan and to maintain sufficient liquidity and capital resources to conduct their businesses. A full-text copy of the Financial Projections is available for free at http://bankrupt.com/misc/Lear_FinancialProjections.pdf The Financial Projections assume that the Plan will be consummated in accordance with its terms and that all transactions contemplated by the Plan will be consummated by the assumed Effective Date. Any significant delay in the assumed Effective Date of the Plan may have a significant negative impact on the operations and financial performance of the Debtors including, but not limited to, an increased risk of inability to meet sales forecasts and higher reorganization expenses. The Financial Projections are subjective in many respects, and thus are susceptible to interpretations and periodic revisions based on actual experience and recent developments. The Debtors do not intend to update or otherwise revise the Financial Projections to reflect the occurrence of future events, even in the event that assumptions underlying the Financial Projections are not borne out, says Mr. Simoncini. Plan Must be Confirmed The Debtors believe that any alternative to Confirmation of their Plan, like conversion of their Chapter 11 cases to cases under Chapter 7 of the Bankruptcy Code or any attempt by another party- in-interest to file a plan, would result in significant delays, litigation and additional costs and, ultimately, would lower the recoveries for Holders of Allowed Claims. A full-text copy of the Debtors' Joint Plan of Reorganization is available for free at: http://bankrupt.com/misc/Lear_Plan.pdf A full-text copy of the Debtors' Disclosure Statement is available for free at: http://bankrupt.com/misc/Lear_DisclosureStmt.pdf About Lear Corp. Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India, and Mexico, among others. Lear Corporation and its affiliates filed for Chapter 11 on July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Affiliates part of the Chapter 11 filing include Lear South Africa Limited, Lear Corporation (Germany) Ltd., Lear Corporation Canada Ltd., Lear Mexican Holdings Corporation, and Lear South American Holdings Corporation. Attorneys at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. McCarthy Tetrault LLP has been engaged as CCAA counsel. Bodman LLP has been hired as special Michigan counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also been tapped as special counsel. Alvarez & Marsal North America LLC, is the Debtors' restructuring advisors. Ernst & Young LLP is the Debtors' auditors and tax advisors. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. Simpson Thacher & Bartlett LLP represents JP Morgan, as admin. agent for senior secured lenders and DIP lenders. As of May 30, 2009, Lear has assets of $1,270,800,000 against debts of $4,536,000,000. Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000) LEAR CORP: To Seek Confirmation of Plan in November --------------------------------------------------- Lear Corp. and its affiliates ask the Court to approve their Disclosure Statement accompanying their Joint Plan of Reorganization dated August 14, 2009. The Debtors also ask the Court approve solicitation procedures which will apply to all of their creditors including creditors and parties-in-interest of the Canadian Debtors. The Debtors believe that the Solicitation Procedures are well-designed and specifically tailored to solicit votes to accept or reject their Joint Plan of Reorganization effectively. The Debtors seek the Bankruptcy Court's approval for the schedule of events relating to confirmation of the Plan: Date Event ---- ----- September 14, 2009, 5:00 p.m. Voting Record Date prevailing Eastern Time September 18, 2009, 10:00 a.m. Disclosure Statement prevailing Eastern Time Hearing September 25, 2009 Solicitation Date October 23, 2009 Voting Deadline October 23, 2009 Confirmation Objection Deadline November 2, 2009 Confirmation Hearing About Lear Corp. Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India, and Mexico, among others. Lear Corporation and its affiliates filed for Chapter 11 on July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Affiliates part of the Chapter 11 filing include Lear South Africa Limited, Lear Corporation (Germany) Ltd., Lear Corporation Canada Ltd., Lear Mexican Holdings Corporation, and Lear South American Holdings Corporation. Attorneys at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. McCarthy Tetrault LLP has been engaged as CCAA counsel. Bodman LLP has been hired as special Michigan counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also been tapped as special counsel. Alvarez & Marsal North America LLC, is the Debtors' restructuring advisors. Ernst & Young LLP is the Debtors' auditors and tax advisors. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. Simpson Thacher & Bartlett LLP represents JP Morgan, as admin. agent for senior secured lenders and DIP lenders. As of May 30, 2009, Lear has assets of $1,270,800,000 against debts of $4,536,000,000. Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000) LEAR CORP: Treatment of Claims Under Chapter 11 Plan ---------------------------------------------------- Under Lear Corp. and its affiliates' Joint Plan of Reorganization, all claims against the Debtors, other than DIP Facility Claims, Administrative Claims and Priority Tax Claims, are classified into seven classes: Class Description ----- ----------- 1A Other Priority Claims Against a Group A Debtor 1B Other Priority Claims Against a Group B Debtor 2A Other Secured Claims Against a Group A Debtor 2B Other Secured Claims Against a Group B Debtor 3A Prepetition Credit Agreement Secured Claims 3B General Unsecured Claims 4A Unsecured Ongoing Operations Claims 4B Intercompany Interests in Group B Debtors 5A Other General Unsecured Claims 6A Convenience Claims 7A-1 Equity Interests in Lear Corporation 7A-2 Intercompany Interests in Group A Debtors Treatment of Claims Estimated Class Status Voting Rights Percentage Recovery ----- ------ ------------- ------------------ 1A Unimpaired Deemed to Accept 100% 2A Unimpaired Deemed to Accept 100% 3A Impaired Entitled to Vote [100]% 4A Unimpaired Deemed to Accept 100% 5A Impaired Entitled to Vote [43]% 6A Impaired Entitled to Vote [25]% 7A-1 Impaired Deemed to Reject 0.0% 7A-2 Unimpaired Deemed to Accept 100% Estimated Class Status Voting Rights Percentage Recovery ----- ------ ------------- ------------------ 1B Unimpaired Deemed to Accept 100% 2B Unimpaired Deemed to Accept 100% 3B Unimpaired Deemed to Accept 100% 4B Unimpaired Deemed to Accept 100% Classes 1A, 2A, 4A, 7A-2, 1B, 2B, 3B, and 4B are Unimpaired under the Plan and are, therefore, presumed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, these Classes are not entitled to vote on the Plan and the vote of these Holders of Claims will not be solicited. Each Holder of an Allowed Claim in each of Classes 3A, 5A and 6A will be entitled to vote to accept or reject the Plan. Class 7A-1 is Impaired and Holders of Class 7A-1 Interests will receive no distributions under the Plan on account of their Interests and are therefore, presumed to have rejected the Plan. Therefore, Holders of Class 7A-1 Interests are not entitled to vote on the Plan and the vote of the Holders will not be solicited. Allowed Administrative Claims will be paid in full in Cash: (a) on the Effective Date or as soon as reasonably practicable thereafter. DIP Facility Claims will convert into the Exit Facility or be paid off in full and in Cash. In the event the DIP Facility Claims convert into the Exit Facility, Reorganized Lear Corporation will pay to the Exit Facility Agent, for the account of each DIP Lender, a fee, at Reorganized Lear Corporation's sole election, of either: (i) DIP Facility Warrants issued Pro Rata in the name of each DIP Lender as soon as reasonably practicable following the Effective Date to purchase a number of shares of New Common Stock with an aggregate stated value as of the Effective Date equal to $25 million -- or, if less than all of the DIP Facility Claims convert into the Exit Facility, the Warrant Share of $25 million; or (ii) Cash on the Effective Date in an amount equal to 5% of the principal amount of each the DIP Lender's DIP Facility Claims that convert into the Exit Facility. Allowed Priority Tax Claims will receive regular installment payments in Cash over a period ending not later than five years after the Petition Date of a total value, as of the Effective Date, equal to the Allowed amount of the Claim. The total value will include simple interest to accrue on any outstanding balance of the Allowed Priority Tax Claim starting on the Effective Date at the rate of interest determined under applicable non- bankruptcy law pursuant to Section 511 of the Bankruptcy Code. Under the Plan, the Debtor-in-possession claim will convert into the Exit Facility or be paid off in full and in cash. In the event the DIP Facility Claims convert into the Exit Facility, Reorganized Debtors will pay to the Exit Facility Agent a fee of either: (i) DIP Facility Warrants issued pro rata in the name of each DIP Lender as soon as reasonably practicable after the Effective Date to purchase a number of shares of New Common Stock with an aggregate stated value as of the Effective Date equal to $25,000,000; or (ii) cash on the Effective Date equal to 5% of the principal amount of each DIP Lender's DIP Facility Claims that convert into the Exit Facility. Intercompany Claims will not be eligible to receive any distribution on account of the Claim as of the Effective Date. Reorganized Lear Corporation may, or may cause each applicable Debtor to, in Reorganized Lear Corporation's sole discretion, reinstate or compromise, as the case may be, Intercompany Claims. About Lear Corp. Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India, and Mexico, among others. Lear Corporation and its affiliates filed for Chapter 11 on July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Affiliates part of the Chapter 11 filing include Lear South Africa Limited, Lear Corporation (Germany) Ltd., Lear Corporation Canada Ltd., Lear Mexican Holdings Corporation, and Lear South American Holdings Corporation. Attorneys at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. McCarthy Tetrault LLP has been engaged as CCAA counsel. Bodman LLP has been hired as special Michigan counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also been tapped as special counsel. Alvarez & Marsal North America LLC, is the Debtors' restructuring advisors. Ernst & Young LLP is the Debtors' auditors and tax advisors. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. Simpson Thacher & Bartlett LLP represents JP Morgan, as admin. agent for senior secured lenders and DIP lenders. As of May 30, 2009, Lear has assets of $1,270,800,000 against debts of $4,536,000,000. Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: U.K. Unit Had $48.8 Billion at Insolvency ---------------------------------------------------------- Dominic Gibb, former financial controller and director of Lehman Brothers International (Europe), submitted a statement of affairs of LBIE to its joint administrators at PricewaterhouseCoopers LP. According to the redacted statement of financial affairs, LBIE had "estimated total assets available for preferential creditors" aggregating $48.79 billion as of the date of its insolvency. This comprises: Book Value (in Millions) ------------- A. Charged Assets Assets subject to fixed charge - Assets subject to floating charge - B. Uncharged Assets Net third party receivables US$21,940 Net affiliate customer receivables 9,685 Depot 15,980 Other items - including fixed assets, Reconciling items and control account breaks 1,186 Contingent receivables from guarantees and shareholders - ------ Total US$48,790 According to Mr. Gibb, LBIE had these liabilities: (in Millions) ------------- Debts to Preferential creditors - Debts secured by floating charges - Unsecured non-preferential claims US$32,376 Subordinated debt 2,225 Issued and called up capital 13,373 According to the Statement of Financial Affairs the amount of recovery by creditors from the assets are "uncertain." In accordance with Paragraph 47(1) Schedule B1 of the Insolvency Act 1986, the directors of an insolvent company are bound to submit a Statement of Affairs to the insolvency office holders. The Statement of Affairs is a statutory document setting out the financial position of the company at the date of insolvency. Redacted Statement of Affairs In advance of the finalization of the Statement of Affairs, the Joint Administrators obtained from the Court an order for limited disclosure in respect of certain parts of the statement. The Joint Administrators were concerned that it would be prejudicial to the conduct of the administration for the names of individual creditors and details of LBIE's estimated liabilities to individual creditors to be disclosed. In particular, the Joint Administrators were concerned that (i) disclosure of this information could result in LBIE breaching duties of confidentiality owed to certain of its creditors; (ii) valuing the claims with any degree of certainty was extremely problematical and thus disclosing names of creditors and valuations of claims could be materially misleading and could result in claims submitted against the estate increasing, referencing values in the statement of affairs; and (iii) the level of sensitivity around this information would mean that its disclosure could have a detrimental impact on what was and is currently a cooperative and mutually beneficial relationship with LBIE's counterparties. As a result of this Court Order, the Statement of Affairs is publicly available only in its limited form. The redacted Statement of Affairs for LBIE can be accessed for free at: http://bankrupt.com/misc/lehmans_redacted_SOA_170809.pdf About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for $2 dollars plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: FSA Findings in Structured Products Probe Delayed ------------------------------------------------------------------ Since Lehman Brothers' collapse in September 2008, the Financial Services Authority and Financial Ombudsman Service have been looking at the potential detriment this has caused for investors in the U.K. structured products market. In May, the FSA and Ombudsman agreed that the issues relating to Lehmans-backed structured products should be considered under the "Wider Implications" process1., to allow the FSA to explore all options to achieve the best outcome for consumers. Although the FSA has completed several elements of its work, it has asked the Ombudsman to continue to defer its consideration of complaints by a further three months to allow the FSA to consider the remaining aspects. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for $2 dollars plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN RE: Court Schedules Chapter 15 Hearing on September 9 ------------------------------------------------------------ On August 6, 2009, Peter C.B. Mitchell and D. Geoffrey Hunter, as provisional liquidators of Lehman Re Ltd., filed a petition pursuant to Chapter 15 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the Southern District of New York seeking recognition of the winding-up of the Company commenced under the Bermuda Companies Act 1981 before the Supreme Court of Bermuda as a "foreign main proceeding," as defined in Section 1502(4) of the Bankruptcy Code. With respect to the petition, the Bankruptcy Court has scheduled a hearing on recognition of the Bermuda Proceeding for 10:00 a.m. on September 9, 2009 before the Honorable James M. Peck in Room 601 of the Bankruptcy Court, One Bowling Green, New York. Copies of the petition and related documents are available to parties in interest on the Bankruptcy Court's Electronic Case Filing System, which can be accessed from the Bankruptcy Court's Web site at http://www.nysb.uscourts.govor upon written request to the petitioners' United States counsel (including by facsimile or e-mail) addressed to: Cadwalder, Wickersham & Taft LLP One World Financial Center New York, NY 10281 Fax: (212) 504-6666 Attn: Betty Comerro Betty.Comerro@cwt.com Any party in interest wishing to submit a response or objection to the petition or the relief requested by the petitioners must do so in accordance with the Bankrutpcy Code and the Federal Rules of Bankruptcy Procedure, in writing and setting forth the basis therefor, which response or objection must be filed electronically with the Court by registered users of the Court's electronic case filing system in accordance with General Order M-242 (a copy of which may be view on the Court's Web site) and by all other parties in interest on a 3.5 inch disc, preferably in Portable Document Format (PDF), Word Perfect or any other Windows-based word processing format. A hard copy of any response or objection must be sent to the Chambers of the Honorable James M. Peck, United States Bankruptcy Judge and served upon the petitioners' United States counsel, so as to be received no later than 4:00 p.m. on September 1, 2009. In addition to filing a written object, all parties in interest opposed to the petition must appear at the hearing at the time and place set forth above. Lehman Re Ltd. is a Bermuda -based insurance unit of Lehman Brothers Holdings Inc. Lehman Re's petition for liqudation was filed with the Supreme Court of Bermuda on September 23, 2008. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for $2 dollars plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LOUISIANA FILM: Misses Deadline to Answer Involuntary Bankr. Suit ----------------------------------------------------------------- The Associated Press reports that Louisiana Film Studios LLC missed an August 13 court-ordered deadline to answer a lawsuit seeking to put the Company into involuntary Chapter 11 bankruptcy. According to The AP, Louisiana Film is at the center of a $1.9 million investment dispute involving members of the New Orleans Saints. The report says that a group of 27 people, including several members of the New Orleans Saints, who bought what they thought were $1.9 million in state movie tax credits, filed the bankruptcy petition against Louisiana Film. Louisiana Film and its chief, Wayne Read, never applied for the credits, the report states, citing state officials. The AP relates that the credits came with the promise of $1.33 return for every dollar invested and were due to be paid on March 31. Mr. Read, The report states, said several times that he will repay the buyers once he finds additional investors for the studio. He failed to appear last week at a hearing at which U.S. Bankruptcy Judge Elizabeth Magner ordered appointment of an overseer for Louisiana Film's finances, the report says. According to the report, the Office of the U.S. Trustee recommended Gerald Schiff, a Lafayette attorney who served as a federal bankruptcy judge from 1992 through 2006. Mr. Read, according to The AP, sent an e-mail to the court before the hearing, seeking a delay as he had been unable to hire a lawyer, but the request was denied. Mr. Read said in a statement that he would be meeting with three potential investor groups within a week to raise capital to pay back the tax credit buyers and pay off other creditors, The AP relates. According to The AP, Mr. Read said he hoped new investors would bring in a new management team. Judge Magner, The AP reports, has set a hearing for August 20 to consider whether to put Louisiana Film into Chapter 11 reorganization. The AP relates that most of the Company's assets have been frozen. Harahan, Louisiana-based Louisiana Film Studios, LLC, is a movie studio. 47 Construction, LLC, et al., filed an Chapter 11 bankruptcy petition to put the Company into Chapter 11 protection on July 23, 2009 (Bankr. E.D. La. Case No. 09-12232). LOU PEARLMAN: Ponzi Victims Won't Face Clawback Suits ----------------------------------------------------- Hundreds of investors taken in by boy-band impresario Lou Pearlman's $300 million Ponzi scheme won't be facing clawback suits under a reported settlement with the court-appointed trustee in Pearlman's bankruptcy case, according to Law360. The report says that the U.S. Trustee Soneet Kapila has agreed to let drop more than 230 suits launched earlier this year in the U.S. Bankruptcy Court for the Middle District of Florida. 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. LPL HOLDINGS: S&P Affirms B+ Counterparty Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services said that it completed its review of its counterparty credit ratings on eight independent U.S. brokerage firms. As a result of this review, S&P placed the ratings on E*TRADE Financial Corp. and its subsidiary, E*TRADE Bank, on CreditWatch with positive implications and affirmed the ratings on the other seven companies. The CreditWatch action on E*TRADE was based on the application of S&P's criteria for distressed exchange offerings and a review of the company's financial position, which has faced unique challenges from asset quality problems at its banking unit. "The CreditWatch listing reflects S&P's belief that the debt exchange no longer meets S&P's criteria for a distressed exchange offering, because the value to the investors is unlikely to be less than what it promised on the original securities," said Standard & Poor's credit analyst Charles D. Rauch. "We based S&P's affirmation of ratings on the other brokers on S&P's review of the impact of industrywide developments such as market conditions and, in the case of the retail firms, investor participation," said Standard & Poor's credit analyst Robert B. Hoban. "We also assessed company-specific measures such as liquidity and capitalization, and near-term debt service capacity." The ongoing downturn has pressured these companies. Nonetheless, so far, they have mostly fared considerably better than large banks and universal bank brokerage peers, despite their inherently less diversified business profiles and generally less substantial resources. Primary advantages are lower credit and market risk exposures, flexible cost bases, and less-capital-intensive businesses. S&P believes the brokerage industry's near-term prospects will remain less than ideal as long as the broader economy remains depressed. However, S&P also sees those brokers that are not facing specific structural issues as largely well positioned to keep enduring these less-than-optimal operating conditions. Most of the companies covered in this review are maintaining defensive financial profiles, with reduced leverage and/or higher degrees of liquidity, which should provide some cushion if operating conditions turn sour again. Regardless of future operating conditions, S&P believes the survivors will benefit from the culling of U.S. brokerage firms over the past year and a half. In particular, the independent retail brokers have taken advantage of disarray at the warehouse firms to poach financial advisers from them. Ratings List Ratings Affirmed BNY ConvergEx Group LLC Counterparty Credit Rating B+/Stable/-- Senior Secured B+ Subordinated Local Currency B- Recovery Rating 6 Charles Schwab Corp. Counterparty Credit Rating A/Stable/A-1 Senior Unsecured A Commercial Paper A-1 Charles Schwab & Co. Inc. Counterparty Credit Rating A+/Stable/-- Schwab Capital Trust I Preferred Stock BBB+ IBG LLC Counterparty Credit Rating BBB+/Stable/-- Jefferies Group Inc. Counterparty Credit Rating BBB/Negative/-- Senior Unsecured BBB Preferred Stock BB+ LPL Holdings, Inc. Counterparty Credit Rating B+/Stable/-- Senior Secured B+ Subordinated B- Raymond James Financial, Inc. Counterparty Credit Rating BBB/Negative/A-2 Senior Unsecured BBB TD AMERITRADE Holding Corp. Counterparty Credit Rating Local Currency BBB+/Stable/-- Senior Secured BBB+ Ratings Placed On CreditWatch E*TRADE Financial Corp. To From -- ---- Counterparty Credit Rating CC/Watch Pos/-- CC/Negative/-- Senior Unsecured CC/Watch Pos CC Senior Unsecured CCC-/Watch Pos CCC E*TRADE Bank To From -- ---- Counterparty Credit Rating CCC+/Watch Pos/C CCC+/Negative/C Certificate Of Deposit Local Currency CCC+/Watch Pos/C CCC+/C MMC ENERGY: To Present Financials on Liquidation Basis ------------------------------------------------------ MMC Energy, Inc., in consultation with its auditors RBSM, LLP, concluded that based on recent events, facts and circumstances that it would be appropriate to adopt a liquidation basis of accounting rather than the going-concern basis GAAP accounting used in the Company's previously reported financial statements. To ensure that its financials are presented in conformity with liquidation accounting principles, the Company will require additional time to prepare the proper financial statement presentation and disclosures related to liquidation basis accounting. The change in accounting standards will only affect the Company's financials on a going-forward basis. None of the Company's previously reported financial statements will require updates or changes of any kind. The Company expects to file its Form 10-Q for the fiscal quarter ended June 30, 2009 by August 19, 2009. MMC Energy, Inc. is an energy management company that acquires and actively manages electricity generating and energy infrastructure related assets in the United States. The Company had three electricity generation assets in California. Its natural gas fueled electricity generating facilities are commonly referred to as peaker plants. The Company generates revenue form providing capacity and ancillary reliability services to transmission grid that distributes electricity to industrial and retail electricity providers. As of March 31, 2009, MMC Energy had $44,580,375 in assets against debts of $ 10,419,424. NEW JERSEY HEALTHCARE: S&P Withdraws BB+ Rating on $11.94MM Bonds ----------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB+' long-term rating on the $11.94 million series 1997A bonds issued by New Jersey Health Care Facilities Financing Authority for Christian Healthcare Center at the issuer's request. The series 1997A bonds were redeemed in full on March 23, 2009, and are no longer outstanding. NII CAPITAL: S&P Affirms 'BB-' Rating on Senior Unsecured Notes --------------------------------------------------------------- Standard & Poor's Rating Services said it affirmed its 'BB-' issued-level rating on NII Capital Corp.'s senior unsecured notes due 2016, upsized to $800 million from $500 million. The '2' recovery rating on the notes indicates expectations for substantial (70%-90%) recovery in the event of payment default. NII Capital Corp. is a subsidiary of Reston, Va.-based wireless carrier NII Holdings Inc. Although numerically, S&P's analysis indicates recovery in the 90%-100% range, S&P has capped the recovery rating at '2' based on its assessment of the "creditor-friendliness" of the insolvency regimes for countries in which the company conducts its operations. The notes are being issued under rule 144A with registration rights and proceeds will be used for general corporate purposes, including the funding of expansion projects in Latin America and potential spectrum acquisitions. At the same time, S&P affirmed the 'B+' corporate credit rating on parent NII Holdings, given that the increase in pro forma leverage is modest, to 2.9x from 2.7x. The outlook is stable. S&P also affirmed the 'B+' issue-level rating on NII Holdings' existing $1.2 billion senior unsecured convertible notes due 2012 and the $350 million senior unsecured convertible notes due 2025. The recovery rating is unchanged at '4', which indicates expectations for average (30%-50%) recovery in the event of payment default. S&P expects total debt outstanding to be about $3.0 billion. "The ratings reflect competitive wireless industry conditions, and exposure to sovereign, regulatory, and foreign exchange risks, which could hurt financial performance," said Standard & Poor's credit analyst Allyn Arden. They also reflect technology risk associated with the company's dependence on Motorola Inc.'s (BB+/Stable/--) unique integrated digital enhanced network (iDEN) as well as expectations for negative net free cash flow over the next year because of aggressive expansion plans. Tempering factors include NII's niche business focused on high average revenue per user and low-churn corporate customers, some geographic diversity, adequate liquidity, and moderate leverage for the rating. NOVASTAR FINANCIAL: Posts $48.5 Million Net Loss for June 30 Qtr ---------------------------------------------------------------- NovaStar Financial Inc. reported a net loss of $48,509,000 for the three months ended June 30, 2009, from a net loss of $197,184,000 for the same period in 2008. NovaStar reported a net loss of $140,207,000 for the six months ended June 30, 2009, from a net loss of $479,854,000 for the same period in 2008. As of June 30, 2009, the Company had $1,692,668,000 in total assets and $2,716,462,000 in total liabilities. As of June 30, 2009, the Company's total liabilities exceeded its total assets under GAAP, resulting in a shareholders' deficit. NovaStar said its losses, negative cash flows, shareholders' deficit, and lack of significant operations raise substantial doubt about the Company's ability to continue as a going concern and, therefore, may not realize its assets and discharge its liabilities in the normal course of business. There is no assurance that cash flows will be sufficient to meet the Company's obligations. As of August 14, 2009, the Company had approximately $21.1 million in available cash on hand (including restricted cash of $6.4 million). In addition to the Company's operating expenses, the Company has quarterly interest payments due on its trust preferred securities and intends to make payments in legal/lease obligations related to its discontinued lending and servicing operations. The Company's current projections indicate sufficient available cash and cash flows from its mortgage securities to meet these payment needs. However, the cash flow from the Company's mortgage securities is volatile and uncertain in nature, and the amounts the Company receives could vary materially from its projections. Therefore, no assurances can be given that the Company will be able to meet its cash flow needs, in which case it may seek protection under applicable bankruptcy laws. Cash flows from mortgage loans -- held-in-portfolio are used to repay the asset-backed bonds secured by mortgage loans and are not available to pay the Company's other debts, the asset-backed bonds are obligations of the securitization trusts and will be repaid using collections of the securitized assets. The trusts have no recourse to the Company's other, unsecuritized assets. The Company will continue to focus on minimizing losses, preserving liquidity, and exploring operating company opportunities. The Company's residual and subordinated mortgage securities are a significant source of cash flows. Based on current projections, the cash flows from the mortgage securities will decrease in the next several months as the underlying mortgage loans are repaid, and could be significantly less than the current projections if losses on the underlying mortgage loans exceed the current assumptions. The Company also has significant obligations with respect to junior subordinated notes relating to the trust preferred securities. As of April 2009, the Company restructured its obligations under the junior subordinated notes relating to trust preferred securities. A full-text copy of the Company's quarterly report on Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?4213 NovaStar Financial, Inc. and its subsidiaries hold certain nonconforming residential mortgage securities. Prior to changes in its business in 2007, the Company originated, purchased, securitized, sold, invested in and serviced residential nonconforming mortgage loans and mortgage backed securities. The Company retained, through its mortgage securities investment portfolio, significant interests in the nonconforming loans it originated and purchased, and through its servicing platform, serviced all of the loans in which it retained interests. Effective August 1, 2008, the Company acquired a 75% interest in StreetLinks National Appraisal Services, LLC, a residential mortgage appraisal company, for an initial cash purchase price of $750,000 plus future payments contingent upon StreetLinks reaching certain earnings targets. Simultaneously with the acquisition, the Company transferred ownership of 5% of StreetLinks to the Chief Executive Officer of StreetLinks. On April 26, 2009, the Company acquired a 70% interest in Advent Financial Services, LLC, a start up operation which will provide access to tailored banking accounts, small dollar banking products and related services to meet the needs of low and moderate income level individuals, for an initial cash contribution into Advent of $2 million. Management is continuing to evaluate opportunities to invest excess cash as it is available. NPC INTERNATIONAL: Decline in Sales Won't Affect S&P's 'B' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said that NPC International Inc.'s (B/Stable/--) announcement that its comparable-stores sales declined 12.6% in the second quarter (ended June 30, 2009), has no immediate impact on the ratings or outlook. Profitability actually improved in the quarter as a result of incremental operating income from restaurants acquired from Pizza Hut International Inc. last year. NPC also reduced debt by $15.1 million, which means that pro forma operating lease adjusted debt to EBITDA is approximately 5.3x, and is still appropriate for the rating category. The company also disclosed that its consolidated leverage ratio (as defined by its credit agreement) was 3.83x, which gives the company adequate cushion over the maximum leverage ratio covenant of 5.25x. This cushion and NPC's cash-flow-generating ability provide adequate liquidity. NYC OFF-TRACK BETTING: Faces Insolvency, State Comptroller Says --------------------------------------------------------------- The New York City Off-Track Betting Corporation (NYC OTB) is facing financial insolvency if current financial trends continue, according to an audit released August 14 by New York State Comptroller Thomas P. DiNapoli. The NYC OTB's operating expenses and accumulated losses have increased steadily in the last four years, resulting in an operating deficit of approximately $38 million. In total, the organization has an outstanding deficit of more than $228 million. Mr. DiNapoli's audit also recommended significant management changes. "New York City OTB is on very shaky financial ground," Mr. DiNapoli said. "Even if cost-savings measures are implemented, it's unlikely that it will remain financially solvent for long. This is a serious problem that needs in-depth examination. If the goal is to keep OTB viable, serious consideration must be given to changing the mandated state formulas and restructuring operations to coordinate different aspects of the racing industry. "The off-track betting industry in New York has taken a beating in the last few years. It's not the cash cow it used to be. The future of the industry is seriously in question, and there are jobs at risk and economic development opportunities being missed. NYC OTB provides millions of dollars in revenues to the horse racing industry, which in turn provides employment for thousands of New Yorkers. The industry is too important to fail. Something has to be done. Inaction will mean insolvency." NYC OTB is a public benefit corporation created in 1970 to generate revenue through pari-mutuel betting for New York City, the horse racing industry and the state. NYC OTB has 68 betting locations and accepts wagers over the phone and Internet. As of September 1, 2008, it had a total of 1,366 employees. There are six regional off-track betting corporations in the state. In recent years, NYC OTB has been unable to cover all of its operating expenses without using surplus funds and delaying some statutory payments. Since 2004, its outside CPA firm has questioned its ability to keep operating. NYC OTB had planned to close in June 2008, but instead the state took it over on June 17, 2008. The audit, which began after the state took over operations, examined the financial condition of NYC OTB from July 1, 2004 through October 24, 2008. Auditors reviewed current financial statements and actions taken by NYC OTB to reduce operating costs, as well as identified additional opportunities for possible cost reductions. The review of the NYC OTB's finances found: * Financial condition deteriorated: From fiscal years 2004-05 to 2007-08, NYC OTB collected about $1 billion a year in wagers, but accumulated growing operating deficits, totaling about $38 million. In fiscal year ended June 30, 2008, NYC OTB took in a total of $998.2 million in wagers. The winning bettors received approximately $760.9 million, and statutory distributions, totaling $128.6 million, were made to the horse racing industry ($93.2 million), New York City and local governments ($20.2 million) and New York State ($15.2 million). NYC OTB was left with $116.1 million to cover its operating expenses, which were $133.9 million, leaving it with an operating deficit for the year of $17.8 million. * Distribution formula changes not enough: The NYC OTB's statutory distributions are a significant financial outlay. By far the most significant of these distributions are to the horse racing industry. Over a four-year period, distributions to the industry totaled $386 million and accounted for more than 72% of the NYC OTB's total $533.5 million in statutory distributions. Legislative changes in June 2008 to allow the NYC OTB to retain more of its revenue have not had a significant impact on the organization because wagers are down and are expected to remain down due to economic conditions. * No comprehensive assessment of operating expenses: While management has taken action to address operating deficits, it has not performed a detailed assessment of its operations or developed a plan for achieving cost reductions by specific dates. To achieve potential cost savings, Mr. DiNapoli recommends that NYC OTB: -- Conduct a formal evaluation of executive, management and branch staffing. -- Examine the wide variations in operation expenses for branch offices. For instance, when comparing operating expenses as a percentage of handle, some offices have operating expenses of 6% while others are as high as 27 percent. -- Review consultant contracts to determine if they can be reduced or eliminated. Auditors examined three of the largest consultant contracts and found no written justification for the contracts, none had been selected through a competitive process and no evaluation was done as to whether these services could be performed in-house. * Determine if the organization needs 87 vehicles, including the 22 vehicles assigned to executive and management staff. Auditors were unable to find any written justification governing the assignment of vehicles. In addition, vehicle logs were not properly maintained and did not include information on who was going where and for what purpose. Each vehicle costs about $6,700 a year to maintain. In its response to the audit, the OTB said it was re-examining all aspects of operations to identify cost saving opportunities. However, OTB officials said more significant actions such as changing the mandatory distribution system and aligning the business interests of the state's various racing institutions were necessary to stave off ultimate insolvency. OPUS WEST: Files Schedules of Assets & Liabilities -------------------------------------------------- A. Real Property $19,347,473 B. Personal Property B.1 Cash on hand Petty cash - Phoenix 200 B.2 Financial accounts Bank of America Checking #5885 & 1821 26,193 Agency checking #5919 220,998 Private bank checking 22,530 Wilmington Trust Checking 3,256,809 Wilmington Trust Agency Checking 36,540 BofA Payroll Account 7,236 Private Bank Payroll Account 2,733 BofA Money Market 389 B.3 Security deposits US Airways suite deposit 19,792 Dallas office 4,266 Houston office 4,451 Regus HQ office 3,830 B.4 Household goods - B.5 Books & art objects - B.6 Wearing apparel - B.7 Furs and jewelry - B.8 Firearms - B.9 Interests in insurance Prepaid property insurance 8,142 Prepaid workers comp. insurance 230,924 Prepaid medical & vision 54,000 Life insurance (CSV) 36,420 B.10 Annuities - B.11 Interests in an education IRA - B.12 Interests in IRA, ERISA, and Keogh - B.13 Stocks and Interests 211,183,219 See http://bankrupt.com/misc/OWCB13.pdf B.14 Joint Ventures - B.15 Govt. & Corporate Bonds - B.16 Accounts Receivable Accounts receivable, net 3,205,732 Notes receivable - McDowell Village 2,170,719 Accounts receivable - due from PPSL 4,200,000 Phoenix LLC B.17 Alimony - B.18 Other Liquidated Debts - B.19 Equitable or Future Interests - B.20 Interests in Estate of a Decedent - B.21 Other Contingent Claims - B.22 Intellectual Property - B.23 Licenses & Other Intangibles - B.24 Customer Lists - B.25 Automobiles & Trucks - B.26 Boats, motors, & accessories - B.27 Aircraft - B.28 Office Equipment Computer equipment 17,250 Office furniture 36,875 Leasehold improvements 151,394 B.29 Machinery - B.30 Inventory - B.31 Animals - B.32 Crops - B.33 Farming Equipment - B.34 Farm Supplies - B.35 Other Personal Property Camarillo operating deposit 20,000 Prepaid property mgt. fees 85,682 TOTAL SCHEDULED ASSETS $244,353,797 ===================================================== C. Property Claimed as Exempt Not applicable D. Secured Claims $17,944,562 See http://bankrupt.com/misc/OWCD.pdf E. Unsecured Priority Claims 1,251,193 See http://bankrupt.com/misc/OWCE.pdf F. Unsecured Non-priority Claims 1,098,341,815 See http://bankrupt.com/misc/OWCF.pdf TOTAL SCHEDULED LIABILITIES $1,117,537,570 ===================================================== 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: Files Statement of Financial Affairs ----------------------------------------------- John Greer, the authorized representative of Opus West Corporation, relates that the Company earned income from the operation of its business within two years prior to the Petition Date: Period Amount ------ ------------ Jan. 1 to June 30, 2009 $108,962,314 Year 2008 412,338,159 With regard to debts which are not primary consumer debts, Opus West Corp. paid an aggregate of $16,810,176 to various creditors within 90 days before it filed for bankruptcy protection. A list of the payments is available for free at: http://bankrupt.com/misc/OWC3b.pdf Within one year immediately preceding the Petition Date, the Company paid an aggregate of $4,969,497 for the benefit of creditors who are or were insiders. A list of the Insider Payments is available for free at: http://bankrupt.com/misc/OWC3c.pdf Mr. Greer tells the Court that the Debtor was a party to 11 lawsuits, all of which are pending in the Superior Court of California, County of San Diego and County of San Bernardino, and the District Court in Harris County, Texas. A list of the lawsuits is available for free at: http://bankrupt.com/misc/OWCSuits.pdf Within one year before the Petition Date, the Company gave an aggregate of $472,107 to various charitable institutions, including the American Cancer Society, the American Heart Association, and the Boy Scouts of America. It also gave gifts, totaling $31,110, to various individuals. A list of the contributions and gifts is available for free at: http://bankrupt.com/misc/OWCGifts.pdf Opus West Corp. also disbursed an aggregate of $2,480,120 to certain professionals, with respect to consultation concerning debt consolidation, relief under the bankruptcy law or preparation of a petition within one year before the Petition Date: Professional Date Amount ------------ -------- ------- BMC Group, Inc. 07/02/09 $50,000 Chatham 06/17/09 300,000 Franklin Skierski 07/02/09 200,000 Lovall Hayward LLP Greenberg Traurig LLP 07/03/09 938,407 06/05/09 146,847 05/28/09 219,865 04/21/09 250,000 Phoenix Capital Partners 07/02/09 275,000 Pronske & Patel PC 07/02/09 100,000 Other than transfers made in the ordinary course of business, Opus West Corp. also made other transfers, aggregating $32,442, to various entities and individuals, a list of which is available for free at http://bankrupt.com/misc/OWCOtherTransfers.pdf Within one year preceding the Petition Date, the Company closed certain accounts in Bank of America, JP Morgan Chase, and Wells Fargo. A list of the Closed Accounts is available for free at: http://bankrupt.com/misc/OWCClosedAccounts.pdf Within two years immediately preceding the Petition Date, the Company's books and records were held by these individuals: Name Period ---- ------ Claire Janssen Apr. 2005 to present Vickie Sixta May 1995 to present Tammy Hall Dec. 2006 to present Abbey Price Aug. 2005 to Feb. 2009 Gabor Veres Jan. 2006 to present Elaine Deines May 2006 to June 2009 John Gamble May 2006 to June 2009 Amy Rees Jul. 2008 to present Mike Hake May 2006 to July 2008 Within the two years immediately preceding the Petition Date, Opus West Corp.'s books were audited by KPMG LLP. Opus West Corp.'s current officers are: Name Title ---- ----- Joel Despain Vice president, real estate Ran Holman Vice president, real estate dvlpmt. Claire C. Janssen Chief financial officer Jeff Roberts Vice president, real estate dvlpmt. Vickie M. Sixta Secretary Timothy J. Smith Tax officer Gregory A. Wattson Vice president of retail dvlpmt. The Company terminated 18 officers and directors within the one year period immediately preceding the Petition Date. A list of terminated officers is available for free at: http://bankrupt.com/misc/OWCTermOff.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: Opus West LP Files Schedules of Assets & Debts --------------------------------------------------------- A. Real Property $67,711,715 B. Personal Property B.1 Cash on hand - B.2 Financial accounts 0 B.3 Security deposits Two Addison water deposit 1,250 B.4 Household goods - B.5 Books & art objects - B.6 Wearing apparel - B.7 Furs and jewelry - B.8 Firearms - B.9 Interests in insurance Prepaid property insurance 9,247 B.10 Annuities - B.11 Interests in an education IRA - B.12 Interests in IRA, ERISA, and Keogh - B.13 Stocks and Interests 45,267,883 B.14 Joint Ventures - B.15 Govt. & Corporate Bonds - B.16 Accounts Receivable 231,288 B.17 Alimony - B.18 Other Liquidated Debts - B.19 Equitable or Future Interests - B.20 Interests in Estate of a Decedent - B.21 Other Contingent Claims - B.22 Intellectual Property - B.23 Licenses & Other Intangibles - B.24 Customer Lists - B.25 Automobiles & Trucks 12,565 B.26 Boats, motors, & accessories - B.27 Aircraft - B.28 Office Equipment - B.29 Machinery - B.30 Inventory - B.31 Animals - B.32 Crops - B.33 Farming Equipment - B.34 Farm Supplies - B.35 Other Personal Property 47 TOTAL SCHEDULED ASSETS $113,233,995 ====================================================== C. Property Claimed as Exempt Not applicable D. Secured Claims 72,306,788 See http://bankrupt.com/misc/OWLPSkeD.pdf E. Unsecured Priority Claims 0 F. Unsecured Non-priority Claims 47,054,359 See http://bankrupt.com/misc/OWLPSkeE.pdf TOTAL SCHEDULED LIABILITIES $119,361,147 ====================================================== 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: Opus West LP Files Statement of Financial Affairs ------------------------------------------------------------ John Greer, authorized representative of Opus West L.P., relates that the Company earned income from the operation of its business within two years prior to the Petition Date: Period Amount ------ ------ Jan. 1 to Jun. 30, 2009 $1,719,037 Year 2008 22,102,621 With regard to debts which are not primary consumer debts, OWLP paid $5,314,802 to various creditors within 90 days before it filed for bankruptcy protection. A list of the payments is available for free at http://bankrupt.com/misc/OWLP3b.pdf Mr. Greer tells the Court that the Company was a party to eight lawsuits, all of which are pending in various district courts in Texas. A list of the lawsuits is available for free at: http://bankrupt.com/misc/OWLPSuits.pdf Within one year immediately preceding the Petition Date, OWLP placed 17 acres of land in Harris County, Texas, known as "Energy Crossing" in the hands of a custodian, Ray Mackey. Other than transfers made in the ordinary course of business, OWLP also transferred two properties to two special purpose entities, which are 100% owned by the Company: Property Transferee -------- ---------- Two Addison Circle OWP Addison Office LLC Fort Bend Crossing OWP Fort Bend Retail LLC Within two years immediately preceding the Petition Date, OWLP's books and records were held by these individuals: Name Period ---- ------ Claire Janssen Apr. 2005 to present Vickie Sixta May 1995 to present Tammy Hall Dec. 2006 to present Abbey Price Aug. 2005 to Feb. 2009 Gabor Veres Jan. 2006 to present Elaine Deines May 2006 to June 2009 John Gamble May 2006 to June 2009 Amy Rees Jul. 2008 to present Mike Hake May 2006 to July 2008 Within the two years immediately preceding the Petition Date, OWLP's books were audited by KPMG LLP. OWLP is owned by Opus West Corporation, which has a 1% interest, and Opus West Partners, Inc., which has a 99% ownership interest. OWLP's current officers are: Name Title ---- ----- Joel Despain Vice president, real estate Ran Holman Vice president, real estate dvlpmt. Claire C. Janssen Chief financial officer Jeff Roberts Vice president, real estate dvlpmt. Vickie M. Sixta Secretary Timothy J. Smith Tax officer Gregory A. Wattson Vice president of retail dvlpmt. 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. PARMALAT SPA: Four Deutsche Bank Execs to Stand at Italy Trial -------------------------------------------------------------- Judge Maria Cristina Sarli of Parma, Italy, ruled on June 8, 2009, that four executives of Deutsche Bank must stand trial for allegedly contributing to the 2003 collapse of Parmalat S.p.A., Dow Jones Newswires reported. The trial is set to commence September 28, 2009. The four executives are Carlo Arosio, Giorgio Di Domenico, Marco Pracca and Tommaso Zibordi. Another Deutsche Bank executive, Guido Williams, has been acquitted, according to Dow Jones. As widely reported, Parmalat collapsed at the weight of its billions of debt in 2003 allegedly due to fraud perpetrated by its management. Parmalat's founder and former chief executive officer, Calisto Tanzi, has been sentenced to 10 years in prison for securities-laws violations leading to Parmalat's collapse. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The Company's U.S. operations filed for Chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On Jan. 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presides over the Parmalat Debtors' U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat permanent injunction. PARMALAT SPA: Judge Drain Extends U.S. Injunction Until Sept. 23 ---------------------------------------------------------------- Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York has adjourned until September 23, 2009, at 10:00 a.m., the hearing to consider the Preliminary Injunction request of Gordon I. MacRae and James Cleaver, as Joint Official Liquidators of Parmalat Capital Finance Limited, Dairy Holdings Limited, and Food Holdings Limited; and Parmalat Finanziaria S.p.A., and its affiliates and subsidiaries, under the direction of Dr. Enrico Bondi, Extraordinary Administrator of the Parmalat companies, provided that, if no objection is received by September 9, the consideration will be on the papers and without a hearing unless the Court otherwise advises the parties. The Order will be without prejudice to Parmalat's right to object for preliminary injunctive relief. Each of the Petitioners and Parmalat reserves all rights and arguments with respect to the proceedings under Section 304 of the Bankruptcy Code. Nothing contained in the Order will be construed as Parmalat's implicit or explicit agreement with any of the positions or actions taken by the Liquidators in commencing the ancillary proceedings, in the United States or in the Cayman Islands. Judge Drain has also extended Parmalat's time to answer the petition commencing the ancillary proceedings until October 23, 2009, unless otherwise ordered by the Bankruptcy Court. He also ruled that the Temporary Restraining Order will remain in effect pursuant to the Order until September 23, 2009. Should the Petitioners in one or more of the ancillary proceedings seek a preliminary injunction on the September 23 Return Date, Judge Drain directed them to file and serve notice of motion of those intentions by August 17, with the notice attaching a proposed form of order, a memorandum of law and appropriate documents in support of the request. Exhibit and witness lists related to any Preliminary Injunction Hearing will be served and filed by September 14, 2009. A full-text copy of the 28th TRO is available for free at: http://bankrupt.com/misc/Parmalat_28thTRO.pdf About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The Company's U.S. operations filed for Chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On Jan. 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presides over the Parmalat Debtors' U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat permanent injunction. PARMALAT SPA: Multidistrict Litigation to Commence Oct. 13 ---------------------------------------------------------- Judge Lewis A. Kaplan of the U.S. District Court for the Southern District of New York scheduled a trial with respect to the multidistrict litigation on October 13, 2009. The trial of the Dairy Holdings Limited and Food Holdings Limited case, which parties waived trial by jury, will commence on September 14. Judge Kaplan also issued a pretrial order, which adopted the statements, directions and agreements that the MDL parties have conferred and agreed upon them and with the Court pursuant to Rule 16 of the Federal Rules of Civil Procedure. The Pretrial Order also contains the parties' contentions, and a joint statement of issues to be tried. A full-text copy of the pre-trial order is available for free at: http://bankrupt.com/misc/ParmaMDL_PreTrialOrder_062509.pdf In response to the Scheduling Order, James L. Bernard, Esq., at Stroock & Stroock & Lavan, LLP, in New York, counsel to Grant Thornton, wrote to Judge Kaplan informing the Court that his firm will accept service, on behalf of Grant Thornton International Ltd., of any amendments to MDL Plaintiffs' complaints, reserving all objections and defenses. Under then Scheduling Order, Lead Plaintiffs Hermes Focus Asset Management Europe Limited, Capital & Finance Asset Management, Solotrat, Societe Moderne des Terrassements Parisiens and Cattolica Partecipazioni S.p.A., and Defendants Grant Thornton LLP, Grant Thornton International Ltd, Grant Thornton International separately filed with the Court proposed jury instructions. Full-text copies of the Jury Instructions are available for free at: http://bankrupt.com/misc/Parma_JuryInstructions_Defendants.pdf http://bankrupt.com/misc/Parma_JuryInstructions_Plaintiffs.pdf Dr. Bondi Amends Complaint Dr. Bondi amends his September 30, 2005 First Amended Complaint to add allegations with respect to, and to bring causes of action against, Grant Thornton International Ltd. His original complaint was filed against Grant Thornton International in Illinois for the alleged fraud and malpractice of Grant Thornton, one of Parmalat's former auditors. John B. Quinn, Esq., at Quinn Emmanuel Urquhart Oliver & Hedges, LLP, in New York, asserts for Dr. Bondi that GTI Ltd. purposely availed itself of the laws of Illinois by becoming a successor-in- interest to GTI, accepting the vast majority of GTI's assets and personnel pursuant to a Asset Purchase Agreement with the intent of continuing GTI's business, and by engaging in the fraudulent transfer. Mr. Quinn alleges that GTI Ltd. is a mere continuation of GTI, and is vicariously, jointly and severally liable for GTI's obligations, including Dr. Bondi's claims. Accordingly, Dr. Bondi asks the Court for an order granting all of the relief against GTI Ltd. requested in his First Amended Complaint against GTI, and that the Court grant these additional requests against GTI and GTI Ltd.: -- an order avoiding the transfer of the Assets from GTI to GTI Ltd.; -- an order attaching the Assets transferred from GTI to GTI Ltd.; -- an order enjoining GTI and GTI Ltd. from further disposition of the Assets, and from disposition of any other assets within their possession; -- an order appointing a receiver to take charge of the Assets, and of all other assets within GTI Ltd.'s possession or control; -- judgment in the amount of the Assets; and -- an order granting attorneys' fees and costs incurred in the pursuit of relief against GTI Ltd. and the Assets. Grant Thornton Seeks to Dismiss Claims Grant Thornton International Ltd. filed under seal a motion to dismiss with prejudice the supplement and amendment to the third amended consolidated class action complaint, amendment to Dr. Enrico Bondi's first amended complaint adding allegations relating to GTI Ltd., and Parmalat Capital Finance Limited's first amendment to complaint. The request's accompanying memorandum of law, declaration of James L. Bernard, Esq., and the exhibits are also filed under seal. Dr. Bondi, is the Extraordinary Commissioner for Parmalat Finanziaria S.p.A., Parmalat S.p.A., and other affiliated entities. In other filings, several parties have submitted with the Court sealed documents, which are placed in vault. No other information has been disclosed regarding the numerous Sealed Documents. GTI & BofA Seek to Exclude 5 Testimonies Grant Thornton International, Grant Thornton LLP, and Bank of America Corporation, jointly ask the Court to exclude the "fundamentally unreliable" testimonies of Stefania Chiaruttini, Oliver Galea, Roberto Megna, and Franco Lagro regarding the reports and the topics on which the Italian Witnesses were designated in Dr. Bondi's "Supplemental Expert Witness Designations" of May 21, 2007 and Class Plaintiffs' "Amended Disclosure of Expert Witnesses" of May 21, 2007, and letter from James L. Sabella of May 24, 2007. The Italian Witnesses are forensic accounting experts. In a redacted memorandum, Mr. Bernard contends that the Court has already excluded from evidence the reports the Italian Witnesses prepared for use in Parmalat's Italian proceedings -- the sole basis for and subject of their proposed testimony in the MDL proceedings because those reports were not the result of reliable investigations. He argues that the Italian Witnesses have done nothing to address the fatal failings the Court identified, and therefore, their testimony must be excluded under Rules 702 and 703 of the Federal Rules of Evidence. Mr. Bernard also asserts that Dr. Bondi and the Plaintiffs persist in violating both the Court's order and Rule 26(a)(2) of the Federal Rules of Civil Procedure by refusing to disclose the documents that the Italian Witnesses considered, thereby preventing the Defendants from challenging their opinions. He adds that the Italian witnesses' testimony cannot be introduced at the MDL class trial because the Plaintiffs intend to introduce the witnesses' testimonies solely by deposition, ignoring repeated warnings from the Court and clear caselaw. Robert D. Keeling, Ernesto Gregorio Valenti and Mr. Bernard submit separate declarations in support of the request to exclude. In another redacted memorandum in further support of the request, Mr. Bernard contends that the Court has already ruled that the Italian Witnesses' investigations and conclusions are unreliable. Despite the Plaintiffs' argument that despite the rulings the witnesses' testimony should nevertheless be permitted under Rule 707, he points out that an expert cannot conduct an unreliable investigation and reach unreliable conclusions, and yet satisfy Rule 702 by delivering reliable, admissible testimony about those conclusions. Grant Thornton, in another sealed request, asks the Court to exclude the expert testimony of Scott D. Hakala. Mr. Bernard argues that Mr. Hakala's opinions related to Parmalat's financial condition, loss causation, and damages were never intended for, and are not suitable for, a trial on the merits. "[Mr.] Hakala has repeatedly been criticized for the very same tactics he has used here, and his opinions, which routinely offer bold conclusions not tied to the facts of the case, have been rejected by courts across the country," Mr. Bernard alleges. "This Court should do the same," he continues. Grant Thorn submits a redacted memorandum, and Mr. Bernard submits a redacted declaration, in further support of the request to exclude Mr. Hakala's testimony. GTI and BofA's Motion for Summary Judgment Pursuant to Rule 56(b) of the Federal Rules of Civil Procedure and upon the accompanying sealed memorandum of law and other statements, defendants Grant Thornton International, Grant Thornton LLP and Bank of America Corporation, et al., notifies the Court and parties-in-interest that they will ask Judge Kaplan, on a date to be determined by the Court, for an order granting summary judgment and dismissing with prejudice, pursuant to the in pari delicto defense, all claims asserted against Grant Thornton and BofA by Dr. Bondi and Parmalat Capital Finance Ltd., citing among others Bondi v. GTI, 421 F. Supp. 2d 703, 713 (S.D.N.Y. 2006). Mr. Bernard contends that there is no question that the plaintiffs, which are represented by Parmalat and its financing vehicle PCFL, committed massive fraud. He avers that from 1990 to 2003, Parmalat fraudulently held itself out as a thriving company, bilking investors and lenders out of tens of billions of dollars so that it could continue to survive and grow, when in truth it was insolvent by 1989 at the latest. He alleges that PCFL furthered that fraud both by fraudulently raising capital to fund Parmalat's operations, and by recording fake accounting entries that allowed Parmalat to hide its insolvency. Parmalat and PCFL now seek to be relieved of the consequences of their fraud, Mr. Bernard asserts. Standing in the shoes of Parmalat, Dr. Bondi sues GTI and GT-US, and PCFL sues GTI alleging vicarious liability relating to audits by Grant Thornton S.p.A. of Parmalat's financial statements. Dr. Bondi and PCFL also sue the BofA Defendants over a series of transactions with Parmalat that allegedly abetted Parmalat's wrongdoing. "All four actions suffer from the same flaw: they are premised on fraud committed by Parmalat and PCFL and are therefore barred by in pari delicto," Mr. Bernard tells the Court, among other things. Hence, the Defendants ask Judge Kaplan to enter summary judgment their favor and dismiss all of Dr. Bondi's and PCFL's claims with prejudice. Mark P. Guerrera and Michele Tagliaferri file separate declarations in support of the Summary Judgment Request. Grant Thornton Seeks to Limit Statements Pursuant to the Federal Rules of Civil Procedure and Federal Rules of Evidence, Defendants Grant Thornton International and Grant Thornton LLP notify the Court that they will present to Judge Kaplan, on a date to be determined by the Court, GTI's and GTI- US's motion in limine to limit the statements that form the basis of the MDL Plaintiffs' claims. In the accompanying memorandum, Mr. Bernard contends that the Court should preclude the Plaintiffs from carrying out their stated intention to argue that the Defendants should be held liable for these alleged misstatements: (1) statements issued by Deloitte & Touche S.p.A., which Plaintiffs never pleaded as the basis for their claims against the Defendants; (2) statements issued by Grant Thornton S.p.A. regarding Parmalat subsidiaries, which also were never pleaded as the basis for Plaintiffs' claims; and (3) the audit opinion for Parmalat Finanziaria S.p.A. issued by GT-Italy on May 13, 1999, which falls outside the relevant limitations period. The Defendants also ask the Court to address the issues in advance of the other pretrial motions in light of their dramatic impact on the parties' trial preparation. "In the interest of fairness and efficiency, Plaintiffs should not be permitted to expand their claims beyond the very narrow misstatements they pleaded -- nor should they take up the time of the Court and the jury with a time-barred claim on which they cannot possibly prevail," Mr. Bernard argue. "In the recent Pretrial Order, Plaintiffs asserted an entirely new theory of liability. They now contend that GTI and GT-US should be held liable for misstatements not only by GT-Italy but by DT- Italy as well," Mr. Bernard alleges. "This theory is both procedurally defaulted and meritless on its face," he adds. Lead Plaintiffs Object to Motion to Exclude Lead Plaintiffs Hermes Focus Asset Management Europe Limited, Capital & Finance Asset Management, Solotrat, Societe Moderne des Terrassements Parisiens, Cattolica Partecipazioni S.p.A., and Enrico Bondi contend that once the fog of the Defendants' "hyperbolic rants is parted," it becomes clear that their request to preclude the Italian Witnesses from testifying at all in Dr. Bondi's cases is based primarily on (i) an erroneous application of the hearsay concept of "reliability," and (ii) Defendants' view of the weight and credibility of the experts' anticipated testimony -- not their actual work or qualifications to testify as forensic accounting experts. Mr. Quinn argues that despite scouring 24 days' worth of deposition transcripts and over 1,600 pages of reports prepared by the four forensic accountants, tellingly, the Defendants do not, among other things: -- say anything at all about, let alone levy any criticism against, seven of the 13 expert reports at issue here, or the methodologies, conclusions and testimony they encompass; and -- meaningfully challenge the experts' qualifications, expertise, methodologies or the relevance of their conclusions to issues the jury will consider. Mr. Quinn also points out that notwithstanding the Defendants' "high-decibel rhetoric," they have failed to demonstrate that the testimony of Dr. Chiaruttini and Messrs. Galea, Megna and Lagro is inadmissible, and the request to preclude should, therefore, be denied. Dr. Bondi & PCFL Object to Summary Judgment Request Dr. Bondi and PCFL jointly ask the Court to deny the Summary Judgment Request. They contend that the Defendants' argument boils down to the proposition that an auditor or financial advisor, who knowingly and substantially assists a corporate officer to steal large sums of money, is immune from liability if his conduct also provided any incidental benefit on the corporation. Allan B. Diamond, Esq., at Diamond McCarthy LLP, in Dallas, Texas, argues that the Defendants, by invoking New York law, have contended that that benefit compels imputation and automatically triggers the bar of in pari delicto. He insists that this is not the law in New York, much less the law applicable in the cases. Mr. Diamond points out, among other things, that the Defendants have not shown that in pari delicto is a valid defense to all of the Plaintiffs' claims. As a matter of law, he notes, in pari delicto does not apply to plaintiffs' claim for accounting malpractice because, under Illinois' audit interference doctrine, the only acts that create a defense to a malpractice claim are those that interfere with the accountant's ability to perform his duties. He reminds the Court that Grant Thornton S.p.A.'s lead audit partner admitted that he knew of, and assisted in, the falsifications designed to conceal the insiders' looting in Parmalat. Accordingly, he says, nothing the corrupt insiders did could have misled GT-Italy or interfered with its audit duties. GTI and BofA Talk Back In response to the objection, Grant Thornton and BofA argue that the Plaintiffs were required to come forward with evidence demonstrating a genuine dispute warranting a trial, but the Plaintiffs have not. Mr. Bernard contends that the Plaintiffs do not even address, much less dispute, the vast majority of the points in the Defendants' memorandum. "[The Plaintiffs] do not dispute that Parmalat's and PCFL's officers acted within the scope of their authority when they caused the companies to enter into transactions with BofA and issue financial statements," Mr. Bernard tells the Court. He adds that the Plaintiffs do not dispute that the fraud occurred as the Defendants have described, enabling Parmalat to bilk its creditors out of at least an undisclosed and redacted amount. There can be no doubt that in pari delicto bars the Plaintiffs' claims, Mr. Bernard insists. Mark P. Guerrera, Jeremy Walton and Ernesto Gregorio Valenti file separate declarations in further support of the Defendants' request for summary judgment on the grounds of in pari delicto. BofA has also filed a redacted memorandum in further support of the request. Dr. Bondi & BofA's Motion to Stay Dr. Bondi and the BofA Defendants jointly sought and obtained a Court order staying pending requests in the action Dr. Bondi commenced against the BofA Defendants pending the satisfaction of certain conditions in the settlement that the BofA Defendants has recently reached with Dr. Bondi. The parties had asked the Court to stay both the request to exclude testimony and request for summary judgment without prejudice as the requests relate only to Bondi vs. BofA action. The settlement, under which BofA is expected to pay $100,000,000 to Parmalat, has not yet been filed with the Court. Stipulation Dismissing Grant Thornton Defendants and third-party plaintiffs Grant Thornton International and Grant Thornton LLP, and third-party defendant Parmalat S.p.A. were named as defendants in the class action alleging violations of the federal securities laws. GTI and GT-US brought third-party complaints against Parmalat S.p.A. and Dr. Bondi, which complaints sought contribution from Parmalat and Dr. Bondi if GTI and GT-US were held liable in the class action. As previously reported, Parmalat and Dr. Bondi have entered into a settlement agreement with the class plaintiffs resolving all claims brought against Parmalat in the class action. The Court on March 2, 2009, entered a final judgment and partial order of dismissal in the class action, in which it gave final approval to the settlement. The Final Judgment and Partial Order included a contribution bar order preventing any person or entity from seeking contribution from Parmalat and Dr. Bondi to the fullest extent permitted by Section 78u-4(f)(7)(A) of the Commerce and Trade Code. GTI, GT-US Parmalat and Dr. Bondi stipulated and agreed that GTI's and GT-US's Third-Party Complaints for contribution against Parmalat and Dr. Bondi will be and are dismissed with prejudice. Judge Kaplan approved the stipulation. * * * The Court granted Dr. Bondi's request to dismiss the counterclaims on spoliation of evidence asserted by defendants Grant Thornton LLP and Grant Thornton International. Judge Kaplan opined that Grant Thornton' counterclaims fail to state a claim upon which relief may be granted. Judge Kaplan has granted GTI's sealed request to dismiss with prejudice the supplement and amendment to the third amended consolidated class action complaint, amendment to Dr. Bondi's first amended complaint adding allegations relating to GTI Ltd., and Parmalat Capital Finance Limited's first amendment to complaint. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The Company's U.S. operations filed for Chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On Jan. 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presides over the Parmalat Debtors' U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat permanent injunction. PARMALAT SPA: Records EUR228.6 Million Profit in 1H of 2009 ----------------------------------------------------------- Parmalat S.p.A., in a statement released July 30, 2009, announced that its Board of Directors, under the chairmanship of Raffaele Picella, reviewed and approved the Semiannual Financial Report at June 30, 2009, as well as a resolution to distribute a partial statutory dividend for the current year for a total payout of about 69.8 million euros, equal to 0.041 euros per share. Parmalat Group * Net revenues at constant exchange rates and scope of consolidation grew to 1,895.7 million euros (+ 2.6%) * EBITDA at constant exchange rates and scope of consolidation increased to 165.4 million euros (+ 20.8%) * Profitability improved, despite strong competitive pressure * Group interest in net profit of 247.8 million euros * Net financial assets increased to 1,130.0 million euros Parmalat S.p.A. * Parent company's net profit totaled 228.6 million euros Consolidated Financial Highlights of the Parmalat Group and Parmalat SpA (in millions of euros) First Half First Half of 2009 of 2008 % change ---------- ---------- -------- Net revenues at constant exchange rates 1,895.7 1,847.5 2.6% Net revenues 1,848.0 1,902.4 (2.9%) EBITDA at constant exch. rates 165.4 136.9 20.8% EBITDA 161.6 141.1 14.5% Group interest in net profit 247.8 425.0 Net financial assets 1,130.0 1,108.8 Net profit of Parmalat S.p.A. 228.6 447.1 Parmalat Group Net revenues, restated at constant exchange rates, totaled 1,895.7 million euros, or 48.2 million euros more (+2.6%) than the 1,847.5 million euros reported at June 30, 2008, calculated on a comparable scope of consolidation basis (excluding 54.9 million euros attributable to Newlat, which was sold in the first half of 2008). The list price increases implemented in 2008 to offset a sharp rise in the components of production accounted for most of the increase in net revenues. EBITDA, restated at constant exchange rates, grew to 165.4 million euros, a gain of 28.5 million euros (+20.8%) compared with the 136.9 million earned in the first half of 2008, on a comparable scope of consolidation basis, specifically with regard to 4.2 million euros attributable to Newlat, which was sold in the first half of 2008. During the first six months of 2008, the Group continued to face strong competitive pressure from private labels. Nevertheless, it improved its profitability, in part due to the savings realized on purchases of raw milk in many of the countries where Parmalat operates. The increase in advertising campaigns, started in the first half of the first semester, will continue with more strength in the second part of 2009 to support the Group's brands and products. Also innovation and modernization programs focused on the more profitable market segments, such as children's cheese, flavored milks and desserts will continue. The fruit beverages division strengthened its competitive position in all major markets. The table provides a breakdown of revenues and EBITDA by geographic region: (in millions of euros) 2008 2007 ---------------------- ---------------------- Net Net Regions revenues EBITDA % revenues EBITDA % ------- -------- ------ ---- -------- ------ ---- Italy 505.6 61.7 12.2 599.9 55.9 9.3 Others Europe 67.9 10.6 15.6 81.8 10.9 13.4 Russia 33.4 6.4 19.1 42.7 6.2 14.4 Portugal 29.5 3.8 12.9 32.3 3.7 11.6 Romania 5.0 0.4 8.7 6.8 1.1 15.5 Canada 638.6 51.1 8.0 637.3 57.3 9.0 Africa 165.5 6.2 3.7 160.0 8.5 5.3 South Africa 144.7 4.1 2.8 140.3 5.9 4.2 Others Africa 20.8 2.1 9.9 19.8 2.6 13.2 Australia 200.2 17.6 8.8 223.1 3.7 1.6 Central/S. America 270.6 26.3 9.7 202.1 20.8 10.3 Venezuela 202.8 22.2 11.0 118.6 13.1 11.0 Colombia 47.0 3.4 7.1 62.7 6.7 10.8 Others Central and South America 20.8 0.7 3.4 20.8 1.0 4.7 Others (0.4) (11.9) n.s. (1.9) (16.0) n.s. Total for the ------- ------ ---- -------- ------ ---- Parmalat Group 1,848.0 161.6 8.7 1,902.4 141.1 7.4 In Italy, net sales revenues decreased from 599.9 million euros in the first half of 2008 to 505.6 million euros in the first six months of 2009, owing in part to two major divestments completed in 2008: Newlat (May 2008) and some brands in the cheese category (Ala, Polenghi and Optimus -- December 2008). Restated net of the corresponding contributions, the revenue amounts were 547.5 million euros in the first half of 2008 and 505.6 million euros in the first six months of 2009. The decrease in net sales revenues, compared with 2008, is mainly the result of the pass-through effect on sales prices of a reduction in the cost of raw milk and of the decrease in unit sales, particularly in the fresh milk market segment, due to strong growth by private labels in the modern distribution channel. Despite this challenging environment, Parmalat was able to contain the reduction in the sales volume of fresh milk, thanks to a strong performance by Blu Premium, with unit sales of this brand doubling compared with 2008. Zymil also presented a positive trend in volumes both for fresh and UHT milk, as well as for sales prices. The fruit beverages division, with the Santal brand, supported by advertising campaigns, presented a positive trend notwithstanding the limited phenomenon of the seasonal nature due to the climate. EBITDA grew to 61.7 million euros in the first half of 2009, up from 55.9 million euros in the same period last year. EBITDA also improved on a percentage basis, rising to 12.2%, or 290 bps (basis points) more than in the first six months of 2008, when they were 9.3% of net sales revenues. In Canada, when the data are stated in local currency, net sales revenues for the first half of the year showed an increase of 4.4%, rising from 981.7 million Canadian dollars in 2008 to 1,025.0 million Canadian dollars this year, and EBITDA was 82.0 million Canadian dollars, down from 88.2 Canadian dollars in the first six months of 2008. Stated in euros, net sales revenues for the first half of 2009 amount to 638.6 million euros, or 0.2% more than the 637.3 million euros booked in the same period last year, and EBITDA was 51.1 million euros, or 6.2 million euros less than in the first six months of 2008. The negative conditions of the local economy had a direct impact on consumer confidence and buying patterns, with shoppers shifting their preference toward lower priced products. Unit sales and sales prices were higher than in the first half of 2008, but promotional pressure increased and variable and fixed industrial costs were also up. Sales volumes grew by 5.5% compared with the previous year, with healthy increases in unit sales of pasteurized milk and yogurt. In Australia, when the data are stated in local currency, net sales revenues for the first half of the year increased from 369.2 million Australian dollars in 2008 to 376.2 million Australian dollars in 2009 and EBITDA jumped from 6.1 million Australian dollars to 33.1 million Australian dollars. Stated in euros, net sales revenues for the first half of 2009 were 200.2 million euros, down from 223.1 million euros in the first six months of 2008, and EBITDA improved to 17.6 million euros, or 14 million euros more than in the first half of 2008. The Australian subsidiary reported net sales revenues substantially in line with those booked in the first six months of 2008, even though the "white milk" segment continued to be affected by aggressive competition from private labels. In this environment, unit sales of pasteurized milk, yogurt and desserts decreased in the first half of 2009. In addition to the effect of the SBU's pricing strategy, the improvement in profitability achieved, compared with the first half of 2008, reflects the positive impact of a more streamlined product catalog, a more effective use of human resources and savings in fixed industrial costs. Moreover, the results for the first six months of 2008 were penalized by "step-up" increases in raw milk prices applied by Australia's major cooperatives during the July 2007 - June 2008 period. The Group's operations in Africa, which use the euro to consolidate amounts stated in the currencies of multiple countries (South Africa, Zambia, Mozambique, Botswana and Swaziland) reported higher revenues of 165.5 million euros, up from 160.0 million euros in the first half of 2008 (+3.4%). However, EBITDA decreased to 6.2 million euros, compared with 8.5 million euros last year. Overall, unit sales by the African SBU were up for milk, fruit beverages and cheese. In South Africa, the severe crisis that began in the second quarter of 2008 continued to affect the performance of the local subsidiary, as consumers cut spending drastically. In the SBU's target markets, these developments produced a shift in the buying patterns of consumers, who tended to favor lower priced products in cost-saving package sizes. The local subsidiary is continuing to implement programs to improve manufacturing efficiency and cut costs. The Group's other African subsidiaries in Zambia and Botswana also reported across-the-board decreases due to negative economic conditions, while operations in Mozambique and Swaziland achieved positive results. In Europe, excluding Italy, revenues were 67.9 million euros, down from 81.8 million euros in the first half of 2008. EBITDA was 10.6 million euros, about the same as the 10.9 million euros earned in the first six months of 2008. However, the ratio of EBITDA to revenues improved to 15.6%, up from 13.4% in the first half of 2008. The situation in the markets in Europe is characterized by a downward sales trend caused by a sharp reduction in consumer spending. Despite these conditions, the Russian operations succeeded in preserving their high level of profitability, but the Romanian SBU was heavily penalized by increases in the cost of raw materials and packaging materials. The Portuguese subsidiary succeeded in holding EBITDA steady compared with the previous year thanks mainly to its effective stewardship of pricing policies in the purchasing of raw materials. In Central and South America, revenues grew to 270.6 million euros, up from 202.1 million euros in the first six months of 2008. EBITDA for the first half of the year were also up, rising from 20.8 million euros in 2008 to 26.3 million euros in 2009. Positive results by the Venezuelan subsidiary, due mainly to a strong performance by the fruit beverage and dairy products divisions and a resumption of powdered milk distribution activities are the primary reasons for this improvement. In Colombia, consumer spending contracted, due in part to the economic crisis that started in the United States. In the other countries in Central and South America, the Ecuadorian subsidiary performed well, but the opposite was true for those in Nicaragua, Paraguay and Cuba, which were faced with external problems that included, respectively, the extreme poverty of the population, the devaluation of the local currency and adverse weather conditions. EBIT was 288.5 million euros, down from 443.0 million euros in the first half of 2008. In addition to EBITDA (161.6 million euros), the main items that had an impact on EBIT included proceeds from settlements of actions to void and actions for damages of 181.7 million euros (437.9 million euros in the first six months of 2008) and litigation-related legal expenses of 6.1 million euros (27.1 million euros in the first half of 2008). Group interest in net profit was 247.8 million euros, a decrease of 177.2 million euros compared with the 425.0 million euros earned in the first half of 2008. A reduction in the contribution provided to the bottom line by actions to void and actions for damages (178.7 million euros in the first six months of 2009, compared with 426.8 million euros in the same period last year, net of the tax effect) is the main reason for this decrease. The Group's net financial assets increased by 21.2 million euros in the first half of 2009, rising from 1,108.8 million euros at the end of 2008 to 1,130.0 million euros at June 30, 2009. The main reasons for this increase include: -- a cash flow from operating activities of 72.3 million euros; -- the inflows from litigation settlements of 181.4 million euros related to settlements and 18.6 million euros related to costs incurred to pursue the corresponding legal actions; -- an outflow for income taxes of about 38.8 million euros; -- the payment of dividends totaling 163.8 million euros, including 162.2 million euros attributable to the Group's Parent Company; and -- the impact of the translation into euros of the net borrowings of companies that operate outside the euro zone, amounting to 11.5 million euros. Parmalat S.p.A. Net revenues were 416.6 million euros, a decrease of 9.1% compared with the 458.3 million euros booked in the first half of 2008 (- 7.3% excluding the contribution of the cheese operations sold in 2008). EBITDA grew to 41.5 million euros, or 16.6 million euros more (+66.7%) than the 24.9 million euros earned in the first six months of 2008. This improvement reflects a gain of 18.7 million euros in the return on sales, due mainly to lower raw material prices, offset in part by higher additions to the allowances for doubtful accounts, which increased by 2.3 million euros. EBIT was 194.6 million euros, a decrease of 181.2 million euros compared with the first half of 2008 (375.8 million euros). The main reason for this shortfall is a reduction in proceeds from settlements with credit institutions: 181.7 million euros in the first six months of 2009 compared with 437.0 million euros in the same period last year. The net profit for the period was 228.6 million euros, or 218.5 million euros less than the 447.1 million euros earned in the first six months of 2008. This negative change is chiefly the result of the decrease in proceeds from settlements mentioned, which contributed about 178.7 million euros to the bottom line (net of the applicable tax effect) compared with 426.8 million euros in the first half of 2008. Reductions in net financial income (-12.8 million euros) and in dividend income from investee companies (33.9 million euros, compared with 45.8 million euros tin the first half of 2008) account for the balance of the decrease. Net financial assets improved, rising from 1,441.2 million euros at December 31, 2008 to 1,480.3 million euros at June 30, 2009, a gain of 39.1 million euros. This increase reflects the combined impact of proceeds from settlements (about 181.4 million euros), the payment of dividends (about 162.2 million euros) and the cash flow from operations. Business Outlook There are no reasons to change the guidance that, assuming constant exchange rates, calls for revenue growth of 2% to 4% and an EBITDA ranging from 310 to 320 million euros, considering its results and the macroeconomic and competitive context. Partial Statutory Dividend At today's meeting, the Board of Directors also approved a motion to distribute a partial statutory dividend for 2009 in the amount of 0.041 euros per share, before any statutory withholdings, for a total payout of about 69.8 million euros. This partial statutory dividend is an advance on the full dividend for 2009. The partial statutory dividend will be payable from September 24, 2009 against presentation of Coupon No. 5, September 21, 2009 record date. The distribution of the partial statutory dividend was based on the Company's financial statements at June 30, 2009 and the accompanying Report of the Board of Directors. The Independent Auditors have rendered an opinion with regard to both documents. In the Company's financial statements, the accompanying Report of the Board of Directors and the opinion of the Independent Auditors, rendered pursuant to Article 2433 bis of the Italian Civil Code, are available to the public at the Company's registered office at 4 Via delle Nazioni Unite, in Collecchio (Parma), and through Borsa Italiana SpA (http://www.borsaitaliana.it). The documents have also been posted on the Company's website (http://www.parmalat.com). Holders of the "2005-2015 PARMALAT S.p.A. Common Share Warrants" are informed that, due to the declaration of the partial statutory dividend, the right to exercise their warrants will be suspended from July 31, 2009, included, until the dividend record date, September 21, 2009, excluded. A copy of the Semiannual Financial Report at June 30, 2009, together with the Report of the Independent Auditors can be obtained for free at: http://researcharchives.com/t/s?420d About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The Company's U.S. operations filed for Chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On Jan. 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presides over the Parmalat Debtors' U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat permanent injunction. PEMGROUP: Offshore Entity Must be Under Receivership, Court Says ---------------------------------------------------------------- Mark Maremont at The Wall Street Journal reports that U.S. District Judge Philip S. Gutierrez in Los Angeles ruled that an offshore entity was an affiliate of Danny Pang's former firm, PEMGroup, and should be run by a court-appointed receiver. According to The Journal, Mr. Pang has been accused by federal regulators of fleecing investors of hundreds of millions of dollars, which he denied. The Journal relates that Judge Gutierrez found that Su-Wei Yang, a Taiwanese woman who once controlled the entity, likely had a close relationship with Mr. Pang. Ms. Yang was Mr. Pang's girlfriend and therefore was his agent, The Journal says, citing Robert Mosier, the receiver. Mr. Mosier filed e-mails and photos that included a snapshot showing Ms. Yang resting her head on Mr. Pang's shoulder, The Journal states. Mr. Pang is already married. The Journal states that Mr. Pang's lawyers called the allegation of an affair unsupported "office gossip" and threatened possible legal action, but Judge Gutierrez ruled that the photos "strongly suggest their relationship transcended that of a normal business relationship" and also ruled in favor of Mr. Mosier's application to take control of 15 other entities deemed PEMGroup affiliates. PEMGroup -- http://pemgroup.com/-- is an investment firm based in Los Angeles. According to Blog.taragana.com, federal regulators won a court order freezing the assets of financier PEMGroup owner Danny Pang, accused of defrauding investors of hundreds of millions of dollars. The U.S. Securities and Exchange Commission said that the assets of Mr. Pang's two investment companies, Private Equity Management Group Inc. and Private Equity Management Group LLC, were also frozen. He was ordered to surrender his passports and bring back to the U.S. any assets sent overseas. The Wall Street Journal Law Blog reported in May 2009, court- appointed receiver Robert Mosier accused Mr. Pang of running the firm like a "personal piggy bank". The receiver claimed that the fund had a shortfall of between $400 million and $600 million. Mr. Mosier alleged in a federal court filing that more than $80 million in questionable personal and business expenses were financed by PEMGroup's investors, including a recent $1 million Disney cruise for the entire staff, the purchase of several jets and $6.9 million in undocumented loans to Mr. Pang. PILGRIM'S PRIDE: Court OKs $100MM Reduction of DIP Facility ----------------------------------------------------------- Pilgrim's Pride Corporation and its debtor affiliates obtained approval from Judge D. Michael Lynn of the United States Bankruptcy Court for the Northern District of Texas to enter into the Third Amendment to Amended and Restated Post-Petition Credit Agreement by and among the Debtors, the DIP Lenders and Bank of Montreal. On December 2, 2008, the Bankruptcy Court granted interim approval authorizing the Company and certain of its subsidiaries consisting of PPC Transportation Company, PFS Distribution Company, PPC Marketing, Ltd., and Pilgrim's Pride Corporation of West Virginia, Inc. (collectively, the "US Subsidiaries"), and To-Ricos, Ltd., and To-Ricos Distribution, Ltd., to enter into a Post-Petition Credit Agreement among the Company, as borrower, the US Subsidiaries, as guarantors, Bank of Montreal, as agent (the "DIP Agent"), and the lenders party thereto. On December 2, 2008, the Company, the US Subsidiaries and the other parties entered into the Initial DIP Credit Agreement, subject to final approval of the Bankruptcy Court. On December 30, 2008, the Bankruptcy Court granted final approval authorizing the Company and the Subsidiaries to enter into an Amended and Restated Post-Petition Credit Agreement dated December 31, 2008, as amended, among the Company, as borrower, the Subsidiaries, as guarantors, the DIP Agent, and the lenders party thereto. The DIP Credit Agreement provides for an aggregate commitment of up to $450 million, which permits borrowings on a revolving basis. The commitment includes a $25 million sub-limit for swingline loans and a $20 million sub-limit for standby letters of credit. Outstanding borrowings under the DIP Credit Agreement will bear interest at a per annum rate equal to 8.0% plus the greatest of (i) the prime rate as established by the DIP Agent from time to time, (ii) the average federal funds rate plus 0.5%, or (iii) the LIBOR rate plus 1.0%, payable monthly. The weighted average interest rates for the three and nine months ended June 27, 2009 were 11.25% and 11.33%, respectively. The loans under the Initial DIP Credit Agreement were used to repurchase all receivables sold under the Company's Amended and Restated Receivables Purchase Agreement dated September 26, 2008, as amended (the "RPA"). Loans under the DIP Credit Agreement may be used to fund the working capital requirements of the Company and its subsidiaries according to a budget as approved by the required lenders under the DIP Credit Agreement. Actual borrowings by the Company under the DIP Credit Agreement are subject to a borrowing base, which is a formula based on certain eligible inventory and eligible receivables. The borrowing base formula is reduced by (i) pre-petition obligations under the Fourth Amended and Restated Secured Credit Agreement dated as of February 8, 2007, among the Company and certain of its subsidiaries, Bank of Montreal, as administrative agent, and the lenders parties thereto, as amended, (ii) administrative and professional expenses incurred in connection with the bankruptcy proceedings, and (iii) the amount owed by the Company and the Subsidiaries to any person on account of the purchase price of agricultural products or services (including poultry and livestock) if that person is entitled to any grower's or producer's lien or other security arrangement. The borrowing base is also limited to 2.22 times the formula amount of total eligible receivables. The DIP Credit Agreement provides that the Company may not incur capital expenditures in excess of $150 million. The Company must also meet minimum monthly levels of EBITDAR. Under the DIP Credit Agreement, "EBITDAR" means, generally, net income before interest, taxes, depreciation, amortization, writedowns of goodwill and other intangibles, asset impairment charges, certain closure costs and other specified costs, charges, losses and gains. The DIP Credit Agreement also provides for certain other covenants, various representations and warranties, and events of default that are customary for transactions of this nature. As of June 27, 2009, the applicable borrowing base and the amount available for borrowings under the DIP Credit Agreement were both $348.6 million as there were no outstanding borrowings under the Credit Agreement. The principal amount of outstanding loans under the DIP Credit Agreement, together with accrued and unpaid interest thereon, are payable in full at maturity on December 1, 2009, subject to extension for an additional six months with the approval of all lenders thereunder. All obligations under the DIP Credit Agreement are unconditionally guaranteed by the Subsidiaries and are secured by a first priority priming lien on substantially all of the assets of the Company and the Subsidiaries, subject to specified permitted liens in the DIP Credit Agreement. The DIP Credit Agreement allows the Company to provide additional advances to the Non-filing Subsidiaries of up to approximately $25 million. Management believes that all of the Non-filing Subsidiaries, including the Company's Mexican subsidiaries, will be able to operate within this limitation. On July 15, 2009, the Company entered into a Third Amendment to the DIP Credit Agreement. The Amendment is subject to the approval of the Bankruptcy Court. The Amendment amends the DIP Credit Agreement to allow the Company to invest in certain interest bearing accounts and government securities, subject to certain conditions. In connection with the Amendment, the Company also agreed to reduce the total available commitments under the DIP Credit Agreement from $450 million to $350 million. The Amendment also allows the Company to enter into certain ordinary course hedging contracts relating to feed ingredients used by the Company and its subsidiaries in their businesses. The Company may only enter into hedging contracts which satisfy the following conditions, among other restrictions: (a) the contract is traded on a recognized commodity exchange; (b) the contract expiration date is no later than March 21, 2010, or a later date if agreed to by the DIP Agent; (c) the Company and its subsidiaries do not have open forward, futures or options positions in the subject commodity, other than commodity hedging arrangements entered into at the request or direction of a customer, in excess of 50% of the Company's other expected usage of such commodity for a specified period; (d) the contract is not entered into for speculative purposes; and (e) the Company will not have more than $100 million in margin requirements with respect to all such non-customer hedging contracts. The amendments in the Third DIP Financing Amendment are beneficial to the Debtors and their creditors, Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, in Dallas, Texas stresses. The removal of the current restriction on hedging to allow Permitted Hedging Contracts will permit the Debtors to hedge their businesses against future volatility in the prices of certain commodities, like the price of corn used in the feed for chickens, and to take advantage of current favorable hedging conditions. Moreover, since the DIP Credit Agreement currently only permits Cash Collateral to be deposited in non-interest bearing accounts maintained by the DIP Agent, the amendment to the existing restriction on where Cash Collateral Accounts and Collection Accounts may be held allows the Debtors to earn interest on Cash Collateral and provides the Debtors added flexibility in managing their cash management system. A full-text copy of the Third DIP Credit is available for free at http://bankrupt.com/misc/PPC_3rdDIPCreditAmendment.pdf Creditors Committee's Objection The Official Committee of Unsecured Creditors objects to the Debtors' motion to enter into the Third DIP Credit Agreement, contending that the Debtors need to show why it is necessary to continue to pay the commitment fees called for under the DIP Credit Agreement for what is now a "stand-by" DIP. The Creditors' Committee tells the Court the Debtors need to explain why the Debtors are not terminating the DIP loan and why is it necessary to continue to maintain the DIP Credit Agreement. The Debtors, in response, note that the Creditors' Committee is the only objecting party to the Motion. The Debtors further note that the Creditors' Committee does not challenge or object to any of the proposed amendments to the DIP Credit Agreement. Instead, the Committee appears to challenge the Debtors' business decision to keep in place the postpetition financing facility. The Debtors maintain that it is in the best interest of their estates and their creditors to maintain a postpetition credit facility on a "standby" basis, albeit at a smaller commitment level. Mr. Youngman asserts that as recent history has shown, capital markets and the economy are volatile and, among other things, it is essential that the Debtors' customers, suppliers, and employees see that the Debtors have sufficient liquidity if the unexpected should occur. The Debtors insist that their request should be approved. About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- employs roughly 41,000 people and operates chicken processing plants and prepared-foods facilities in 14 states, Puerto Rico and Mexico. The Company's primary distribution is through retailers and foodservice distributors. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC, is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The Company's claims and noticing agent is Kurtzman Carson Consulting LLC. A nine-member committee of unsecured creditors has been appointed in the case. As of December 27, 2008, the Company had $3,215,103,000 in total assets, $612,682,000 in total current liabilities, $225,991,000 in total long-term debt and other liabilities, and $2,253,391,000 in liabilities subject to compromise. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the Chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. PILGRIM'S PRIDE: Court OKs Syndication of $1.65 Bil. Exit Pact -------------------------------------------------------------- Judge D. Michael Lynn of the United States Bankruptcy Court for the Northern District of Texas Forth Worth Division authorized Pilgrim's Pride Corporation and its debtor affiliates to enter into an agreement for the syndication of a $1,650,000,000 exit financing with CoBank, ACB, and Cooperatieve Centrale Raiffeisen- Boerenleenbank B.A., "Rabobank International," New York Branch. Judge Lynn, however, ruled that the Debtors are not authorized, at this time, to pay the Subject Fees defined in the Revised Mandate Letter and Revised Commitment Letter, which are: -- the administrative agent fee with CoBank; -- the collateral agent fee with CoBank and Rabobank; -- the joint lead arranger fee with CoBank and Rabobank; -- the joint syndication agent fee letter with CoBank and Rabobank; and -- the commitment fee. Further, Judge Lynn ruled that: * upon the Debtors' Motion pursuant to Section 107(b) of the Bankruptcy Code and Bankruptcy Rule 9018 for authorization to File Fee Letters Under Seal, and upon the Debtor Parties, CoBank, and Rabobank having entered into a revised Mandate Letter, revised Commitment Letter and revised Joint syndication Agent Mandate Fee Letter, the Debtors are authorized, but not required, to enter into the Mandate Letter, Commitment Letter and Fee Letters; * the Debtors are authorized, but not required to pay the fees and expenses pursuant to the terms of the Revised Mandate Letter, the Revised Commitment Letter, and Revised Fee Letter, provided that the Debtors are not authorized, at this time, to pay the Subject fees as applicable; * the Debtors are authorized but not required, to accept financing commitments upon terms substantially similar to the terms of the Revised Mandate Letter, Revised Commitment Letter, Revised Fee Letters and term sheet; * the Debtors are authorized but not required, to provide indemnification to each Lender Party; * nothing in the Order will prohibit the Debtors from Seeking Court authority to decrease the amounts authorized to be paid pursuant to the terms of the Revised Mandate Letter, Revised Commitment Letter, and Revised Fee Letter; * a hearing will take place on August 26, 2009, at 10:30 a.m. Central Time, to address the payment of the Subject Fees. About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- employs roughly 41,000 people and operates chicken processing plants and prepared-foods facilities in 14 states, Puerto Rico and Mexico. The Company's primary distribution is through retailers and foodservice distributors. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC, is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The Company's claims and noticing agent is Kurtzman Carson Consulting LLC. A nine-member committee of unsecured creditors has been appointed in the case. As of December 27, 2008, the Company had $3,215,103,000 in total assets, $612,682,000 in total current liabilities, $225,991,000 in total long-term debt and other liabilities, and $2,253,391,000 in liabilities subject to compromise. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the Chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. PILGRIM'S PRIDE: Members of Fee Review Committee Named ------------------------------------------------------ The initial members of the Fee Review Committee in Pilgrim's Pride Corp.'s cases are: * Nancy Rapoport, Chair University of Nevada, Las Vegas William S. Boyd School of Law E-Mail: nancy.repoport@unlv.edu * David J. Bechstein Vice President, Bank of Montreal E-mail: david.bechstein@bmo.com * Mark Lawrenz Vice President, Risk Management Pilgrim's Pride Corporation E-mail: Mark.Lawrence@pilgrimspride.com * Ronald Seigley Vice President, Cobank Division Manager, Special Assets E-mail: rseigley@cobank.com * Ronald Borcky International Paper Company E-mail: ronald.borcky@ipaper.com * Lisa L. Lambert Office of the U.S. Trustee E-mail: Erin.Schmidt2@usdoj.gov * The Official Committee of Equity Security Holders -- M & G Investment Management Ltd. Attn: PPM America, as agent/Joel Klein 225 W. Wacker, Suite 1200 Chicago, Illinois 60606 Tel No: (312) 634-2559 Fax No: (312) 634-0728 E-mail: joel.klein@ppmamerica.com -- Michael Cooper 4825 E. Crystal Lane Paradise Valley, Arizona 85253 Tel No: (602) 510-6633 Fax No: (480) 807-4995 E-mail: mcooper@krsearch.net * The current members of the University of Nevada, Las Vegas, William S. Boyd School of Law team working for Professor Rapoport. Functions of the FRC According to Ms. Rapoport, the philosophy of the FRC is not to micromanage the decisions of the various professionals appointed by this Court, but rather to act as an extra safeguard to ensure that the fees and expenses of these professionals are incurred appropriately. The FRC expects that professionals will not charge the entities they represent for overhead expenses or other fees or expenses not authorized by the Court's guidelines for Compensation of Expenses Reimbursement of Professionals. All professionals should serve their monthly bills and quarterly summaries on each member of the FRC and on each member of the UNLV Team electronically, in searchable PDFs and Excel spreadsheet formats. Each bill should include information that distinguishes the costs of the work performed due to the bankruptcy case from the work that would have been done for the relevant entity notwithstanding the bankruptcy case. For the first time that any professional serves bills, the professional should also include a copy of the order approving the appointment. About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- employs roughly 41,000 people and operates chicken processing plants and prepared-foods facilities in 14 states, Puerto Rico and Mexico. The Company's primary distribution is through retailers and foodservice distributors. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC, is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The Company's claims and noticing agent is Kurtzman Carson Consulting LLC. A nine-member committee of unsecured creditors has been appointed in the case. As of December 27, 2008, the Company had $3,215,103,000 in total assets, $612,682,000 in total current liabilities, $225,991,000 in total long-term debt and other liabilities, and $2,253,391,000 in liabilities subject to compromise. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the Chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. PRIMUS TELECOM: Reports $25.47-Mil. Net Income for Q2 ----------------------------------------------------- Primus Telecommunications Group, Inc., has filed with the U.S. Securities and Exchange Commission its second quarter 2009 report on Form 10-Q. As of June 30, 2009, Primus reported total assets of $334.54 million, against $760.86 million in liabilities. The Company reported $426.32 million in total stockholders' deficit. Primus reported $25.47 million net income for the three months ended June 30, 2009, compared to $46.69 million net income in the same period last year. For the six months ended June 30, 2009, the Company reported $39.33 million in net income, compared to $43.79 million net income in the same period last year. Second Quarter Results Net revenue, exclusive of the currency effect, decreased $6.1 million, or 2.6%, to $229.9 million for the three months ended June 30, 2009, from $235.9 million for the three months ended June 30, 2008. Inclusive of the currency effect, which accounted for a decrease of $33.1 million, net revenue decreased $39.2 million to $196.7 for the three months ended June 30, 2009, from $235.9 millions for the three months ended June 30, 2008. Selling, general and administrative expenses, exclusive of the currency effect, decreased $12.1 million to $57.9 million, or 25.2% of net revenue, for the three months ended June 30, 2009, from $70.0 million, or 29.7% of net revenue, for the three months ended June 30, 2008. Inclusive of the currency effect, which accounted for a $7.5 million decrease, selling, general and administrative expenses decreased $19.6 million to $50.4 million for the three months ended June 30, 2009 from $70.0 million for the three months ended June 30, 2008. Depreciation and amortization expense decreased $1.8 million to $6.3 million for the three months ended June 30, 2009, from $8.1 million for the three months ended June 30, 2008. Interest expense and accretion on debt discount, net decreased $10.0 million to $3.4 million for the three months ended June 30, 2009, from $13.3 million for the three months ended June 30, 2008. The decrease was attributable to the cessation of interest accruals for the liabilities subject to compromise, including 8% Senior Notes, 14 1/4% Senior Secured Notes, 3 3/4% Convertible Notes, 5% Exchangeable Senor Notes, 12 3/4% Senior Notes and Step Up Convertible Subordinated Debentures, as a result of the Chapter 11 Cases instituted on March 16, 2009. Gain on early extinguishment or restructuring of debt decreased $32.2 million. In the second quarter 2008, the Company realized a gain on restructuring of debt of $32.2 million including the expensing of related financing costs. Reorganization items, net is an $8.3 million expense for the three months ended June 30, 2009, due to the incurrence of professional fees as a result of the Chapter 11 Cases. Income tax benefit (expense) is $1.1 million expense for the three months ended June 30, 2009 from $2.4 million benefit for the three months ended June 30, 2008. The expense consists of foreign withholding tax on intercompany interest and royalty fees owed to a United States subsidiary by the Company's Canadian and Australian subsidiaries and charges for uncertain tax positions under FASB Interpretation (FIN) No. 48, "Accounting for Uncertainty in Income Taxes". Half-Year Results Results of operations for the six months ended June 30, 2009, as compared to the six months ended June 30, 2008 Net revenue, exclusive of the currency effect, increased $8.1 million, or 1.8%, to $469.4 million for the six months ended June 30, 2009, from $461.3 million for the six months ended June 30, 2008. Inclusive of the currency effect, which accounted for a decrease of $78.2 million, net revenue decreased $70.1 million to $391.2 for the six months ended June 30, 2009, from $461.3 millions for the six months ended June 30, 2008. Selling, general and administrative expenses, exclusive of the currency effect, decreased $25.3 million to $113.5 million, or 24.2% of net revenue, for the six months ended June 30, 2009, from $138.8 million, or 30.1% of net revenue, for the six months ended June 30, 2008. Inclusive of the currency effect, which accounted for a $17.7 million decrease, selling, general and administrative expenses decreased $43.0 million to $95.8 million for the six months ended June 30, 2009, from $138.8 million for the six months ended June 30, 2008. Depreciation and amortization expense decreased $3.7 million to $12.3 million for the six months ended June 30, 2009, from $16.1 million for the six months ended June 30, 2008. Gain on sale or disposal of assets was a $2.5 million gain for the six months ended June 30, 2008. In the six months ended June 30, 2008, the Company recognized a gain of $0.8 million associated with the sale of certain surplus fiber assets in the US and a gain of $1.8 million associated with a sale of a minority equity investment in a Japanese entity. Interest expense and accretion on debt discount, net decreased $14.6 million to $13.9 million for the six months ended June 30, 2009, from $28.6 million for the six months ended June 30, 2008. The decrease was mainly attributable to the cessation of interest accruals for the liabilities subject to compromise as a result of the Chapter 11 Cases instituted on March 16, 2009. Gain on early extinguishment or restructuring of debt was $34.5 million from the six months ended June 30, 2008. In the second quarter 2008, the Company realized a gain on restructuring of debt of $32.2 million including the expensing of related financing costs. In the first quarter 2008, the Company made open market debt purchases resulting in a $2.2 million gain on early extinguishment of debt including the write-off of related deferred financing costs, discount and effective interest. Reorganization items, net was a $8.3 million gain for the six months ended June 30, 2009. In accordance with SOP No. 90-7, the Company ceased amortization of debt premiums, discounts and deferred financing costs related to the liabilities subject to compromise on the Petition Date. The $3.5 million of unamortized debt premiums and discounts has been written off and recorded as a gain, offset by the expensing of $3.6 million of unamortized deferred financing costs, as an adjustment to the net carrying value of the pre-petition debt, and the incurrence of professional fees regarding the bankruptcy filing. Long term debt was further reduced by $20.5 million of future interest payable that previously had been recorded as a portion of long-term obligations for the 14 1/4% Senior Secured Notes and 5% Exchangeable Senior Notes as the issuance of these notes had been deemed troubled debt restructurings. Income tax expense increased to $3.9 million for the six months ended June 30, 2009. The expense consists of foreign withholding tax on intercompany interest and royalty fees owed to a United States subsidiary by the Company's Canadian and Australian subsidiaries and charges for uncertain tax positions under FASB Interpretation (FIN) No. 48, "Accounting for Uncertainty in Income Taxes". Liquidity and Capital Resources Changes in Cash Flows Net cash provided by operating activities was $17.1 million for the six months ended June 30, 2009, as compared to net cash provided by operating activities of $5.3 million for the six months ended June 30, 2008. For the six months ended June 30, 2009, net income, net of non-cash operating activity, provided $27.4 million of cash. In addition, cash was increased by a reduction in accounts receivable of $7.8 million, a reduction in other assets of $2.5 million, an increase in accrued expenses, deferred revenue, other current liabilities and other liabilities, net of $1.3 million and an increase in accrued income tax of $2.1 million. For the six months ended June 30, 2009, the Company used $12.8 million to reduce the Company's accounts payable, $5.4 million to reduce the accrued interconnection costs, and $1.6 million to reduce the Company's accrued interest. Cash effect of reorganization items was $4.6 million, which includes professional fees paid for reorganization. For the six months ended June 30, 2008, net income, net of non-cash operating activity, provided $21.5 million of cash. In addition, cash was increased by a reduction in prepaid expenses, other current assets and other assets of $12.1 million and an increase in accrued interconnection costs of $3.2 million. For the six months ended June 30, 2008, the Company used $6.4 million to increase the Company's accounts receivable, $16.6 million to reduce the Company's accounts payable, $0.9 million to reduce the Company's accrued interest, $4.5 million to reduce the Company's accrued income taxes and $3.2 million to reduce the Company's accrued expenses, deferred revenue, other current liabilities and other liabilities. Net cash used in investing activities was $5.6 million for the six months ended June 30, 2009 compared to $12.0 million for the six months ended June 30, 2008. Net cash used in investing activities during the six months ended June 30, 2009, included $5.7 million of capital expenditures, $0.2 million for a business acquisition in Australia and $0.1 million increase in restricted cash, offset by $0.2 million net cash proceeds from the sale of a Japanese retail business and $0.2 million from the disposition of network assets. Net cash used in investing activities was $12.0 million for the six months ended June 30, 2008. Net cash used in investing activities during the six months ended June 30, 2008, included $14.6 million of capital expenditures offset by $1.7 million net cash proceeds from the disposition of a minority equity investment in Japan and $0.8 million from the disposition of surplus fiber assets. Net cash used in financing activities was $8.3 million for the six months ended June 30, 2009, as compared to $19.5 million for the six months ended June 30, 2008. During the six months ended June 30, 2009, $5.5 million was used to reduce the Company's Canadian Credit Facility, $0.5 million was used to reduce the principal amount of the Term Loan, and $2.3 million was used to reduce the principal amounts outstanding on capital leases, leased fiber capacity, financing facilities and other long-term obligations. Net cash used in financing activities was $19.5 million for the six months ended June 30, 2008. During the six months ended June 30, 2008, $11.2 million was used to purchase and retire $0.8 million principal amount of the Company's 12 3/4% Senior Notes and $13.8 million principal amount of the Company's Step Up Convertible Subordinated Debentures. The Company also used $8.3 million for debt exchanges and principal payments on capital leases, leased fiber capacity, financing facilities and other long-term obligations. Short- and Long-Term Liquidity Considerations and Risks The Chapter 11 Cases were preceded by severe downturns in global economic conditions and contraction of capital markets beginning in mid-year 2008, as well as the significant exchange rate appreciation of the United States dollar during the second half of 2008, which impaired the Company's ability to strengthen the balance sheet opportunistically and improve cash flows through potential refinancing and equity capital infusions. Further, the conditions made the sale of non-strategic assets and businesses to generate enhanced liquidity difficult to complete on acceptable terms or at all. Additionally, given that the preponderance of the Company's holding company obligations are in United States dollars, the sharp strengthening of the United States dollar as compared to other foreign currencies during the second half of 2008 added further strain on the Company's liquidity position with payments from the Company's foreign operating subsidiaries yielding less United States dollars. Notwithstanding confirmation of the Plan, the Company expects to continue to have significant debt service obligations on a long- term basis. Cash flows from operations are not anticipated to be sufficient to make the balloon payments on the remaining outstanding principal of the Senior Secured Tem Loan Facility and the Canadian Credit Facility due February and May 2011, respectively; therefore, the Company expects to seek external financing prior to that date. There can be no assurance the Company will be successful in these efforts to consummate timely any such transactions or at all or to obtain any such financing on acceptable terms or at all, especially in consideration of the state of the current global economic and credit situation. The Company may be subject to additional covenants and limitations in levels of debt and debt transactions. More information is available for free at: http://ResearchArchives.com/t/s?420b About Primus Telecom PRIMUS Telecommunications Group, Incorporated (OTCBB: PRTL) -- http://www.primustel.com-- is an integrated communications services provider offering international and domestic voice, voice-over-Internet protocol (VOIP), Internet, wireless, data and hosting services to business and residential retail customers and other carriers located primarily in the United States, Canada, Australia, the United Kingdom and Western Europe. PRIMUS provides services over its global network of owned and leased transmission facilities, including approximately 500 points-of-presence (POPs) throughout the world, ownership interests in undersea fiber optic cable systems, 18 carrier-grade international gateway and domestic switches, and a variety of operating relationships that allow it to deliver traffic worldwide. Founded in 1994, PRIMUS is based in McLean, Virginia. The Company and four its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. D. Del. Lead Case No. 09-10867). George N. Panagakis, Esq., and T Kellan Grant, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, are the Debtors' proposed counsel. Davis L. Wright, Esq., Eric M. Davis, Esq., and Anthony Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, are the Debtors' proposed local counsel. The Debtor proposed CRT Investment Banking LLC as financial adviser and investment banker. When the Debtors filed for protection from their creditors, they listed assets between $100 million and $500 million, and debts between $500 million and $1 billion. The Debtors filed their proposed plan of reorganization together with their bankruptcy petitions on March 16, 2009. An amended reorganization plan was filed April 27, 2009 and the final plan was filed on June 12, 2009. Primus has implemented its Chapter 11 reorganization plan. PROPEX INC: Proposes Expedited Settlement with PBGC --------------------------------------------------- Fabrics Estate Inc., formerly Propex Inc., asked the Bankruptcy Court to approve on an expedited basis a settlement it wants to enter into with the Pension Benefit Guaranty Corp. The Debtors have reached a deal with the PBGC regarding (1) the PBGC's substantial claims filed against the Debtors' estates during the Chapter 11 cases in connection with the termination of the Debtors' pension plans and (2) the PBGC's objection to certain language in the Debtors' First Amended Joint Plan of Liquidation Under Chapter 11 of the Bankruptcy Code regarding injunctions and releases. The Settlement has been approved by the Official Committee of Unsecured Creditors. The terms of the Settlement are: (1) The PBGC will be granted a Class 2 Allowed Priority Claim in the amount of $125,000; (2) the PBGC's Pension Insurance Premiums Claim of $4,632 will be deemed to have been withdrawn; (3) the PBGC's remaining claims against Fabrics Estate Inc. will be Class 3 Allowed General Unsecured Claims, and the corresponding claims against the other Debtors will be deemed withdrawn; (4) the following language will be included in a modified version of Section 13.1 of the Plan: "Notwithstanding the foregoing or anything to the contrary in this Plan, the Pension Benefit Guaranty Corporation, whether acting on its own behalf or as trustee of the Pension Plans ("PBGC"), is not and shall not be enjoined from any act or action against any Representatives or individuals regarding fiduciary obligations under the Employee Retirement Income Security Act"; provided, however, that all Representatives and individuals reserve all rights they otherwise have at applicable law, and such rights are not affected hereby and (5) the PBGC will not object to the confirmation of the Plan on any ground. About Propex Inc. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It also produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. In Europe, the company has manufacturing facilities in Germany, Hungary and the United Kingdom. The Company and its debtor-affiliates filed for Chapter 11 protection on January 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249). The Debtors selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. The Official Committee of Unsecured Creditors tapped Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel. Propex Inc., and its affiliates delivered to the Court a Joint Plan of Reorganization and Disclosure Statement on October 29, 2008. As of June 29, 2008, the Debtors' balance sheet showed total assets of USUS$562,700,000, and total debts of USUS$551,700,000. Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Propex Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) RANDA LUGGAGE: Launches New Men's Lines & Distribution Center ------------------------------------------------------------- Randa Luggage unveiled Monday the opening of a new fulfillment distribution center in Reno, Nevada, as part of its reinvestment and expansion in the luggage business. "With the improving economy, the company is well positioned to meet increased demand and timely delivery of its licensed products," Randa said in a news statement. The 250,000 square foot facility features eco-friendly and state- of-the-art enhancements, which will increase fill rates, speed to market, and overall efficiencies. Terry Tackett, President of Randa Luggage, commented on the opening, "As we continue to invest in Randa Luggage, we feel strongly that this new facility will provide additional competitive advantages enabling us to better execute on our business plan, despite the distractions of the previous few months." The announcement comes just two weeks after the company emerged from Chapter 11 where the Delaware Bankruptcy Court ruled in Randa Luggage's favor as well as stating that all objections were without merit. In addition, Randa Luggage has secured all necessary financing for its restructuring as well as operating capital in order to meet its projected growth and revenue targets. Separately, as part of its expansion plan, the company announced the launch of three new brands for Fall 2009 including Levi's backpacks, Perry Ellis luggage and performance luggage from Columbia Sportswear to complement new collections from existing brands which include Diane von Furstenberg, Nautica, Chaps and Liz Claiborne. Randa Luggage Inc., formerly known as Badanco Enterprises Inc., manufactures, distributes and markets luggage, bags, backpacks and briefcases under brand names including Tommy Bahama, Nautica, Diane von Furstenberg, Perry Ellis and Liz Claiborne. Randa Luggage is headquartered Totowa, New Jersey and has offices in London, Toronto and Hangzhou, China. Randa Luggage and its affiliates including Badanco Acquisition LLC filed for Chapter 11 on May 11 (Bankr. D. Del. Case No. 09-11638). READER'S DIGEST: To Implement Equity-for-Debt Plan Through Ch. 11 ----------------------------------------------------------------- The Reader's Digest Association, Inc. said August 17 it has reached an agreement in principle with a majority of its senior secured lenders on the terms of a restructuring plan to significantly reduce its debt burden and strengthen the company financially for the future. The restructuring agreement provides that the company's senior secured lenders will exchange a substantial portion of the company's $1.6 billion in senior secured debt for equity and provides for a transfer of ownership of the company to the lender group. The company has elected not to make a $27 million interest payment due August 17 on its 9% Senior Subordinated Notes due 2017. Instead, the company is using the 30-day grace period available on the interest payment to continue discussions with its lender group and other stakeholders regarding the terms of final documentation and to gain additional support for the consensual de-leveraging transaction. Use of the 30-day grace period does not constitute a default that permits acceleration of the Senior Subordinated Notes or any other indebtedness. In addition, RDA continues to be in compliance with its financial covenants. The company's business operations remain strong, with anticipated Fiscal 2009 revenue declines (not yet reported) in the low single digits, currency neutral, despite the global recession. As part of the agreement in principle, RDA anticipates implementing the restructuring under court supervision through a voluntary pre-arranged filing under Chapter 11 of the United States Bankruptcy Code, which it expects to complete on an expedited basis while operating business as usual. During the 30- day grace period, the Company will seek further consensus among its lenders and other stakeholders in advance of such a filing to facilitate the completion of RDA's restructuring objectives. The agreement in principle includes a commitment from certain members of the senior lender group to provide $150 million in new money Debtor-in-Possession (DIP) financing, convertible into exit financing upon emergence, which the company expects will ensure sufficient liquidity during the reorganization process and beyond. In addition to providing RDA with the necessary capital to emerge from Chapter 11, the arrangement also establishes the substantive terms of the $550 million in debt that will remain on RDA's balance sheet upon emergence, a 75% reduction from the current $2.2 billion in debt. As a result of the agreement reached with a majority of the senior lenders, the company expects that, subject to court approval, the vast majority of its suppliers and vendors will recover in full under a Chapter 11 plan. The Chapter 11 filing will apply only to the company's U.S. businesses -- its operations in Canada, Latin America, Europe, Africa, Asia and Australia-New Zealand will not be affected. RDA's International operations are expected to have adequate funding based on continuing operations and access to proceeds from the DIP financing. Mary Berner, RDA's President and Chief Executive Officer, said the company will continue to operate normally throughout the restructuring process. "This agreement in principle with our lenders follows months of intensive strategic review of our balance-sheet issues to financially strengthen the company," she said. "We are gratified to have this support from our secured lender group. The company has strong brands and products, a leadership position in many markets around the world and a solid plan for the future. Restructuring our debt will enable us to have the financial flexibility to move ahead with our growth and transformational initiatives." "We also thank our sponsor Ripplewood Holdings, who has provided inspired vision and stewardship over the last two and a half years, including during this process," added Ms. Berner. In March 2007, Ripplewood led a consortium of investors in a transaction that resulted in the company's acquisition. All of the members of the company's Board of Directors who have served since the March 2007 acquisition, with the exception of Ms. Berner, have resigned from the company's Board. The two recently appointed directors also continue to serve on the Board. The company and the lenders recognize that the Board has chosen to support a consensual and expedited process towards reorganization that seeks to maximize creditor recoveries. Further information about the company can be found at http://www.rda.com/ About The Reader's Digest Association The Reader's Digest Association, Inc. is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded websites generating 22 million unique visitors per month, and sells approximately 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. As of March 31, 2009, Reader's Digest had total assets of $2,815,900,000 against debts of $3,499,800,000 for a stockholder's deficit of $683,900,000. The Company incurred a net loss of $462,000,000 on $479,000,000 of revenues during the quarter ended March 31, 2009. REPROS THERAPEUTICS: May Need to Seek Bankruptcy Protection ----------------------------------------------------------- Repros Therapeutics (Nasdaq:RPRX) on August 17 announced financial results for the second quarter ended June 30, 2009 and provided a company update. Recent Events On August 6, 2009, the Company announced that it received verbal notice from the United States Food and Drug Administration (FDA) during a teleconference with the Division of Reproductive and Urologic Products that the Company's Investigational New Drug Applications (INDs) for Proellex(R) had been placed on clinical hold for safety reasons. This action followed the Company's voluntary decision to suspend dosing of all patients in its clinical trials of Proellex(R) after discovering elevated liver enzymes in a number of patients enrolled in the clinical trials. On August 7, 2009, the Company received a letter from The Nasdaq Stock Market advising that the Company's market value was below the minimum $50,000,000 requirement for continued listing on the Nasdaq Global Market. The Company is provided 90 days until November 5, 2009, to regain compliance, at which time the Company's securities will be delisted from such market unless the market value of the Company's securities listed on Nasdaq is $50,000,000 or more for a minimum of 10 consecutive business days. The letter also recited that the Company's total assets and total revenue fell below certain required thresholds under related rules and suggested that the Company consider applying for transfer of its securities to the Nasdaq Capital Market, which has substantially lower listing requirements. The Company is considering its options at this time and intends to take whatever actions it can to best protect shareholder value, however, there can be no assurance that the Company's securities will continue to be traded on any of The Nasdaq Stock Market trading markets. On August 7, 2009, R.M. Berry filed a putative class action lawsuit naming the Company, Joseph Podolski, Paul Lammers, and Louis Ploth, Jr. as defendants. The lawsuit is pending in the United States District Court for the Southern District of Texas, Houston Division. The lawsuit alleges that the defendants made certain misleading statements related to the Company's Proellex drug. To date, no proceedings of any kind have occurred in the lawsuit, and an estimate of the possible loss or range of loss in connection with the lawsuit cannot be made. The Company has retained counsel to assist it in defending this action. Liquidity and Going Concern Uncertainty Note 1 of the Company's consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2008 includes disclosure regarding the substantial doubt about the Company's ability to continue as a "going concern". Additionally, the report of its independent registered public accounting firm included in the Annual Report on Form 10-K for the year ended December 31, 2008 includes an explanatory paragraph that there is substantial doubt about Repros' ability to continue as a "going concern". Repros also received a similar going concern opinion for the year ended December 31, 2007. Since its currently available cash and cash equivalents is not adequate to meet its accounts payable and accrued expenses, the Company has engaged a law firm that specializes in work-out and bankruptcy matters to assist it in attempting to negotiate with and reduce amounts owed to its vendors. Several vendors have ceased performing any work for the company and have notified the Company of a claim against us and in one case filed suit for payment of $147,000, which such vendor claims it is owed under their agreement with the Company. The Company intends, to the extent possible, to ensure that its available cash is used for patient safety in connection with its study closeout activities. However, due to its constrained cash position, the Company does not have sufficient funds at this time to comply with all of its financial obligations under the agreements with the clinical research organizations unless acceptable work-out arrangements are completed. "The uncertainties relating to the foregoing matters raise substantial doubt about Repros' ability to continue as a going concern," the company said. As of June 30, 2009, the Company had approximately $4.0 million in cash and cash equivalents and its accounts payable and accrued expenses were approximately $7.5 million. Furthermore, as of August 14, 2009, the Company had approximately $2.7 million in cash and cash equivalents, and the amount of accounts payable and accrued expenses were significantly higher than $7.5 million. As a result, the amount of cash on hand is not sufficient to continue to fund the Company's ongoing clinical trials of Androxal(R), complete all necessary activities relating to the suspension of its clinical trial program for Proellex(R), pay its accounts payable and accrued expenses as well as its normal corporate overhead and expenses. Effective August 16, 2009, the Company adopted a 50% salary reduction program for all salaried employees in an effort to reduce expenses while maintaining its current effort without diminution. The Company is in the process of exploring potential new financing alternatives that may allow it to maintain its current reduced level of operations; however, there can be no assurances that we will be successful in raising any such funds on a timely basis or at all. Significant additional capital will be required for the Company to continue development of either of its product candidates. Failure to raise sufficient funds in the immediate short term "will likely result in the filing of bankruptcy and dissolution of the Company," the Company said. Financial Results Net loss for the three month period ended June 30, 2009, was ($8.9) million or ($0.59) per share as compared to a net loss of ($6.1) million or ($0.48) per share for the same period in 2008. The net loss for the six month period ended June 30, 2009 was ($15.6) million or ($1.03) per share as compared to a net loss of ($12.8) million or ($1.00) per share for the same period in 2008. The increase in loss for both the three and six month periods ended June 30, 2009 as compared to the same period in 2008 was primarily due to an increase in clinical development activities for Proellex and its general and administration expenses, partially offset by decreased expenses in clinical development activities for Androxal. The Company has total assets of $8,197,000 against debts of $7,481,000 as of June 30, 2009. A full-text copy of the Company's news release is available for free at: http://researcharchives.com/t/s?4210 About Repros Therapeutics Repros Therapeutics focuses on the development of oral small molecule drugs for major unmet medical needs that treat male and female reproductive disorders. RIVER ROAD: Sends InterContinental Chicago O'Hare in Ch. 11 ----------------------------------------------------------- According to Bloomberg News, River Road Hotel Partners LLC, owner of the InterContinental Chicago O'Hare airport hotel filed for bankruptcy in U.S. Bankruptcy Court in Chicago. Based in Oak Brook, Illinois, River Road listed assets of as much as $100 million and debt of as much as $500 million. Chicago O'Hare airport hotel boasts of a contemporary art gallery with monthly exhibits and a full-time curator. RIVIERA HOLDINGS: June 30 Balance Sheet Upside-Down by $73 Million ------------------------------------------------------------------ Riviera Holdings Corp.'s balance sheet at June 30, 2009, showed total assets of $203.21 million, total liabilities of $276.27 million, resulting in a stockholders' deficit of $73.06 million. For three months ended June 30, 2009, the Company posted a net loss of $13.51 million compared with a net income of $10.07 million for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $14.54 million compared with a net income of $4.29 million for the same period in 2008. The Company stated that there is substantial doubt about its ability to continue as a going concern. The Company is currently in default on its Credit Facility with Wachovia Bank, National Association as of June 30, 2009. If the Company's debt is accelerated and the Company's long-term assets must be liquidated, these assets may be impaired in comparison to current recovery values. The Company is carrying long-term assets based upon management's assumptions related to its current intentions and plans. With the aid of its financial advisors and outside counsel, the Company is negotiating with its various creditor constituencies to refinance or restructure its debt. The Company cannot assure that it will be successful in completing a refinancing or consensual out-of-court restructuring, if necessary. If it is unable to do so, the Company would likely be compelled to seek protection under Chapter 11 of the U. S. Bankruptcy Code. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?4208 About Riviera Holdings Riviera Holdings Corp., through its wholly owned subsidiary, Riviera Operating Corporation, owns and operates the Riviera Hotel & Casino (Riviera Las Vegas) located on the Las Vegas Boulevard in Las Vegas, Nevada. The Company, through its wholly owned subsidiary, Riviera Black Hawk, Inc., owns and operates the Riviera Black Hawk Casino (Riviera Black Hawk), a limited-stakes casino in Black Hawk, Colorado. Riviera Las Vegas comprises approximately 1.8 million square feet, including 110,000 square feet of casino space, a 160,000-square-foot convention, meeting and banquet facility; 2,075 hotel rooms (including 177 luxury suites) in five towers; three restaurants; a buffet; four showrooms; a lounge, and approximately 2,300 parking spaces. Riviera Black Hawk has 32,000 square feet of gaming space, parking for approximately 520 vehicles, a 252-seat buffet, two bars and an entertainment center with seating for approximately 400 people. On March 31, 2009, Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings for Riviera to 'D', following the company's announcement that it did not pay the roughly $4 million of accrued interest on the Company's $245 million credit facility. RUTH JONES: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Ruth Jones 75 Beacon Hill Lane New Canaan, CT 06840 Case No.: 09-51596 Chapter 11 Petition Date: August 14, 2009 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: Peter L. Ressler, Esq. Groob Ressler & Mulqueen 123 York Street, Ste 1B New Haven, CT 06511-0001 Tel: (203) 777-5741 Fax: (203) 777-4206 Email: ressmul@yahoo.com Total Assets: $10,900,000 Total Debts: $14,690,061 The petition was signed by Ms. Jones. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Am Trust Bank $1,586,000 PO Box 74259 ($1,500,000 Cincinnati, OH 45274 secured) American Express Credit card purchases $49,740 Centurion BK The Optima Card American Express Credit card purchases $22,000 Centurion BK The Optima Card Bank of America $52,214 Bank of America Line of credit $336,000 Bank of America Home Loans 42/44 Urban Street $174,000 New Canaan, ($650,000 CT 06840 secured) ($480,000 senior lien) Chase Cardmember Service Credit purchases $31,912 Connecticut Community Bank 277 Old Stamford $2,235,000 115 E. Putnam Avenue Road New Canaan ($1,700,000 Cos Cob, CT 06807 CT 06840 secured) County Bank 279 Old Stanford $282,000 200 E. 42nd Street 9th Fl. Road New ($1,500,000 New York, NY 10017 Canaan, CT 06840 secured) ($1,586,000 senior lien) County Bank 138 River Street $266,000 200 E. 42nd Street 9th Fl. New Canaan, ($450,000 New York, NY 10017 CT 06840 secured) ($312,000 senior lien) County Bank 50 Urban Street $350,139 200 E. 42nd Street 9th Fl. New Canaan, ($550,000 New York, NY 10017 CT 06840 secured) ($315,000 senior lien) County Bank 41 Hillside Avenue $340,000 200 E. 42nd Street 9th Fl. New Canaan, ($600,000 New York, NY 10017 CT 06840 secured) ($280,000 senior lien) Discover Card Credit card purchases $4,080 Edward Marcus, Esq. Legal Services $4,700 Ridgefield Bank Mortgage 75 Beacon Hill $1,494,417 150 Danbury Road Lane New ($2,200,000 Ridgefield, CT 06877 Canaan, CT 06840 secured) ($1,986,466 senior lien) USA Bank 277 Old Stamford $198,000 Road New ($1,700,000 Canaan, CT 06840 secured) ($2,235,000 senior lien) USA Bank 145 River Street $584,393 691 North Main Street New Canaan ($450,000 Port Chester, NY 10573 CT 06840 secured) Wachovia Bank 42/44 Urban Street $101,000 New Canaan ($650,000 CT 06840 secured) ($654,000 senior lien) Wachovia Bank 384 White Oak $150,000 Shade Road New ($800,000 Canaan, CT 06840 secured) ($700,000 senior lien) Washington Mutal 994 Charlestown $2,000,000 PO Box 78148 Beach Road ($1,500,000 Phoenix, AX 85062 Wakefield, RI 02879 secured) SCHOLL FOREST: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Scholl Forest Industries, Inc. fka Scholl Forest Industries, L.P. fka Scholl Forest Products 6800 Pine Vista Lane Houston, TX 77092 Case No.: 09-35962 Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. ------ -------- Scholl Truss & Component, Inc. 09-35963 Chapter 11 Petition Date: August 14, 2009 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Wesley W. Steen Debtor's Counsel: David A. Zdunkewicz, Esq. Andrews & Kurth 600 Travis, Ste 4200 Houston, TX 77002 Tel: (713) 220-4200 Fax: (713) 238-7106 Email: dzdunkewicz@akllp.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Ward H. Scholl, the company's president. Scholl Forest Industries' List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Boise Cascade-Dallas $646,000 Dept 0640 PO Box 120001 Dallas, TX 75312 Temple-Inland $173,986 West Fraser (South), Inc. $130,694 Hampton Lumber Sales Company $83,054 Viking Forest Products, LLC $61,154 Weyerhaeuser $55,514 Southern Lumber Company $54,953 Advantage Logistics Solutions $52,028 Dixie Plywood Company-Houston $50,969 Louisiana Pacific Corporation $47,955 Georgia-Pacific-Dallas $47,316 Martco Partnership $43,834 Tomball Forest Ltd. $40,759 Wood Perfect $33,880 Eastex Forest Products $29,034 United Steel Products Co., Inc. $26,616 North Pacific Group $25,499 Boozer Laminated Beam $23,691 Huttig Building Products $23,422 Woodtone Building Material $22,798 SEAQUEST DIVING: Circuit Court Approves $2.7MM Claim Subordination ------------------------------------------------------------------ The U.S. Court of Appeals for the Fifth Circuit has ruled that a $2.7 million unsecured claim in the Chapter 11 case of SeaQuest Diving LP and general partner SeaQuest General Holdings LLC must be subordinated because the claim arose from the rescission of a purchase or sale of the debtors' security, according to Law360. SeaQuest Diving, L.P. -- http://seaquestdivinglp.com/-- is a privately held commercial diving services that performs underwater emergency response services, sonar imaging, salvage and abandonment operations, site surveys and debris removal, and underwater inspection and construction services. The Limited Partnership and SeaQuest General Holdings, LLC, filed chapter 11 petitions (Bankr. S.D. Tex. Case Nos. 07-32068 and 07-32070) on March 29, 2007, estimating their assets and debts in the range of $1 million to $100 million. Rodney L. Poirot, Esq., at Cavazos Hendricks & Poirot, P.C., in Dallas, represents the debtors. In their initial papers delivered to the bankruptcy court, the Debtors listed S&J Diving, Inc., and Stan Jones as their largest unsecured creditor, owed $2,742,015. The Fifth Circuit's ruling says this claim won't be paid unless and until all general unsecured creditors' claims are paid in full. SIMMONS CO: Bank Lenders, Noteholders Move Forbearance to Aug. 31 ----------------------------------------------------------------- Simmons Bedding Company, a subsidiary of Simmons Company, has reached an agreement with the majority of its senior bank lenders and the majority of the holders of Simmons Bedding's $200.0 million 7.875% senior subordinated notes to extend their forbearance periods from August 14, 2009 to August 31, 2009. As reported by the Troubled Company Reporter on July 17, 2009, Simmons Bedding did not make the scheduled interest payment of $7.9 million due on July 15 on its $200.0 million 7.875% senior subordinated notes. Under the terms of Simmons Bedding's existing forbearance agreement with the majority of the outstanding holders of the Notes, the holders of a majority of the Notes have agreed to refrain from exercising their rights and remedies under the Notes with respect to such non-payment of interest. The Company's cash on hand as of July 14 was roughly $62 million, which was available to pay operating costs and expenses. At March 28, 2009, the Company's balance sheet showed total assets of $875.6 million and total liabilities of $1.2 billion, resulting in a stockholders' deficit of about $367.0 million. About Simmons Bedding Company Atlanta-based Simmons Bedding Company -- http://www.simmons.com/- - is one of the world's largest mattress manufacturers, manufacturing and marketing a broad range of products including Beautyrest(R), Beautyrest Black(R), Beautyrest Studio(TM), BeautySleep(R), ComforPedic by Simmons(TM), Natural Care(R) and Beautyrest Beginnings(TM). Simmons Bedding operates 19 conventional bedding manufacturing facilities and two juvenile bedding manufacturing facilities across the United States, Canada and Puerto Rico. Simmons Bedding also serves as a key supplier of beds to many of the world's leading hotel groups and resort properties. SKINS INC: Files for Chapter 7 Liquidation in Delaware ------------------------------------------------------ Skins Inc. and its wholly owned subsidiary, Skins Footwear, Inc. filed a voluntary petition in the Unites States Bankruptcy Court for the District of Delaware, pursuant to Chapter 7 of Title 11 of the United States Code. As of August 17, the Bankruptcy Court has not yet been appointed a trustee. The bankruptcy trustee will be responsible for the liquidation of the Companies' assets. The Debtors have retained the services of Loizides, P.A., to represent them in the bankruptcy proceedings. In connection with the filings, Skins Inc. and Skins Footwear, Inc. have ceased all business activity and operations. Both Companies believe that their assets will be insufficient to satisfy the claims of creditors and it is unlikely that shareholders of each company will be eligible to participate in any distributions of the assets held by the respective Companies, as a result of the bankruptcy. As of March 31, 2009, the Company had $626,785 in assets against debts of $2,991,088. Skins' counsel may be reached at Christopher D. Loizides, Esq., at Loizides, P.A., 1225 King Street, Suite 800, Wilmington, DE 19801 Phone: 302-654-0248 Skins Inc., a Nevada corporation with its corporate office located in Hoboken, New Jersey, has designed and continues to develop a patented two-part, footwear structure consisting of an outer collapsible "Skin" and an inner orthopedic support section called the "Bone." The design is intended to allow consumers to purchase one inner section, the Bone, and numerous outer Skins, resulting in multiple style variations from the same pair of shoes, with the same feel and fit despite which Skin is being worn. Skins Inc. and its wholly-owned subsidiary, Skins Inc. and wholly owned subsidiary filed for Chapter 7 on August 14, 2009 (Bankr. D. Del. Case Nos. 09-12889 and 09-12888) SPANSION INC: Court Won't Force Opening of Books to Tessera ----------------------------------------------------------- Ethan Horwitz, a lawyer at King & Spalding representing Spansion Inc., said that the Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware has denied Tessera Inc.'s request to look at the Company's books, Patrick Fitzgerald posted at The Wall Street Journal blog, Bankruptcy Beat. Bankruptcy Beat relates that the U.S. International Trade Commission favored Tessera earlier this year in a case involving patents associated with computer chip packaging. The Commission, overturning an earlier ruling, issued a ban on the import of the infringing chips, and said that companies had to stop selling products using the chips, Bankruptcy Beat states. According to the blog, Tessera said that Spansion has continued to infringe on its patents by selling the products even after the Commission issued its ruling. A probe of Spansion's business was necessary to determine the extent of the ongoing infringement of its patents, Bankruptcy Beat says, citing Tessera. Bankruptcy Beat relates that Spansion denied breaching the Commission's order and said that Tessera is trying to use the bankruptcy probe to gain an advantage in the patent dispute. Spansion, according to Bankruptcy Beat, said that The Commission's rulings would cost $500 million in sales and force the Company to shut down production facilities. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. SPANSION INC: Suspends Memorandum of Understanding With ASE ----------------------------------------------------------- Lisa Wang at Taipei Times reports that Spansion Inc., as part of restructuring efforts, has backed out of its memorandum of understanding with Advanced Semiconductor Engineering Inc. Taipei Times says that Spansion and ASE had planned to form a chip testing and packaging venture. According to Taipei Times, Spansion corporate marketing director John Nation said that the restructuring will focus on cutting costs, strengthening efficiency, and improving asset management. The report quoted Mr. Nation as saying, "We signed the MOU last year. It did not go anywhere since we filed for Chapter 11 protection" in March. Spansion wanted to achieve greater flexibility in its manufacturing strategy by subcontracting part of capacities to other companies, Taipei Times states, citing Mr. Nation. Mr. Nation, according to Taipei Times, Spansion would keep its partnership with contract chipmakers, including Taiwan Semiconductor Manufacturing Co. and SMIC. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. SPORTSMAN'S WAREHOUSE: Emerges From Chapter 11 Bankruptcy --------------------------------------------------------- Billings Gazette reports that Sportsman's Warehouse Inc. said on Friday that it has exited Chapter 11 bankruptcy and has a new source of capital. According to Billings Gazette, Sportsman's Warehouse founder and former CEO Stu Utgaard has stepped down as the top executive. Billings Gazette relates that while bank debt forced Sportsman's Warehouse to liquidate 23 stores and sell about 15 -- including stores in Missoula, Helena, and Bozeman -- to a Canadian farmers' cooperative, the stores in Billings and Casper remained open and part of the Company. The Sportsman's Warehouse bankruptcy resulted in the laying off of almost 2,000 workers. Private equity investment company Seidler Equity Partners is investing an undisclosed amount of capital in the post-bankruptcy Sportsman's Warehouse, Billings Gazette states. Headquartered in Midvale, Utah, Sportsman's Warehouse, Inc. -- http://www.sportsmanswarehouse.com/-- and its affiliates has 29 stores selling indoors and outdoor gears and equipment. The Companies filed for Chapter 11 bankruptcy protection on March 20, 2009 (Bankr. D. Del. Bankr. Case No. 09-10990). Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher assists the Companies in their restructuring efforts. Kurtzman Carson Consultants is the Company's claims agent. Roberta DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors of Sportsman's Warehouse Inc. Greenberg Traurig LLP represents the Committee. The Company listed assets of $436 million against debt totaling $452 million as of December 31, 2008. STAMFORD INDUSTRIAL: Defers $1-Mil. Payment on Credit Agreement --------------------------------------------------------------- Stamford Industrial Group, Inc., reports as of June 30, 2009, the Company was in violation of its financial covenants under its credit agreement and had been engaged in discussions with its lenders to address such violations. Pending the resolution of its dialogue with the lenders, the Company elected not to make a required debt payment on June 30, 2009, to the lenders in an amount equal to $1.0 million, representing an amortized payment of principal together with interest due, even though it had sufficient cash to make such payment. As a result of its default status under the credit agreement, the Company reclassified its $18.0 million loan balance due under the credit agreement to current liabilities for the period ended June 30, 2009. Stamford Industrial also reports that on August 6, 2009, despite continued dialogue with its lenders, Concord Steel, Inc., the Company's wholly owned subsidiary, received a written notice from the lenders under its credit agreement declaring that the principal amount of all obligations of Concord under its credit agreement had been accelerated and were immediately due and payable as a result of Concord's defaults under the credit agreement. In addition, the lenders exercised their right to set off the obligations against all funds contained in Concord's principal deposit account with the administrative agent resulting in Concord having limited and intermittent access to sufficient funds to support its business operations causing a substantial doubt about its ability to continue as a going concern. On August 12, 2009, in connection with their ongoing efforts to resolve defaults under the credit agreement, Concord, the Company, Concord's subsidiaries and the lenders entered into a letter agreement dated August 10, which provided for, among other things, rescission of the termination of the revolver facility, the June 30 payment default being cured, and the application of all existing funds of Concord and future incoming funds of Concord to repay amounts outstanding under the term loan. In addition, Concord (i) consented to the lenders' acceleration of the term loan as well the lenders' continuing ability to apply funds of Concord as prepayments against the term loan; and (ii) waived any and all claims it may have against the lenders. On August 13, 2009, in connection with their ongoing efforts to resolve defaults under the credit agreement, Concord, the Company, Concord's subsidiaries and the lenders entered into a Third Amendment and Temporary Waiver Agreement pursuant to which, Concord's borrowing access under the revolver facility was reinstated through and including September 12, 2009, solely for purposes of making payments pursuant to a weekly budget that has been approved by the lenders and granting a temporary waiver of certain defaults and event of defaults under the credit agreement. The Company and Concord expect to continue negotiations with the lenders to modify the credit agreement in order to address Concord's ability to continue to comply with the credit agreement on an ongoing basis after the expiration of the reinstated revolving facility so that Concord can continue to borrow under the credit agreement beyond September 12, 2009. The Company cannot give any assurances that it has or can raise sufficient funds to repay all of the outstanding amounts under the credit agreement, that it will be able to successfully enter into an amendment of the credit agreement satisfactory to Concord, the Company and the lenders that will be effective after the expiration of the reinstated revolving facility or that it will be able to otherwise resolve outstanding matters with the lenders in a manner satisfactory to Concord and the Company. If the Company is unable to enter into a further amendment of the credit agreement in a manner satisfactory to it, the ongoing defaults under the credit agreement and the exercise of the lenders' available remedies under the credit agreement may require the Company, Concord or Concord's subsidiaries to seek reorganization or restructuring, including filing for protection under bankruptcy laws or cease operations, which would have a material adverse effect on the market price of the Company's common stock, its business, financial condition and results of operations. On Monday, the Company reported that net loss for the three months ended June 30, 2009, was $44.3 million or $5.26 per diluted share versus net income of $36.6 million or $3.81 per diluted share in the comparable three months last year. Net loss for the six months ended June 30, 2009 was $45.2 million or $5.37 per diluted share versus net income of $38.1 million or $3.97 per diluted share for the six months ended June 30, 2008. In a news statement, the Company said management has assessed its deferred tax asset and currently believes the Company will not likely realize sufficient taxable income in future years to utilize its deferred tax assets, the Company has recorded a full valuation allowance of approximately $41.6 million against its deferred tax assets in the quarter ended June 30, 2009. This assessment is based on the realizability of its deferred tax assets taking into consideration, among other things, Concord's decrease in revenues, continued poor economic conditions, ongoing discussions with the lenders under its credit agreement so that Concord can continue to borrow under the Credit Agreement beyond September 12, 2009, as well as recent events and related concerns of whether the Company will be able to continue as a going concern. Stamford Industrial Group, Inc. -- http://www.Stamfordig.com/-- is working to build a diversified global industrial manufacturing group through organic and acquisition growth initiatives that will complement and diversify existing business lines. Concord Steel, Inc., its wholly owned subsidiary acquired in October 2006, is an independent manufacturer of steel counter-weights and structural weldments that are incorporated into a variety of industrial equipment, including aerial work platforms, cranes, elevators and material handling equipment. TEMECULA VALLEY BANCORP: May Delay Ch. 7 Filing to Next Month ------------------------------------------------------------- Temecula Valley Bancorp Inc. said its expects to file a Chapter 7 petition before the U.S. Bankruptcy Court for the Central District of California in "late August or September 2009." Temecula made the announcement on August 17. The Company in late July said that it was filing for bankruptcy by August 18. Temecula Valley Bancorp Inc. served as the holding company for Temecula Valley Bank. On July 17, the California Department of Financial Institutions closed Temecula Valley Bank and subsequently, the Federal Deposit Insurance Corporation was appointed as receiver. Subsequent to the Bank closure and receivership, the FDIC informed the Company that First-Citizens Bank and Trust Company, Raleigh, North Carolina, assumed all of the deposits of the Bank, excluding those from brokers, and purchased essentially all of the Bank's assets in a transaction facilitated by the FDIC. As a result, the Company has ceased all business activity and operations since the Bank has been the Company's only source of revenue. Temecula Valley had total assets of $1,495,000,000 against debts of $1,484,911,000 as of March 31, 2009. However, some of these assets belonged to the bank. In a transaction with the FDIC, First-Citizens Bank and Trust Company assumed all of the deposits and purchase essentially all of the assets of Temecula Valley Bank. As of May 31, 2009, Temecula Valley Bank had total assets of $1.5 billion and total deposits of approximately $1.3 billion. TERPHANE HOLDING: Moody's Withdraws All 'Caa3' Ratings ------------------------------------------------------ Moody's Investors Service withdrew all of its ratings for Terphane Holding Corporation for business reasons. These ratings were withdrawn: -- Caa3 LGD 4, 51% rating for $76.5 million senior secured notes, due 2010 -- Caa3 LGD 4, 51% rating for $6.5 million senior secured notes, due 2010 -- Caa3 Corporate Family Rating -- Caa3 Probability of Default Rating Moody's last rating action on Terphane occurred on July 31, 2009 when Moody's downgraded the corporate family rating to Caa3 and the probability of default rating to Ca/LD. Three days later, the PDR and senior secured notes rating was upgraded to Caa3 in accordance with Moody's policies regarding limited defaults. Terphane Holding Corporation is a manufacturer of specialty polyester films with technical support and manufacturing operations in North America and South America. Headquartered in Cabo de Santo Agostinho, Pernambuco, Brazil, Terphane had revenues of roughly $106 million for the twelve months ended March 31, 2009. UBS AG: U.S. Extends Tax Probe to Hong Kong ------------------------------------------- Carrick Mollenkamp at The Wall Street Journal reports that the U.S. has extended its crackdown on UBS AG clients to Hong Kong. U.S. Attorney Thomas P. O'Brien said in a statement that the Justice Department and IRS were "aggressively pursuing those who shirk their federal tax obligations by hiding funds in secret bank accounts in Europe and Asia." The Journal relates that a document filed by John McCarthy shows the tax scheme relied in part on channeling funds to a Swiss UBS account held in the name of a Hong Kong entity, the second time accounts in the Asian financial hub have figured in these cases. As reported by the Troubled Company Reporter on August 17, 2009, Mr. McCarthy is a California client of UBS AG who will plead guilty to a charge of failing to file a tax report for an offshore bank account holding more than $1 million. Mr. McCarthy opened a Swiss account in 2003 under Hong Kong-based COGS Enterprises Ltd. Mr. McCarthy failed to file a Foreign Bank and Financial Accounts report. According to The Journal, Jeffrey Chernick, who pleaded guilty in July to filing a false tax return, admitted in a statement of facts agreed with the Justice Department that he also used a Hong Kong corporation and offshore bank accounts to conceal from the IRS commissions paid for sales. Citing people familiar with the matter, The Journal states that the Hong Kong link is important, as the Justice Department and Internal Revenue Service are using that as a clue of wrongdoing as they go through some 250 names that UBS handed over to the U.S. government. The Journal notes that Hong Kong can be used as a legitimate tax- planning jurisdiction that could proceed to mainland China. Citing tax lawyers, The Journal relates that Hong Kong's corporate legal system allows structures to be assembled with ease, in many ways similar with how corporations are formed in the U.S. or Europe, but the IRS might still face challenges probing corporations set up in Hong Kong, which had once denied tax information to other jurisdictions. A Hong Kong government spokesperson said in a statement that Hong Kong has "stringent and effective anti-tax avoidance legislation" and doesn't have laws protecting bank secrecy. According to The Journal, a law that would align Hong Kong with international standards on exchange of tax information was submitted to lawmakers in July. Some outside fiduciary advisers offered templates for setting up offshore structures on behalf of UBS clients, The Journal reports, citing a person familiar with the matter. Based in Zurich, Switzerland, UBS AG (VTX:UBSN) -- http://www.ubs.com/-- is a global provider of financial services for wealthy clients. UBS's financial businesses are organized on a worldwide basis into three Business Groups and the Corporate Center. Global Wealth Management & Business Banking consists of three segments: Wealth Management International & Switzerland, Wealth Management US and Business Banking Switzerland. The Business Groups Investment Bank and Global Asset Management constitute one segment each. The Industrial Holdings segment holds all industrial operations controlled by the Group. Global Asset Management provides investment products and services to institutional investors and wholesale intermediaries around the globe. The Investment Bank operates globally as a client-driven investment banking and securities firm. The Industrial Holdings segment comprises the non-financial businesses of UBS, including the private equity business, which primarily invests UBS and third-party funds in unlisted companies. As reported in the Troubled Company Reporter-Europe, UBS has amassed more than US$53 billion in writedowns and losses since the credit crisis began. The bank expects to post a loss in the second quarter of 2009. The bank's net loss for full-year 2008 widened to CHF19.697 billion from of CHF5.247 million in the prior year. Net losses from continuing operations totaled CHF19.327 billion, compared with losses of CHF5.111 billion in the prior year. UBS attributed the losses to negative revenues in its fixed income, currencies and commodities (FICC) area. For the 2008 fourth quarter, UBS incurred a net loss of CHF8.100 billion, down from a net profit of CHF296 million. Net loss from continuing operations was CHF7.997 billion compared with a profit of CHF433 million. The Investment Bank recorded a pre-tax loss of CHF7.483 billion, compared with a pre-tax loss of CHF2.748 billion in the prior quarter. This result was primarily due to trading losses, losses on exposures to monolines and impairment charges taken against leveraged finance commitments. An own credit charge of CHF1.616 billion was recorded by the Investment Bank in fourth quarter 2008, mainly due to redemptions and repurchases of UBS debt during this period. UBS said it will further reduce its headcount to 15,000 by the end of the year. UBS's personnel numbers reduced to 77,783 on December 31, 2008, down by 1,782 from September 30, 2008, with most staff reductions at its investment banking unit. UCBH HOLDINGS: Fitch Downgrades Issuer Default Rating to 'CC' ------------------------------------------------------------- Fitch Ratings has downgraded the long-term Issuer Default Ratings of UCBH Holdings, Inc., and its bank subsidiary, United Commercial Bank, to 'CC'. A full list of ratings appears at the end of this release. The downgrade follows UCBH's announcement of preliminary second quarter 2009 (2Q'09) results and the release of its regulatory statements. Due to the magnitude of the loss, the company's capital ratios have significantly eroded and the bank subsidiary is no longer considered 'well-capitalized' by regulatory standards. For sometime, Fitch has been concerned with UCBH's capital position, given the company's current credit pressures and that it remains highly exposed to commercial real estate in problematic markets. Considering the company's financial pressures, Fitch anticipates that the company will likely be subject to regulatory actions. UCBH is exploring capital raising initiatives to strengthen its capital position and to shore up the holding company's financial resources. However, Fitch views the prospects for raising equity from external sources low given the level of UCBH's credit challenges. However, UCBH does remain in discussions with China Minsheng Bank regarding a third stage investment in the company, which could bring in some needed capital. Fitch has maintained a recovery rating of 'RR6' on the preferred and trust preferred securities of UCBH. The 'RR6' implies recovery between 0%-10% on these issues should the issuer fail or default. Fitch has also maintained a recovery rating of 'RR3' on the uninsured deposits implying a recovery between 51%-70%. UCBH is a $12.8 billion banking company headquartered in San Francisco, with domestic operations in Atlanta, Boston, Houston, New York City and Seattle and a growing presence in the greater China region. UCBH focuses on servicing the major Asian communities in the U.S. Fitch has downgraded these ratings; UCBH Holdings, Inc. -- Long-term IDR to 'CC' from 'CCC'; United Commercial Bank -- Long-term IDR to 'CC' from 'CCC'; -- Long-term deposits to 'CCC/RR3' from 'B-/RR3'; -- Short-term deposits to 'C' from 'B'. Fitch has affirmed these ratings: UCBH Holdings, Inc. -- Short-term IDR 'C'; -- Preferred stock 'C/RR6'; -- Individual 'E'; -- Support '5'; -- Floor 'NF' United Commercial Bank -- Short-term IDR 'C'; -- Individual 'E'; -- Support '5'; -- Floor 'NF' UCBH Trust Co. UCBH Capital Trust I UCBH Capital Trust II UCBH Capital Trust III UCBH Capital Trust IV UCBH Capital Trust V UCBH Holdings Statutory Trust I UCBH Holdings Statutory Trust II -- Trust preferred securities 'C/RR6'. VISTEON CORP: Court OKs Cash Collateral Until September 9 --------------------------------------------------------- Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware authorized Visteon Corporation and its debtor affiliates to use cash collateral through September 9, 2009; or the date specified as the expiration date in any notice of an event of default. Pursuant to the Court's 6th Interim Order, the Debtors may use Cash Collateral for payment of costs and expenses associated with the operation of their businesses and the conduct of their Chapter 11 cases in the amounts and categories of the Debtors' expenditures, revenues and collateral base forecast, pursuant to an agreed upon budget, a copy of which is available for free at: http://bankrupt.com/misc/Viateon_911Budget.pdf A full-text copy of the Sixth Interim Cash Collateral Order is available for free at: http://bankrupt.com/misc/Visteon_6thInterimCashColl.pdf A hearing to consider final approval of the Debtors' request will be held on September 9, 2009, at 1:00 p.m. Objections must be served no later than September 4, 2009. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The Company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon 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: Creditors Committee Supports Retiree Benefits Halt ---------------------------------------------------------------- Visteon Corp. and its affiliates assert that they cannot afford to continue paying retirees health and life insurance benefits. The Debtors relate that they recognize the hardship that amending or terminating retiree benefits will impose, particularly for the minority of retirees who are not yet Medicare-eligible. The Debtors add that they have done everything possible to avoid terminating those benefits. "Over the past several years, the Sponsoring Debtors have implemented steep cost cuts in other areas that, for the most part, have affected the active workforce," Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, says. He relates that since 2004, the Debtors have reduced their U.S. workforce by 84%. They have also reduced salaries and benefits for both salaried and hourly employees, as well as for retirees. The Debtors do not deny that termination or amendment of the health and life insurance benefits will impose hardship upon their employees. The Debtors admit that the Chapter 11 case has imposed severe hardship on many different stakeholder groups due to the Debtors' financial condition, the state of the automotive supply industry against the backdrop of the U.S. and global economy, and the needs of the Debtors to implement a comprehensive and sustainable restructuring. Committee Supports Health Benefits Termination The Official Committee of Unsecured Creditors says it is sympathetic to the impact the termination of the other post- employment benefits programs will have on retirees. However, the Committee asserts that contrary to the Objectors' protestation, bankruptcy does not automatically shackle a debtor ad infinitum to benefits obligations that it did not voluntarily accept prepetition, especially of those obligations were not product of clear back-and-forth collective bargaining. "In light of the Sponsoring Debtors' financial distress and present inability to access working capital, the [Creditors] Committee believes that their decision to terminate historic 'at will' OPEB programs . . . is a matter of business necessity and a sound exercise of business judgment," says Gregory A. Taylor, Esq., at Geddes, P.A., in Wilmington, Delaware, counsel for the Committee. Two additional letters were sent to the Court opposing the OPEB Termination Motion. IUE-CWA Exhibits The International Union of Electronic, Electrical, Technical Salaried, Machine, and Furniture Workers-Communication Workers of America delivered to the Court exhibits in support of its preliminary objection and supplemental objection to the OPEB Termination Motion. The Exhibits consist of (1) letters and statements from IUE-CWA represented retirees, their beneficiaries, and supporters in opposition to the Motion, and (2) a Petition signed by IUE-CWA represented retirees, their beneficiaries, and supporters in opposition to the Motion. Full- text copies of the Exhibits are available for free at: http://bankrupt.com/misc/Visteon_IUE_Petition.pdf http://bankrupt.com/misc/Visteon_IUE_Letters.pdf Court Yet to Rule on Request The Associated Press reported that after a two-day hearing, Judge Sontchi told lawyers Friday, August 14, 2009, that he would take into consideration the evidence and arguments presented with respect to Visteon's retiree benefits. Judge Sontchi though has not a set a specific date for any ruling to be made. "I feel that the record is sufficiently complex and the law is sufficiently complex to require the court to thoroughly review the record," the AP quoted Judge Sontchi as saying. The AP added that any ruling could affect some 6,600 retirees and their families, and about 1,000 future retirees. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The Company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon 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: Proposes Alston & Bird AS Litigation Counsel ---------------------------------------------------------- Visteon Corp. and its affiliates seek the Bankruptcy Court's authority to employ Alston & Bird LLP as special litigation counsel pursuant to Section 327(e) and 328 of the Bankruptcy Code. The Debtors want to engage Alston & Bird to represent them in connection with the enforcement of Visteon's GPS portfolio, namely U.S. Patent Nos. 5,544,060; 5,654,892; 5,680,312; 5,819,200; 8,832,408; 5,987,375; 6,029,110; 6,088,649; 6,097,316; 6,212,472; 6,212,473; 6,366,853; 6,591,185; and 6,820,238. The Debtors seek to retain Alston & Bird with respect to the prosecution of all claims for infringement of the Patents that the Firm agrees to prosecute. The Debtors tell the Court they have selected Alston & Bird because of the firm's extensive experience and knowledge in the various areas of practice as to which its continued representation is sought. The Debtors propose to pay Alston & Bird based according to this fee structure: (A) The Debtors will pay Alston & Bird a percentage of the Adjusted Gross Recovery. The applicable percentage of the Adjusted Gross Recovery will depend on the stage at which the recovery is obtained: (1) If the Adjusted Gross Recovery is obtained before any deposition is taken by any party in the Visteon Patent Lawsuits, then the Debtors will pay Alston & Bird, as fees for services, 20% of the Adjusted Gross Recovery. (2) If the Adjusted Recovery is obtained after any deposition is taken by any party in the Visteon Patent Lawsuits, but before the close of discovery, then the Debtors will pay Alston & Bird, as fees and services, 30% of the Adjusted Gross Recovery. (3) If the Adjusted Gross Recovery is obtained any time after the beginning of trial in the Visteon Patent Lawsuits, then the Debtors will pay Alston & Bird, as fees for services, 40% of the Adjusted Gross Recovery. (B) Alston and Bird agrees to credit the Debtors, against the prepetition fees already paid by the Debtors. (C) It is also a condition of employment and portion of the compensation to which Alston & Bird will be entitled to that a related compromise and settlement is approved by the Court for the waiver and release of any claim for recovery of any transfer for any of the prepetition compensation paid to Alston & Bird for work performed before the Petition Date. Gross Recovery will include all items of value received by the Debtors as a result of the Visteon Patent Lawsuit prosecuted by Alston & Bird. The Debtors also intend to reimburse Alston & Bird for 50% of certain actual and necessary expenses incurred by the firm. The remaining 50% of the expenses will be borne by Alston & Bird. All expenses borne by the Debtors and Alston & Bird will be recouped out of any recovery. The Debtors have paid Alston & Bird $294,354 for professional services performed incurred during the 90-day period prior to the Petition Date. William M. Atkinson, Esq., at Alston & Bird LL, in Charlotte, North Carolina, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. A full-text copy of Alston & Bird's Engagement Agreement is available for free at: http://bankrupt.com/misc/Visteon_A&BEngagement.pdf About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The Company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon 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: Proposes to Settle Avoidance Claims vs. Alston ------------------------------------------------------------ In the months leading up to the Petition Date, the Debtors hired Alston & Bird LLP to advise them concerning the scope of their GPS Patent portfolio and to begin certain suggested enforcement efforts. Those efforts, the Debtors note, were the result of an hourly engagement and led to the identification of several entities in need of a license from them. As a result of those efforts, the Debtors say it paid Alston & Bird $294,354 in fees and expenses, which amount may be claimed to be avoidable transfers. Since Alston & Bird's enforcement efforts are not yet complete, the Debtors seek the Court's authority to engage Alston & Bird to continue to work on a contingent fee basis. According to the Debtors, Alston & Bird has agreed to represent them and to give credit against the agreed upon contingency fee equal to the prepetition fees and expenses, so long as all of the Debtors' claims against the prepetition fees and expenses are released. In exchange for Alston & Bird representing the Debtors on a contingent fee basis and giving the Debtors a credit against any fees owing totaling $294,354, the Debtors and their representatives waive, release, resolve, compromise and settle any and all claims arising under Chapter 5 of the Bankruptcy Code in connection with the amounts paid prior to the Petition Date. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The Company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon 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) WAVE SYSTEMS: June 30 Balance Sheet Upside-Down by $5.69 Million ---------------------------------------------------------------- Wave Systems Corp.'s balance sheet at June 30, 2009, showed total assets of $2.85 million and total liabilities of $8.54 million, resulting in a stockholders' deficit of about $5.69 million. For three months ended June 30, 2009, the Company posted a net loss of $343,752 compared with a net loss of $5.63 million for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $1.86 million compared with a net loss of $11.64 million for the same period. Going Concern Doubt Wave has incurred substantial operating losses since its inception, and as of June 30, 2009, has an accumulated deficit of $346.55 million. Wave is expecting to incur an operating loss for the calendar year 2009. As of June 30, 2009, Wave had negative working capital of $5,902,916. Wave has begun market introduction of its security and broadband media distribution software products and has signed initial distribution contracts for these applications. However, due to the early stage nature of this market, it is unlikely that Wave will generate sufficient revenue to cover all of its cash flow needs to fund its operating requirements for the twelve-months ending June 30, 2010. Wave projects that it has enough liquid assets to continue operating through February 2010. Wave estimates that it will need a minimum of approximately $2,000,000 of additional cash from a combination of revenue growth, expense reductions and additional financings, to fund operating expenses and capital expenditures for the twelve-months ending June 30, 2010. If Wave is not successful in raising the needed capital, or is not successful in executing its business plan, Wave could be forced to cease operations or merge with or sell its business to another company. No assurance can be provided that any of these initiatives will be successful. Due to Wave's current cash position, its capital needs over the next year and beyond, the fact that Wave has not at this time secured enough financing to fund operations through June 30, 2010, and beyond, and the uncertainty as to whether Wave will achieve its sales forecast for its products and services, substantial doubt exists with respect to Wave's ability to continue as a going concern. A full-text copy of the Company's Form 10-Q is avaialble for free at http://ResearchArchives.com/t/s?4207 About Wave Systems Headquartered in Lee, Massachusetts, Wave Systems Corp. (Nasdaq: WAVX) -- http://www.wave.com/-- provides software to help solve critical enterprise PC security challenges such as strong authentication, data protection, network access control and the management of these enterprise functions. WCI COMMUNITIES: Proposes Chetrit as Lead Bidder for Pompano Condo ------------------------------------------------------------------ Dawn McCarty at Bloomberg News reports that WCI Communities Inc. is seeking approval from the U.S. Bankruptcy Court for the District of Delaware to hold a Sept. 22 auction for the sale of a Pompano Beach, Florida, condominium complex. The Company has selected Chetrit Group LLC, which has offered $46.7 million, as lead bidder at the auction. WCI said the subject property was up for sale for several months and it received at least 15 written bids from interested buyers. After reviewing all offers, the Company has determined that Chetrit currently has the best offer for the property. The Court will consider approval of the proposed sale process on September 2. Headquartered in Bonita Springs, Florida, WCI Communities, Inc. (Pink Sheets: WCIMQ) -- http://www.wcicommunities.com/-- is a fully integrated homebuilding and real estate services company with more than 50 years' experience in the design, construction and operation of leisure-oriented, amenity rich master-planned communities. It has operations in Florida, New York, New Jersey, Connecticut, Virginia and Maryland. The Company directly employs approximately 1,170 people, as well as approximately 1,800 sales representatives as independent contractors. The Company and 126 of its affiliates filed for Chapter 11 protection on August 4, 2008 (Bankr. D. Del. Lead Case No. 08-11643 through 08-11770). On July 1, 2009, debtor-affiliates WCI 2009 Corporation, WCI 2009 Management, LLC and WCI 2009 Asset Holding, LLC filed separate Chapter 11 petitions (Case Nos. from 09-12269 to 09-12271). Thomas E. Lauria, Esq., Frank L. Eaton, Esq., and Linda M. Leali, Esq., at White & Case LLP, in Miami, Florida, represent the Debtors as counsel. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Fox Rothschild LLP, represent the Debtors as Delaware counsel. Lazard Freres & Co. LLC is the Debtors' financial advisor. Epiq Bankruptcy Solutions LLC is the claims and notice agent for the Debtors. The U.S. Trustee for Region 3 appointed five creditors to serve on an official committee of unsecured creditors. Daniel H. Golden, Esq., Lisa Beckerman, Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP; and Laura Davis Jones, Esq., Michael R. Seidl, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the committee in these cases. When the Debtors filed for protection from their creditors, they listed total assets of $2,178,179,000 and total debts of $1,915,034,000. WILLIAMS COAL: Has Distributable Income of $1.68MM for Q2 --------------------------------------------------------- Williams Coal Seam Gas Royalty Trust filed with the Securities and Exchange its financial statements for the three-month and six- month periods ended June 30, 2009, which was prepared by Bank of America, N.A., as Trustee of the Trust. The Trust disclosed distributable income of $1,687,693 for three months ended June 30, 2009, and income of $3,605,529 for six months ended June 30, 2009. In the opinion of the Trustee, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the assets, liabilities and trust corpus of the Trust as of June 30, 2009, the distributable income for the three-month and six-month periods ended June 30, 2009 and 2008, and the changes in trust corpus for the six-month periods ended June 30, 2009 and 2008, have been included. The distributable income for the interim periods is not necessarily indicative of the distributable income for the full year. The Trust said that there is substantial doubt regarding the Trust's ability to continue as a going concern. The Trust added that the computed value could be negatively impacted by future revisions to the underlying reserve estimates. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?4209 On March 12, 2009, Ernst & Young LLP in Tulsa, Oklahoma expressed substantial doubt about the Trust's ability to continue as a going concern after auditing the Company's financial statements for the fiscal years ended Dec. 31, 2008, and 2007. The auditor noted that the 2009 commodity price outlook and the resulting possible impact on the termination events pursuant to the terms of the Trust Agreement. About Williams Coal Seam Gas Williams Coal Seam Gas Royalty Trust (NYSE:WTU) was formed to acquire and hold certain net profits interests in proved natural gas properties located in the San Juan Basin of New Mexico and Colorado owned by Williams Production Company. The assets of the Trust, other than cash and cash equivalents held for the payment of expenses and liabilities and for distribution to Unitholders, are the Royalty Interests. The Royalty Interests consist primarily of a net profits interest in the Underlying Properties. The NPI generally entitles the Trust to receive 60% of the NPI Net Proceeds attributable to gas produced and sold from WPC's net revenue interests in the properties, in which WPC has a working interest and the revenue stream received by WPC attributable to its 35% net profits interest in 5,348 gross acres in La Plata County, Colorado. YRC WORLDWIDE: S&P Affirms 'CCC' Corporate Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'CCC' long-term corporate credit rating on YRC Worldwide Inc. S&P also removed the ratings from CreditWatch, where S&P had placed them with negative implications on April 24, 2009. YRCW employees represented by the IBT have ratified amendments to its existing labor agreement, which include a 5% further wage reduction and an 18-month suspension of union pension fund contributions. The pension contributions will not accrue during this period. YRCW estimates these modifications will generate about $45 million in monthly savings in 2009 and $50 million in 2010. For the quarter ended June 30, YRCW reported revenues of $1.3 billion, down 45% versus 2008 and pretax losses of $369 million. Pricing, as measured by total revenue per hundredweight, was down substantially in the YRC National and YRC Regional segments, largely due to lower fuel surcharge revenues. The company also recorded a goodwill impairment charge related to its Shanghai Jiayu Logistics acquisition, which it completed in August 2008. The outlook is negative. "We expect recent modifications to the company's labor agreement to result in marginal cost savings and asset sales to generate modest cash flow," said Standard & Poor's credit analyst Anita Ogbara. Still, customer attrition, weak tonnage, and a competitive less-than-truckload pricing environment will continue to constrain YRCW's earnings and cash flow. "We could lower the ratings if its liquidity position deteriorates further due to covenant concerns and access to capital becomes further constrained," she continued. S&P is unlikely to revise the outlook to stable in the near term. * Chinese Auto Suppliers Likely to Emerge as Global Consolidators ----------------------------------------------------------------- PRTM is releasing the findings from its global study of more than 350 automotive suppliers to determine the winners and losers in the consolidation of the automotive supply industry. Chinese and the largest global European suppliers scored highest on PRTM's global buyer scale, indicating these suppliers will likely buy other suppliers that are distressed, as a result of the global automotive industry downturn. For instance, Guangzhou Automotive Components, a division of the highly profitable 51% state-owned automobile manufacturer Guangzhou Automobile Industry Group Co. in Guangzhou, China, and Weichai Power Co., a state- owned diesel-engine manufacturer in Weifang, China, appear on PRTM's global top 10 buyer list. Guangzhou already has an active M&A history in buying automotive assemblers and suppliers. The South Chinese company is also a joint-venture partner of Toyota Motor Corp. and Honda Motor Co. in China. Weichai Power and Toyota Keiretsu suppliers, such as Denso Corp., Toyota Boshoku Corp. and Aisin Seiki Co., are also on the top 10 buyer list, along with large, global European suppliers like ZF Friedrichshafen AG, SKF Group, and BASF AG. However, Dietmar Ostermann, global lead director for PRTM's automotive industry practice and author of this study, adds: "Despite the fact that Toyota Keiretsu suppliers show very well as potential buyers in our study and have the financial strength and capability to be a consolidator, we don't expect them to be very busy with M&A activities. It is counter-cultural to Toyota, and I expect they will continue to grow organically or engage in joint ventures." Only one U.S. supplier, PPG Industries, Inc., appears on the top 10 global buyer list. PPG, located in Pittsburgh, Pa., is a glass and paint manufacturer that serves the auto industry, but is also highly diversified into several other industry sectors. PRTM predicts that several of the remaining 31 largest global North American suppliers are most likely headed for bankruptcy or buy- out. Earlier this year, Lear Corp., Metaldyne Corp. and Visteon Corp., among others, filed for Chapter 11 bankruptcy protection. Other prominent U.S. auto suppliers, such as American Axle & Manufacturing Holdings, Inc., a large General Motors Co. axle and drive shaft supplier, could follow suit, predicts PRTM. Interestingly, in North America, the risk of failure is higher for the 31 largest global 100 suppliers than the next largest 30 suppliers. "This is, in part, because the large, global North American suppliers have been under more intense scrutiny from auto manufacturers, and several of them are tied to Chrysler and General Motors," says Ostermann. The intensity of bankruptcies and consolidation is anticipated to be strongest in the chassis (brakes, steering, axles, suspensions, etc.) and electrical/electronics (wire harnesses, switches, door systems, etc.). Chassis systems are usually capital investment- intensive and, thus, more impacted by volume declines, whereas electronic systems represent the future of the vehicle industry and many suppliers are trying to add electronic capabilities to their respective automotive systems. In fact, PRTM studied the accelerating pace of the most recent 122 supplier bankruptcies and found that a significant number were chassis system suppliers, such as Metaldyne, Hayes Lemmerz International, Inc., Contech and J.L. French. "Pair that with the relatively unconsolidated supply base with over 120 chassis suppliers of relevant size globally and the fact that this segment has the largest number of strong potential buyers and weak potential bankruptcy candidates, and it tells you that the M&A pressure will be highest in chassis systems," Ostermann says. The study covered 357 global suppliers from North America, Europe, South America, China, India, Japan and South Korea and was conducted by a global PRTM team between February and July 2009. It evaluates more than 20 financial and qualitative criteria, such as cash flow and ownership structure. For the complete findings or to schedule a discussion with a PRTM automotive expert, contact Danielle Bernier at dbernier@prtm.com or +1 781.434.1206. Since 1976, PRTM has created a competitive advantage for its clients by changing the way companies operate. PRTM's management consultants work with senior executives to develop and implement innovative operational strategies that deliver breakthrough results. The firm is a leader in operational strategy, supply chain, product development, and customer value management. PRTM has 18 offices worldwide and serves major industry and global public sectors. * Farm Values Rebound in Central U.S., Kansas City Fed Says ----------------------------------------------------------- Farmland values and credit conditions are improving as investors show interest in rural properties, Bloomberg reported, citing the Kansas City Federal Reserve Bank. Land values in the bank's region, which covers parts of seven central and western U.S. states, are steady to higher than a year ago, the bank said Aug. 14. A majority of farmers surveyed by the Kansas City Fed said farmland values will stay stable in the next few months. Farmland prices in the U.S. averaged $2,100 an acre at the start of 2009, down 3.2% from a year earlier, the first decline since 1987. * Station Casinos, Cooper-Standard Led Bankruptcies Since Mid-July ------------------------------------------------------------------ Two mega cases were filed since mid-July 2009: -- casino operator Station Casinos Inc., with $5,725,001,325 in total assets and $6,482,637,653 in total debts. -- auto parts maker Cooper-Standard Holdings Inc. and its 12 affiliates, with $1,733,017,000 in total assets and $1,785,039,000 in total debts; and The number of bankruptcy filings by companies with assets exceeding $1 billion has increased to 17 since April 16. Real estate developer Opus West Corp., with $1,275,334,000 in total assets and $1,462,328,000 in debts as of May 31; and car parts maker Lear Corp., which reported $1,270,800,000 in total assets and $4,536,000,000 in total debts, filed for bankruptcy during the 30-day period ended July 15. During the 30-day period ended June 15, seven companies with assets exceeding $1 billion, filed for bankruptcy, led by automaker General Motors and amusement park operator Six Flags. During the 30-day period ended May 15, six companies with assets exceeding $1 billion sought bankruptcy protection, led by Chrysler LLC, the U.S.'s third largest auto manufacturer, mall owner General Growth Properties, mortgage lender Thornburg Mortgage, and wheels maker Hayes Lemmerz. Total Total Petition Bankruptcy Assets Debts Company Date Court ($ in MM) ($ in MM) ------- -------- ---------- --------- --------- AbitibiBowater 04/16/09 Delaware $9,900 $8,700 General Growth 04/16/09 Manhattan $29,500 $27,200 Source Interlink 04/27/09 Delaware $2,400 $1,900 Chrysler LLC 04/30/09 Manhattan $39,300 $55,200 Thornburg Mortgage 05/01/09 Maryland $24,400 $24,700 Hayes Lemmerz 05/11/09 Delaware $1,300 $1,400 ION Media 05/19/09 Manhattan $1,855 $1,936 Visteon 05/28/09 Delaware $4,577 $5,324 General Motors 06/01/09 Manhattan $82,290 $172,810 Fontainebleau 06/09/09 S. Florida More Than More than Las Vegas $1 Bil. $1 Bil. Crescent Resources 06/10/09 W. Texas More Than More than $1 Bil. $1 Bil. Six Flags 06/13/09 Delaware $2,907 $3,432 Extended Stay 06/15/09 Manhattan $7,100 $7,600 Opus West Corp. 07/06/09 N. Texas $1,275 $1,462 Lear Corp 07/07/09 Manhattan $1,271 $4,536 Station Casinos 07/28/09 Nevada $5,725 $6,482 Cooper-Standard 08/04/09 Delaware $1,733 $1,785 Lehman Brothers Holding Corp. remains the biggest corporate bust in history. Lehman, which filed in 2008, had $639,000,000,000 in total assets and $613,000,000,000 in total debts at that time of its filing. General Motors is the biggest bankruptcy of 2009, thus far. Of the 17 mega cases filed since April 15, six cases went to Delaware and another six cases went to Southern District of New York in Manhattan. (A) Station Casinos Station Casinos Inc., based in Las Vegas, and 17 affiliates commenced prepackaged bankruptcy proceedings before the U.S. Bankruptcy Court for the District of Nevada on July 28, 2009. Judge Gregg W. Zive handles the cases. Station Casinos 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 owns and operates: (i) Palace Station, (ii) Boulder Station, (iii) Texas Station, (iv) Sunset Station, (v) Santa Fe Station Hotel & Casino, (vi) Red Rock, (vii) Fiesta Rancho Casino Hotel, (viii) Fiesta Henderson Casino Hotel, (ix) Wild Wild West, (x) Wildfire Casino, (xi) Wildfire Casino - Boulder Highway, formerly known as Magic Star Casino, (xii) Gold Rush Casino, and (xiii) Lake Mead Casino. Paul S Aronzon, Esq.; Thomas R Kreller, Esq.; Samir Parikh, Esq.; and Adam Moses, Esq., at Milbank, Tweed, Hadley & McCloy LLP in Los Angeles, serve as bankruptcy counsel. Bruce Thomas Beesley, Esq., and Laury Macauley, Esq., at Lewis and Roca LLP, in Reno, serve as local counsel. Lazard Freres & Co. LLC are the investment bankers. Kurtzman Carson Consultants LLC are the claims agent. Pursuant to an agreement with the Company's senior secured lenders, none of the Company's casino operating subsidiaries or affiliates were included in the Chapter 11 filings. When it filed for bankruptcy, the Company had in place an agreement with its senior secured lenders that permits it to borrow, as needed, up to $150 million of cash from one of its non-operating subsidiaries. Station Casinos engaged in extensive restructuring efforts for more than 10 months prior to filing for bankruptcy. Tamara Audi at The Wall Street Journal said Station Casinos filed for bankruptcy after failing to reach a prearranged agreement with its lenders. According to WSJ, bondholders hold $2.3 billion of Station Casinos' $5.7 billion debt. WSJ notes that the lack of an agreement with bondholders could mean a long haul in bankruptcy court, but Station Casinos Chief Accounting Officer Tom Friel said that "all the lenders are on board" with the move to file. According to WSJ, Mr. Friel said that after months of talks, "we feel it's helpful to have the formal court process to resolve some of the issues." On February 23, 2009 Boyd Gaming made a $950 million offer to acquire a significant portion of Station Casinos. The offer was to purchase 14 of the 18 casinos owned and operated by Station in the Las Vegas area. Station would only retain four Station casinos: Palace, Boulder, Sunset and Red Rock casinos. Boyd expressed an interest in continued discussion to acquire some of the final four properties. (B) Cooper-Standard Cooper-Standard Automotive Inc., headquartered in Novi, Mich., is a global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Holdings Inc., f/k/a CSA Acquisition Corp., and 12 affiliates sought chapter 11 creditor protection on August 4 before the U.S. Bankruptcy Court for the District of Delaware. Judge Peter J. Walsh handles the cases. Canadian subsidiary, Cooper-Standard Automotive Canada Limited, has also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Gary L. Kaplan, Esq., Richard Slivinski, Esq., and Peter B. Siroka, Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP, in New York; and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Chun I. Jang, Esq., at Richards, Layton & Finger PA in Wilmington, serve as counsel. Alvarez & Marsal are the financial advisors. Lazard Freres & Co. are the investment bankers. Kurtzman Carson Consultants LLC are the claims agent. Certain of the Company's current lenders agreed to provide the Company with up to US$175 million in debtor-in-possession (DIP) financing -- consisting of a US$175 million superpriority delayed draw term loan facility plus a US$25 million standby uncommitted single draw term loan facility. Cypress Group and Goldman Sachs Capital Partners Funds bought Cooper-Standard in 2004 for US$1,165,000,000 in cash. To finance the acquisition, the Company accessed US$125 million of revolving credit, and term loan facilities aggregating US$350 million. Cooper-Standard also amassed debt in connection with its 2006 purchase of fluid handling businesses in North America, Europe and China from ITT Industries Inc. for approximately US$202 million; and a 2007 deal to buy nine Metzeler Automotive Profile Systems sealing operations in Germany, Italy, Poland, Belarus, Belgium, and a joint venture interest in China from Automotive Sealing Systems S.A. Allen J. Campbell, vice president and CFO of Cooper-Standard, said, "The current and unprecedented global economic crisis has had a crushing effect on the automotive industry and ultimately the Company's business." Automotive sales in the U.S. have declined significantly in 2008 and 2009. "Restructuring the Company's balance sheet to align with the new automotive marketplace is the right decision at the right time," said James S. McElya, Chairman and Chief Executive Officer of Cooper-Standard. Notable Filers During the past 30 days, two chapter 11 cases involving companies with assets between $100 million and $500 million were filed -- Arclin US Holdings Inc., CommerceConnect Media Holdings, Inc., and ProtoStar Ltd. A fourth case, Meridian Automotive Systems, Inc., went straight to chapter 7 liquidation. In contrast, during the past 30 day ended mid-July, there was a rise in bankruptcy filings among companies with assets between $100 million and $500 million. There were 16 filers the past 30 days compared to 10 during the 30-day period ended June 15. Jeweller Finlay Enterprises Inc. was the lone chapter 11 case involving assets between $500 million and $1 billion that was filed since mid-July. * CSC Launches Bankruptcy Tracking Service to Help Limit Losses --------------------------------------------------------------- As the number of bankruptcies surge to record heights, banks, and financial institutions are searching for ways to protect themselves and suppress their losses. Corporation Service Company has launched Bankruptcy Tracker that sends companies nearly- instant notification if one of their customers has filed for bankruptcy. With this new service from CSC, financial institutions can receive prompt notice of relevant bankruptcy filings. This advance notice enables them to respond to proof of claim filing and other deadlines, and to assertively monitor and protect their interests. According to the American Bankruptcy Institute, the number of consumer bankruptcies reached the highest mark since the fall of 2005. In July alone, 126,434 bankruptcies were filed, representing a 34% increase over July of 2007 and an 8% increase over June's filings. It is no surprise that businesses are also failing at a record pace. In the first quarter, 14,319 businesses filed for bankruptcy protection, representing the most active quarter in more than 15 years. With CSC's new Bankruptcy Tracking service, banks can monitor their debtors and receive notification if one files in any bankruptcy court. When a bankruptcy is filed against a lender's debtor, CSC will send a prompt email alert with key information about the filing. With this information, banks can act quickly to ensure their losses are minimized or altogether prevented. "When it comes to dealing with a debtor's bankruptcy, any delay in responding can be costly. Too often, notices of bankruptcy are not routed to the correct person in time to properly respond," said Mark Rosser Vice President with CSC. "With this new service from CSC, financial institutions can receive prompt notice of relevant bankruptcy filings. This advance notice enables them to respond to proof of claim filing and other deadlines, and to assertively monitor and protect their interests." About CSC Corporation Service Company -- http://www.cscglobal.com-- is a privately owned service organization that provides matter management, corporate compliance, and trustee services for companies and law firms worldwide; domain name management and brand identity protection services for top global brands; and due diligence and transactional services for the world's largest financial institutions. CSC has more than 1,000 employees located throughout North America and Europe and is one of the largest registered agent service providers in the United States. * Ellsworth Joins Kurtzman as Part of Administar Consolidation -------------------------------------------------------------- Kurtzman Carson Consultants LLC said Owen Ellsworth has joined KCC as a corporate restructuring services consultant. Mr. Ellsworth brings extensive experience in corporate bankruptcy and finance to his new role, contributing to the professional-level expertise of KCC's consulting staff. Mr. Ellworth's move to KCC signals the latest progression in the firm's consolidation of Administar's bankruptcy practice, which is also owned by financial services provider Computershare. The integration of KCC and Administar bankruptcy practice began in June 2009 to maximize synergies of the two groups. "We are delighted that Owen has decided to join the KCC team and welcome the industry expertise and knowledge that he brings," said Eric Kurtzman, KCC's CEO and Co-Founder. "His addition to KCC's growing restructuring services department represents another step in our efforts to consolidate Administar's bankruptcy practice under the KCC umbrella, as we move forward in combining the strengths and efficiencies of both companies." In his former position at Administar, Mr. Ellsworth participated in Chapter 11 client engagements such as Allied Holdings, JHT Holdings Inc. and Nutritional Sourcing Corporation. Previously, Mr. Ellsworth was responsible for strategy and product management for JPMorgan Chase Bank's Bankruptcy and Settlement Services Group, as well as financial management at Chase Manhattan Bank. An active member of the American Bankruptcy Institute and Turnaround Management Association, Mr. Ellsworth earned a Bachelor of Science degree in Applied Economics and Business Management from Cornell University in New York. In the past year, KCC's staff expanded by 150% to remain ahead of the growing demand for claims and noticing services driven by the recent rise of Chapter 11 filings. KCC continues to expand its infrastructure and operational capacity in anticipation of continued Chapter 11 filings due to the current economic lull. KCC's growing roster of clients includes Cooper-Standard Holdings, Charter Communications, General Growth Properties, Lear Corporation, Six Flags, Visteon, among many others. About KCC Founded in 2001, Kurtzman Carson Consultants LLC, a Computershare company, is a claims and noticing agent providing administrative- support services and technology solutions to companies undergoing corporate restructuring. With offices in Los Angeles, New York and Memphis, KCC has established a reputation for industry expertise, highly responsive client service and industry-leading technologies. Corporate America's industry leaders have relied on KCC for their business-critical data management needs. A pioneer of web-based technology for the legal and financial markets, KCC has been recognized for its innovative business model, company growth and industry leadership. * Former Greenberg Taurig Shareholder Joins Alston & Bird --------------------------------------------------------- Alston & Bird LLP reported that John Weiss, a former shareholder at Greenberg Traurig, LLP, has joined Alston & Bird's New York office as a partner, adding to the firm a wealth of experience in helping clients reorganize and restructure their businesses, and navigate complex bankruptcy proceedings. "John has been a trusted advisor to clients facing some of their toughest decisions," said Richard R. Hays, managing partner of Alston & Bird. "His expertise strengthens our firm's position as a partner that clients can rely on to help them steer through the unprecedented challenges facing businesses today." Prior to joining Greenberg Traurig, Mr. Weiss was an associate in Latham & Watkins' bankruptcy group in New York. Before Latham & Watkins, Mr. Weiss began his career as an associate at Duane Morris in Wilmington, Delaware. Mr. Weiss specializes in business reorganization, restructuring and bankruptcy law. In bankruptcy proceedings, he has represented debtors, official and unofficial committees, secured creditors, unsecured creditors, defendants in avoidance actions, lessors and lessees of both real and personal property and professional service firms. Mr. Weiss received a B.A. from Ohio State University in 1996, and his law degree from Dickinson School of Law in 2000. He was named Top Bankruptcy Lawyer, based on number of active assignments, by The Deal in November, 2006, and co-authored "A New World Order: How Hedge Funds Have Changed the Playing Field for Corporate Directors" for the New York Law Journal in March, 2008. Mr. Weiss is the third bankruptcy partner in Alston & Bird's New York office, and the ninth bankruptcy partner in the firm overall. About Alston & Bird With more than 900 attorneys, Alston & Bird -- http://www.alston.com/-- is a national AmLaw 100 firm. The firm's core practice areas are intellectual property, complex litigation, corporate and tax, with national industry focuses in health care, energy, financial services, and public policy. The firm has appeared on FORTUNE magazine's ranking of the "100 Best Companies to Work For" 10 years in a row, more often than any other law firm in the United States. The firm has offices in Atlanta, Charlotte, Dallas, Los Angeles, New York, Research Triangle Park, N.C., Silicon Valley, Ventura County, and Washington, D.C. * Margolis and Marcum to Join Forces Effective September 1 ---------------------------------------------------------- The members of Margolis & Company P.C., a regional certified public accounting and business consulting firm in the Philadelphia area, will join New York-based Marcum LLP September 1, 2009. Marcum will now operate from the former Margolis & Company offices in Bala Cynwyd (Philadelphia) and Newtown, Pennsylvania. Established in 1960, Margolis & Company serves the financial needs of middle-market, entrepreneurial, closely-held and publicly owned businesses and high-net-worth individuals in the greater Philadelphia area. In addition, the Firm has strong service niches in distributorships, real estate, not-for-profit, medical practices, and serves smaller, publicly-held entities. Marcum, one of the Top 20 accounting and advisory services firms in the country, has strong service niches in SEC registrants, alternative investment partnerships, family office services, bankruptcies and receiverships and services for the government and public sector. "With our combined strengths and shared commitment to exceptional service, we can now offer our clients even greater resources across multiple disciplines," said Jeffrey M. Weiner, Managing Partner of Marcum and Chairman/CEO of the Marcum Group. The entire 70 plus Margolis team will join Marcum. Effective with this transaction, Marcum will have more than 800 professionals, including 101 Partners, in 12 locations in New York, New Jersey, Connecticut, Pennsylvania, Florida and Grand Cayman. "Joining with a firm the size and quality of Marcum is a tremendous benefit for our clients," said David H. Glusman, who will serve as Managing Partner of Marcum's Philadelphia office. "This was a strategic decision that positions us to greatly enhance the range of services we can provide to our clients while taking our firm to the next stage in its development." For more than 50 years, Marcum LLP has provided traditional audit and tax services and a wide range of specialized advisory services. Marcum is a member of the Marcum Group, the gateway to a group of organizations that provide a variety of professional services including accounting and advisory, technology solutions, recruiting, wealth management and marketing and design. These organizations include Marcum Rosenfarb LLC; MarcumRachlin, a division of Marcum LLP; M&K Financial Services LLC; Marcum Search LLC; Marcum Technology LLC; M&K Investment Advisers LLP; and Rachlin Design. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total Total holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ -------- ------- ABSOLUTE SOFTWRE ABT CN 107 (7) 24 ACCO BRANDS CORP ABD US 1,100 (107) 135 AETERNA ZENTARIS AEZ CN 117 3 43 AFC ENTERPRISES AFCE US 131 (33) 2 AMR CORP AMR US 24,138 (3,000) (3,129) ARBITRON INC ARB US 220 0 2 ARRAY BIOPHARMA ARRY US 108 (54) 31 ARVINMERITOR INC ARM US 2,627 (846) 3 AUTOZONE INC AZO US 5,296 (45) (527) BIOSPECIFICS TEC BSTC US 12 6 9 BLOUNT INTL BLT US 474 (36) 151 BOARDWALK REAL E BEI-U CN 2,377 (22) N.A. BOARDWALK REAL E BOWFF US 2,377 (22) N.A. BP PRUD BAY-RTU BPT US 9 8 0 BURCON NUTRASCIE BU CN 4 3 2 CABLEVISION SYS CVC US 9,307 (5,284) (198) CARDTRONICS INC CATM US 468 (10) (50) CENTENNIAL COMM CYCL US 1,455 (948) 180 CENVEO INC CVO US 1,459 (231) 186 CHENIERE ENERGY CQP US 1,920 (436) 27 CHENIERE ENERGY LNG US 2,785 (364) 184 CHOICE HOTELS CHH US 357 (141) (22) CINCINNATI BELL CBB US 2,009 (623) (19) CLOROX CO CLX US 4,576 (175) (757) DEXCOM DXCM US 65 1 37 DISH NETWORK-A DISH US 7,265 (1,519) (240) DOMINO'S PIZZA DPZ US 461 (1,372) 113 DUN & BRADSTREET DNB US 1,623 (719) (147) DYAX CORP DYAX US 68 (37) 32 EASTMAN KODAK EK US 7,105 (109) 1,100 EINSTEIN NOAH RE BAGL US 150 (4) (47) ELECTRO-OPTICAL MELA US 8 7 6 ENERGY COMPOSITE ENCC US 0 0 0 ENGLISH LANGUAGE ELLG US 2 1 1 EPICEPT CORP EPCT SS 16 (3) 7 EXELIXIS INC EXEL US 333 (123) 29 EXTENDICARE REAL EXE-U CN 1,719 (38) 111 FORD MOTOR CO F US 204,327 (9,418) (39,573) FORD MOTOR CO F BB 204,327 (9,418) (39,573) FX ENERGY INC FXEN US 40 7 4 GENCORP INC GY US 1,015 1 (8) GLG PARTNERS INC GLG US 494 (271) 166 GLG PARTNERS-UTS GLG/U US 494 (271) 166 GOLD RESOURCE CO GORO US 9 9 7 HAYDEN HALL INC HYDN US 1 (5) (6) HEALTHSOUTH CORP HLS US 1,888 (662) (77) HERMAN MILLER MLHR US 767 8 167 HUMAN GENOME SCI HGSI US 670 (55) 117 IMAX CORP IMX CN 270 (18) 55 IMAX CORP IMAX US 270 (18) 55 IMMUNOMEDICS INC IMMU US 59 0 7 IMS HEALTH INC RX US 2,030 (22) 318 INCYTE CORP INCY US 159 (291) 101 INSULET CORP PODD US 99 (3) 63 INTERMUNE INC ITMN US 165 (80) 98 IPCS INC IPCS US 553 (34) 68 ISTA PHARMACEUTI ISTA US 72 (78) 24 JAZZ PHARMACEUTI JAZZ US 108 (88) (17) JUST ENERGY INCO JE-U CN 457 (652) (369) KNOLOGY INC KNOL US 639 (44) 37 LIN TV CORP-CL A TVL US 781 (187) 14 LINEAR TECH CORP LLTC US 1,421 (266) 963 LOGMEIN INC LOGM US 47 7 1 MANNKIND CORP MNKD US 267 (19) 0 MAP PHARMACEUTIC MAPP US 65 1 24 MAXLIFE FUND COR MXFD US 0 0 0 MEAD JOHNSON-A MJN US 1,707 (897) 380 MEDIACOM COMM-A MCCC US 3,707 (426) (265) MODAVOX INC MDVX US 5 3 (1) MOODY'S CORP MCO US 1,873 (749) (404) NATIONAL CINEMED NCMI US 603 (499) 91 NAVISTAR INTL NAV US 9,656 (1,447) 1,784 NPS PHARM INC NPSP US 144 (219) 80 OCH-ZIFF CAPIT-A OZM US 1,854 (157) N.A. ONCOGENEX PHARMA OGXI US 7 3 4 OSIRIS THERAPEUT OSIR US 129 2 64 OTELCO INC-IDS OTT US 349 9 24 OTELCO INC-IDS OTT-U CN 349 9 24 OVERSTOCK.COM OSTK US 129 (3) 33 PALM INC PALM US 643 (108) 11 PDL BIOPHARMA IN PDLI US 217 (306) 140 PERMIAN BASIN PBT US 10 0 9 PETROALGAE INC PALG US 5 (23) (7) POTLATCH CORP PCH US 916 0 N.A. QWEST COMMUNICAT Q US 20,226 (1,051) 260 REGAL ENTERTAI-A RGC US 2,647 (228) (40) RENAISSANCE LEA RLRN US 58 0 (6) REVLON INC-A REV US 797 (1,074) 87 SALLY BEAUTY HOL SBH US 1,464 (645) 420 SANDRIDGE ENERGY SD US 2,364 (91) 114 SEMGROUP ENERGY SGLP US 354 (128) 31 SIGA TECH INC SIGA US 8 (13) (4) SONIC CORP SONC US 828 (22) 75 STANDARD PARKING STAN US 230 4 (13) STEREOTAXIS INC STXS US 43 (10) (3) SUCCESSFACTORS I SFSF US 165 (5) 1 SUN COMMUNITIES SUI US 1,192 (81) N.A. SYNERGY PHARMACE SGYP US 0 (1) (1) TALBOTS INC TLB US 999 (184) (28) TAUBMAN CENTERS TCO US 2,858 (184) N.A. TENNECO INC TEN US 2,767 (289) 240 THERAVANCE THRX US 206 (263) 144 UAL CORP UAUA US 18,805 (159) (2,345) UNITED RENTALS URI US 3,918 (2,628) 316 US AIRWAYS GROUP LCC US 7,857 (46) (548) VECTOR GROUP LTD VGR US 757 (336) 158 VENOCO INC VQ US 725 2 (3) VERIFONE HOLDING PAY IT 843 (165) 299 VERIFONE HOLDING PAY US 843 (14) 299 VERIFONE HOLDING VF2 GR 843 (14) 299 VIRGIN MOBILE-A VM US 320 (14) (126) WARNER MUSIC GRO WMG US 3,988 (256) (680) WEIGHT WATCHERS WTW US 1,085 (142) (309) WR GRACE & CO GRA US 3,815 (142) 977 ZYMOGENETICS INC ZGEN US 271 (792) 85 ********* 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 **