/raid1/www/Hosts/bankrupt/TCR_Public/090821.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, August 21, 2009, Vol. 13, No. 231
Headlines
58 E. OAK: MDE Partners to Conduct Sept 1 Auction of Collateral
ACCESS PHARMACEUTICALS: Posts $2.2MM Net Loss for June 30 Quarter
ACCURIDE CORP: Deutsche Bank Replaces Citicorp as Loan Agent
ACCURIDE CORP: Sun Capital Appoints Michael Alger to Board
ADVANCE FOOD: S&P Changes Outlook to Stable; Affirms 'B' Rating
AFFINIA GROUP: S&P Changes Outlook to Stable, Affirms 'B' Rating
AFFINITY GROUP: Nonpayment of Interest Cues S&P's 'D' Rating
AGT CRUNCH: Competing Bids for Grand & Wabash Club Due Sept. 2
ALPHA SECURITY: Stockholders Approve Plan of Liquidation
AMERICAN CAPITAL: Has $547MM Loss in Q2; Continues Covenant Breach
AMERICAN INT'L: Treasury Dept. OKs CEO's $7-Mil. Annual Salary
AMERICAN INT'L: Names Jay Wintrob as Retirement Services Prez, CEO
AMERICAN INT'L: Says Lawsuit on Madoff Losses Without Merit
ANTHONY MONTALBANO: Case Summary 20 Largest Unsecured Creditors
ASARCO LLC: Grupo Mexico Amends Plan to Provide $2.2BB Offer
ASARCO LLC: Modifies Plan to Provide Hiked Sterlite Offer
ASARCO LLC: Voting Results on Parent & Sterlite Plans Released
ASSOCIATED MATERIALS: Swings to $4.39MM Net Loss in 1st Half 2009
BALLY TOTAL: Court Confirms Second Reorganization Plan
BALLY TOTAL: Files Supplements to Reorganization Plan
BASSETT FURNITURE: To Restate 10-Q Report; Seek Covenant Waivers
BEAZER HOMES: S&P Raises Corporate Credit Rating to 'CCC'
BEECH TREE: Case Summary & 20 Largest Unsecured Creditors
BERNARD MADOFF: Cohmad Seeks to Move Lawsuit to District Court
BERNARD MADOFF: Picard Says Two Offshore Firms Ignored Suits
BEST ENERGY: Inks Amendment & Waiver to PNC Bank Credit Agreement
BIOPURE CORP: To Pay $600,000 to "Deceived" Investors
BOSCOV'S INC: Ballots for Joint Plan Due August 28
BOSTON CHICKEN: ACE Insurance Agrees to Pay $17 Million
BOYD GAMING: S&P Affirms Corporate Credit Rating at 'BB-'
BUDGET FINANCE: Case Summary & 20 Largest Unsecured Creditors
CABI DOWNTOWN: Files for Chapter 11 Bankruptcy Protection
CARTERET ARMS LLC: Case Summary & 20 Largest Unsecured Creditors
CCS MEDICAL: Wins Court Nod to Send Plan to Creditors for Voting
CHIYODA AMERICA: Files Chapter 11, Pre-Negotiated Plan
CRUCIBLE MATERIALS: Mortgages Invalid, Creditors Committee Says
CHIYODA AMERICA: Case Summary & 20 Largest Unsecured Creditors
CHRIS NUNEZ: Voluntary Chapter 11 Case Summary
CLEARPOINT BUSINESS: Has "Going Concern" Doubt in Form 10-Q
DAVITA INC: Fitch Affirms Issuer Default Rating at 'BB-'
DEL MONTE: Fitch Affirms Long-Term Issuer Default Rating at 'BB'
DELFASCO INC: Bankr. Court Won't Handle Environmental Dispute
EACO CORP: Balance Sheet Upside-Down by $3.8-Mil. as of July 1
EARL JONES CONSULTING: Owner Is Personally Bankrupt
EMCORE CORP: $122.5 Million Net Loss Cues Going Concern Doubt
EMPIRE RESORTS: Inks Investment Agreement with Kien Huat Realty
EMPIRE RESORTS: Discloses Going Concern Doubt Due to Notes Dispute
ENERGYCONNECT GROUP: Reports $601,000 Net Income in Q2
ESI TRACTEBEL: Moody's Upgrades Ratings on Senior Bonds From 'Ba1'
EXCO RESOURCES: S&P Raises Corporate Credit Rating to 'B+'
FIRSTFED FINANCIAL: Capital Ratios Below "Well Capitalized" Levels
FREDDIE MAC: New CEO to Get $700,000 Base Salary
FREDDIE MAC: Cut in Gov't Aid to Affect Access to Debt Markets
FORD MOTOR: Working With Union and Suppliers to Hike Production
GENERAL MOTORS: Creditors' Committee Launches Bankruptcy Web Site
GENERAL MOTORS: Board to Meet Today to Discuss Opel Bids
GENERAL MOTORS: BNYMTC Wants MTCC Named Indenture Trustee
GENERAL MOTORS: Creditors Committee Proposes FTI as Fin'l Advisor
GENERAL MOTORS: Deals With Treasury to Cover Foreign Subsidiaries
GENERAL MOTORS: Inks Stock Purchase Pact for SAAB Sale
GENERAL MOTORS: Old GM Files Interim Financial Report
GENERAL MOTORS: Remy Int'l Wants Probe on 1994 Agreement
GLOBAL CHARTER: Case Summary 20 Largest Unsecured Creditors
GRAY TELEVISION: S&P Downgrades Corporate Credit Rating to 'CCC'
GUARANTY LIFE: AM Best Downgrades Financial Strength to 'B'
HALCYON HOLDING: In Court Battle on Loan Default, Files for Ch. 11
HURON CONSULTING: Completes Restatement of 2006-2009 Financials
JL FRENCH: Court Sets September 10 General Claims Bar Date
JOHN WHITNEY: Proposes Friedman Law as Bankruptcy Counsel
JOHN WHITNEY: Meeting of Creditors Scheduled for September 3
JOHNNY REESE: Case Summary & 16 Largest Unsecured Creditors
JOSEPH DENNIS DOWNS: Case Summary & 20 Largest Unsecured Creditors
JOSEPH JOHN: Case Summary & 20 Largest Unsecured Creditors
KATHY COX: Fox to Withhold $1MM Prize Pending Creditors' Deal
KIRK CORP: Plan Confirmation Hearing Set for September 2
LEHMAN BROTHERS: Ended, Transferred $1.04-Bil. in Loans in July
LEHMAN BROTHERS: De Minimis Assets Disposed of as of Aug. 14
LEHMAN BROTHERS: Proposes Settlement with Units on Loans Sale
LEHMAN BROTHERS: Wants Probe of Pinnancle & CHFA on Swaps
LEHMAN BROTHERS: Gets Court Nod for Amended MRA With Aurora Bank
LIFE SCIENCES: Faces Oakland Class Action on Lion Holdings Merger
LIFE SCIENCES: Posts Lower Net Income of $6.3MM for Q2 2009
MEDIACOM COMMUNICATIONS: Fitch Corrects Senior Ratings to 'BB'
MERIDIAN RESOURCE: Posts $1MM Net Loss in Quarter Ended June 30
METROMEDIA STEAKHOUSES: May Exit Chapter 11 in September
MICHAEL COMPANIES: Case Summary & 20 Largest Unsecured Creditors
MIDWAY GAMES: Gets Court Nod to Sell Interests in Foreign Units
MIDWAY GAMES: Court Approves Sale of Remaining Assets to THQ
MILLWORK SPECIALTIES: Case Summary & 20 Largest Unsec. Creditors
MIKE YOUNG: Shuts Down Operations Pending Bankr. Court Action
MOVIE GALLERY: Plan Admin.'s Notice to Disallow Settled Claims
MOVIE GALLERY: Plan Admin.'s Notice to Expunge Superseded Claims
MOVIE GALLERY: Toskes Get Stay Relief to Pursue PI Action
MOVIE GALLERY: Trustee Gets Feb. 12 Extension for Claim Objections
MTR GAMING: Earns $352,000 in Q2; Maturity of $130MM Notes Looms
MXENERGY HOLDINGS: Inks Amendment to Societe Generale Credit Pact
NELSON HERNANDEZ: Case Summary & 20 Largest Unsecured Creditors
NEW TOWNE: Court Rejects Plan's Non-Debtor Releases & Injunctions
NEWPORT TELEVISION: S&P Raises Corporate Credit Rating to 'B-'
OAKLEY DOKLEY: Case Summary & 1 Largest Unsecured Creditor
OCALA FUNDING: Moody's Cuts Ratings on Subordinated Notes to 'B3'
OXBOW CARBON: S&P Puts 'B+' Corp. Rating on CreditWatch Positive
PATRICK CARDEN: Case Summary & 5 Largest Unsecured Creditors
PHILADELPHIA NEWSPAPERS: Files Insider-Backed Chapter 11 Plan
PHILADELPHIA NEWSPAPERS: Court Doubts Probe on Recorded Meeting
PROLIANCE INTERNATIONAL: Can Employ Jones Day as Counsel
PROLIANCE INTERNATIONAL: Hires Van Doorne as Special Counsel
PROPEX INC: Files Liquidating Trust Agreement With E. Davis
PROPEX INC: IRS Wants Plan Language on Injunction Stricken
PROPEX INC: Resolves ACE Objections to Pacts Assumption
PROTOSTAR LTD: Bankruptcy Court OKs Auction of Satellite Units
QUEST ENERGY: Records $101-Mil. Net Loss for 1H of 2009
QUEST RESOURCE: To Run Out of Cash to Pay Expenses After Sept. 15
RANDALL WANSER: Case Summary & 20 Largest Unsecured Creditors
READER'S DIGEST: Nearly 80% of Secured Lenders Agree to Plan
RED HILL: Case Summary & 3 Largest Unsecured Creditors
ROGER GARDNER: Case Summary & 20 Largest Unsecured Creditors
SCOTTISH RE: Moody's Downgrades Insurance Strength Rating to 'B2'
SENTINEL MANAGEMENT: Liquidating Trustee Can't Pursue Claims
SILVER CLUB: Max Baer Mulls Purchase, Reopening of Hotel-Casino
SIRIUS XM: To Raise $257 Million by Issuing Senior Notes Due 2015
SK FOODS: Ex-VP to Cooperate in Govt. Probe on Inflating Prices
SKYPOWER CORP: Voluntary Chapter 11 Case Summary
STATION CASINOS: Schedules Deadline Moved to September 22
STATION CASINOS: Proposes Odyssey as Advisors to Board Committee
STATION CASINOS: Proposes FTI Consulting as Fin'l Advisor
STATION CASINOS: Proposes Squire Sanders as Committee Board Atty
STATION CASINOS: CMBS Units Propose FTI as Financial Advisor
STATION CASINOS: CMBS Units Propose GD&C as Special Counsel
STERLING MINING: Regains Possession of Sunshine Mine
SURFECT HOLDINGS: Decides to Liquidate Under Chapter 7
TOR MINERALS: Needs Capital from New Lender to Keep Going Concern
TRIBUNE CO: Finalizing Deal to Sell Cubs to Rickets Family
TRIPLE CROWN: Amends Second Lien Senior Secured Credit Agreement
TRONOX INC: Anadarko & Kerr-McGee Want Case Dismissed
TRONOX INC: Barroway Topaz Files Shareholders Class Action
TRONOX INC: Delays Filing Of Q2 Financial Results
TRONOX INC: Has Many Potential Buyers of Assets, ICIS Says
TRONOX INC: Mt. Canaan's Wants Lift Stay to Complete Litigation
UBS AG: Inks Settlement Pact With IRS Regarding Summons
UCI HOLDCO: Moody's Confirms Corporate Family Rating at 'Caa1'
UDR INC: Sweetens Tender Offer, Moves Deadline to Improve Turnout
UNIFI INC: Inks Change of Control Agreements with Executives
UTGR INC: Must Provide More Financial Info to Greyhound Assoc.
VALENCE TECHNOLOGY: Has $6.1MM Net Loss for June 30 Quarter
WEST CORP: Lenders Agree to Amendment of Credit Agreement
WESTWAY GROUP: Going Concern Doubt Removed After Merger Closed
WOLVERINE TUBE: Posts $18.3 Million Net Loss for First Half 2009
XENIA RURAL: S&P Downgrades Ratings on 2006 Water Bonds to 'BB'
* Cash for Clunkers Ends, New Dealer Stimulus Program Begins
* Bankruptcy Filings by Private Equity-Backed Firms Increase
* Former FDIC Chair Isaac Says Bank Failures Likely to Continue
* S&P Says Junk Bond Defaults $453 Billion, Exceed 2008 Total
* Chanin's Covington to Lead Kibel Green's Restructuring Team
* Manju Gupta Joins McDonald Hopkins' Cleveland Office
* BOOK REVIEW: Dangerous Pursuits - Mergers and Acquisitions in
the Age of Wall Street
*********
58 E. OAK: MDE Partners to Conduct Sept 1 Auction of Collateral
---------------------------------------------------------------
MDE Partners, LLC, will conduct a public sale on Tuesday,
September 1, 2009, at 10:00 a.m., at the offices of Horwood Marcus
& Berk Chartered, 180 North LaSalle Street, Suite 3700, Chicago,
Illinois 60601, without reserve of all right, title and interest
of Esquire Venture LLC, an Illinois limited liability company
(Pledgor), in and to:
(a) 100% of the membership interests of 58 E. Oak, LLC, an
Illinois limited liability company ("Borrower");
(b) any and all of the distributions and dividends received,
receivable, or otherwise distributed to Esquire Venture LLC
on account of the membership interests; and
(c) all products and proceeds of any of the foregoing
collateral.
The sale is being held in connection with the outstanding
indebtedness of 58 E. Oak, LLC, to MDE Partners, LLC, in the
amount of not less than $2,900,000.
58 E. Oak, LLC, is the owner of the real property commonly known
as 58-104 E. Oak Street, Chicago, Illinois. The property consists
of an 18,388 square foot or 0.422 acre site. The western part of
the site is the Esquire Theater building and the eastern part of
the site is developed with a 3-story building with retail tenants.
The lender makes no representation as to the collateral.
All questions and inquiries concerning the sale should be
addressed to:
Scott A. Josephson
Horwood Marcus & Berk Chartered
180 North LaSalle Street, Suite 3700
Chicago, Illinois 60601
Tel: (312) 606-3200
ACCESS PHARMACEUTICALS: Posts $2.2MM Net Loss for June 30 Quarter
-----------------------------------------------------------------
Access Pharmaceuticals, Inc., narrowed its net loss to $2,208,000
for the three months ended June 30, 2009, from net loss of
$13,261,000 for the same period a year ago.
For the six months ended June 30, 2009, the Company posted net
loss of $4,297,000 from net loss of $25,314,000 for the same
period a year ago.
As of June 30, 2009, the Company had $2,351,000 in total assets
and $16,177,000 in total liabilities, resulting in $13,826,000
stockholders' deficit.
Access Pharmaceuticals funded its operations primarily through
private sales of common stock, preferred stock, convertible notes
and through licensing agreements. Its principal source of
liquidity is cash and cash equivalents. Licensing fees provided
some funding for operations during the quarter ended June 30,
2009. As of June 30, 2009, its cash and cash equivalents were
$1,231,000 and its net cash burn rate for the six months ended
June 30, 2009, was roughly $241,000 per month. As of June 30,
2009, its working capital deficit was $5,842,000. Its working
capital deficit at June 30, 2009 represented an increase of
$1,187,000 as compared to its working capital deficit as of
December 31, 2008, of $4,655,000. The increase in the working
capital deficit at June 30, 2009 reflects milestone payments from
licensing agreements offset by operating expenses which included
manufacturing product scale-up for its new ProLindac trial and
MacroChem expenses. As of June 30, 2009, it had one convertible
note outstanding in the principle amount of $5.5 million which is
due September 13, 2011.
After the quarter closed Access Pharmaceuticals received
$1,000,000 in license receipts from an existing license agreement.
Its cash balance at August 12, 2009, was $1,553,000.
As of June 30, 2009, the Company did not have enough capital to
achieve its long-term goals. "If we raise additional funds by
selling equity securities, the relative equity ownership of our
existing investors would be diluted and the new investors could
obtain terms more favorable than previous investors. A failure to
obtain necessary additional capital in the future could jeopardize
our operations," Access Pharmaceuticals said.
"We have generally incurred negative cash flows from operations
since inception, and have expended, and expect to continue to
expend in the future, substantial funds to complete our planned
product development efforts. Since inception, our expenses have
significantly exceeded revenues, resulting in an accumulated
deficit as of June 30, 2009 of $241,226,000. We expect that our
capital resources will be adequate to fund our current level of
operations into the first quarter of 2010. However, our ability
to fund operations over this time could change significantly
depending upon changes to future operational funding obligations
or capital expenditures. As a result we may be required to seek
additional financing sources within the next twelve months. We
cannot assure you that we will ever be able to generate
significant product revenue or achieve or sustain profitability.
"In order to conserve cash for the operations of Access,
management, employees and consultants reduced their monthly
stipends. Some consultants also agreed to take common stock and
warrants for their services.
"Since our inception, we have devoted our resources primarily to
fund our research and development programs. We have been
unprofitable since inception and to date have received limited
revenues from the sale of products. We cannot assure [] that we
will be able to generate sufficient product revenues to attain
profitability on a sustained basis or at all. We expect to incur
losses for the next several years as we continue to invest in
product research and development, preclinical studies, clinical
trials and regulatory compliance," Access Pharmaceuticals said.
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?425d
About Access Pharmaceuticals
Headquartered in Dallas, Texas, Access Pharmaceuticals Inc.
(OTC BB: ACCP.OB) -- http://accesspharma.com/-- is an emerging
biopharmaceutical company developing products for use in the
treatment of cancer, the supportive care of cancer, and other
disease states. The Company's product for the management of oral
mucositis, MuGard(TM) has received marketing clearance by the FDA
as a device. The Company's lead clinical development program for
the drug candidate ProLindac(TM) is in Phase II clinical testing.
Access also has advanced drug delivery technologies including
Cobalamin(TM) mediated oral drug delivery and targeted delivery.
Going Concern Doubt
On March 31, 2008, Whitley Penn LLP, in Dallas, expressed
substantial doubt about Access Pharmaceuticals Inc.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the year ended Dec. 31,
2007, and 2006. The auditing firm pointed to the company's
recurring losses from operations, negative cash flows from
operating activities and an accumulated deficit.
ACCURIDE CORP: Deutsche Bank Replaces Citicorp as Loan Agent
------------------------------------------------------------
Accuride Corporation on August 14, 2009, entered into a Third
Amendment and Consent to the Fourth Amended and Restated Credit
Agreement and First Amendment to the Amended and Restated
Guarantee and Collateral Agreement with respect to its Fourth
Amended and Restated Credit Agreement, dated as of January 31,
2005, with Accuride Canada Inc., the subsidiaries of the Company
party thereto, the lenders from time to time party thereto,
Citicorp USA, Inc., the administrative agent for the Lenders, and
the other agents party thereto.
The Third Amendment provides for the resignation of Citicorp as
administrative agent and the appointment by the Lenders of
Deutsche Bank Trust Company Americas to serve as administrative
agent. In connection with the Third Amendment, the Company also
entered into various documents which transfer the agency and
rights with respect to the collateral to the Credit Agreement from
Citicorp to Deutsche.
An affiliate of Sun Capital Securities Group, LLC is one of the
lenders that approved the Third Amendment. Sun Capital and its
affiliates hold roughly 32.2% of the Company's common stock on a
fully diluted basis and benefit from certain corporate governance
rights.
Second Temporary Waiver Period
As reported by the Troubled Company Reporter on August 20, 2009,
the Company and the Lenders entered into a Second Temporary Waiver
Agreement. The Lenders have agreed to continue to waive the
Company's non-compliance with the financial covenants under the
Credit Agreement for the fiscal quarter ended June 30, 2009, as
described in the First Temporary Waiver Agreement filed on July 9,
2009, for the duration of the Second Temporary Waiver Period. In
addition, the Lenders have agreed to waive any default under the
Credit Agreement if the Company fails to make the interest payment
due and owing on August 1, 2009 to the holders of the Company's
8-1/2% Senior Subordinated Notes due 2015.
The "Second Temporary Waiver Period" terminates on September 7,
2009 unless terminated earlier as the result of, among other
things: (i) an event of default under the Credit Agreement that is
not a Scheduled Default or an Additional Default, (ii) payment by
the Company of the Senior Subordinated Notes Interest Payment, or
(iii) the failure by the Company or the subsidiary guarantors to
comply with the terms and provisions of the Second Temporary
Waiver. The Second Temporary Waiver Period may be extended to
September 15 if the Company obtains a temporary waiver or
forbearance, in form and substance reasonably satisfactory to
Deutsche and the Lender Steering Committee, from the holders of
the Senior Subordinated Notes within five business days following
the expiration of any grace period applicable to any default under
the Senior Subordinated Notes as a result of the Company's failure
to make the Senior Subordinated Notes Interest Payment.
Under the Second Temporary Waiver: (i) interest on advances and
all outstanding obligations under the Credit Agreement will accrue
at an annual rate of 2.0% plus the otherwise applicable rate
during the Second Temporary Waiver Period, (ii) the Company and
its subsidiaries must comply with certain restrictions on
incurring additional debt, making investments and selling assets
and (iii) the Company must comply with specified minimum liquidity
requirements.
An affiliate of Sun Capital is one of the lenders that approved
the Second Temporary Waiver.
Strategic Alternatives
Accuride is proactively evaluating strategic alternatives to
address ongoing liquidity and financing concerns, including
amendments and additional waivers to the Credit Agreement, the
sale of non-core assets or alternative debt structures. The
Company expects to use the Second Temporary Waiver Period to
continue working toward implementing one or more of these
strategic alternatives, and views the Second Temporary Waiver as
an additional step in a broader transaction with its lenders,
although the nature and parameters of this transaction are not yet
defined.
Under the Second Temporary Waiver, if requested by the
administrative agent for the Lenders or the Lender Steering
Committee that has been formed to represent the Lenders in their
negotiations with the Company, the Company will provide the
administrative agent, the Steering Committee and their respective
advisors with weekly updates regarding the ongoing financial
performance, operations and liquidity of the Company and its
subsidiaries, and the progress toward a proposal for an amendment
to or restructuring of the obligations under the Credit Agreement
and the Senior Subordinated Notes. There can be no assurance,
however, that the Company's proposal to the Lenders, or any other
strategic alternative, will be implemented prior to the expiration
of the Second Temporary Waiver Period, in which case an event of
default would likely occur under the Credit Agreement. The
occurrence of an event of default under the Credit Agreement would
permit the Lenders to restrict the Company's access to available
cash, and possibly result in the acceleration of the Company's
obligations under the Credit Agreement and the acceleration of
debt under other debt agreements that may contain cross-
acceleration or cross-default provisions.
About Accuride
Accuride Corporation -- http://www.accuridecorp.com/-- is one of
the largest and most diversified manufacturers and suppliers of
commercial vehicle components in North America. Accuride's
products include commercial vehicle wheels, wheel-end components
and assemblies, truck body and chassis parts, seating assemblies
and other commercial vehicle components. Accuride's products are
marketed under its brand names, which include Accuride, Gunite,
Imperial, Bostrom, Fabco, Brillion, and Highway Original.
ACCURIDE CORP: Sun Capital Appoints Michael Alger to Board
----------------------------------------------------------
Accuride Corporation reports that following the August 6, 2009
resignation by Douglas C. Werking from his position as a member of
the Board of Directors of the Company, on August 13, the Board
appointed Michael E. Alger as a director.
Accuride says Mr. Alger was nominated as a candidate to the Board
by Sun Accuride Debt Investments, LLC, an affiliate of Sun Capital
Partners and the holder of the sole outstanding share of the
Company's Series A Preferred Stock. Pursuant to the Company's
Certificate of Designation of Series A Preferred Stock, the Series
A Stockholder has the sole right to nominate a candidate for
consideration by the Board to fill the vacancy created by Mr.
Werking's resignation.
Sun Capital and its affiliates hold approximately 32.2% of the
Company's common stock on a fully diluted basis and benefit from
certain corporate governance rights.
Mr. Alger, a Vice President at Sun Capital Partners, has over 28
years of experience in senior finance and operations management
roles. Prior to joining Sun Capital Partners in 2007, Mr. Alger
served as the CFO of Indalex Aluminum Solutions from 2000 to 2007.
Before serving as CFO of Indalex, Mr. Alger served as Vice
President of Finance for Favorite Brands and as CFO for Jel Sert
and Olds Products. Prior to that, Mr. Alger held a number of
senior finance positions with Kraft General Foods and Baxter
International and he started his career as an auditor with Price
Waterhouse. Mr. Alger received a Bachelor of Science degree in
Accounting from the University of Illinois, a Masters in
Management in Finance from Northwestern University and is also a
certified public accountant.
Mr. Alger is an officer of Sun Capital Partners, Inc.
Additionally, Mr. Alger is an officer and director of numerous
affiliates of Sun Capital Partners, Inc., none of which are
affiliated with the Company or registered investment companies
under the Investment Company Act of 1940.
Mr. Werking is one of five directors nominated and elected by Sun
Accuride Debt Investments.
About Accuride
Accuride Corporation -- http://www.accuridecorp.com/-- is one of
the largest and most diversified manufacturers and suppliers of
commercial vehicle components in North America. Accuride's
products include commercial vehicle wheels, wheel-end components
and assemblies, truck body and chassis parts, seating assemblies
and other commercial vehicle components. Accuride's products are
marketed under its brand names, which include Accuride, Gunite,
Imperial, Bostrom, Fabco, Brillion, and Highway Original.
ADVANCE FOOD: S&P Changes Outlook to Stable; Affirms 'B' Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it revised its
outlook on Enid, Oklahoma-based Advance Food Co. Inc. to stable
from negative. At the same time, S&P affirmed its rating on the
company, including the 'B' corporate credit rating.
"The outlook revision reflects the company's improved liquidity
because of an improved cushion on the company's first- and second-
lien debt to EBITDA covenants," said Standard & Poor's credit
analyst Christopher Johnson. "The EBITDA cushion is now more than
20% primarily because of better operating performance." Covenant
defined EBITDA for the trailing 12 months ended June 20, 2009,
improved by almost 40% from its recent low at fiscal year end
2008, when profitability was negatively affected by higher raw
material costs and operating inefficiencies related to delays in
the launch of the company's new manufacturing facilities.
The ratings on Advance Food reflect the company's highly leveraged
capital structure and aggressive financial policies. Advance
Food's high customer concentration and narrow product focus
contribute to its vulnerable business risk position, despite its
leading positions in certain beef-based products serving the
foodservice industry and existing long-term relationships with its
distributors.
Advance Food develops, manufactures, and markets processed food
items, including meat products and ready-to-serve nonmeat
products. Although Advance Food sells most of its products
through its network of third-party distributors, the company also
develops and markets its products to meet specific end-user
requirements. Restaurants represent a majority of the company's
end users, which include independent restaurants, in addition to
regional and national chains. The company is a modest player in
the estimated $450 billion U.S. food-prepared-away-from-home
market. This market includes many larger, vertically integrated
processors of meat such as Tyson Foods Inc. (BB/Negative/--).
The stable outlook reflects S&P's belief that the company's
liquidity position will remain adequate given S&P's expectations
that covenant cushion will stay higher than 20% over the next
year. In addition, the company's credit measures have
significantly improved after consecutive quarters of double digit
year-on-year EBITDA growth following last year's completion of
the company's new manufacturing facilities. S&P could consider
revising the outlook to positive if the company sustains adjusted
debt to EBITDA of 4x or less, and FFO to total debt remains higher
than 15%. S&P believes this could occur if the company maintains
adjusted EBITDA margins of at least 10% while generating
negligible sales growth in what S&P expects to be a continued
difficult demand environment in the foodservice industry.
Alternatively, S&P would consider revising the outlook to negative
if operating performance were to significantly deteriorate due to
a more severe fall off in industry demand, or from significant
margin compression due to a run up in raw material prices, thereby
pressuring the EBITDA cushion on the company's leverage covenant.
AFFINIA GROUP: S&P Changes Outlook to Stable, Affirms 'B' Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said it has revised its outlook
on Affinia Group Inc. to stable from negative and affirmed its 'B'
corporate credit rating and other ratings.
"The outlook revision follows Affinia's refinancing of its secured
debt, which in S&P's view improved the company's liquidity by
eliminating restrictive financial covenants," said Standard &
Poor's credit analyst Gregg Lemos Stein. The company issued
$225 million in new senior secured notes due 2016 and obtained a
$315 million asset-based lending revolving credit facility due
2013. This enabled the company to replace a smaller, $125 million
revolving credit facility, a senior secured term loan with
$287 million outstanding, and a $100 million accounts receivable
facility. The previous secured credit agreement contained a
leverage covenant that severely limited the amount the company
could borrow under its revolving credit facility. The refinancing
also extended the company's long-term debt maturities, as the
previous revolving credit facility was due in 2010 and the term
loan in 2011.
Affinia's debt increased by about $25 million as a result of the
transactions, but in S&P's view, leverage remains consistent with
S&P's expectations for the 'B' corporate credit rating. The
ratings on Ann Arbor, Mich.-based Affinia reflect the company's
highly leveraged balance sheet and participation in the intensely
competitive auto aftermarket components industry. These
weaknesses more than offset Affinia's fair geographic diversity
and improving profitability resulting from a multi-year
restructuring program, which is now largely complete and remains
on target for projected cost savings.
Nearly all of Affinia's sales come from supplying parts to the
replacement aftermarket, so the company is not exposed to the
volatile and declining production schedules of the U.S.-based
automakers. However, the auto aftermarket is price-sensitive and
vulnerable to substitution by low-cost imports, as well as to
fluctuations in consumer demand. Volatile raw material costs are
also a risk, although recent declines in key commodity prices may
alleviate this pressure for the near term.
Industry growth is sluggish, and S&P's ratings reflect the
assumption that this will remain the case for the rest of 2009 and
much of 2010 because of the weak U.S. economy. Demand for
Affinia's products is also correlated with miles driven, which is
susceptible to higher fuel prices and has been weak for the past
year and a half. According to the Federal Highway Administration,
miles driven through the first five months of 2009 were down 0.8%
year over year, or 9.9 billion vehicle miles. There were signs of
stabilization in this measure in April and May 2009, the most
recent months for which data is available.
To address the threat of foreign competition and eliminate excess
manufacturing capacity, Affinia has closed numerous plants in
North America and Europe while increasing production and
outsourcing to lower-labor-cost countries such as China, India,
Mexico, and Ukraine. A key factor is the company's ability to
maintain pricing amid lower manufacturing costs and high
competition. The outlook is stable. S&P could revise the outlook
to negative or lower the rating if free operating cash flow turns
substantially negative in the second half of 2009 despite the
positive effect of seasonality. S&P would also consider lowering
the rating if leverage increases substantially to more than 6x,
including S&P's adjustments, from about 5.1x as of June 30, 2009,
pro forma for the refinancing. In S&P's view, this could occur if
the year-over-year gross margin improvement Affinia accomplished
in the first half of 2009 reverses itself in the second half of
the year or in 2010, and sales remain flat compared to recent
quarters.
An upgrade is unlikely during the next year because of weak
economic conditions in the U.S. and Western Europe, but it could
be triggered in the long term by leverage declining significantly
to 4.5x or better, coupled with a sustainable improvement in free
operating cash flow that allows for permanent debt reduction.
AFFINITY GROUP: Nonpayment of Interest Cues S&P's 'D' Rating
------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its ratings on
Ventura, California-based direct marketing company Affinity Group
Holding Inc. and its operating subsidiary Affinity Group Inc.
S&P lowered the corporate credit rating to 'D' from 'CCC'. S&P
also lowered the issue-level rating on AGHI's 10.875% senior to
'D' from 'CC'. The recovery rating on this debt remains unchanged
at '5', indicating S&P's expectation of modest (10%-30%) recovery
for noteholders in the event of a payment default.
In addition, S&P lowered the issue-level ratings on Affinity Group
Inc.'s senior secured credit facilities to 'CC' from 'B-'. The
recovery rating on the revolver and first-lien term loan remain
unchanged at '1', indicating S&P's expectation of very high (90%-
100%) recovery for lenders.
S&P also lowered the rating on Affinity Group Inc.'s 9% senior
subordinated notes due 2012 to 'C' from 'CCC-', while leaving the
recovery rating on this debt unchanged at '6', indicating S&P's
expectation of negligible (0%-10%) recovery in the event of a
payment default.
"The corporate credit rating action, as well as the issue-level
rating downgrades, reflects Affinity Group's failure to make the
Aug. 15, 2009, interest payment on the 10.875% senior notes,"
explained Standard & Poor's credit analyst Tulip Lim. The company
has a grace period of 30 days to cure the default. During the
grace period, Affinity intends to discuss with bondholders
possible alternative capital structures after a possible cash
equity investment now under negotiation, including the exchange of
the notes for new securities, which result in bondholders
receiving less than par value.
"While a payment default has not occurred according to the legal
provisions of the 10.875% notes," said Ms. Lim, "we view an
interest or principal payment lapse as a default, even if a grace
period exists, in the event that the nonpayment is a function of
the borrower being under financial stress and when S&P is not
confident that the payment will be made in full during the grace
period." S&P has taken this view because bondholders will be
receiving less than par value for the notes and because of the
company's highly leveraged financial profile, weak operating
outlook, and limited liquidity given the near-term maturity of its
senior credit facility.
AGT CRUNCH: Competing Bids for Grand & Wabash Club Due Sept. 2
--------------------------------------------------------------
AGT Crunch Acquisition LLC and its affiliates seek approval from
the U.S. Bankruptcy Court for the Southern District of New York
for the sale of assets relating to their fitness center located at
38 East Grand Avenue, Chicago, Illinois 60661, pursuant to an
Asset Purchase Agreement between Fitness Formula CF Contracts,
LLC, as buyer, and debtor Crunch CFI GW, LLC, as seller.
In connection with the sale, the Debtors also ask the Court to
authorize the assumption and assignment of the membership
agreements and personal training agreements of the members of the
Grand & Wabash Club.
At the August 10, 2009 hearing to consider the sale of
substantially all of their assets to CH Fitness Investors, LLC,
their insider first lien lender, the Debtors explained that CH
Fitness was not interested in acquiring or operating certain of
the Debtors' clubs, which include the Grand & Wabash Club.
Accordingly, the Debtors excluded the Grand & Wabash Club from the
asset purchase agreement with CH Fitness. When the Debtors close
this sale, however, they will only have a limited timeframe and
limited funds available to liquidate their estate in an orderly,
value-maximizing manner under the terms of their postpetition
financing facility.
The Debtors have been unable to find a potential purchaser willing
to acquire the Grand & Wabash Club's lease on terms agreeable to
the lessor and a potential purchaser. Accordingly, the Debtors
filed a motion to reject the underlying lease for the Grand &
Wabash Club. However, to maximize value for the Debtors' estates,
and to minimize the potential claims from the members of the Grand
& Wabash Club if it were to be closed outright, the Debtors have
entered into the Agreement for the sale of membership agreements
with Fitness Formula.
Under the Agreement, Fitness Formula would acquire substantially
all of the membership agreements for the Grand & Wabash Club and
honor commitments for personal training contracts. The Buyer has
represented to the Debtors that it will transfer these members to
a "Fitness Formula" club near the Grand & Wabash Club.
The proposed Sale is subject to higher and better offers, and the
Debtors and their financial advisor will continue to market the
Grand & Wabash Club. The Debtors ask the Court to consider
September 2 as the deadline for bids. They will seek approval of
the sale on September 8. An auction will be conducted if bids are
received.
Under the Agreement, the Buyer would (i) purchase from the Seller
all of the Seller's right, title, and interest in and to certain
of the assets utilized in the operation of the Grand & Wabash
Club, including accounts receivable and sales data and
information, and (ii) assume and honor the terms of membership
agreements and personal training agreements of all members of the
Grand & Wabash Club.
Subject to certain offsets or adjustments permitted by the
Agreement, the Buyer will pay to the Seller a "Purchase Price"
equal to $50,000, with 85% of the Purchase Price allocated to the
purchase of the Membership Agreements and 15% of the Purchase
Price allocated to the purchase of all other Assets.
As reported by the TCR on August 12, AGT Crunch obtained Judge
Robert Gerber's approval to sell its high-end fitness clubs, named
Fitness Crunch, to insider Angelo, Gordon & Co., after a
settlement that calls for the buyer to pay more money to
creditors. AGT Crunch reached an agreement to sell its business
to CH Fitness Investors LLC -- an entity formed by New Evolution
Fitness Company and certain investing affiliates of Angelo Gordon
-- for a credit bid of as much as $40 million. The credit bid
would be comprised of debt on the DIP loan as well as a portion of
the $56.7 million Crunch owes on a pre-bankruptcy secured loan
from CH Fitness.
About AGT Crunch
AGT Crunch Acquisition Co. and its affiliates ran and operated the
Crunch Fitness chain of 19 high-end fitness clubs. The clubs,
with 73,000 members, are located in New York, Chicago, Los Angeles
and Rock Creek, Maryland. New York-based AGT Crunch Acquisition
LLC and its affiliates filed for Chapter 11 on May 6, 2009 (Bankr.
S.D.N.Y. Lead Case No. 09-12889). Davin J. Hall, Esq., at Dechert
LLP, represents the Debtors in their restructuring efforts. Diana
G. Adams, the U.S. Trustee for Region 2, appointed seven creditors
to serve on the official committee of unsecured creditors.
The petition listed assets of $104 million against $102 million in
total liabilities. Debt includes $56.7 million on a first-lien
loan now mostly owned by Angelo Gordon affiliates. There is a
second-lien debt for another $22.7 million.
ALPHA SECURITY: Stockholders Approve Plan of Liquidation
--------------------------------------------------------
Alpha Security Group Corporation said its stockholders voted at
its special meeting held on August 20, 2009, to approve a plan of
liquidation for the Company.
The Company's board of directors expects that the trustee of the
Company's trust account will shortly make a final liquidating
distribution of the trust account in the approximate amount of
$10.00 per share of common stock issued in the Company's initial
public offering, payable upon presentation, to the holders of such
shares. Stockholders whose stock is held in "street name" through
a broker will automatically receive payment through the Depository
Trust Company. No payments will be made with respect to any of
the Company's outstanding warrants or to the shares owned by the
Company's initial stockholders that were owned prior to the
Company's initial public offering.
Alpha Security Group Corporation (NYSE Alternext US: HDS) is a
special purpose acquisition corporation formed for the purpose of
effecting a merger, capital stock exchange, asset acquisition or
other similar business combination with an unidentified operating
business.
AMERICAN CAPITAL: Has $547MM Loss in Q2; Continues Covenant Breach
------------------------------------------------------------------
American Capital Ltd. posted a net loss of $547.00 million for
three months ended June 30, 2009, compared with a net loss of
$70.00 million for the same period in 2008.
For six months ended June 30, 2009, the Company posted a net loss
of $1.09 billion compared with a net loss of 883.00 million for
the same period in 2008.
At June 30, 2009, the Company's balance sheet showed total assets
of $6.62 billion, total liabilities of $4.73 billion and
shareholders' equity of $1.89 billion.
The Company related that for the year ended Dec. 31, 2008, Ernst &
Young LLP expressed substantial doubt about its ability to
continue as a going concern as a result of being in breach of
certain financial covenants under its unsecured borrowing
arrangements. The breach of these financial covenants was due to
the significant decrease in its shareholders' equity as a result
of net unrealized depreciation on its portfolio investments during
2008.
As of June 30, 2009, the Company said it continued to be in breach
of these financial covenants on $2.3 billion of unsecured
borrowing arrangements. As a result, during the continuance of
these events of defaults, the lenders and note holders under the
borrowing arrangements may declare all borrowings outstanding
under their respective arrangements to be immediately due and
payable after any applicable notice periods.
A full-text copy of the Company's Form 10-Q is available for free
at http://ResearchArchives.com/t/s?423d
American Capital Ltd. is a publicly traded mezzanine and buyout
shop based in Maryland.
AMERICAN INT'L: Treasury Dept. OKs CEO's $7-Mil. Annual Salary
--------------------------------------------------------------
Lavonne Kuykendall at The Wall Street Journal reports that Kenneth
Feinberg, the Treasury Department's special master for executive
compensation for institutions that received bailouts, has approved
the incoming American International Group Inc. president and CEO
Robert Benmosche's salary of $7 million per year, plus annual
long-term incentive awards of as much as $3.5 million.
As reported by the Troubled Company Reporter on August 19, 2009,
AIG, on August 16, 2009, entered into an agreement with
Mr. Benmosche establishing his compensation as President and CEO
of the Company. Under the agreement, Mr. Benmosche will receive
an annual salary of $7 million, consisting of $3 million in cash
and $4 million in fully-vested common stock of AIG. The after-tax
shares granted to Mr. Benmosche will not be transferable for a
period of five years except as AIG's Compensation and Management
Resources Committee may approve in the case of death or
disability. In addition, Mr. Benmosche will be eligible to
receive a performance-based, long-term incentive award of up to
$3.5 million each year (prorated for 2009) in the form of stock or
phantom stock units in AIG.
According to The Journal, the package has received "approval in
principle" from Mr. Feinberg.
A person familiar with the matter said last week that the lack of
a formal pay package as Mr. Benmosche left him "ready to walk
[away from AIG] if this doesn't get resolved, and resolved
quickly," The Journal relates. The report says that Mr.
Benmosche's predecessor Edward Liddy, who left the position on
August 7, 2009, failed to negotiate a salary beyond the $1 annual
paycheck he got when he took the role at the request of the
Treasury Department in September 2008.
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: Names Jay Wintrob as Retirement Services Prez, CEO
------------------------------------------------------------------
American International Group, Inc., has appointed Jay S. Wintrob
has been named President and Chief Executive Officer of Domestic
Life and Retirement Services, a new position.
Mr. Wintrob, formerly President and CEO of AIG Retirement
Services, will lead AIG's U.S.-based life insurance and retirement
services businesses, which market their products and services
under the well-established brands American General AGLA,
SunAmerica, VALIC, and Western National.
In addition, Mary Jane Fortin, currently Senior Executive Vice
President Chief Administrative Officer, and Chief Financial
Officer of the domestic life companies, has been named President
and CEO of American General Life Companies. Ms. Fortin, as well
as each Retirement Services profit center president, will report
to Mr. Wintrob. She succeeds Matthew E. Winter, who was recently
promoted to AIG Vice Chairman of Administration.
"I am very enthusiastic about the growth potential of the domestic
life and retirement services businesses, and believe these market-
leading companies will prosper under the strong leadership of Jay
Wintrob," said Robert H. Benmosche, President and CEO of AIG.
"Given its experienced management team and prior operating
history, I believe the Domestic Life and Retirement Services group
can operate with greater autonomy going forward and build upon the
improved operating income results delivered in the first half of
2009."
The unified businesses will offer a comprehensive suite of life
and retirement savings products through an established multi-
channel distribution network that includes banks, national,
regional and independent broker-dealers, career financial
advisors, wholesale life brokers, insurance agents, and a direct-
to-consumer platform. With their combined expertise in savings,
protection, and retirement income solutions, these businesses will
be well positioned to meet consumers' next generation financial
security needs.
Mr. Wintrob was named President and CEO of AIG Retirement Services
in 2001. He previously served as Senior Vice President, Executive
Vice President, Vice Chairman, and Chief Operating Officer. He
also served as President of SunAmerica Investments, Inc., from
1994 through 2000, overseeing the company's invested asset
portfolio. Mr. Wintrob joined SunAmerica in 1987. SunAmerica was
acquired by AIG in 1999. Mr. Wintrob played a pivotal role in the
acquisition and integration of VALIC and Western National into
Retirement Services when AIG acquired American General Corporation
in 2001. Prior to joining SunAmerica, Mr. Wintrob was with the
law firm O'Melveny & Myers where he practiced corporate law.
Ms. Fortin was named Senior Executive Vice President, Chief
Administrative Officer and Chief Financial Officer of American
General Life Companies in 2009. She joined the American General
Life Companies as Executive Vice President and Chief Financial
Officer in 2006. Prior to joining American General, Ms. Fortin
was a senior executive with the Hartford Financial Services Group,
Inc., where she served as Senior Vice President and Director of
Mutual Funds and 529 Programs and President and CEO of the
Canadian Mutual Fund business. She previously served as Senior
Vice President and Chief Accounting Officer for Hartford Life.
Ms. Fortin has also held audit positions with
PricewaterhouseCoopers and Arthur Andersen.
Based on market data, the combined insurance companies forming
Domestic Life and Retirement Services ranked as the third-largest
life insurance organization in the U.S. with more than
$213 billion of admitted assets as of March 31, 2009. The
combined companies had more than $17 billion in sales for the 12
months ending June 30, 2009. They were among the largest issuers
of annuities and term life insurance in the United States as well
as a leading provider of defined contribution plans in the
education and healthcare markets. They currently have more than
16 million customers and nearly 300,000 financial professionals
appointed to sell their insurance and retirement savings products.
About American International
Based in New York, American International Group, Inc., is the
leading international insurance organization with operation in
more than 130 countries and jurisdictions. AIG companies serve
commercial, institutional and individual customers through the
most extensive worldwide property-casualty and life insurance
networks of any insurer. In addition, AIG companies are leading
providers of retirement services, financial services and asset
management around the world. AIG's common stock is listed on the
New York Stock Exchange, as well as the stock exchanges in Ireland
and Tokyo.
In September 2008, AIG experienced a liquidity crunch when its
credit ratings were downgraded below "AA" levels by Standard &
Poor's, Moody's Investors Service and Fitch Ratings. On
September 16, 2008, the Federal Reserve Bank created an
$85 billion credit facility to enable AIG to meet increased
collateral obligations consequent to the ratings downgrade, in
exchange for the issuance of a stock warrant to the Fed for 79.9%
of the equity of AIG. The credit facility was eventually
increased to as much as $182.5 billion. AIG has sold a number of
its subsidiaries and other assets to pay down loans received, and
continues to seek buyers of its assets.
At March 31, 2009, AIG had $819.75 billion in total assets and
$765.53 billion in total liabilities. At September 30, 2008, AIG
had $1.022 trillion in total assets and $950.9 billion in total
debts.
The Troubled Company Reporter reported on March 4, 2009, that
Moody's Investors Service confirmed the A3 senior unsecured debt
and Prime-1 short-term debt ratings of American International
Group. AIG's subordinated debt rating has been downgraded to Ba2
from Baa1. The rating outlook for AIG is negative. This rating
action follows AIG's announcement of net losses of $62 billion for
the fourth quarter and $99 billion for the full year of 2008,
along with a revised restructuring plan supported by the U.S.
Treasury and the Federal Reserve. This concludes a review for
possible downgrade that was initiated on September 15, 2008.
AMERICAN INT'L: Says Lawsuit on Madoff Losses Without Merit
-----------------------------------------------------------
Chad Bray at The Wall Street Journal reports that American
International Group Inc. said that a lawsuit by policyholders
Robert and Harlene Horowitz is without merit.
As reported by the Troubled Company Reporter on August 20, 2009,
law firm Milberg LLP, on behalf of the Horowitzes, sued AIG in the
U.S. District Court in Manhattan on alleged refusal to honor a
fraud-protection provision in their homeowner's insurance policy.
The two investors claimed that they lost money to Bernard Madoff.
The complainants said that AIG, through its units AIU Holdings and
American International Insurance Co., refused to honor a claim by
the two investors under their homeowner's insurance policy with
AIG Fraud SafeGuard coverage. The Horowitz Family Trust, with
Robert Horowitz, reportedly had $8.5 million in its account with
Mr. Madoff as of November 30, 2008, according to court documents.
The two investors had invested money with Mr. Madoff's firm since
1997. AIG refused to pay for amounts beyond any initial
investments with Mr. Madoff and denied claims related to "any
alleged gains, growth or appreciation."
AIG said in a statement that it will cover, under some product
lines, losses that are a result of a fraud, if the policyholder
suffered an actual net loss and has done so for claims related to
the Madoff scandal. The Journal quoted an AIG spokesperson as
saying, "In fact, our Private Client Group has paid hundreds of
eligible policyholders who suffered Madoff-related losses pursuant
to this coverage. However, in this case, we declined the
plaintiffs' claim because they received more money from Madoff
through withdrawals from their account than they had deposited."
The complainant's claim shouldn't be weighed on a "pure money in,
money out" measure, The Journal relates, citing Brad Friedman, the
couple's lawyer. According to the report, Mr. Friedman said,
"When the Horowitzes invested their money with Madoff, they did
not expect Mr. Madoff to hide their money under a rock or to lock
it in a safe. They invested with the express purpose of an
investment with the reasonable expectation that the money would
grow. Therefore, they are entitled to a reasonable return."
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.
ANTHONY MONTALBANO: Case Summary 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Anthony P. Montalbano, Sr.
1916 Midwest Club Parkway
Oak Brook, IL 60523-2525
Bankruptcy Case No.: 09-30477
Chapter 11 Petition Date: August 19, 2009
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Susan Pierson
Debtor's Counsel: Howard L. Adelman, Esq.
Adelman & Gettleman Ltd.
53 W. Jackson Blvd., Suite 1050
Chicago, IL 60604
Tel: (312) 435-1050
Fax: (312) 435-1059
Email: hla@ag-ltd.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $100,000,001 to $500,000,000
A list of the Company's 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/ilnb09-30477.pdf
The petition was signed by Anthony P. Montalbano, Sr.
ASARCO LLC: Grupo Mexico Amends Plan to Provide $2.2BB Offer
------------------------------------------------------------
Asarco Incorporated and Americas Mining Corporation delivered to
the U.S. Bankruptcy Court for the Southern District of Texas
their Seventh Amended Plan of Reorganization for ASARCO LLC,
Southern Peru Holdings, LLC, AR Sacaton, LLC, and ASARCO Master,
Inc., on August 17, 2009.
The Parent previously filed on August 14, a Modified Sixth
Amended Plan, which Plan pegs the Parent Contribution at
$1.72 billion in cash plus a $280 million one-year secured note
that bears a 6% interest to pay asbestos claimholders.
At a hearing held in the morning of August 17, 2009, however,
Grupo Mexico SAB de C.V. announced that it is raising its offer
for ASARCO's assets to $2.2 billion in cash, which would
guarantee the full payment of administrative, priority, secured,
asbestos personal injury claims and general unsecured claims.
Grupo Mexico is AMC and Asarco Inc.'s parent. The Parent
formally delivered to the Court on the same day its Seventh
Amended Plan, which provides for $2.2051 billion cash for
ASARCO's operating assets and contemplates the Parent's aim to
regain control of ASARCO.
"The music is stopping and there is only one chair left and we
are going to sit down," Bloomberg News quoted Grupo Mexico's
Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
in Los Angeles, California, as saying.
Grupo Mexico has assured Judge Schmidt that it arranged with five
banks a financing for $1.5 billion to finance the Parent Plan,
Bloomberg News reports. Grupo Mexico has also said that it is
ready to pay $22.5 million in commitment fees to the unnamed
banks.
The Seventh Amended Plan provides that the Parent has placed a
$125 million deposit pursuant to an Escrow Agreement to
demonstrate and support its intention to timely consummate the
Parent Plan, which deposit is set to increase to $1.6 billion
upon entry of a report and recommendation by the Bankruptcy Court
in favor of confirming the Parent Plan.
Interests and Claims
Under the Seventh Amended Plan, Class 3 General Unsecured Claims
will receive cash in an amount equal to the principal amount of
the Allowed General Unsecured Claim plus Postpetition Interest on
the Claim.
Class 4 Asbestos Personal Injury Claims against any of the
Debtors will together be allowed in the aggregate amount of
$1 billion. On the effective date of the Seventh Amended Plan,
the trust to be established under Section 524(g) of the
Bankruptcy Code will be funded with the Section 524(g) Trust
Assets, which will include an amount of cash representing
Postpetition Interest to be determined at the Plan Rate only, on
a principal amount of $780 million.
Claims of the Asbestos Subsidiary Debtors against ASARCO,
including all Derivative Asbestos Claims, will be deemed
satisfied by the funding of the Asbestos Trust as contemplated
under the Parent Plan. ASARCO's Administrative Claims under the
Secured Intercompany DIP Credit Facility will be credited against
the Cash component of the Section 524(g) Trust Assets to be
contributed to the Section 524(g) Trust on the Initial
Distribution Date.
Holders of Allowed Class 6 Late-Filed Claims will receive Cash in
an amount equal to the principal amount of the Allowed Late-Filed
Claim plus Postpetition Interest.
Each Holder of Class 9 Interests in ASARCO will retain 100% of
its Interests in ASARCO, which Interests will automatically
convert into Interests in Reorganized ASARCO on the Plan
Effective Date. The equity interests in Reorganized ASARCO will
continue to be held by ASARCO USA Incorporated, according to the
Seventh Amended Plan.
Other Provisions
Under the Seventh Amended Plan, the Parent notes that these
parties are not included in the group of ASARCO Protected
Parties:
-- Baker Botts L.L.P.,
-- Jordan, Hyden, Womble, Culbreth & Holzer, P.C.,
-- Barclays Capital, Inc.,
-- H. Malcolm Lovett, Jr.,
-- Edward Caine,
-- Joseph F. Lapinsky,
-- Douglas E. McAllister, and
-- any of the Excluded Parties' present and former partners,
associates, directors, officers, agents, attorneys,
accountants, consultants, financial advisors, investment
bankers, professionals, experts and employees.
The whole article containing provisions on Litigation Trust and
SCC Litigation Trust has been omitted under the Seventh Amended
Plan.
Clean and redlined copies of the Seventh Amended Parent Plan and
the Modified Sixth Amended Plan are available for free at:
http://bankrupt.com/misc/ASARCOInc_7thAmendedPlan_081709.pdf
http://bankrupt.com/misc/ASARCOInc_7thPlan_Redlined_081709.pdf
http://bankrupt.com/misc/ASARCOInc_Mod6thPlan_Redlined_081409.pdf
http://bankrupt.com/misc/ASARCOInc_Modified6thPlan_081409.pdf
In connection with the Modified Sixth Amended Plan, the Parent
also filed a further supplement to the Joint Disclosure Statement
and a supplement to its Plan's glossary. Copies of the
supplements can be obtained for free at:
http://bankrupt.com/misc/ASARCOInc_JDS_Supplement_081309.pdf
http://bankrupt.com/misc/ASARCOInc_SuppGlossary_081409.pdf
A redlined copy of the Seventh Amended Plan's glossary is also
available for free at:
http://bankrupt.com/misc/ASARCOInc_Glossary_Redlined_081709.pdf
In a separate filing, the Parent submitted (i) a corrected
Exhibit 2 on the Schedule of Released Litigation, and (ii) a
fully executed Exhibit 25 on Second Amended and Restated Escrow
Agreement related to the Seventh Amended Plan. Copies of the
Exhibits are available for free at:
http://bankrupt.com/misc/ASARCOInc_CorrectedExhibits_081809.pdf
Parent Responds to Objections
In another filing, the Parent informs the Court and parties-in-
interest that it is negotiating with certain objecting parties
and has reached agreements resolving many of those objections
against the Parent Plan.
Charles A. Beckham, Jr., Esq., at Haynes and Boone, LLP, in
Houston, Texas, says the Parent continues to work with creditors
and other constituencies in an effort to resolve outstanding
objections. To the extent any objections cannot be resolved by
the end of the Confirmation Hearing, the Parent asks the Court to
overrule those objections.
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)
ASARCO LLC: Modifies Plan to Provide Hiked Sterlite Offer
---------------------------------------------------------
ASARCO LLC delivered to the U.S. Bankruptcy Court for the
Southern District of Texas a Modified Sixth Amended Plan of
Reorganization with technical and clarifying modifications as of
August 7, 2009. Another Modified Sixth Amended Plan was filed
August 11, 2009, with further modifications.
Clean and blacklined copies of the Modified Plans are available
for free at:
http://bankrupt.com/misc/ASARCO_6thAmendedPlan_080709.pdf
http://bankrupt.com/misc/ASARCO_6thAmendedPlan_081109.pdf
http://bankrupt.com/misc/ASARCO_6thPlan_081109_Blacklined.pdf
Sterlite Industries (India) Limited, a subsidiary of Vedanta
Resources plc, stated that it has changed its bid to purchase
operating assets of ASARCO LLC. The revised consideration under
the Modified Sixth Amended Plan includes:
(a) $1.58 billion in cash; and
(b) a $208 million Copper Price Participation Note, which is a
note from the earlier offered $770 million note.
The consideration was changed to reflect an increase in copper
prices and to meet the expectations of creditors, Sterlite noted
in a public statement. Higher cash consideration also reflects
offer of cash in lieu of the reduction in value of the Copper
Price Participation Note from $770 million to $208 million.
Sterlite will also be the beneficiary of 50% of the proceeds from
General Unsecured Creditors' interest in the judgment against
Americas Mining Corporation awarded by the U.S. District Court
for the Southern District of Texas, Brownsville Division, once
the General Unsecured Creditors are paid in full, including
postpetition interest.
The Modified Plans also provide, among other things, that
Sterlite and the Class 3 Claimants have agreed to the
Sterlite Side Subordination Arrangement, pursuant to which the
SCC Litigation Trustee is in charge of making the distribution
Sterlite is entitled to receive on account of (i) its Class A-2
SCC Litigation Trust Interests to the Class A-1 SCC Litigation
Trust Beneficiaries on a pro rata basis, and (ii) its Class B-2
SCC Litigation Trust Interests to the Class B-1 SCC Litigation
Trust Beneficiaries on a pro rata basis, until the Sterlite Side
Subordination Conversion Event.
Moreover, in light of the recent modifications to their Sixth
Amended Plan, the Debtors notified the Court and parties-in-
interest that they have amended certain of the Plan Documents,
including:
-- The Glossary of Defined Terms for the Debtors' Plan
Documents, which is attached as Exhibit A-1 to the Joint
Disclosure Statement in support of the three Competing
Plans in ASARCO LLC's case;
-- Amendment Nos. 4 and 5 to the New Plan Sponsor PSA, which
is a supplement to Exhibit M to the Disclosure Statement
filed on July 6, 2009; and
-- The Form of SCC Litigation Trust Agreement, attached as
Exhibit 5 to the Debtors' Plan, which was filed on
July 6, 2009.
Full-text copies of the Amended Plan Documents and a blacklined
copy of the Amended Glossary are available for free at:
http://bankrupt.com/misc/ASARCO_AmendedGlossary_081109.pdf
http://bankrupt.com/misc/ASARCO_AmendedPlanDocs_081109.pdf
The Debtors have also filed supplements to the Joint Disclosure
Statement in light of their August 11 Modified Plan. Copies of
the supplements can be obtained for free at:
http://bankrupt.com/misc/ASARCO_JDS_Supplement_081109.pdf
http://bankrupt.com/misc/ASARCO_JDS_Supplement_081409.pdf
In a separate filing, the Debtors file a supplemental brief
regarding the operation of the SCC litigation trust under the
August 11 Modified Plan. The Debtors note that their Plan
contemplates that the Court will make a series of determinations
that ultimately ensure that distributions to creditors as of the
Plan Effective Date are no more than that necessary to pay
creditors in full, and that the assessment of the total value of
claims is aided by the fact that the Debtors have reached
settlements with most of the major claims holders, among other
things.
Debtors Negotiate with Objectors
In an omnibus response, the Debtors informed the Court and
parties-in-interest that they have resolved several of the
objections asserted against their Chapter 11 Plan.
"The Debtors are in continuing negotiations with nearly all
objectors in an effort to secure the consensual resolution of
their objections," says Jack L. Kinzie, Esq., at Baker Botts
L.L.P., in Dallas, Texas. He notes that the Debtors will address
legal issues regarding their Plan during the Confirmation Hearing
and in their brief.
To the extent any objections to the Debtors' Plan have not been
resolved by the end of the Confirmation Hearing, the Debtors ask
the Court to overrule those objections and enter an order
confirming their Plan.
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)
ASARCO LLC: Voting Results on Parent & Sterlite Plans Released
--------------------------------------------------------------
Four years into bankruptcy, the confirmation hearings on the
Chapter 11 proceedings of ASARCO LLC and its debtor affiliates
finally commenced on August 10, 2009. Judge Schmidt has set for
the confirmation hearings to continue through August 19, if
necessary.
Before the Court's consideration are the Competing Chapter 11
Plans proposed by ASARCO LLC and the plan sponsor, Sterlite (USA)
Inc., on the one hand, and by Asarco Incorporated and Americas
Mining Corporation, on the other hand. Harbinger Capital
Partners Master Fund I, Ltd., also filed its own competing plan,
but has recently opted for the abatement of that plan's
confirmation.
Even at the late stages of the confirmation hearing, the battle
for the control of ASARCO continues to heat up between Grupo
Mexico SAB de C.V., parent company for AMC and Asarco Inc, and
the Debtors and Sterlite USA, Inc.
At the August 17 hearing, Grupo Mexico announced its offer to
increase its bid for the ASARCO LLC assets to $2.2 billion. On
the same day, the Parent formally delivered to the Court its 7th
Amended Plan, covering the $2.2 billion offer and payment in full
of creditors' claims. Just three days before its most recent
bid, the Parent modified its 6th Amended Plan on August 14 to
offer $1.72 billion in cash and a $280 million note for the
ASARCO assets. Before the Confirmation Hearings began, the
Parent's bid was at $1.4625 billion in cash and note amounts
totaling $280 million.
The Parent maintained that it has talked to certain banks for the
acquisition of a $1.5 billion financing to fund its proposed
Chapter 11 plan. The Debtors want proof of those transactions
and have asked the Court to compel the production of those
financing documents.
ASARCO LLC's counsel, Jack L. Kinzie, Esq., of Baker Botts
L.L.P., subsequently announced at the August 19 hearing that
Sterlite will raise its bid for ASARCO LLC to match the Parent's
offer to pay creditors in full. "It is a payment-in-full plan,"
Mr. Kinzie told Judge Schmidt. However, Mr. Kinzie did not
revealed the value of Sterlite's new offer, Bloomberg News
reported on August 19.
The announcement on a new Sterlite offer comes after it increased
its bid under a Modified Sixth Amended Plan dated August 11,
2009, to $1.58 billion in cash and a $208 million Copper Price
Participation Note, a reduction from the earlier offered
$770 million note.
In a recent news update, Sterlite issued a press release dated
August 20, 2009, confirming that it is increasing its offer for
the ASARCO assets by $500 million and contemplates full payment
of creditor claims. With this improvement, the revised total
consideration by Sterlite will increase to cash at closing of
approximately $2.1 billion. Sterlite added that:
-- while there is an increase in the cash consideration,
Sterlite will receive an approximately 72.5% interest in
the Litigation Trust to be set up by ASARCO LLC at Closing
of the transaction to pursue a judgment against Americas
Mining Corporation awarded by the US District Court of
Texas, Brownsville Division; and
-- the 9-year Copper Price Participation Note of $207.9
million and the Put Option granted to the Asbestos
Creditors against their share of 27% litigation interest
remain unchanged.
To note, the new Sterlite bid for the ASARCO assets is
$500 million short of its $2.6 billion original offer in July
2008. Sterlite withdrew that offer in October 2008, citing
reduced copper prices among others.
Voting Results
The Debtors' balloting agent, AlixPartners LLP, also delivered to
the Court a tabulation of the voting results on the Competing
Plans on August 18, 2009. AlixPartners presented to the Court a
summary of the voting results:
Debtors Plan Parent Plan Harbinger Plan
% Amount Voted % Amount Voted % Amount Voted
---------------- ---------------- ----------------
Class Accept Reject Accept Reject Accept Reject
----- ------ ------ ------ ------ ------ ------
1 95.88% 4.12% 67.59% 32.41% 0.52% 99.48%
2 48.37% 51.66% 52.76% 47.24% 0.31% 99.69%
3 98.90% 1.10% 4.32% 95.68% 14.21% 85.79%
4 99.99% 0.01% 89.78% 10.22% 0.08% 99.92%
5 99.60% 0.40% 22.76% 77.24% 3.96% 96.04%
6 -- -- -- -- -- --
7 -- -- -- -- -- --
8 0.00% 100.00% 100.00% 0.00% 0.00% 100.00%
9 -- -- -- -- -- --
10 -- -- -- -- -- --
Meade A. Monger of AlixPartners supervised the tabulation
procedures performed by personnel of AlixPartners with respect to
the Voting Classes for votes received by the August 17, 2009
voting deadline.
AlixPartners also presented the results of plan preferences, with
the Debtors' Plan being voted as the most preferred Plan by the
creditors.
A full-text copy of the complete voting tabulation and plan
preference results for the ASARCO LLC Competing Plans is
available for free at:
http://bankrupt.com/misc/ASARCO_TabulationResults_081809.pdf
AlixPartners has been designated to review and tabulate ballots
submitted by the Voting Classes on the Competing Plans. The
Voting Classes are holders of Class 1 Priority Claims, Class 2
Secured Claims, Class 3 General Unsecured Claims, Class 4
Asbestos Personal Injury Claims, Class 5 Convenience Claims,
Class 6 Late Filed Claims, Class 7 Subordinated Claims, Class 8
Interests in ASARCO, Class 9 Interests in the Asbestos Subsidiary
Debtors and Class 10 Interests in the Other Subsidiary Debtors.
In a separate filing, Omar J. Alaniz of AlixPartners filed with
the Court an electronic image of the Class 8 ballot submitted by
ASARCO USA Incorporated (DE). "Because the electronic image is
faint, I have also included the vote data maintained by
AlixPartners and highlighted the portion that shows that the
Class 8 ballot submitted indicates a 3 preference ranking for the
Debtors' Plan, a 1 preference ranking for the Parent's Plan, and
a 1 preference ranking for the Harbinger Plan," Mr. Alaniz says.
A copy of ASARCO USA's ballot can be obtained for free at:
http://bankrupt.com/misc/ASARCOUSA_Class8Ballot_081909.pdf
Debtors to File Plan Supplements
The Debtors also notified parties-in-interest that they will make
certain designations and filings prior to the conclusion of the
confirmation hearings, including:
-- the designation of the persons, who will initially serve as
Plan Administrator, Liquidation Trustee, SCC Litigation
Trustee, Asbestos Trustees, members of the Asbestos TAC,
and officers and directors of each of the Reorganized
Debtors;
-- the filing of a schedule of the annual compensation to be
paid to the executives, officers and directors of the
Reorganized Debtors; and
-- the filing of biographical data regarding the initial Plan
Administrator, Asbestos Trustees and members of the
Asbestos TAC.
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)
ASSOCIATED MATERIALS: Swings to $4.39MM Net Loss in 1st Half 2009
-----------------------------------------------------------------
Associated Materials, LLC, swung to a net loss of $4,392,000 for
the six months ended July 4, 2009, from a net income of $4,288,000
for the same six-month period ended June 28, 2008.
The Company reported net income of $10,073,000 for the quarter
ended July 4, 2009, from net income of $12,041,000 for the quarter
ended June 28, 2008.
As of July 4, 2009, the Company had $797,309,000 in total assets;
and total current liabilities of $174,166,000, Deferred income
taxes of $46,818,000, Other liabilities of $58,301,000, Long-term
debt of $224,500,000; and Member's equity of $293,524,000.
AMH is required to begin paying cash interest on its outstanding
11-1/4% senior discount notes due 2014 on September 1, 2009. The
Company believes its cash flows from operations and its borrowing
capacity under its asset-based credit facility with Wachovia
Capital Markets, LLC and CIT Capital Securities LLC, as joint lead
arrangers, Wachovia Bank, N.A., as agent and the lenders party to
the facility, will be sufficient to satisfy its obligations to pay
principal and interest on its outstanding debt, maintain current
operations and provide sufficient capital, as well as pay
dividends or make other upstream payments sufficient for AMH to be
able to service its debt obligations, for the remainder of 2009.
However, AMH noted the building products industry continues to be
negatively impacted by a weak housing market, with a number of
factors contributing to lower current demand for the Company's
products, including reduced numbers of existing home sales and new
housing starts and depreciation in housing prices. If these
trends continue, the Company's ability to generate cash sufficient
to meet its existing indebtedness obligations could be adversely
affected, and the Company could be required either to find
alternate sources of liquidity or to refinance its existing
indebtedness in order to avoid defaulting on its debt obligations.
Beyond 2009, the ability of the Company to generate sufficient
funds and have sufficient restricted payments capability both to
service its own debt obligations and to allow the Company to pay
dividends or make other upstream payments sufficient for AMH to be
able to service its increased obligations will be dependant in
large part on the impact of building products industry conditions
on the Company's business, profitability and cash flows and on the
ability of the Company or its parent companies to refinance its
and/or their indebtedness. There can be no assurance that the
Company or AMH would be able to obtain any necessary consents or
waivers in the event either of them is unable to service or were
to otherwise default under their debt obligations, or that either
of them or AMH II would be able to successfully refinance their
indebtedness. The ability to refinance any indebtedness may be
made more difficult to the extent that current building products
industry and credit market conditions continue to persist. The
inability of either of the Company or AMH to service or either of
them or AMH II to refinance their indebtedness would likely have a
material adverse effect on each of the Company, AMH and AMH II.
The Company, Gentek Building Products, Inc., and Gentek Building
Products Limited, as borrowers, entered into the ABL Facility on
October 3, 2008. One of the Company's joint lead arrangers under
the ABL Facility, CIT Capital Securities LLC, is a subsidiary of
CIT Group, Inc., who incurred significant rating downgrades due to
liquidity concerns. Subsidiaries of CIT are also lenders under
both the U.S. and Canadian facilities of the Company. CIT
recently announced that it had entered into a $3 billion loan
facility provided by a group of its major bondholders and that it
intends to commence a comprehensive restructuring of its
liabilities to provide additional liquidity and further strengthen
its capital position. AMH said it continues to closely monitor
this situation and does not believe it will have a material impact
on the Company's financial condition or ability to fund
operations.
The ABL Facility provides for a senior secured asset-based
revolving credit facility of up to $225.0 million, comprising a
$165.0 million U.S. facility and a $60.0 million Canadian
facility, in each case subject to borrowing base availability
under the applicable facility. The entire principal amount (if
any) outstanding under the ABL Facility is due and payable in full
at maturity on October 3, 2013, except in the event that the
Company's obligations under its 9-3/4% notes due 2012 remain
outstanding as of the date six months prior to their stated
maturity, April 15, 2012, in which case the ABL Facility will be
due and payable on October 15, 2011. As of July 4, 2009, there
was $39.5 million drawn under the ABL Facility and $116.3 million
available for additional borrowing.
The Company, AMH II and its direct and indirect subsidiaries are
continuing to explore ways to optimize their capital structure,
which could include various liability management transactions or
the refinancing of certain debt securities during the remainder of
2009 or thereafter.
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?4251
About Associated Materials
Based in Cuyahoga Falls, Ohio, Associated Materials LLC fka
Associated Materials Inc. -- http://www.associatedmaterials.com/-
- is a manufacturer of exterior residential building products,
which are distributed through company-owned distribution centers
and independent distributors across North America. AMI produces a
broad range of vinyl windows, vinyl siding, aluminum trim coil,
aluminum and steel siding and accessories, as well as vinyl
fencing and railing. AMI is a privately held, wholly-owned
subsidiary of Associated Materials Holdings Inc., which is a
wholly-owned subsidiary of AMH, which is a wholly-owned subsidiary
of AMH II, which is controlled by affiliates of Investcorp S.A.
and Harvest Partners Inc.
* * *
As reported by the Troubled Company Reporter on June 18, 2009,
Standard & Poor's Ratings Services said its 'CCC+' corporate
credit ratings and negative outlook on AMH Holdings Inc. and
Associated Materials Inc., are unchanged following AMH Holdings
II's plan to exchange its outstanding 13.625% senior notes due
2014 for $20 million of cash and $13.066 million of new 20% senior
notes due 2014. AMH Holdings II is an unrated entity and its
senior notes due 2014 are not rated by Standard & Poor's.
S&P says the ratings and outlook on AMH Holdings and AMI
incorporate a highly leveraged financial profile and a significant
increase in cash interest expense starting September 2009.
Following the completion of the exchange, there will be
$20 million of new senior subordinated notes due 2012 issued by
AMI in a private placement, partially offset by a reduction of
debt obligations at AMH II.
BALLY TOTAL: Court Confirms Second Reorganization Plan
------------------------------------------------------
Bally Total Fitness Holding Corporation and its 42 debtor-
affiliates stepped Judge Burton R. Lifland, of the U.S. Bankruptcy
Court for the Southern District of New York, through the statutory
requirements under Sections 1129(a) and (b) of the Bankruptcy Code
necessary to confirm their Second Amended Joint Plan of
Reorganization:
A. Section 1129(a)(1) requires that the Second Amended Plan
comply with all applicable provisions of the Bankruptcy Code,
which includes compliance with Sections 1122 and 1123,
governing classification and contents of the Plan.
The Second Amended Plan provides for the separate
classifications of Claims and Equity Interests into 12 Classes
based on valid business, factual and legal reasons.
The Plan classifies each Claim against and Equity Interest in
the Debtors into a Class containing only substantially similar
Claims or Equity Interests, in accordance with Section
1122(a).
Pursuant to Section 1123(a)(1), the Plan properly classifies
all Claims and Equity Interests that require classification.
The Debtors have provided proof of legitimate reason and
justification with respect to Claims classified in Class 10
and Equity Interests in Class 12.
The Plan also properly identifies and describes each Class of
Claims and Equity Interests that is not Impaired under the
Plan or impaired under the Plan, in compliance with Sections
1123(a)(2) and 1123(a)(3).
In accordance with Section 1123(a)(4) of the Bankruptcy Code,
the Plan provides the same treatment for each Claim or Equity
Interest of a particular Class unless the holder of the
Claim or Equity Interest has agreed to less favorable
treatment.
In accordance with Section 1123(a)(5), the Plan provides
adequate means for its implementation. The Reorganized
Debtors' charters, bylaws or comparable constituent documents
contain provisions prohibiting the issuance of non-voting
equity securities, as well as providing for the appropriate
distribution of voting power among all classes of equity
securities authorized for issuance, as required under Section
1123(a)(6).
In accordance with Section 1123(a)(7), the provisions of the
Plan and the Reorganized Debtors' charters, bylaws or
comparable constituent documents regarding the manner of
selection of officers and directors of the Reorganized Debtors
are consistent with the interests of creditors and equity
security holders and with public policy.
The Plan further impairs or leaves unimpaired, as the case may
be, each Class of Claims and Equity Interests, pursuant to
Section 1123(b)(1).
As mandated by Section 1123(b)(2), the Plan provides for the
assumption, assumption and assignment, or rejection of the
executory contracts or unexpired leases of the Debtors that
have not been previously assumed, assumed and assigned, or
rejected pursuant to Section 365 of the Bankruptcy Code.
In accordance with Section 1123(b)(3), Plan provides that the
Reorganized Debtors will retain and may enforce any claims,
demands, rights, defenses and causes of action that any Debtor
or Estate may hold against any entity, including any
Litigation Rights, to the extent not expressly released
under the Plan or by any final order entered by the Court,
including, without limitation, the Plan Releases.
Furthermore, the Plan modifies or leaves unaffected the rights
of certain holders of Claims in Classes 1 and 2, pursuant to
Section 1123(b)(5).
Pursuant to Section 1123(b)(6), the Plan includes additional
appropriate provisions that are not inconsistent with
applicable provisions of the Bankruptcy Code. As required by
Section 1123(d), the Plan also provides for the satisfaction
of Cure Claims associated with each assumed executory contract
or unexpired lease pursuant to the Plan, in accordance with
Section 365(b)(1).
B. The Debtors have satisfied Section 1129(a)(2), which requires
that the proponent of a plan of reorganization comply with the
applicable provisions of the Bankruptcy Code. The Debtors
have complied with Section 1129(a)(2) by distributing their
Disclosure Statement and soliciting acceptances of the Plan
through their Claims and Noticing Agent, and timely mailed
notices to non-voting creditors as described in the
Solicitation Procedures.
The Plan was voted on by eight of the Classes of Impaired
Claims that were entitled to vote, consisting of Classes 3,
4, 5, 6, 7, 8, 9, and 10. The Claims and Noticing Agent has
made a final determination of the validity of, and tabulation
with respect to, all acceptances and rejections of the Plan by
holders of Claims entitled to vote on the Plan, including the
amount and number of accepting and rejecting Claims in the
Voting Classes.
As indicated in the Voting Declaration submitted by the Claims
and Noticing Agent, each of Classes 3, 4, 5, 6, 7, 8, and 9
have accepted the Plan by at least two-thirds in amount and a
majority in number of the Claims in the Classes actually
voting. Class 10 has voted to reject the Plan since two-
thirds in amount of Claims actually voting did not vote in
favor of the Plan.
C. The Plan was proposed in good faith, negotiated and
proposed with the intention of accomplishing a successful
reorganization, and for no ulterior purpose, and fairly
achieves a result consistent with the objectives and purposes
of the Bankruptcy Code, thereby satisfying Section
1129(a)(3).
The Plan also reflects substantial input from the principal
constituencies having an interest in the Chapter 11 cases and,
as evidenced by the overwhelming acceptance of the Plan.
D. In accordance with Section 1129(a)(4), no payment for services
or costs and expenses in or in connection with the Chapter 11
Cases, or in connection with the Plan, has been or will be
made by any Debtor other than payments that have been
authorized by the Court. All payments to be made to
professionals or other entities asserting a Fee Claim for
services rendered before the Effective Date of the Plan will
be subject to the Court's review and approval.
E. The Plan discloses (i) the identities of the officers and
directors of the Reorganized Debtors and (ii) the identity of
any insiders that will be employed or retained by the
Reorganized Debtors. The compensation of the Reorganized
Debtors' directors will be consistent with each Reorganized
Debtor's constituent documents, in accordance with Section
1129(a)(5).
The proposed directors and officers for the Reorganized
Debtors are qualified, and the appointments to, or continuance
in, their offices are consistent with the interests of holders
of Claims and Equity Interests and with public policy.
F. Section 1129(a)(6) of the Bankruptcy Code is inapplicable to
the Chapter 11 Cases because the Plan does not contain any
rate changes subject to the jurisdiction of any governmental
regulatory commission and will not require governmental
regulatory approval.
G. The liquidation analysis in the Disclosure Statement and the
Plan (i) are persuasive and credible, (ii) have not
been controverted by other evidence and (iii) establish that
each holder of a Claim or Equity Interest in an Impaired Class
either has accepted the Plan, or will receive or retain on
account of a Claim or Equity Interest, property of a value as
of the Effective Date of the Plan, that is not less
than the amount that it would receive if the Debtors were
liquidated under Chapter 7 of the Bankruptcy Code.
As a result, the Plan satisfies Section 1129(a)(7).
H. The Plan has not been accepted by all Impaired all Classes of
Claims and Equity Interests because the holders of Equity
Interests in Class 12 are deemed to have rejected the Plan,
and the holders of Subordinated Note Claims in Class 10 have
voted to reject the Plan. Nevertheless, the Plan is
confirmable because it satisfies Section 1129(b)(1) with
respect to the non-accepting Classes of Claims and Equity
Interests.
I. The Plan provides treatment for Administrative Claims,
Priority Tax Claims and Other Priority Claims that is
consistent with the requirements of Section 1129(a)(9) of the
Bankruptcy Code.
J. The Plan has been accepted by seven classes of Impaired Claims
that are entitled to vote on the Plan, composed of Classes 3,
4, 5, 6, 7, 8, and 9, which were determined without including
any acceptance of the Plan by any "insider," thereby
satisfying Section 1129(a)(10).
K. The Plan is feasible, within the meaning of Section
1129(a)(11), and the Debtors have demonstrated a reasonable
assurance of the Plan's prospects for success. The Debtors'
projections of the capitalization and financial information of
the Reorganized Debtors as of the Effective Date are
reasonable and made in good faith, with each Reorganized
Debtor deemed to be solvent as of the Effective Date after
giving effect to the Restructuring Transactions.
Confirmation of the Plan is not likely to be followed by
liquidation, other than the potential liquidation of inactive
Debtor-entities that no longer serve an ongoing business
purpose to the Plan, or the need for the further financial
reorganization of the Debtors.
L. The Plan provides that the Debtors will satisfy fees payable
pursuant to Section 1930 of Judiciary and Judicial Procedures
Code on or before the Effective Date of the Plan. Thereafter,
all fees will be paid by the Reorganized Debtors until the
earlier of (y) the conversion or dismissal of the applicable
Chapter 11 Case under Section 1112 of the Bankruptcy Code, or
(z) the closing of the Chapter 11 cases pursuant to Section
350(a).
Thus, the Plan meets the requirement of Section 1129(a)(12).
M. The Debtors do not have retiree benefits as defined in Section
1114 of the Bankruptcy Code. To the extent that applies to
the Debtors, the Reorganized Debtors will continue to pay all
retiree benefits for the period during which the Debtors have
obligated themselves to provide the benefits, thereby
satisfying Section 1129(a)(13).
N. Each of the Debtors is a corporation and is not required to
pay domestic support obligations. Accordingly, Section
1129(a)(14) is not implicated by the Plan.
O. Each of the Debtors is a corporation and does not need to
pay five years' worth of disposable income to unsecured
creditors. Accordingly, Section 1129(a)(15) is not implicated
by the Plan.
P. The Plan does not provide for transfers of property by
nonprofit entities, and each of the Debtors is a moneyed,
business, or commercial corporation. Accordingly, Section
1129(a)(16) is not implicated by the Plan.
Finding that the Second Amended Joint Plan complies with the
statutory requirements, Judge Lifland confirmed Bally II's Plan on
August 19, 2009.
The Court approved the appointment of a Claims Monitor and
authorized the Debtors to enter into an engagement letter with the
Claims Monitor. The identity of the Claims Monitor will be
filed with the Court prior to the effective date of the Plan and
upon filing, will be deemed approved.
The reasonable and necessary fees and expenses of the Claims
Monitor -- including the reasonable and necessary fees and
expenses of any professionals assisting the Claims Monitor in
carrying out its duties under the Plan -- will be paid by the
Reorganized Debtors in an amount not to exceed $200,000 in
accordance with the Plan and the Engagement Letter without further
Court order.
Judge Lifland clarified that if the Plan Effective Date does not
occur on or before December 19, 2009, or 120 days after the
Confirmation Date:
-- the Confirmation Order will be vacated;
-- no distributions under the Plan will be made;
-- the Debtors and all holders of Claims and Equity Interests
will be restored to the status quo ante as of the day
immediately preceding the Confirmation Date as though the
Confirmation Date had never occurred; and
-- the Debtors' obligations with respect to the Claims and
Equity Interests will remain unchanged.
The business and assets of the Debtors will remain subject to the
jurisdiction of the Court until the Effective Date of the Plan,
the Court ruled.
Bally expects to emerge from Chapter 11 "in late August or early
September [2009]," Jonathan Stempel of Reuters reports, citing an
unnamed outside spokesman for Bally.
Confirmation Objections Withdrawn
Prior to the Court's confirmation of the Second Amended Plan,
these parties-in-interest withdrew their objections to the Plan:
(1) The Mattone Group Jamaica Co., LLC, The Mattone Group
Ltd., WWP Amenities MPH Partner LLC
(2) Westchester Fire Insurance Company and ACE USA
(3) ACE American Insurance Company, Fireman's Fund Insurance
Company
(4) Missouri Department of Revenue
(5) Sir Francis Drake Holdings, LP
(6) Georgia Department of Revenue
(7) Sywest Development
The Objection withdrawals are in light of separate agreements
reached among the Debtors and the Objecting Parties to ultimately
resolve the Objections, as specified in the Second Amended Plan.
Any objections or responses to confirmation of the Plan and the
reservation of rights that (a) have not been withdrawn, waived or
settled prior to the entry of the Confirmation Order, or (b) are
not cured, are overruled in their entirety and on their merits,
and all withdrawn objections or responses are deemed withdrawn
with prejudice, Judge Lifland said.
The Court held that neither the Confirmation Order nor the Plan
will:
(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, including
any right of the Debtors to challenge the timeliness of a
pleading or a defense.
Judge Lifland noted that the Debtors have resolved the Limited
Objection and Reservation of Rights filed by Westchester Fire
Insurance Company and ACE USA. Accordingly, Westchester Fire and
ACE will withdraw their Objection, and the Reorganized Bally will
enter into, as of the Plan Effective Date, a new indemnity
agreement in favor of ACE, to indemnify ACE for future claims that
may arise under surety bonds executed for the Debtors or
Reorganized Debtors by ACE.
The Debtors and the Reorganized Debtors acknowledge that ACE
currently holds collateral which will continue to secure all
indemnification or other obligations arising either prepetition,
postpetition or post-confirmation in connection with ACE's surety
bonds.
In addition, the Debtors and Lexington Insurance Company have
agreed that the Court's order dated January 14, 2009, approving
(y) the Debtors' assumption of certain insurance agreements and
(z) the Debtors' entry into an insurance program with certain
affiliate of American International Group, Inc., will remain in
full force and effect. Nothing in the Plan or Confirmation Order
will adversely impact the effectiveness or validity of the AIG
Insurance Order or alter or impair the Insurer's rights or
Debtors' obligations under any policies assumed by the Debtors.
Any liquidation, estimation, settlement or other resolution of
Claims against the Debtors that may be covered by Policies issued
by Lexington will be in compliance with the applicable Assumed
Policies. Any liquidation, estimation, settlement, or other
resolution of Claims affects coverage or payment by Lexington
under the terms of any Policy will not be binding upon Lexington,
absent its participation or consent, the Court ruled.
In order to facilitate the completion of certain settlement
negotiations seeking to resolve litigation pending in the Northern
District of Illinois, captioned Great Am. Ins. Co. v. Bally Total
Fitness Holding Corp., as well as other related actions, the
Debtors and the Reorganized Debtors are authorized to extend the
time to assume or reject certain agreements between them and
former D&Os Lee S. Hillman, John W. Dwyer, Paul Toback and
Theodore Noncek, until the earlier of:
* 90 days following the Effective Date of the Plan; and
* five days after the date on which an order approving the
Settlement of the Coverage Action and all related actions
entered by the Bankruptcy Court becomes final.
In the event that the Settlement is not finalized and approved by
the Bankruptcy Court, the parties reserve all rights and defenses,
including those available under both bankruptcy and non-bankruptcy
law, according to Judge Lifland.
Fanelli and Hardie Declare Support for Plan Confirmation
In a declaration filed with the Court prior to the Confirmation of
the Plan, William G. Fanelli, acting chief financial officer of
Bally, maintained that the Plan is confirmable because, among
other things, it gained overwhelming votes of support from
creditors, with only the Subordinated Noteholder Class rejecting
the Plan.
In addition, no creditor has objected to the consolidation of the
Debtors' estates for which the Plan provides. Therefore, the
Consolidation under the Plan is "consensual," Mr. Fanelli pointed
out.
According to Mr. Fanelli, the Debtors' customer base is entirely
unaware of the legal distinctions between the various Debtor-
entities. Similarly, the Debtors maintain a centralized
purchasing function and cash management system. As a result, the
Debtors' trade creditors believed they were dealing with Bally,
and were overwhelmingly unaware whether they were dealing with a
given Debtor-subsidiary while unaware of that subsidiary's
identity or position in the Debtors' corporate structure.
Thus, he said, from the perspective of their creditors, the
Debtors operate as a single business enterprise. The Debtors'
creditors dealt with the Debtors as a single business unit.
Mr. Fanelli further averred that no creditor will be harmed by the
Consolidation of the Debtors' estates, since (i) the vast majority
of the Debtors' assets are at the parent level, and (ii)
substantially all of the Debtors' assets are encumbered by the
Prepetition Credit Facility and the Prepetition Lenders are not
receiving a 100% distribution on their claims.
William H. Hardie, III, a managing director of Houlihan Lokey
Howard & Zukin, the Debtors' financial advisors, said in a
separate declaration that the importance of the Debtors'
reorganization efforts "is confirmed by the creditor body's
reaction to the Plan."
Echoing Mr. Fanelli's statements, Mr. Hardie noted that not only
is the Plan affirmatively supported by all key creditor
constituencies, but it has been accepted by a large majority of
creditors in every Class, other than the Subordinated Note Claims
in Class 10.
"The Debtors, who have been operating solely through the use of
cash collateral, are on the verge of confirming a consensual
Chapter 11 Plan of reorganization even when many retail
enterprises are facing liquidation," Mr. Hardie pointed out.
A full-text copy of the court order confirming Bally II's Second
Amended Plan is available for free at:
http://bankrupt.com/misc/BallyII_PlanConfirmationOrd.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)
BALLY TOTAL: Files Supplements to Reorganization Plan
-----------------------------------------------------
Prior to the confirmation of their Second Amended Plan of
Reorganization, Bally Total Fitness Holding Corp. and its
affiliates submitted to Judge Burton Lifland supplements
to the Plan.
The Plan Supplements are:
(1) Additional executory contracts and unexpired leases to be
rejected as of the Effective Date of the Second Amended
Plan, a complete list of which is available for free at:
http://bankrupt.com/misc/BallyII_AddRejectedContracts&Leases.pdf
(2) Additional executory contracts and unexpired leases to be
assumed as of the Effective Date of the Second Amended
Plan with cure amounts indicated, a complete list of which
is available at no charge at:
http://bankrupt.com/misc/BallyII_AddAssumedContracts&Leases.pdf
(3) An amended description of the Reorganized Debtors'
Restructuring Transactions, to include these changes:
* BTF Europe Corporation is one of the Reorganized
Debtors' subsidiaries that may be ultimately merged or
liquidated into Bally Total Fitness of the Mid-Atlantic,
Inc.; and
* BTF Europe Corporation is deemed not to remain in
existence following completion of the Restructuring
Transactions.
A full-text copy of the Amended Restructuring Transactions
is available for free at:
http://bankrupt.com/misc/BallyII_AmendedRestructuring.pdf
(4) An amended list of Reorganized Bally II's initial
directors and officers, specifically naming (i) Frederic
F. Brace as an independent appointee to chair the Audit
Committee, and (ii) Timothy Bernlohr as an independent
appointee to chair the Compensation Committee
Amended List of D&Os
The Debtors' amended list of individuals comprising Reorganized
Bally II's Board of Directors reflect:
(1) Gene Davis, Chairman of the Board. Mr. Davis was appointed
Chairman of the Board prior to Bally's bankruptcy filing.
Pursuant to the Plan, Mr. Davis will continue as Chairman
of the Board of Reorganized Bally. Mr. Davis is Chairman
and CEO of PIRINATE Consulting Group, LLC, which provides
consultancy services to public and private businesses that
are undergoing transition. Services include crisis and
turn-around management; merger and acquisition consulting;
hostile and friendly takeovers; proxy contests; and
strategic planning advisory services.
(2) Michael Sheehan. Mr. Sheehan has served as Chief
Executive Officer of the Company since July 2008. Prior
to joining Bally, Mr. Sheehan served as the Chief
Operating Officer of 24 Hour Fitness since 2005. Before
serving as Chief Operating Officer, Mr. Sheehan served as
Executive Vice President, Operations of 24 Hour Fitness.
In addition to his comprehensive experience in the fitness
industry, Mr. Sheehan has played key operational, finance
and sales roles with multi-unit consumer retailers,
including management roles with Pepsico, Nestle and Yum
Brands, a food service holding company with well-known
brands including Taco Bell, Kentucky Fried Chicken and
Pizza Hut.
(3) Kevin Corgan. Mr. Corgan is a Managing Director at
JPMorgan Chase & Co., and is currently the head of North
American Distressed and High Yield Credit Trading, a
position he has held since 2006. Mr. Corgan's business
unit trades and makes proprietary investments in high
yield and distressed securities, bank loans and credit
derivatives. Mr. Corgan previously served in a similar
role at Morgan Stanley from 2003 to 2006. Prior to his
role at Morgan Stanley, Mr. Corgan worked at Goldman Sachs
as a trader in the High Yield and High Grade bond
division. He graduated from MIT with a BS in economics.
(4) Michael Kerrane. Mr. Kerrane is an Executive Director at
JPMorgan Chase & Co., where he has worked since 2000 as a
financial analyst, specializing in High Yield and
Distressed investments. Prior to joining JPMorgan, Mr.
Kerrane was an investment analyst at Lehman Brothers,
specializing in the retail industry. He previously served
in a similar role at Standard & Poor's. Mr. Kerrane is a
Chartered Financial Analyst and member of the New York
Society of Security Analysts. He earned an MBA from
Cornell University, and graduated from UCLA with a BA in
economics.
(5) Daniel Allen. Mr. Allen is a Partner and Senior Portfolio
Manager at Anchorage Advisors L.L.C., a New York-based
registered investment adviser. Prior to joining Anchorage
in 2008, Mr. Allen spent the previous six years with
Morgan Stanley and in his most recent role was responsible
for North American Credit Trading with a primary focus on
bank debt, high yield bonds and distressed securities.
Earlier in his career at Morgan Stanley, he oversaw the
par loan and distressed loan trading desks and later
managed the leveraged credit trading and high yield
operations. Prior to joining Morgan Stanley in 2002, Mr.
Allen was a Loan Trader at Goldman Sachs and a Corporate
Bond Trader at Fidelity Investments. Mr. Allen received
his B.S. from Skidmore College and his M.B.A. from Duke
University's Fuqua School of Business.
(6) Aaron N. Rosenstein. Mr. Rosenstein is a senior member of
the investment team and Co-Head of Restructuring at
Anchorage Advisors, L.L.C., a New York-based registered
investment adviser. Prior to joining Anchorage in 2003,
he was a principal at a private real estate investment and
finance company. Earlier in his career, Mr. Rosenstein
worked at Goldman Sachs, where he evaluated and executed
proprietary investments in distressed bank debt and bonds.
Mr. Rosenstein received a B.S. from The Wharton School and
serves on the Board of Trustees of The Abraham Joshua
Heschel School.
(7) Frederic F. Brace. Mr. Brace is being appointed to the
Board of Reorganized Bally as an independent appointee to
chair the audit committee. Mr. Brace was an Executive
Vice President and the Chief Financial Officer of UAL
Corp., an air transportation company, from August 2002
until his retirement in October 2008. During UAL's
bankruptcy from 2002-2006, Mr. Brace also served as its
Chief Restructuring Officer, responsible for all
Bankruptcy-related matters, culminating in the successful
reorganization and exit of UAL in 2006. Mr. Brace
currently serves on the Board of Directors of
BearingPoint, Inc., business consulting and systems
integration firm, Anixter International, a communications,
electrical wire and cable products distribution company,
and Great Atlantic & Pacific Tea Company, a food retailer.
(8) Timothy Bernlohr. Mr. Bernlohr was appointed to the Board
prior to Bally's bankruptcy filing. Mr. Bernlohr will
continue on the Board of Reorganized Bally as an
independent appointee to chair the compensation committee.
Mr. Bernlohr is the founder and managing member of TJB
Management Consulting, LLC, which specializes in providing
Project-specific consulting services to businesses in
transformation. Mr. Bernlohr is the former President and
CEO of RBX Industries, Inc., which is a leading designer,
manufacturer, and marketer of closed cell rubber and
plastic materials to the automotive, construction, and
industrial markets. Prior to joining RBX in 1997, Mr.
Bernlohr spent 16 years in sales and marketing management
in the International and Industry Products division of
Armstrong World Industries (now Armacell International,
GmbH). Mr. Bernlohr is also a Director of General
Chemical Industrial Products, Cadence Innovation, WCI
Steel, and General Insulation Company, Inc. Mr. Bernlohr
earned his bachelor of arts degree in 1981 from Penn State
University.
The Officers of Reorganized Bally, as of August 1, 2009, are:
Name Title
---- -----
Michael W. Sheehan Chief Executive Officer
Kathleen M. Boege Senior Vice President, General
Counsel and Secretary
William G. Fanelli Senior Vice President, Acting
Chief Financial Officer
Thomas S. Massimino Senior Vice President, Operations
Guy Thier Senior Vice President,
Information Technology and Chief
Information Officer
Steve Butler Zone Vice President
Michael A. LaManna Zone Vice President
John H. Wildman Zone Vice President
Teresa R. Willows Zone Vice President
Mike Feinman National Vice President, Fitness
Services
Earl J. Acquaviva, Jr. Vice President, Associate General
Counsel and Assistant Secretary
Rebecca A. Gall Vice President, Advertising
William C. Midwig Vice President, Customer Care
Ralph O'Hara Vice President, Corporate
Controller and Financial
Reporting
Susan R. Rehorst Vice President, Treasurer
James W. Shannahan Vice President, Facilities
Steven J. Tucker Vice President, Finance
Ronald E. Siegel Assistant Secretary
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)
BASSETT FURNITURE: To Restate 10-Q Report; Seek Covenant Waivers
----------------------------------------------------------------
Bassett Furniture Industries, Inc., said its triennial accounting
review by the Securities and Exchange Commission is close to being
completed.
Bassett had received comment letters from the Commission during
the second and third quarters of 2009, relating to Bassett's Form
10-K for the year ended November 29, 2008, and Form 10-Q for the
quarter ended February 28, 2009. Due to the potential
implications of these comments, the Company delayed its filing of
its Form 10-Q for the quarter ended May 30, 2009.
The Company worked very closely with its external auditors and
with the Staff of the SEC in the reevaluation of the accounting
policies and processes related to the questions raised by the SEC
in its comment letters. As a result, the Company will restate its
previously issued financial statements for the quarter ended
February 28, 2009, and file an Amended Form 10-Q with the SEC.
The restatement will increase the Company's net loss for the
quarter by $3.3 million, resulting in a net loss of $12.0 million,
as compared to a previously reported net loss of $8.7 million.
The increased net loss is primarily due to increased reserves and
valuation adjustments related to long-term notes receivable as a
result of the Company's reevaluation of its accounting policies
and processes surrounding its licensee notes receivable.
As a result of the restatement, the Company violated the net worth
covenant under its revolving credit facility for the quarter ended
February 28, 2009. As such, the Company has reclassified its debt
under the revolving credit facility from long-term to current.
The Company expects to file its Amended Form 10-Q for the quarter
ended February 28, 2009, within the next week.
In addition, the Company is in discussions with its bank to obtain
a waiver of the debt covenant violation or an amendment to the net
worth covenant and expects these negotiations to be completed by
the end of August by which time the Company plans to file its Form
10-Q for the quarter ended May 30, 2009.
"In light of a thorough review of certain of our accounting
processes and policies over the past couple of months and in
consultation with the Staff of the SEC and our external auditors,
we believe that restating our first quarter 2009 results is
appropriate," said J. Michael Daniel, interim chief financial
officer. "We believe that we have resolved the main accounting
and reporting issues, and we expect to have final resolution next
month after we file our official response to the last comment
letter from the SEC. We are grateful to the Staff for the
assistance they provided throughout the reevaluation process."
On July 22, 2009, the Company received a notification letter from
the NASDAQ Stock Market dated July 14, regarding noncompliance
with the rules for continued listing according to Listing Rule
5250(c)(1) as a result of the Company's failure to file its May
2009 Form 10-Q with the SEC within the required period. The
Company has until September 14, 2009, to submit a plan to regain
compliance with NASDAQ's continuing listing standards.
For more than 100 years, Bassett Furniture Industries, Inc.,
(Nasdaq:BSET) has provided families with home furnishings.
Bassett is a group of more than 130 stores located in the United
States, Puerto Rico and Canada. Bassett stores offer furniture,
lamps, rugs, mirrors and artwork.
BEAZER HOMES: S&P Raises Corporate Credit Rating to 'CCC'
---------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Atlanta-based Beazer Homes USA Inc. to 'CCC' from 'SD'
(selective default). The outlook is negative. The issue-level
rating on the senior unsecured notes remains unchanged at 'D'
reflecting S&P's expectation that additional discounted
repurchases or a similar restructuring are likely. S&P's '5'
recovery rating is also unchanged and indicates its expectation
for a modest (10%-30%) recovery in the event of default.
"Our rating on Beazer primarily reflects the company's very highly
leveraged capital structure and consequent low tangible net worth.
This could be problematic in the near-to-intermediate term, in
S&P's view, given a small estimated cushion over a minimum
tangible net worth covenant governing many of the company's senior
unsecured notes," said credit analyst James Fielding. "Recent
discounted debt repurchases, which S&P viewed as selective
defaults, were not sufficient to alleviate these concerns. S&P
does note that Beazer's operating loss narrowed significantly in
the most recent quarter and that the company maintains adequate
unrestricted cash to meet its financial obligations in the near
term."
The negative outlook reflects S&P's expectation that Beazer's
earnings will remain weak over the intermediate term and that any
subsequent losses could further reduce the company's cushion over
its tangible net worth covenant. S&P will lower its corporate
credit rating if it appears likely that Beazer will violate a
covenant. Additionally, S&P would lower its rating if the
company's cash balance is sharply reduced by larger-than-
anticipated operating cash flow deficits. Barring a material
recapitalization of the company, S&P is unlikely to revise its
outlook to stable or consider raising the ratings in the near
term.
BEECH TREE: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Beech Tree Corporation
dba The Copper Beech Inn
58 Otter Cive Drive
Old Saybrook, CT 06475
Bankruptcy Case No.: 09-32276
Chapter 11 Petition Date: August 19, 2009
Court: United States Bankruptcy Court
District of Connecticut (New Haven)
Judge: Lorraine Murphy Weil
Debtor's Counsel: James G. Verrillo, Esq.
Zeisler and Zeisler
558 Clinton Avenue
P.O. Box 3186
Bridgeport, CT 06605
Tel: (203) 368-4234
Fax: (203) 367-9678
Email: jverrillo@zeislaw.com
Estimated Assets: $1,000,000 to $10,000,000
Estimated Debts: $1,000,000 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/ctb09-32276.pdf
The petition was signed by Ian Phillips, owner of the Company.
BERNARD MADOFF: Cohmad Seeks to Move Lawsuit to District Court
--------------------------------------------------------------
According to David Glovin at Bloomberg News, Cohmad Securities
Corp., wants to move the lawsuit filed by Irving Picard against it
from the bankruptcy court to federal district court. Cohmad said
in a filing with the U.S. District Court for the Southern District
of New York that it would be a "profound waste" of resources if it
had to defend lawsuits in bankruptcy court, where the trustee
sued, and in district court, where the Securities and Exchange
Commission filed a suit against it on the same day.
As reported by the Troubled Company Reporter on June 23, 2009,
Irving H. Picard, the trustee for the liquidation of Bernard L.
Madoff Investment Securities LLC, filed a complaint in the U.S.
Bankruptcy Court for the Southern District of New York against
Cohmad and a number of its principals, including Maurice "Sonny"
Cohn, Marcia Cohn and Robert Jaffe, as well as other related
defendants.
The complaint seeks to avoid decades' worth of transactions
through which BLMIS paid well over $100 million to Cohmad, Sonny
Cohn and other Cohmad related individuals in exchange for Sonny
Cohn, Marcia Cohn, Robert Jaffe and other Cohmad employees
introducing victims to BLMIS and knowingly helping Madoff create,
fund and maintain his massive Ponzi scheme. Remarkably, 90% or
more of the income to Cohmad and others came from the referral of
customers to Madoff.
"Although Madoff stated he was operating alone, our investigation
has yielded significant evidence that, in fact, a variety of other
people helped Madoff prey on innocent victims," explained David
Sheehan, counsel for the Trustee and a partner at Baker &
Hostetler, the court appointed counsel for Mr. Picard. "We are
bringing this lawsuit to help recover, at the very least, the
commissions that Madoff's enablers generated for knowingly
introducing unsuspecting investors to Madoff," said Mr. Picard.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC was a market maker in
U.S. stocks, including all of the S&P 500 and more than 350 Nasdaq
stocks. The firm moved large blocks of stock for institutional
clients by splitting up orders or arranging off-exchange
transactions between parties. It also performed clearing and
settlement services. Clients included brokerages, banks, and
other financial institutions. In addition, Madoff Securities
managed assets for high-net-worth individuals, hedge funds, and
other institutional investors.
The firm is being liquidated in the aftermath of a fraud scandal
involving founder Bernard L. Madoff.
As reported by the Troubled Company Reporter on December 15, 2008,
the Securities and Exchange Commission charged Mr. Madoff and his
investment firm with securities fraud for a multi-billion dollar
Ponzi scheme that he perpetrated on advisory clients of his firm.
The estimated losses from Mr. Madoff's fraud were allegedly at
least US$50 billion.
Also on December 15, 2008, the Honorable Louis A. Stanton of the
U.S. District Court for the Southern District of New York granted
the application of the Securities Investor Protection Corporation
for a decree adjudicating that the customers of BLMIS are in need
of the protection afforded by the Securities Investor Protection
Act of 1970. Irving H. Picard, Esq., was appointed as trustee for
the liquidation of BLMIS, and Baker & Hostetler LLP was appointed
as counsel.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to 150
years of life imprisonment for defrauding investors.
BERNARD MADOFF: Picard Says Two Offshore Firms Ignored Suits
------------------------------------------------------------
Erik Larson at Bloomberg News reports that Irving Picard told the
U.S. Bankruptcy Court for the Southern District of New York that
Cayman Islands-based Primeo Fund and Bermuda-based Alpha Prime
Fund Ltd. are ignoring the complaints he filed against the two
offshore hedge funds. Mr. Picard asked the Bankruptcy Court to
file default notices against the two firms. The suits named
British bank HSBC Holdings Plc, which acted as beneficiary bank
and custodian for the funds' Madoff investments, as defendant but
the default doesn't apply to HSBC, which has said it has "good
defenses" to the trustee's allegations.
As reported by the Troubled Company Reporter on July 17, 2009,
Bernard L. Madoff Investment Securities LLC trustee Irving Picard,
appointed under the Securities Investor Protection Act to
liquidate the company, sued Bermuda-based Alpha Prime Fund Limited
for allegedly receiving almost US$213 million in transfers from
the Madoff firm in the past two years. According to the report,
Mr. Picard alleged that HSBS and its unit were conduits for the
shifting of money from Madoff to Alpha Prime. Mr. Picard's
complaint said that from January 2005 to December 11, 2008 -- the
day Mr. Madoff was arrested and was sued by the U.S. Securities
and Exchange Commission -- Alpha Prime received transfers via HSBC
and beneficial tax payments of almost US$213 million. HSBC, its
subsidiary and other unnamed entities invested US$227.6 million
with a Madoff firm on behalf of Alpha Prime starting in June 2003,
according to the complaint.
Mr. Picard filed a separate suit against HSBC and Cayman Islands-
based Primeo to recover as much as US$150 million. Mr. Picard
said, "Hedge funds and funds of funds like Primeo were
sophisticated investors" and they "knew or should have known that
Madoff's investment advisory business was predicated on fraud."
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC was a market maker in
U.S. stocks, including all of the S&P 500 and more than 350 Nasdaq
stocks. The firm moved large blocks of stock for institutional
clients by splitting up orders or arranging off-exchange
transactions between parties. It also performed clearing and
settlement services. Clients included brokerages, banks, and
other financial institutions. In addition, Madoff Securities
managed assets for high-net-worth individuals, hedge funds, and
other institutional investors.
The firm is being liquidated in the aftermath of a fraud scandal
involving founder Bernard L. Madoff.
As reported by the Troubled Company Reporter on December 15, 2008,
the Securities and Exchange Commission charged Mr. Madoff and his
investment firm with securities fraud for a multi-billion dollar
Ponzi scheme that he perpetrated on advisory clients of his firm.
The estimated losses from Mr. Madoff's fraud were allegedly at
least US$50 billion.
Also on December 15, 2008, the Honorable Louis A. Stanton of the
U.S. District Court for the Southern District of New York granted
the application of the Securities Investor Protection Corporation
for a decree adjudicating that the customers of BLMIS are in need
of the protection afforded by the Securities Investor Protection
Act of 1970. Irving H. Picard, Esq., was appointed as trustee for
the liquidation of BLMIS, and Baker & Hostetler LLP was appointed
as counsel.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to 150
years of life imprisonment for defrauding investors.
BEST ENERGY: Inks Amendment & Waiver to PNC Bank Credit Agreement
-----------------------------------------------------------------
Best Energy Services, Inc., has entered into a second amendment
and waiver of its credit agreement with PNC Bank. Under the
second amendment, covenant terms on minimum EBITDA and rig
utilization have been adjusted significantly downward. Interest
rate on the term loan has been increased by 0.25%.
Under the new covenant tests, Fixed Charge Coverage, EBITDA and
rig utilization rates are:
-- Minimum Fixed Charge Coverage Requirements:
Minimum Fixed Charge
12 Month Period Ending: Coverage Ratio
----------------------- --------------------
September 30, 2009 No Test
December 31, 2009 No Test
March 31, 2010 No Test
June 30, 2010 No Test
September 30, 2010 1.10 to 1.0
December 31, 2010 1.10 to 1.0
March 31, 2011 1.10 to 1.0
-- Minimum Quarterly EBITDA Requirements:
Fiscal Quarter Ending Minimum EBITDA
--------------------- --------------
Three month period ending
September 30, 2009 ($30,000)
Six month period ending
December 31, 2009 $880,000
Nine month period ending
March 31, 2010 $1,640,000
Twelve month period ending
June 30, 2010 $2,685,000
Twelve month period ending
September 30, 2010 $3,795,000
Twelve month period ending
December 31, 2010 $3,990,000
Twelve month period ending
March 31, 2011, and each
fiscal quarter ending thereafter $4,000,000
-- Minimum Quarterly Rig Utilization Requirements:
Fiscal Quarter Ending Minimum Rig Utilization
---------------------- -----------------------
September 30, 2009 34%
December 31, 2009 39%
March 31, 2010 40%
June 30, 2010 41%
September 30, 2010 43%
December 31, 2010 43%
March 31, 2011 and each fiscal
quarter ending thereafter 43%
Commenting on the amended agreement with PNC, Mark Harrington,
Chairman and CEO of Best Energy Services, said, "It is rewarding
to all of us that in these very challenging times, PNC continues
to work side-by-side with us to meet and address our challenges.
We thank them for once again demonstrating their continued support
of our business model."
About Best Energy Services
Based in Houston, Texas, Best Energy Services, Inc. --
http://www.BEYSinc.com/-- is a well service, drilling and
ancillary services provider to the domestic oil, gas, water and
mining industries. Through its subsidiaries, Best Well Service,
Inc. and Bob Beeman Drilling Co., and its Housing Accommodations
and Geological Services operations, the Company is actively
engaged in supporting the exploration, production and recovery of
oil, gas, water and mineral resources in Arizona, Colorado,
Kansas, New Mexico, Nevada, Oklahoma, Texas, Utah, and Wyoming.
BIOPURE CORP: To Pay $600,000 to "Deceived" Investors
-----------------------------------------------------
MassDevice reports that Biopure Corp. has settled its five-year
dispute with shareholders alleging management's malfeasance in
touting the Company's stock.
Court documents say that Biopure, under the proposed settlement,
will pay $600,000 to investors contending that they were deceived
by Biopure executives who allegedly concealed negative news about
the Company's artificial blood products. According to MassDevice,
money for the settlement will come from a directors and officers
insurance policy covering legal costs associated with management
errors and omissions.
MassDevice relates that plaintiffs accused Biopure management of
deliberately misleading investors about the status of the
Company's 2002 application to market its Hemopure artificial blood
product in the U.S. The U.S. Food and Drug Administration voiced
serious concerns about whether Hemopure could be used to treat
anemic patients during surgery or as a blood substitute for trauma
victims, court documents say. The FDA decided to halt clinical
trials of Hemopure in April 2003.
The complainants had alleged that instead of disclosing the steep
regulatory hurdle with the FDA, the Biopure executives continued
to tout Hemopure's prospects for several months, artificially
buoying its stock price, MassDevice says. According to
MassDevice, Biopure's share price sank, falling from an August
high of $8.35 a share to less than $2.50 by the end of 2003, when
the truth about the regulatory concerns leaked later in the year.
Biopure executives denied any wrongdoing and sought several times
to have the case dismissed, the report states.
MassDevice relates that prospective buyers were bidding on Biopure
assets Tuesday. Biotech LLC, says the report, put up a
$2.6 million "stalking horse" bid for Biopure's assets.
Based in Cambridge, Massachusetts, Biopure Corporation --
http://www.biopure.com/-- develops and markets pharmaceuticals,
called oxygen therapeutics, that are intravenously administered to
deliver oxygen to the body's tissues.
Biopure filed for Chapter 11 bankruptcy protection on July 16,
2009 (Bankr. D. Mass. Case No. 09-16725). Christopher J. Panos,
Esq., at Craig and Macauley, P.C., assists the Debtor in its
restructuring efforts. The Debtor listed $5,076,000 in assets and
$2,729,000 in debts.
BOSCOV'S INC: Ballots for Joint Plan Due August 28
--------------------------------------------------
On July 22, 2009, the U.S. Bankruptcy Court for the District of
Delaware approved the revised disclosure statement explaining the
second amended joint plan of BSCV, Inc. (f/k/a Boscov's, Inc.) and
its debtor affiliates, dated July 17, 2009.
As a result, the disclosure statement may now be disseminated to
holders of claims against and interests in the Debtors for
solicitation of votes to accept or reject the Plan.
The voting deadline is 8:00 p.m., Eastern time, on August 28,
2009.
A hearing to consider cofirmation of the Plan has been scheduled
for September 17, 2009, at 3:00 p.m., Eastern time.
Objections, if any, to the confirmation of the Plan must be filed
with the Court so that they are received no later than 5:00 p.m.,
Eastern time, on August 28, 2009.
Summary of Plan Terms
Except as provided in the Plan, each Debtor will, as a Reorganized
Debtor, continue to exist after the Plan's Effective Date as a
separate corporate entity.
Following the sale of substantially all of the Debtors' assets to
BLF Acquisition, Inc., which closed on December 4, 2008, the
assets of the Debtors' consist almost exclusively of cash and the
right to receive future cash from, among other things, tax refunds
and a $4.0 million note executed by BLF in connection with a prior
settlement with the official committee of unsecured creditors.
The Plan essentially provides for the distribution of the
aforementioned cash, after the payment of expenses of the estates,
to the holders of allowed claims in accordance with the priorities
established by the Bankruptcy Code.
The Debtors estimate that between approximately $8.4 million and
$10.4 million will be available to fund distributions to general
unsecured creditors in Class 4 under the Plan for an estimated
recovery of 6.4% to 15.74%. In addition, the Debtors anticipate
that they will receive tax refunds totaling $7.0 million during
calendar year 2009, which would arise from the carryback of an
expected net operating loss for the Debtors' tax year ending
January 31, 2009, to the Debtors' tax year ended January 31, 2007.
If the Debtors receive the tax refund as expected, it is
anticipated that between approximately $15.4 million and
$17.4 million will be made available for distribution on account
of allowed claims in Class 4 under the Plan after payment of the
Distribution Trust Expenses.
Holders of old common stock interests, which are unimpaired, will
retain their interests under the Plan, and are deemed to have
accepted the Plan.
Only priority claims under Class 3 and general unsecured claims
under Class 4, being impaired, are entitled to vote on the plan.
Prepetition intercompany claims under Class 6, although impaired,
are deemed to have accepted the Plan. Classes in 1, 2, 7, and 8
are unimpaired and are deemed to have accepted the Plan.
Subordinated claims under Class 5, who will not receive any
property under the Plan, are not entitled to vote and deemed to
have rejected the Plan.
A full-text copy of the 2nd amended joint plan of BSCV, Inc., and
its debtor affiliates is available for free at:
http://bankrupt.com/misc/bscv.2ndamendedDS.pdf
On November 21, 2008, the Bankruptcy Court approved the sale of
substantially all of the Debtors' assets to BLF Acquisition, Inc.,
an entity owned by former management and shareholders of the
Debtors led by Albert Boscov, the Debtors' previous chairman and
chief executive officer. The proceeeds of the sale have been used
to pay down the Debtors' secured creditors.
The consideration paid by BLF under the BLF APA consisted of the
following:
-- all outstanding amounts owing under the Debtors' first lien
debtor in possession revolving loan facility, dated August 5,
2008, among the Debtors, Bank of America, as agent, and a
syndicate of lenders (the "DIP Lenders");
-- all outstanding amounts owing under the Debtors' pre-petition
second lien credit agreement, dated March 20, 2008, among the
Debtors, GB Merchant Partners LLC (as successor to Bear
Stearns Corporate Lending, Inc.), as administrative agent and
collateral agent, and the lenders party thereto;
-- cash totaling $3 million, subject to possible adjustment
upward under the BLF asset purchase agreement; and
-- the assumption of various liabilities.
Additionally, as part of the consideration under the BLF asset
purchase agreement, BLF was required to pay (i) the claims of
certain holders of administrative expense claims arising under
section 503(b)(9) of the Bankruptcy Code, (ii) the administrative
expense claims of estate professionals for fees accrued but not
yet paid prior to the closing of the sale, up to a cap, (iii) the
amounts necessary to cure all monetary defaults under the
contracts and leases purchased under the BLF asset purchase
agreement, and (iv) certain other amounts.
Boscov's Inc. and its debtor-affiliates filed for Chapter 11
protection on August 4, 2008 (Bankr. D. Del. Case No. 08-11637).
Judge Kevin Gross presides over the cases.
Attorneys at Jones Day serve as the Debtors' lead counsel. The
Debtors' claims agent is Kurtzman Carson Consultants L.L.C.
Attorneys at Cooley Godward Kronish LLP, in New York, and Potter
Anderson & Corroon LLP , in Wilmington, Delaware, represent the
Debtors as co-counsel.
In its amended schedules filed with the Court on March 12, 2009,
BSCV Department Store, LLC (f/k/a Boscov's Department Store, LLC)
listed assets of $315.7 million against debt totaling
$314.6 million. Secured creditors are owed $196.2 million.
BOSTON CHICKEN: ACE Insurance Agrees to Pay $17 Million
-------------------------------------------------------
In 1995, ACE Insurance Company issued a $20 million director and
officer liability policy to Boston Chicken, Inc. In 2005, Gerald
K. Smith, the Plan Trustee winding up Boston Chicken's estate,
sued ACE Insurance. After more than four years of litigation,
with stops in the District Court, the Ninth Circuit and a
Bermudian court, ACE has agreed to pay $17 million to compromise
and settle Mr. Smith's lawsuit in exchange for a full release and
dismissal of the lawsuit.
Beus Gilbert PLLC, the law firm representing Mr. Smith on a
contingency basis, will intercept $4.25 million of the $17 million
settlement amount. The balance will be distributed to Boston
Chicken's unsecured creditors.
Boston Chicken, Inc., sought Chapter 11 protection (Bankr. D.
Ariz. Case No. 98-12547) in October 1998. On January 6, 2000, the
Company filed a Joint Plan of Reorganization and related
Disclosure Statement. The basis of the Plan of Reorganization was
an asset purchase agreement dated November 30, 1999, among the
Debtors, as Sellers, Golden Restaurant Operations, Inc., a wholly-
owned subsidiary of McDonald's Corporation, as Buyer, and
McDonald's, as guarantor of certain of GRO's obligations under the
Asset Purchase Agreement. Under the terms of the Asset Purchase
Agreement, GRO purchased substantially all of the Debtors' assets
for approximately $173.5 million and assumed some of the
restaurant company's liabilities.
BOYD GAMING: S&P Affirms Corporate Credit Rating at 'BB-'
---------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed its 'BB-'
corporate credit rating on Las Vegas-based Boyd Gaming Corp. The
rating outlook is negative.
"At the same time, S&P revised its recovery rating on Boyd's
senior subordinated debt to '5', indicating S&P's expectation of
modest (10%-30%) recovery for lenders in the event of a payment
default, from '3'," said Standard & Poor's credit analyst Ben
Bubeck. S&P also lowered its issue-level rating on this debt to
'B+' (one notch lower than the 'BB-' corporate credit rating) from
'BB-', in accordance with S&P's notching criteria for a '5'
recovery rating.
The recovery rating revision reflects S&P's reassessment of the
value of the Echelon site on the Las Vegas Strip and a reduction
in S&P's assumed emergence EBITDA multiple to 7.0x from 7.5x, due
to widespread and persistent challenging operating conditions in
the gaming sector, and S&P's expectation that these conditions
will impact valuations in the future.
The rating on Boyd reflects the company's high debt leverage, a
portfolio consisting of some second-tier assets in competitive
markets, and S&P's expectations for limited covenant cushion over
the next few quarters. These factors are partially offset by
Boyd's geographically diverse portfolio, an experienced management
team, and adequate liquidity.
The rating incorporates S&P's expectation that EBITDA will
continue to decrease through 2009. However, although wholly owned
EBITDA fell 22% in 2008, S&P expects ongoing cost-containment
efforts combined with improved operating performance at properties
outside of the Las Vegas locals market to curb EBITDA declines in
2009. More specifically, S&P's rating incorporates the
expectation that wholly owned EBITDA will decline in the low-teens
percentage area in 2009, which would drive leverage, excluding
earnings from Borgata, to more than 8x by the end of the year.
Wholly owned EBITDA declined about 12% during the six months ended
June 30, 2009.
BUDGET FINANCE: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Budget Finance Corporation
44 East Galena Boulevard
Aurora, IL 60606
Bankruptcy Case No.: 09-30450
Chapter 11 Petition Date: August 19, 2009
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: John H. Squires
Debtor's Counsel: Michael L. Gesas, Esq.
Arnstein & Lehr, LLP
120 South Riverside Plaza, Ste. 1200
Chicago, IL 60606-3910
Tel: (312) 876-7125
Fax: (312) 876-6260
Email: mlgesas@arnstein.com
Estimated Assets: $1,000,000 to $10,000,000
Estimated Debts: $1,000,000 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/ilnb09-30450.pdf
The petition was signed by Robert R. Reuland, president of the
Company.
CABI DOWNTOWN: Files for Chapter 11 Bankruptcy Protection
---------------------------------------------------------
Cabi Downtown, LLC, has filed for Chapter 11 bankruptcy protection
in the U.S. Bankruptcy Court for the Southern District of Florida
(Case No. 09-27168), listing $100 million to $500 million in
liabilities owed to 200 to 999 creditors.
South Florida Business Journal reports that Cabi Downtown's
liabilities include:
-- the original $256 million construction loan on the
Everglades on the Bay, the 506-unit twin-tower project,
was made by Bank of America, with a November 2008 maturity
date that was extended to February 18, 2009;
-- $912,272 in disputed debt owed to Gryphon Construction
LLC;
-- $395,456 owed to law firm Siegfried, River, Lerner De
La Torre & Sobel; and
-- $193,750 in disputed claim by Holly Sime Realty.
According to Business Journal, sales of Everglades on the Bay
units started in 2004, but Cabi Downtown soon returned buyer
deposits due to rising construction costs.
Mindy A. Mora, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP,
assists Cabi Downtown in its restructuring efforts.
Aventura, Florida-based Cabi Downtown, LLC, operates a real estate
business.
CARTERET ARMS LLC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Carteret Arms, LLC
C/O Connolly Properties Inc
128 East Seventh Street
Plainfield, NJ 07060
Case No.: 09-31726
Debtor-affiliate filing separate Chapter 11 petition August 7,
2009:
Entity Case No.
------ --------
Plainfield Apartments, LLC 09-30679
Debtor-affiliates filing separate Chapter 11 petition July 29,
2009:
Entity Case No.
------ --------
179 South Harrison, LLC 09-29667
158 South Harrison Associates, LLC 09-29669
Cypress House, LLC 09-29668
Type of Business: The Debtor operates a real estate business.
Chapter 11 Petition Date: August 19, 2009
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Judge: Morris Stern
Debtor's Counsel: Richard D. Trenk, Esq.
Trenk, DiPasquale, Webster,
Della Fera & Sodono, P.C.
347 Mt. Pleasant Avenue, Suite 300
West Orange, NJ 07052
Tel: (973) 243-8600
Email: rtrenk@trenklawfirm.com
Total Assets: $232,663
Total Debts: $14,603,970
The petition was signed by David M. Connolly, the company's
manager.
Carteret Arms' List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
ABJ Sprinkler Co., Inc. $1,521
Corbett Exterminating, Inc. $2,054
Aberbach, Zolin & Co. $2,640
Makrancy Quality Landscape $2,766
and Flowers
Levy Ehrlich & Petriello, PC $3,015
Manatee Environmental $3,146
Association
Bill Rich $3,623
Dimeglio Landscaping Co. $4,868
Network Communications $6,460
AFCO $7,513
J.W. Kennedy LLC $7,972
Amtech Elevator Services $8,133
Waste Management of NJ $10,399
UGI Energy Services $11,442
Manhattan Welding Company $13,449
Trenton Water Works $21,589
PSE&G $57,850
Hess Corporation $227,228
Urban American Capital, LLC $1,200,000
590 56th Street
West New York
NY 07093
New York Community Bank $13,000,000
PO Box 9018
Central Islip,
NY 11722
CCS MEDICAL: Wins Court Nod to Send Plan to Creditors for Voting
----------------------------------------------------------------
Judge Christopher Sontchi of the U.S. Bankruptcy Court for the
District of Delaware has approved the disclosure statement
explaining CCS Medical Inc.'s proposed Chapter 11 plan of
reorganization. CCS Medical may now begin sending ballots to
creditors entitled to vote on the Plan.
According to Bloomberg News's Michael Bathon, second lien lenders
owed $130 million wanted another appraisal on the Company's value.
Goldman Sachs & Co. has valued the Company at $230 million to
$286 million, giving less than 100 cents on the dollar available
to repay first lien lenders of their $350 million in claims.
Judge Sontchi, however, declined the second lien lenders' request,
saying that it will only delay the Chapter 11 case. The Company
had contemplated on a quick Chapter 11 turnaround as it negotiated
the terms of the Plan with senior lenders prepetition.
As reported by the Troubled Company Reporter on July 21, 2009, CCS
Medical and its debtor-affiliates delivered to the Bankruptcy
Court a joint Chapter 11 plan of reorganization, which provides
for potential recovery to unsecured creditors in the form of cash
or warrant, based on a "gift" provided by first lien lenders.
According to the disclosure statement, the Plan provides for the
restructuring of the Debtors' liabilities in a manner designed to
maximize recovery to all stakeholders and to enhance the finance
viability of the reorganized Debtors. In addition, the Plan
provides for balance sheet restructuring that swaps the Debtors'
current debt evidence by the first lien lender claims for
$200 million in new notes and 100% of the new equity. Other
secured and certain unsecured creditors will receive cash or
warrants, as applicable.
Furthermore, based on the valuation, it is not expected that there
will be any recovery available for classes other than
administrative expense claims, U.S. Trustee fees, fee claims,
priority claims, priority non-tax claims, debtor-in-possession
claims and first lien lender claims. However, the first lien
lenders have agreed to provide a portion of their recovery on
account of the first lien lender claims in the form of warrants
and cash as a "gift" to certain holders of allowed second lien
lender claims, allowed trade claims and allowed general unsecured
claims. All of the Debtors' exciting common stock and preferred
shares will be cancelled and the holders will not be entitled
to any recovery under the plan. The restructuring transactions
contemplated by the Plan will substantially de-lever the Debtors
and provide more needed liquidity.
In connection with preparing the estimation of recoveries, the
Debtors assumed that their ongoing enterprises value for purposes
of the Plan is between $230 million and $286 million, based on the
valuation prepared by Goldman Sachs $ Co. LLC.
Under the Plan, holders of first lien lender claims, totalling
$350 million, are expected to recover between 66% and 82%.
Estimated recovery of holders of second lien lender claim, trade
claim, and general unsecured claims has not been determined.
A full-text copy of the Disclosure Statement is available for free
at http://ResearchArchives.com/t/s?3f9e
A full-text copy of the Chapter 11 Plan is available for free at:
http://ResearchArchives.com/t/s?3f9f
About CCS Medical
Founded in 1994, CCS Medical -- http://www.ccsmed.com/-- has
become a leading provider of medical supplies. CCS Medical
assists patients that need diabetes test strips, insulin pumps,
urological supplies, ostomy supplies, advanced wound care
dressings and prescription drugs. Clear Water, Florida-based CCS
Medical specializes in providing a convenient way for patients to
receive supplies for their chronic illnesses in a manner that
saves them time and money.
CCS Medical, along with its affiliates, filed for Chapter 11 on
July 8, 2009 (Bankr. D. Del. Case No. 09-12390). At the time of
the filing, CCS Medical said that it had assets of $100 million to
$500 million against debts of $500 million to $1 billion.
Attorneys at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors. Willkie Farr & Gallagher LLP serves as co-counsel to the
Debtors. Goldman, Sachs & Co., serves as investment banker and
Alvarez & Marsal Healthcare Industry Group, LLC, as restructuring
advisor. Epiq Bankruptcy Solutions LLC is claims agent.
CHIYODA AMERICA: Files Chapter 11, Pre-Negotiated Plan
------------------------------------------------------
Chiyoda America Inc., a subsidiary of Japan's Chiyoda Gravure
Corp., filed a Chapter 11 petition August 19 in Manhattan (Bankr.
S.D.N.Y. Case No. 09-15059).
Chiyoda, according to Bloomberg's Bill Rochelle, also filed a plan
to pay unsecured creditors in full over time so the parent may
retain ownership. The plan calls for the parent's secured claim
to be reduced to $3 million, with the deficiency of $14.2 million
becoming an unsecured claim. Third-party unsecured creditors are
slated to be paid in full over four years, if they vote for the
plan.
Chiyoda, Bloomberg relates, makes gravure printed products for
manufacturers of kitchen countertops and laminated flooring.
Financial difficulties were precipitated by a dispute among
shareholders, cheaper imports from China and the decline in the
construction and real estate markets. Revenue for the year ended
Sept. 30 will be about $7.6 million. For the year, the loss
before interest, taxes, depreciation and amortization is projected
to be $1.8 million, according to a court filing.
The assets are on the books for $21.3 million, while debt totals
$44.5 million. Debt includes a secured claim of $17.2 million
owed to the parent, plus $12.4 million in unsecured claims from
affiliates.
CRUCIBLE MATERIALS: Mortgages Invalid, Creditors Committee Says
---------------------------------------------------------------
According to Bloomberg's Bill Rochelle, the official committee of
unsecured creditors in Crucible Materials Corp.'s Chapter 11 cases
commenced an adversary proceeding against the secured lenders,
contending the banks never or belatedly filed mortgages or liens
against almost $14 million in real property and fixtures.
Crucible represented to the Bankruptcy Court that the lenders,
owed $64.5 million, had valid security interests. Wachovia
Capital Financial Corp. (New England) serves as agent for the
lenders being sued. The Creditors Committee contends that the
mortgages are unperfected and unenforceable against the properties
where there were no filings.
Based in Syracuse, New York, Crucible Materials Corporation -- aka
Crucible Specialty Metals, Crucible Service Centers, Crucible
Compaction Metals, Crucible Research and Trent Tube -- makes
stainless and alloy steel for use in the aircraft, automotive,
petrochemical, and other industries. The Company is currently
employee-owned. Its Web site is http://www.crucible.com/
The Company and its affiliate, Crucible Development Corporation,
filed for Chapter 11 protection on May 6, 2009 (Bankr. D. Del.
Lead Case No. 09-11582). Mark Minuti, Esq., at Saul Ewing LLP
represents the Debtors in their restructuring efforts. The
Debtors engaged Duff & Phelps Securities LLP as investment banker;
RAS Management Advisors LLC as business advisor; and Epiq
Bankruptcy Solutions LLC as claims agent. Roberta A. DeAngelis,
United States Trustee for Region 3, appointed five creditors to
serve on the Official Committee of Unsecured Creditors. The
Debtors listed assets and debts both ranging from $100 million to
$500 million.
Gym Owner Bally Total Fitness Confirms 2nd Reorganization Plan
Bally Total Fitness Holding Corp. is on the cusp of
emerging from bankruptcy reorganization for a second time in
less than two years, given the signature of the bankruptcy judge
yesterday on an order confirming another Chapter 11 plan.
CHIYODA AMERICA: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Chiyoda America, Inc.
fka Cosmopolitan Graphics Corporation
fka Advanced Printing
708 Third Avenue
5th Floor, Suite #97
New York, NY 1001
Case No.: 09-15059
Chapter 11 Petition Date: August 19, 2009
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Arthur J. Gonzalez
Debtor's Counsel: Michael Z. Brownstein, Esq.
Blank Rome LLP
405 Lexington Avenue
New York, NY 10174
Tel: (212) 885-5520
Fax: (212) 885-5001
Email: mbrownstein@blankrome.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Hiroshi Mizumoto, the company's vice-
president and general manager.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Tentok Paper Co., Ltd. $5,364,158
264 Tenma, Fuji
Shizuka 419-0205
Japan
Munksjo Paper, Inc. $645,049
Division D‚cor
642 River Street
Fitchburg, MA 01420-2918
Liochem, Inc. $531,298
2145 East Park Drive
Conyers, GA 30013
Hi-Tech Color Inc. $302,404
Midway Industrial Park
1721 Midway Road
Odenton, MD 21113
Nagase & Co. Ltd $193,149
AON Risk Services, Inc. $52,823
of New York
Pamarco Global Graphics $51,907
Aetna Health Insurance $42,679
Premiums
Coatings, Adhesives, Inks $42,370
Dolan Construction Inc. 14 Quail Ridge $37,520
Drive, Reading
PA 19607
Richard L. Sensenig Co. $36,585
PPL Electric Utilities $34,508
Marco Incorporated $29,644
Sauressig $17,064
Berkheimer Earned Income Tax $10,846
Herbein & Company, Inc. Professional $10,020
Services
UGI Utilities $9,645
Hukill Chemical Corp. $8,709
Linda Dunlap Vacation and $8,491
Severance
Guardian Dental $7,450
CHRIS NUNEZ: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Chris Nunez
395 Fitzgerald Avenue
San Martin, CA 95046
Bankruptcy Case No.: 09-56897
Chapter 11 Petition Date: August 19, 2009
Court: United States Bankruptcy Court
Northern District of California (San Jose)
Debtor's Counsel: Scott J. Sagaria, Esq.
Law Offices of Scott J. Sagaria
333 W San Carlos, St. #1625
San Jose, CA 95110
Tel: (408) 279-2288
Email: sjsagaria@sagarialaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Mr. Nunez.
CLEARPOINT BUSINESS: Has "Going Concern" Doubt in Form 10-Q
-----------------------------------------------------------
ClearPoint Business Resources Inc. on August 18 reported a net
loss of $283,531 on $1,351,149 of revenue for quarter ended
June 30, 2009, compared with a net loss of $4,944,214 on
$3,291,462 of revenue during the year-ago period.
As of June 30, 2009, ClearPoint had total assets of $3,392,403
against debts of $26,262,146, resulting to a stockholders' deficit
of $22,769,743.
A copy of the Company's Form 10-Q filed with the Securities and
Exchange Commission is available for free at:
http://researcharchives.com/t/s?4264
"Historically, ClearPoint has funded its cash and liquidity needs
through cash generated from operations and debt financing. At
June 30, 2009, the Company had an accumulated deficit of
$55,412,191 and working capital deficiency of $8,904,055. For the
six months ended June 30, 2009, the Company incurred a net loss of
$921,648. Although the Company restructured its debt and obtained
new financing in the third quarter of 2009, cash projected to be
generated from operations may not be sufficient to fund operations
and meet debt repayment obligations during the next twelve months.
In order to meet its future cash and liquidity needs, the Company
may be required to raise additional financing and restructure
existing debt," the Company said.
"There is no assurance that the Company will be successful in
obtaining additional financing and restructuring its existing
debt. If the Company does not generate sufficient cash from
operations, raise additional financing and restructure existing
debt, there is substantial doubt about the ability of the Company
to continue as a going concern. The accompanying unaudited
condensed consolidated financial statements have been prepared
assuming that the Company will continue as a going concern, which
contemplates, among other things, the realization of assets and
satisfaction of liabilities in the normal course of business."
ClearPoint had said August 17 in its Form NT 10-Q that it will
include a "going concern" note to its condensed consolidated
financial statements that will be included in the Form 10-Q
indicating substantial doubt about the Company's ability to
continue as a going concern.
About ClearPoint Business
ClearPoint Business Resources, Inc., is a workplace management
solutions provider. ClearPoint provides various temporary staffing
services as both a direct provider and as a franchisor. During
the year ended December 31, 2008, ClearPoint transitioned its
business model from a temporary staffing provider through a
network of branch-based offices or franchises to a provider that
manages clients' temporary staffing needs through its open
Internet portal-based iLabor Network (iLabor). ClearPoint's
services focus on assisting clients in managing their contingent
labor needs. iLabor creates an open marketplace for suppliers of
temporary labor to bid on and fulfill orders for temporary labor
placed by ClearPoint's clients. iLabor Network provides services
to clients ranging from small businesses to Fortune 500 companies.
DAVITA INC: Fitch Affirms Issuer Default Rating at 'BB-'
--------------------------------------------------------
Fitch Ratings has affirmed DaVita Inc.'s ratings:
-- Issuer Default Rating at 'BB-';
-- Bank credit facility at 'BB+';
-- Senior unsecured notes at 'BB-';
-- Senior subordinated notes at 'B'.
The Rating Outlook is Stable.
The ratings apply to approximately $3.7 billion of debt
outstanding as of June 30, 2009.
The ratings reflect DaVita's incrementally improved financial and
operating metrics, partially offset by continued industry
pressures. Leverage (total debt/EBITDA) has declined to 3.11
times (x) for the last 12 months ended June 30, 2009, from 3.38x
LTM ended June 30, 2008. This reduction was driven by an increase
in profitability with EBITDA increasing to $1,182 million from
$1,098 million during the same period in the prior year. During
the past year, the company has focused on building cash balances
as opposed to paying down debt, given the recent challenging
environment for the credit markets and the relatively favorable
borrowing rates on its bank loans.
The company generates reasonably consistent cash flow growth.
Free cash flow (cash flow from operations minus capital
expenditures) for the LTM ended June 30, 2009 was approximately
$366 million (which includes $161 million in distributions to
minority investors, acquisitions and the building of de novo
facilities) compared to $232 million (which includes $213 million
in distributions to minority investors, acquisitions and the
building of de novo facilities) for the same period last year.
Reliable demand growth and stable margins despite pressure by
payers combined with low fixed costs and modest maintenance
capital expenditures support DaVita's cash generation.
Private payers appear to be negotiating more strongly regarding
the rates at which they reimburse the company. Private payers
account for roughly 35% of revenues but virtually all of the
company's profitability. Although DaVita has publicly stated that
it is willing to lose some private payer business if the economics
of the relationship are not sufficient, its stance does not appear
to have significantly impacted volumes and margins. Nevertheless,
this is a risk to DaVita and the dialysis provider market.
Congress is currently attempting to reform the health care system.
To date, there have been a number of bills proposed, but none
voted on by either chamber. Given the scope, complexity and
political sensitivity of this issue, it is difficult to determine
what the ultimate outcome of health reform initiatives will be.
However, any reform that shifts patients from private payer plans
to government payer plans will likely have a negative impact on
DaVita's margins, unless there was a meaningful increase in
government reimbursement rates.
Fitch expects DaVita will operate with leverage in the range of
3.0x to 3.85x. Net leverage for LTM June 30, 2009, was 2.63x.
Acquisitions will likely be the primary factor that drives
leverage towards the upper range. Share repurchases are likely be
considered within the context of the valuations of acquisition
targets and the company's equity. On balance, Fitch believes
DaVita's 'BB-' rating provides it with reasonable financial
flexibility within the rating category.
At June 30, 2009, DaVita had approximately $3.7 billion in
outstanding debt, including approximately $1.9 billion in term
loans under its secured credit facility, with amortizations
$46.7 million in 2009, $90.6 million in 2010, $68.1 million in
2011 and $1,707.8 million in 2012. Other debt maturities include
$900 million of 6.625% senior notes due 2013, and $850 million of
7.25% senior subordinated notes due 2015. Liquidity comprised
$563 million in cash and short-term investments, as well as
roughly $202 million in availability on its $250 million secured
revolving credit facility, net of roughly $48 million in
outstanding letters of credit.
DEL MONTE: Fitch Affirms Long-Term Issuer Default Rating at 'BB'
----------------------------------------------------------------
Fitch Ratings has affirmed the ratings of Del Monte Foods Company
and Del Monte Corporation. The Rating Outlook has been revised to
Positive from Stable. The ratings are:
Del Monte Foods Company (Parent)
-- Long-term Issuer Default Rating at 'BB'.
Del Monte Corporation (Operating Subsidiary)
-- Long-term IDR at 'BB';
-- Senior secured bank facility at 'BB+';
-- Senior subordinated notes at 'BB-'.
At May 3, 2009, Del Monte's debt totaled approximately
$1.6 billion, down from $1.9 billion for the year ended April 27,
2008. All of Del Monte's debt was issued by Del Monte
Corporation, a wholly owned operating subsidiary, and is
guaranteed by Del Monte Foods Company, the parent corporation.
Del Monte's ratings reflect the company's balanced financial
strategy, solid cash flow generation, and leading number-one and
number-two market positions in processed produce and many of the
pet food and snack categories in which it competes. These factors
are weighed against the fact that acquisitions have historically
played a key role in Del Monte's growth, even though revenue has
benefited from new product development. Furthermore, in Pet
Products, the company competes with several large competitors with
greater financial resources and has significantly increased
marketing expenditures in order to build its brand strength and
maintain its market positions.
For the fiscal year ended May 3, 2009, Del Monte's total debt-to-
operating earnings before interest taxes depreciation and
amortization was 3.4 times, EBITDA-to-gross interest expense was
4.2x and funds from operations fixed charge coverage was 2.4x.
These credit statistics were better than Fitch had expected, given
the company's ability to offset 12% cost inflation, mainly due to
higher raw materials and packaging cost, with pricing actions and
productivity initiatives during fiscal 2009.
The Positive Outlook is driven by better than anticipated
operating performance and the fact that cash flow generation will
benefit from a more benign commodity cost environment in fiscal
2010. Debt reduction is also expected to remain a priority for
Del Monte in the near-to-intermediate term, given the company's
desire to increase financial flexibility and refinance a portion
of its debt over the next 12 months. The company used proceeds
from the divestiture of StarKist in October 2008 to reduced debt
by $332 million during fiscal 2009. Continued generation of
meaningful free cash flow (defined as cash flow from operations
less capital expenditures and dividends), further reductions in
financial leverage and relatively stable operating margins could
result in an upgrade of Del Monte's ratings.
During fiscal 2009, Del Monte's free cash flow declined to
$80 million, after averaging $145 million over the past five
years. The decline was primarily due to higher cash taxes and, to
a lesser extent, cash payments related to commodity futures
positions related to hedging. At May 3, 2009, total liquidity of
$527 million included approximately $143 million of cash and
$384 million of availability (excluding letters of credit) on its
$450 million secured revolver due February 2011. Scheduled debt
maturities over the next three fiscal years include $32 million in
2010, $331 million in 2011, and $495 million in 2012.
Del Monte's secured bank facility requires the Company to maintain
a total debt-to-EBITDA ratio equal to or less than 4.75x through
Jan. 31, 2010. The requirement gradually steps down to 3.75x for
the period ending May 1, 2011 and thereafter. Del Monte must also
maintain a minimum fixed charge coverage ratio of 1.15x. The bank
agreement contains a material adverse effect clause. Upon the
occurrence of both a change of control and a ratings decline,
subordinated note holders can require Del Monte to redeem the
notes after all secured obligations have been satisfied.
Del Monte is a producer, distributor and marketer of branded
processed produce, tomato, broth and pet food and snacks in the
U.S. retail market. In fiscal 2009, Del Monte generated
$3.6 billion of revenue. Consumer Foods and Pet Products
represented 54% and 46% of revenue and 47% and 53% of operating
income (excluding corporate expenses), respectively. Del Monte's
consumer brands include Del Monte, Contadina and College Inn. Del
Monte's pet products brands include 9Lives, Meow Mix, Milk-Bone,
Kibbles 'n Bits and Meaty Bone.
DELFASCO INC: Bankr. Court Won't Handle Environmental Dispute
-------------------------------------------------------------
WestLaw reports that the government's adversary proceeding against
a Chapter 11 debtor, in which the government sought a declaratory
judgment that its request for relief respecting a remediation
order issued against the debtor prepetition, pursuant to the
Resource Conservation and Recovery Act (RCRA), fell within the
police and regulatory powers exception to the automatic stay, an
injunction under the RCRA to enforce the remediation order, and
civil penalties against the debtor for failing or refusing to
comply with the order, required substantial and material
interpretation of environmental laws. Thus, mandatory withdrawal
of the reference of the adversary proceeding from the bankruptcy
court was warranted. It did not matter whether the bankruptcy
court could capably interpret the implicated environmental laws,
and the applicability of the automatic stay did not have to be
resolved by the bankruptcy court in the first instance. U.S. v.
Delfasco, Inc., --- F.Supp.2d ----, 2009 WL 2058539 (D. Del.)
(Farnan, J.).
Delfasco, Inc., owns property located in Grand Prairie, Texas, on
which it operated its Delfasco Forge Division from 1981 to 1997.
In 2002, Delfasco discovered and reported the presence of
trichloroethylene at the Grand Prairie Property after voluntarily
conducting tests and investigations under regulations promulgated
by the Texas Commission on Environmental Quality. Delfasco is
required, under an EPA Unilateral Administrative Order (Docket No.
RCRA-06-2008-0907), to install and maintain mitigation systems in
affected residences, conduct additional testing, and conduct a
complete groundwater and soil remediation. The government wants
to make sure the Debtor will do what it's supposed to do.
Based in Hurst, Tex., Delfasco, Inc. -- http://www.delfasco.com/-
- makes practice bombs for Air Force and Navy pilots, and does
other metal fabrication and forging. Delfasco filed for Chapter
11 protection on July 28, 2008 (Bankr. D. Del., Case No. 08-
11578). Steven M. Yoder, Esq., at Potter Anderson & Corroon, LLP,
in Wilmington, Del., represents the company. When Delfasco filed
for bankruptcy, it estimated assets and liabilities of $1,000,000
to $10,000,000.
EACO CORP: Balance Sheet Upside-Down by $3.8-Mil. as of July 1
--------------------------------------------------------------
EACO Corporation reported a net loss of $152,600 on $234,700 of
revenue for quarter ended July 1, 2009, compared with a net loss
of $434,800 on $349,400 of revenue during quarter ended July 2,
2008.
As of July 1, 2009, the Company had total assets of $12,009,800,
against total debts of $15,820,100, resulting to a stockholders'
deficit of $3,810,000.
The Company noted it incurred significant losses and had negative
cash flow from operations for the year ended December 31, 2008,
and had a working capital deficit of approximately $2,197,200 at
that date. As of July 1, 2009, the Company's working capital
deficit increased to $3,182,700. The cash balance at July 1, 2009
was $5,600. The cash outflows through June 2010 are estimated to
total approximately $989,400, which will generate an estimated
negative cash balance of $983,800 in the next twelve months.
"These circumstances raise substantial doubt about the Company's
ability to continue as a going concern," the Company said.
A copy of the Company's second quarter report on Form 10-Q filed
with the Securities and Exchange Commission is available for free
at http://researcharchives.com/t/s?4267
EACO Corporation is engaged in the management of rental properties
that it owns in Florida and California, United States. As of
December 31, 2008, EACO owned two restaurant properties: one
located in Orange Park, Florida (the Orange Park property) and one
in Brooksville, Florida (the Brooksville property). The Orange
Park Property was vacant at December 31, 2008, while the
Brooksville Property was leased out to a tenant under a lease,
which commenced on January 9, 2008. The Company is obligated for
leases of two restaurant locations, one located in Tampa, Florida
(the Fowler Property) and another located in Deland, Florida (the
Deland Property). The Deland Property was subleased to a
restaurant operator while the Fowler Property was subleased to an
entertainment company at December 31, 2008. In addition, the
Company owns an income producing real estate property held for
investment in Sylmar, California with two industrial tenants.
EARL JONES CONSULTING: Owner Is Personally Bankrupt
---------------------------------------------------
CBC News reports that Earl Jones has been declared personally
bankrupt, and the probe into whether he defrauded investors of as
much as $50 million from nearly 150 former clients will proceed to
the next phase.
A court in Canada held a hearing on August 19 on a request to have
Mr. Jones declared personally bankrupt. Quebec's securities
regulator suspected Mr. Jones of running a Ponzi scheme.
RSM Richter's report sent to creditors of Earl Jones Consulting
say that that Mr. Jones personally withdrew more than $12.3
million from the Company's accounts between 1987 and 2009.
According to CBC News, Mr. Jones, who is out on bail after being
charged earlier in August with four counts of theft and four of
fraud, didn't appear at the Quebec Superior Court hearing in
Montreal on Wednesday. CBC News relates that bankruptcy lawyer
Neil Stein assured that Mr. Jones was notified.
CBC News, citing Mr. Stein, reports that the bankruptcy
declaration means that personal properties of Mr. Jones and his
wife can be put up for sale. The properties include a BMW, an
Audi and condos.
Mr. Stein, CBC News relates, said that he would be sending
subpoenas to Mr. Jones, his wife, and his kids to have them answer
questions about their financial dealings.
Earl Jones Consulting was a company ran by investment adviser Earl
Jones. The Company in July 2009 was declared bankrupt by
the Quebec Superior Court in Montreal. Quebec's securities
regulator alleges Mr. Jones swindled at least 50 investors out of
at least $30 million in a possible Ponzi scheme.
EMCORE CORP: $122.5 Million Net Loss Cues Going Concern Doubt
-------------------------------------------------------------
EMCORE Corp. said it incurred a net loss of $122.5 million for the
nine months ended June 30, 2009, which included a non-cash
impairment charge of $60.8 million related to the write-down of
fixed assets, goodwill and intangible assets associated with the
Company's Fiber Optics segment. The Company added its operating
results for future periods are subject to numerous uncertainties
and it is uncertain if the Company will be able to reduce or
eliminate its net losses for the foreseeable future. Although
total revenue has increased sequentially over the past several
years, the Company has not been able to sustain historical revenue
growth rates in 2009 due to material adverse changes in market and
economic conditions. If management is not able to increase
revenue and/or manage operating expenses in line with revenue
forecasts, the Company may not be able to achieve profitability.
As of June 30, 2009, cash, cash equivalents, and restricted cash
totaled approximately $9.9 million and working capital totaled
$45.3 million. Historically, the Company has consumed cash from
operations. During the nine months ended June 30, 2009, it
consumed approximately $30.5 million in cash from operations.
"These matters raise substantial doubt about the Company's ability
to continue as a going concern," the Company said.
As of June 30, 2009, the Company had assets of $189,554,000
against debts of $51,643,000, for a stockholders' equity of
$137,911,000.
A copy of the Company's quarterly report for the period ended
June 30, 2009, filed with the Securities and Exchange Commission
is available fore free at http://researcharchives.com/t/s?4268
EMCORE Corporation provides compound semiconductor-based
components and subsystems for the broadband, fiber optic,
satellite, and terrestrial solar power markets. The Company has
two reporting segments: Fiber Optics and Photovoltaics. Fiber
Optics segment offers optical components, subsystems, and systems
that enable the transmission of video, voice, and data over high-
capacity fiber optic cables for high-speed data and
telecommunications, cable television (CATV) and fiber-to-the-
premises (FTTP) networks. Photovoltaics segment provides solar
products for satellite and terrestrial applications. On February
22, 2008, EMCORE acquired telecom-related assets of Intel
Corporation's Optical Platform Division (OPD). On April 20, 2008,
EMCORE acquired the enterprise and storage-related assets of Intel
Corporation's OPD business, as well as Intel's Connects Cables
business. In January 2009, the Company completed the sale of
WorldWater & Solar Technologies Corporation.
EMPIRE RESORTS: Inks Investment Agreement with Kien Huat Realty
---------------------------------------------------------------
Empire Resorts, Inc., on August 19, 2009, entered into an
Investment Agreement with Kien Huat Realty III Limited, a
corporation organized under the laws of the Isle of Man, pursuant
to which (i) the Company issued to the Investor 6,804,188 shares
of its common stock, par value $0.01 per share, or roughly 19.9%
of the outstanding shares of Common Stock on a pre-transaction
basis, for aggregate consideration of $11 million, and (ii)
subject to and following stockholder approval of the transaction,
as required under applicable NASDAQ Marketplace Rules, and the
satisfaction of other customary closing conditions, the Company is
to issue to the Investor an additional 27,701,852 shares of Common
Stock for additional consideration of $44 million. During the
period between the closing of the First Tranche and the closing of
the Second Tranche, the Company will be subject to certain
customary covenants related to the operation of its business.
As a result of the closing of the Second Tranche, if approved by
the Company's stockholders, the Investor would own 34,506,040
shares of the Common Stock, representing one share less than 50.0%
of the voting power of the Company following the closing. The
Company intends to use the proceeds of the First Tranche and
Second Tranche, if approved by stockholders, for transaction
costs, to pay interest on existing indebtedness, including roughly
$2.6 million of interest on the Company's Convertible Senior Notes
due July 31, 2014, and for general working capital.
Under the Investment Agreement, the parties also agreed to
negotiate in good faith and cooperate to mutually agree upon the
terms and conditions of a loan agreement, to be executed upon the
closing of the Second Tranche in a form and substance reasonably
agreeable to the parties, pursuant to which it is anticipated that
the Investor will make available to the Company a loan of up to
the lesser of $10 million or the maximum amount the Company is
then permitted to borrow (taking into account other indebtedness
of the Company at such time) under the terms of its existing
indebtedness. The Company would be permitted to use the proceeds
of this loan, among other things, to repay in full, purchase or
acquire by assignment any remaining obligation of the Company
under its loan agreement with The Park Avenue Bank and for working
capital purposes.
Under the terms of the Investment Agreement, the Investor is
entitled to recommend three directors whom the Company is required
to cause to be elected or appointed to its Board, subject to the
satisfaction of all legal and governance requirements regarding
service as a director of the Company and to the reasonable
approval of the Governance Committee of the Board. The Investor
will be entitled to recommend three Board Representatives for so
long as it owns at least 24% of the voting power of the Company
outstanding at such time, after which the number of Board
Representatives whom the Investor will be entitled to designate
for election or appointment to the Board will be reduced as
follows: (i) to two, for so long as the Investor owns capital
stock of the Company with at least 16% of the voting power of the
Company; (ii) to one, for so long as the Investor owns capital
stock of the Company with at least 8% (but less than 16%) of the
voting power of the Company; and (iii) to zero, at such time that
the Investor owns no capital stock or capital stock with less than
8% of the voting power of the Company.
Upon the closing of the First Tranche on August 19, 2009, the
Investor recommended two of the Board Representatives, Messrs. G.
Michael Brown and Colin Au, who were appointed to the Board to
serve within the Class I and II classes, respectively, with terms
expiring at the annual meeting during the calendar year 2010 and
2011, respectively. The Investor will also be entitled to
recommend the appointment of the third Board Representative upon
the closing of the Second Tranche. The Investor has also
designated Mr. Brown to be appointed at the next special meeting
of the Board to serve as Chairman of the Board.
Mr. Au is also a party to a Consulting Agreement with the Company,
dated as of August 19, 2009. Mr. Au has agreed to provide the
Company with certain consulting services, including assisting the
Company in expanding its presence in the gaming industry and
advising the Company on matters related to casino development. In
consideration of the services to be performed under the Consulting
Agreement, the Company has agreed to pay to Mr. Au $300,000
annually, paid in equal monthly installments. The term of the
Consulting Agreement expires on the third anniversary of the date
of its execution, unless extended by mutual agreement of the
parties.
On August 12, the Company received notice from each of Kenneth
Dreifach and Bruce M. Berg of their resignations from their
positions as members of the Board of Directors of the Company,
effective immediately. Mr. Dreifach served as a Class II director
and Mr. Berg served as Class III director on the Board, whose
terms were scheduled to expire in 2011 and 2012, respectively.
Mr. Berg continues to serve as a director of the Company's
subsidiary, Monticello Raceway Management, Inc. Mr. Dreifach was
a member of the Audit and Corporate Governance and Nominations
Committees. Messrs. Dreifach and Berg resigned to pursue other
opportunities and there are no disagreements with the Board that
the Company is aware of relating to their resignations as members
of the Board.
Registration Rights Agreement
Pursuant to the terms of the Investment Agreement, on August 19,
the Company also entered into a Registration Rights Agreement with
the Investor. The Registration Rights Agreement provides, among
other things, that the Investor may require that the Company file
one or more "resale" registration statements, registering under
the Securities Act of 1933, as amended, the offer and sale of all
of the Common Stock issued or to be issued to the Investor
pursuant to the Investment Agreement as well as any shares
acquired by way of a share dividend or share split or in
connection with a combination of such shares, recapitalization,
merger, consolidation or other reorganization with respect to such
shares.
Stockholder Voting Agreement
Concurrently with the execution of the Investment Agreement, and
as a condition and inducement to the Investor's willingness to
enter into the Investment Agreement, holders of roughly 38% of the
Company's outstanding Common Stock entered into a Stockholder
Voting Agreement, pursuant to which such stockholders, among other
things, agreed to vote all of the shares of voting capital stock
of the Company that such stockholders own in favor of the
proposals to be recommended by the Company at the special meeting
of stockholders to be held to approve the transactions
contemplated by the Investment Agreement and other related
matters.
Amendment to Rights Agreement
As required under the Investment Agreement, the Company also
entered into a First Amendment to Rights Agreement with
Continental Stock Transfer & Trust Company, as rights agent,
effective August 19, 2009. The Rights Agreement Amendment amended
Section 1(a) of that certain rights agreement, dated as of
March 24, 2008, by and between the Company and the Rights Agent to
provide that no person will become an "Acquiring Person," as such
term is defined therein, if such person becomes the beneficial
owner of 20% or more of the Common Stock of the Company then
outstanding as a consequence of an agreement, transaction or
understanding with the Company that has been previously approved
by a majority of the Company's Board of Directors. As permitted
under the Rights Agreement Amendment, the Board resolved that the
Investor is not and shall not be deemed to be an "Acquiring
Person" for purposes of the Rights Agreement as a result of the
execution of the Investment Agreement and the consummation of the
transactions contemplated thereby.
About the Investor
Kien Huat is an investment company beneficially owned by a Lim
family trust of which Mr. Lim Kok Thay of Malaysia and members of
his family are beneficiaries. Affiliates of Kien Huat maintain
substantial interests in a multinational group of companies
actively involved in gaming, leisure, hospitality, power
generation, plantations, property development, biotechnology and
oil and gas. Kien Huat affiliates separately own a substantial
interest in Star Cruises Ltd., the largest cruise operator in
Asia, and financed the startup of the Foxwoods Resort & Casino in
Connecticut and the Seneca Niagara Casino in New York.
Genting is Asia's largest casino operator and a leading integrated
resorts development specialist with over 20 years of global
experience in developing, operating and marketing internationally
acclaimed casinos and integrated resorts in different parts of the
world, including Australia, the Americas, Malaysia, the
Philippines and the United Kingdom. Genting is the largest casino
operator in the United Kingdom through its ownership of Genting UK
Plc. In 2010, Genting will open a $4.55 billion integrated resort
on Sentosa Island in Singapore, which will include a Universal
Studios Theme Park, a Hard Rock Hotel, and gaming, leisure and
hospitality venues.
Genting was founded in 1965 by Mr. Lim Kok Thay's father, Mr. Lim
Goh Tong, who built Genting's first gaming and entertainment
resort, known as Genting Highlands, in Malaysia, the world's
largest single resort, which includes over 10,000 hotel rooms
within a complete entertainment city. In 2008, Guinness World
Records listed the Genting Highlands First World Hotel as the
world's largest hotel.
Genting has 27,000 employees and is four listed companies: Genting
Berhad (Kuala Lumpur Stock Exchange: 3182.KL -- www.genting.com),
Genting Malaysia Berhad (Kuala Lumpur Stock Exchange: 4715.KL --
www.gentingmalaysia.com), Genting Plantations Berhad (Kuala Lumpur
Stock Exchange: 2291.KL - www.gentingplantations.com) and Genting
Singapore PLC (Stock Exchange of Singapore: G13.SI --
www.gentingsingapore.com).
Important Information
The offer and sale of the securities sold or to be sold pursuant
to the Investment Agreement has not been registered under the
Securities Act in reliance on the provisions of Section 4(2)
thereof, and such securities may not be offered or sold in the
United States in the absence of an effective registration
statement or exemption from the registration requirements under
the Securities Act.
In connection with the Investment Agreement, the Company will
prepare a proxy statement for the Company's stockholders to be
filed with the Securities and Exchange Commission. The proxy
statement will contain information about the Company, the
Investment Agreement and related matters.
Amendments to Bylaws
On August 12, 2009, the Board of the Company approved an amendment
to the Company's Second Amended and Restated By-laws, in
accordance with the terms of the Investment Agreement. The By-law
Amendment, which became effective upon the closing of the First
Tranche, modernizes the methods by which notice of special
meetings of the Board may be given and provides that such notices
must be given to the members of the Board at least 72 hours before
the time fixed for the meeting.
As required under the Investment Agreement, the Company also filed
a Certificate of Amendment to the Certificate of Designations of
Series A Junior Participating Preferred Stock with the Secretary
of State of the State of Delaware on August 19, which increased
the number of shares constituting such series of preferred stock
to 95,000.
Notice of Default
As reported by the Troubled Company Reporter, Empire Resorts
received a notice from Plainfield Special Situations Master Fund
Limited, Highbridge International LLC and Whitebox Advisors LLC -
purported beneficial owners of $48,730,000 principal amount of the
Company's 5-1/2% senior convertible notes -- alleging that an
event of default has occurred with respect to the Notes and
reserving their respective rights and remedies.
The noteholders allege that an event of default has occurred as a
result of the Company's failure to pay the principal amount of the
Notes plus accrued and unpaid interest and liquidated damages upon
their purported timely exercise of certain put rights under the
indenture dated as of July 26, 2004, by and among the Company and
The Bank of New York Mellon Corporation.
On August 5, 2009, the Company filed a declaratory judgment action
against the beneficial owners of the Notes, as well as The
Depository Trust Company and the Trustee, in the Supreme Court of
the State of New York in Sullivan County.
In its complaint, the Company seeks a judicial determination that
(1) no Holder, as defined under the Indenture, delivered a Put
Notice to the office of the Trustee within the lawfully mandated
time for exercise of a Holder's put rights under the Indenture
prior to the close of business on July 31, 2009, and that (2) the
Notes, in the full amount of $65,000,000, mature on July 31, 2014.
About Empire Resorts
Empire Resorts Inc. -- http://www.empiresorts.com/-- owns and
operates the Monticello Casino & Raceway, including slot machines
and a 230-acre harness racing facility in Sullivan County, 90
miles from midtown Manhattan.
EMPIRE RESORTS: Discloses Going Concern Doubt Due to Notes Dispute
------------------------------------------------------------------
Empire Resorts, Inc., had total assets of $45,791,000 against
total debts of $81,489,000, resulting to total stockholders'
deficit of $35,698,000. The $81,489,000 in liabilities, which
include $65,000,000 owing to convertible notes, are all classified
as "current liabilities". Accumulated deficit has reached
$105,375,000.
On July 26, 2004, the Company issued $65 million of 5.5% senior
convertible notes, which are currently convertible into
approximately 5.2 million shares of common stock, subject to
adjustment upon the occurrence or non-occurrence of certain
events. The notes were issued with a maturity date of July 31,
2014 and each holder had the right to demand that we repurchase
the notes at par plus accrued interest on July 31, 2009. Interest
is payable semi-annually on January 31 and July 31.
On August 3, 2009, the Company received a notice from three
entities, asserting that they were beneficial holders of notes in
an aggregate principal amount of $48,730,000, and that the Company
was in default under the indenture by not purchasing and paying
for them. Accordingly, on August 5, 2009, the Company instituted
a declaratory judgment action in the Supreme Court of the State of
New York in Sullivan County, in which it named as defendants the
trustee, i.e., The Bank of New York Mellon Corporation, The
Depository Trust Company and 12 entities claiming interests in the
notes. In the action, the Company alleges two causes of action,
one seeking a declaration by the Court that the defendants failed
to properly exercise any option pursuant to Section 3.07(a) of the
indenture to require us to purchase their interest in the notes,
and the other cause of action seeking a declaration that the three
entities which gave the purported notice of default have not
invoked the Default Consequences under the indenture. The Company
did not make the interest payment on the notes of $2.6 million
that was due on July 31, 2009. The Company is obligated to pay
interest on overdue installments of interest at a rate of 9% and
will be in default on such payment if it is not made by August 31,
2009. The same three entities that gave the Company the notice on
August 3, 2009 also gave written notice to the Company on August
11, 2009, asserting that it was in default under the indenture for
not paying the interest due on July 31, 2009.
The Company says its ability to continue as a going concern is
dependent upon a determination that it did not have the obligation
to repurchase our senior convertible notes on July 31, 2009, or
its ability to arrange financing with other sources to fulfill its
obligations under the Loan Agreement and senior convertible notes,
if required. The Company is continuing efforts to obtain
financing, "but there is no assurance that we will be successful
in doing so."
Empire Resorts recorded a net loss of $4,226,000 on $16,369,000 of
net revenues during the quarter ended June 30, 2009. This
compares to a $1,995,000 net loss on $17,645,000 of net revenues
during the same period in 2008.
A copy of the Company's Form 10-Q is available for free at:
http://researcharchives.com/t/s?425c
Empire Resorts -- http://www.empiresorts.com/-- owns and
operates the Monticello Casino & Raceway, including slot machines
and a 230-acre harness racing facility in Sullivan County, 90
miles from midtown Manhattan.
ENERGYCONNECT GROUP: Reports $601,000 Net Income in Q2
------------------------------------------------------
EnergyConnect Group Inc. disclosed a net income of $601,050 on
$7,251,756 of sales during the quarter ended July 4, 2009. It had
a net loss of $2,229,324 on $5,062,682 of sales during the quarter
ended June 28, 2008.
The Company had $8,363,534 in assets against current debts of
$4,462,853, and long-term debt of $2,519,131, resulting to a
shareholders' equity of $1,382,550 as of July 4, 2009.
The Company said that as a result of its history of losses and
difficulty in generating sufficient cash flow to meet obligations
and sustain its operations, its independent registered public
accounting firm, in their report included in its January 3, 2009
Form 10-K, have expressed substantial doubt about its ability to
continue as going concern.
In prior periods, the Company generated cash through its
discontinued operating subsidiary, Christenson Electric, Inc.
This subsidiary also held a $10 million operating line of credit
under which the Company borrowed funds against eligible accounts
receivable. The funds generated from the discontinued operations
and their debt facility are no longer available to the continuing
entity. All future cash will need to be generated from the
operations of EnergyConnect, its debt facility and from funds
raised through future debt and equity financings should cash
generated from operations and current debt facilities prove
insufficient.
Management believes it has sufficient capital resources to meet
projected cash flow deficits for the following 12 months. If
during that period or thereafter, the Company is not successful in
generating sufficient liquidity from operations, cash needs exceed
its ability to borrow on its debt facility, or in raising
sufficient capital resources, on terms acceptable to them, this
could have a material adverse effect on the Company's business,
results of operations liquidity and financial condition.
A copy of the Company's Form 10-Q filed with the Securities and
Exchange Commission is available for free at:
http://researcharchives.com/t/s?426a
About EnergyConnect Group
San Jose, California-based EnergyConnect Group, Inc. (OTCBB: ECNG)
-- http://www.energyconnectinc.com/-- through its subsidiary
EnergyConnect, Inc., provides a full range of demand response
services to the electric power industry. Its customers are the
regional grid operators who pay the Company market rates for
reductions in electrical demand during periods of high prices or
peak demand and for being available to reduce electric power
demand on request at periods of capacity limitations or in
response to grid emergencies. The Company's suppliers are large
commercial and industrial consumers of electricity who the Company
pays to shift their demand for electricity from high priced hours
in the day to lower priced hours. The Company also pays
participating energy consumers to be available to curtail electric
demand on request. On September 24, 2008, the Company's
shareholders voted to change the name of the Company to
EnergyConnect Group from Microfield Group, Inc.
ESI TRACTEBEL: Moody's Upgrades Ratings on Senior Bonds From 'Ba1'
------------------------------------------------------------------
Moody's Investors Service upgraded the rating on ESI Tractebel
Acquisition Corporation's senior secured bonds to Baa3 from Ba1.
Moody's also affirmed ESI Tractebel Funding Corporation's Baa2
rating for its senior secured bonds. The rating outlook for both
entities is stable.
The rating action reflects the robust debt service coverages at
Funding Corp, strong consolidated debt service coverages at
Acquisition Corp and expectations of continued solid financial
metrics. From 2006 to 2008, Funding Corp averaged debt service
coverage ratios of approximately 3.3 times while Acquisition Corp
averaged consolidated DSCR of approximately 2.3 times according to
Moody's calculations. Also for the last twelve months ended June
2009, Funding Corp and Acquisition Corp had DSCR of approximately
3.8 times and 2.5 times (consolidated basis), respectively,
according to Moody's calculations. In the near term, Moody's
expects a decline in financial metrics due to market conditions;
however, Moody's expects that Funding Corp and Acquisition Corp
should be able to maintain DSCR above 3.0x and 1.75x (consolidated
basis), respectively. Moody's notes that 80% of aggregate
generating capacity is sold to NSTAR Electric Company (Issuer
Rating A1) or to Jersey Central Power and Light (senior unsecured
Baa2).
The rating actions also reflect generally good operational
performance at Acquisition Corp's two projects, the project's
ultimate ownership by financially strong sponsors and the
significant deleveraging at Funding Corp resulting in the expected
elimination of structurally senior operating company debt at the
end of 2010 when Funding Corp's bonds mature.
The rating affirm of Funding Corp's debt recognizes Jersey Central
Light and Power's Baa2 senior unsecured rating and its role as
majority offtaker with 56% of consolidated contracted capacity.
JCP&L's rating effectively serves to limit Funding Corp's rating.
The stable outlook reflects Moody's expectation of good operating
performance and continued strong financial metrics at both Funding
Corp and Acquisition Corp.
ESI Tractebel Funding Corp is a funding corporation which
indirectly owns Northeast Energy Associates, a Massachusetts
limited partnership and North Jersey Energy Associates, a New
Jersey limited partnership. NJEA owns an approximate 290 MW
natural gas fired facility located in Sayerville, New Jersey and
NEA owns a similarly configured approximate 300 MW facility in
Bellingham, Massachusetts. Acquisition Corp is a holding company
that owns Funding Corp. Acquisition Corp is owned equally by
subsidiaries of FPL Group Inc. and GDF-Suez S.A.
The last rating action was on January 11, 2005, when Acquisition
Corp's ratings were affirmed.
EXCO RESOURCES: S&P Raises Corporate Credit Rating to 'B+'
----------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Dallas-based EXCO Resources Inc. to 'B+' from 'B'. S&P
removed the rating from CreditWatch, where it had been placed with
positive implications on June 30, 2009. The outlook is stable.
The issue-level rating on EXCO's $450 million senior unsecured
notes remains on CreditWatch with positive implications pending a
revised recovery analysis upon receipt from the company of
additional information, including updated PV-10 figures. The
recovery rating remains at '5' (recovery of 10% to 30% of
principal at the time of default). Given that a recovery rating
of '5' generally results in an issue-level rating one notch below
the corporate credit rating, S&P would expect to upgrade the issue
to 'B' if the PV-10 figures result in a similar recovery to that
previously estimated.
"The upgrade on the corporate credit rating follows the successful
completion of two transactions: one with BG Energy Holdings
[A/Stable/A-1] and the other with an affiliate of Encore
Acquisition Co.," said Standard & Poor's credit analyst Patrick Y.
Lee. "As a result of these transactions, EXCO has materially
reshaped its balance sheet, removed near-term refinancing risk
related to its $300 million senior unsecured term loan, and
improved liquidity."
The rating on EXCO reflects the company's historically acquisitive
growth strategy; its relatively high, though reduced, debt; a
midsize, principally natural gas, reserve base; and the weak
outlook for near-term natural gas prices. These weaknesses are
partially offset by EXCO's geographically diversified base of
natural gas reserves; its good growth prospects in the emerging
Marcellus and Haynesville Shale; its meaningful hedge protection
in 2009 and 2010; and expectations of free cash flow over the
intermediate term.
The outlook is stable and is supported by improved credit metrics
and meaningful hedge protection in the oil and natural gas markets
for 2009 and 2010.
S&P could revise the outlook to positive or upgrade the company
over the intermediate term if EXCO achieves further material
deleveraging through either assets sales or free cash flow.
S&P could revise the outlook to negative if EXCO were to revert to
a more aggressive financial policy with regard to aggressively-
financed acquisitions or approached its financial covenants under
its revolving credit facilities.
FIRSTFED FINANCIAL: Capital Ratios Below "Well Capitalized" Levels
------------------------------------------------------------------
FirstFed Financial Corp.'s second quarter report on Form 10-Q
includes a note on its ability to continue as a "going concern".
The Company and its banking unit First Federal Bank of California
are operating under Amended Orders to Cease and Desist issued on
May 28, 2009, by the Office of Thrift Supervision. As required by
the Amendments, the Company and the Bank have submitted a detailed
capital plan to the OTS addressing how the Bank will meet and
maintain a tier 1 core capital ratio of 7% and a minimum total
risk-based capital ratio of 14% by September 30, 2009.
The Bank's risk-based capital ratio was 9.63% at June 30, 2009 and
its core and tangible capital ratios were 4.79%. These capital
ratios are below the levels required by the Bank's federal
regulators to be considered "well capitalized".
"The ability of the Company and the Bank to continue to meet all
of the requirements of the Amendments and the Orders will be
affected by market conditions in the economy and other
uncertainties. Declining real estate values and rising
unemployment in the state of California could have a significant
impact on future losses incurred on loans. In addition, there can
be no assurance in the current economic environment that the
Company will be able to raise capital to regain "well capitalized"
status or to meet future regulatory requirements. Due to these
conditions and events, substantial doubt exists in the Company's
ability to continue as a going concern," the Company stated.
FirstFed posted a comprehensive loss $48.74 million or $3.37 per
diluted share of common stock for the second quarter of 2009
compared with a comprehensive loss of $36.56 million or $2.60 per
diluted share of common stock for the second quarter of 2008.
A copy of the Company's Form 10-Q filed with the Securities and
Exchange Commission is available at:
http://researcharchives.com/t/s?4269
FirstFed Financial Corp. (Pink Sheets: FFED) is the parent company
of First Federal Bank of California. The Bank operates 39 retail
banking offices in Southern California.
At June 30, 2009, the Company had $6.36 billion in total assets
and $6.20 billion in total liabilities.
FREDDIE MAC: New CEO to Get $700,000 Base Salary
------------------------------------------------
Freddie Mac (formally known as the Federal Home Loan Mortgage
Corporation) has entered into a Memorandum Agreement with Bruce M.
Witherell as the company's chief operating officer.
As reported by the Troubled Company Reporter, Freddie Mac on
August 18, 2009, said its board of directors has named Mr.
Witherell as CEO, effective September 14, 2009.
Mr. Witherell, 49, joins Freddie Mac from PrimeStone Partners,
LLC, a private investment and advisory firm. Previously,
Mr. Witherell served as managing director and global co-head of
the residential mortgage business of Morgan Stanley, a global
financial services firm, from December 2006 to May 2008. Before
his service at Morgan Stanley, he worked in various roles at
Lehman Brothers Holdings Inc., a global investment bank, for 15
years, including as chief executive officer of Lehman Brothers
Bank and as chief executive officer of Aurora Loan Services from
2003 to 2006.
The Federal Housing Finance Agency, the Company's conservator, has
approved the Memorandum Agreement and consulted with the U.S.
Department of the Treasury.
The terms of his Memorandum Agreement provide Mr. Witherell with
the following during his employment with Freddie Mac:
-- An annual base salary of no less than $700,000, which
amount may be increased in the discretion of Freddie Mac,
subject to approval by FHFA after consulting with
Treasury;
-- To the extent permitted by FHFA, in consultation with
Treasury, after receipt of clarification on the impact of
recent regulatory actions impacting Freddie Mac's
executive compensation, a short-term and long-term
incentive opportunity that, when added to his base salary,
would be consistent with the level of compensation
provided by Freddie Mac's major competitors;
-- Relocation benefits consistent with Freddie Mac's standard
executive relocation benefit as well as nine months
temporary lodging at a local apartment (in lieu of Freddie
Mac's standard temporary living relocation benefit),
reimbursement for reasonable commuting and necessary
living expenses, and reimbursement for travel between the
Washington, D.C. area and New York for Mr. Witherell and
his immediate family members for the first nine months of
his employment;
-- The opportunity to participate in all employee benefit
plans offered to Freddie Mac's senior executive officers,
including the company's Supplemental Executive Retirement
Plan, pursuant to the terms of these plans; and
-- If Freddie Mac terminates Mr. Witherell's employment for
any reason other than cause (as is defined in the
Memorandum Agreement), he will be eligible to receive
severance pay (which will generally be for no less than 12
months) and other benefits pursuant to the terms of any
then-applicable Freddie Mac severance policy, subject to
the approval of FHFA. In addition, in the event that
Freddie Mac terminates Mr. Witherell's employment for any
reason or he voluntarily terminates his employment, then
Freddie Mac will provide him with any earned but unpaid
base salary through the date of termination, any accrued
but unpaid vacation through the date of termination, and
any reasonable business expenses incurred through the date
of termination.
Mr. Witherell is subject to non-competition and non-solicitation
of employees restrictions for a period of two years and one year,
respectively, following any termination of his employment, and he
is also subject to certain restrictions with respect to
confidential information obtained during the course of his
employment.
Freddie Mac also has entered into a Recapture Agreement with Mr.
Witherell. The Recapture Agreement provides for Freddie Mac's
recapture from Mr. Witherell of Recapture Eligible Compensation
(which, as defined in the Recapture Agreement, varies depending on
which Triggering Event has occurred) if, at any time during Mr.
Witherell's employment with Freddie Mac (or, under certain
circumstances after termination of his employment), the board of
directors determines and notifies Mr. Witherell in writing that
any Triggering Event (as defined in the Recapture Agreement) has
occurred. The Recapture Period (as defined in the Recapture
Agreement) also varies depending on which Triggering Event has
occurred. In the event that Mr. Witherell is terminated for cause
(as defined in the Recapture Agreement), he forfeits rights to any
future payment of annual short-term incentive, long-term incentive
or severance benefits that might otherwise have been due pursuant
to the terms of applicable plans or awards from the date of Mr.
Witherell's termination forward. The board has discretion to
determine the appropriate amount required to be recaptured, if
any, upon a Triggering Event, which is intended to be the
compensation in excess of what Freddie Mac would have paid Mr.
Witherell had Freddie Mac taken into consideration the impact of
the Triggering Event at the time such compensation was awarded.
Freddie Mac also agreed to enter into an indemnification agreement
with Mr. Witherell.
About Freddie Mac
The Federal Home Loan Mortgage Corporation (FHLMC) NYSE: FRE --
http://www.freddiemac.com/-- commonly known as Freddie Mac, is a
stockholder-owned government-sponsored enterprise authorized to
make loans and loan guarantees. Freddie Mac was created in 1970
to provide a continuous and low cost source of credit to finance
America's housing.
Freddie Mac conducts its business primarily by buying mortgages
from lenders, packaging the mortgages into securities and selling
the securities -- guaranteed by Freddie Mac -- to investors.
Mortgage lenders use the proceeds from selling loans to Freddie
Mac to fund new mortgages, constantly replenishing the pool of
funds available for lending to homebuyers and apartment owners.
Conservatorship
As reported by the Troubled Company Reporter, the U.S. government
took direct responsibility for Fannie Mae and Freddie Mac, placing
the government sponsored enterprises under conservatorship on
September 7, 2008. James B. Lockhart, director of Federal Housing
Finance Agency, said that Fannie Mae and Freddie Mac share the
critical mission of providing stability and liquidity to the
housing market. Between them, the Enterprises have $5.4 trillion
of guaranteed mortgage-backed securities (MBS) and debt
outstanding, which is equal to the publicly held debt of the
United States. Among the key components of the conservatorship,
the FHFA, as conservator, assumed the power of the Board and
management.
FREDDIE MAC: Cut in Gov't Aid to Affect Access to Debt Markets
--------------------------------------------------------------
Freddie Mac (formally known as the Federal Home Loan Mortgage
Corporation) acknowledged in a regulatory filing with the
Securities and Exchange Commission that its improved access to the
unsecured debt markets may not continue upon completion or
termination of government actions. According to Freddie Mac, any
reduction in government support for its debt funding program could
adversely affect its ability to issue long-term debt.
The U.S. Treasury and the Federal Reserve have taken a number of
actions affecting Freddie Mac's access to debt financing,
including:
-- Treasury entered into the Lending Agreement with Freddie
Mac on September 18, 2008, under which Freddie Mac may
request funds through December 31, 2009. As of June 30,
2009, Freddie Mac had not borrowed under the Lending
Agreement. As such, use of the Lending Agreement has not
been tested as a component of Freddie Mac's liquidity
contingency plan.
-- The Federal Reserve has implemented a program to purchase,
in the secondary market, up to $200 billion in direct
obligations of Freddie Mac, Fannie Mae, and the Federal
Home Loan Bank.
According to Freddie Mac, the Lending Agreement is scheduled to
expire on December 31, 2009. Upon expiration of the Lending
Agreement, Freddie Mac will not have a liquidity backstop
available to it -- other than Treasury's ability to purchase up to
$2.25 billion of its obligations under its permanent authority --
if Freddie Mac is unable to obtain funding from issuances of debt
or other conventional sources.
"Absent an extension of the Lending Agreement, if backstop
liquidity is needed after December 31, 2009, we will need to seek
alternative sources for it. At present, we are not able to
predict the likelihood that a liquidity backstop will be needed,
or to identify the alternative sources that might then be
available to us, other than draws from Treasury under the Purchase
Agreement or its ability to purchase up to $2.25 billion of our
obligations under its permanent authority," Freddie Mac said.
In a Form 10-Q filing on August 7, 2009, Freddie Mac posted wider
net loss of $9.08 billion for the first six months of 2009, from
a net loss of $968 million for the first half of 2008. Freddie
Mac posted net income of $767 million for the three months ended
June 30, 2009, from a net loss of $819 million for the same
quarter a year ago.
As of June 30, 2009, Freddie Mac had $892.29 billion in total
assets and $884.05 billion in total liabilities. Total equity was
$8.2 billion at June 30, 2009, compared to a deficit of
$30.6 billion at December 31, 2008. A full-text copy of Freddie
Mac's quarterly report on Form 10-Q is available at no charge at:
http://ResearchArchives.com/t/s?4250
On November 17, 2008, Freddie Mac received a notice from the NYSE
that it had failed to satisfy one of the NYSE's standards for
continued listing of its common stock. Specifically, the NYSE
advised Freddie Mac that it was "below criteria" for the NYSE's
price criteria for common stock because the average closing price
of its common stock over a consecutive 30 trading-day period was
less than $1 per share. On December 2, 2008, Freddie Mac advised
the NYSE of its intent to cure this deficiency, and that it may
undertake a reverse stock split in order to do so.
On February 26, 2009, the NYSE suspended the application of its
minimum price listing standard until June 30, 2009 (subsequently
extended until July 31, 2009). The suspension period expired on
July 31, 2009, and Freddie Mac has not regained compliance with
the minimum price standard.
Under applicable NYSE rules, Freddie Mac have until October 20,
2009, to bring its share price and its average share price for the
30 consecutive trading days preceding October 20, 2009, above $1.
If Freddie Mac fails to do so, NYSE rules provide that the NYSE
will initiate suspension and delisting procedures.
Freddie Mac said the delisting of its common stock would likely
also result in the delisting of its NYSE-listed preferred stock.
The delisting of its common stock or NYSE-listed preferred stock
would require any trading in these securities to occur in the
over-the-counter market and could adversely affect the market
prices, trading volume and liquidity of the markets for these
securities. As a result, it could be more difficult for Freddie
Mac's shareholders to sell their shares, especially at prices
comparable to those in effect prior to delisting.
Freddie Mac said it will work with its Conservator to determine
the specific action or actions that may be taken to cure the
deficiency, but there is no assurance that any such actions will
be taken or that any actions taken will be successful.
About Freddie Mac
The Federal Home Loan Mortgage Corporation (FHLMC) NYSE: FRE --
http://www.freddiemac.com/-- commonly known as Freddie Mac, is a
stockholder-owned government-sponsored enterprise authorized to
make loans and loan guarantees. Freddie Mac was created in 1970
to provide a continuous and low cost source of credit to finance
America's housing.
Freddie Mac conducts its business primarily by buying mortgages
from lenders, packaging the mortgages into securities and selling
the securities -- guaranteed by Freddie Mac -- to investors.
Mortgage lenders use the proceeds from selling loans to Freddie
Mac to fund new mortgages, constantly replenishing the pool of
funds available for lending to homebuyers and apartment owners.
Conservatorship
As reported by the Troubled Company Reporter, the U.S. government
took direct responsibility for Fannie Mae and Freddie Mac, placing
the government sponsored enterprises under conservatorship on
September 7, 2008. James B. Lockhart, director of Federal Housing
Finance Agency, said that Fannie Mae and Freddie Mac share the
critical mission of providing stability and liquidity to the
housing market. Between them, the Enterprises have $5.4 trillion
of guaranteed mortgage-backed securities (MBS) and debt
outstanding, which is equal to the publicly held debt of the
United States. Among the key components of the conservatorship,
the FHFA, as conservator, assumed the power of the Board and
management.
FORD MOTOR: Working With Union and Suppliers to Hike Production
---------------------------------------------------------------
Ford Motor Company reports it is working closely with the United
Autoworkers union and its suppliers to ramp up production of the
Escape and Focus.
At the Kansas City (Mo.) Assembly Plant, for example, employees
agreed to work Friday and Saturday, Aug. 21-22, during what was a
planned shutdown week. In August and September, Ford will build
approximately 3,500 additional Escapes.
At Wayne (Mich.) Assembly Plant, Ford is increasing Focus
production by more than 6,000 units in the third quarter through
increased overtime Monday through Friday and adding Saturday
production shifts.
As reported by the Troubled Company Reporter on August 17, 2009,
Ford is increasing North American production in the third and
fourth quarters to respond to growing demand for new Ford products
and to ensure dealers are well stocked with fuel-efficient
vehicles eligible for the "Cash for Clunkers" program.
Ford is increasing third quarter production by another 10,000
units to 495,000 units primarily to build additional Escape small
utility vehicles and Focus small cars, the two most popular Ford
vehicles under the federal government's "Cash for Clunkers"
program. Ford's planned third quarter production is now 18% above
third quarter 2008 production levels.
Ford also plans to produce 570,000 vehicles in the fourth quarter,
33% higher than year-ago levels and 15% above the third quarter
production plan. The increase represents higher production across
a range of cars, crossovers and trucks.
"Under the 'Cash for Clunkers' program, the Ford Escape and Focus
are flying off dealer lots, and we're doing all we can to ensure
our dealers are well stocked with the fuel-efficient vehicles that
customers really want," said Mark Fields, Ford's president of The
Americas. "We also are planning a significant increase in fourth
quarter production compared with last year, continuing to match
production to the real demand. We'll need this additional
production as even more people are drawn to our high-quality,
fuel-efficient lineup, including our newest entries such as the
Ford Taurus and Lincoln MKT."
"This is a team effort with the UAW and our suppliers to meet the
demand for fuel-efficient vehicles," said Joe Hinrichs, Ford group
vice president, Global Manufacturing and Labor Affairs. "We asked
our union partners to pull out all the stops -- overtime, Saturday
shifts, working during the shutdown -- and they have delivered."
The effort to meet "Cash for Clunkers" demand has required close
coordination among Ford's sales and marketing, purchasing,
manufacturing and material planning and logistics divisions.
While increasing production, Ford also is reprioritizing vehicle
shipments to ensure that vehicles in high demand, such as the
Focus, Escape and Fusion, arrive at dealership quickly.
"Our carriers have been instructed to load Focus, Escapes and
Fusions first," said Ken Czubay, Ford's vice president of U.S.
Marketing, Sales and Service. "We want to ensure that dealers
have an uninterrupted flow of product, because in many cases, they
are selling them as soon as they arrive on the lot."
The fourth quarter production plan represents an increase of
75,000 vehicles versus the third quarter. The increase, which
includes several Ford cars, crossovers and trucks, will help Ford
rebuild inventories of key products.
"As we gain momentum with strong new products -- with top fuel
economy, quality, technology and safety -- we are in a position to
increase our production and deliver profitable growth over time,"
Mr. Fields said.
Ford posted net income of $2.26 billion for the second quarter
ended June 30, 2009, from a net loss of $8.69 billion for the same
period a year ago. For the first half of 2009, Ford posted net
income of $834 million from a net loss of $8.62 billion for the
first half of 2008.
As of June 30, 2009, Ford had $200.19 billion in total assets and
$209.61 billion in total liabilities, resulting in $9.42 billion
total deficit.
A full-text copy of Ford Motor's quarterly report on Form 10-Q is
available at no charge at http://ResearchArchives.com/t/s?413d
About Ford Motor
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles in
200 markets across six continents. With about 260,000 employees
and about 100 plants worldwide, the company's core and affiliated
automotive brands include Ford, Jaguar, Land Rover, Lincoln,
Mercury, Volvo, Aston Martin, and Mazda. The Company provides
financial services through Ford Motor Credit Company.
The Company has operations in Japan in the Asia Pacific region. In
Europe, the Company maintains a presence in Sweden, and the United
Kingdom. The Company also distributes its brands in various
Latin-American regions, including Argentina and Brazil.
As reported by the Troubled Company Reporter on April 15, 2009,
Standard & Poor's Ratings Services said it raised its ratings on
Ford Motor Co. and related entities, including the corporate
credit rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor
Credit Co. are unchanged, at 'CCC+', and the ratings on FCE Bank
PLC, Ford Credit's European bank, are also unchanged, at 'B-',
maintaining the one-notch rating differential between FCE and its
parent Ford Credit. S&P said that the outlook on all entities is
negative.
Moody's Investors Service in December 2008 lowered the Corporate
Family Rating and Probability of Default Rating of Ford Motor
Company to Caa3 from Caa1 and lowered the company's Speculative
Grade Liquidity rating to SGL-4 from SGL-3. The outlook is
negative. The downgrade reflects the increased risk that Ford
will have to undertake some form of balance sheet restructuring to
achieve the same UAW concessions that General Motors and Chrysler
are likely to achieve as a result of the recently-approved
government bailout loans. Such a balance sheet restructuring
would likely entail a loss for bond holders and would be viewed by
Moody's as a distressed exchange and consequently treated as a
default for analytic purposes.
GENERAL MOTORS: Creditors' Committee Launches Bankruptcy Web Site
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors of General Motors
Corp. -- n/k/a Motors Liquidation Company -- launched its new
bankruptcy information Web site:
http://www.motorsliquidationcreditorscommittee.com/
On June 1, 2009, General Motors Corp. and certain of its
subsidiaries and affiliates filed for chapter 11 bankruptcy
protection. On June 3, 2009, the United States Trustee appointed
15 of the largest unsecured creditors to serve as the Official
Committee of Unsecured Creditors of Old GM. One of the Committee's
responsibilities is to provide access to information for all of
Old GM's general unsecured creditors. On August 3, 2009, the
Bankruptcy Court authorized the Committee to establish a Web site
to provide information and communicate with Old GM's creditors.
The Committee Web site offers an opportunity for general unsecured
creditors of Old GM to submit their questions to the Committee and
its professional advisors. The Web site also provides information
about the material aspects of Old GM's bankruptcy case, which is
continuing under Old GM's new name: "Motors Liquidation Company."
Aspects of the bankruptcy case include:
-- names of the current members of the unsecured creditors'
committee;
-- deadlines for filing proofs of claim and the forms for
filing proofs of claim in the chapter 11 cases;
-- contact information for the primary parties in the
chapter 11 cases;
-- access to key court documents in the chapter 11 cases;
-- a "frequently asked questions" section about the
chapter 11 cases; and
-- general bankruptcy overview.
The information on the Web site was created by, and is being
maintained by, Kramer Levin Naftalis & Frankel LLP, which is
counsel to the Committee in Old GM's chapter 11 case.
GENERAL MOTORS: Board to Meet Today to Discuss Opel Bids
--------------------------------------------------------
General Motors Co. directors will conduct a conference call today,
Aug. 21, to discuss bids for its Opel division, Katie Merx and
Laurence Frost at Bloomberg News report, citing two people
familiar with the planning.
According to Bloomberg, one of the people who asked not to be
identified because the deliberations aren't public, said the board
will weigh those two bids against insolvency. The source told
Bloomberg a group led by Aurora, Ontario-based car-parts maker
Magna International Inc. is likely to win the bidding, because
Germany's EUR4.5-billion (US$6.4 billion) financing package favors
it.
Credit Guarantees
Patrick Donahue at Bloomberg News reports Chancellor Angela
Merkel's government offered to contribute EUR4.5 billion (US$6.4
billion) in credit guarantees toward an offer by Magna for GM's
Opel division. Bloomberg relates Steffen Moritz, an Economy
Ministry spokesman, said yesterday in Berlin Germany's federal and
state governments will put forward the entire amount toward
Magna's bid and negotiate with European Union countries afterward.
According to Bloomberg, the German chancellor, faced with rising
unemployment as national elections loom on Sept. 27, prefers the
bid by the Magna, believing it will secure more jobs.
Magna Bid
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 last week Magna and
Sberbank are offering to pay about EUR500 million (US$714 million)
for a combined 55% stake in Opel. Bloomberg said 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.
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: BNYMTC Wants MTCC Named Indenture Trustee
---------------------------------------------------------
The Bank of New York Mellon Trust Company, N.A., as resigning
Indenture Trustee under the Trust Indenture and Security Agreement
dated as of September 27, 1991, and supplemented on September 27,
1991, seeks the Court's authority to appoint Manufacturers and
Traders Trust Company as successor indenture trustee for the 91A-3
Equipment Notes.
Edward P. Zujkowski, Esq., at Emmet Marvin & Martin, LLP, in New
York, relates that prior to the Petition Date, Old GM and the
Owner Trustee entered into a certain Leveraged Lease of Automobile
Manufacturing Equipment pursuant to which the Owner Trustee leased
certain personal property equipment to Old GM.
The Owner Trustee assigned its rights under the Lease to the
BNYMTC, as Indenture Trustee. Since the completion of the Sale,
the Debtors have been unable to resolve certain issues relating to
the Lease and the Equipment with the Indenture Trustee because
BNYMTC has resigned as Indenture Trustee and a successor Indenture
Trustee has not yet been appointed.
The Indenture further provides that, if an Indenture Trustee
resigns, the "Owner Trustee [will] promptly appoint a successor
Indenture Trustee." Accordingly, on July 3, 2009, BNYMTC notified
the Owner Trustee of its resignation as Indenture Trustee,
pursuant to the Indenture, Mr. Zujkowski points out.
Since BNYMTC notified the Owner Trustee of its resignation, the
Owner Trustee has informed BNYMTC that it will not appoint a
successor indenture trustee absent direction from Phillip Morris
Capital Corporation, the Owner Participant under the Participation
Agreement dated as of September 23, 1991.
However, Phillip Morris has refused to direct the Owner Trustee to
appoint a successor trustee, following talks held between the
parties, Mr. Zujkowski says.
The delay in appointing a successor indenture trustee has impacted
the ability of the Debtors to negotiate terms of a stipulation it
has proposed to resolve issues related to the Equipment.
Furthermore, given the speed at which the Chapter 11 cases are
progressing, it is imperative that a successor trustee be
appointed immediately to preserve and protect the rights of the
respective parties to the transaction.
In response, Phillip Morris informed with the Court, pursuant to
Rule 30(b)(6) of the Federal Rules of Civil Procedure, that it
will take the deposition of BNYMTC for use in the hearing on
BNYMTC's Motion.
According to Phillip Morris, BNYMTC will designate one or more
officers, directors, managing agents, or other persons to testify
on its behalf as corporate representative regarding:
-- all discussions communications, correspondence, plans or
strategies of BNYMTC relating to its resignation as
Indenture Trustee;
-- all attempts by BNYMTC to resign as Indenture Trustee;
-- any offers or negotiations with respect to the Equipment;
-- all communications and correspondence between BNYMTC and
the Debtors that attempt to resolve the issues pertaining
to the Equipment; and
-- all facts and matters relating to the Indenture, the Lease,
the Participation Agreement, the Owner Trustee, the Owner
Participant and Old GM.
BNYMTC's request will be heard before the Court on August 21,
2009.
About General Motors
Headquartered in Detroit, Michigan, General Motors Corp.
(NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM
employs about 266,000 people around the world and manufactures
cars and trucks in 35 countries. In 2007, nearly 9.37 million GM
cars and trucks were sold globally under the following brands:
Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.
GM Europe is based in Zurich, Switzerland, while General Motors
Latin America, Africa and Middle East is headquartered in Miramar,
Florida.
As reported by the Troubled Company Reporter, GM reported net loss
of US$6.0 billion, including special items, in the first quarter
of 2009. This compares with a reported net loss of US$3.3 billion
in the year-ago quarter. As of March 31, 2009, GM had
US$82.2 billion in total assets and US$172.8 billion in total
liabilities, resulting in US$90.5 billion in stockholders'
deficit.
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors'
restructuring officer. GM is also represented by Jenner & Block
LLP and Honigman Miller Schwartz and Cohn LLP as counsel.
Cravath, Swaine, & Moore LLP is providing legal advice to the GM
Board of Directors. GM's financial advisors are Morgan Stanley,
Evercore Partners and the Blackstone Group LLP.
General Motors changed its name to Motors Liquidation Co.
following the sale of its key assets to a company 60.8% owned by
the U.S. Government.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL MOTORS: Creditors Committee Proposes FTI as Fin'l Advisor
-----------------------------------------------------------------
To avail of the assistance it needs in collecting, and analyzing
financial and other information in relation to the Debtors'
Chapter 11 cases, the Official Committee of Unsecured Creditors in
Motors Liquidation Co.'s cases sought and obtained the Court's
approval to retain FTI Consulting, Inc., as its Financial Advisor
nunc pro tunc to June 3, 2009.
According to Creditors' Committee Chairman David Vanasky Jr., the
Creditors' Committee has selected FTI as its financial advisor
because of the firm's diverse experience and extensive knowledge
in the field of bankruptcy. FTI has considerable experience with
rendering these services to committees and other parties in
numerous Chapter 11 cases.
As the Creditors' Committee's Financial Advisors, FTI will
perform:
(a) Review and analysis of the Debtors' sale procedures,
including, but not limited to, assets and liabilities
retained by the Debtors and transferred to New GM;
(b) Review and analysis of potential recoveries to unsecured
creditors and related liquidation analyses;
(c) Review and analysis of cash flow budgets, including wind
down costs and other transitional costs;
(d) Assistance in the review of reports or filings as required
by the Bankruptcy Court or the Office of the United States
Trustee, including, but not limited to, schedules of
assets and liabilities, statements of financial affairs
and monthly operating reports;
(e) Review of the Debtors' financial information, including,
but not limited to, analyses of cash receipts and
disbursements, DIP budget, wind down budget, financial
statement items and proposed transactions for which
Bankruptcy Court approval is sought;
(f) Evaluation of employee issues, including, but not limited
to potential employee retention and severance plans,
review and analysis of pension funding and related
liabilities, and other union related issues;
(g) Analysis of assumption and rejection issues regarding
executory contracts and leases, including, but not limited
to, dealers, suppliers, and other counterparties;
(h) Validation of the Debtors' proposed restructuring or
liquidation and sale plan and the business and financial
condition of the Debtors generally;
(i) Advice and assistance to the Committee in negotiations and
meetings with the Debtors, the banks and other lenders,
the United States Treasury, Evercore Group, L.L.C., AP
Services, L.L.C. and its affiliates, any other
stakeholders and the financial and legal advisors for the
aforementioned parties;
(j) Advice and assistance on any tax consequences of proposed
sale transactions or other sale transaction;
(k) Assistance with the claims resolutions and procedures,
including, but not limited to, analyses of creditors'
claims by type and entity;
(l) Review and analysis of potential fraudulent transfers,
including specific transaction and forensic analyses;
(m) Litigation consulting services and expert witness
testimony regarding confirmation issues, avoidance actions
or other matters;
(n) Review and analysis of DIP and exit financing, including
collateral analysis and cash flow validation; and
(o) Other functions as requested by the Committee or its
counsel to assist the Committee in these chapter 11 cases.
FTI will be paid in accordance with this compensation structure:
(a) From the commencement of the FTI Committee Engagement on
June 3 to July 10, 2009, the date of closing of the
363 Sale, on an hourly basis;
(b) Upon expiration of the period covered by the fee
arrangement, a fixed fee of $750,000 per month for each of
the first three months and $500,000 per month thereafter
prorated for any partial month until the Effective Date of
the Plan of Reorganization or Liquidation. The Monthly
Fixed Fee will be subject to a periodic review by the
Creditors' Committee and FTI, and any proposed changes
will be subject to Court approval.
For the periods covered by the Monthly Fixed Fee, FTI will only be
required to maintain time records for services rendered, in half
hour increments.
The current hourly rates that FTI charges its clients are:
Professional Hourly rate
------------ -----------
Senior Managing Director $710 to 825
Director/Managing Director $520 to 685
Associate/Consultant $255 to 480
Paraprofessional $105 to 210
Mr. Vanasky informed the Court that FTI will be entitled to a
completion fee of $5,000,000 upon the successful wind-down of the
Debtors' estates.
The Completion Fee will be considered earned and payable in two
parts:
-- $2.5 million upon confirmation of a Plan of Liquidation,
and
-- $2.5 million upon receipt by unsecured creditors of not
less than 70% of the equity and warrants received by
Debtors as proceeds from the 363 Sale.
Notwithstanding the terms of the completion fee, to the extent
there is insufficient liquidity in the estate to pay any
portion of the Completion Fee, the amount cannot be satisfied out
of the Equity and Warrants. In that event, the unpaid portion of
the Completion Fee will be eliminated, Mr. Vanasky explained.
In addition to the fees, FTI is entitled to receive reimbursement
of actual and necessary expenses incurred by FTI throughout the
FTI Committee Engagement, Mr. Vanasky asserted, more importantly,
if the FTI Committee Engagement is terminated without cause, the
full Completion Fee will be due at termination he stressed.
The Debtors will indemnify and hold FTI harmless against any
losses, claims, damages or liabilities arising out of or related
to the FTI Committee Engagement.
Michael Eisenband, the senior managing director of FTI assures the
Court that FTI does not represent any other entity having an
interest adverse to the Committee in connection with the Debtors
case. Moreover, FTI vows to protect its clients' information
through the use of its "Ethical Wall and Confidentiality
Agreements" procedures.
Upon approval of the Creditors' Committee's application to retain
FTI, Judge Gerber ruled that notwithstanding the approval, the
United States Trustee will retain its right to object to the
Hourly Compensation, Monthly Fixed Fee and Completion Fee based on
the reasonableness and standard provided for the Section 330 of
the bankruptcy Code.
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: Deals With Treasury to Cover Foreign Subsidiaries
-----------------------------------------------------------------
General Motors Company disclosed in a regulatory filing with the
Securities and Exchange on August 19, 2009, amendments of the (i)
Secured Credit Agreement it entered into with the United States
Department of the Treasury on August 12, 2009, and (ii) the
Voluntary Employee Beneficiary Association Trust it entered with
the UAW Retiree Medical Benefits Trust on August 14, 2009.
Under the Amendments, the representations and warranties, the
affirmative and negative covenants and the events of default under
the Secured Credit Agreement and the VEBA Note Agreement were
expanded to apply to, in addition to GM and its controlled United
States and Canadian subsidiaries, GM's controlled subsidiaries
world-wide, subject to certain exceptions.
GM Vice President, Controller and Chief Accounting Officer Nick S.
Cyprus explains that the Amendments were entered into in
satisfaction of a requirement under a post-closing letter
agreement dated July 10, 2009, among GM, the Treasury Department
and the New VEBA in connection with the Secured Credit Agreement
and the VEBA Note Agreement.
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: Inks Stock Purchase Pact for SAAB Sale
------------------------------------------------------
General Motors Co. confirmed it has signed a stock purchase
agreement with Koenigsegg Group AB regarding the sale of 100% of
the shares of Saab Automobile AB. The deal is expected to
conclude in the next months and will then secure Saab's future.
Saab Automobile plans to exit legal reorganization shortly.
The stock purchase agreement will be subject to agreed closing
conditions. Conditions to close the sale include expected funding
commitments with Swedish government support and guarantees, as
well as transitional assistance from GM, as Saab becomes
independent. Saab is about to launch several new cars, developed
with General Motors that are in the final stages of development.
As part of the proposed transaction, GM and Saab will continue to
share technology and services during a defined time period. This
will be managed through licenses and service agreements.
"This contract is an important step in the journey to a potential
deal, said Carl-Peter Forster, president of GM Europe. "Saab's
great cars, its unique design, safety- and engine-technology, as
well as its excellent brand image, combined with Koenigsegg
Group's unique combination of innovation and entrepreneurial
spirit, bode well for a successful future for the brand. We will
continue to work with all parties to define the final details and
ensure a fast closure of the deal, which we expect to take place
in the next few months. The closure of the deal is contingent on
the funding commitment from the European Investment Bank,
guaranteed by the Swedish government," Forster added.
"We have now concluded another important step in realizing the
great potential of Saab," said Christian von Koenigsegg, CEO of
Koenigsegg Group. "Our plan is to transform Saab into a stand-
alone vibrant entrepreneurial company and make it 'sustainable' by
making it profitable. We will revive Saab's Swedish heritage of
ecological sensitivity, safety, design innovation and 'fun to
drive' experience!"
Jan Ake Jonssson, Managing Director of Saab, said: "This is
excellent news for everyone connected to Saab around the globe.
This is an important step to secure jobs and our long-term future
as a Swedish carmaker. In the short-term, it will enable us to
move forward with exciting new cars starting this month with the
all new Saab 9-3X."
Funding Concerns
According to an August 18, 2009 report, Koenigsegg still needed
$300 million to complete the deal, Bloomberg News reported.
Under the deal, Koenigsegg and GM will each shell out $500 million
in capital to Saab, Bloomberg cited. Moreover, while the Swedish
government has committed to guarantee $600 million in loans and
was previously reported to guarantee more than $600 million, the
government has so far declined to provide the $300 million,
Bloomberg said. Koenigsegg, GM and Sweden are still holding talks
regarding the matter, Bloomberg related.
About Koenigsegg Group AB
Koenigsegg Group AB is a consortium of private investors
including Koenigsegg Automotive AB. Koenigsegg Automotive AB
manufactures supercars. It has representatives in Africa, Asia,
Europe, the Middle East, North America, and the Oceania. The
company was founded in 1994 and is based in Angelholm, Sweden.
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: Old GM Files Interim Financial Report
-----------------------------------------------------
Motors Liquidation Company, formerly known as General Motors
Corporation, and its debtor-affiliates, filed with the Court an
interim report dated August 11, 2009, disclosing their financial
information.
The Interim Report is limited in scope, covers a limited period of
time and has been prepared solely for the purpose of complying
with bankruptcy law requirements and requests of the Office of the
United States Trustee for the Southern District of New York,
Joseph H. Smolinksy, Esq., at Weil Gotshal & Manges LLP, in New
York, said. The financial information contained in the Report is
not prepared in accordance with U.S. generally accepted accounting
principles, was not audited or reviewed by independent
accountants, and is subject to future adjustment and
reconciliation, he added.
Mr. Smolinksy disclosed that as of July 10, 2009, the Debtors have
cash balance of $1.17 billion, representing proceeds of loans made
by the U.S. Department of the Treasury and Export Development
Canada, as lenders under the Secured Superpriority Debtor-In-
Possession Credit Agreement dated June 3, 2009, as amended and
restated on July 10, 2009.
MLC is obligated to repay the Lenders under the $1.17 billion
Wind-Down Facility from the proceeds of the Facility as well as
from the proceeds from the sale of substantially all of General
Motors Corporation's assets pursuant to Section 363 of the
Bankruptcy Code, other than its equity interests in General Motors
Company. The Wind-Down Facility is otherwise non-recourse to MLC.
As part of the consideration received by MLC from the Sec. 363
Sale, GMCo issued to MLC (a) 50,000,000 shares, or 10%, of its
common stock, and (b) warrants to acquire newly issued shares of
its common stock initially exercisable for a total of 90,909,090
shares of common stock, or 15% of the GM common stock on a fully
diluted basis. MLC will receive additional shares of General
Motors Company if the allowed claims against MLC exceed certain
thresholds.
MLC owns 127 properties located throughout the continental United
States, ranging in purpose from engineering centers to residential
properties. MLC owns 16 manufacturing properties and has entered
into triple net lease agreements with GMCo, which are subject to a
Transition Services Agreement, pursuant to which GMCo will perform
certain facility idling services for MLC at agreed upon rates.
Moreover, MLC is a party to leases of real property which it
intends to reject as GMCo terminates its lease with MLC and
vacates the property.
MLC's investments in subsidiaries consist of investments in 152
wholly and partially owned non-debtor entities. Several
dealerships have ongoing operations and are being reviewed to
determine their ultimate disposition. Other MLC-owned dealers
which are inactive or have already liquidated in the ordinary
course.
According to Mr. Smolinsky, General Motors Nova Scotia Finance
Company is a finance company that was created to issue
approximately $1 billion in GBP bonds, which are guaranteed by
MLC. General Motors Strasbourg owns a plant that is currently
operating which manufactures transmissions.
MLC's assets include all tax claims and tax refunds to the extent
that they relate exclusively to the assets not sold to and
liabilities not assumed by General Motors Company in the Sec. 363
Sale.
Meanwhile, MLC's indebtedness for borrowed money, other than under
the Wind-Down Facility, is principally comprised of unsecured
public bonds and industrial revenue bonds.
MLC is also obligated to provide retiree insurance benefits, most
significantly, medical and life insurance, to six union groups --
also called the "Splinter Unions," consisting of:
(a) The International Union of Electrical Workers
(b) The United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial and Service
Workers International Union
(c) International Union of Operative Engineers (IUOE)
(d) Catering/UCR
(e) Teamsters/IBT
(f) Boilermakers/MPBP
The Retiree Benefits cost the Debtors approximately $23 million
per month. In addition, MLC has obligations arising from
collective bargaining agreements with certain Splinter Unions that
were negotiated following the closure of certain plants and
locations, which are estimated to cost $1.34 million per month,
Mr. Smolinsky disclosed.
With respect to litigation liabilities, MLC has product and
asbestos liabilities. These reserves are for actual claims and
lawsuits filed as well as an estimate for incidents incurred but
not reported. The product liability claims are for incidents that
occurred prior to July 10, 2009, and are primarily related to
property damages, personal injuries and breach of warranty claims.
The asbestos claims allege that exposure to asbestos resulted in
asbestosis, mesothelioma, cancers, and death. The other litigation
liability reserve is for pending matters and includes employee,
dealer, pricing, intellectual property, and other matters.
The environmental liabilities of the Debtors relate to land and
facilities owned or previously associated with MLC, which
represent the costs to perform remediation on the sites with the
goal of obtaining regulatory closure whenever possible to
facilitate their disposition and to allow for productive use by
others.
MLC's estimated liabilities also include accrued costs for several
professional service firms for services rendered during the period
June 1, 2009 to July 10, 2009. As of June 1, 2009, the Debtors
have a total balance of $26,868,300 with these professionals:
AP Services LLC $20,000,000
Honigman Miller LLP 583,394
Jenner & Block LLP 384,906
Weil, Gotshal & Manges LLP 5,900,000
A full-text copy of Motors Liquidations Company's Interim
Financial Report is available for free at:
http://bankrupt.com/misc/MLCInterimReport.pdf
About General Motors
Headquartered in Detroit, Michigan, General Motors Corp.
(NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM
employs about 266,000 people around the world and manufactures
cars and trucks in 35 countries. In 2007, nearly 9.37 million GM
cars and trucks were sold globally under the following brands:
Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.
GM Europe is based in Zurich, Switzerland, while General Motors
Latin America, Africa and Middle East is headquartered in Miramar,
Florida.
As reported by the Troubled Company Reporter, GM reported net loss
of US$6.0 billion, including special items, in the first quarter
of 2009. This compares with a reported net loss of US$3.3 billion
in the year-ago quarter. As of March 31, 2009, GM had
US$82.2 billion in total assets and US$172.8 billion in total
liabilities, resulting in US$90.5 billion in stockholders'
deficit.
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors'
restructuring officer. GM is also represented by Jenner & Block
LLP and Honigman Miller Schwartz and Cohn LLP as counsel.
Cravath, Swaine, & Moore LLP is providing legal advice to the GM
Board of Directors. GM's financial advisors are Morgan Stanley,
Evercore Partners and the Blackstone Group LLP.
General Motors changed its name to Motors Liquidation Co.
following the sale of its key assets to a company 60.8% owned by
the U.S. Government.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL MOTORS: Remy Int'l Wants Probe on 1994 Agreement
--------------------------------------------------------
Pursuant to Rule 2004 of the Federal Rules of Bankruptcy
Procedure, Remy International, Inc., asks the U.S. Bankruptcy
Court for the Southern District of New York to direct (i) the
production of documents, and (ii) the oral examination of certain
individuals connected with General Motors Corp. in relation to the
Debtors' alleged breach of the representations, warranties,
covenants or agreements contained in an Asset Purchase Agreement
dated July 13, 1994.
Representing Remy, N. Kathleen Strickland, Esq., at Ropers,
Majeski, Kohn & Bentley, in San Francisco, California, contends
that the Agreement enumerated various retained liabilities,
relating to, among other things, product liability claims, for
which GM agreed to indemnify and hold Remy harmless.
Since the Agreement was executed in 1994, GM has defended, and is
currently defending, Remy in lawsuits filed by persons alleging
injury from products GM manufactured prior to the closing date of
the Agreement, Ms. Strickland relates.
In July 2009, however, GM informed Remy that it did not intend to
continue to honor the Agreement, stating in pertinent part that:
(a) on July 10, 2009, GM emerged from Chapter 11 and became
"General Motors Company," a new entity;
(b) as part of the bankruptcy process, General Motors Company
did not assume the Agreement;
(c) General Motors Company will not assume any responsibility
under the Agreement for asbestos litigation; and
(d) GM will be communicating the information to an outside
counsel representing GM and Remy.
On August 3, 2009, Remy sought for GM's production of documents in
relation to GM's "Contingent Matters-Litigation "involving
asbestos-related and other product liabilities. GM, however, has
not produced the Documents.
In this regard, Remy asks the Court to compel the Debtors'
production of, among other things, copies of (i) all data
compilations concerning past, pending, or future Asbestos Claims
or Product Liability Claims against GM, (ii) forecast, projection,
report or analysis that GM relied on in computing its recorded
liabilities for asbestos-related and product liability matters as
of December 31 in 2006, 2007, and 2008, (iii) related pending,
projected or anticipated claims, and (iv) all documents setting
forth the aggregate amount of the Debtors' insurance applicable to
the Claims.
Remy also asks for copies of GM's engagement of Hamilton
Rabinowitz & Associates Inc., or Dr. Francine Rabinowitz.
About General Motors
Headquartered in Detroit, Michigan, General Motors Corp.
(NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM
employs about 266,000 people around the world and manufactures
cars and trucks in 35 countries. In 2007, nearly 9.37 million GM
cars and trucks were sold globally under the following brands:
Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.
GM Europe is based in Zurich, Switzerland, while General Motors
Latin America, Africa and Middle East is headquartered in Miramar,
Florida.
As reported by the Troubled Company Reporter, GM reported net loss
of US$6.0 billion, including special items, in the first quarter
of 2009. This compares with a reported net loss of US$3.3 billion
in the year-ago quarter. As of March 31, 2009, GM had
US$82.2 billion in total assets and US$172.8 billion in total
liabilities, resulting in US$90.5 billion in stockholders'
deficit.
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors'
restructuring officer. GM is also represented by Jenner & Block
LLP and Honigman Miller Schwartz and Cohn LLP as counsel.
Cravath, Swaine, & Moore LLP is providing legal advice to the GM
Board of Directors. GM's financial advisors are Morgan Stanley,
Evercore Partners and the Blackstone Group LLP.
General Motors changed its name to Motors Liquidation Co.
following the sale of its key assets to a company 60.8% owned by
the U.S. Government.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
GLOBAL CHARTER: Case Summary 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Global Charter Services, Ltd.
200 West Adams Street, Suite 1100
Chicago, IL 60606
Bankruptcy Case No.: 09-12918
Chapter 11 Petition Date: August 19, 2009
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Judge: Christopher S. Sontchi
Debtor's Counsel: Kevin Scott Mann, Esq.
Cross & Simon, LLC
913 N. Market Street, 11th Floor
P.O. Box 1380
Wilmington, DE 19899-1380
Tel: (302) 777-4200
Fax: (302) 777-4224
Email: kmann@crosslaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/deb09-12918.pdf
The petition was signed by Robert Anderson, vice president of
Finance and Operations of the Company.
GRAY TELEVISION: S&P Downgrades Corporate Credit Rating to 'CCC'
----------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on Atlanta-based TV broadcaster Gray Television Inc.
to 'CCC' from 'CCC+'. The rating outlook is negative.
S&P also lowered its rating on Gray's senior secured credit
facilities to 'CCC' from 'CCC+' (the same as the corporate credit
rating), and revised the recovery rating to '4' from '3'. The '4'
recovery rating indicates S&P's expectation of average (30%-50%)
recovery in the event of a payment default.
"The downgrade reflects S&P's concern about Gray's weakening
operating performance and reduced flexibility in complying with
the leverage covenant under its credit agreement," said Standard &
Poor's credit analyst Deborah Kinzer, "which could lead to a
covenant breach earlier than S&P had previously expected." The
company had a very thin 3.3% EBITDA cushion of compliance with its
leverage covenant as of June 30, 2009. Per the covenant
calculation, Gray's leverage ratio was 7.98x versus the covenant
maximum of 8.25x at June 30, 2009. Although the covenant loosens
to 8.50x in the third quarter and 8.75x in the fourth quarter, S&P
believes that continuing declines in EBITDA could lead the company
to violate the covenant by the end of 2009.
"In addition," said Ms. Kinzer, "we are concerned that at that
time, the company could be unable to absorb any additional
interest costs that would accompany another amendment to its
credit agreement."
GUARANTY LIFE: AM Best Downgrades Financial Strength to 'B'
-----------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to B
(Fair) from B+ (Good) and issuer credit rating to "bb+" from "bbb-
" of Guaranty Income Life Insurance Company (Baton Rouge, LA).
The outlook for both ratings is stable.
The rating downgrades recognize Guaranty Income's decline in its
risk-adjusted capital position as measured by Best's Capital
Adequacy Ratio (BCAR). The decline is primarily a result of
market volatility and its impact on the company's asset base.
Guaranty Income maintains a conservative investment philosophy
consisting of higher quality fixed-income securities. However,
the company recently experienced rating downgrades in its
mortgage-backed security portfolio, which resulted in an increase
in below investment grade holdings. As a result, Guaranty
Income's risk-based capital ratio, as calculated by BCAR,
materially weakened. In addition, given the uncertainty of the
current investment climate, A.M. Best remains concerned over the
potential for additional investment losses and further rating
actions on Guaranty Income's investment grade and below investment
grade fixed income portfolio, which could further weaken the
company's risk-adjusted capital ratio.
As a positive offsetting factor, Guaranty Income's liquidity
position is strong, characterized by significant holdings of cash
and short-term securities. A.M. Best expects the company to draw
down its short-term position and invest in high quality fixed
assets over the next several months.
Guaranty Income's absolute level of capital has remained
relatively stable in recent years following capital contributions,
as the parent has sold several non-core subsidiaries and used the
proceeds to retire debt and contribute capital to Guaranty Income.
Additionally, the company has reported favorable individual
annuity premium trends due to marketing initiatives and
strengthening of its distribution channel. Moreover, better
spreads have contributed to improved operating results during the
past several years. A.M. Best will continue to monitor the
current economic and investment climate and assess the impact on
the company's risk-based capital ratio.
HALCYON HOLDING: In Court Battle on Loan Default, Files for Ch. 11
------------------------------------------------------------------
Halcyon Holding Group LLC and two affiliated companies filed
Chapter 11 petitions on Aug. 17 in Los Angeles, California (Bankr.
C.D. Calif. Case No. 09-31854). Halcyon said it has between $50
million and $100 million in both assets and debts.
Bloomberg's Bob Van Voris relates Halcyon is owned by Derek
Anderson and Victor Kubiceck, producers of the movie "Terminator
Salvation".
Halcyon, according to Bloomberg, filed for bankruptcy amid a court
battle with a hedge fund that provided some funding for the film.
Halcyon filed August 17, the same day it sued the hedge fund
Pacificor LLC and one of its former employees, according to the
Los Angeles Times. According to the Times, Messrs. Anderson and
Kubiceck failed to make a payment demanded by Pacificor, which is
based in Santa Barbara, California.
In their suit against Pacificor, filed in state court in
Los Angeles, Messrs. Anderson and Kubiceck claimed they couldn't
make the payment because of a lien Pacificor placed on Dominion
Holdings, one of the companies that filed for protection.
Halcyon borrowed a total of $39 million from Pacificor and has
paid back $15 million, the Times said, citing people close to the
company. "Terminator Salvation" took in about $370 million at the
box office, according to the Times.
HURON CONSULTING: Completes Restatement of 2006-2009 Financials
---------------------------------------------------------------
Huron Consulting Group Inc. has completed its restatement of
financial statements for fiscal years 2006, 2007 and 2008 and
first quarter 2009. The Company filed its amended annual report
on Form 10K/A for the year ended December 31, 2008, its amended
quarterly report on Form 10Q/A for the quarter ended March 31,
2009, and Form 10Q for the quarter ended June 30, 2009 with the
Securities and Exchange Commission.
The restatement pertains to the accounting for certain
acquisition-related payments received by selling shareholders of
four acquired businesses that were subsequently redistributed by
such selling shareholders among themselves and to other select
client-serving and administrative Company employees based, in
part, on continuing employment with the Company or the achievement
of personal performance measures.
The selling shareholders were not prohibited from redistributing
such acquisition-related payments under the terms of the purchase
agreements with the Company for the acquisitions of the acquired
businesses. However, under GAAP, such payments are imputed to the
Company, and the portion of such payments redistributed based on
performance or employment is required to be reflected as non-cash
compensation expense of the Company, even though the amounts
received by the selling shareholders do not differ significantly
from the amounts they would have received if such portion had been
distributed solely in accordance with their ownership interests.
Huron said the restatement is necessary because the Company did
not record those portions of the acquisition-related payments as a
separate non-cash compensation expense with a corresponding
increase in paid-in capital.
Impact of Restatement on Net Income, EBITDA
The restatement resulted in a reduction of roughly $56 million in
net income and EBITDA for all restated periods. For the three
years 2008, 2007, and 2006, $38.1 million -- $25.2 million in
2008, $12.8 million in 2007 and $0.1 million in 2006 -- was
redistributed by the selling shareholders among themselves and
$13.9 million -- $5.4 million in 2008, $4.8 million in 2007 and
$3.7 million in 2006 -- was redistributed to other Huron
employees. The redistribution of the $38.1 million in 2008, 2007
and 2006 by the selling shareholders among themselves resulted in
certain selling shareholders receiving an aggregate of
$5.2 million -- $2.7 million in 2008, $2.4 million in 2007 and
$100,000 in 2006 -- in excess of the amounts they would have
received if the portion of the acquisition-related payments
redistributed based on performance or employment had been
distributed solely in accordance with their ownership interests.
Other selling shareholders received a corresponding lower amount
in 2008, 2007, and 2006 than they would have received based on
their ownership interests.
The redistributed acquisition-related payments are not tax-
deductible because the payments were not made by the Company, and
there is no change to the provision for income taxes or the
Company's tax accounts on an annual basis. However, as a result
of the correction of the errors related to the accounting for the
acquisition-related payments, the Company recalculated its
provision for income taxes for each of the quarterly periods in
2006, 2007, and 2008 and for the first quarter of 2009 using the
annual effective income tax rate method in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes."
As a result, the Company's interim quarterly provision for income
taxes decreased in certain periods and increased in others, with a
corresponding change in income tax receivable or payable. The
recalculation of the provision for income taxes also resulted in
changes to the Company's net income, earnings per share, total
assets and total stockholders' equity for each of the affected
quarters that were in addition to the changes in the Company's net
income and earnings per share that resulted from the accounting of
the redistributed acquisition-related payments as non-cash
compensation expense and the corresponding adjustment to
additional paid-in capital.
As a result of the recalculation, the Company's restated net
income, restated basic earnings per share and restated diluted
earnings per share for the quarter ended March 31, 2009, as set
forth in the Form 10Q/A, was $7.1 million, $0.36 per share and
$0.35 per share, respectively, compared to $6.0 million, $0.33 per
share and $0.32 per share, respectively, for the same period.
While the correction of the errors in accounting for the
acquisition-related payments significantly reduced the Company's
net income and earnings per share for each of the affected
periods, it had no effect on Huron's total assets, total
liabilities or total stockholders' equity on an annual basis. The
correction of these errors also had no effect on the Company's
cash or cash flows from operations or Adjusted EBITDA.
Based on the results of the Company's inquiry into the
acquisition-related payments matter to date and the agreement
amendments, the Company currently anticipates that future earn-
outs will only be accounted for as additional purchase
consideration and not also as non-cash compensation expense.
Effective August 1, 2009, the selling shareholders of two of the
acquired businesses each amended certain agreements related to the
earn-outs to provide that future earn-outs will be distributed
only to the applicable selling shareholders and only in accordance
with their equity interests on the date we acquired the business
with no required continuing employment. The Company expects to
recognize roughly $8.3 million of non-cash compensation expense
during the first seven months of 2009 related to the
redistribution of acquisition-related payments for that period, of
which $7.1 million was recognized in the six months ended June 30,
2009. In addition, the Company expects to incur a moderate
increase in cash compensation expense in future periods related to
shareholder payments and employee payments for such periods, which
it currently estimate to be no more than $4 million in each of
2009, 2010 and 2011.
However, there can be no assurance that additional information
will not be discovered that will require future acquisition-
related payments pertaining to the acquired businesses to continue
to be accounted for as non-cash compensation expense, which would
be material to Huron's results of operations through 2011. The
earn-out payments for one of the acquired businesses are payable
through March 31, 2010, and the earn-out payments for a second
acquired business are payable through December 31, 2011. There
are no additional earn-out obligations related to the other two
acquired businesses.
Additionally, as a result of the impact that Huron's restatement
may have on the business, the Company expects to incur a moderate
increase in cash compensation expense to retain Huron's top-
performing employees. It also expects an increase in operating
expenses, including legal fees, as a result of the Company's
inquiries into the acquisition-related payments and the allocation
of chargeable hours further described below, the restatement, the
SEC investigation with respect to the circumstances that led to
the restatement, the SEC inquiry into the allocation of chargeable
hours and the purported shareholder class action lawsuits in
respect of the restatement.
Huron Warns of Possible Covenant Violations
Having completed the restatement and upon the delivery of
compliance certificates for the second quarter of 2009 to its
lenders under the Company's credit agreement, the Company expects
to be in full compliance with the financial covenants under the
credit agreement. However, as a result of the significant decline
in the price of the Company's common stock following the July 31,
2009 announcement of the restatement, the Company expects to
engage in an impairment analysis with respect to the carrying
value of its goodwill in connection with the preparation of its
financial statements for the quarter ended September 30, 2009.
If, following such analysis, the Company is required to record a
non-cash goodwill impairment charge, the Company may not be in
compliance with the financial covenants in its credit agreement.
There can be no assurance that the Company will remain in
compliance with the financial covenants under the credit agreement
or, if it does not, that it will obtain any necessary amendments
or waivers from any lenders and, even if the Company is able to
obtain them, such amendments or waivers may subject the Company to
terms materially less favorable than those in its current
agreement.
SEC Investigation
The SEC is commencing an investigation with respect to the
circumstances that led to the restatement. In addition to the SEC
investigation, the Company has conducted a separate inquiry, in
response to an inquiry from the SEC, into the allocation of
chargeable hours. This matter has no impact on billings to the
Company's clients, and did not result in an adjustment to the
Company's historical financial statements. The Company intends to
cooperate fully with the SEC in its investigation and inquiry. In
addition, several purported shareholder class action complaints
have been filed in connection with the restatement, which assert
claims under Section 10(b) and Section 20(a) of the Securities
Exchange Act of 1934, as amended, and Rule 10b-5 promulgated
thereunder. The Company intends to defend vigorously the actions.
John McCartney, chairman of the Audit Committee of Huron
Consulting Group's Board of Directors said, "We are confident that
our review of the Company's accounting for the acquisition-related
payments has identified the necessary adjustments to our financial
statements and we have taken appropriate action in connection with
these matters. We continue to cooperate fully with the SEC
investigation with respect to the restatement, as well as the SEC
inquiry into the allocation of chargeable hours. It is important
that Huron continue to focus on providing high-quality service to
its clients. The Company also appreciates the support it has
received from its employees and many of its clients during this
process."
"The Company recognizes that employee retention is a key to the
Company's continued success, and earlier this year, the Company
began working with an external compensation consultant to update
the Company's compensation structure for Managing Directors.
Huron has an optimistic view of the future and is committed to
retaining and properly rewarding key performers in the
organization," added McCartney.
About Huron Consulting Group
Huron Consulting Group -- http://www.huronconsultinggroup.com/--
helps clients in diverse industries improve performance, comply
with complex regulations, resolve disputes, recover from distress,
leverage technology, and stimulate growth. The Company teams with
its clients to deliver sustainable and measurable results. Huron
provides services to a wide variety of both financially sound and
distressed organizations, including leading academic institutions,
healthcare organizations, Fortune 500 companies, medium-sized
businesses, and the law firms that represent these various
organizations.
JL FRENCH: Court Sets September 10 General Claims Bar Date
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
established September 10, 2009, at 4:00 p.m. as the general bar
date for the filing of proofs of claim against any of the Debtors.
The bar date with respect to governmental units is January 11,
2010, at 4:00 p.m.
All original proofs of claim must be filed with the Debtors'
claims agent, BMC Group, Inc., so as to be received on or before
the applicable bar date, at:
a) if sent by mail:
J.L. French Automotive Castings, Inc.
c/o BMC Group, Inc.
P.O. Box 3020
Chanhassen, MN 53317-3020
b) If sent by messenger or overnight courier:
J.L. French Automotive Castings, Inc.
c/o BMC Group, Inc.
18750 Lake Drive East
Chanhassen, MN 55317
About J.L. French
Based in Sheboygan, Wisconsin, J.L. French Automotive Castings
Inc. -- http://www.jlfrench.com/-- supplies aluminum die castings
specializing in powertrain and automotive components. The Company
has four manufacturing locations around the world including plants
in the United States, and Spain. The Company has six engineering/
customer service offices to globally support its customers near
its regional engineering and manufacturing locations. The Company
began making aluminum die castings in 1968 in Sheboygan, Wisconsin
as a small, family owned business and is now an industry leader in
technical resources.
The Company and six of its affiliates filed for Chapter 11
protection on July 13, 2009 (Bankr. D. Del. Lead Case No.
09-12445). Pachulski Stang Ziehl & Jones LLP, and Milbank, Tweed,
Hadley & McCloy LLP, represent the Debtors in their restructuring
efforts. The Debtors selected BMC Group Inc. as claims agent;
Conway MacKenzie & Dunleavy Inc. as financial advisor; Houlihan
Lokey Howard & Zukin Capital Inc. as investment banker. The U.S.
Trustee for Region 3 has not appointed creditors to serve on the
Official Committee of Unsecured Creditors. When the Debtors
sought for protection from their creditors, they listed between
$100 million and $500 million each in assets and debts.
JOHN WHITNEY: Proposes Friedman Law as Bankruptcy Counsel
---------------------------------------------------------
John Harvey Whitney, Jr., asks the U.S. Bankruptcy Court for the
Central District of California for authority to employ the law
firm of Friedman Law Group as counsel.
The firm will, among other things:
-- advise the Debtor generally regarding matters of the
bankruptcy law, including the requirements of the Bankruptcy
Code, the Federal Rules of Evidence, the U.S. Trustee
Guidelines relating to the operation of the Debtor's
business;
-- represent the Debtor in the Chapter 11 case, in any
adversary proceedings, contested matters and administrative
hearings in the Bankruptcy Court or in the District Court
connected therewith, and in any actions in other courts
where the rights of the bankruptcy estate may be litigated
or affected; and
-- advise the Debtor concerning the rights and remedies of the
bankruptcy estate in regard to the estate's assets and with
respect to the claims of creditors.
In a separate motion, the Debtor selected Snyder Dorenfeld LLP as
special litigation counsel.
J. Bennett Friedman, Esq., managing partner at the firm, tells the
Court that his hourly rate is $425. Mr. adds that the firm also
received a $25,000 retainer.
Mr. Friendman can be reached at:
Friendman Law Group
1900 Avenue of the Stars, Suite 1800
Los Angeles, CA 90067-4409
Tel: (310) 552-9292
Fax: (310) 552-9291
About John Harvey Whitney
Los Angeles, California-based John Harvey Whitney, Jr., filed for
Chapter 11 on August 3, 2009 (Bankr. C. D. Calif. Case No. 09-
30258). The Debtor did not file a list of its 20 largest
unsecured creditors when it filed its petition. In his petition,
the Debtor listed $10,000,001 to $50,000,000 in assets and
$1,000,001 to $10,000,000 in debts.
JOHN WHITNEY: Meeting of Creditors Scheduled for September 3
------------------------------------------------------------
The U.S. Trustee for Region 16 will convene a meeting of creditors
in John Harvey Whitney, Jr.'s Chapter 11 case on Sept. 3, 2009, at
9:00 a.m. The meeting will be held at 725 S Figueroa St., Room
2610, Los Angeles, California.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
About John Harvey Whitney
Los Angeles, California-based John Harvey Whitney, Jr., filed for
Chapter 11 on August 3, 2009 (Bankr. C.D. Calif. Case No. 09-
30258). The Debtor did not file a list of its 20 largest
unsecured creditors when it filed its petition. Jerome Bennett
Friedman, Esq. at Friendman Law Group represents the Debtor in his
restructuring efforts. In his petition, the Debtor listed
$10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000
in debts.
JOHNNY REESE: Case Summary & 16 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Johnny Reese
3061 Cahaba Valley Road
Pelham, AL 35124
Bankruptcy Case No.: 09-04906
Chapter 11 Petition Date: August 19, 2009
Court: United States Bankruptcy Court
Northern District Of Alabama (Birmingham)
Judge: Benjamin G. Cohen
Debtor's Counsel: C Taylor Crockett, Esq.
PO Box 10526
Birmingham, AL 35202
Tel: (205) 254-3500
Email: taylor@taylorcrockett.com
Total Assets: $4,571,095
Total Debts: $8,117,770
A full-text copy of Mr. Reese's petition, including a list of his
16 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/alnb09-04906.pdf
The petition was signed by Mr. Reese.
JOSEPH DENNIS DOWNS: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Joint Debtors: Joseph Dennis Downs, II
Julie Ritchie Downs
166 Abbey Ridge
Bardstown, KY 40004
Bankruptcy Case No.: 09-34177
Chapter 11 Petition Date: August 19, 2009
Court: United States Bankruptcy Court
Western District of Kentucky (Louisville)
Debtors' Counsel: Neil Charles Bordy, Esq.
Seiller Waterman LLC
2200 Meidinger Tower
462 S 4th Street
Louisville, KY 40202
Tel: (502) 584-7400
Email: bordy@derbycitylaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtors' petition, including a list of
their 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/kywb09-34177.pdf
The petition was signed by the Joint Debtors.
JOSEPH JOHN: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Joint Debtors: Joseph John
Reena John
9039 Hunting Arrow Street
Las Vegas, NV 89123
Bankruptcy Case No.: 09-25235
Chapter 11 Petition Date: August 18, 2009
Court: United States Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Bruce A. Markell
Debtors' Counsel: Samuel A. Schwartz, Esq.
626 S Third St
Las Vegas, NV 89101
Tel: (702) 385-5544
Fax: (702) 385-2741
Email: sam@schwartzlawyers.com
Total Assets: $1,743,219
Total Debts: $2,569,647
A full-text copy of the Debtors' petition, including a list of
their 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/nvb09-25235.pdf
The petition was signed by the Joint Debtors.
KATHY COX: Fox to Withhold $1MM Prize Pending Creditors' Deal
-------------------------------------------------------------
WCTV.tv reports that the Fox Broadcasting Co. won't release the
$1 million game show prize that Georgia schools Superintendent
Kathy Cox won from "Are You Smarter than a 5th Grader?" for
charity.
Fox Broadcasting, according to WCTV.tv, wants Ms. Cox to work out
an agreement with the trustee and her creditors.
As reported by the Troubled Company Reporter on February 2, 2009,
a lawyer representing Ms. Cox's creditors confirmed that his
clients were considering making a claim on the $1 million game
show prize. Fidelity Investments, the investment firm hired to
create an account for distributing the money to three public
schools for blind and deaf students, returned the $1 million game
show prize to Fox Broadcasting Co. in December 2008, because it
didn't want to become involved in the bankruptcy case, Karen
White, Ms. Cox's attorney, said.
Gary W. Brown, the bankruptcy trustee, is trying to claim the
money for Ms. Cox's creditors, WCTV.tv states. The prize money is
part of Ms. Cox's personal income, the report says, citing Mr.
Brown.
Kathy Cox is a former Fayette County teacher and legislator now in
her second term as schools chief. She oversees a state system of
1.7 million students and an education budget of $9.5 billion, most
of which it passes to local systems.
As reported by the Troubled Company Reporter on November 26, 2008,
Ms. Cox and her husband John have filed for Chapter 7 bankruptcy.
Ms. Cox listed above $3.5 million in liabilities and less than
$650,000 in assets. Most of the debt comes from Mr. Cox's Pebble
Hill Homes, a business he started in Fayetteville in 2001. Ms.
Cox, who makes about $125,000 a year, has no role in Pebble Hill
but is a co-signer on loans for it. Almost $2.9 million of the
$3.5 million in debts are unsecured.
KIRK CORP: Plan Confirmation Hearing Set for September 2
--------------------------------------------------------
Mary Ellen Podmolik at Chicago Tribune reports that the U.S.
Bankruptcy Court for the Northern District of Illinois will decide
whether it will approve Kirk Corp.'s reorganization plan on
September 2.
Chicago Tribune relates that Kirk must convince creditors that its
reorganization terms are fair and its future as a home builder is
viable. Chicago Tribune says that Kirk CEO John Carroll remains
optimistic. "The fundamental things that drive homes are still
there. People are still getting married, having kids. People are
getting divorced. That will create pent-up demand," the report
quoted Mr. Carroll as saying. The report states that Mr. Carroll
will invest not at least $500,000 for a 49% stake in a reorganized
company.
JPMorgan Chase, which stopped funding Kirk and led caused the
Debtor to file for bankruptcy, has been unconvinced of the
Company's reorganization efforts, Chicago Tribune relates.
JPMorgan said in court documents, "In the end, this bankruptcy
does not benefit the lenders in any conceivable way. Indeed, it
can only harm the lenders and, truth be told, is an exercise in
futility. The lenders should not be forced to continue to fund
the debtors' foray into bankruptcy. The debtors are liquidating
finished inventory and litigating with the lenders over what is at
best an uncertain future and at worst a doomed fate."
Chicago Tribune reports that a reorganized Kirk:
-- would be leaner, with about 15 workers;
-- would no longer have Donald Kirk, Kirk's founder and
largest unsecured creditor with a subordinated debt of
$5.7 million, as an investor;
-- be 51% owned by an employee stock ownership plan;
-- focus on about 250 lots in Bolingbrook, Lakemoor, and
Woodstock; and
-- sign over to JPMorgan Chase 170 acres of land in Elburn
and acreage attached to its Apple Creek Estates project in
Woodstock.
Kirk Homes, an industry leader in sustainable development
initiatives and preservation of open space, is currently building
communities in Bolingbrook, Hoffman Estates, Lakemoor and
Woodstock. Kirk Corporation is based in Streamwood, Illinois.
Kirk voluntarily filed for reorganization under Chapter 11 of the
U.S. Bankruptcy Code in the Northern District of Illinois.
LEHMAN BROTHERS: Ended, Transferred $1.04-Bil. in Loans in July
---------------------------------------------------------------
Pursuant to a court order authorizing the Debtors to terminate or
assign unfunded commitments and enter into restructuring
transactions with respect to their corporate loans, Lehman
Brothers Holdings Inc. filed in Court a monthly report of the
transactions they made for July 2009.
The report showed that the Debtors terminated or assigned nine
corporate loans, with an aggregate outstanding principal balance
of $1,039,156,775. The Debtors did not make any payment in
connection with the termination or assignment, the report said.
The Debtors also disclosed that they did not enter into any
restructuring transactions during the period in which they have a
beneficial interest in at least 10% of the outstanding principal
amount or which the outstanding principal amount due to them is
more than $50 million.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
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: De Minimis Assets Disposed of as of Aug. 14
------------------------------------------------------------
Pursuant to the procedures governing the sale or abandonment of
their de minimis assets, the Debtors filed in Court a monthly
report of assets that were disposed of as of August 14, 2009.
The Debtors disclosed in the report that they abandoned spare
parts for a Turbomecca helicopter engine as well as 143 pallets
of office furniture, consisting principally of modular cubicle
pieces that were removed from the former offices of BNC Mortgage
LLC and stored at a warehouse owned by Corporate Business
Interiors. The spare parts were abandoned to Executive Fliteways
Inc. while the pieces of furniture were abandoned to Hice Stiles
of CBI.
The Debtors say they have no further use for the spare parts and
that there is no market for those items according to their
broker. The recipient, the Debtors, say has offered to dispose
of those items in exchange for $50.
As for the furniture, the Debtors estimated that the cost of
transferring the items and marketing them would exceed the profit
that would be generated from the sale.
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: Proposes Settlement with Units on Loans Sale
-------------------------------------------------------------
Lehman Brothers Holdings Inc. asks the Court to approve an
agreement with two of its wholly-owned subsidiaries, Lehman ALI
Inc. and Lehman Re Ltd., to settle their dispute over the sale of
certain loans.
The dispute stemmed from the decision of Lehman Commercial Paper
Inc. and another unit to sell to Lehman Re certain residential
and commercial mortgage and mezzanine loans, which they purchased
from LBHI and Lehman ALI. The move was criticized by LBHI and
Lehman ALI, both of which questioned the right of LCPI to sell
those loans.
Under the settlement, LBHI, Lehman ALI, and LCPI agreed to
execute and deliver to Lehman Re certain assignment documents
with respect to each loan and confirm that Lehman Re has been the
sole owner of the loans since September 17, 2008. In return,
Lehman Re will assume the future funding obligations of LBHI,
Lehman ALI, and LCPI under the loans from and after September 17,
2008; pay $1 million to those companies; and grant them a right
of first offer to purchase some of the loans. The companies also
agreed to release each other from all claims arising after
September 17, 2008.
The hearing to consider approval of the settlement is scheduled
for August 26, 2009. Creditors and other concerned parties have
until August 21, 2009, to file their objections.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
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: Wants Probe of Pinnancle & CHFA on Swaps
---------------------------------------------------------
Lehman Brothers Holdings Inc., in separate motions, seeks
permission from the Court to investigate Pinnacle Foods Finance
LLC, and Colorado Housing and Finance Authority.
LBHI wants the two investigated in connection with the
termination of their swap transactions with its units, Lehman
Brothers Special Financing Inc. and Lehman Brothers Financial
Products Inc. The parties entered into the swap transactions
under separate ISDA Master Agreements, which were terminated by
Pinnacle and CHFA following the bankruptcy filing of the Lehman
units.
In court papers, LBHI questions the amounts which Pinnacle and
CHFA said are payable as part of the termination of the
transactions. LBHI also complains that they did not provide
complete and sufficient information on how they determined the
amounts, leaving LBHI in doubt if their valuation was proper or
not.
Pinnacle determined that it owes LBSF about $17.5 million while
CHFA determined that it owes about $80 million. CHFA also
claimed that it is owed approximately $9 million by LBFP.
As part of the investigation, LBHI demands Pinnacle and CHFA to
produce a set of documents and designate a person to be
questioned under oath regarding the valuation.
The hearing to consider approval of the proposed investigation is
scheduled for August 26, 2009. Creditors and other concerned
parties have until August 21, 2009, to file their objections.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
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: Gets Court Nod for Amended MRA With Aurora Bank
----------------------------------------------------------------
The Bankruptcy Court authorized Lehman Brothers Holdings Inc. to
provide additional financing to Aurora Bank FSB and its unit.
In an order dated August 5, 2009, the Court approved the amended
master repurchase agreement that would permit LBHI to acquire
from Aurora Bank a portfolio of loans for up to $450 million; and
LBHI's entry into a bridge financing facility with Aurora Loan
Services LLC under which it is required to provide the company up
to $500 million in short-term secured financing.
A draft copy of the amended repurchase agreement and financing
facility is available for free at:
http://bankrupt.com/misc/LehmanAmendedMRAAurora.pdf
Prior to the Court's approval, Elliott Associates LP and four
other creditors dropped their objection after LBHI provided them
with additional information about the proposed financing. The
creditors opposed the proposed financing due to the lack of
information and the alleged failure of LBHI to address issues
including the enforceability of its security interests if Aurora
Bank is seized, among other issues.
LBHI, however, countered that the objection is devoid of merit
and that it made every attempt to provide the necessary
information to the fiduciaries of its general unsecured creditors
contrary to Elliot Associates' allegations. LBHI also argued
that it is receiving fair consideration and a reasonable rate of
return on its investment under the deal.
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)
LIFE SCIENCES: Faces Oakland Class Action on Lion Holdings Merger
-----------------------------------------------------------------
Life Sciences Research, Inc., reports that, on August 10, 2009, a
complaint was filed in connection with a purported class action
lawsuit, Oakland v. Life Sciences Research, Inc., et al., with
respect to the proposed merger of the Company with and into Lion
Merger Corp., an entity controlled by Andrew Baker, the Chairman
and Chief Executive Officer of the Company, contemplated by the
Agreement and Plan of Merger, dated July 8, 2009, by and among the
Company, Lion Holdings, Inc., and Merger Sub.
The complaint was filed in the Superior Court of New Jersey,
Chancery Division, Somerset County, and names as defendants the
Company, Mr. Baker and the other members of the Company's Board of
Directors. The complaint alleges, among other things, that the
directors breached their fiduciary duties in connection with the
Merger by agreeing to sell the Company for an unfair price
pursuant to an unfair process, that the Merger Agreement contains
preclusive deal protection provisions by virtue of its termination
fee provisions, that the Company and Andrew Baker aided and
abetted the directors' breach of their fiduciary duties and that
the Company has failed to disclose material facts regarding the
Merger. The complaint seeks injunctive and other unspecified
relief.
On July 13, 2009, a first amended complaint was filed in another
purported class action in connection with the Merger. That
action, captioned Berger v. Life Sciences Research, et al., was
also filed in the Superior Court of New Jersey, Chancery Division,
Somerset County (Civil Action No. SOM-C-12006-09), and names the
same parties as defendants.
The Company is responding appropriately to these lawsuits.
The Company also reports that the purported class action lawsuit,
Ramaiah v. Baker, et al., which was filed in the Superior Court of
New Jersey, Chancery Division, Somerset County, on July 17, was
voluntarily dismissed by the plaintiffs thereto on August 5,
without prejudice and without costs to any party.
About Life Sciences Research
Headquartered in East Millstone, New Jersey, Life Sciences
Research Inc. (NYSE Arca: LSR) -- http://www.lsrinc.net/-- is a
global contract research organization providing product
development services to the pharmaceutical, agrochemical and
biotechnology industries. LSR operates research facilities in the
United States and the United Kingdom.
As of June 30, 2009, the Company had $183,594,000 in total assets
and $191,293,000 in total liabilities, resulting in $7,699,000 in
stockholders' deficit.
LIFE SCIENCES: Posts Lower Net Income of $6.3MM for Q2 2009
-----------------------------------------------------------
Life Sciences Research, Inc., posted lower net income of
$6,300,000 for the three months ended June 30, 2009, from net
income of $7,284,000 for the same period a year ago. The Company
also posted lower net income of $9,964,000 for the six months
ended June 30, 2009, from net income of $14,019,000 for the same
period a year ago.
As of June 30, 2009, the Company had $183,594,000 in total assets
and $191,293,000 in total liabilities, resulting in $7,699,000 in
stockholders' deficit.
On March 2, 2006, the Company entered into a $70 million loan
under the terms of a Financing Agreement dated March 1, 2006 with
a third party lender. The loan matures on March 1, 2011 and had
an interest rate of LIBOR plus 825 basis points (which reduced to
LIBOR plus 800 basis points upon the Company meeting certain
financial tests). On July 8, 2009, the Company entered into the
Third Amendment and Waiver and Consent to the March 2006 Financing
which, among other things, provided the consent of the lenders to
the Company's entry into a merger. It also makes the following
principal revisions to the March 2006 Financing: (i) increases the
applicable interest rate under the terms of the Financing
Agreement from LIBOR plus 3.50% per annum to LIBOR plus 5.50% per
annum; (ii) revises the covenants regarding Leverage Ratio and
Consolidated EBITDA for the period ending June 30, 2009 to
1.06:1.00 and $41,300,000, respectively; and (iii) revises the
covenants regarding Leverage Ratio and Consolidated EBITDA for the
period ending September 30, 2009 to 1.15:1.00 and $37,000,000,
respectively.
The Third Amendment also provides that Consolidated EBITDA shall
exclude reasonable fees and expenses incurred in connection with
the transactions contemplated by the Merger Agreement to the
extent accrued or actually paid during such period (without
duplication) in an aggregate amount not to exceed $2,000,000. The
Third Amendment provides for an amendment fee of $5 million
payable to the lenders; such fee, however, will not be due if, on
or prior to the date that is five months after the amendment
effective date, (i) all obligations under the Financing Agreement
are paid in full; (ii) the Merger is consummated; or (iii) a
"superior proposal" (as defined in the Merger Agreement) is
consummated with the prior written consent of the Required Lenders
(which consent shall not be unreasonably withheld). The original
and amended loans have a LIBOR floor set at 425 basis points.
LIBOR has fallen below 425 basis points for part of 2008 and for
the duration of 2009 through to June 30, 2009, resulting in the
interest rate being fixed at 775 basis points (the LIBOR floor of
425 basis points plus 350 basis points) for 11 months during 2008
and for the six months ended June 30, 2009.
On July 8, 2009, the Company entered into the Agreement and Plan
of Merger with Lion Holdings, Inc., and Lion Merger Corp., a
wholly owned subsidiary of Parent. Lion will merge with and into
the Company, with the Company continuing as the surviving company
and a wholly owned subsidiary of Parent following the Merger.
A Special Committee consisting of the Company's independent
directors was charged with evaluating strategic alternatives for
the Company and unanimously recommended the approval of the
Merger. Based upon this recommendation, the Board of Directors of
the Company (with Andrew Baker and Brian Cass abstaining),
approved the Merger and resolved to recommend that LSR
stockholders approve the Merger. The Special Committee was
advised by independent counsel and an independent financial
advisor who provided a fairness opinion to the Special Committee.
The Merger Agreement provides that, upon consummation of the
Merger, each share of common stock, par value $0.01 per share, of
the Company issued and outstanding immediately prior to the
effective time of the Merger, other than shares owned by Parent,
Lion or their affiliates, will be converted into the right to
receive $8.50 in cash. Based upon the latest information
available to the Company, Mr. Baker beneficially owns
approximately 18.1% of the shares. No stockholder has any
statutory right to demand and receive payment of the fair value of
his, her or its shares in connection with the Merger.
Consummation of the Merger is subject to a number of conditions,
including without limitation: (i) the approval of the Merger by
(A) the holders of at least a majority of the outstanding shares
entitled to vote on the Merger at a stockholders' meeting duly
called and held for such purpose and (B) a majority of the votes
cast by holders of outstanding shares entitled to vote on the
Merger at a stockholders' meeting duly called and held for such
purpose, excluding any votes cast by Parent, Lion, Andrew Baker or
any other "interested party"; (ii) the absence of any "company
material adverse effect"; and (iii) other closing conditions set
forth in the Merger Agreement.
Each of the Company and Parent has the right to terminate the
Merger Agreement under certain circumstances, which may require
the payment of a termination fee.
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?425e
Life Sciences Research has filed a proxy statement with the
Securities and Exchange Commission in connection with its special
meeting of stockholders to be held at a yet to be determined date.
At the special meeting, stockholders will be asked to consider and
vote upon a proposal to approve the merger of Lion Merger with and
into the Company. A full-text copy of the proxy statement is
available at no charge at http://ResearchArchives.com/t/s?425e
The Company also has filed a Rule 13e-3 Transaction Statement on
Schedule 13E-3 in connection with the merger, a copy of which is
available at no charge at http://ResearchArchives.com/t/s?425f
About Life Sciences Research
Headquartered in East Millstone, New Jersey, Life Sciences
Research Inc. (NYSE Arca: LSR) -- http://www.lsrinc.net/-- is a
global contract research organization providing product
development services to the pharmaceutical, agrochemical and
biotechnology industries. LSR operates research facilities in the
United States and the United Kingdom.
MEDIACOM COMMUNICATIONS: Fitch Corrects Senior Ratings to 'BB'
--------------------------------------------------------------
This is a revision of a release issued Aug. 17, 2009. It corrects
the senior secured debt ratings for Mediacom's subsidiaries to
'BB' from 'BB-'.
Fitch Ratings has affirmed the Issuer Default Rating for Mediacom
Communications Corporation and its wholly owned subsidiaries
Mediacom LLC and Mediacom Broadband LLC at 'B'.
In addition, Fitch rates LLC's debt issuance:
-- 9.125% senior notes due 2019 'B-/RR5'.
Mediacom Illinois LLC
Mediacom Arizona LLC
Mediacom Indiana LLC
Mediacom California LLC
Mediacom Minnesota LLC
Mediacom Delaware LLC
Mediacom Wisconsin LLC
Mediacom Southeast LLC
Mediacom Iowa LLC
Zylstra Communications Corporation
-- $300 million Senior secured term loan D 'BB/RR1'.
Approximately $3.4 billion of debt as of June 30, 2009 is
affected. The Rating Outlook for all of Mediacom's ratings is
Stable.
Fitch's rating action follows LLC's announcement that the company
launched a cash tender offer for any and all of its 9.5% senior
notes due 2013 and their 7.875% senior notes due 2011. The total
amount outstanding under the notes is $625 million as of June 30,
2009. The tender will be financed through a $350 million issuance
of LLC's 9.125% senior notes due August 2019 and proceeds received
from a new $300 million term loan D. The term loan is expected to
be secured in a similar manner as the existing LLC credit facility
and have the same covenant package including the 6.0 times (x)
total leverage covenant at the borrower level of LLC's capital
structure. From Fitch's perspective the tender offer and the new
financing is a positive for MCCC's overall credit profile. While
debt levels remain relatively constant through the debt tender
process, the refinancing extends LLC's maturity profile. However
the issuance of term loan D increases the proportion of secured
debt within LLC's debt structure to over 77% (pro forma) versus
59% as of June 30, 2009, limiting the amount of incremental
secured debt LLC can incur at the 'RR1' recovery rating.
Overall Fitch's ratings for Mediacom reflect the company's high
leverage relative to its peer group. While acknowledging the
positive operational momentum experienced during the first half of
2009, MCCC's service penetration levels and ARPU profile continue
to trail industry leaders as well as comparable rural orientated
cable operators.
Fitch anticipates that MCCC's credit profile will strengthen
within the current ratings category during the course of 2009 as
modest EBITDA growth coupled with reduced capital expenditures is
expected to yield positive free cash flow (defined as cash flow
from operations less capital expenditures) during 2009. During
the first half of 2009 MCCC generated approximately $58.2 million
of free cash flow. Fitch believes that MCCC will use the free
cash flow generation during 2009 to retire approximately
$64 million of scheduled amortization from MCCC's subsidiary
credit facilities during the remainder of 2009 resulting in
moderate de-leveraging of the company's balance sheet. Total debt
outstanding as of June 30, 2009, increased $54 million relative to
year end 2008 to $3.37 billion. However EBITDA growth experienced
during the first half of 2009 has lowered MCCC's leverage metric
to 6.38x as of the LTM period ended June 30, 2009, reflecting a
modest improvement from 6.48x as of year end 2008. The
incremental debt was used in part to fund the stock repurchase
from affiliates of Morris Communications Company, LLC. By year
end 2009 Fitch expects that MCCC's leverage metric will improve to
6.2x.
Mediacom's ratings are supported by a stable liquidity position,
the key to which is the available borrowing capacity from its
subsidiary credit facilities, which in aggregate totalled
approximately $611.3 million as of June 30, 2009. The remaining
borrowing capacity from the revolvers combined with anticipated
free cash flow generation should, in Fitch's opinion, provide
sufficient flexibility to meet to meet Mediacom's liquidity
requirements during the ratings horizon, including approximately
$187 million of credit facility amortization scheduled during the
remainder of 2009 and 2010. Fitch notes that approximately
$53 million of the company's available borrowing capacity from its
revolver will expire on March 31, 2010, and the remaining capacity
is set to expire during 2011 and 2012.
The 'RR1' recovery rating assigned to Mediacom LLC and Mediacom
Broadband LLC's subsidiary senior secured credit facilities
indicates superior recovery prospects, which are based on the
asset coverage of these loans. The 'RR5' recovery ratings
assigned to the senior unsecured debt issued by Mediacom Broadband
and Mediacom LLC reflect the diminished recovery prospects of
bondholders at this level of the capital structure driven by the
large amount of senior secured debt ahead of these bonds in the
capital structure.
The Stable Outlook incorporates Fitch's expectation that
Mediacom's credit profile will continue to improve during 2009
driven by relatively steady operating metrics. Fitch anticipates
that the current economic conditions and competitive operating
environment will translate into slower RGU growth for Mediacom
during 2009 likely resulting in a moderation of the company's
revenue and EBITDA growth rates as compared to 2008 levels.
However, from Fitch's perspective there is sufficient tolerance
within Mediacom's current ratings to withstand a slower growth
profile. The Stable Outlook also reflects the absence of
aggressive share repurchase policy that will take management's
focus off of de-leveraging Mediacom's balance sheet.
Fitch has affirmed these ratings with a Stable Outlook:
Mediacom Communications Corporation
-- IDR at 'B'.
Mediacom Broadband LLC
-- IDR at 'B';
-- Senior unsecured 'B-/RR5'.
Mediacom LLC
-- IDR at 'B';
-- Senior unsecured 'B-/RR5'.
Mediacom Illinois LLC
Mediacom Arizona LLC
Mediacom Indiana LLC
Mediacom California LLC
Mediacom Minnesota LLC
Mediacom Delaware LLC
Mediacom Wisconsin LLC
Mediacom Southeast LLC
Mediacom Iowa LLC
Zylstra Communications Corporation
-- IDR at 'B';
-- Senior secured 'BB/RR1'.
MCC Georgia, LLC
MCC Illinois, LLC
MCC Iowa, LLC
MCC Missouri, LLC
-- IDR at 'B';
-- Senior secured 'BB/RR1'.
Fitch has assigned these new ratings:
Mediacom LLC
-- Senior unsecured notes due 2019 'B-/RR5.
Mediacom Illinois LLC
Mediacom Arizona LLC
Mediacom Indiana LLC
Mediacom California LLC
Mediacom Minnesota LLC
Mediacom Delaware LLC
Mediacom Wisconsin LLC
Mediacom Southeast LLC
Mediacom Iowa LLC
Zylstra Communications Corporation
-- Senior secured term loan D 'BB/RR1'.
MERIDIAN RESOURCE: Posts $1MM Net Loss in Quarter Ended June 30
---------------------------------------------------------------
Meridian Resource Corp. posted a net loss of $1.42 million for
three months ended June 30, 2009, compared with a net earnings of
$839,000 for the same period in 2008.
For six months ended June 30, 2009, the Company posted a net loss
of $62.42 million compared with a net earnings of $4.40 million
for the same period in 2008.
At June 30, 2009, the Company's balance sheet showed total assets
of $207.77 million, total liabilities of $152.61 million and
stockholders' equity of $55.16 million.
The Company said that there is substantial doubt about its ability
to continue as a going concern. The Company also said that the
lenders reduced the borrowing base of its credit facility from its
then-current and fully drawn $95 million to $60 million. The
credit facility provides that outstanding borrowings in excess of
the borrowing base must be repaid within 90 days after the
redetermination. Accordingly, a $34.5 million payment to the
lenders for the borrowing base deficiency was due July 29, 2009.
The Company does not have sufficient cash available to repay the
deficiency and, consequently, failed to pay the amount when due
and is in default under the credit facility for the failure. The
outstanding borrowings under the credit facility are $94.5 million
at June 30, 2009, and Aug. 10, 2009.
As of Dec. 31, 2008, and June 30, 2009, the Company is also in
default of certain covenants under its credit facility, including
one that requires the Company to maintain a current ratio. In
addition, the Company was not in compliance with a covenant
requiring that the Company's auditors' opinion of its current
financial statements be without modification. The Company's 2008
audit report from its independent registered accounting firm
included a going concern explanatory paragraph.
Because of the defaults, in accordance with the credit facility,
the Company granted mortgages on certain producing properties that
increase from not less than 75% to not less than 95% the amount of
the present value of proved oil and natural gas properties that
are secured by pledges to the lenders.
A full-text copy of the Company's Form 10-Q is available for free
at http://ResearchArchives.com/t/s?4242
Meridian Resource Corp. (NYSE: TMR), incorporated in 1990, is an
independent oil and natural gas company. The Company explores
for, acquires and develops oil and natural gas properties. As of
December 31, 2008, it had proved reserves of 80 billion cubic
feet. 63% of its proved reserves were natural gas and
approximately 64% were classified as proved developed. It owns
interests in 19 fields and 100 producing wells, and operated
approximately 96% of its total production during the year ended
Dec. 31, 2008. The Company's wholly owned subsidiary, TMR
Drilling Corporation, owns a rig which is used primarily to drill
wells operated by the Company.
METROMEDIA STEAKHOUSES: May Exit Chapter 11 in September
--------------------------------------------------------
Metromedia Steakhouses Co. could emerge from Chapter 11 bankruptcy
next month, once its reorganization plan would be approved by
court at a hearing set for September 29, Karen Robinson-Jacobs at
The Dallas Morning News reports.
The Dallas Morning relates that the U.S. Bankruptcy Court for the
District of Delaware approved Metromedia Steakhouses' disclosure
statement this week. Tobey Daluz at Ballard Spahr Andrews &
Ingersoll, LLP, who is one of the attorney's for the Official
Committee of the Unsecured Creditors, said that Metromedia
Steakhouses will be able to mail the Plan to creditors after minor
revisions, The Dallas Morning states. The report, citing Mr.
Daluz, says that creditors have until September 22 to vote on the
Plan.
Unsecured creditors, under the Plan, would share an $850,000
payment and a $3.65 million promissory note, and the payments are
expected to amount to about half of the allowed claims, The Dallas
Morning states. According to The Dallas Morning, the creditors
could forgo payment and accept an equity stake in the new company.
Metromedia Steakhouses plans to change its name to Homestyle
Dining LLC after emerging from bankruptcy, The Dallas Morning
reports.
The Dallas Morning quoted Mr. Daluz as saying, "The creditors'
committee has signed off on the plan. There may be individual
claimants who are involved in court proceedings, but for all
intents and purposes . . . Metromedia [Steakhouses] will emerge
from bankruptcy upon confirmation."
Plano, Texas-based Metromedia Steakhouses Company, L.P. owned,
operated and franchised family-focused restaurants operating under
the Ponderosa Steakhouse and Bonanza Steakhouse brands under the
Metromedia Restaurant Group. Metromedia Steakhouse and three
affiliates filed Chapter 11 petitions on Oct. 22, 2008 (Bankr. D.
Del. Lead Case No. 08-12490). Judge Mary Walrath handles the
case. Bruce Grohsgal, Esq., and Laura Davis Jones, Esq., at
Pachulski, Stang, Ziehl Young & Jones LLP, represent the Debtors
in their chapter 11 cases. In its bankruptcy petition, Metromedia
estimated assets of $1 million to $10 million and debts of $100
million to $500 million.
Based in Plano, Tex., S & A Restaurant Corp. --
http://www.steakandale.com,http://www.steakandalerestaurants.com,
http://www.bennigans.com/-- and other affiliated entities
operate the Bennigan's Grill & Tavern, and the Steak & Ale
restaurant chains under the Metromedia Restaurant Group. S & A
Restaurant and 38 of its affiliates filed Chapter 7 petition
under the U.S. Bankruptcy Code on July 29, 2008 (Bankr. E.D. Tex.
Case No. 08-41898). J. Michael Sutherland, Esq. at Carrington
Coleman Sloman & Blumenthal, represents the Debtors in their
restructuring efforts. When the Debtors filed for bankruptcy,
they listed estimated assets of between $100,000,000 and
$500,000,000 and estimated debts of between $10,000,000 and
$50,000,000.
The Metromedia Restaurant Group, a unit of closely held
conglomerate Metromedia Company, was one of the world's leading
multi-concept table-service restaurant groups, with more than 800
Bennigan's(R), Bennigan's SPORT(TM), Steak and Ale(R), Ponderosa
Steakhouse(R) and Bonanza(TM) Steakhouse restaurants in the United
States and abroad.
MICHAEL COMPANIES: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Michael A. Companies, Inc.
19754 Wilson Street
San Bernardino, CA 92509
Bankruptcy Case No.: 09-29040
Chapter 11 Petition Date: August 19, 2009
Court: United States Bankruptcy Court
Central District of California (Riverside)
Judge: Sheri Bluebond
Debtor's Counsel: Stuart J. Wald, Esq.
36154 Coffee Tree Pl
Murrieta, CA 92562
Tel: (310) 429-3354
Email: stuart.wald@gmail.com
Jeffrey T. Gwynn, Esq.
The Gwynn Law Firm PC
455 W. La Cadena Drive, Ste 18
Riverside CA 92501
Tel: (905) 684-3774
Total Assets: $5,354,161
Total Debts: $3,253,404
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/cacb09-29040.pdf
The petition was signed by Michael A. Madrid, president of the
Company.
MIDWAY GAMES: Gets Court Nod to Sell Interests in Foreign Units
---------------------------------------------------------------
Midway Games Inc. and its affiliates obtained for permission from
the Bankruptcy Court to sell their equity interests of its Midway
Home Entertainment Inc. unit in:
(A) Midway Games sAS, a French societe par actions
simplifiee, and Midway Games Limited, and English limited
liability private company, to Spiess Media Holding UG,
pursuant to a stock purchase agreement; and
(B) Midway Games GmbH, a limited liability company regustered
under the commercial registry of the Local Court
Amtsgericht) of Munich, to F+F Publishing GmbH pursuant
to another stock purchase agreement.
Following the recent sale of key assets to Warner Brothers
Entertainment Inc., the Debtors have been in the process of
marshaling and managing remaining assets. Other than the proposed
purchasers, there were no other parties interested in the Foreign
Subsidiaries.
Aside from the three units to be sold in the private sales, other
foreign subsidiaries of Midway include Midway Studios-NewCastle
Ltd. in the U.K.; Midway Australia Holdings Pty Ltd. in Victoria,
Australia; Ratbag Pty Ltd. in South Australia; Midway Games Canada
Corp. in Nova Scotia; and K.K. Midway Games in Japan. Newcastle
is subject to insolvency proceedings and previously operated as a
studio and a developer of video games. The other foreign
subsidiaries are not currently subject to insolvency proceedings
in any location, and primarily distribute the Debtors' products
overseas.
Terms of Sale
Spiess Media is a German enterprise company with limited liability
formed by Martin Spiess for the purchase of the shares of Midway
SAS and Midway Limited. Mr. Spiess has served as the Executive
Vice President - International for Midway Limited since April
2008.
F+F Publishing GmbH is a German limited liability company
primarily in the business of distributing video games and other
products to retailers. F+F Publishing has been operated for
several years by Uwe Furstenberg and Hans Meyer, the sole
shareholders of F+F.
Messrs. Furstenberg and Meyer are current members of management of
Midway GmbH.
The two private sales will yield a total consideration of
US$1.7 million to Midway Home Entertainment.
Spiess Media will pay EUR1 for all of MHE's shares in Midway SAS
and Midway Limited. F+F Publishing will pay EUR1 for all of MHE's
shares in Midway GmbH.
As a condition to closing, MHE and Midway Games on the one hand
and Midway SAS, Midway Limited and Midway GmBH on the other will
enter into an intercompany claims agreement to resolve certain of
their intercompany obligations. Pursuant to the agreement, Midway
Limited will pay to MHE US$1,700,000.
About Midway Games
Midway Games Inc. (OTC Pink Sheets: MWYGQ), headquartered in
Chicago, Illinois, with offices throughout the world, is a leading
developer and publisher of interactive entertainment software for
major videogame systems and personal computers. More information
about Midway and its products can be found at
http://www.midway.com/
The Company and nine of its affiliates filed for Chapter 11
protection on February 12, 2009 (Bankr. D. Del. Lead Case No. 09-
10465). David W. Carickhoff, Jr., Esq., Michael David Debaecke,
Esq., and Victoria A. Guilfoyle, Esq., at Blank Rome LLP,
represent the Debtors in their restructuring efforts. The Debtors
proposed Lazard as their investment banker, Dewey & LeBoeuf LLP as
special counsel, and Epiq Bankruptcy Solutions LLC as claims
agent.
On July 10, 2009, Midway and certain of its U.S. subsidiaries
completed their sale of substantially all of their assets to
Warner Bros. Entertainment Inc. in a sale approved by the Court.
The aggregate gross purchase price is approximately US$49 million,
including the assumption of certain liabilities.
MIDWAY GAMES: Court Approves Sale of Remaining Assets to THQ
------------------------------------------------------------
Midway Games Inc. and its affiliates obtained from the Bankruptcy
Court approval of a private sale to THQ Inc. of substantially all
of the remaining assets used in connection with and arising out of
the operation of Midway Home Entertainment's video game design and
development business conducted at the studio located in San Diego,
California. THQ has agreed to pay $200,000 cash and offer
employment to not less than 40 employees of the San Diego studio.
Following the recent sale of key assets to Warner Brothers
Entertainment Inc., the Debtors have been in the process of
marshaling and managing remaining assets. The business conducted
at the San Diego studio, which remained after the WBEI sale,
consisted primarily of the design and development team working on
the TNA Wrestling video game.
Although several parties expressed interest in an acquisition of
the business in San Diego, none of these parties had progressed to
the point of any certainty that a transaction could be completed.
Therefore, on July 1, 2009, the Debtors gave the required 60-day
notice under the federal Worker Adjustment and Retraining
Notification Act of 1988 to the design team at the studio and
certain other employees totaling 99 employees.
Terms of Sale
Sold assets include tangible personal property; pre-existing
tools, software and code; all digital assets pertaining to game
development; intellectual properties; certain licenses; and
infringement claims. The License Agreement effective as of
September 15, 2005, between TNA Entertainment LLC and MHE, as
amended, and the completed TNA iMPACT! Wrestling game and third
party development contracts for the development of handlheld
versions of that game are excluded assets under the Purchase
Agreement.
THQ will pay $200,000 cash plus any cure amounts associated with
the assumption of contracts.
THQ will make offers of employment to not less than 40 employees
of the San Diego studio.
In the event the purchase agreement is terminated, the Debtors
have agreed to reimburse to THQ up to $50,000.
Closing will occur not later than September 4, 2009.
The Debtors say that the purchase agreement reached with THQ, an
experienced and financially strong buyer, has very few conditions
to closing.
About Midway Games
Midway Games Inc. (OTC Pink Sheets: MWYGQ), headquartered in
Chicago, Illinois, with offices throughout the world, is a leading
developer and publisher of interactive entertainment software for
major videogame systems and personal computers. More information
about Midway and its products can be found at
http://www.midway.com/
The Company and nine of its affiliates filed for Chapter 11
protection on February 12, 2009 (Bankr. D. Del. Lead Case No. 09-
10465). David W. Carickhoff, Jr., Esq., Michael David Debaecke,
Esq., and Victoria A. Guilfoyle, Esq., at Blank Rome LLP,
represent the Debtors in their restructuring efforts. The Debtors
proposed Lazard as their investment banker, Dewey & LeBoeuf LLP as
special counsel, and Epiq Bankruptcy Solutions LLC as claims
agent.
MILLWORK SPECIALTIES: Case Summary & 20 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: Millwork Specialties, Inc.
2530 James B. White Hwy N.
Whiteville, NC 28472
Bankruptcy Case No.: 09-07010
Chapter 11 Petition Date: August 19, 2009
Court: United States Bankruptcy Court
Eastern District of North Carolina (Wilson)
Debtor's Counsel: Trawick H. Stubbs Jr., Esq.
Stubbs & Perdue, P.A.
P.O. Drawer 1654
New Bern, NC 28563
Tel: (252) 633-2700
Fax: (252) 633-9600
Email: efile@stubbsperdue.com
Estimated Assets: $1,000,000 to $10,000,000
Estimated Debts: $1,000,000 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/nceb09-07010.pdf
The petition was signed by Russell K. Worley, president of the
Company.
MIKE YOUNG: Shuts Down Operations Pending Bankr. Court Action
-------------------------------------------------------------
Mike Young Motors' lawyer, Robert Barron, has shut down as it
awaits the outcome of a Chapter 11 bankruptcy hearing set for
August 28, 2009, KFDM reports.
Citing Mr. Barron, KFDM relates that Mike Young can't sell
vehicles right now as neither Chrysler Financial or GMAC will
approve the sales. Chrysler Financial won't free up about
$200,000 in an account that it froze as collateral, says KFDM.
Federal Judge Bill Parker turned down last week Mike Young's
request to use money in an account frozen by Chrysler Financial to
remain in business, according to the report.
KFDM states that Mike Young needs the money to pay off trade-ins
and taxes for customers whose transactions were stopped by the
bankruptcy filing.
According to KFDM, the lenders claimed that Mike Young owes them a
total of $2 million dollars for vehicles that were sold but never
paid for by the dealership. Mike Young, the report says, also has
millions of dollars worth of inventory on his lot that was
financed by Chrysler and GMAC.
The money the dealership collected for trade-ins and taxes doesn't
belong to the dealership or Chrysler, but to customers who
fulfilled their end of the deal and got caught up in the court
filings, KFDM says, citing Mr. Barron.
Mr. Barron, KFDM relates, said that Mike Young is exploring
options for remaining in business and will present plans during
the August 28 hearing.
Creditors will be able to meet with Mike Young during a meeting
set for September 11, 2009, KFDM reports.
Mike Young Motors is a Winnie car dealership. The Company filed
for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court
in Beaumont.
MOVIE GALLERY: Plan Admin.'s Notice to Disallow Settled Claims
--------------------------------------------------------------
Under the Debtors' confirmed Second Amended Joint Plan
of Reorganization, William Kaye was appointed Plan Administrator
and granted authority to settle, compromise, withdraw or litigate
to judgment objections to any General Unsecured Claims. The Plan
Administrator has authority to expunge any General Unsecured
claims that have been settled and amended.
Accordingly, the Plan Administrator submitted to the Court a
notice containing a list of claims that have been settled and
subsequently amended. The Notice sets forth claims that have
been amended pursuant to a settlement with the Plan Administrator
and, therefore, are to be disallowed.
Moreover, in an effort to provide clarity to all parties-in-
interest, the Plan Administrator has amended the Notice. The
Plan Administrator notes that the Claims on the Amended Notice
will be allowed as filed, or in the reduced amounts as stated on
the column of the Notice titled "Proposed Settlement Amount."
A copy of the Amended Notice is available for free at
http://bankrupt.com/misc/MG_PlanAdmin_1stNOSatisfiedClaims.pdf
The Amended Notice gained the Court's approval.
Prior the entry of the Court's order, Landlords Colvest-
Belchertown Development Co., L.P., and Wethersfield Retail, LLC,
objected to any attempt by the Plan Administrator to limit,
reduce or quantify their claims to the unsecured component only
or otherwise exclude or disallow the priority component of their
Claims.
In a letter delivered to the Court, Merchants Walk, Ltd.,
explained that it received an exhibit stating that its claim has
been settled. Merchants Walk says it is not sure what it
implies. According to Merchants Walk, it has agreed to a
settlement, but it has not received a settlement check.
The Plan Administrator settled the objections at a hearing.
About Movie Gallery
Headquartered in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is the second largest North
American video rental company with approximately 3,300 stores
located in all 50 U.S. states and Canada operating under the
brands Movie Gallery, Hollywood Video and Game Crazy. Since MGI's
initial public offering in August 1994, the Company has grown from
97 stores to its present size through acquisitions and new store
openings.
The Company and its debtor-affiliates filed for Chapter 11
protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to
07-33853). Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M.
Cieri, Esq., at Kirkland & Ellis LLP, represented the Debtors.
Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak
Rock LLP, were the Debtors' local counsel. The Debtors' claims &
balloting agent was Kurtzman Carson Consultants LLC. When the
Debtors filed for protection from their creditors, they listed
total assets of US$891,993,000 and total liabilities of
US$1,419,215,000.
The Official Committee of Unsecured Creditors has selected
Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B.
Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl &
Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at
Miles & Stockbridge PC, as its local counsel.
The U.S. Bankruptcy Court for the Eastern District of Virginia
confirmed the Debtors' Second Amended Chapter 11 Plan of
Reorganization on April 9, 2008. The Debtors emerged from
bankruptcy on May 20, 2008. William Kaye was appointed Plan
Administrator and Litigation Trustee of the Movie Gallery
Litigation Trust. (Movie Gallery Bankruptcy News, Issue No. 39;
Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/
or 215/945-7000)
MOVIE GALLERY: Plan Admin.'s Notice to Expunge Superseded Claims
----------------------------------------------------------------
Pursuant to the Debtors' confirmed Second Amended Joint Plan
of Reorganization, William Kaye was appointed Plan Administrator
and was granted authority to settle, compromise, withdraw or
litigate to judgment objections to any General Unsecured Claims.
The Plan Administrator has authority to expunge any General
Unsecured claims that have been settled and amended.
At the Plan Administrator's behest, the Court expunged in their
entirety 17 claims that have been amended or superseded by
subsequent claims. A list of the expunged Claims is available
for free at http://ResearchArchives.com/t/s?4169
The Claims listed in the column "Claim No. of Surviving Claim" of
the List will survive the expunged Claims.
In addition, at the Plan Administrator's behest, the Court
expunged in their entirety claims that have been assumed or
superseded by subsequent claims. An 8-page list of the expunged
Claims is available for free at:
http://ResearchArchives.com/t/s?416a
About Movie Gallery
Headquartered in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is the second largest North
American video rental company with approximately 3,300 stores
located in all 50 U.S. states and Canada operating under the
brands Movie Gallery, Hollywood Video and Game Crazy. Since MGI's
initial public offering in August 1994, the Company has grown from
97 stores to its present size through acquisitions and new store
openings.
The Company and its debtor-affiliates filed for Chapter 11
protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to
07-33853). Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M.
Cieri, Esq., at Kirkland & Ellis LLP, represented the Debtors.
Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak
Rock LLP, were the Debtors' local counsel. The Debtors' claims &
balloting agent was Kurtzman Carson Consultants LLC. When the
Debtors filed for protection from their creditors, they listed
total assets of US$891,993,000 and total liabilities of
US$1,419,215,000.
The Official Committee of Unsecured Creditors has selected
Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B.
Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl &
Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at
Miles & Stockbridge PC, as its local counsel.
The U.S. Bankruptcy Court for the Eastern District of Virginia
confirmed the Debtors' Second Amended Chapter 11 Plan of
Reorganization on April 9, 2008. The Debtors emerged from
bankruptcy on May 20, 2008. William Kaye was appointed Plan
Administrator and Litigation Trustee of the Movie Gallery
Litigation Trust. (Movie Gallery Bankruptcy News, Issue No. 39;
Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/
or 215/945-7000)
MOVIE GALLERY: Toskes Get Stay Relief to Pursue PI Action
---------------------------------------------------------
The Bankruptcy Court has granted Trilby Toske and John C. Toske's
motion to lift the automatic stay to pursue a personal injury
action against Hollywood Entertainment Corporation in the Circuit
Court of Pinellas County, Florida, which action was stayed by the
automatic stay imposed upon the filing of HEC of its petition for
relief under Chapter 11 of the Bankruptcy Code.
The stipulation, as amended, is approved in all respects.
The John C. Toske claims against HEC, docketed as Claim Nos. 410
and 1235, are expunged. The Trilby Toske Claims against HEC,
docketed as Claim Nos. 566 and 1234, are also expunged, while the
Trilby Toske Claim No. 411, is reduced to and allowed as a
General Unsecured Claim in the HEC case in the total amount of
$250,000. On account of the reduced and Allowed General
Unsecured Claim, Trilby Toske will receive distribution as
provided for in the Plan and no other consideration directly from
HEC.
The Toskes are granted relief from all stays and injunctions
imposed by Section 524 of the Bankruptcy Code, the Confirmation
Order or any other order of the Court to allow them to proceed
with the Florida Case. The Toskes, in turn, must Toskes waive
their right to collect against HEC or any of the Reorganized
Debtors on any judgment, settlement or order of any court of
competent jurisdiction entered in their favor, except to the
extent that Trilby Toske will receive distribution under the Plan
based on her Allowed General Unsecured Claim, and provided
further that the Toskes may collect on any judgment, settlement
or order of any court of competent jurisdiction against any
insurance carrier, agency, broker or company that issued
appropriate insurance to cover the Toske Claims raised in the
Florida Case that exceed the Self Insured Requirement of
$500,000.
About Movie Gallery
Headquartered in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is the second largest North
American video rental company with approximately 3,300 stores
located in all 50 U.S. states and Canada operating under the
brands Movie Gallery, Hollywood Video and Game Crazy. Since MGI's
initial public offering in August 1994, the Company has grown from
97 stores to its present size through acquisitions and new store
openings.
The Company and its debtor-affiliates filed for Chapter 11
protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to
07-33853). Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M.
Cieri, Esq., at Kirkland & Ellis LLP, represented the Debtors.
Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak
Rock LLP, were the Debtors' local counsel. The Debtors' claims &
balloting agent was Kurtzman Carson Consultants LLC. When the
Debtors filed for protection from their creditors, they listed
total assets of US$891,993,000 and total liabilities of
US$1,419,215,000.
The Official Committee of Unsecured Creditors has selected
Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B.
Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl &
Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at
Miles & Stockbridge PC, as its local counsel.
The U.S. Bankruptcy Court for the Eastern District of Virginia
confirmed the Debtors' Second Amended Chapter 11 Plan of
Reorganization on April 9, 2008. The Debtors emerged from
bankruptcy on May 20, 2008. William Kaye was appointed Plan
Administrator and Litigation Trustee of the Movie Gallery
Litigation Trust. (Movie Gallery Bankruptcy News, Issue No. 39;
Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/
or 215/945-7000)
MOVIE GALLERY: Trustee Gets Feb. 12 Extension for Claim Objections
------------------------------------------------------------------
William Kaye, the Litigation Trustee of the Movie Gallery
Litigation Trust and the Plan Administrator, sought and obtained
an order from the Court extending the bar date for filing
objections to general unsecured claims from August 13, 2009, to
February 12, 2010.
The Plan Administrator expects to be able to conclude his review
of Claims and file objections to Claims prior to the Extended
Claims Objection Bar Date. However, out of an abundance of
caution, the Plan Administrator asked the Court to extend the
deadline without prejudice to his right to seek further
extensions of the time within which to file objections to Claims.
The Plan Administrator relates that he is nearing completion of
his review and reconciliation of the over 10,000 General
Unsecured Claims. Mr. Kaye estimates that only approximately 200
claims remain to be reviewed and resolved.
Prior to the Court's ruling, Vincent E. Rhynes objected to the
Litigation Trustee's motion with respect to his claim. Mr.
Rhynes said the Plan Administrator's counsel has already received
the "Original Stock Certificates" by registered mail with a copy
of his claim. He said all rights to recovery should remain
persevered in the event issues with respect to Section 507(d) of
the Bankruptcy Code are acting to prevent pro rata distributions
and other performed conditions as found under Section 1143 of the
Bankruptcy News.
About Movie Gallery
Headquartered in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is the second largest North
American video rental company with approximately 3,300 stores
located in all 50 U.S. states and Canada operating under the
brands Movie Gallery, Hollywood Video and Game Crazy. Since MGI's
initial public offering in August 1994, the Company has grown from
97 stores to its present size through acquisitions and new store
openings.
The Company and its debtor-affiliates filed for Chapter 11
protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to
07-33853). Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M.
Cieri, Esq., at Kirkland & Ellis LLP, represented the Debtors.
Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak
Rock LLP, were the Debtors' local counsel. The Debtors' claims &
balloting agent was Kurtzman Carson Consultants LLC. When the
Debtors filed for protection from their creditors, they listed
total assets of US$891,993,000 and total liabilities of
US$1,419,215,000.
The Official Committee of Unsecured Creditors has selected
Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B.
Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl &
Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at
Miles & Stockbridge PC, as its local counsel.
The U.S. Bankruptcy Court for the Eastern District of Virginia
confirmed the Debtors' Second Amended Chapter 11 Plan of
Reorganization on April 9, 2008. The Debtors emerged from
bankruptcy on May 20, 2008. William Kaye was appointed Plan
Administrator and Litigation Trustee of the Movie Gallery
Litigation Trust. (Movie Gallery Bankruptcy News, Issue No. 39;
Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/
or 215/945-7000)
MTR GAMING: Earns $352,000 in Q2; Maturity of $130MM Notes Looms
----------------------------------------------------------------
MTR Gaming Group, Inc., reported a net income of $352,000 for
three months ended June 30, 2009, compared with a net loss of
$2.30 million for the same period in 2008.
For six months ended June 30, 2009, the Company reported a net
income of $1.10 million compared with a net loss of $4.93 million
for the same period in 2008.
At June 30, 2009, the Company's balance sheet showed total assets
of $508.52 million, total liabilities of $411.78 million and
shareholders' equity of $96.74 million.
The Company said that there is substantial doubt about its ability
to continue as a going concern. The Company related that its
$130 million 9.75% Senior Unsecured Notes mature on April 1, 2010.
However, its Fifth Amended and Restated Credit Agreement, as
amended, requires the Company to refinance those notes by Jan. 2,
2010, on terms and conditions acceptable to our senior secured
lenders. If the Senior Unsecured Notes are not refinanced by the
date, the maturity date of the amounts outstanding under its
existing senior secured revolving credit facility will be
accelerated to Jan. 2, 2010.
The Company also related that it maintained compliance with the
covenants as of June 30, 2009. Although it anticipated that it
will maintain compliance with these covenants for each of the
remaining quarters in the year ending Dec. 31, 2009, failure to
meet these financial tests could result in a demand for the
acceleration of repayment of amounts outstanding under the credit
facility and would have a material adverse effect on its financial
position.
A full-text copy of the Company's Form 10-Q is available for free
at http://ResearchArchives.com/t/s?423f
MTR Gaming Group, Inc. (NASDAQ: MNTG) owns and operates racetrack,
gaming and hotel properties in West Virginia, Pennsylvania and
Ohio. The Company, through its wholly owned subsidiaries, owns
and operates The Mountaineer Casino, Racetrack & Resort in
Chester, West Virginia; Presque Isle Downs & Casino in Erie,
Pennsylvania, and Scioto Downs in Columbus, Ohio. The Company
also owns a 50% interest in North Metro Harness Initiative, LLC,
which operates Running Aces Harness Park in Anoka County,
Minnesota, and a 90% interest in Jackson Trotting Association,
LLC.
MXENERGY HOLDINGS: Inks Amendment to Societe Generale Credit Pact
-----------------------------------------------------------------
MXenergy Inc. and MXenergy Electric Inc., subsidiaries of MXenergy
Holdings Inc., entered into the Seventh Amendment and Waiver dated
as of August 14, 2009, to the Third Amended and Restated Credit
Agreement dated as of November 17, 2008, as amended, with the
Company and certain of its subsidiaries, as guarantors, the
lenders party thereto and Societe Generale, as administrative
agent.
Pursuant to the terms of the Credit Agreement Amendment, the
definition of "Maturity Date" was amended in its entirety to mean
August 18, 2009; provided that the maturity date will be extended
to August 31 -- if on or prior to August 14, the administrative
agent will have received:
1) a fully executed copy of a letter regarding the Refinance
Transaction as defined in the Credit Agreement from the
Refinance Party to the Company which is in form and
substance satisfactory to the administrative agent and the
Majority Lenders in their sole discretion;
2) effective amendments to the Exchange Offering Memo and the
Lock-Up Agreement each defined in the Credit Agreement, in
each case:
a) containing terms substantially consistent with the
Commercial Term Sheet and other terms agreed to
(pursuant to evidence reasonably satisfactory to the
administrative agent and the Majority Lenders) by the
Company, the Refinance Party and the holders of the
Senior Notes, as defined in the Credit Agreement;
b) extending the expiration date of the Senior Notes
Exchange Offer to a date no later than August 29, 2009;
c) identifying the Refinance Party by name; and
d) in form and substance reasonably satisfactory to the
administrative agent and the Majority Lenders; and
3) evidence satisfactory to the administrative agent and the
Majority Lenders in their sole discretion that all
consents, approvals and notices set forth on Part A of
Schedule I to the Sixth Amendment to the Third Amended and
Restated Credit Agreement have been obtained or made on
or prior to August 18, 2009.
MXenergy also entered into the Fourteenth Amendment to Master
Transaction Agreement dated as of August 14, 2009 -- Hedge
Agreement Amendment -- with the Company and certain of its
subsidiaries, as guarantors, and Societe Generale, as hedge
provider, amending certain provisions of that certain Master
Transaction Agreement dated as of August 1, 2006. The provisions
of the Hedge Agreement Amendment amended the Hedge Agreement to
conform to the provisions of the Credit Agreement Amendment.
The members of the lending syndicate are:
* Societe Generale
* Wachovia Bank, N.A.
* CoBank, ACB
* Morgan Stanley Bank
* Bank of America, N.A.
* Allied Irish Banks p.l.c.
* RZB Finance LLC
* Denham Commodity Partners Fund LP
MXenergy and MXenergy Electric entered into the Sixth Amendment,
Waiver and Consent dated as of July 31, 2009. Pursuant to the
terms of the Credit Agreement, the Company was required to achieve
specified milestones related to the consummation of a Liquidity
Event. Pursuant to the Credit Agreement Amendment, the milestones
were revised by amending and restating in its entirety the
definition of "Trigger Event" contained therein, which now
required:
(1) the Company to deliver effective extensions of its
exchange offer to holders of the Senior Notes to a date
no later than August 14, 2009;
(2) the Company to deliver a letter from the Refinance Party
-- as defined in the Credit Agreement Amendment -
confirming that the Refinance Party actively continues to
negotiate definitive documentation in good faith with the
Company and the borrowers thereunder on the Refinance
Transaction -- as defined in the Credit Agreement
Amendment -- and that the Refinance Party's due diligence
investigation of the borrowers' business has not
identified any materially adverse matters in the judgment
of the Refinance Party on or prior to August 7, 2009;
(3) the Company to deliver on or before August 7, 2009:
(a) to Bracewell & Giuliani LLP, a Commercial Term Sheet
as defined in the Credit Agreement Amendment),
(b) to the administrative agent, a certificate from an
authorized officer of the Company certifying that the
Commercial Term Sheet (i) evidences that any
collateral to be provided to the Refinance Party in
connection with Refinance Transaction shall
specifically exclude certain cash collateral and the
related account, and (ii) enables a refinancing in
full of the obligations under the Credit Agreement
and permits MXenergy to request the issuance of
letters of credit in a face amount sufficient to
enable the borrowers to comply with certain
collateral requirements thereunder; and
(c) a written agreement among the Refinance Party, the
Company and the borrowers confirming that (i) such
Commercial Term Sheet represents the agreement of
such persons as to the matters contained therein,
(ii) no other material matters in connection with the
Senior Notes Exchange Offer or the Refinance
Transaction remain outstanding as between such
persons, and (iii) such Commercial Term Sheet is not
inconsistent in any manner with the equity and
intercreditor term sheets previously provided to the
lenders under the Credit Agreement;
(4) On or prior to August 28, 2009, the Company to deliver
-- in the case of a Senior Notes Exchange Offer -
evidence that the holders of at least 90% of the
outstanding principal amount of the Senior Notes
(excluding Senior Notes owned by the Company) have
validly tendered and not withdrawn their Senior Notes in
the Senior Notes Exchange Offer, as modified pursuant to
the amendment to the Exchange Offering Memorandum
described in the definition of "Maturity Date";
(5) that the Senior Notes Exchange Offer shall not have (a)
expired or terminated without having holders of a
sufficient amount of the Senior Notes to make the Senior
Notes Exchange Offer effective having validly tendered
and not withdrawn their Senior Notes in the Senior Notes
Exchange Offer, or (b) amended or otherwise modified in
any manner (unless amended or otherwise modified (i) as
required in the Credit Agreement Amendment to cause the
occurrence of the effective date of the Credit Agreement
Amendment, (ii) as described in the definition of
"Maturity Date" (i.e., to make any changes required to
reflect the terms set forth in the Commercial Term Sheet
or the equity and intercreditor term sheets, and to
extend the expiration date of the Senior Notes Exchange
Offer to a date no later than August 28, 2009) or (iii)
solely to extend the expiration date of the Senior Notes
Exchange Offer such that it is consummated and settled
simultaneously with the closing of the Refinance
Transaction); and
(6) that neither the Company nor the borrowers shall have
received a notice of or have become aware of a
termination or abandonment of a Refinance Party, or of a
significant change in structure that could reasonably be
expected to delay the closing to after August 31, 2009,
of the refinancing in full of the obligations under the
Credit Agreement contemplated as of the effective date of
the Credit Agreement Amendment, and that neither the
Company nor any borrower or any of its subsidiaries shall
have taken any action to terminate or abandon the
Refinance Transaction, or shall have failed to take any
action which failure has the effect of terminating or
abandoning the Refinance Transaction.
Various other terms of the Credit Agreement were also amended by
the Credit Agreement Amendment, including:
-- The Maturity Date was extended through August 18, 2009;
provided that the Maturity Date would be extended through
August 31, 2009, if certain deliveries were made to the
administrative agent thereunder on or prior to August 14,
2009.
-- The revolving commitments of the lenders thereunder were
reduced to $94.0 million as of the effective date of the
Credit Agreement Amendment.
-- An additional event of default was added pursuant to the
Credit Agreement Amendment upon any governmental or
regulatory body having jurisdiction or any local
distribution company taking any adverse action (in the
sole judgment of the majority lenders) against the
Company, a borrower or any of their respective
subsidiaries.
-- The Credit Agreement Amendment requires the consent of
each of the lenders affected thereby in order to allow the
borrowers to postpone any date fixed by Section 2.14(e)
therein for cash collateralization of, or provision of a
substitute letter of credit with respect to, the aggregate
letter of credit exposure.
-- The Credit Agreement Amendment provides the following
amendments regarding letters of credit: (1) the final date
on which the Company may request issuance, increase,
amendment, renewal or extension of letters of credit under
the Credit Agreement was extended to August 11, 2009 or,
if the Maturity Date has been extended to August 31, 2009,
to August 27, 2009; (2) no letter of credit issued,
increased, amended, renewed or extended prior to the
effective date of the Credit Agreement Amendment shall
have an expiration date later October 31, 2009 (other than
up to $40 million face amount of letters of credit which
may have an expiration date not later than January 31,
2010); and (3) no letter of credit issued, increased,
amended, renewed or extended on or after the effective
date of the Credit Agreement Amendment shall have an
expiration date later than October 15, 2009 or, if the
Maturity Date has been extended to August 31, 2009, later
than November 15, 2009.
-- Lastly, the Credit Agreement Amendment provides that the
loan parties shall not permit the aggregate amount of
natural gas inventory to exceed 6.1 Bcf on any day in the
month of August 2009.
As reported by the Troubled Company Reporter on August 20, 2009,
MxEnergy Holdings has amended the terms of its private offer to
exchange any and all of the Company's outstanding Floating Rate
Senior Notes due 2011 (CUSIP Nos. 62846X AA3; U62432 AA4;62846X
AC9) held by eligible holders, excluding Notes held by the Company
and its corresponding solicitation of consents from Holders of the
Notes for certain amendments to the indenture under which the
Notes were issued.
MXenergy also entered into the Thirteenth Amendment to Master
Transaction Agreement dated as of July 31, 2009. Among other
things, the Hedge Agreement Amendment amends the definition of
"Commitment Termination Date" thereunder to conform the
termination dates with the dates set forth in the definition of
"Maturity Date" under the Credit Agreement. Further, the Hedge
Agreement Amendment amends the milestones required to be achieved
thereunder with respect to a Liquidity Event, by: (1) extending
the date by which a Liquidity Event must occur to August 31, 2009,
and (2) adding the requirement that no later than August 31, 2009,
there shall occur a financial closing and funding of (a) the
refinancing in full of the obligations under the Credit Agreement
and (b) either (i) the payment in full of all amounts owing to the
Hedge Provider under the ISDA Master Agreement in respect of the
termination of each Transaction; or (ii) to the extent that one or
more Transactions under the ISDA Master Agreement are not
terminated on or about the Commitment Termination Date, the
assumption -- whether through novation or otherwise -- of all such
Transactions under the ISDA Master Agreement with an eligible
counterparty consented to by the Hedge Provider in its sole
discretion. Additionally, the Hedge Agreement Amendment further
amends the milestones required to be achieved thereunder to
conform with the Trigger Event requirements under the Credit
Agreement.
Various other terms of the Hedge Agreement were also amended by
the Hedge Agreement Amendment, including:
-- The Hedge Agreement Amendment provides that an extension
fee and certain accrued payments be made to the Hedge
Provider.
-- The Hedge Agreement Amendment reduces the total permitted
hedged volume under the Hedge Agreement from 12 Bcf to
11 Bcf.
-- Lastly, the Hedge Agreement Amendment has added the
following Specified Events: (1) any amendment or waiver
shall occur to the definition of "Borrowing Base" under
the Credit Agreement without the prior written consent of
the Hedge Provider, (2) the failure of MXenergy to
maintain a borrowing base availability under the Credit
Agreement of at least $10,000,000, (3) the failure of
MXenergy to pay the extension fee to Hedge Provider, and
(4) the failure of MXenergy to deliver a letter of credit
to Hedge Provider by 4:00 p.m. on August 3, 2009, which
contains specific terms set forth in the Hedge Agreement
Amendment.
A full-text copy of the Sixth Amendment, Waiver and Consent to the
Third Amended and Restated Credit Agreement, dated as of July 31,
2009, by and among MXenergy Inc. and MXenergy Electric Inc., as
borrowers, MXenergy Holdings Inc. and certain of its subsidiaries,
as guarantors, the lenders party thereto and Societe Generale, as
administrative agent, as administrative agent, is available at no
charge at http://ResearchArchives.com/t/s?4258
A full-text copy of the Thirteenth Amendment to the Master
Transaction Agreement, dated as of July 31, 2009, by and among
MXenergy Inc., the Company and certain of its subsidiaries, as
guarantors, and Societe Generale, as hedge provider, as
administrative agent, is available at no charge at
http://ResearchArchives.com/t/s?4259
A full-text copy of the Seventh Amendment and Waiver to the Third
Amended and Restated Credit Agreement, dated as of August 14,
2009, by and among MXenergy Inc. and MXenergy Electric Inc., as
borrowers, MXenergy Holdings Inc. and certain of its subsidiaries,
as guarantors, the lenders party thereto and Societe Generale, as
administrative agent, is available at no charge at
http://ResearchArchives.com/t/s?4256
A full-text copy of the Fourteenth Amendment to the Master
Transaction Agreement, dated as of August 14, 2009, by and among
MXenergy Inc., the Company and certain of its subsidiaries, as
guarantors, and Societe Generale, as hedge provider, is available
at no charge at http://ResearchArchives.com/t/s?4257
About MXenergy
MXenergy Holdings, Inc. -- http://www.mxenergy.com/-- is one of
the fastest growing retail natural gas and electricity suppliers
in North America, serving roughly 500,000 customers in 39
utility territories in the United States and Canada. The Company
was founded in 1999 to provide natural gas and electricity to
consumers in deregulated energy markets. MXenergy is a member of
the Chicago Climate Exchange and an Energy Star Partner.
The Company has indicated in a regulatory filing with the
Securities and Exchange Commission that if its restructuring
efforts are not successful, it intends to explore all other
alternatives, but would likely be required to commence a
bankruptcy proceeding.
NELSON HERNANDEZ: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Joint Debtors: Nelson Ramos Hernandez
dba Bufete Legal Ramos Hernandez
Carmen E. Negron Berrios
PO Box 7132
Ponce, PR 00732
Bankruptcy Case No.: 09-06797
Chapter 11 Petition Date: August 19, 2009
Court: United States Bankruptcy Court
District of Puerto Rico (Ponce)
Debtors' Counsel: Modesto Bigas Mendez, Esq.
Bigas & Bigas
P.O. Box 7462
Ponce, PR 00732
Tel: (787) 844-1444
Email: modesto@coqui.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtors' petition, including a list of
their 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/prb09-06797.pdf
The petition was signed by the Joint Debtors.
NEW TOWNE: Court Rejects Plan's Non-Debtor Releases & Injunctions
-----------------------------------------------------------------
WestLaw reports that the mere fact that the plan proponent, a
company formed by managers of a bankrupt limited liability company
to acquire its mortgage debt, had voluntarily agreed to
subordinate any deficiency claim that it acquired upon liquidation
of the debtor's assets to the claims of the debtor's general
unsecured creditors, and thereby provided unsecured creditors with
a benefit that they could not otherwise hope to obtain, was an
insufficient basis to allow the court to approve the broad non-
debtor releases and injunctive provisions included in the
company's proposed liquidating Chapter 11 plan. This was
especially true where the debtor, as a non-individual debtor that
would not continue in business, was ineligible for a discharge.
The company, by including these release and injunctive provisions,
was seeking to secure for itself and its principals benefits which
Congress had decided to deny to the debtor. In re New Towne
Development, LLC, --- B.R. ----, 2009 WL 2495770 (Bankr. M.D.
La.).
Three of New Towne Development, LLC's creditors filed an
involuntary Chapter 11 petition (Bankr. M.D. La. Case No. 09-
10029) against the company on January 13, 2009. Old Towne
Development Group, LLC, a secured creditor, filed an amended
liquidating Chapter 11 plan for the Debtor on June 23, 2009, and
moved for confirmation of that plan. The Chapter 11 trustee and
the Petitioning Creditors objected to confirmation of the lender's
plan, and the Honorable Douglas D. Dodd denied confirmation of
that plan in a Memorandum Opinion dated Aug. 14, 2009.
NEWPORT TELEVISION: S&P Raises Corporate Credit Rating to 'B-'
--------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its corporate
credit rating on Kansas City, Missouri-based TV broadcaster
Newport Television Holdings LLC and its operating subsidiary,
Newport Television LLC, to 'B-' from 'SD'. The rating outlook is
negative.
At the same time, S&P raised its issue-level rating on the
operating company's senior secured term loan B to 'B-' (at the
same level as the corporate credit rating on the company) from
'D'. The recovery rating on the term loan remains unchanged at
'4', indicating S&P's expectation of average (30%-50%) recovery
for lenders in the event of a payment default.
In addition, S&P affirmed its issue-level ratings on the company's
other debt issues and removed them from CreditWatch, where they
were placed with negative implications on June 2, 2009. The
recovery ratings remain unchanged.
"The rating actions reflect S&P's reassessment of Newport's
financial condition and business outlook following its repurchase
of a portion of its term loan at a steep discount," said Standard
& Poor's credit analyst Deborah Kinzer, "and the sponsor's
conversion of its senior interim loan into additional equity
interests." The negative outlook stems from S&P's concern that
despite the debt reduction, sharp revenue and EBITDA declines,
very limited liquidity, and negative discretionary cash flow will
thwart the company's efforts to maintain a comfortable cushion of
compliance with its bank covenants, particularly in mid-to-late
2010.
OAKLEY DOKLEY: Case Summary & 1 Largest Unsecured Creditor
----------------------------------------------------------
Debtor: Oakley Dokley, LLC
218 Main Street
PMB 539
Kirkland, WA 98033
Bankruptcy Case No.: 09-18427
Chapter 11 Petition Date: August 19, 2009
Court: United States Bankruptcy Court
Western District of Washington (Seattle)
Judge: Thomas T. Glover
Debtor's Counsel: Danial D. Pharris, Esq.
Lasher Holzapfel Sperry & Ebberson PLLC
601 Union St., Ste. 2600
Seattle, WA 98101-4000
Tel: (206) 624-1230
Email: pharris@lasher.com
Total Assets: $3,002,000
Total Debts: $3,128,370
The Debtor identified Stantec Architects with a disputed trade
claim for $58,370 as its largest unsecured creditor. A full-text
copy of the Debtor's petition, including a list of its largest
unsecured creditor, is available for free at:
http://bankrupt.com/misc/wawb09-18427.pdf
The petition was signed by Brent C. Nicholson, manager of the
Company.
OCALA FUNDING: Moody's Cuts Ratings on Subordinated Notes to 'B3'
-----------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of extendible
asset-backed commercial paper and the Subordinated Notes of Ocala
Funding, LLC. The rating of ABCP is now Not Prime, downgraded
from Prime-1 on review for possible downgrade, and the rating of
the Subordinated Notes is now B3 on review for possible downgrade
from Baa2 on review for possible downgrade. Ocala is sponsored by
Taylor, Bean & Whitaker Mortgage Corp and provides warehouse
funding for conforming residential mortgages.
The rating action is based primarily on the uncertainty with
respect to the status of the mortgage loans funded by Ocala. On
August 3, federal agents raided the offices of mortgage lending
firm TBW and two days later the Federal Housing Administration
suspended the firm's ability to make loans insured by the federal
agency. Subsequently, both Freddie Mac and Ginnie Mae stripped
TBW of its approved seller status. The revocation of TBW's
approved seller status triggered an Event of Default under the
terms of the Ocala program documents. The EOD requires Ocala to
cease purchasing loans and cease issuing ABCP. The mortgages
backing the facility have to be liquidated no later than 45 days
following the declaration of EOD either by delivery to Freddie Mac
or, failing that, open market sale. Given TBW's loss of approved
servicer status, it is unclear whether the loans can be delivered
to and will be accepted by Freddie Mac in a timely fashion.
Moody's has attempted to contact the parties to Ocala but no
information about the status of the collateral and repayment of
the outstanding notes has been forthcoming.
Ocala is a single seller mortgage warehouse sponsored by TBW, with
a program size of $1.75 billion. Ocala funds the purchase of
eligible Freddie Mac mortgage loans that have been sold into
forward trade with a qualified counterparty. The facility
benefits from swap contracts that cover the interest rate risk and
market value risk for non-delinquent, non-defaulted loans. BNP
Paribas (Aa1/Prime-1/B) and Deutsche Bank AG (Aa1/Prime-1/B) are
the swap counterparties to this transaction. A reserve fund of
$20.25 million, representing 1.16% of the program size provides
credit support to both the extendible ABCP and the subordinate
note. The subordinate note of $67.5 million or 3.9% of the
program size, together with the reserve fund, provides credit
support to the outstanding ABCP ($1.68 billion or 96% of program
size).
Complete rating actions are:
Issuer: Ocala Funding LLC
-- Sub. Notes 2005-A, Downgraded to B3 and Remains On Review for
Possible Downgrade; previously on Aug. 5, 2009 Baa2 Placed
Under Review for Possible Downgrade
-- Sub Notes 2006-A, Downgraded to B3 and Remains On Review for
Possible Downgrade; previously on Aug. 5, 2009 Baa2 Placed
Under Review for Possible Downgrade
-- Sub. Notes 2006-B, Downgraded to B3 and Remains On Review for
Possible Downgrade; previously on Aug. 5, 2009 Baa2 Placed
Under Review for Possible Downgrade
-- Ser. 2005-1-SLNs, Downgraded to NP; previously on Aug. 5,
2009 P-1 Placed Under Review for Possible Downgrade
-- Ser. 2005-1-CNs, Downgraded to NP; previously on Aug. 5, 2009
P-1 Placed Under Review for Possible Downgrade
OXBOW CARBON: S&P Puts 'B+' Corp. Rating on CreditWatch Positive
----------------------------------------------------------------
Standard & Poor's Ratings Services said it placed its ratings,
including its 'B+' corporate credit rating, on West Palm Beach,
Florida-based Oxbow Carbon LLC on CreditWatch with positive
implications.
"The CreditWatch placement acknowledges Oxbow's better-than-
expected operating performance thus far in 2009 driven by the
significantly improved performance of its coal business as well as
better-than-expected performance from its fuel grade coke
business, despite the weak economic environment," said Standard &
Poor's credit analyst Sherwin Brandford.
As of June 30, 2009, adjusted debt to EBITDA was under 2x,
stronger than the 3.5x to 4.5x range S&P considers to be
acceptable for the current ratings. The rating action also
reflects its expectation that Oxbow's operating performance over
the next few quarters could be sustained at a level that would
result in leverage remaining below 3.5x. As a result, S&P
believes the rating has upside potential.
Oxbow Carbon is an industrial company with four major lines of
business: fuel grade coke, calcined coke, steam coal, and
distribution. The company sells its products in North America and
internationally.
In resolving the CreditWatch listing, S&P will discuss with
management both its near and intermediate term operating
expectations, including third quarter 2009 operating results, its
business strategies, as well as its future financial policy. If a
higher rating is the ultimate outcome of S&P's review, it would be
limited to one notch.
PATRICK CARDEN: Case Summary & 5 Largest Unsecured Creditors
------------------------------------------------------------
Joint Debtors: Patrick M. Carden
Debbie J. Carden
6407 Melray St.
Moorpark, CA 93021
Bankruptcy Case No.: 09-13332
Chapter 11 Petition Date: August 19, 2009
Court: United States Bankruptcy Court
Central District of California (Santa Barbara)
Judge: Robin Riblet
Debtors' Counsel: Nasser U. Abujbarah, Esq.
10654 N 32 St.
Phoenix, CA 85028
Tel: (602) 493-2586
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtors' petition, including a list of
their 5 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/cacb09-13332.pdf
The petition was signed by the Joint Debtors.
PHILADELPHIA NEWSPAPERS: Files Insider-Backed Chapter 11 Plan
-------------------------------------------------------------
Philadelphia Newspapers, LLC, and its affiliates filed a Chapter
11 plan of reorganization on August 20. The Plan provides for the
sale of substantially all of the Debtors' assets to Philly Papers,
LLC, absent higher and better bids at an auction.
On August 20, the Debtors executed that an Asset Purchase
Agreement with Philly Papers. Under the deal, Philly Papers will
pay to the Debtors' estates a cash purchase price of $30,000,0000,
plus an additional cash payment in an amount equal to the Debtors'
existing deposits with their insurance carriers and credit card
processors, less the amount of accrued and unpaid administrative
and priority claims against the Debtors' estates as of the closing
of the Plan Sale and less the sum of $750,000, which will be used
to fund a liquidating trust for the benefit of the Debtors'
general unsecured trade creditors. The Debtors anticipate that
the Stalking Horse Agreement will yield gross proceeds to the
estates in the amount of over $41,000,000, after payment of
approximately $6,000,000 in administrative and priority claims.
The Debtors further anticipate that they will have approximately
$8,000,000 of cash on hand as of the closing. The purchase
proceeds plus cash on hand will be used to pay off any outstanding
debtor-in-possession financing facility advances (estimated to be
$15,000,000 as of closing) and to make a distribution to the
Debtors' senior secured lenders of approximately $36,000,000.
Additionally, the Stalking Horse Agreement does not include the
sale of the Debtors' real property located at 400 North Broad
Street, Philadelphia, Pennsylvania and certain adjacent parcels,
which will be transferred to the Agent for the senior secured
lenders under the Plan. Finally, the Plan will provide for
distribution of 3% of the equity interests in the Stalking Horse
(or other successful bidder) to holders of unsecured prepetition
creditors other than general trade creditors. The Debtors believe
that the value they will realize from the Stalking Horse Agreement
constitutes fair market value for their assets and will support a
confirmable Plan that will maximize value to their various
creditor constituencies and bring a successful conclusion to the
Chapter 11 Cases. On that basis the Debtors are prepared to
proceed with the sale of their business and assets under the
terms of the Stalking Horse Agreement and the Plan, subject to
higher and better bids in accordance with bid procedures to be
established by the Court.
The Debtors have estimated the ultimate distributions that will be
made in respect of Allowed Claims and Interests. Liquidation of
the Debtors' assets under chapter 7 of the Bankruptcy Code will
not result in a higher distribution to any Class of Claims or
Interests.
The parties contemplate closing of the sale by December 29, 2009.
Philly Papers will receive a break-up fee of $1 million and
expense reimbursement of up to $500,000 if the Debtors' close a
transaction with another party.
According to the disclosure statement explaining the Plan, holders
of secured claims, including $66 million, senior secured claims,
will recover 100 cents on the dollar. Holders of $350 million
prepetition unsecured debt claims will recover less than 1% of
their claims. Holders of prepetition unsecured trade claims will
recover up to 6%.
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/PhillyNews_DiscStatement.pdf
A copy of the Insider Plan is available for free at:
http://bankrupt.com/misc/PhillyNews_Ch11Plan.pdf
Senior Lenders' Alternative Plan
As reported by the TCR on August 17, senior lenders of
Philadelphia Newspapers have asked the Bankruptcy to allow them to
submit their own reorganization Plan for the Company.
The steering group of prepetition secured lenders and Citizens
Bank of Pennsylvania, in its capacity as administrative agent and
collateral agent under a Credit and Guaranty Agreement, dated June
29, 2006, with Citizens, and certain other lender parties in the
original principal amount of $295,000,000, say they are willing to
submit a plan that is superior to the insider-backed plan the
Company is filing.
The Steering Group Plan provides the Prepetition Lenders with a
combination of (a) restructured term debt of the reorganized
company, and (b) equity in the reorganized company.
In addition, pursuant to the Plan, the Debtors' unsecured
mezzanine debt holders will receive, among other things and
subject to certain limitations, (a) a pro-rata share of 4.75% of
fully diluted new common equity in the form of shares in the
reorganized company, and (b) a pro-rata share of 15.0% of fully
diluted common equity in the reorganized company in the form of
warrants. Each of the Debtors' unsecured creditors that do not
hold mezzanine debt will receive a pro rata share of $500,000 in
cash, subject to a maximum 10% recovery on each such allowed
unsecured claim.
The Plan further provides already-arranged exit financing in the
amount of $25 million.
The lenders' proposal to terminate Philadelphia Newspapers'
exclusive rights to propose a Chapter 11 plan is scheduled for
hearing on August 28. The Debtors' exclusive rights to file a
plan expire August 31.
The Steering Group members are Angelo Gordon & Co., CIT Syndicated
Loan Group, Credit Suisse Candlewood Special Situations Master
Fund LTD., Eaton Vance Management, GECC, and Wells Fargo Foothill.
About Philadelphia Newspapers
Philadelphia Newspapers -- http://www.philly.com/-- owns and
operate numerous print and online publications in the Philadelphia
market, including the Philadelphia Inquirer, the Philadelphia
Daily News, several community newspapers, the region's number one
local Web site, philly.com, and a number of related online
products. The Company's flagship publications are the Inquirer,
the third oldest newspaper in the country and the winner of
numerous Pulitzer Prizes and other journalistic recognitions, and
the Daily News.
Philadelphia Newspapers and its debtor-affiliates filed for
Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D.
Pa. Case No. 09-11204). Proskauer Rose LLP is the Debtors'
bankruptcy counsel, while Lawrence G. McMichael, Esq., at Dilworth
Paxson LLP is the local counsel. The Debtors' financial advisor
is Jefferies & Company Inc. The Garden City Group, Inc. serves as
claims and notice agent. Philadelphia Newspapers listed assets
and debts of $100 million to $500 million in its bankruptcy
petition.
PHILADELPHIA NEWSPAPERS: Court Doubts Probe on Recorded Meeting
---------------------------------------------------------------
Bob Warner at Philadelphia Daily News reports that chief
bankruptcy judge Stephen Raslavich has expressed strong doubts on
the quality of an investigation aimed at resolving the
unauthorized recording of a private meeting last year between
publisher Brian Tierney and Philadelphia Newspapers LLC's biggest
creditors.
According to Philadelphia Daily, former state Superior Court judge
Robert Graci spent two months and almost $100,000 looking into the
taping incident. Mr. Graci currently works for the law firm
Eckert Seamons Cherin & Mellott LLC, which submitted an interim
report this week that concluded that no further legal action is
advisable, Philadelphia Daily relates.
Philadelphia Daily states that Mr. Graci didn't take sworn
statements from the 18 people he interviewed and instead relied on
his handwritten notes. According to the report, Judge Raslavich
told Mr. Graci, "You should have taken sworn statements . . . A
lot of this conversation could have been rendered unnecessary."
Mr. Graci, Philadelphia Daily says, asked last week to see the e-
mails of Vincent DeVito, a managing director of CIT Group Inc and
who admitted taping the meeting. The report states that no e-
mails from Mr. DeVito have been provided.
Philadelphia Daily relates that Judge Raslavich postponed ruling
on a motion from the newspapers' bankruptcy attorneys that asked
to allow law firm Elliott, Greenleaf & Siedzikowski P.C. to
investigate the taping incident. The report quoted
Philadelphia Daily quoted Gary Schildhorn at Eckert Seamans firm -
- which represents unsecured creditors and was picked by another
bankruptcy judge, Jean K. FitzSimon -- to explore the taping
incident, as saying, "The debtors have yet to identify any damage
. . . which resulted either from the taping incident or from the
lenders' actions after the taping incident. Apparently, the tape
was not played, transcribed, or otherwise utilized in a manner
detrimental to the interests of these debtors or their estates."
Christy Callahan Comerford, Philadelphia Newspapers' lawyer, told
the court that Brad Pattelli -- an executive with Angelo, Gordon &
Co., the Company's biggest creditor -- had given a deposition in
which he acknowledged having talked to Mr. DeVito about the
practice of recording meetings, before the November meeting
occurred, Philadelphia Daily reports.
Philadelphia Newspapers -- http://www.philly.com/-- owns and
operate numerous print and online publications in the Philadelphia
market, including the Philadelphia Inquirer, the Philadelphia
Daily News, several community newspapers, the region's number one
local Web site, philly.com, and a number of related online
products. The Company's flagship publications are the Inquirer,
the third oldest newspaper in the country and the winner of
numerous Pulitzer Prizes and other journalistic recognitions, and
the Daily News.
Philadelphia Newspapers and its debtor-affiliates filed for
Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D.
Pa. Case No. 09-11204). Proskauer Rose LLP is the Debtors'
bankruptcy counsel, while Lawrence G. McMichael, Esq., at Dilworth
Paxson LLP is the local counsel. The Debtors' financial advisor
is Jefferies & Company Inc. The Garden City Group, Inc., serves as
claims and notice agent. Philadelphia Newspapers listed assets
and debts of $100 million to $500 million in its bankruptcy
petition.
PROLIANCE INTERNATIONAL: Can Employ Jones Day as Counsel
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has granted
Proliance International Inc. and its debtor-affiliates permission
to employ Jones Day as counsel, nunc pro tunc to the petition
date.
As reported in the TCR on July 20, 2009, Jones Day has agreed to
render general legal services to the Debtors as needed throughout
the course of their Chapter 11 cases, including bankruptcy,
corporate, employee benefits, environmental, finance, intellectual
property, labor and employment, litigation, real estate,
securities and tax advice.
The firm's professionals who will provide services in connection
with the Chapter 11 cases are:
Professional Designation Hourly Rate
------------ ----------- -----------
Robert A. Profusek, Esq. Partner $950
Paul D. Leake, Esq. Partner $825
Steven C. Bennett, Esq. Partner $775
Patricia J. Villareal, Esq. Partner $700
Pedro A. Jimenez, Esq. Partner $675
Andrew M. Levine, Esq. Partner $600
Ross S. Barr, Esq. Associate $525
Michael P. Considine, Esq. Associate $425
Jennifer J. O'Neil, Esq. Associate $400
Dennis N. Chi, Esq. Associate $350
Marissa J. Cohen, Esq. Associate $350
Denise Hirtzel Paralegal $275
As reported in the TCR on August 19, 2009, Proliance
International, Inc. said in a regulatory filing that the sale of
its North American assets to Centrum Equities XV, LLC, was
consummated under the provisions of Section 363 of the Bankruptcy
Code on August 14, 2009.
On July 2, Proliance and certain of its affiliates entered into an
acquisition agreement providing for the sale to Centrum of
substantially all of Proliance's North American assets.
On August 13, the parties entered into a second amendment to the
Acquisition Agreement to, among other things, provide for a fixed
purchase price of $15.0 million, subject to adjustment based only
on the Sellers' level of cash collections from customers for the
week beginning August 10, 2009. The purchase price will not
otherwise be adjusted, including based on inventory or accounts
receivables levels as was previously reported. A copy of the
second amendment is available for free at:
http://researcharchives.com/t/s?4238
A sale hearing concerning the approval of the acquisition of the
North American assets by Buyer was held before the Bankruptcy
Court on August 13. At the hearing, the Bankruptcy Court entered
a final order approving the sale on the terms set forth in the
Acquisition Agreement, as amended.
Based in New Haven Connecticut, Proliance International, Inc. --
http://www.pliii.com/-- aka Godan makes automobile parts. The
Company and its affiliates filed for Chapter 11 on July 2, 2009
(Bankr. D. Del. Lead Case No. 09-12278). Christopher M. Samis,
Esq., and Daniel J. DeFranceschi, Esq., at Richards, Layton &
Finger PA, represent the Debtors in their restructuring efforts.
The Debtors' financial condition as of June 22, 2009, showed total
assets of $160.3 million and total debts of $133.5 million.
PROLIANCE INTERNATIONAL: Hires Van Doorne as Special Counsel
------------------------------------------------------------
Proliance International Inc. and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware for permission
to employ Van Doorne N.V. as special counsel, nunc pro tunc to the
petition date.
Van Doorne will render legal services to the Debtors in connection
with the proposed sale of the stock of Nederlandse Radiateuren
Fabriek B.V., including corporate, finance and regulatory advice.
Specifically, Van Doorne has agreed, among other things, to:
a. draft necessary legal documentation to effect the proposed
sale of the stock of NRF;
b. assist the Debtors in contract negotiations regarding the
proposed sale of the stock of NRF; and
c. assist the Debtors with the employee consultation process
relating to the employees of NRF.
Van Doorne's hourly rates range from EUR170 for junior associates
to EUR440 for partners.
Johan M. Boeren, a partner at Van Doorne N.V., tells the Court
that he is admitted to practice law in the Netherlands, that the
firm has no connection with the Debtors, their creditors, the U.S.
Trustee or any other parties with an actual or potential interest
in the Debtors' chapter 11 cases or their respective attorneys or
accountants, and does not represent or hold any interest adverse
to the Debtors or their estates with respect to the matters on
which the firm seeks to be employed.
As reported in the TCR on August 19, 2009, Proliance
International, Inc. said in a regulatory filing that the sale of
its North American assets to Centrum Equities XV, LLC, was
consummated under the provisions of Section 363 of the Bankruptcy
Code on August 14, 2009.
On July 2, Proliance and certain of its affiliates entered into an
acquisition agreement providing for the sale to Centrum of
substantially all of Proliance's North American assets.
On August 13, the parties entered into a second amendment to the
Acquisition Agreement to, among other things, provide for a fixed
purchase price of $15.0 million, subject to adjustment based only
on the Sellers' level of cash collections from customers for the
week beginning August 10, 2009. The purchase price will not
otherwise be adjusted, including based on inventory or accounts
receivables levels as was previously reported. A copy of the
second amendment is available for free at:
http://researcharchives.com/t/s?4238
A sale hearing concerning the approval of the acquisition of the
North American assets by Buyer was held before the Bankruptcy
Court on August 13. At the hearing, the Bankruptcy Court entered
a final order approving the sale on the terms set forth in the
Acquisition Agreement, as amended.
Based in New Haven Connecticut, Proliance International, Inc. --
http://www.pliii.com/-- aka Godan makes automobile parts. The
Company and its affiliates filed for Chapter 11 on July 2, 2009
(Bankr. D. Del. Lead Case No. 09-12278). Christopher M. Samis,
Esq., and Daniel J. DeFranceschi, Esq., at Richards, Layton &
Finger PA, represent the Debtors in their restructuring efforts.
The Debtors' financial condition as of June 22, 2009, showed total
assets of $160.3 million and total debts of $133.5 million.
PROPEX INC: Files Liquidating Trust Agreement With E. Davis
-----------------------------------------------------------
Fabrics Estate, Inc., and its debtor affiliates presented to the
Court on August 11, 2009, a copy of the Liquidating Trust
Agreement and Consulting Agreement they entered into with Eugene
I. Davis, as trustee of the Liquidating Trust.
As previously reported, the Debtors' Plan of Liquidation provides
for the establishment of the Fabrics Estate, Inc. Liquidating
Trust.
The Debtors relate that the Liquidating Trust is being created
for the purposes of:
(i) liquidating their assets for the benefit of the
beneficiaries, in accordance with Treasury Regulations
Section 301.7701-4(d), with no objective or authority to
continue or engage in the conduct of a trade or business;
and
(ii) distributing the Trust Assets or the proceeds to the
beneficiaries pursuant to the Plan of Liquidation.
The Liquidating Trust and the Liquidating Trustee will have all
powers necessary to implement the provisions of the Agreement and
administer the Liquidating Trust, including the authority to:
(1) prosecute, in the name of the Liquidating Trust, the
Debtors' Estates, or otherwise, any claims of the Debtors'
Estates, including avoidance actions;
(2) conserve, protect, collect and liquidate or otherwise
convert into cash all assets that constitute part of the
Trust Assets;
(3) do all other acts that may be necessary or appropriate for
the final distribution of trust assets, including the
execution and delivery of appropriate agreements or other
documents of disposition, liquidation, or dissolution
containing terms that are consistent with the terms of the
Plan and that satisfy the applicable requirements of
applicable state law and other terms to which the
applicable entities may agree;
(4) do all acts contemplated by the Plan to be done by the
Liquidating Trust; and
(5) manage the affairs of the Liquidating Trust.
Mr. Davis, as the Liquidating Trustee, will be paid a monthly fee
of $9,500 for his services.
The Liquidating Trust Agreement will be effective on the Plan
Effective Date.
A full-text copy of the Liquidating Trust Agreement is available
for free at http://bankrupt.com/misc/Fabrics_LiquidatingTrust.pdf
In an amended notice, the Debtors clarified that the filing of
the Liquidating Trust Agreement and Consulting Agreement serves
as a supplement to their Plan of Liquidation.
The Court is set to convene the confirmation hearing on the
Debtors' Plan on August 21, 2009.
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)
PROPEX INC: IRS Wants Plan Language on Injunction Stricken
----------------------------------------------------------
The Internal Revenue Service relates that at the time the Debtor
Propex Concrete Systems Corporation filed its bankruptcy
petition, it was indebted to the United States for $1,563 in
taxes for federal employment tax liabilities, all of which is an
unsecured priority claim.
The United States of America, on behalf of the IRS, opposes the
Debtors' First Amended Joint Plan of Liquidation. Kent M.
Anderson, Esq., assistant United States attorney, points out
that:
(1) There is no way of estimating the Plan Effective Date
based on the subjective nature of the conditions set forth
under the Plan and based on the Debtors' discretion to
determinate a business day after certain conditions are
met. The Debtors' Plan, Mr. Anderson notes, provides that
priority tax claims will be paid "in one Cash payment, on
or as soon practicable after the later of (x) the
Effective Date, or (y) the date that is ten Business Days
after the Allowance Date;" and
(2) The Plan provides that the Debtors will pay no interest on
any claims. According to Mr. Anderson, unless and until
the Debtors define "Effective Date" with more certainty,
the IRS's priority claim is entitled to interest in
accordance with the Bankruptcy Code.
Moreover, the IRS seek that language in the Debtors' Plan, which
provides for an injunction against certain postpetition actions,
be stricken in their entirety.
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)
PROPEX INC: Resolves ACE Objections to Pacts Assumption
-------------------------------------------------------
ACE American Insurance Company and possibly other entities within
the ACE Group of Companies, the Debtors, and Xerxes Operating
Company L.L.C. and Xerxes Foreign Holdings Corp., and their
subsidiaries, have agreed to resolve ACE's objection and consent
to the assumption and assignment of these insurance agreements:
Insurer Policy No. Policy Term
------- ---------- ------------
ACE American Insurance Company WLR C43986144 12/01/04 to
12/01/05
ACE American Insurance Company SCF C44002012 12/01/04 to
12/01/05
ACE American Insurance Company WLR C44001792 12/01/05 to
12/01/06
ACE American Insurance Company SCF C44002036 12/01/05 to
12/01/06
ACE American Insurance Company W00530098 12/01/08 to
12/01/09
Indemnity Insurance Co. NO2195914 12/01/08 to
of North America 12/01/09
Indemnity Insurance Co. NO2195915 12/01/08 to
of North America 06/01/09
ACE Property & Casualty Ins. Co. M00530049 12/01/08 to
of North America 12/01/09
Indemnity Insurance Co. NO219594A 12/01/08 to
of North America 12/01/09
ACE American Insurance Company Program Agreement effective
December 1, 2004, with Propex
Fabrics Holdings, Inc., as
Amended
ACE American Insurance Company Program Agreement effective
December 1, 2005, with Propex
Fabrics Holdings, as amended
As previously reported, ACE opposed the sale of its Program
Agreements and Insurance Policies.
Accordingly, the Court authorized the Debtors to assume and
assign the Agreements to Xerxes Operating Company LLC and Xerxes
Foreign Holdings Corp., and their subsidiaries, now known as
Propex Holding LLC and Propex Operating Company LLC.
The cure amount for the assumption and assignment of the Policies
is $0. In accordance with the parties' Consent and Agreement, at
the sole discretion of ACE Companies, either the existing Letter
of Credit issued by BNP Paribas Securities Corp. to the ACE Group
totaling $368,966 will be amended or a replacement Letter of
Credit in the same amount will be provided to the ACE Group in
order to secure the Purchasers' performance.
The Debtors are authorized to take any action required to
effectuate the parties' Consent and Agreement. The Debtors are
required to consent to the transfer of the existing Letter of
Credit Facility to the Purchasers and any amendment to the
existing Letter of Credit to reflect the transfer.
A full-text copy of the Consent and Agreement is available for
free at http://bankrupt.com/misc/Fabrics_Consent&Agreement.pdf
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)
PROTOSTAR LTD: Bankruptcy Court OKs Auction of Satellite Units
--------------------------------------------------------------
Bloomberg News reports that Judge Mary Walrath has authorized
Protostar LTd. to sell its two satellites at an October 14
auction. According to Bloomberg's Michael Bathon, Judge Walrath
granted the proposed procedures for the sale of virtually all the
assets of ProtoStar I Ltd. and ProtoStar II Ltd., the company's
units. The assets include the two satellites and ground
equipment, software and contracts needed to operate them.
As reported by the TCR on Aug. 12, 2009, the Debtors have
submitted separate bid procedures for assets of Protostar I Ltd.
and Protostar II Ltd. They propose to pay a break up fee of up to
3% of the cash purchase price of the assets and expense
reimbursement of up to $500,000 to the stalking horse bidder in
the event another party is the successful bidders at the auction.
About ProtoStar Ltd.
Hamilton, HM EX, Bermuda-based ProtoStar Ltd. is a satellite
operator formed in 2005 to acquire, modify, launch and operate
high-power geostationary communication satellites for direct-to-
home satellite television and broadband internet access across the
Asia-Pacific region.
The Company and its affiliates filed for Chapter 11 on July 29,
2009 (Bankr. D. Del. Lead Case No. 09-12659.) The Debtor selected
Pachulski Stang Ziehl & Jones LLP as Delaware counsel; Law Firm of
Appleby as their Bermuda counsel; UBS Securities LLC as financial
advisor & investment banker and Kurtzman Carson Consultants LLC as
claims and noticing agent. In their petition, the Debtors listed
between $100 million and $500 million each in assets and debts.
As of December 31, 2008, ProtoStar's consolidated financial
statements, which include non-debtor affiliates, showed total
assets of $463,000,000 against debts of $528,000,000.
QUEST ENERGY: Records $101-Mil. Net Loss for 1H of 2009
-------------------------------------------------------
On August 18, 2009, Quest Energy Partners, L.P., filed its
quarterly report on Form 10-Q, disclosing a net loss of
$31,434,000 on revenues of $15,887,000 for three months ended June
30, 2009, compared with a net loss of $93,616,000 on $49,142,000
of revenues during the same period in 2008.
On August 17, Quest Energy filed its quarterly report for the
first quarter of 2009, disclosing a net loss of $69,566,000 on
revenues of $22,222,000 for three months ended March 31, 2009,
compared with a net loss of $40,765,000 on $38,314,000 of revenues
during the same period in 2008.
As of June 30, 2009, Quest Energy had assets of $158,885,000,
compared with total debts of $241,324,000, resulting to a total
partners' deficit of $82,439,000,
The Partnership noted that it and its predecessor have incurred
significant losses from 2004 through 2008 and into 2009, mainly
attributable to the operations, impairment of oil and gas
properties, unrealized gains and losses from derivative financial
instruments, legal restructurings, financings, the current legal
and operational structure and, to a lesser degree, the cash
expenditures resulting from the investigation related to certain
unauthorized transfers, repayments and re-transfers of funds to
entities controlled by their former chief executive officer. "We
have determined that there is substantial doubt about our ability
to continue as a going concern."
A copy of the Partnership's First Quarter Report is available for
free at http://researcharchives.com/t/s?4265
A copy of the Partnership's Second Quarter Report is available for
free at http://researcharchives.com/t/s?4266
About Quest Energy
Based in Oklahoma City, Quest Energy Partners was formed by Quest
Resources Corporation in 2007 to conduct, in a master limited
partnership structure, the exploration and production operations
previously conducted by QRCP's wholly-owned subsidiaries, Quest
Cherokee, LLC, and Quest Cherokee Oilfield Service, LLC. QRCP
owns 100% of Quest Energy Partners' general partner and controls
the election of the board of directors of the general partner.
Since Quest Energy Partners' initial public offering, its general
partner has had the same executive officers as QRCP.
Quest Energy Partners does not have any employees, other than
field level employees, and depends on QRCP for all general and
administrative functions necessary to operate Quest Energy
Partners' business. QRCP provides services pursuant to the terms
of the management services agreement between Quest Energy Partners
and Quest Energy Service, LLC, a wholly owned subsidiary of QRCP.
Going Concern Doubt
As reported in the Troubled Company Reporter on July 1, 2009,
UHY LLP in Houston, Texas, in its June 15, 2009 audit report,
raised substantial doubt about the ability of Quest Energy
Partners, L.P., and subsidiaries -- the Partnership -- to continue
as a going concern, citing the Partnership's inability to amend
the terms of its credit facilities.
Quest Energy Partners does not expect to be in compliance with the
covenants in its credit agreements for all of 2009. If defaults
exist at June 30, 2009, or in subsequent periods that are not
waived by the lenders, Quest Energy Partners said its assets could
be subject to foreclosure or other collection efforts.
QUEST RESOURCE: To Run Out of Cash to Pay Expenses After Sept. 15
-----------------------------------------------------------------
Quest Resource Corporation currently estimates that it will not
have enough cash to pay its expenses, including capital
expenditures and debt service requirements, after September 15,
2009. This date could be extended if QRCP is able to restructure
its debt obligations, issue equity securities or sell additional
assets.
QRCP filed with the Securities and Exchange Commission on Monday
and Tuesday quarterly reports for the period ended March 31, 2009,
and June 30, 2009.
QRCP posted net loss of $79,040,000 for the first quarter 2009,
from a net loss of $41,823,000 for the first quarter 2008. The
Company posted net loss of $30,530,000 for the second quarter
2009, from a net loss of $97,652,000 for the same period a year
ago. For the first half of 2009, the Company booked net loss of
$109,570,000 from net loss of $139,475,000 for the first half
2008.
As of June 30, 2009, the Company had total assets of $504,510,000;
and total current liabilities of $90,521,000, long-term derivative
financial instrument liabilities of $8,153,000, asset retirement
obligations of $6,211,000, and notes payable of $307,722,000. As
of June 30, 2009, the Company had accumulated deficit of
$371,896,000 and total stockholders' deficit before non-
controlling interests of $72,839,000.
The Company has incurred significant losses from 2003 through 2008
and into 2009, mainly attributable to operations, legal
restructurings, financings, the current legal and operational
structure and, to a lesser degree, the cash expenditures resulting
from the investigation related to certain unauthorized transfers,
repayments and re-transfers of funds to entities controlled by the
Company's former chief executive officer. "We have determined
that there is substantial doubt about our ability to continue as a
going concern," the Company said.
QRCP is almost exclusively dependent upon distributions from its
partnership interests in Quest Energy Partners, L.P., and Quest
Midstream Partners, L.P., for cash flow. Quest Midstream has not
paid any distributions on any of its units since the second
quarter of 2008, and Quest Energy suspended its distributions on
its subordinated units since the third quarter of 2008 and all
units starting with the fourth quarter of 2008. QRCP does not
expect to receive any distributions from Quest Energy or Quest
Midstream for the remainder of 2009 and is unable to estimate at
this time when such distributions may be resumed.
Although QRCP is not currently receiving distributions from Quest
Energy or Quest Midstream, it continues to require cash to fund
general and administrative expenses, debt service requirements,
capital expenditures to develop and maintain its undeveloped
acreage, drilling commitments and payments to landowners necessary
to maintain its oil and gas leases.
Given the liquidity challenges facing the Company, Quest Midstream
and Quest Energy, each entity has undertaken a strategic review of
its assets and has evaluated and continues to evaluate
transactions to dispose of assets to raise additional funds for
operations or to repay indebtedness. On July 2, 2009, QRCP, Quest
Midstream and Quest Energy entered into an Agreement and Plan of
Merger pursuant to which would form a new, yet to be named,
publicly traded holding corporation that, through a series of
mergers and entity conversion, would wholly own all three
entities.
"While we anticipate completion of the Recombination before the
end of 2009, it remains subject to the satisfaction of a number of
conditions, including, among others, the arrangement of one or
more satisfactory credit facilities for New Quest, the approval of
the transaction by our stockholders and the unitholders of QELP
and QMLP, and consents from each entity's existing lenders. There
can be no assurance that these conditions will be met or that the
Recombination will occur," QRCP said.
Upon completion of the Recombination, the equity of New Quest
would be owned roughly 44% by current QMLP common unit holders,
roughly 33% by current QELP common unit holders (other than QRCP),
and roughly 23% by current QRCP stockholders.
As of June 30, 2009, QRCP, excluding QELP and QMLP, had cash and
cash equivalents of $1.1 million and no ability to borrow under
the terms of its existing credit agreement.
A full-text copy of the Company's Second Quarterly Report is
available at no charge at http://ResearchArchives.com/t/s?4254
A full-text copy of the Company's First Quarterly Report is
available at no charge at http://ResearchArchives.com/t/s?4255
About Quest Resource
Quest Resource Corporation -- http://www.qrcp.net/,
http://www.qelp.net,and http://www.qmlp.net/-- is a fully
integrated E&P company that owns producing properties and acreage
in the Appalachian Basin of the northeastern United States; 100%
of the general partner and a 57% limited partner interest in Quest
Energy Partners, L.P.; and 85% of the general partner and a 36.4%
of the limited partner interests in the form of subordinated units
in Quest Midstream Partners, L.P. Quest Resource operates and
controls Quest Energy Partners and Quest Midstream Partners
through its ownership of their general partners.
As reported by the Troubled Company Reporter on June 23, 2009, the
report of UHY LLP, in Houston, Texas, the Company's independent
registered public accounting firm, on its financial statements for
the fiscal year ended December 31, 2008, includes an explanatory
paragraph regarding the Company's ability to continue as a going
concern. The factors contributing to this concern include QRCP's
recurring losses from operations, stockholders' accumulated
deficit, and inability to generate sufficient cash flow to meet
its obligations and sustain its operations.
QRCP does not anticipate being able to make its next quarterly
principal payment due September 30, 2009, under its Amended and
Restated Credit Agreement with Royal Bank of Canada, as
administrative agent and collateral agent.
The TCR said July 14 that QRCP's lenders led by Royal Bank of
Canada, among other things, agreed to waive the interest coverage
ratio and leverage ratio covenants for the fiscal quarter ended
June 30, 2009; and defer until September 30, 2009, interest
payment due on June 30, 2009.
RANDALL WANSER: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Joint Debtors: Randall John Wanser
Christina Andrea Wanser
aka Christina Andrea Bocock
3146 Diablo View Road
Lafayette, CA 94549
Bankruptcy Case No.: 09-47635
Chapter 11 Petition Date: August 19, 2009
Court: United States Bankruptcy Court
Northern District of California (Oakland)
Judge: Randall J. Newsome
Debtors' Counsel: Darya Sara Druch, Esq.
Law Offices of Darya Sara Druch
1 Kaiser Plaza #480
Oakland, CA 94612
Tel: (510) 465-1788
Email: darya@daryalaw.com
Total Assets: $3,062,585
Total Debts: $4,129,229
A full-text copy of the Debtors' petition, including a list of
their 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/canb09-47635.pdf
The petition was signed by the Joint Debtors.
READER'S DIGEST: Nearly 80% of Secured Lenders Agree to Plan
------------------------------------------------------------
The Reader's Digest Association, Inc., said August 20 that nearly
80 percent of its senior secured lenders have signed on to an
agreement in principle for a restructuring plan to significantly
reduce its debt burden and strengthen the company financially for
the future. As announced on August 17, 2009, 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 will reduce the company's total
debt by 75%, from approximately $2.2 billion to $550 million.
The Company on August 17 elected not to make a $27 million
interest payment due on its 9 percent Senior Subordinated Notes
due 2017 and intended to use the 30-day grace period 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. Since then, senior
secured lenders representing nearly 80% of the dollar value of the
outstanding bank debt and nearly 70% in number of the investing
institutions have signed on to the terms of the deal.
A copy of the Restructuring Support Agreement to be signed by the
Company and consenting lenders is available for free at:
http://researcharchives.com/t/s?422e
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.
RED HILL: Case Summary & 3 Largest Unsecured Creditors
------------------------------------------------------
Debtor: Red Hill Properties, LLC
2530 James B. White Hwy N.
Whiteville, NC 28472
Bankruptcy Case No.: 09-07009
Chapter 11 Petition Date: August 19, 2009
Court: United States Bankruptcy Court
Eastern District of North Carolina (Wilson)
Debtor's Counsel: Trawick H. Stubbs Jr., Esq.
Stubbs & Perdue, P.A.
P.O. Drawer 1654
New Bern, NC 28563
Tel: (252) 633-2700
Fax: (252) 633-9600
Email: efile@stubbsperdue.com
Estimated Assets: $1,000,000 to $10,000,000
Estimated Debts: $1,000,000 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
3 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/nceb09-07009.pdf
The petition was signed by Russell K. Worley, member-manager of
the Company.
ROGER GARDNER: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Roger J. Gardner
dba Rising Sun Arabians, LLC
dba Youngardner, LLC
15713 365th Ave SE
Sultan, WA 98294
Bankruptcy Case No.: 09-18401
Chapter 11 Petition Date: August 19, 2009
Court: United States Bankruptcy Court
Western District of Washington (Seattle)
Judge: Karen A. Overstreet
Debtor's Counsel: Larry B. Feinstein, Esq.
Vortman & Feinstein
500 Union St., Ste. 500
Seattle, WA 98101
Tel: (206) 223-9595
Email: lbf@chutzpa.com
Total Assets: $4,099,055
Total Debts: $3,124,766
A full-text copy of Mr. Gardner's petition, including a list of
his 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/wawb09-18401.pdf
The petition was signed by Mr. Gardner.
SCOTTISH RE: Moody's Downgrades Insurance Strength Rating to 'B2'
-----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Scottish Re
(U.S.), Inc. (insurance financial strength rating to B2 from B1;
negative outlook) and its affiliates. The outlooks are stable,
except for SRUS, which has a negative outlook. The ratings will
be withdrawn for business reasons.
Moody's last rating action on Scottish Re and its affiliates was
on January 23, 2009, when the IFS rating of SRUS was downgraded
from to B1 from Ba3, and the IFS rating of Scottish Annuity & Life
Insurance Company (Cayman) Ltd was downgraded to Ca from B3.
SRUS and SALIC are the main operating companies of Scottish Re.
In the same rating action, the preferred stock of Scottish Re
Group Limited was downgraded to Ca from Caa3.
These ratings were downgraded and will be withdrawn:
* Scottish Annuity & Life Insurance Company (Cayman) Ltd.:
insurance financial strength rating to C from Ca;
* Stingray Pass-Through Certificates (based on insurance financial
strength rating of SALIC): senior secured rating to C from Ca;
* Scottish Re (U.S.), Inc.: insurance financial strength rating to
B2 from B1;
* Scottish Re Group Limited: preferred stock rating to C from Ca
Scottish Re Group Limited is a Cayman Islands company with
principal executive offices located in Bermuda. On March 31,
2009, Scottish Re reported total assets of $5.1 billion and
shareholder's equity of $1.7 million.
Moody's insurance financial strength ratings are opinions of the
ability of insurance companies to pay punctually senior
policyholder claims and obligations.
SENTINEL MANAGEMENT: Liquidating Trustee Can't Pursue Claims
------------------------------------------------------------
WestLaw reports that a former Chapter 11 trustee, in his capacity
as trustee of a liquidation trust established under the debtor's
confirmed plan, did not have standing to pursue claims that were
allegedly assigned to the trust in the debtor's plan for the
benefit solely of the assigning creditors, with any recovery
thereon to be pooled together into a special tranche of the trust
and distributed only to the assignors in accordance with
priorities established by the plan. The estate had no interest in
the claims, and the trustee had no authority under the Code to
pursue them. A bankruptcy trustee should not be permitted to
bring claims for the benefit of the few at the expense of the
many. Grede v. Bank of New York Mellon, --- B.R. ----, 2009 WL
2244605 (N.D. Ill.).
As reported in the Troubled Company Reporter on Aug. 4, 2009, the
Hon. James B. Zagel of the U.S. District Court for the Northern
District of Illinois has dismissed a suit against Bank of New York
Mellon Corp. brought by the liquidation trustee of money manager
Sentinel Management Group Inc. ruling that the trustee cannot
recover for Sentinel customers hundreds of millions that were
allegedly lost as a result of a fraudulent investment scheme,
according to a report from Law360.
About Sentinel Management
Based in Northbrook, Illinois, Sentinel Management Group Inc. --
http://www.sentinelmgi.com/-- was a full service firm offering
a variety of security solutions. The Company filed a voluntary
Chapter 11 petition on August 17, 2007 (Bankr. N.D. Ill. Case No.
07-14987). Ronald Barliant, Esq., Randall Klein, Esq., and
Kathryn A. Pamenter, Esq., at Goldberg, Kohn, Bell & Black
Rosenbloom & Moritz, Ltd., represent the Debtor as counsel.
Quinn, Emanuel Urquhart Oliver & Hedges, LLP, represents the
Official Committee of Unsecured Creditors as counsel. DLA Piper
US LLP is the Committee's co-counsel. When the Debtor sought
bankruptcy protection, it listed assets and debts of more than
$100 million.
On August 28, 2007, the Court approved Frederick Grede as the
Debtor's Chapter 11 Trustee. Marc I. Fenton, Esq., at DLA Piper
US LLP, and Vincent E. Lazar, Esq, at Jenner & Block LLP,
represent the Chapter 11 Trustee as counsel.
As reported by the Troubled Company Reporter on January 2, 2009,
the Court confirmed on December 15, 2008, the plan of liquidation
of Sentinel, and Mr. Grede is managing the liquidation. A copy of
the Plan is available for free at:
http://bankrupt.com/misc/SentinelManagement_4thAmendedPlan.pdf
SILVER CLUB: Max Baer Mulls Purchase, Reopening of Hotel-Casino
---------------------------------------------------------------
The Associated Press reports that Max Baer Jr. is considering
buying Silver Club, a closed hotel-casino in Sparks, and turning
it into Jethro's Beverly Hillbillies Hotel and Casino.
Mr. Baer has met with city officials and at least three city
councilmen about the possible purchase of the club, The AP
relates, citing Sparks Mayor Geno Martini.
Mr. Baer, according to The AP, hasn't met with any representatives
of Silver Club owner Harold Holder.
The AP quoted Don Smith, Mr. Baer's spokesperson, as saying, "The
Silver Club has had its problems in the past but Max believes that
it could be a success, which would only help the Victorian Square
area. But Max felt it would require a good relationship with the
Nugget across the street."
Silver Club operates slot machines in smaller Nevada casinos. The
slot machines and casinos are in Hawthorne, Elko, Spring Creek,
Winnemucca, and Sparks, Nevada. Silver Club and three affiliates
filed for Chapter 11 on June 19, 2009 (Bankr. D. Nev. Case No. 09-
51953). Judge Gregg W. Zive presides over the case. Attorneys at
Belding, Harris & Petroni, Ltd., represent the Debtors. The
Company disclosed that at the time of its Chapter 11 filing, it
had assets of $1,000,001 to $10,000,000 against debts of
$10,000,001 to $50,000,000.
SIRIUS XM: To Raise $257 Million by Issuing Senior Notes Due 2015
-----------------------------------------------------------------
SIRIUS XM Radio intends to offer $257,000,000 aggregate principal
amount of Senior Secured Notes due 2015 to qualified institutional
buyers pursuant to Rule 144A under the Securities Act of 1933, as
amended, and outside the United States in compliance with
Regulation S under the Securities Act.
The notes will bear interest at an annual rate of 9.75%. The
price to investors will be 97.248% of the principal amount of the
notes. The Company will receive gross proceeds of $249,927,360
from the sale of the notes before deducting the initial
purchasers' commissions and estimated offering expenses.
SIRIUS XM will use the net proceeds from the offering to repay
indebtedness incurred under its Credit Agreement with Liberty
Media Corporation.
The securities will not be registered under the Securities Act, or
any state securities laws, and may not be offered or sold in the
United States absent registration, except pursuant to an exemption
from the registration requirements of the Securities Act and
applicable state securities laws.
Ratings Action
As reported by the Troubled Company Reporter on August 17, 2009,
Moody's Investors Service assigned a Caa2 rating to Sirius XM's
proposed senior secured notes due 2015. Moody's believes the
offering modestly improves the intermediate-term liquidity profile
by reducing interest expense by approximately $10 million per
year, pushing out the final maturity from 2012 to 2015, and
eliminating quarterly amortization that would have begun in 2010.
According to Moody's, the notes are secured by a pledge of
substantially all of Sirius XM's assets and are guaranteed by all
of Sirius XM's wholly-owned domestic subsidiaries, including its
FCC license subsidiary; notably, however, the liens on Sirius XM's
senior secured credit facility will have priority over the liens
securing the notes. Sirius XM's Ca Corporate Family Rating and
Caa3 Probability of Default Rating are not affected due to ongoing
concerns regarding the long-term cash sustainability of the
business model within the existing capital structure. Loss given
default assessments were updated to reflect the current debt mix.
The rating outlook remains positive.
Meanwhile, Standard & Poor's Ratings Services assigned Sirius XM's
senior secured notes due 2015 S&P's issue-level rating of 'B+'
(two notches higher than the 'B-' corporate credit rating). S&P
also assigned the notes a recovery rating of '1', indicating S&P's
expectation of very high (90% to 100%) recovery for noteholders in
the event of a payment default.
S&P raised its corporate credit rating on Sirius XM and XM
Satellite Radio Holdings Inc. (which S&P analyze on a consolidated
basis) to 'B-' from 'CCC+'. The rating outlook is stable. In
addition, S&P revised the recovery rating on Sirius XM's senior
unsecured and subordinated debt to '5', indicating S&P's
expectation of modest (10% to 30%) recovery for debtholders in the
event of a payment default, from '6'. S&P raised the issue-level
rating on this debt to 'CCC+' (one notch lower than the 'B-'
corporate credit rating on the company) from 'CCC-', in accordance
with S&P's notching criteria for a '5' recovery rating. The
revision of the recovery rating reflects an increase in S&P's
estimate of enterprise value at the time of the simulated default
within S&P's recovery analysis.
S&P also raised the rest of its issue-level ratings on Sirius XM,
XM Satellite Radio Holdings, and XM Satellite Radio Inc. by one
notch, in conjunction with the one-notch upgrade of the corporate
credit rating. The recovery ratings on these remaining debt
issues remain unchanged.
About SIRIUS XM Radio
Based in New York, SIRIUS XM Radio Inc. broadcasts in the United
States music, sports, news, talk, entertainment, traffic and
weather channels for a subscription fee through proprietary
satellite radio systems. Subscribers can also receive certain
music and other channels over the Internet. The Company's
satellite radios are primarily distributed through automakers,
retailers and the Company's Web sites. The Company has
agreements with every major automaker to offer SIRIUS or XM
satellite radios as factory or dealer-installed equipment in their
vehicles. SIRIUS and XM radios are also offered to customers of
rental car companies.
SK FOODS: Ex-VP to Cooperate in Govt. Probe on Inflating Prices
---------------------------------------------------------------
Former SK Foods LP vice president Jeffrey Sherman Beasley will be
cooperating with authorities in an investigation into the Company,
after being charged in a Sacramento federal court Wednesday with
participating in a nationwide conspiracy to drive up food prices,
Denny Walsh at The Sacramento Bee reports, citing federal
prosecutors Benjamin Wagner and Sean Flynn.
According to The Bee, Mr. Beasley, who was SK Foods' vice
president from 2004 to 2008, is charged with conspiracy in
connection with bribery for purchasing managers of major food
companies and conspiracy to sell mislabeled tomato. The Bee
relates that Mr. Beasley, along with other senior leaders at SK
Foods, allegedly ordered the falsification of quality-control
documents.
Mr. Beasley, The Bee states, told fellow executives in a January
2007 e-mail that the inventory of processed tomato product
containing the required 31% of natural tomato soluble solids was
34.5 million pounds short of contractual obligations. According
to the report, Mr. Beasley suggested mislabeling 7.9 million
pounds containing NTSS levels of 25% and 28%.
The Bee notes that bribes ensured that customers purchased
processed tomato products from SK Foods at inflated prices and
induced purchasing managers to share competitors' bids and other
information with SK Foods. The report says that former purchasing
managers at Kraft Foods Inc., Frito-Lay Inc., and B&G Foods Inc.
already pleaded guilty to receiving bribes from former SK Foods
sales broker Randall Lee Rahal, who also admitted to racketeering,
bid rigging, and contract-allocation conspiracies.
The Bee reports that Mr. Rahal told Mr. Beasley in a recorded
telephone conversation on April 3, 2008, that a purchasing manager
for an SK Foods customer had recently turned over to him a
contract offer to the customer from Morning Star Packing Co. The
information would be useful at an upcoming SK Foods pricing
strategy meeting, the report states, citing Mr. Beasley.
SK Foods LP runs a tomato processing facility in Lemoore. It
filed for Chapter 11 bankruptcy protection after being dropped by
its lending group. As reported by the Troubled Company Reporter
on May 12, 2009, creditors filed an involuntary Chapter 11
petition SK Foods LP and affiliate RHM Supply/ Specialty Foods
Inc. before the U.S. Bankruptcy Court for the Eastern District of
California. SK Foods had said that it was preparing to file a
voluntary Chapter 11 petition.
SKYPOWER CORP: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: SkyPower Corp.
250 Yonge Street, 16th Floor
Toronto, Ontario M5B 2L7
Canada
Case No.: 09-12914
Chapter 11 Petition Date: August 19, 2009
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Judge: Peter J. Walsh
Debtor's Counsel: Gregory Alan Taylor, Esq.
Ashby & Geddes
500 Delaware Avenue, 8th Floor
P.O. Box 1150
Wilmington, DE 19899
Tel: (302) 654-1888
Fax: (302) 654-2067
Email: bankruptcy@ashby-geddes.com
Karen B. Skomorucha, Esq.
Ashby & Geddes, P.A.
500 Delaware Avenue, 8th Floor
P.O. Box 1150
Wilmington, DE 19899
Tel: (302) 654-1888
Fax: (302) 654-2067
Email: kskomorucha@ashby-geddes.com
William Pierce Bowden, Esq.
Ashby & Geddes
500 Delaware Avenue
8th Floor, P.O. Box 1150
Wilmington, DE 19899
Tel: (302) 654-1888
Fax: (302) 654-2067
Email: wbowden@ashby-geddes.com
Estimated Assets: $100,000,001 to $500,000,000
Estimated Debts: $100,000,001 to $500,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
STATION CASINOS: Schedules Deadline Moved to September 22
---------------------------------------------------------
Pursuant to Bankruptcy Rule 1007 and Local Rule 1007(d), the
Bankruptcy Court has extended, on a final basis, the deadline by
which Station Casinos Inc. and its affiliates must file their
schedules of assets and liabilities and statement of financial
affairs through September 22, 2009, without prejudice to the
Debtors' ability to request additional time should it become
necessary.
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477).
Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as
legal counsel in the Chapter 11 case; Brownstein Hyatt Farber
Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as
local counsel. The Debtor is also hiring Lazard Freres & Co. LLC
as investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STATION CASINOS: Proposes Odyssey as Advisors to Board Committee
----------------------------------------------------------------
Station Casinos Inc. and its affiliates seek the Court's authority
to employ Odyssey Capital Group, LLC, as financial advisor and
investment banker to the Special Litigation Committee of the Board
of Directors of Debtor Station Debtor, Inc.
The Debtors engaged Odyssey pursuant to an engagement letter
dated April 10, 2009, to report to legal counsel for the Special
Litigation Committee with respect to an independent investigation
of potential claims against the Debtors arising out of the
acquisition in 2007 of SCI by Fertitta Colony Partners LLC,
Fertitta Partners, LLC, and FCP Vote Co, LLC.
The Debtors seek to continue the employment of Odyssey to render
all necessary financial advisor and investment banker services to
the Special Litigation Committee and its legal counsel may be
required in conducting an independent investigation, including,
but not limited to:
(a) reviewing and analyzing the financial analysis performed
by SCI's financial advisors with respect to the
Transaction to determine if it was reasonable;
(b) reviewing and analyzing SCI's solvency, on a going concern
basis, at the time of and following the Transaction;
(c) conducting interviews with management;
(d) attending meetings of the Special Litigation Committee;
(e) providing testimony, as necessary, with respect to matters
which it has been engaged to advise the Special Litigation
Committee on in any proceeding before the Bankruptcy
Court;
(f) being available to the Special Litigation Committee and
its legal counsel to assist them regarding the services to
be provided; and
(g) any other services requested by the Special Litigation
Committee or its legal counsel.
Odyssey's hourly rates are:
Professional Hourly Rate
------------ -----------
Partners and Managing Directors $495 - $450
Associates $425 - $395
The Debtors will pay and reimburse Odyssey for fees and out-of-
pocket expenses incurred by Odyssey in the Debtors' Cases.
The Engagement Agreement also provides that the Debtors will
indemnify Odyssey and certain related persons in accordance with
certain indemnification provisions.
Before the Petition Date and pursuant to an Engagement Agreement,
Odyssey requested and received a payment totaling $125,000 for
professional services rendered and to be rendered and charges and
disbursements incurred by Odyssey in connection with the
services, which amount was deemed earned upon receipt. In
addition, Odyssey requested and received a retainer totaling
$125,000 for professional services rendered and to be rendered
and charges and disbursements incurred by Odyssey in connection
with the services to be performed following the Petition Date.
The entire Retainer remained unapplied as of the Petition Date.
Aside from the Retainer, within one year before the Petition
Date, Odyssey received $789,936 on account of its prepetition
services to the Debtors.
Lawrence X. Taylor, managing director of Odyssey Capital Group,
LLC, tells the Court that Odyssey does not hold or represent an
interest adverse to the Debtors' estates and is a "disinterested
person," as that term is defined in Section 101(14) of the
Bankruptcy Code and modified by Section 1107(b), with respect to
the matters for which it is to be employed.
Moreover, Mr. Taylor assures the Court that the professionals at
Odyssey do not have any connection with the Debtors or their
affiliates, their creditors, their estates, any United States
District Judge or United States Bankruptcy Judge for the District
of Nevada, the United States Trustee or any person employed in
the office of the United States Trustee for Region 17, or any
other party in interest, or their respective attorneys and
accountants.
Thomas M. Friel, the executive vice president, chief accounting
officer, and treasurer of Station Casinos, Inc., filed with the
Court a declaration as further support to the Application.
Odyssey Capital is located at Suite 720 at Two North Central
Avenue, in Phoenix, Arizona, with telephone number (602) 257-
8400, facsimile (602) 257-8600, and e-mail address at
info@odycap.com
In a separate filing, the Debtors seek to have the employment
application heard as soon as possible. However, due to the
Court's full calendar, the next available dates at which there is
sufficient time to hear the Application are September 2, 2009 and
November 16, 2009.
The Debtors believe that it is inappropriate for them to request
that their professionals render over three months of service
before having their respective employment applications approved
by the Court. Consequently, the Debtors ask the Court to have
the notice shortened in order to allow for the Application to be
heard on September 2, 2009 at 9:30 a.m.
Bill Cossitt, Esq., trial attorney for the Assistant United
States Trustee, was contacted regarding the proposed Order
Shortening Time. Mr. Cossitt agreed to time being shortened in
light of the unique scheduling dynamics in the Cases.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477).
Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as
legal counsel in the Chapter 11 case; Brownstein Hyatt Farber
Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as
local counsel. The Debtor is also hiring Lazard Freres & Co. LLC
as investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STATION CASINOS: Proposes FTI Consulting as Fin'l Advisor
---------------------------------------------------------
Station Casinos Inc. and its affiliates seek the Court's
permission to employ FTI Consulting, Inc., as their financial
advisors, nunc pro tunc to to August 11, 2009, under an engagement
letter.
FTI will provide consulting and advisory services as FTI and the
Debtors deem appropriate and feasible to advise the Debtors in
the course of the Chapter 11 cases, including:
(a) Assistance with various accounting and financial matters
related to the Chapter 11 proceedings, including preparing
the Statement of Financial Affairs, Schedules of Assets
and Liabilities, and Monthly Operating Reports, and other
compliance-related documents to meet the needs of the U.S.
Trustee and the Bankruptcy Court; and
(b) Other assistance as the Debtors may request and FTI agrees
to perform.
In addition, FTI, utilizing a separate team, has also filed a
retention application seeking to be retained as financial
advisors by the CMBS Debtors. By a date no later than August 11,
2009, in order to ensure that it is able to faithfully uphold its
fiduciary duties, FTI required each member of each respective
team to read, sign and return to FTI's Conflicts Manager an
ethical wall agreement indicating:
(a) there will be no discussions or communications -- orally,
electronically or otherwise -- between any persons who are
or have been involved in the Engagement and other Station
Casinos matter, about the substance of their respective
engagements;
(b) only the persons working on matters involving the
Engagement will be provided access to non-public documents
or information relating to the Engagement; and
(c) no person working on any other Station Casinos matter
will be provided access to non-public documents or
information relating to the Engagement.
Further, FTI is setting up electronic internal security walls to
ensure that only FTI employees involved directly with or working
on the Engagement may have access to the information, databases,
e-mails, schedules or any other information of or relating to the
Engagement. The FTI Security Administrator will monitor these
software walls and related security periodically for compliance
with the Ethical Wall procedures.
The Debtors will pay and reimburse FTI for fees and out-of-pocket
expenses incurred by FTI in the Debtors' Cases.
FTI's hourly rates are:
Professional Hourly Rate
------------ -----------
Senior Managing Director $710-825
Directors and Managing Directors $525-685
Associates and Consultants $255-480
Administration and Paraprofessionals $105-210
The Debtors and FTI have agreed that:
-- any controversy or claim in connection with the Application
or the services provided by FTI to the Debtors, including
any matter involving a successor-in-interest or agent of
any of the Debtors or of FTI, will be brought in the U.S.
Bankruptcy Court or the District Court for the District of
Nevada;
-- FTI and the Debtors and any of their successors and assigns
consent to the jurisdiction and venue of the court as the
sole and exclusive forum for the resolution of the claims,
causes of actions or lawsuits;
-- FTI and the Debtors, and any of their successors and
assigns waive trial by jury, the waiver being informed and
freely made;
-- if the Bankruptcy Court, or the District Court, does not
have or retain jurisdiction over the claims and
controversies, FTI and the Debtors will submit first to
non-binding mediation; and, if mediation is not successful,
then to binding arbitration, in accordance with the certain
dispute resolution procedures; and
-- judgment on any arbitration award may be entered in any
court having proper jurisdiction.
Further, FTI has agreed not to assert any defense based on
jurisdiction, venue, abstention or otherwise to the jurisdiction
and venue of the Bankruptcy Court or the District Court for the
District of Nevada to determine any controversy or claims with
respect to the Application or the services it provided.
M. Freddie Reiss, a senior managing director of FTI Consulting,
Inc., assures the Court that FTI (i) has no connection with the
Debtors, its creditors or other parties in interest in the Cases,
(ii) does not hold any interest adverse to the Debtors' estates,
and (iii) believes it is a "disinterested person" as defined
within Section 101(14) of the Bankruptcy Code.
Thomas M. Friel, the executive vice president, chief accounting
officer, and treasurer of Station Casinos, Inc., filed with the
Court a declaration as further support to the Application.
FTI Consulting is located at Suite 1400 at 500 E. Pratt Street,
in Baltimore, Maryland, with telephone number 1-410-951-4800 and
facsimile number 1-410-951-4895.
In a supplemental filing, the Debtors seek to have the employment
application heard as soon as possible. However, due to the
Court's full calendar, the next available dates at which there is
sufficient time to hear the Application are September 2, 2009 and
November 16, 2009.
The Debtors believe that it is inappropriate for them to request
that their professionals render over three months of service
before having their respective employment applications approved
by the Court. Consequently, the Debtors ask the Court to have
the notice shortened in order to allow for the Application to be
heard on September 2, 2009 at 9:30 a.m.
Bill Cossitt, Esq., trial attorney for the Assistant United
States Trustee, was contacted regarding the proposed Order
Shortening Time. Mr. Cossitt agreed to time being shortened in
light of the unique scheduling dynamics in the Cases.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477).
Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as
legal counsel in the Chapter 11 case; Brownstein Hyatt Farber
Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as
local counsel. The Debtor is also hiring Lazard Freres & Co. LLC
as investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STATION CASINOS: Proposes Squire Sanders as Committee Board Atty
----------------------------------------------------------------
Station Casinos Inc. and its affiliates seek the Court's
permission to employ Squire, Sanders & Dempsey, LLP, as the
Debtors' special counsel to a Special Litigation Committee of the
Board of Directors of Station Casinos, Inc., in the Chapter 11
cases.
The Special Litigation Committee was formed by SCI's Board of
Directors on March 31, 2009, to independently investigate and
take any actions with respect to any potential claims, including
derivative claims of SCI, arising out of the acquisition in 2007
of SCI by Fertitta Colony Partners LLC, Fertitta Partners, LLC
and FCP Vote Co, LLC.
On April 10, 2009, Squire Sanders was employed by the Special
Litigation Committee to render all necessary legal services to
the Special Litigation Committee that it may require in
conducting its in independent investigation. The Debtors propose
to continue the employment of Squire Sanders to render all
necessary legal services to the Special Litigation Committee that
it may require in conducting its in independent investigation
during the Chapter 11 Cases.
The Debtors, through the Special Litigation Committee, will
employ Squire Sanders on an hourly basis at rates consistent with
Squire Sanders' routinely charges in comparable matters"
Professional Hourly Rate
------------ ------------
Partners $950 - $350
Associates $475 - $190
Legal Assistants $300 - $95
The Debtors will also reimburse Squire Sanders for its out-of-
pocket expenses incurred the Cases.
On April 3, 2009, Squire Sanders asked and received a retainer in
the amount of $125,000 for professional services rendered and to
be rendered and charges and disbursements incurred by Squire
Sanders in connection with the services.
As of the Petition Date, Squire Sanders had been compensated for
all known fees and reimbursed for all known expenses incurred
before the Petition Date. The entire Retainer remained unapplied
as of the Petition Date. Squire Sanders reserves the right to
apply certain amounts of the Retainer to fees and expenses
accrued before the Petition Date but not discovered or otherwise
accounted for until after the Petition Date. Squire Sanders will
retain all remaining amounts of the Retainer in trust during the
pendency of the Chapter 11 Cases to be applied to any
professional fees, charges and disbursements that remain unpaid
at the end of the Cases.
Aside from the Retainer, within one year before the Petition
Date, Squire Sanders received $1,229,064 on account of its
prepetition services to the Debtors.
Stephen D. Lerner, Esq., a partner in Squire, Sanders & Dempsey,
LLP, assures the Court that his firm does not hold or represent
an interest adverse to the Debtors' estates and is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code and modified by Section 1107(b).
An "Ethical Wall" will be erected to separate attorneys and
employees from all other Squire Sanders personnel; especially
from those who will represent the Debtors. The Ethical Wall will
supplement the pre-existing responsibility of every attorney at
Squire Sanders under the codes and rules of professional ethics
not to reveal a confidence or secret of a client, not to use a
confidence or secret of a client to the disadvantage of a client,
and not to use a confidence or secret of a client for the
attorney's own advantage or the advantage of a third person. The
screened individuals will have no involvement in Squire Sanders'
representation of the Special Litigation Committee.
Thomas M. Friel, the executive vice president, chief accounting
officer, and treasurer of Station Casinos, Inc., filed with the
Court a declaration as further support to the Application.
Squire Sanders is located at Suite 2900 at 221 E. Fourth Street,
in Cincinnati, Ohio, with telephone number +1.513.361.1200 and
facsimile number +1.513.361.1201.
The Debtors, in a supplemental filing, seek to have the
employment application heard as soon as possible. However, due
to the Court's full calendar, the next available dates at which
there is sufficient time to hear the Application are September 2,
2009 and November 16, 2009.
The Debtors believe that it is inappropriate for them to request
that their professionals render over three months of service
before having their respective employment applications approved
by the Court. Consequently, the Debtors ask the Court to have
the notice shortened in order to allow for the Application to be
heard on September 2, 2009 at 9:30 a.m.
Bill Cossitt, Esq., trial attorney for the Assistant United
States Trustee, was contacted regarding the proposed Order
Shortening Time. Mr. Cossitt agreed to time being shortened in
light of the unique scheduling dynamics in the Cases.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477).
Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as
legal counsel in the Chapter 11 case; Brownstein Hyatt Farber
Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as
local counsel. The Debtor is also hiring Lazard Freres & Co. LLC
as investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STATION CASINOS: CMBS Units Propose FTI as Financial Advisor
------------------------------------------------------------
CMBS Debtors -- FCP MezzCo Borrower V, LLC, FCP MezzCo Borrower
IV, LLC, FCP MezzCo Borrower III, LLC, FCP MezzCo Borrower II,
LLC, FCP MezzCo Borrower I, LLC, and FCP PropCo, LLC -- seek the
Court's permission to employ FTI Consulting, Inc., as their
financial advisors nunc pro tunc to the Petition Date to address
any matters arising from a conflict or a potential conflict of
interest between the CMBS Debtors and Debtor Stations Casinos,
Inc. and its other affiliated debtors and debtors-in-possession.
Pursuant to the terms of an Engagement Letter, FTI will provide
consulting and advisory services as FTI and the CMBS Debtors deem
appropriate and feasible to insure that the CMBS Debtors are, and
at all times, remain, independent from SCI as mandated by the
respective operating agreements of each of the CMBS Debtors and
to insure that the CMBS Debtors are obtaining independent advice
in the Chapter 11 cases.
FTI will render various services to the CMBS Debtors with respect
to matters where the interests of any CMBS Debtor, on the one
hand and SCI, or any of the other affiliated debtors on the other
hand, are determined to be in actual or potential conflict by
either the CMBS Debtors or a majority of the Board of Directors
of the CMBS Debtors including, but not limited to:
(a) analysis of the business plan, projections and other
forecasts prepared by or on behalf of the CMBS Debtors;
(b) analysis of the assets, liabilities and financial
statements of the CMBS Debtors;
(c) assistance evaluating various resolutions that may be
brought before the Boards of Directors of the CMBS
Debtors; and
(d) other work as may be requested by the CMBS Debtors and
agreed to by FTI.
FTI has asked that it be engaged under a general retainer. The
CMBS Debtors believe that FTI should be employed under a general
retainer because of the variety and complexity of the services
that will be required during the proceedings.
FTI has performed certain prepetition financial advisor services
on behalf of CMBS Debtors in connection with the preparation of
the Chapter 11 cases. Pursuant to the Engagement Letter, FTI
received from the CMBS Debtors total "on account" cash in the
amount of $250,000 prepetition. Since commencing the engagement,
FTI has applied against the on-account cash the aggregate
prepetition amount of $217,483, which amount reflects $211,915
billed to the CMBS Debtors for professional services and $5,567
for out of pocket expense reimbursement. Upon the filing of the
petition, the remaining On-Account Cash balance retained by FTI
was $32,516, where it stands currently as well.
The CMBS Debtors will pay and reimburse FTI for fees and out-of-
pocket expenses incurred by FTI in the CMBS Debtors' Cases.
FTI's hourly rates are:
Professional Hourly Rate
------------ -----------
Senior Managing Director $710-825
Directors and Managing Directors $525-685
Associates and Consultants $255-480
Administration and Paraprofessionals $105-210
Ronald F. Greenspan, a senior managing director of FTI
Consulting, Inc., tells the Court that FTI (i) has no connection
with the CMBS Debtors, their creditors or other parties in
interest in the Cases; (ii) does not hold any interest adverse to
the CMBS Debtors' estates; and (iii) believes it is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
Mr. Greenspan says that FTI is not a "creditor" of the CMBS
Debtors within the meaning of Section 101(10). Further, Mr.
Greenspan adds that neither him nor any other FTI partner or
principal is a holder of any shares of the CMBS Debtors' stock.
Thomas M. Friel, the executive vice president, chief accounting
officer, and treasurer of Station Casinos, Inc., filed with the
Court a declaration as further support to the Application.
FTI is located at Suite 1400 at 500 E. Pratt Street, in
Baltimore, Maryland, with telephone number 1-410-951-4800 and
facsimile number 1-410-951-4895.
The Debtors, in a separate filing, seek to have the employment
application heard as soon as possible. However, due to the
Court's full calendar, the next available dates at which there is
sufficient time to hear the Application are September 2, 2009 and
November 16, 2009.
The Debtors believe that it is inappropriate for them to request
that their professionals render over three months of service
before having their respective employment applications approved
by the Court. Consequently, the Debtors ask the Court to have
the notice shortened in order to allow for the Application to be
heard on September 2, 2009 at 9:30 a.m.
Bill Cossitt, Esq., trial attorney for the Assistant United
States Trustee, was contacted regarding the proposed Order
Shortening Time. Mr. Cossitt agreed to time being shortened in
light of the unique scheduling dynamics in the Cases.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477).
Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as
legal counsel in the Chapter 11 case; Brownstein Hyatt Farber
Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as
local counsel. The Debtor is also hiring Lazard Freres & Co. LLC
as investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STATION CASINOS: CMBS Units Propose GD&C as Special Counsel
-----------------------------------------------------------
The CMBS Debtors seek the Court's authority to employ Gibson,
Dunn & Crutcher LLP, as their special counsel, nunc pro tunc to
the Petition Date, to address any matters arising from a conflict
or a potential conflict of interest between the CMBS Debtors, on
the one hand, and Debtor Stations Casinos, Inc. and its other
affiliated debtors and debtors-in-possession, on the other hand.
In the last four months, GD&C has represented and advised the
CMBS Debtors with respect to certain Board of Directors matters,
corporate, finance, real estate, potential litigation and other
legal matters.
Pursuant to each of their respective operating agreements, each
of the CMBS Debtors are "special purpose" entities that are
required to maintain their respective separateness and
independence from each other and the balance of the Debtors
herein. To achieve that status, the respective Operating
Agreement of each of the CMBS Debtors establishes a Board of
Directors of three members and expressly mandates that two of the
Directors be "Independent Directors" as defined in each the
operating agreement.
One key requirement of an Independent Director is that he or she
not be a member, manager, officer or employee of any "Affiliate"
of any of the other Debtors herein. The operating agreements
also obligate each of the CMBS Debtors to "maintain an arm's
length relationship with any Affiliate".
Since the current cases involve both the CMBS Debtors and other
Affiliated Debtors, two sets of counsel are required for each
CMBS Debtor to insure that each of the CMBS Debtors operates
within the limited scope of its authority by faithfully observing
at all times each of the requirements imposed upon the CMBS
Debtors within their respective operating agreements. To do so,
the CMBS Debtors anticipate that GD&C will monitor the status of
the cases as they relate to the CMBS Debtors and, to the extent
that the interests of any CMBS Debtor, on the one hand and SCI,
or any of the other affiliated debtors on the other hand, are
determined to be in actual or potential conflict or may raise
issues as to independence and separateness of the CMBS Debtors by
either the CMBS Debtors or a majority of the Board of Directors
of the CMBS Debtors, GD&C will provide general legal services, as
needed, arising from any matters where a conflict or a potential
conflict of interest as to independence and separateness of the
CMBS Debtors may exist in order to insure that the CMBS Debtors
are, and at all times, remain, independent from SCI as mandated
by the respective operating agreements of each of the CMBS
Debtors and to insure that the CMBS Debtors are obtaining
independent advice in the Cases.
GD&C as special counsel will provide legal advice and perform
legal services with respect to:
(a) Board of Directors matters and determinations;
(b) the Master Lease and, in particular, represent the
separate and independent interests of the CMBS Debtors;
and
(c) advice with respect to the corporate implementation of any
restructuring, including the related documentation; and
general corporate matters.
The CMBS Debtors will pay and reimburse GD&C for fees and out-of-
pocket expenses incurred in the Debtors' Cases. GD&C's hourly
rates for its attorneys ranges from $295 to $895.
On April 23, 2009, pursuant to letter agreements dated March 31,
2009, the CMBS Debtors provided GD&C with an advance payment of
$350,000 to establish a retainer to pay for legal services
rendered or to be rendered in connection with the CMBS Debtors'
restructuring efforts. According to GD&C's books and records,
during the period April 1 through July 24, 2009, GD&C
periodically billed against the advance payment of $350,000 and
drew upon the retainer in the approximate aggregate amount of
$250,272 for services and expenses incurred through July 24,
2009. The retainer was replenished in each instance pursuant to
the Legal Services Letters.
The full amount of the retainer, $350,000, remains and is held by
GD&C according to its standard internal procedures in the same
manner as GD&C holds retainers received from each of its other
clients.
Lesley Wasser, Esq., a member in Gibson, Dunn & Crutcher LLP,
discloses that GD&C currently represents or has recently
represented the certain parties in interest in the Debtors' Cases
in matters wholly unrelated to the matters for which GD&C is to
be employed. Accordingly, Ms. Wasser GD&C has no connection
with, or any interest adverse to, the CMBS Debtors, their
creditors, the United States Trustee for the District of Nevada,
or any other party with an actual or potential interest in the
CMBS Debtors' Cases or their attorneys or accountants, with
respect to the matters on which GD&C is to be employed in the
Cases.
Thomas M. Friel, the executive vice president, chief accounting
officer, and treasurer of Station Casinos, Inc., filed with the
Court a declaration as further support to the Application.
GD&C is located at 333 South Grand Avenue, in Los Angeles,
California, with telephone number (213) 229-7000 and facsimile
number (213) 229-7520.
In a supplemental filing, the Debtors seek to have the employment
application heard as soon as possible. However, due to the
Court's full calendar, the next available dates at which there is
sufficient time to hear the Application are September 2, 2009 and
November 16, 2009.
The Debtors believe that it is inappropriate for them to request
that their professionals render over three months of service
before having their respective employment applications approved
by the Court. Consequently, the Debtors ask the Court to have
the notice shortened in order to allow for the Application to be
heard on September 2, 2009 at 9:30 a.m.
Bill Cossitt, Esq., trial attorney for the Assistant United
States Trustee, was contacted regarding the proposed Order
Shortening Time. Mr. Cossitt agreed to time being shortened in
light of the unique scheduling dynamics in the Cases.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477).
Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as
legal counsel in the Chapter 11 case; Brownstein Hyatt Farber
Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as
local counsel. The Debtor is also hiring Lazard Freres & Co. LLC
as investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STERLING MINING: Regains Possession of Sunshine Mine
----------------------------------------------------
Minco Silver Corporation reports that on August 14, 2009 the
United States Bankruptcy Court for the District of Idaho held that
Sunshine Precious Metals, Inc.'s continued occupation of the
Sunshine Mine is contrary to the best interest of the Sunshine
Mine and ordered the possession of the Sunshine Mine be returned
to Sterling Mining Company. Minco Silver said turnover occurred
at 12:00 pm on Wednesday, August 19, 2009.
On March 3, 2009, shortly after Sterling filed its petition in
bankruptcy, the Company in its efforts to support Sterling,
assumed a portion of Sterling's financial obligations including
but not limited to all insurance costs and obligations under the
lease dated June 6, 2003. Furthermore, Minco Silver extended to
Sterling pursuant to the terms of a post petition financing
agreement an additional US$1,000,000 line of credit to fund
Sterling's expenses and costs associated with the Sunshine Mine.
On May 15, 2009, the Court issued an interim order approving the
Post Petition Financing and announced the first of two pivotal
decisions paving the way for Sterling to regain the Sunshine Mine,
ensuring the protection of creditors from investment loss.
On May 20, 2009, the Company announced that the Court issued the
first ruling in favor of Sterling which held that the Sunshine
Lease was not terminated and granted the right to cure for any
defaults as determined by the Court.
On July 14, 2009, SNS Silver Corp. abandoned the Sunshine Mine
effectively turning over the mine to SPMI raising serious concerns
as to the state and condition of the mine due to inadequate
maintenance and the impending risk of damage from rising water.
"We are committed to the reorganization of Sterling and looking
forward to work with Sterling to care and maintain the Sunshine
Mine," commented by Dr. Ken Cai, Chairman and CEO of the Company.
As reported by the Troubled Company Reporter on August 11, 2009,
creditors Sunshine and stockholder American Reclamation Inc. ask
the court for an order dismissing Sterling Mining's Chapter 11
case.
Sunshine and American Reclamation told the Court that the filing
of the Sterling petition was an ultra vires act of a sole
officer/director, not an act approved or authorized by a properly
constituted Sterling board of directors. They said the Court is
obligated to lift the automatic stay, vacate, without prejudice,
any orders which have been entered and dismiss the pending Chapter
11 petition because, "if the District Court finds that those who
purport to act on behalf of the corporation have not been granted
authority by local law to institute the proceedings, it has no
alternative but to dismiss the petition."
About Minco Silver
Vancouver, British Columbia-based Minco Silver Corporation
(CA:MSV) -- http://www.mincosilver.ca/-- is a TSX listed company
focusing on the acquisition and development of silver dominant
projects. The Company owns 90% interest in the world class Fuwan
Silver Deposit, situated along the northeast margin of the highly
prospective Fuwan Silver Belt.
About Sterling Mining
Based in Coeur d'Alene, Idaho, Sterling Mining Company (OTCBB:SRLM
and FSE:SMX) -- http://www.SterlingMining.com/-- is a mineral
resource development and exploration company. The company has a
long term lease on the Sunshine Mine in North Idaho's Coeur
d'Alene Mining District. The Sunshine Mine is comprised of 5,930
patented and unpatented acres, and historically produced over
360 million ounces of silver from 1884 until its closure in early
2001. Sterling Mining leased the Sunshine Mine in June 2003,
along with a mill, extensive mining infrastructure and equipment,
a large land package, and a database encompassing a long history
of exploration, development and production.
As of September 30, 2008, Sterling Mining had $31.9 million in
total assets, and $13.2 million in total current liabilities and
$1.6 million in total long-term liabilities. In its schedules,
the Debtor listed total assets of $11,706,761 and total debts of
$14,159,010.
Sterling Mining filed for bankruptcy protection on March 3, 2009
(Bankr. D. Idaho Case No. 09-20178). Bruce A. Anderson, Esq., at
Elsaesser Jarzabek Anderson Marks Elliott & McHugh, Chartered
represents the Debtor as counsel.
SURFECT HOLDINGS: Decides to Liquidate Under Chapter 7
------------------------------------------------------
Surfect Holdings, Inc. and its wholly owned subsidiary, Surfect
Technologies, Inc., each filed on August 17, 2009, a voluntary
petition for liquidation under Chapter 7 of the United States
Bankruptcy Code in the United States Bankruptcy Court for the
District of Arizona (Case No. 09-19665).
The Company says it has been unable to secure additional funding
to continue operations.
The Company had total assets of $1,254,433 against debts of
$527,241 as of Dec. 31, 2008.
Surfect Holdings provided advanced metallization, interconnect and
module process and tool solutions for Solar Cell, LED and power
management applications. Its Solar Smart Solutions(TM) are
designed to help producers of solar cells and modules lower their
production costs and achieve greater cell and module efficiency.
TOR MINERALS: Needs Capital from New Lender to Keep Going Concern
-----------------------------------------------------------------
TOR Minerals International, Inc., posted a net loss of $277,000
for six months ended June 30, 2009, compared with a net loss of
$927,000 for the same period in 2008.
At June 30, 2009, the Company's balance sheet showed total assets
of $34.66 million, total liabilities of $12.18 million and
shareholders' equity of $22.48 million.
The Company said that there is substantial doubt about its ability
to continue as a going concern. The Company added that its
ability to continue to operate as a going concern is dependent on
its ability to successfully establish a corporate lending
relationship with a new financial institution for the US
operation, and raise sufficient new capital and improve its
operating cash flows to a sufficient level.
The Company related that it has significant borrowings which
require, among other things, compliance with certain financial
covenants, specifically a Consolidated Fixed Charge Ratio and a
Consolidated Funded Debt to EBITDA Ratio, on a quarterly basis.
As a result of the operating losses incurred throughout 2008 and
the first quarter of 2009, the Company was not in compliance with
these ratio covenants under its US Credit Agreement with Bank of
America, N.A. as of Dec. 31, 2008, and March 31, 2009. The
Company amended the Credit Agreement with the Bank. As a result,
all of the Company's debt owed to the Bank matures on Oct. 1,
2009.
A full-text copy of the Company's Form 10-Q is available for free
at http://ResearchArchives.com/t/s?4240
TOR Minerals International, Inc. (NASDAQ: TORM) is a worldwide
specialty chemical company engaged in the business of
manufacturing and marketing mineral products for use as pigments,
pigment extenders and flame retardants used in the manufacture of
paints, industrial coatings, plastics, catalysts and solid surface
applications. The Company's U.S. manufacturing plant, located in
Corpus Christi, Texas, is situated on the north side of the Corpus
Christi Ship Channel and has its own dock frontage at the plant.
The Company also utilizes the Bulk Terminal, operated by the Port
of Corpus Christi Authority, to discharge bulk shipments of
synthetic rutile and Barite from cargo vessels directly into
trucks for delivery to its plant.
TRIBUNE CO: Finalizing Deal to Sell Cubs to Rickets Family
----------------------------------------------------------
Tribune Co. is expected to finalize an agreement to sell the
Chicago Cubs baseball team to the family of Thomas Ricketts,
chairman of Incapital LLC, Crain's reported, citing a person
familiar with the transaction. The parties have been working to
formalize terms of a limited partnership between the Ricketts
family and Tribune, which is retaining a 5% stake in the franchise
to avoid a huge tax hit from the sale, the report said.
That agreement likely will be inked by Monday, the same person
said, preventing Tribune from pursuing deals with other bidding
groups. The sale requires approval from the Major League Baseball
and the Bankruptcy Court.
According to Crain's, Mr. Ricketts' tentative $900-million deal
with Tribune to buy the Cubs, Wrigley Field and a 25% stake in
Comcast SportsNet, struck in January, was thrown into question
last month when Tribune re-opened talks with runner-up bidder Marc
Utay, a Chicago-area native and private-equity investor in New
York.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-
13141). The Debtors proposed Sidley Austion LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of December 8, 2008, the Debtors have $7,604,195,000 in total
assets and $12,972,541,148 in total debts.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIPLE CROWN: Amends Second Lien Senior Secured Credit Agreement
----------------------------------------------------------------
Triple Crown Media, Inc., on March 31, 2009, entered into
Amendment No. 5 to its Second Lien Senior Secured Credit Agreement
and Note by and among Triple Crown Media, LLC as Borrower; the
Company as Parent and Guarantor; Wilmington Trust FSB as
Administrative Agent and Collateral Agent; BR Acquisition Corp.,
BR Holding, Inc., DataSouth Computer Corporation, Gray Publishing,
LLC and Capital Sports Properties, Inc. as Guarantors; Wachovia
Bank, National Association, as administrative agent for lenders
party to the First Lien Facilities; and Global Leveraged Capital
Credit Opportunity Fund I, GoldenTree 2004 Trust, GoldenTree
Capital Solutions Fund Financing, GoldenTree Capital Solutions
Offshore Fund Financing, GoldenTree Capital Opportunities, LP,
GoldenTree MultiStrategy Financing, Ltd., Greyrock CDO, Ltd.,
Landmark III CDO Limited, Landmark IV CDO Limited, Landmark V CDO
Limited, Landmark VI CDO Limited, and Landmark VII CDO Limited as
Lenders.
Pursuant to the Amendment to the Second Lien, the Company was
required -- among other things -- to take certain action within
120 days after the effective date of the amendment, including
without limitation, the issuance of certain warrants to the
lenders under the Second Lien Credit Agreement, the execution of
certain equity agreements with management, and steps necessary to
result in the Company no longer being required to file periodic
reports with the SEC under the Securities and Exchange Act of
1934.
On July 27, 2009, the Company entered into an agreement with the
lenders under the Second Lien Credit Agreement extending the
deadline for the Company to comply with the requirements of
Sections 8-10 of the Amendment to the Second Lien through
August 7, 2009. On August 6, and again on August 11 and 14, the
Company entered into agreements further extending this deadline
through August 18.
In May 2009, the Company reported net loss of $1,844,000 for the
three months ended March 31, 2009, and net loss of $4,731,000 for
the nine months ended March 31, 2009.
As of March 31, 2009, the Company had $36,431,000 in total assets;
and $88,296,000 in total liabilities and $17,581,000 in Series A
redeemable, convertible preferred stock; resulting in $69,446,000
in stockholders' deficit.
About Triple Crown
Headquartered in Lawrenceville, Georgia, Triple Crown Media Inc.
(Nasdaq: TCMI) -- http://triplecrownmedia.com/-- owns and
operates six daily newspapers and one weekly newspaper in Georgia.
As of December 31, 2008, the Company had negative working capital
of roughly $68 million and it failed to meet certain financial
loan covenants contained in its loan agreements. On January 3,
2009, subsequent to the quarter ended December 31, 2008, the
Company failed to make a $1.1 million interest payment, which
constitutes an additional violation of its loan covenants. As a
result of not being in compliance with its loan facility covenants
as of December 31, 2008, the Company classified all of its loan
facility debt as a current liability to reflect the option its
lenders have to call its debt at any time.
"These factors raise substantial doubt as to our ability to
continue as a going concern," Mark G. Meikle, executive vice
president and chief financial officer, said.
TRONOX INC: Anadarko & Kerr-McGee Want Case Dismissed
-----------------------------------------------------
Anadarko Petroleum Corporation and Kerr-McGee Corporation ask the
U.S. Bankruptcy Court for the Southern District of New York to
dismiss each of the claims asserted by Tronox Incorporated,
Tronox Worldwide LLC, formerly known as Kerr-McGee Chemical
Worldwide LLC, and Tronox LLC, formerly known as Kerr-McGee
Chemical LLC.
The adversary proceeding is the Debtors' attempt to rewrite
history to blame the Debtors' financial condition and foist their
environmental and other liabilities on Kerr-McGee and Anadarko,
Lydia Protopapas, Esq., at Weil, Gotshal & Manges LLP, in
Houston, Texas, argues on behalf of Anadarko and Kerr-McGee.
Ms. Protopapas points out that the gravamen of the complaint is a
so-called grand "scheme" by Anadarko and Kerr-McGee to set the
Debtors up for failure. The "scheme" allegations, however, are
insufficient as a matter of law, she asserts. Not only are they
impermissibly conclusory, they are implausible and do not comport
with reality, she complains.
Furthermore, Ms. Protopapas points out, throughout the Complaint,
the three distinct corporate plaintiffs are impermissibly treated
as one single "Tronox" entity; the two independent corporate
defendants are improperly lumped together as one; and numerous
transactions among many different corporate entities spanning a
period of decades are impermissibly consolidated and poorly
defined in an attempt to bring time-barred transfers into play.
Use of these strategies in the Complaint makes the allegations
not only misleading, but insufficient as a matter of law, Ms.
Protopapas argues.
In addition, Ms. Protopapas complains that the amounts Tronox
Inc. paid on account of its environmental liabilities were
entirely consistent with the earlier disclosures of the
liabilities -- made by both Kerr-McGee before the Tronox Inc.
initial public offering and by Tronox Inc. itself afterwards.
While the Debtors now attempt to pinpoint historic environmental
liabilities as the root of Tronox Inc.'s failure, it was only
after Tronox Inc. filed for bankruptcy that it began to blame its
deteriorating financial condition on these alleged liabilities,
she points out.
The Debtors' allegation of a massive fraud on the Debtors'
creditors was purportedly undertaken through a hodgepodge of
unspecified fraudulent transfers and common law torts. These
accusations, Ms. Protopapas asserts, are a clear effort to avoid
the more likely explanation reached after considering the impact
of rising costs, reduced demand, non-functioning credit and
financial markets, and the global economic crisis as a whole on
the Debtors' business.
For the same reasons that the Debtors' Complaint should be
dismissed as to its actual and constructive fraudulent transfer
claims, the United States' "Complaint in Intervention" in the
adversary proceeding should also be dismissed, Anadarko and Kerr-
McGee asserts. Ms. Protopapas asserts that the time has come for
the Court to decide whether the U.S. Government may pursue
fraudulent transfer claims against them.
To improve its position over all other creditors in the Chapter
11 cases, the Government has asserted its own fraudulent transfer
claims against Defendants under the Federal Debt Collection
Practices Act, Ms. Protopapas notes. These claims mirror the
fraudulent transfer claims already being prosecuted by the
Debtors in the Adversary Proceeding under the Oklahoma Uniform
Fraudulent Transfer Act and are based on the same implausible
fraudulent "scheme" and deficient fact allegations contained in
the Debtors' Complaint, she contends.
Parties Dispute over Revised Stipulation Order
In a letter submitted to the Court on August 11, 2009, David J.
Zott, P.C., Esq., at Kirkland &. Ellis LLP, Chicago, Illinois,
relates that at the July 14, 2009 hearing, the Court asked the
Debtors to settle an order approving the revised stipulation with
respect to the Federal Debt Collection Procedures Act. The Court
advised that the order approving the stipulation should include
language preserving Anadarko and Kerr-McGee's rights as well as
the Court's jurisdiction to construe the Stipulation and modify
it for cause later in the Case.
While the Debtors and the other parties to the Stipulation agreed
to the proposed order, the Stipulation Parties -- composed of the
Debtors, the United States of America, the Official Committee of
Unsecured Creditors, the Official Committee Of Equity Security
Holders, the DIP Agent, and the Prepetition Agent -- were unable
to reach an agreement on the proposed order with Anadarko and
Kerr-McGee. The Stipulation Parties believe that their proposed
order addresses the concerns expressed by the Court at the July
14 hearing in a clear and concise manner, and therefore it should
be approved.
Although the Debtors asked that Anadarko and Kerr-McGee jointly
file its competing proposed order along with the Stipulation
Parties' proposed order, Anadarko and Kerr-McGee declined to
jointly file, Mr. Zott tells the Court. The Debtors expect that
Anadarko and Kerr-McGee will separately file a competing proposed
order.
In a letter dated August 11, 2009, Jason W. Billeck, Esq., at
Weil, Gotshal & Manges LLP, Houston, Texas, says because the
Stipulation Parties did not submit a proposed order approving the
Revised Stipulation and Order that complies with the Court's
instructions and the representations of Debtors' counsel,
Anadarko and Kerr-McGee submitted an alternative order approving
the Stipulation.
Mr. Billeck relates that despite the Court's instructions and the
Debtors' representations, the Stipulation Parties first submitted
to Anadarko a proposed order that ambiguously stated that the
Stipulation was without prejudice to Anadarko's rights, except as
expressly provided in the Stipulation. Anadarko objected and
submitted revised language based on the Court's instructions.
The Stipulation Parties substantially rejected Anadarko's
suggestions, Mr. Billeck says. Instead, they submitted to
Anadarko, and then to the Court, a revised proposed order
approving the Stipulation that impacts Anadarko's right and,
therefore, binds Anadarko impairing its rights by barring it from
asserting that the Stipulation Parties waived certain rights by
entering the Stipulation. Accordingly, Anadarko asks the Court
to reject the Stipulation Parties' proposed order and approve its
proposed order instead.
Debtors Serve Subpoena
The Debtors inform the Court that they intend to serve a subpoena
to Sarah Loomis Cave, Esq., Hughes Hubbard & Reed LLP, on behalf
of James W. Giddens, SIPC for Lehman Brothers, Inc. The Debtors
are asking from Mr. Giddens documents and communications
concerning, among other things, the nature, scope, magnitude, or
total potential cost of the Legacy Liabilities.
Lehman Brothers Inc., including JP Morgan Securities, Inc., is
the underwriter of the November 28, 2005 initial public offering
of Tronox Class A shares.
Lehman Brothers Inc., together with Credit Suisse, also are
arrangers and bookrunners to the $450,000,000 Credit Agreement
among Tronox Incorporated, Tronox Worldwide LLC, as borrower, the
several lenders from time to time parties hereto, ABN Amro Bank
N.V., as syndication agent, JPMorgan Chase Bank, N.A. and
Citicorp USA, Inc. as co-documentation agents, and Lehman
Commercial Paper Inc., as administrative Agent, dated as of
November 28, 2005.
About Tronox Inc.
Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes. Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products. The Company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries. In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.
Tronox has $1.6 billion in total assets, including $646.9 million
in current assets, as at September 30, 2008. The Company has
$881.6 million in current debts and $355.9 million in total
noncurrent debts.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.
N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases. The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.
Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B. Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK. As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of class
B common stock.
Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRONOX INC: Barroway Topaz Files Shareholders Class Action
----------------------------------------------------------
The law firm of Barroway Topaz Kessler Meltzer & Check, LLP,
announced that a class action lawsuit was filed in the United
States District Court for the Southern District of New York on
behalf of purchasers of Tronox, Inc., between November 28, 2005,
and January 12, 2009, inclusive.
If you wish to discuss this action or have any questions
concerning this notice or your rights or interests with respect
to these matters, please contact Barroway Topaz Kessler Meltzer &
Check, LLP (Darren J. Check, Esq., or David M. Promisloff, Esq.)
toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at
info@btkmc.com.
The Complaint charges Kerr-McGee Corporation, Anadarko Petroleum
Corporation and certain of Kerr-McGee and Tronox's officers and
directors with violations of the Securities Exchange Act of 1934.
Tronox is not named in this action as a defendant because it filed
for bankruptcy protection in January 2009. Tronox is a producer
and marketer of titanium dioxide pigment (an inorganic white
pigment used in paint, coatings, plastics, paper and other
products).
Tronox was spun-off from Kerr-McGee in a two-step transaction. In
November 2005, Kerr McGee sold 17.5 million shares of Tronox Class
A shares in an initial public offering for $14.00 per share
generating proceeds for Kerr-McGee of $225 million. After the
IPO, Kerr-McGee distributed the balance of the shares that it
owned as Class B shares to its shareholders as a dividend.
More specifically, the Complaint alleges that the Company failed
to disclose and misrepresented the following material adverse
facts which were known to defendants or recklessly disregarded by
them: (1) that the Company's reserves for environmental
liabilities failed to include reserves for other identified, but
undisclosed sites; (2) that the Company faced extraordinarily high
exposure regarding its environmental liabilities, which it failed
to fully disclose to its shareholders; (3) that the Company's
reserves for environmental liabilities were wholly inadequate; (4)
that the Company would face extremely high tort liabilities,
particularly for wood treatment claims; (5) that the Company's
financial statements and, specifically the methodology used to
calculate the Company's environmental liabilities reserve, were
not prepared in accordance with Generally Accepted Accounting
Principles; (6) that the Company lacked adequate internal and
financial controls; (7) that, as a result of the foregoing, the
Company's financial statements were materially false and
misleading at all relevant times; and (8) that, as a result of the
foregoing, defendants' statements about the Company's financial
well-being and future business prospects were lacking in any
reasonable basis when made. As a result of defendants' wrongful
acts and omissions, and the precipitous decline in the market
value of the Company's securities, Plaintiff and other Class
Members have suffered significant losses and damages.
Plaintiff seeks to recover damages on behalf of class members and
is represented by the law firm of Barroway Topaz Kessler Meltzer &
Check which prosecutes class actions in both state and federal
courts throughout the country. Barroway Topaz Kessler Meltzer &
Check is a driving force behind corporate governance reform, and
has recovered billions of dollars on behalf of institutional and
individual investors from the United States and around the world.
For more information about Barroway Topaz Kessler Meltzer & Check,
or for additional information about participating in this action,
please visit http://www.btkmc.com/
If you are a member of the class described above, you may, not
later than September 8, 2009, move the Court to serve as lead
plaintiff of the class, if you so choose. A lead plaintiff is a
representative party that acts on behalf of other class members in
directing the litigation. In order to be appointed lead plaintiff,
the Court must determine that the class member's claim is typical
of the claims of other class members, and that the class member
will adequately represent the class. Your ability to share in any
recovery is not, however, affected by the decision whether or not
to serve as a lead plaintiff. Any member of the purported class
may move the court to serve as lead plaintiff through counsel of
their choice, or may choose to do nothing and remain an absent
class member.
About Tronox Inc.
Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes. Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products. The Company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries. In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.
Tronox has $1.6 billion in total assets, including $646.9 million
in current assets, as at September 30, 2008. The Company has
$881.6 million in current debts and $355.9 million in total
noncurrent debts.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.
N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases. The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.
Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B. Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK. As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of class
B common stock.
Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRONOX INC: Delays Filing Of Q2 Financial Results
-------------------------------------------------
Tronox Incorporated disclosed with the U.S. Securities and
Exchange Commission that it needs additional time to file its
Quarterly Report for the period ended June 30, 2009, due to the
Company's continuing review of its environmental and other
contingent liability reserves.
The Company believes that additional time is necessary for a more
thorough review of financial and other disclosures regarding
environmental and other reserves.
The Company expects to report net sales of $258.8 million for the
quarter ended June 30, 2009, compared to net sales of
$333.9 million for the quarter ended June 30, 2008. Gross margin
is expected to be $27.2 million for the quarter ended June 30,
2009, compared to gross margin of $8.3 million for the quarter
ended June 30, 2008. The amounts reported include classification
of the operating results associated with the Company's German
subsidiaries as discontinued operations for the current quarter
and the corresponding quarter for the prior fiscal year.
The Company continues to operate its businesses and manage its
properties as debtors in possession under the jurisdiction of the
Bankruptcy Court and in accordance with the applicable provisions
of the Bankruptcy Code. The Company expects to report
reorganization expenses of $9.7 million for the quarter ended
June 30, 2009.
As previously reported, the Company's German subsidiaries, Tronox
GmbH and its wholly owned subsidiary, Tronox Pigments GmbH, filed
applications with the Insolvency Court in Krefeld, Germany, to
commence insolvency proceedings.
The Company relinquished control over these subsidiaries to the
Insolvency Court and as a result, has deconsolidated the assets
and liabilities of the subsidiaries from its financial statements
as of March 13, 2009. In conjunction with the loss of control,
operating results associated with the German subsidiaries have
been classified as discontinued operations. The Company will
report income on discontinued operations, net of tax, of
$0.1 million for the quarter ended June 30, 2009, and a loss from
discontinued operations, net of tax, of $18.1 million, for the
corresponding quarter in the prior year.
About Tronox Inc.
Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes. Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products. The Company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries. In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.
Tronox has $1.6 billion in total assets, including $646.9 million
in current assets, as at September 30, 2008. The Company has
$881.6 million in current debts and $355.9 million in total
noncurrent debts.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.
N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases. The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.
Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B. Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK. As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of class
B common stock.
Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRONOX INC: Has Many Potential Buyers of Assets, ICIS Says
----------------------------------------------------------
Tronox has no lack of potential suitors for its assets, according
an August 11, 2009 report by ICIS News.
Tronox is seeking a bidder for its plants and operating assets.
ICIS News pointed out that U.S. company, Huntsman International
LLC, is one of the companies eyeing on Tronox's asserts.
There are several candidates to acquire Tronox's assets, "but
with the rapidly changing business and economics environment, the
negotiations tend to become more complex," ICIS News quoted an
unnamed major producer.
"Some TiO2 producers cannot and some do not desire to bid for the
whole of Tronox' assets," ICIS news quoted the producer as
saying, "but some bidders are willing to take it all. Whatever
the outcome, buyers will be faced with a narrower choice of
suppliers in the future."
ICIS said another source indicated that a foreign buyer, however,
could significantly alter the marketplace. According to ICIS
News, most attractive to foreign interests would be Tronox's two
US TiO2 plants -- in Hamilton, Mississippi, and Savannah, Georgia
-- which employ the chloride process.
Globally, Tronox produces 14 grades of TiO2 pigment using the
chloride process and 17 grades using the sulphate process.
About Tronox Inc.
Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes. Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products. The Company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries. In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.
Tronox has $1.6 billion in total assets, including $646.9 million
in current assets, as at September 30, 2008. The Company has
$881.6 million in current debts and $355.9 million in total
noncurrent debts.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.
N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases. The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.
Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B. Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK. As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of class
B common stock.
Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRONOX INC: Mt. Canaan's Wants Lift Stay to Complete Litigation
---------------------------------------------------------------
Debtor Triple S Refining Corporation filed a declaratory judgment
action against Mt. Canaan Full Gospel Church, Inc., in the United
States District Court for the Northern District of Alabama.
Mt. Canaan initiated an action against Kerr McGee Refining
Corporation; Kerr McGee Corporation; Triangle Terminal of
Birmingham, Inc.; Triangle Refineries, Inc.; Allied Energy
Corporation; Colonial Pipeline Company; and Fictitious Defendants
1 through 20 in the Circuit Court of Jefferson County, Alabama.
Mt. Canaan's Complaint alleges Alabama state law causes of action
for (i) negligence; (ii) gross negligence, recklessness, and
wantonness; (iii) trespass; (iv) nuisance; and (v) strict
liability related to massive environmental contamination on or
near its property which is located in Birmingham, Alabama. Mt.
Canaan requested a jury trial on all issues.
By this motion, Mt. Canaan asks the United States Bankruptcy
Court for the Southern District of New York to lift the automatic
stay to liquidate its claim -- that is, to complete litigation of
the State Court Action -- and to the extent a judgment is entered
against any of the Debtor-Defendants, to proceed against
insurance proceeds, if any, or to otherwise file a claim in the
Chapter 11 cases.
Jennifer B. Kimble, Esq., at Burr & Forman LLP, in Birmingham,
Alabama, relates that because litigation of Mt. Canaan's claims
against the Debtor-Defendants could proceed in the State Court
where the action is pending, requiring Mt. Canaan to also
liquidate its claims against the Debtor-Defendants in the
Bankruptcy Court would result in duplicative litigation.
Additionally, Ms. Kimble asserts, since the same legal issues
would be present in both the State Court Action and the
liquidation of Mt. Canaan's claim in the Bankruptcy Court, there
is the potential for inconsistent results. It is also likely
that the State Court's familiarity with the case, as well as
applicable law, would enable the State Court to completely
resolve the dispute, she adds.
About Tronox Inc.
Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes. Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products. The Company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries. In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.
Tronox has $1.6 billion in total assets, including $646.9 million
in current assets, as at September 30, 2008. The Company has
$881.6 million in current debts and $355.9 million in total
noncurrent debts.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.
N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases. The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.
Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B. Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK. As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of class
B common stock.
Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
UBS AG: Inks Settlement Pact With IRS Regarding Summons
-------------------------------------------------------
UBS AG reported the formal signing of a settlement agreement with
the US Internal Revenue Service regarding the John Doe summons
issued on July 21, 2008. The summons has been the subject of a
civil action in the United States District Court of the Southern
District of Florida.
The agreement does not call for any payment by UBS. It resolves
all issues relating to the alleged breaches of UBS's Qualified
Intermediary Agreement with the IRS as set forth in the Notice of
Default dated May 15, 2008.
As part of the settlement, the parties will promptly file a
stipulation with the court to dismiss the enforcement action
relating to the John Doe summons.
In accordance with the separate agreement between the U.S. and
Switzerland, the IRS will submit a request for administrative
assistance pursuant to the existing US-Switzerland Double Taxation
Treaty to the Swiss Federal Tax Administration (SFTA). This
request will seek information relating to certain accounts of U.S.
persons maintained at UBS in Switzerland. It is expected that
approximately 4,450 accounts will be provided to the SFTA in
response to this treaty request. The SFTA will decide which of
those accounts should be disclosed to the IRS, and such decisions
will be subject to judicial review.
UBS is required to provide information on the accounts covered by
the treaty request to the SFTA and to send notices to affected
U.S. persons encouraging them to take advantage of the IRS's
voluntary disclosure practice and to instruct UBS to send their
account information and documentation to the IRS.
The U.S. government will withdraw the John Doe summons with
prejudice as to all accounts not covered by the treaty request no
later than December 31, 2009, provided that UBS has complied with
those obligations that are required to be performed by that date.
The U.S. government will withdraw the John Doe summons with
prejudice as to the remaining accounts -- those subject to the
treaty request -- no later than August 24, 2010, upon the actual
or anticipated delivery to the IRS of information relating to
accounts covered by the treaty request that does not differ
significantly from the expected results. In addition, the summons
will be withdrawn with prejudice as to those remaining accounts if
at any time on or after January 1, 2010, the IRS has received
information relating to at least 10,000 accounts of U.S. persons
maintained at UBS in Switzerland. The sources of the information
include, in addition to the treaty request itself, the IRS's
voluntary disclosure practice, client instructions to UBS to send
account information to the IRS and the Deferred Prosecution
Agreement.
If neither of these events were to occur by August 24, 2010, the
two governments would confer and consult in order to consider
alternative mechanisms for achieving the expected levels of
account information exchange expected to occur through the treaty
request. Possible measures will not impose any financial or new,
non-financial obligations on UBS. If these efforts were not
successful, the John Doe summons could remain in place beyond
August 24, 2010, as to the portion of the accounts covered by the
treaty request that have not otherwise been disclosed to the IRS.
UBS Chairman Kaspar Villiger said, "This agreement helps resolve
one of UBS's most pressing issues. I am confident that the
agreement will allow the bank to continue moving forward to
rebuild its reputation through solid performance and client
service. UBS welcomes the fact that the information-exchange
objectives of the settlement can be achieved in a lawful manner
under the existing treaty framework between Switzerland and the
United States."
Josh Fineman and Elena Logutenkova at Bloomberg News reports that
the Swiss government said it will sell its 6 billion-franc
investment in UBS. The government gave a mandate to three Swiss
and foreign banks to sell 332.2 million UBS shares, securing a
certain minimum price, the report says, citing Peter Siegenthaler,
director of the federal finance administration.
UBS, Bloomberg relates, said that the Swiss Confederation will
waive its right to receive future coupons on the mandatory
convertible notes for a cash amount of 1.8 billion Swiss francs,
representing the present value of the future coupon payments.
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.
UCI HOLDCO: Moody's Confirms Corporate Family Rating at 'Caa1'
--------------------------------------------------------------
Moody's Investors Service confirmed the Corporate Family and
Probability of Default ratings of UCI Holdco, Inc., at Caa1.
Holdco is the ultimate parent of United Components, Inc. In a
related action, the rating of Holdco's unguaranteed senior
unsecured note was confirmed at Caa3; the rating of UCI's senior
secured term loan was confirmed at B1; and the rating of UCI's
senior subordinated notes was confirmed at Caa2. The outlook is
negative. This action concludes the review initiated on March 30,
2009.
The confirmation of Holdco's Corporate Family and Probability of
Default ratings at Caa1 reflects the company's weak credit metrics
and increased reliance on receivables factoring to support its
liquidity following expiration of its committed bank revolving
credit facility. UCI is one of North America's largest automotive
aftermarket suppliers, and holds a relatively stable position in
supplying aftermarket parts that are critical to vehicle
performance. The company's filtration products (about 42% of 2008
revenues) are largely consumables that have relatively short and
predictable replacement cycles and are somewhat resistant to
economic downturns. The company's fuel, cooling, and engine
management products (about 58% of 2008 revenues) are non-
discretionary products that are required for proper vehicle
performance, and have more stable demand patterns which offer
important revenue visibility. However, UCI has a leveraged
capital structure and faces major amortization requirements
beginning in September 2011 which, in Moody's view, will require
meaningful improvement in operating performance over the
intermediate term in order to position the company to address
these cash requirements.
The negative outlook reflects Moody's view that despite the
supportive general fundamentals of the automotive aftermarket, the
company's top line growth will continue to be pressured by shifts
in consumer spending patterns as a result of an uncertain economy.
As the domestic vehicle population is expected to increase at
slower rates, the average vehicle age should continue to increase.
Nevertheless, automotive aftermarket revenue trends will continue
to be constrained by reduced travel patterns which have pressured
passenger miles driven. UCI's restructuring actions and lower
year-over-over commodity costs are expected to help mitigate these
pressures. For the LTM period ending June 30, 2009, the company's
Debt/EBITDA (including the Holdco notes) was approximately 9.2x
using Moody's standard adjustments, and EBIT/Interest approximated
0.5x. The negative outlook also reflects Moody's view of the
additional risk of the company's decision to operate without a
committed revolving credit facility.
Moody's considers UCI's liquidity to be weak, largely driven by
the lack of a long-term committed revolving credit facility. As
of June 30, 2009, the company had $90.7 million of unrestricted
cash and cash equivalents. The company is expected to generate
positive free cash flow over the next four quarters. The previous
$75 million revolving credit facility matured in June 2009. UCI
has increased its use of factoring lines to provide additional
liquidity support, but as these programs are uncommitted they are
not viewed as a long term financing source under the liquidity
analysis. Weak Industry conditions also may pressure the
company's covenant cushions over the near-term. Alternate
liquidity is limited as the term loan facility is secured by
essentially all the tangible and intangible asset of UCI.
These ratings were confirmed:
UCI Holdco, Inc.:
-- Caa1, Corporate Family Rating;
-- Caa1, Probability of Default Rating;
-- Caa3 (LGD5, 86%), unguaranteed senior unsecured notes;
United Components, Inc.
-- B1 (LGD1, 9%), $190 million (remaining amount) guaranteed
senior secured bank term loan due 2012;
-- Caa2 (LGD4, 58%), $230 million of guaranteed senior
subordinated unsecured notes maturing 2013
The last rating action for Holdco was on March 30, 2009 when the
Corporate Family Rating was lowered to Caa1 and ratings placed
under review.
UCI, headquartered in Evansville, Indiana, is one of the larger
and more diversified companies primarily servicing the vehicle
aftermarket. The company supplies a broad range of filtration
products, fuel products cooling systems, and engine management
systems. While approximately 87% of revenues are automotive
related, UCI also services customers within the trucking, marine,
mining, construction, agricultural, and industrial vehicle
markets. Annual revenues in 2008 were approximately $880 million.
UCI is an indirect wholly owned subsidiary of UCI Holdco, Inc.,
which is a portfolio company of the Carlyle Group.
UDR INC: Sweetens Tender Offer, Moves Deadline to Improve Turnout
-----------------------------------------------------------------
Denver-based UDR, Inc., extended the early tender deadline in
respect of its cash tender offer and consent solicitation for its
8-1/2% Debentures Due September 15, 2024 (CUSIP No. 910197AC6), to
5:00 p.m., Eastern Time, on August 20, 2009, unless extended or
earlier terminated, from 5:00 p.m., Eastern Time, on August 19,
2009.
The Company had previously extended the early tender deadline from
5:00 p.m., Eastern Time, on August 17, 2009, to 5:00 p.m., Eastern
Time, on August 19. As a result of the extension of the early
tender deadline, the consent solicitation was to expire at the
Extended Early Tender Deadline on August 20.
The Company said the Early Tender Payment set forth in the Offer
to Purchase and Consent Solicitation Statement dated August 4, has
been increased from $30 per $1,000 principal amount of Notes to
$120 per $1,000 principal amount of Notes validly tendered at or
prior to the Extended Early Tender Deadline and accepted for
purchase. The increased Early Tender Payment of $120 per $1,000
principal amount of Notes will be paid to all holders who have
previously tendered their Notes if their Notes are accepted for
purchase in the Offer.
The expiration time of the Offer has been extended from
11:59 p.m., Eastern Time, on August 31, 2009, to 11:59 p.m.,
Eastern Time, on September 3, 2009, unless extended or earlier
terminated. Holders of Notes may tender their Notes until the
Extended Expiration Time.
The Offer Consideration of $980 per $1,000 principal amount of
Notes validly tendered and accepted for purchase, as set forth in
the Offer to Purchase, has not been changed. Therefore, holders
who validly tender their Notes and deliver their consents at or
prior to the Extended Early Tender Deadline will receive the
increased Total Consideration of $1,100 per $1,000 principal
amount of Notes tendered, which includes the increased Early
Tender Payment of $120 per $1,000 principal amount of Notes, if
their tendered Notes are accepted for purchase. However, holders
who validly tender their Notes and deliver their consents after
the Extended Early Tender Deadline but by the Extended Expiration
Time will receive $980 per $1,000 principal amount of Notes if
their Notes are accepted for purchase, and they will not receive
an Early Tender Payment with respect to their tendered Notes.
As of 5:00 P.M., Eastern Time, on August 19, 2009, valid tenders
and consents had been received from holders of $17,949,000 in
aggregate principal amount of Notes, representing roughly 33.79%
of the outstanding Notes. Because the withdrawal deadline for the
Offer has already expired, Notes previously tendered and consents
previously delivered cannot be withdrawn.
Except as set forth, all other terms of the Offer and Solicitation
remain unchanged.
The complete terms and conditions of the Offer and Solicitation
are described in the Offer to Purchase dated August 4, 2009,
copies of which were previously sent to holders of the Notes.
Copies of the Offer to Purchase and letter of transmittal may be
obtained by contacting Global Bondholders Services Corporation as
Information Agent at (866) 924-2200 (U.S. toll-free) or (212) 430-
3774. The Company has engaged Wells Fargo Securities to serve as
Dealer Manager for the tender offer. Questions regarding the
tender offer and consent solicitation may be directed to Wells
Fargo Securities at (866) 309-6316 (U.S. toll-free) or (704) 715-
8341.
Completion of the Offer is subject to satisfaction or waiver by
the Company of certain conditions, as described in the Offer to
Purchase.
About UDR Inc.
UDR, Inc. -- http://www.udr.com/-- an S&P 400 company, is a
multifamily real estate investment trust that delivers returns by
successfully managing, buying, selling, developing and
redeveloping attractive real estate properties in targeted U.S.
markets. As of August 1, 2009, UDR owned 44,990 apartment homes
and had 1,916 homes under development. For over 37 years, UDR has
delivered long-term value to shareholders, the best standard of
service to residents, and the highest quality experience for
associates.
UNIFI INC: Inks Change of Control Agreements with Executives
------------------------------------------------------------
Unifi, Inc., on August 14, 2009, entered into Change of Control
Agreements with William L. Jasper, the Company's President and
Chief Executive Officer, R. Roger Berrier, Jr., the Company's
Executive Vice President of Sales, Marketing and Asian Operations,
Thomas H. Caudle, Jr., the Company's Vice President of
Manufacturing, Charles F. McCoy, the Company's Vice President,
Secretary, General Counsel, Chief Risk Officer and Corporate
Governance & Compliance Officer, and Ronald L. Smith, the
Company's Vice President and Chief Financial Officer.
The Agreements are effective until the earlier of two years from
the date of a change of control, the termination of the Officer
prior to the change of control, or if no change of control has
occurred, December 31, 2011. The Agreements provide that if an
Officer's employment is terminated involuntarily, other than by
death or disability or cause, or voluntarily for good reason,
after a change in control of the Company, the Officer will receive
certain benefits.
The present value of the benefits will be 2.99 times the average
total compensation paid to the Officer by the Company during the
five calendar years -- or the period of the Officer's employment
with the Company if the Officer has been employed with the Company
for less than five calendar years -- preceding the change of
control of the Company, subject to reduction to the extent any
such payments or benefits constitute "parachute payments" within
the meaning of Section 280G of the Internal Revenue Code, to an
amount such that no benefit payment shall be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code, as
determined by the Company's independent certified public
accountants, whose decision shall be binding upon the Company and
the Officer. The benefits will be paid to the Officer in equal
installments over a 24-month period, provided that the payment of
such benefit may be subject to delay to comply with Section 409A
of the Internal Revenue Code.
A change of control is deemed to occur if, among other things, (i)
there shall be consummated any consolidation or merger of the
Company in which the Company is not the surviving entity or the
sale of all or substantially all of the assets of the Company,
(ii) the shareholders of the Company have approved any plan or
proposal for the liquidation or dissolution of the Company, (iii)
any person acquires 20% or more of the outstanding voting stock of
the Company, or (iv) if there is a change in the majority of the
board of directors under specified conditions within a two-year
period.
On July 29, 2009, the Company reported net loss for the fiscal
fourth quarter ended June 28, 2009, of $9.5 million or $0.15 per
share, which compares to net income of $771,000 or $0.01 per share
for the prior year June quarter. Net loss for fiscal year 2009
was $52.3 million or $0.85 per share compared to a net loss of
$16.2 million or $0.27 per share for the prior fiscal year.
As of June 28, 2009, the Company had total assets of
$473.6 million; and total current liabilities of $49.9 million,
long-term debt and other liabilities of $181.5 million, and
deferred income taxes of $416,000.
Unifi, Inc. (NYSE: UFI) -- http://www.unifi.com/and
http://www.repreve.com/-- is a diversified producer and processor
of multi-filament polyester and nylon textured yarns and related
raw materials. The Company adds value to the supply chain and
enhances consumer demand for its products through the development
and introduction of branded yarns that provide unique performance,
comfort and aesthetic advantages. Key Unifi brands include, but
are not limited to: AIO(R) - all-in-one performance yarns,
SORBTEK(R), A.M.Y.(R), MYNX(R) UV, REPREVE(R), REFLEXX(R),
MICROVISTA(R) and SATURA(R). Unifi's yarns and brands are readily
found in home furnishings, apparel, legwear, and sewing thread, as
well as industrial, automotive, military, and medical
applications.
Unifi Inc. continues to carry Moody's Investor Service's Caa2
senior secured debt rating which was placed in December 2007.
UTGR INC: Must Provide More Financial Info to Greyhound Assoc.
--------------------------------------------------------------
The Associated Press reports that the Hon. Arthur Votolato of the
U.S. Bankruptcy Court for the District of Rhode Island has ruled
that UTGR Inc.'s Twin River to provide financial information to
the Rhode Island Greyhound Owners Association.
According to The AP, UTGR wants to end its contract with Rhode
Island Greyhound, because it causes more than $10 million in
annual losses. The contract, the report states, requires a
minimum of 125 days of live racing.
The AP says that UTGR wants to sign a new contract with greyhound
kennel owners willing to race their dogs for less money, but the
greyhound owners said that they need financial information from
Twin River to defend their contract.
UTGR Inc. is the operator of the Twin River racetrack-casino in
Lincoln, Rhode Island. UTGR filed for Chapter 11 on June 23
(Bankr. D. Rhode Island Case No. 09-12418). The Debtors selected
Jager Smith P.C. as counsel, and Winograd, Shine & Zacks P.C. as
their co-counsel. It also hired Zolfo Cooper LLC as bankruptcy
consultants and special financial advisors. In its bankruptcy
petition, the Company estimated assets of less than $500 million
and debt exceeding $500 million.
VALENCE TECHNOLOGY: Has $6.1MM Net Loss for June 30 Quarter
-----------------------------------------------------------
Valence Technology, Inc., reported financial results for its
fiscal 2010 first quarter ended June 30, 2009, compared to 2009
include:
-- Revenue of $4.7 million compared to $11.0 million.
-- Gross margin of $807,000 compared to a negative $26,000.
-- Operating expenses of $5.8 million compared to
$4.6 million.
-- Operating loss of $5.0 million compared to $4.6 million.
-- Net loss for the 2010 first quarter of $6.1 million
compared to $5.5 million for the same period a year ago.
-- Net loss available to common shareholders of $6.2 million
or $0.05 per share, compared to a loss of $5.6 million or
$0.05 per share.
As of June 30, 2009, the Company had $27.0 million in total
assets; and total current liabilities of $8.0 million, long-term
interest payable to stockholder of $25.1 million, long-term debt,
net of debt discount, of $19.5 million, long-term debt to
stockholder, net of debt discount, of $34.7 million, other long-
term liabilities of $142,000, and redeemable convertible preferred
stock of $8.6 million; resulting in $69.2 million of stockholders'
deficit.
As expected, first quarter fiscal 2010 revenue declined compared
to the same period last year. The $6.3 million decline was mainly
due to a slowdown in global economic conditions, which resulted in
lower overall sales of large format battery systems to Segway and
the Tanfield Group, compared to the same period last year.
However, the customer revenue mix was broader for the recent
quarter and included sales to Brammo, ISE and Lishen.
Gross margin as a percentage of sales increased in the first
quarter of fiscal 2010 to 17.1% compared to a negative margin in
the first quarter of fiscal 2009. Last year's quarter included a
$1.5 million adjustment related to discontinuance of the N-Charge
product line. The Company's operating loss widened by $300,000
due to higher operating expenses, including higher litigation
costs incurred to protect and defend the company's patent estate.
In its Form 10-Q report, the Company noted it has incurred
operating losses each year since its inception in 1989 and had an
accumulated deficit of $563.9 million as of June 30, 2009. For
the three-month periods ended June 30, 2009 and June 30, 2008, the
Company sustained net losses available to common stockholders of
$6.2 and $5.6 million, respectively. These factors, among others,
indicate that the Company may be unable to continue as a going
concern for a reasonable period of time. The Company's ability to
continue as a going concern is contingent upon its ability to meet
its liquidity requirements. If the Company is unable to arrange
for debt or equity financing on favorable terms or at all, the
Company's ability to continue as a going concern is uncertain.
At June 30, 2009, the Company's principal sources of liquidity
were cash and cash equivalents of $1.7 million. The Company does
not expect that its cash and cash equivalents will be sufficient
to fund its operating and capital needs for the next three to six
months following June 30, 2009, nor does the Company anticipate
product sales during fiscal 2010 will be sufficient to cover its
operating expenses. Historically, the Company has relied upon
management's ability to periodically arrange for additional equity
or debt financing to meet the Company's liquidity requirements.
Unless the Company's product sales are greater than management
currently forecasts or there are other changes to the Company's
business plan, the Company will need to arrange for additional
financing within the next three to six months to fund operating
and capital needs. This financing could take the form of debt or
equity. Given the Company's historical operating results and the
amount of existing debt, as well as the other factors, the Company
may not be able to arrange for debt or equity financing from third
parties on favorable terms or at all.
The Company's cash requirements may vary materially from those now
planned because of changes in the Company's operations including
the failure to achieve expected revenues, greater than expected
expenses, changes in OEM relationships, market conditions, the
failure to timely realize the Company's product development goals,
and other adverse developments. These events could have a
negative impact on the Company's available liquidity sources
during the next 12 months.
"We started our new fiscal year with progress in a number of
areas," commented Robert L. Kanode, president and CEO of Valence
Technology in a news statement. "During the quarter, we signed
new supply and MOU agreements with Oxygen, Siemens and S&C
Electric as we strengthen our focus on top tier automotive and
stationary customers. While results for the quarter were expected
to be lower due to overall economic conditions, we believe that
our technology and manufacturing experience positions Valence to
capture the upside as demand improves early next year. Our
expertise in the large format market has enabled discussions with
many motive and utility customers who also indicate expanded
budgets next year. In the interim, we continue to manage our
resources efficiently."
"While grant money from the Department of Energy is unavailable to
us at this time, our loan application submitted in March 2009 to
establish a U.S. manufacturing plant has now been deemed
substantially complete -- a key step in the application process.
We are encouraged about the possibility of federal funding for
construction of a new plant which would provide new jobs and
increased supply of alternative energy solutions for the U.S.
markets. However, our long term plans continue to focus on
improving sales in both U.S. and European markets using our
existing manufacturing capability as a platform to expand as
demand dictates."
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?4260
Wm Smith At Market Issuance Sales Agreement
On July 2, 2009, Valence entered into an Amendment No. 1 to At
Market Issuance Sales Agreement with Wm Smith & Co., as sales
agent. The Amendment amended the terms of that certain At Market
Issuance Sales Agreement dated February 22, 2008, between the
Company and the Sales Agent.
The Amendment provides, among other things, that the number of
shares of the Company's common stock which may be issued and sold
in a series of transactions over time as the Company may direct
through the Sales Agent is increased from 5,000,000 to 10,000,000
shares. As of July 6, the Company has sold 4,621,448 shares of
its common stock under the Sales Agreement and 5,378,552 shares
remain available for issuance and sale under the Sales Agreement,
as modified by the Amendment.
Sales of shares of the Company's common stock, if any, may be made
in privately negotiated transactions or any other method permitted
by law, including sales deemed to be an "at the market" offering
as defined in Rule 415 under the Securities Act of 1933, which
includes sales made directly on The NASDAQ Stock Market, the
existing trading market for the Company's common stock, or sales
made to or through a market maker other than on an exchange. The
Sales Agent will make all sales on a best efforts basis using
commercially reasonable efforts consistent with its normal trading
and sales practices, on mutually agreed terms between the Sales
Agent and the Company.
Unless the Company and the Sales Agent agree to a lesser amount
with respect to certain persons or classes of persons, the
compensation to the Sales Agent for sales of common stock sold
pursuant to the Sales Agreement will be 6.0% of the gross proceeds
of the sales price per share.
On July 6, the Company filed with the Securities and Exchange
Commission Prospectus Supplement No. 2 relating to the issuance
and sale of up to 10,000,000 shares of the Company's common stock
from time to time through sales agent, William Smith & Co. The
sales, if any, will be made pursuant to the terms of an At Market
Issuance Sales Agreement. A copy of the Prospectus Supplement is
available at no charge at http://ResearchArchives.com/t/s?4262
Annual Meeting of Stockholders
Valence will hold its Annual Meeting of Stockholders at 9:00 a.m.
Central Daylight Time on September 8, 2009. Venue will be Valence
Technology Conference Room, 12303 Technology Blvd., Suite 950
Austin, Texas.
Items of business are:
(1) To elect five members of the Board of Directors;
(2) To ratify the selection of PMB Helin Donovan, LLP as the
Company's independent registered public accounting firm
for the fiscal year ending March 31, 2010;
(3) To approve the adoption of the Valence Technology 2009
Equity Incentive Plan; and
(4) To transact such other business as may properly come
before the meeting and any adjournment or postponement.
A full-text copy of the proxy statement is available at no charge
at http://ResearchArchives.com/t/s?4261
About Valence Technology Inc.
Valence Technology Inc. (NASDAQ:VLNC) -- http://www.valence.com/
-- develops and markets the industry's commercially available,
safe, large-format family of lithium phosphate rechargeable
batteries. Valence holds a worldwide portfolio of issued and
pending patents relating to its lithium phosphate rechargeable
batteries. The company has facilities in Austin, Texas; Las
Vegas, Nevada; Mallusk, Northern Ireland and Suzhou, China.
Going Concern Doubt
On June 5, 2009, PMB Helin Donovan, LLP, in Austin, Texas,
expressed substantial doubt about Valence Technology's ability to
continue as a going concern after it audited the company's
financial statements for the fiscal years ended March 31, 2009,
2008 and 2007. The firm pointed to the company's recurring losses
from operations, negative cash flows from operations, and net
stockholders' capital deficiency.
WEST CORP: Lenders Agree to Amendment of Credit Agreement
---------------------------------------------------------
West Corporation has received lender consent to amend its Senior
Secured Credit Agreement.
"In connection with the amendment, West expects to extend the
maturity date for $1 billion of its existing term loans from
October 24, 2013 to July 15, 2016 with the interest rate margins
of such extended term loans increasing by 1.50 percent," said West
Corp. Chief Financial Officer, Paul Mendlik.
The amendment would permit West to, among other things, agree with
individual lenders to make additional extensions of their term
loans or extend or refinance their revolving credit commitments
under the Credit Agreement, and to issue new secured notes.
According to the Company's recent regulatory filing, the
$2.53 billion senior secured term loan facility and $250.0 million
senior secured revolving credit facility bear interest at variable
rates. The senior secured term loan facility requires annual
principal payments of roughly $25.3 million, paid quarterly, with
a balloon payment at the maturity date of October 24, 2013, of
roughly $2.36 billion. The senior secured term loan facility
pricing is based on the Company's corporate debt rating and the
grid ranges from 2.125% to 2.75% for LIBOR rate loans (LIBOR plus
2.375% at June 30, 2009), and from 1.125% to 1.75% for base rate
loans (Base Rate plus 1.375% at June 30, 2009), except for the
$134.0 million term loan expansion, which is priced at LIBOR
(subject to a 3.5% floor) plus 5.0%, and Base Rate plus 4.0% for
base rate loans. The rate at June 30, 2009 is Base Rate plus 4.0%
or 7.25%.
The senior secured revolving credit facility pricing is based on
the Company's total leverage ratio. The grid ranges from 1.75% to
2.50% for LIBOR rate loans (LIBOR plus 2.0% at June 30, 2009) and
the margin ranges from 0.75% to 1.50% for base rate loans (Base
Rate plus 1.0% at June 30, 2009). The Company is required to pay
each non-defaulting lender a commitment fee of 0.50% in respect of
any unused commitments under the senior secured revolving credit
facility. The commitment fee in respect of unused commitments
under the senior secured revolving credit facility is subject to
adjustment based upon the Company's total leverage ratio.
The effective annual interest rates, inclusive of debt
amortization costs, on the senior secured term loan facility
during the three and six months ended June 30, 2009, were 5.33%
and 5.25%, respectively, compared to 6.47% and 6.70%,
respectively, during the three and six months ended June 30, 2008.
The average daily outstanding balance and the highest balance
outstanding on the revolving credit facility during the three and
six months ended June 30, 2009, was $224.0 million.
The Company is required under the Senior Secured Term Loan
Facility and Senior Secured Revolving Credit Facility to comply on
a quarterly basis with a maximum total leverage ratio covenant and
a minimum interest coverage ratio covenant. The total leverage
ratio of consolidated total debt to consolidated adjusted earnings
before interest expense, share-based compensation, taxes,
depreciation and amortization, noncontrolling interest, non-
recurring litigation settlement costs, impairments and other non-
cash reserves, transaction costs and after acquisition synergies
and excluding unrestricted subsidiaries may not exceed 6.75 to
1.0, and the interest coverage ratio of consolidated Adjusted
EBITDA to the sum of consolidated interest expense must exceed 1.5
to 1.0. Both ratios are measured on a rolling four-quarter basis.
"We were in compliance with these financial covenants at June 30,
2009. These financial covenants will become more restrictive over
time. We believe that for the foreseeable future we will continue
to be in compliance with our financial covenants," the Company
said in the filing.
The senior secured credit facilities also contain various negative
covenants, including limitations on indebtedness, liens, mergers
and consolidations, asset sales, dividends and distributions or
repurchases of the Company's capital stock, investments, loans and
advances, capital expenditures, payment of other debt, including
the senior subordinated notes, transactions with affiliates,
amendments to material agreements governing the Company's
subordinated indebtedness, including the senior subordinated notes
and changes in the Company's lines of business.
About West Corporation
West Corporation -- http://www.west.com/-- provides outsourced
communication solutions to many of the world's largest companies,
organizations and government agencies. The company's integrated
suite of customized solutions includes worldwide conferencing,
emergency communications, customer care, customer acquisition,
customer retention, business-to-business sales, account management
and accounts receivable management services. Founded in 1986 and
headquartered in Omaha, Nebraska, West has a team of 43,000
employees based in North America, Europe, and Asia.
West Corp. had total assets of $3,295,327,000 against liabilities
of $4,423,148,000, resulting to a stockholders' deficit of
$2,363,605,000 as of June 30, 2009. West has a B2 Corporate
Family Rating and a stable rating outlook.
WESTWAY GROUP: Going Concern Doubt Removed After Merger Closed
--------------------------------------------------------------
Westway Group, Inc.'s predecessor in its 2008 annual report,
disclosed that the lack of assurance that it would be able to
successfully complete a business combination within the required
time frame raised substantial doubt about the Company's ability to
continue as a going concern. "With the completion of the business
combination and release of the funds held in trust, there is no
longer substantial doubt about the Company's ability to continue
as a going concern," Westway said.
The Company had assets of $467,343,000 against debts of
$178,509,000 as of June 30, 2009.
About Westway Group
Westway Group, Inc., formerly Shermen WSC Acquisition Corp.,
through its wholly owned subsidiaries, Westway Feed Products LLC
and Westway Terminal LLC, is a provider of bulk liquid storage and
related services. The Company is also engaged in manufacturing and
distributing liquid animal feed supplements. As of May 28, 2009,
the Company operated a global network of 54 operating facilities
providing 284 million gallons of total bulk liquid storage
capacity and producing 1.7 million tons of liquid feed supplements
annually. On May 28, 2009, the Company completed the acquisition
of the Westway business by effecting mergers of two of its wholly
owned subsidiaries with Westway Terminal Company, Inc. and Westway
Feed Products, Inc., and by purchasing the equity interests of
certain foreign subsidiaries of ED&F Man Holdings Limited (ED&F
Man) engaged in the Westway business.
WOLVERINE TUBE: Posts $18.3 Million Net Loss for First Half 2009
----------------------------------------------------------------
Wolverine Tube Inc. filed with the Securities and Exchange
Commission its quarterly reports for the period ended April 5,
2009, and July 5, 2009.
The Company posted net loss of $7,235,000 for the three months
ended April 5, 2009, from net income of $4,192,000 for the three
months ended March 30, 2008. The Company posted a net loss of
$11,083,000 for the three months ended July 5, 2009, from a net
loss of $11,859,000 for the three months ended June 29, 2008. The
Company posted net loss of $18,318,000 for the first half 2009,
from net loss of $7,667,000 for the first half 2008.
As of July 5, 2009, the Company had $201,105,000 in total assets
and $241,483,000 in total liabilities.
The Company believes that its available cash and cash anticipated
to be generated through operations is expected to be adequate to
fund the Company's liquidity requirements, although there can be
no assurances that the Company will be able to generate such cash.
Additionally, the Company does not currently have in effect a
revolving credit agreement or other capital commitments to
supplement its existing cash and anticipated cash resources, if
necessary, to meet its liquidity requirements materially in excess
of the Company's current expectations. The uncertainty about the
Company's ability to achieve its projected results, the absence of
such credit or capital commitments and the uncertainty about the
future price of copper, which has a substantial impact on working
capital, raises substantial doubt about the Company's ability to
continue as a going concern. The Company expects to continue to
actively manage and optimize its cash balances and liquidity,
working capital, operating expenses and product profitability,
although there can be no assurances the Company will be able to do
so.
A full-text copy of the Company's Second Quarterly Report is
available at no charge at http://ResearchArchives.com/t/s?425a
A full-text copy of the Company's First Quarterly Report is
available at no charge at http://ResearchArchives.com/t/s?425b
Wolverine Tube, Inc., is a global manufacturer and distributor of
copper and copper alloy tube, fabricated products, and metal
joining products.
XENIA RURAL: S&P Downgrades Ratings on 2006 Water Bonds to 'BB'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered the rating and
underlying rating on Xenia Rural Water District, Iowa's 2006 water
revenue bonds to 'BB' from 'BBB'. The outlook is developing.
"The downgrade reflects the district's deteriorating financial
position, which necessitates the use of the district's debt
service reserve to sufficiently cover the system's outstanding
water debt," said Standard & Poor's credit analyst Corey Friedman.
Credit factors reflecting the rating are low liquidity, which
necessitates the use of the bonds debt service reserve fund; high
leverage; a weak additional bonds test, which allows for projected
revenues; and high rates, reflective of the district's extensive
and rural service area. Positive offsetting factors are the
service area's proximity to Des Moines, Iowa (AA+), and its
suburbs, a growing service base, and a bountiful water supply.
The developing outlook reflects the range of options that the
district is considering to address its fiscal situation. S&P
could raise the rating if the district's actions are able
to adequately address its structural imbalance. The district has
represented to us that such actions could include, but are not
limited to, raising utility rates, implementing various budget
adjustments, and potentially receiving forbearance on some of its
senior debt, the result of which would be adequate coverage of
annual debt service. The potential for a higher-rated system to
absorb the district could also lead to a higher rating, should the
other entity assume the obligations. Conversely, S&P could take
an additional negative rating action should the
district's financial position continue to deteriorate.
Insufficient action that leads to further fiscal stress or
continued uncertainty regarding the district's ability to meet its
financial commitments could lead to a lower rating.
* Cash for Clunkers Ends, New Dealer Stimulus Program Begins
------------------------------------------------------------
The U.S. government will shut down its Cash for Clunkers program
at 8 p.m. Monday, in a bid to avoid car dealers and shoppers from
claiming more than the $3 billion set aside for the program.
"This program has been a lifeline to the automobile industry, jump
starting a major sector of the economy and putting people back to
work," said U.S. Transportation Secretary Ray LaHood. "At the
same time, we've been able to take old, polluting cars off the
road and help consumers purchase fuel efficient vehicles."
"The government jump-started our industry and now the industry has
jump started the economy," said Brian Benstock, GM and Vice
President of Paragon Automotive in New York. "They did their job
getting the industry going and we need to do our job keeping it
going." Paragon joined other top U.S. Automotive Retailers in
launching www.AutoStimulusPlan.com, a dealer stimulus program to
help consumers who were left behind by the government's plan.
Over 90% of consumers were not eligible for the government's
program and this left a lot of consumers unsatisfied. Now that
the government's "Cash for Clunkers" program is ending, many of
the largest retailers in the country are participating in the new
stimulus plan that gives consumers up to $4500 of additional
trade-in value towards the purchase of a new or used vehicle.
"The public sector did a great job getting us back on the road but
the private sector needs to drive America forward," said Mr.
Benstock.
The new stimulus plan has fixed many of the problems with the
government program. The new plan is more inclusive because all
trade-ins older than 2007 are eligible regardless of their current
mpg and consumers can purchase or lease any new or used vehicle
with an improved fuel economy of 2mpg. This is a contrast to the
government program which appealed to less than 10% of the market
because it excluded trade-ins with more than 18mpg, used cars and
short term leasing and most vehicles needed to get at least 4mpg
improvement to qualify.
While clunker business began to slow down, dealers participating
in the New Stimulus Plan have seen their sales continue to rise
because they are helping the larger group of consumers that were
left behind by the government program. Paragon Automotive, one of
the participating dealers, went from 17th in new vehicle sales to
#4 in the nation. "The new stimulus plan helped our new car
business but it had an enormous impact on used vehicle sales,"
said Benstock. After Paragon implemented the new stimulus plan
they had their best used vehicle sales month and became the #1
certified pre-owned Honda and Acura dealer in the world.
Paragon's results since the New Stimulus Plan took effect have led
to a historic month:
-- They are on pace for 600 new vehicles to be sold and 300
used vehicles. This represents a 100% increase in new car
business and a 50% increase in pre-owned business.
-- 900 vehicle sales created estimated sales tax revenues of
$2,000,000 for the month which equals $24,000,000 at the
dealerships' current run rate.
-- 900 unit sales created $24,000,000.00 in gross sales.
If half of the dealers in the country (10,000) generated the same
tax revenue last month it would generate a total of $20 billion in
only one month. In a time when states are in danger of
bankruptcy, incremental tax revenue is a big help. John
Malishenko, Director of Operations for Germain Automotive, another
participating dealer in the new Auto Stimulus Plan, reported that
sales have dramatically increased as a result of the new stimulus
plan. "We had our second best weekend of the year. We've seen a
40% increase in unit sales versus July and we are currently pacing
$45,000,000 of sales for the month. While other dealers' business
has been falling off, our business has been setting records
because we are helping customers that others are turning away."
The new stimulus plan helps retailers increase their new vehicle
sales but also helps them improve their used vehicle sales. Used
vehicle inventories have shrunk because the clunkers have to be
destroyed. "We have to buy more used cars at auctions for higher
prices," said John Malishenko, Director of Operations for the
Germain Automotive Group who owns dealerships in Ohio, Arizona,
Florida and Arkansas. "I would prefer to give customers 20
percent more for their trade-in to earn their business rather than
paying more to Manheim Auction. If I overpay under the new
stimulus plan, I still sold a car and I have a customer who will
service with me over the long term."
The dealer Auto Stimulus Plan includes used vehicles and allows
dealers to resell the trade-ins. "Letting consumers buy a used
vehicle or lease a new vehicle makes it affordable for a lot of
people who could not participate otherwise," said Scott Gruwell
from Courtesy Auto Group in California and Arizona, one of GM's
largest dealers and a participating dealer.
"We needed to do something to help out all the customers who were
upset that they could not participate in the government program,"
said Rick Case, owner of Rick Case Automotive Group in Florida,
Georgia and Ohio. "Consumers love the new stimulus plan because
they save a lot of money on their purchase while also reducing
their gas and repair expenses."
The Auto Stimulus Plan is a private sector program promoted by
retailers to help consumers, the economy and the environment at
the same time. To qualify a consumer must select a new or pre-
owned vehicle with a 2MPG improvement over their current vehicle,
which is the same requirement the government program has for
SUV's, but it applies to all vehicles under the dealer plan.
"The mpg requirements are lower because the primary goal of the
plan is to help consumers that didn't qualify for the government's
program and to stimulate the economy through improved sales, jobs
and spending," said Mr. Gruwell. "As a result, the environmental
benefits may not be as big as the government program but it will
help more customers get into more fuel efficient vehicles."
"If a consumer does not have a trade, they can benefit from the
extraordinary manufacturer incentives that are out today," added
Case. "In addition to the stimulus, our dealership is offering up
to $4500 of savings to consumers."
Consumers can learn more about the program and begin connecting
with participating retailers by visiting:
http://www.AutoStimulusPlan.com
The Auto Stimulus Plan gives consumers up to $4500 of additional
trade-in value towards the purchase or lease of a new or used
vehicle with improved fuel economy. The program has fewer rules,
easier paperwork and no minimum MPG requirements for trade-ins.
Summary of the program Requirements:
PROGRAM REQUIREMENTS
Current Vehicle Requirements
-- Vehicle must be older than 2007
-- Vehicle must be in working condition
-- Vehicle has been owned and registered for at least
6 months
-- No minimum mpg requirements
-- Vehicles that are not eligible are: salvaged vehicles and
vehicles with floor or frame damage
Replacement Vehicle Requirements
-- Replacement vehicle must have a minimum of 2mpg
improvement
-- New and Used Vehicles Qualify
-- All makes and models
-- No minimum mpg requirements
-- No price restrictions
-- This plan is not valid in combination with the governments
C.A.R.S. program
The plan varies based on the year, make and model of the eligible
vehicle. The plan may also vary in some states due to state laws
that regulate automotive advertising and promotion. The Auto
Stimulus Plan was planned to end when the government's program
expired but they have extended the end date to November 1st,
because of the sooner than expected termination. Visit
http://www.AutoStimulusPlan.comfor details.
The organization informs consumers that they should be patient if
they cannot get through to the website, www.AutoStimulusPlan.com,
on their first try. During the program's launch there was an
overwhelming level of traffic resulting in periods of
interruption. Consumers are advised to visit at a later time if
the site is not functioning properly.
About www.AutoStimulusPlan.com
Some of the largest automotive retailers in the country are
participating in the Auto Stimulus Plan because it helps consumers
who were left behind by the government's program. The program and
its participating dealers are not affiliated with the government's
program. For more information about the government's program visit
http://www.Cars.gov. Participating dealers are domestic and
import licensed new car dealers who have agreed to provide up to
$4500 of additional trade-in value for consumers to get a newer
more fuel efficient vehicle. The http://www.AutoStimulusPlan.com
Web site and communication campaign was built by Level 5, an
automotive marketing and consulting firm that specializes in
creating and implementing integrated programs for Manufacturers,
Associations and Retailers.
* Bankruptcy Filings by Private Equity-Backed Firms Increase
------------------------------------------------------------
Thomson Reuters-backed website peHUB reports that more private
equity-backed companies have filed for Chapter 11 bankruptcy
protection this year, compared to 2008.
Claire Spencer at Financierworldwide.com relates that 53 private
equity portfolio companies have already filed for bankruptcy this
year, compared to 49 in 2008. peHUB says that Sun Capital
Partners, a private equity firm based in Florida, has seen six of
its portfolio firms -- including small auto suppliers and grocery
chains -- collapsed this year.
* Former FDIC Chair Isaac Says Bank Failures Likely to Continue
---------------------------------------------------------------
Former Federal Deposit Insurance Corp. Chairman William Isaac said
U.S. bank failures are likely to continue over the next two years
as regulators wind down ailing lenders and cleanse the financial
system, Bloomberg News' Gregory Mott reported. "Bank failures are
not necessarily a bad thing," Isaac, who led the FDIC from 1981 to
1985, said August 20 in a CNBC television interview. Shutdowns
help the economy by replacing struggling firms unable to lend
money with stronger institutions, he said.
As of August 20, regulators have closed, and have appointed the
Federal Deposit Insurance Corporation as receiver for, a total of
77 banks. The FDIC has been able to transfer assets and deposits
of most of the closed banks to healthier banks.
Last week, regulators shut five banks, the largest of which is
Colonial bank, with total assets of $25 billion and total deposits
of approximately $20 billion as of June 30, 2009, followed by
Community Bank of Nevada with total assets of $1.52 billion and
total deposits of about $1.38 billion.
The Summer 2009 issue of Supervisory Insights released by the FDIC
on June 16, 2009, said the U.S. financial services industry
experience a crisis in 2008, with these challenges continuing
during the first half of 2009. In 2008, U.S. financial regulatory
agencies extended $6.8 trillion in temporary loans, liability
guarantees and asset guarantees in support of financial services.
By the end of the first quarter of 2009, the maximum capacity of
new government financial support programs in place, or announced,
exceeded $13 trillion.
Bear Stearns was the first large investment bank to be acquired by
a bank holding company during 2008. Of the other four largest
investment banks in the United States, one would fail and the
others would be acquired by, or become, bank holding companies.
In 2008, 25 banks with total assets of $372 billion failed.
IndyMac Bank, FSB, was closed by the Office of Thrift Supervision
on July 11, and the FDIC was named conservator. At the time it
was closed, IndyMac's assets of $32 billion made it the second
largest bank failure in FDIC history.
The FDIC said on May 27 that the number of banks and savings
institutions in its "Problem List" increased to 305 from 252 at
the end of 2008. The 305 banks and thrifts have combined assets
of $220 billion, according to the FDIC's quarterly banking
profile.
* S&P Says Junk Bond Defaults $453 Billion, Exceed 2008 Total
-------------------------------------------------------------
The number of global weakest links continued to decline to 278 as
of Aug. 12, 2009, from 285 in July and a record high of 300 in
April. The decline was largely attributable to the sharp rise in
defaults, many of which were weakest links, said an article
published August 19 by Standard & Poor's.
The 278 weakest links have combined rated debt worth $302.4
billion. By sector, media and entertainment, forest products and
building materials, banks, and retail/restaurants were the most
vulnerable, with the highest concentrations of weakest links,
according to the article, titled "Global Bond Markets' Weakest
Links And Monthly Default Rates (Premium)."
Weakest links are defined as issuers rated 'B-' or lower with
either a negative outlook or with ratings on CreditWatch with
negative implications, and they are at greater risk of default.
Corporate defaults continue to rise rapidly in 2009, already
surpassing the number in all of 2008. Through Aug. 12, 2009, 201
issuers defaulted, affecting debt worth $453.1 billion. By
comparison, 126 defaults were recorded in all of 2008, affecting
debt worth $433 billion.
"Negative outlooks and CreditWatch listings serve as good leading
indicators of actual downgrades," said Diane Vazza, head of
Standard & Poor's Global Fixed Income Research Group. "The one-
year default rate for weakest links was, on average, 5.8 times
higher than for all issuers rated speculative grade from 1999
through June 2009 and was 14 times higher than in 2007, when the
corporate speculative-grade default rate was near historical
lows."
The 12-month-trailing global corporate speculative-grade bond
default rate increased to 8.58% in July 2009 from 8.25% in June
and is now more than 10x the 25-year low of 0.79% recorded in
November 2007. The U.S. speculative-grade corporate default rate
increased for the 20th consecutive month, reaching 9.37% in July
2009, up from 9.24% in June 2009 and now also almost 10x the level
at year-end 2007. The default rate in Europe also increased to
6.12% from 5.13%, while the emerging markets default rate rose to
6.7% from 6.48%.
* Chanin's Covington to Lead Kibel Green's Restructuring Team
-------------------------------------------------------------
Matthew Covington has been added to Kibel Green's team to lead its
financial restructuring practice. Mr. Covington brings more than
a decade of experience in financial restructuring and merger and
acquisition transactions. He has advised companies, creditors and
financial sponsors in both in- and out-of-court restructuring
transactions across a wide variety of industries, executing
transactions valued at over $11 billion.
"Adding Matt to the team is a big win for our firm," says Steven
J. Green, Kibel Green's President. "He is an extraordinary talent
with a proven track record. We look forward to his ability to
drive equity and debt solutions in difficult situations that most
traditional institutions are unable to service."
Prior to joining Kibel Green, Mr. Covington was a Senior Vice
President at Chanin Capital Partners where he executed a wide
range of distressed transactions, involving Chapter 11 and out-of-
court restructurings, recapitalizations, exchange offers, covenant
waivers, litigation support and testimony, Debtor-in-Possession
and Exit financings, and sales of companies or divisions
(including via section 363). Prior to joining Chanin, Mr.
Covington was in the Mergers and Acquisitions Group at Credit
Suisse First Boston in New York.
Mr. Covington holds JD and MBA degrees from the University of
Chicago and an AB in Economics from the University of California
at Berkeley.
Kibel Green Inc.
Matthew P. Getty, Managing Consultant
+1-310-829-0255 ext. 214
mgetty@kibelgreen.com
* Manju Gupta Joins McDonald Hopkins' Cleveland Office
------------------------------------------------------
Manju Gupta has joined the Cleveland office of McDonald Hopkins
LLC as an Associate in the firm's Business Restructuring and
Bankruptcy Department.
Ms. Gupta has six years of law firm experience counseling clients
in diverse restructuring, business and commercial litigation
matters. She works with debtors, creditors, creditors'
committees, and liquidating trustees in business reorganization
matters.
Ms. Gupta serves on the Executive Committee of the William K.
Thomas Inn of Court and holds several leadership positions with
the Cleveland Metropolitan Bar Association, including Treasurer
and Secretary of its Women's Section, Council of the Litigation
Section and member of the Minority Attorney Roundtable Taskforce.
She is also a board member of the Milestones Organization.
Ms. Gupta received a J.D. from Cleveland-Marshall College of Law
and an MBA from the James Nance College of Business at Cleveland
State University in 2003. She received a Bachelor of Science
degree from John Carroll University in 1999.
Ms. Manju Gupta can be reached at 216.430.2023 or
mgupta@mcdonaldhopkins.com
About McDonald Hopkins
With more than 130 attorneys in Chicago, Cleveland, Columbus,
Detroit, and West Palm Beach, McDonald Hopkins --
http://www.mcdonaldhopkins.com/-- is a business advisory and
advocacy law firm focused on business law, litigation, business
restructuring and bankruptcy, healthcare, and estate planning.
The president of McDonald Hopkins is Carl J. Grassi.
* BOOK REVIEW: Dangerous Pursuits - Mergers and Acquisitions in
the Age of Wall Street
----------------------------------------------------------------
Authors: Walter Adams and James W. Brock
Publisher: Beard Books
Softcover: 222 pages
List Price: $34.95
First published in 1989, Dangerous Pursuits - Mergers and
Acquisitions in the Age of Wall Street analyzes central concerns
raised by the flurry of mergers, acquisitions, takeovers, and
buyouts as the twentieth century drew to a close. This was a
period of great economic vitality that challenged conventional
theories and practices. Economists battled over the best way
forward. It was a period of time when "coalition capitalism" was
offered as an alternative to "cowboy capitalism" -- that is, the
belief in economic laissez-faire. As set forth by the authors,
"Coalition capitalism, grounded in 'industrial policy,' is the
neoliberal Left's riposte to the cowboy capitalism of the Right."
Coalition capitalism takes the approach that "planning can be used
to improve [a country's] market performance."
The authors strive to present a balanced portrayal of the
engineers of this economic growth -- those individuals behind the
mergers and acquisitions. To some, they were "predators,
piranhas, greenmailers." Others, however, see T. Boone Pickens,
Carl Icahn, Ivan Boesky, and others as "necessary catalysts for
shaking up stodgy managements and for restoring giant corporations
to their owners, the shareholders." Even the term "greed" is
subject to debate. As a motivation for mergers, "greed is good" -
- as notably voiced by the character Gordon Gekko in the movie
Wall Street -- was an opinion apparently shared by Ivan Boesky,
who told a college graduating class that "greed is all right." On
the other hand, Henry Kravis, a top Wall Street leveraged-buyout
strategist is quoted as saying, "Greed really turns me off."
In discussing the many opinions regarding mergers and
acquisitions, Dangerous Pursuits gives the reader a complete
picture of a time when the American economy, workplace, and
society were transformed. But the authors make no secret that
they are concerned that mergers are weakening American business
and society. Their position is substantiated in chapters on the
effects of mergers from a macro and micro perspective. In a
chapter entitled "The Macro Record," Adams and Brock step back
from viewing mergers in terms of the parochial interest of the
players and look at the "merger game" through the lens of the
national interest. Shorn of media hype, the authors find that the
"merger game" undermines advances in productivity, obstructs
technological development, and weakens competitiveness. What the
"game" does do is earn outsized, quick profits for the
specialists, lawyers, financiers, and bankers who engage in it.
In the chapter "The Micro Record," the authors look at how mergers
have affected particular airlines, steel companies, and
conglomerates. From this micro perspective, they find that the
benefits touted by those with "parochial interests" do not
materialize.
At best, the mergers, acquisitions, takeovers, and buyouts are
seen as impeding the economy from moving ahead. At worst, Taylor
and Brock see an "addiction to mergeritis." No one argues that
mergers did not produce large profits for some. The authors warn,
however, that such success is a "slow and secret poison" to the
U.S. economy.
One-time President of Michigan State University where he also
taught, Walter Adams also taught at European universities,
appeared as an expert on economics before Congressional
committees, and published other books. James W. Brock has been a
member of the economics department faculty at Miami University in
Ohio for more than 20 years, and is the coauthor with Walter Adams
on several books.
*********
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 **