/raid1/www/Hosts/bankrupt/TCR_Public/090904.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, September 4, 2009, Vol. 13, No. 245
Headlines
1031 TAX GROUP: Liquidating Plan Hearing on October 7
804 CONGRESS: Case Summary & 20 Largest Unsecured Creditors
ACCESS PHARMACEUTICALS: Registers 3,510,000 Common Shares With SEC
ACM INVESTMENTS: Voluntary Chapter 11 Case Summary
ADANAC MOLYBDENUM: CCAA Stay Period Extended to November 30
ADVANCED MATERIALS: UFP Technologies Acquires Selected Assets
AGNA HOSPITALITY: Case Summary & 16 Largest Unsecured Creditors
ALIXPARTNERS LLP: S&P Puts 'BB-' Rating on CreditWatch Positive
ALLIED CAPITAL: Fitch Downgrades Issuer Default Rating to 'B+'
ALLIED CAPITAL: S&P Downgrades Senior Unsec. Debt Rating to 'BB'
ALTRA NEBRASKA: Proposes McGrath North Mullin as Counsel
ALTRA NEBRASKA: Wants to Sell Carleton Ethanol Production Plant
ALTERNATIVE DISTRIBUTION: Files Chapter 11 for Debt-Swap Sale
AMBRILIA BIOPHARMA: CCAA Stay Period Extended to October 30
AMERICAN CAPITAL: Gets Forbearance from Unsecured Noteholders
AMERICAN MEDICAL: AM Best Downgrades FSR to 'B'
AMERICAN NATURAL ENERGY: Grant Has Option Purchase 50,000 Shares
ANTHRACITE CAPITAL: Misses Interest Payment on 11.75% Notes
APPALACHIAN OIL: Court Okays Sale to Florida Sunshine Investments
APRIL TYLER: Case Summary & 20 Largest Unsecured Creditors
ARROWHEAD & GATEWAY: Files for Chapter 11 in Phoenix
ASAP WILDFIRE: Case Summary & 10 Largest Unsecured Creditors
AUTOBACS STRAUSS: Plan Filing Deadline Moved to October 18
AVIS BUDGET: Has Deal to Purchase Vehicles From Ford Dealers
AVIZA TECHNOLOGY: Sumitomo's $50MM is Lead Bid at Sept. 29 Auction
BALLY TOTAL: Oritani Wants Lift Stay to Pursue Rights Under Loan
BASIN WATER: Assets Sold to Amplio for $2 Million
BEAZER HOMES: Moody's Assigns 'B1' Rating on $160 Mil. Notes
BEAZER HOMES: Fitch Assigns 'B+/RR1' Rating on $160 Mil. Notes
BEAZER HOMES: S&P Assigns 'CCC+' Rating on $160 Mil. Notes
BELLEVUE PETROLEUM: Case Summary & 6 Largest Unsecured Creditors
BENESSERE LLC: Case Summary & 2 Largest Unsecured Creditors
BERNARD MADOFF: SEC Overlooked Fraud Due to Inexperienced Staff
BIOBASED TECHNOLOGIES: Case Summary & 20 Largest Unsec. Creditors
BI-LO LLC: Creditors & Term Lenders Offer Alternative Plan
BI-WAY CONCRETE: Voluntary Chapter 11 Case Summary
BIZCOM USA: Defaults on Bridge Loan; CX2 Seeks to Keep Licenses
BLOCKBUSTER INC: Sells XTRA-VISION(R) Chain to Birchhall for $45MM
BLOCKBUSTER INC: Viacom Split-Off Deal Amended; L/Cs Reduced
BROOKFIELD PROPERTIES: S&P Assigns 'BB+' Rating on Share Offering
BROWN SHOE: S&P Downgrades Corporate Credit Rating to 'B-'
BUILDERS FIRSTSOURCE: Has Restructuring Proposal From JLL/Warburg
BUILDERS FIRSTSOURCE: S&P Puts 'CCC+' Rating on Negative Watch
BVI RETAIL: Two Banks Win Auction for Belle Island Village
CANWEST MEDIA: DBRS Downgrades Issuer Rating to 'D'
CAPMARK FIN'L: May File Ch.11 to Sell Mortgage Biz to Berkshire
CAPMARK FIN'L: Reports $1.6-Bil. Net Loss for Second Quarter
CAPMARK FIN'L: Berkshire Commits $650MM in Debt Finance for Deal
CARUSO HOMES: To Exit Ch 11 in 2 Weeks, After Creditors OK Plan
CASCADES INC: S&P Changes Outlook to Stable, Affirms 'BB-' Rating
CAVIATA ATTACHED: Section 341(a) Meeting Scheduled for Sept. 21
CCS MEDICAL: Court Refuses Official Committee for 2nd Lien Lenders
CEYLON HOTELS: Case Summary & 20 Largest Unsecured Creditors
CHEMTURA CORP: Aims to Emerge From Ch 11 Bankruptcy by March 2010
CHRYSLER LLC: 18 Old CarCo Units' Schedules of Assets & Debts
CHRYSLER LLC: 18 Old CarCo Units' Statement of Financial Affairs
CHRYSLER LLC: Canada Also Has Cash for Clunkers Program
COEUR D'ALENE: Files New Shelf Registration Statement
COEUR D'ALENE: Swaps $11.88MM Bond Debt for 784,466 Common Shares
COMSTOCK HOMEBUILDING: To Present Compliance Plan to Nasdaq Panel
CONTINENTAL AIRLINES: S&P Junks Issue-Level Rating on Senior Debt
COYOTES HOCKEY: Sports League Doesn't Trust Balsillie
COYOTES HOCKEY: Bidder Ice Edge Reaches Pact With SOF to Pay Debt
COYOTES HOCKEY: Court Reluctant to Toss Out Any Bids
CYNERGY DATA: Case Summary & 25 Largest Unsecured Creditors
DEL MONTE: To Refinance Portion of Debt Within Next 9 Months
DESTINATION MATERNITY: Moody's Affirms 'B2' Corp. Family Rating
DEVELOPERS DIVERSIFIED: Increases Size of Cash Tender Offers
DIAMOND MFG: Case Summary & 5 Largest Unsecured Creditors
DOMINION GROUP: Meeting of Creditors Scheduled for September 28
DORAL ENERGY: Has Lender's Forbearance Until October 15
EAGLE PUBLICATIONS: Court Tentatively Okays Sale to Sample News
EASTBOURNE 59/GRAND: Voluntary Chapter 11 Case Summary
EASTON-BELL: Cures Non-Compliance of Wachovia Credit Agreement
EL DIAMANTE ASSOCIATES: Voluntary Chapter 11 Case Summary
ESCADA AG: Five-Member Creditors' Committee Formed in U.S. Case
FILENE'S BASEMENT: Seeks Extension of Exclusivity to Nov. 30
FIRST METALS: Completes Proposal Issuances
FLEETWOOD ENTERPRISES: Kendall Leads Investors Suit vs. Ex-Execs.
FLORIDA LIFESTYLE: Case Summary & 20 Largest Unsecured Creditors
FORD MOTOR: Has Deal with Avis Budget on Vehicle Purchase
FORD MOTOR: Post Back-To-Back Monthly Sales Increases
FREEDOM COMMUNICATIONS: Details of Stock-Swap Chapter 11 Plan
FREEDOM COMMUNICATIONS: Receives Approval of "First Day" Motions
FRONTIER AIRLINES: Plan Gets Overwhelming Support From Creditors
FRONTIER AIRLINES: Gets Plan Objections From Taxing Authorities
FRONTIER AIRLINES: Begins Codeshare Partnership With Midwest
FRONTIER AIRLINES: Davis Polk Charges $3 Mil. for April-July Work
GENERAL GROWTH: Eurohypo, et al., Want Trade in of Claims Okayed
GENERAL MOTORS: APS Engagement Terms Modified, Rates Reduced
GENERAL MOTORS: Germany, Union Balk at Indecision Over Opel Sale
GENERAL MOTORS: JCI Disputes Cure Amounts for Assumed Pacts
GENERAL MOTORS: Koenisegg's Bid for Saab Won't Get Sweden Aid
GENERAL MOTORS: Old GM Proposes Nov. 9 Deadline for Claims
GENERAL MOTORS: Old GM Wants More Time to Decide on Leases
GLOBAL DOMINION: Case Summary & 18 Largest Unsecured Creditors
GLOBAL ESTATES: Voluntary Chapter 11 Case Summary
GRACEWAY PHARMACEUTICALS: Moody's Cuts Corp. Family Rating to 'B3'
GUARANTY FINANCIAL: D. Faulkner to Serve as Sole Officer
HANESBRANDS INC: S&P Puts 'BB-' Rating on CreditWatch Negative
HARRIS INTERACTIVE: Paid $3.2MM in FY2009 for AlixPartners' Work
HAYES LEMMERZ: Plan Confirmation Hearing Slated for October 15
HEXION SPECIALTY: Admits to Facing Pressure From Vendors
HICKS SPORTS: Texas Rangers Receives Six Initial Bids
HIGHWOOD PARK PROPERTIES: Case Summary & Largest Unsec. Creditor
HWY 90 OFFICE: Voluntary Chapter 11 Case Summary
IMPERIAL INDUSTRIES: Lender Extends Line of Credit to Sept. 30
INSIGHT COMMUNICATIONS: S&P Retains 'B+' Corporate Credit Rating
INTERMET CORP: Tries to Block Conversion of Case to Chapter 7
ISOLAGEN INC: Terms of Court-Confirmed Reorganization Plan
IVIVI TECHNOLOGIES: Forbearance Pact With Emigrant Expires Sept. 9
JAMES EVERETT: Case Summary & 6 Largest Unsecured Creditors
JASON MORRONE: Case Summary & 20 Largest Unsecured Creditors
JEFFERSON COUNTY: In Talks for $25MM Bridge Loan from Regions
JEFFERSON COUNTY: JPM Moves $105MM Payment Deadline to Oct. 30
JIMMY STEPHENSON: Case Summary & 20 Largest Unsecured Creditors
JL FRENCH: Court Confirms Plan of Reorganization
JO-ANN STORES: Moody's Upgrades Corporate Family Rating to 'B1'
KB TOYS: Can Sell IP Assets to CE Stories for $2.1 Million
KIRKLAND DUDLEY: Voluntary Chapter 11 Case Summary
KEARNEY CONSTRUCTION: Can Continue Paying 155 Employees, Suppliers
KOOSHAREM CORPORATION: Moody's Cuts Corp. Family Rating to 'B3'
KWB REAL ESTATE: Voluntary Chapter 11 Case Summary
LAS VEGAS SANDS: Secures $600MM Pre-IPO Financing
LEADING EDGE PORK: Case Summary & 14 Largest Unsecured Creditors
LEAR CORP: Court Approves Key Management Incentive Plan
LEHMAN BROTHERS: Chicago Educ. Board Sues to Stop Swap Assumption
LEHMAN BROTHERS: Gets NY Court Nod to Represent U.K. Estates
LEHMAN BROTHERS: Proposes Debt Repayment Dead With ELQ
LEHMAN BROTHERS: Shinsei Bank Balks at Stay, Contempt Request
LEHMAN BROTHERS: Taps Hudson Global as Contract Attys. Provider
LEHMANN BROS FARMS: Case Summary & 20 Largest Unsecured Creditors
LENNY DYKSTRA: Creditors Want Assets Liquidated to Pay Claims
LMB PROPERTIES: Case Summary & Largest Unsecured Creditor
LORAL SPACE: Debtors Not Jointly & Severally Liable on All Debts
LUIS STAHL: Case Summary & 14 Largest Unsecured Creditors
MCKINNEY SHORES HOTEL: Case Summary & 15 Largest Unsec. Creditors
MGC INVESTMENTS: Case Summary & 11 Largest Unsecured Creditors
MIG INC: Creditors' Trustee Motion Set for Nov. 5 Trial
MITEL NETWORKS: Moody's Junks Corporate Family Rating From 'B3'
MOORE-HANDLEY: Has Deal to Sell All Assets to Bostwick-Braun
MOORE-HANDLEY: Gets Interim OK to Access Cash Securing CIT Loan
N & J ENTERPRISES: Voluntary Chapter 11 Case Summary
NANURI CARE: Case Summary & 2 Largest Unsecured Creditors
NATIONAL MENTOR: Moody's Upgrades Rating on Facility to 'Ba3'
NN ENCHANTED: Case Summary & 3 Largest Unsecured Creditors
NORTEL NETWORKS: Multiple Parties Interested in LG Venture
NORTH CAROLINA MUTUAL: AM Best Downgrades FSR to 'C+'
NORTH VALLEY MALL: Case Summary & 20 Largest Unsecured Creditors
NORVIEW BUILDERS: Case Summary & 4 Largest Unsecured Creditors
NOVADEL PHARMA: Receives $108,700 From Sale of Shares to Seaside
NOVEMBER 2005: S&P Withdraws 'D' Issuer Credit Ratings
NTK HOLDINGS: Unveils Plan to Slash $1.3BB in Debt; to File Ch. 11
O'HARE CENTRE VENTURE: Voluntary Chapter 11 Case Summary
OPUS SOUTH: Deal Lifting Stay to Liquidate Carolina Bank Claim
OSCIENT PHARMACEUTICALS: Court OKs Sale of Factive to Cornerstone
PACIFIC ENERGY: Gets Green Light on Alaska Asset Exchange Pact
PALM ENERGY: Files Chapter 11 to Ward Off Debt Demand
PAPAGO PARAGO PARTNERS: Voluntary Chapter 11 Case Summary
PARLUX FRAGRANCES: Obtains 60-Day Extension to Repay Loan
PATIENT SAFETY: Francis Capital Discloses 14.3% Equity Stake
PATRICIA KLINK: Section 341(a) Meeting Scheduled for September 24
PATRICIA KLINK: Taps Nordman Cormany as General Bankruptcy Counsel
PAVILLION DEVELOPMENT: Case Summary & 19 Largest Unsec. Creditors
PETER MATT: Files Chapter 11 in White Plains
PETER MATT: Voluntary Chapter 11 Case Summary
PLAINFIELD APARTMENTS: Debt to PMUA be Deemed High-Priority Claim
PORT ARTHUR INTEREST: Case Summary & 17 Largest Unsec. Creditors
PROMENADE AT RIVERWALK: Put Into Ch 11 Bankruptcy By Creditors
PROMENADE AT RIVERWALK: Involuntary Chapter 11 Case Summary
PROPEX INC: Fabrics Estate Liquidating Plan Declared Effective
PROPEX INC: Fabrics Estate Professionals Final Fee Applications
QUALITY DISTRIBUTION: Exchange Offer Cues S&P's Junk Rating
QSGI INC: $500,000 Financing Agreement With Victory Park
R.W. HERTEL: Trustee Locates Assets to Be Handed to Creditors
RADLAX GATEWAY: Gets Temporary OK to Use Lender's Cash Collateral
RADLAX GATEWAY: Has Until Sept. 14 to File Schedules and Statement
RADLAX GATEWAY: Meeting of Creditors Scheduled for September 23
RALF WARREN BLACKSTONE: Voluntary Chapter 11 Case Summary
READER'S DIGEST: Moody's Assigns 'Ba1' Rating on $150MM DIP Loan
READER'S DIGEST: Advertising Revenues in Canada Up 1%
READER'S DIGEST: Application to Hire Kirkland as Bankr. Counsel
READER'S DIGEST: Application for KCC as Notice & Claims Agent
READER'S DIGEST: DIP Financing Agreement Amended
READER'S DIGEST: Proposes to Keep Customer Programs
REDDY ICE: Harbinger, et al., Disclose 9.8% Equity Stake
REFCO INC: Judge Lynch Decision Junking Suit vs. Grant, E&Y
REFCO INC: NASCAT Supports SEC Stand on "Primary Violators"
REFCO INC: Plan Admin. Wants Final Decree Closing 20 Cases
RH DONNELLEY: Court OKs Blackstone as Committee Advisor
RH DONNELLEY: Court OKs Cozen as Committee's Local Counsel
RH DONNELLEY: Court OKs JHC as Committee's Forensic Accountant
RH DONNELLEY: Five Units' Schedules of Assets & Liabilities
RH DONNELLEY: Five Units' Statement of Financial Affairs
ROBERT MCCADAMS: Case Summary & 20 Largest Unsecured Creditors
SAMSONITE STORES: Files Ch. 11 to Reject 84 Store Leases
SAMSONITE STORES: Plan Has All Creditors Unimpaired
SAMSONITE STORES: Parent Embarks on Out-Of-Court Restructuring
SAMSONITE STORES: Case Summary & 20 Largest Unsecured Creditors
SARATOGA SHOE DEPOT: Files for Ch 11 After Cancelled Credit Line
SCHOLL FOREST: Names Phoenix Management as Financial Advisor
SCHOLL FOREST: Selects Andrews Kurth as Bankruptcy Counsel
SEMGROUP LP: Hires Deloitte & Touche for Accounting Services
SEMGROUP LP: Coffeyville Sues to Set Off Claim
SHA LLC: AM Best Downgrades Financial Strength to B-
SOPHOI INC: Case Summary & 20 Largest Unsecured Creditors
SOTHEBY'S CORPORATION: Moody's Cuts Corp. Family Rating to 'Ba3'
SOUTH WHITNEY: Case Summary & 3 Largest Unsecured Creditors
SPANSION INC: Pays Travis County $1.8MM for 2008 Taxes
SPANSION INC: Court Approves K&S as Litigation Counsel
SPHERIS INC: Moody's Gives Negative Outlook, Affirms 'B3' Rating
STANDARD PACIFIC: Swaps $27.6MM of 6% Notes for Common Shares
STATION CASINOS: BNP Paribas, et al., Want Examiner
SUBURBAN PROPANE: S&P Raises Corporate Credit Rating to 'BB'
TELETOUCH COMMUNICATIONS: Narrows FY2009 Net Loss to $1.9MM
TELKONET INC: Receives NYSE Amex Staff Determination
TETON ENERGY: May File Chapter 11 if Talks Unsuccessful
TOUSA INC: To Sell CP Red Oak Interests to Lennar
TOUSA INC: Has Claims Settlement With Strategic Capital
TOUSA INC: Proposes to Reject 3 Alamo Ranch Agreements
TOWN CENTER: Files for Chapter 11 in Milwaukee
TOWN CENTER: Case Summary & 18 Largest Unsecured Creditors
UNITED COMPONENTS: S&P Raises Rating on $230 Mil. Notes to 'B-'
US AIRWAYS: Pilots Want PBGC Removed as Pension Plan Trustee
UTSTARCOM INC: Deregisters Shares Issuable Under 3 Employee Plans
US AIRWAYS: Pilots Want PBGC Removed as Pension Plan Trustee
VALLEJO CITY: Court Approves Rejection of Workers' CBA
VP PHASE II: Oct. 3 Auction Set for Veranda Park Building Offices
WASH.COM INC: Voluntary Chapter 11 Case Summary
WCI COMMUNITIES: Emerges from Chapter 11 Protection
WHITNEY HINES: Case Summary & 13 Largest Unsecured Creditors
WISE METALS: Working with Lenders to Extend Loan Maturity Date
YOUNG BROADCASTING: Asks FCC for Okay to Assign Albany Licenses
ZOILA SANCHEZ-ESCOBEDO: Case Summary & 20 Largest Unsec. Creditors
* Crowe Horwath Offers Fresh Start Accounting for Ch. 11 Filers
* Bankruptcy Filings in Manchester Up 45% to Almost 450 in Aug.
* Dealers Group Says August Sales Up 1% from 2008 Level
* PE Firms Turning to Bankruptcy Courts to Buy Assets
* Wilbur Ross Sees 500 More Bank Failures by End of 2010
* BOOK REVIEW: The Deregulation of the Banking and Securities
Industries
*********
1031 TAX GROUP: Liquidating Plan Hearing on October 7
-----------------------------------------------------
The Bankruptcy Court will convene a hearing on October 7 to
consider approval of the liquidating plan proposed by the Chapter
11 trustee of 1031 Tax Group LLC. Creditors entitled to vote on
the Plan have until September 25 to submit their ballots.
As reported by the Troubled Company Reporter on August 19, 2009,
Gerard A. McHale, Jr., the Chapter 11 trustee for the estates of
the 1031 Tax Group LLP, et al., has filed a Chapter 11 plan that
proposes to pay 35 cents on the dollar to unsecured creditors.
Funding for distributions to creditors is primarily derived from
settlements of claims against various firms and entities in
connection with the alleged fraudulent activities and
misappropriation of funds by Edward Okun that led to the collapse
of 1031 Tax Group and its units in 2007.
Under the Plan, holders of general unsecured claims aggregating
$150 million will recover 35% of their claims. Holders of these
claims identified as "exchangers" will recover up to 44% after
giving effect to a class action agreement.
Creditors that have higher rank to unsecured creditors will
receiver full recovery. Holders of equity interests won't get
anything.
On the effective date, a liquidating trust will be formed to
implement the settlement agreements, and to pursue causes of
action. The projected cash balance of the Liquidation Trust as of
the effective date is $78,970,000. This amount will be funded by
the $70,277,500 collectively payable under the settlement
agreements plus cash on hand of $5,897,000 and an anticipated tax
refund of $2,800,000.
The settlement agreements reached by the Chapter 11 trustee are:
* Kluger Peretz Kaplan & Berlin, PL, has been probed by
the Chapter 11 trustee for potential claims in connection
with legal services provided to the Debtors prepetition. The
Debtors' estates will net a total of $12,380,000 from the
settlement.
* Claims from "Errors and Omissions" policies will be settled
by selling the policies back to the carriers for $4.6 million.
* Insurers that provided for commercial crime policies have
agreed to pay a collective amount of $23,250,000 for the
benefit of the estates. The commercial crime policies
generally covered the 1031 Debtors for direct losses of
covered property resulting from "Employee Theft" or "Employee
Dishonesty," as those terms are defined in the policies.
* Certain entities have agreed to settle the Trustee's claims
against them for fraudulent transfers arising from receiving
excessive consideration of the sale of certain assets and
businesses to the Debtors and breach of fiduciary duties
in connection with the transactions. The Former owners
have agreed to pay a total of $2,112,500: (i) Hazel, Dowdall,
Subrt and Livesey will pay $107,500 in connection with the
sale of Atlantic Exchange Company's assets to the Debtors,
(ii) Bennett Davis will pay $400,000 in connection with the
sale of all of NIL's assets to 1031 Tax Group, (iii) McCabe
Group will pay $1.2 million for the sale of the IXG QI
business to 1031 Tax Group, (iv) Pajonas and Regal Entities
will pay $200,000, with $20,000 paid immediately and the
balance payable over three years, without interest, in
connection with the sale of the SOS business to the Debtors,
(v) Shefmans $10,000 for the sale of REES; and (vi) Allred and
Dashiell a total of $325,000 for the l031 Advance business.
* Michael J. Rosen, Esq., at Michael J. Rosen PA, was counsel
to one or more of the 1031 Debtors. To settle potential
claims, the sum of $925,000 will be paid to the estates from
an insurance policy.
* Wachovia Bank N.A. has agreed to pay $45 million to settle
claims by the Chapter 11 trustee and a class action commenced
by exchangers. Wachovia was sued for allegations that it
assisted Mr. Okun in misappropriating funds. Pursuant to
the class action agreement, 60% of the settlement amount is
allocated to the estates while 40% will be allocated to the
plaintiffs at the class suit.
The Chapter 11 trustee has pending lawsuits against, or
settlements with, JPS NH LLC, Boulder Capital LLC, WH Hialeah
Investors V, LLC, and Citibank, N.A. The Chapter 11 trustee has
also commenced an action against Mr. Okun seeking a judgment in
the amount of $150 million.
The cash the Liquidating Trust will hold on the effective date of
the Plan will be applied first to fund an aggregate of $25,848,600
for (i) allowed administrative claims totalling $670,000, (ii)
allowed priority tax claims of $32,600, (iii) allowed fee claims
totalling $19.8 million, (iv) allowed priority non-tax claims
totalling $346,000 and (v) a reserve of $5 million to permit the
Liquidation Trust fund ongoing litigation and other expenses. The
remaining $53,121,400 will be used to fund distributions for
general unsecured claims.
The Plan is being co-proposed by debtor IPofA Shreveport
Industrial Park, LLC. The Plan also provides for the
reorganization of IPofA Shreveport, which owns the Mineral
Servitude (the below-ground rights to exploit the shale gas
deposits in a property in Shreveport, LA). The Liquidating
Trustee will be the sole member of IpofA Shreveport. Reorganized
IPofA Shreveport's activities will relate solely to maximizing any
revenues that may be potentially generated or derived from the
Mineral Servitude.
A copy of the August 12 Plan and Disclosure Statement is available
for free at http://bankrupt.com/misc/1031_Tax_DS_Plan.pdf
About The 1031 Tax Group
Headquartered in Richmond, Virginia, The 1031 Tax Group LLC --
http://www.ixg1031.com/-- was a privately held consolidated group
of qualified intermediaries created to service real property
exchanges under Section 1031 of the Internal Revenue Code.
The Company and 15 of its affiliates filed for Chapter 11
protection on May 14, 2007 (Bankr. S.D.N.Y. Case No. 07-11447
through 07-11462). Gerard A. McHale, Jr., was appointed Chapter
11 trustee. Jonathan L. Flaxer, Esq., and David J. Eisenman,
Esq., at Golenbock Eiseman Assor Bell & Peskoe LLP, represent the
Chapter 11 trustee. Kurtzman Carson Consultants LLC acts as
claims and notice agent. Thomas J. Weber, Esq., Melanie L.
Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig,
LLP, represent the Official Committee of Unsecured Creditors. As
of Sept. 30, 2007, the Debtors had total assets of $164,231,012
and total liabilities of $168,126,294, resulting in a total
stockholders' deficit of $3,895,282.
Former CEO Edward H. Okun is in federal prison at Northern Neck
Regional Jail in Warsaw, Virginia, after being convicted of mail
fraud, among other charges. Mr. Okun allegedly engaged in several
misappropriations of funds of 1031 Tax Group and other entities.
The funds were used for Mr. Okun's lavish lifestyle including
acquiring properties and luxury asset.
804 CONGRESS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: 804 Congress, LLC
fdba 804 Congress, LP
815-A Brazos St., #491
Austin, TX 78701
Bankruptcy Case No.: 09-12482
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Western District of Texas (Austin)
Judge: Craig A. Gargotta
Debtor's Counsel: Stephen W. Sather, Esq.
Barron & Newburger, P.C.
1212 Guadalupe, Suite 104
Austin, TX 78701
Tel: (512) 476-9103 Ext. 220
Fax: (512) 476-9253
Email: ssather@bnpclaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules attached to the Petition, the Company
has assets of at least $6,536,481, and total debts of $3,803,250.
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/txwb09-12482.pdf
The petition was signed by Stefan Whitwell, manager of the
Company.
ACCESS PHARMACEUTICALS: Registers 3,510,000 Common Shares With SEC
------------------------------------------------------------------
Access Pharmaceuticals, Inc., filed with the Securities and
Exchange Commission a Registration Statement on Form S-8 to
register 3,510,000 shares of common stock, consisting of:
-- 3,010,000 shares of Common Stock being registered under
the Access Pharmaceuticals 2005 Equity Incentive Plan, and
-- 500,000 shares of Common Stock being registered under the
2007 Special Stock Option Plan and Agreement.
The number of shares to be registered takes into account a one-
for-five reverse stock split effected June 5, 2006.
A full-text copy of the registration statement is available at no
charge at http://ResearchArchives.com/t/s?43d3
Access said in a Form 10-Q filing, "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
. . . 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.
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.
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.
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.
ACM INVESTMENTS: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: ACM Investments, LLC
dba Burke Square Apartment Homes
60 West Sidlee Street
Thousand Oaks, CA 91360
Bankruptcy Case No.: 09-36367
Debtor-affiliate filing separate Chapter 11 petition:
Entity Case No.
------ --------
Nations West Investments, LLC 09-36369
Chapter 11 Petition Date: August 31, 2009
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Jeff Bohm
Debtor's Counsel: Margaret Maxwell McClure, Esq.
Attorney at Law
909 Fannin, Suite 3810
Houston, TX 77010
Tel: (713) 659-1333
Fax: (713) 658-0334
Email: mccluremar@aol.com
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Naseem Majdalani, member of the
Company.
ADANAC MOLYBDENUM: CCAA Stay Period Extended to November 30
-----------------------------------------------------------
Adanac Molybdenum Corporation has said its application of
August 28, 2009 to the Supreme Court of British Columbia for an
Order under the Companies' Creditors Arrangement Act to extend its
creditor protection has been successful allowing the Company to
continue to restructure and continue to stay all claims and
actions against the Company and its assets.
The August 28th Order extends the stay period under CCAA until
November 30, 2009, at which time the matter will be reviewed by
the Court.
About Adanac Molybdenum
Adanac Molybdenum Corporation Adanac Molybdenum Corporation
(CA:AUA) (PINK SHEETS: AUAYF)(FRANKFURT: A9N) is listed on the TSX
and Frankfurt exchanges and owns the Ruby Creek Project in
northern British Columbia. The Company has advanced the project
through feasibility studies, a production decision and has
previously ordered long-lead equipment, completed permitting for
construction, constructed a road to the site and secured
US$80 million in bridge financing.
ADVANCED MATERIALS: UFP Technologies Acquires Selected Assets
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UFP Technologies, Inc., has purchased certain assets of Advanced
Materials Group in Rancho Dominguez, California. UFP's purchase
of selected assets of AMI was approved by the Bankruptcy Court on
September 2, 2009.
UFP Technologies did not disclose the financial terms of the deal.
"We are very pleased with this transaction," said R. Jeffrey
Bailly, Chairman & CEO of UFP Technologies. "With its ISO 13485
Quality Certification, FDA certification, and clean room
capabilities, AMI's facility is ideally suited to meeting the
needs of our medical customers. It also strengthens our position
on the west coast; with the Rancho Dominguez plant just 85 miles
from our Ventura facility, we will also have the option to
increase efficiencies by combining these two California
operations."
"Following our acquisition of selected assets of Foamade
Industries and E.N. Murray Company, AMI is our third transaction
this year," Mr. Bailly continued, "demonstrating the exciting
acquisition growth opportunities that exist for UFP Technologies."
UFP Technologies designs and manufacturs interior protective
packaging solutions using molded fiber, vacuum-formed plastics,
and molded and fabricated foam plastics. The Company also designs
and manufactures engineered component solutions using laminating,
molding, and fabricating technologies. The Company primarily
serves the automotive, computers and electronics, medical,
aerospace and defense, consumer, and industrial markets.
About Advanced Materials Group
Advanced Materials Group, Inc., develops, manufactures and markets
a wide variety of products from a raw material base of flexible
components. The Company's principal subsidiary, Advanced
Materials, Inc. -- formerly known as Wilshire Advanced Materials,
Inc. -- is the successor to a 50-year old business that converted
specialty materials including foams, foils, films and adhesive
composites into components and finished products.
Advanced Materials Group, Inc., and two affiliates filed for
bankruptcy on July 2, 2009 (Bankr. C.D. Calif. Case No. 09-16529).
Judge Theodor Albert presides over the case. Mark Bradshaw, Esq.,
and Leonard M. Shulman, Esq., at Shulman Hodges & Bastian LLP, in
Foothill Ranch, California, serve as the Debtors' counsel.
Advanced Materials disclosed assets ranging from $1,000,001 to
$10,000,000 and debts from $1,000,001 to $10,000,000 in its
petition. As of February 28, 2009, Advanced Materials Group had
$7,171,748 in total assets and $3,199,677.
AGNA HOSPITALITY: Case Summary & 16 Largest Unsecured Creditors
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Debtor: Agna Hospitality, Inc.
dba Days Inn and Suites
202 Landmark Drive
Normal, IL 61761
Bankruptcy Case No.: 09-72581
Chapter 11 Petition Date: August 31, 2009
Court: United States Bankruptcy Court
Central District of Illinois (Springfield)
Judge: Mary P. Gorman
Debtor's Counsel: Jonathan A. Backman, Esq.
117 N Center St.
Bloomington, IL 61701
Tel: (309) 820-7420
Fax: (309) 820-7430
Email: jabackman@backlawoffice.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 16 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/ilcb09-72581.pdf
The petition was signed by Devang Patel, president of the Company.
ALIXPARTNERS LLP: S&P Puts 'BB-' Rating on CreditWatch Positive
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Standard & Poor's Ratings Services said that it placed its ratings
on AlixPartners LLP, including the 'BB-' corporate credit rating,
on CreditWatch with positive implications. The CreditWatch
placement reflects the company's solid performance and improving
credit metrics. Total debt outstanding as of June 30, 2009, was
$371 million.
"Despite the global recession, AlixPartners' performance has been
solid. For the quarter ended June 30, 2009, the firm's revenues
and EBITDA increased 20% over the prior year period. This has led
to improving credit measures," said Standard & Poor's credit
analyst Andy Liu.
AlixPartners' main practice areas are financial advisory,
enterprise improvement, information management services, and
turnaround and restructuring. The performance at information
management services and turnaround and restructuring practices has
been particularly strong. Standard & Poor's expects that the
company's solid performance will continue through 2009 into 2010.
Furthermore, attrition rate is well within the historical range.
In resolving the CreditWatch listing, Standard & Poor's will meet
with management and discuss the company's business plans and long-
term capital structure.
ALLIED CAPITAL: Fitch Downgrades Issuer Default Rating to 'B+'
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Fitch Ratings has taken these rating actions on Allied Capital
Corporation's Issuer Default Rating and outstanding debt ratings:
-- Long-term IDR downgraded to 'B+' from 'BB';
-- Senior secured debt affirmed at 'BB'; (debt rated 'RR1');
-- Senior unsecured debt downgraded to 'B+' from 'BB'; (debt
rated 'RR4').
The Rating Outlook is Negative. Approximately $1.6 billion of
debt is affected by these actions.
The downgrade reflects the cash drain associated with the
renegotiation of Allied's corporate revolver and private notes,
the expectation for continued asset sales in a distressed
environment in order to meet scheduled debt maturities, the
subordination of public debt holders, and higher funding costs.
Allied had generated approximately $488.6 million of net cash
proceeds from asset sales and principal repayments in first half-
2009. However, restructuring costs, amendment and advisor fees,
and the repayment of $174 million of private notes outstanding
since quarter end will deplete cash balances significantly. Fitch
expects Allied will need to continue to liquidate a meaningful
portion of its portfolio, absent a debt refinancing, in order to
meet $303.8 million of debt maturities before the end of 2010,
$573.7 million of public and private note maturities in 2011 and
$529.1 million of public and private note maturities in 2012.
As part of the debt renegotiation, lenders in the corporate
revolver and private note holders were afforded a first lien on
substantially all of Allied's assets. Fitch has notched the
secured debt rating two notches above that of the IDR and assigned
a Recovery Rating of 'RR1' to reflect that even on a stressed
basis, collateral available to the secured creditors provides
meaningful protection. All public debt will remain unsecured and
structurally subordinated to secured debt. Given Allied's
leverage, Fitch believes recovery prospects for unsecured debt
holders is average, at 31% to 50% of outstanding, hence the 'RR4'
Recovery Rating. As secured debt is repaid, recovery prospects
for unsecured debt could improve.
Renegotiated covenants include a minimum asset coverage
requirement that starts at 135% and reaches 155% by the middle of
2011, an adjusted assets to secured debt coverage ratio that
starts at 175% and rises to 225% by the middle of 2011, and an
adjusted EBIT to interest expense covenant that starts at 1.05
times (x), declines to 0.80x in June 2010 and increases to 0.95x
by the end of 2011. Fitch believes the covenants will provide the
company with sufficient operating flexibility over the medium-
term, barring a repeat of market conditions seen in late 2008
which yielded significant amounts of additional unrealized
depreciation.
Fitch has assigned a Negative Rating Outlook. Fitch may take
further negative rating actions on unrealized portfolio
depreciation and/or reductions in cash earnings which yield
tighter cushions on debt covenants, along with an inability to
generate sufficient liquidity though asset sales to meet debt
maturities as they come due.
Conversely, rating stability will be driven by an improvement in
market spreads, valuation multiples, and underlying portfolio
performance which result in consistent unrealized portfolio
appreciation, combined with the ability to access the debt and
equity markets to raise investment capital when market conditions
improve, which should yield better operating performance.
ALLIED CAPITAL: S&P Downgrades Senior Unsec. Debt Rating to 'BB'
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Standard & Poor's Ratings Services said that it removed its
ratings on Allied Capital Corp. from CreditWatch Negative where
they had been placed on Feb. 20, 2009. At the same time, S&P
lowered the senior unsecured debt rating to 'BB' from 'BB+', and
affirmed its 'BB+' long-term counterparty credit rating. The
outlook is negative.
On Sept. 1, 2009, Allied announced that it had come to an
agreement with its private note holders and bank lenders to
restructure the terms of its debt facilities. As part of the
agreement, private note holders and bank lenders have a blanket
lien on most of the firm's assets. "Because this leaves senior
unsecured creditors at a disadvantage relative to secured
creditors, S&P lowered its rating on the firm's senior unsecured
debt," said Standard & Poor's credit analyst Jeffrey Zaun.
The ratings affirmation and removal from CreditWatch follow the
increased operating flexibility obtained through the agreement.
Notably, the private notes and bank facilities no longer have
capital maintenance or debt-to-equity covenants. Nonetheless,
because of large unrealized depreciation in Allied's portfolio,
leverage remains high, with a debt-to-equity ratio of 1.35x as of
June 30, 2009. Furthermore, nonaccrual loans have ballooned to
36% of loans at cost, which represents 13% of loans at value and
10% of the entire portfolio at value.
S&P believes that strengthening the firm's balance sheet will take
an extended period and that earnings will remain weak well into
2010. S&P's concerns are partially offset by capital levels that
continue to provide some cushion against losses. In S&P's
opinion, the amended agreement with creditors has provided Allied
with breathing room that should allow management to shrink the
firm and delever the balance sheet.
The negative outlook reflects S&P's expectation that the credit
quality of the firm's loan portfolio will continue to deteriorate
and that liquidity could remain scarce in middle-market leverage
finance. S&P also expects Allied to exit a significant number of
troubled investments at a loss, which will contribute to pressure
on earnings. Fees related to the restructured debt facilities,
some of which will amortize during the next three years, will also
hurt reported earnings in the medium term. Finally, S&P expects
Allied's access to equity or term debt funding to remain impaired
into 2010.
S&P could lower the rating if Allied is unable to comply with the
amended covenants or is unable to delever its balance sheet and
improve coverage metrics. On the other hand, S&P could revise the
outlook to stable if the firm improves its financial profile and
stabilizes its portfolio performance.
ALTRA NEBRASKA: Proposes McGrath North Mullin as Counsel
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Altra Nebraska LLC asks the U.S. Bankruptcy Court for the District
of Nebraska for permission to employ McGrath North Mullin & Kratz
PC LLO as its counsel to provide advice and prepare all necessary
documents on behalf of the Debtor in all legal areas necessary for
completion of the case.
The Debtor says that it provided the firm with a general retainer
of $35,000 pre-filing for services rendered in preparation for the
filing and representation in this case. Papers filed with the
Court did not show the firm's standard hourly rates for its
professionals.
The Debtor assures the Court that the firm does not hold or
represent an interest adverse to the estate, and that is
"disinterested persons" as defined in Section 101(14) of the
Bankruptcy Code.
About Altra Nebraska
Healdsburg, California-based Altra Nebraska, LLC, filed for
Chapter 11 on Aug. 13, 2009 (Bankr. D. Nebr. Case No. 09-42348).
Robert J. Bothe, Esq., and Robert P. Diederich, Esq., at McGrath,
North, Mullin & Kratz, PC, represent the Debtor in its
restructuring efforts. In its petition, the Debtor listed
$10,000,001 to $50,000,000 in assets and $50,000,001 to
$100,000,000 in debts.
ALTRA NEBRASKA: Wants to Sell Carleton Ethanol Production Plant
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Altra Nebraska LLC asks the U.S. Bankruptcy Court for the District
of Nebraska to approve sale of its assets free and clear of all
liens, claims and interests, through an auction conducted by Maas
Companies Inc. The Debtor wants to sell its 110-million gallon
annual capacity ethanol production facility near Carleton,
Nebraska.
In a separate request, the Debtor is asking the Court for
permission to employ Maas Companies as its sales agent and
auctioneer.
Starostka Group Unlimited, Strobel Group Unlimited Inc., Beatrice
Concrete Inc., Darland Construction Company, and Gemma Power
Systems LLC object the Debtor's request, saying that it fails to
disclose how its assets are to be sold.
About Altra Nebraska
Healdsburg, California-based Altra Nebraska, LLC, filed for
Chapter 11 on Aug. 13, 2009 (Bankr. D. Nebr. Case No. 09-42348).
Robert J. Bothe, Esq., and Robert P. Diederich, Esq., at McGrath,
North, Mullin & Kratz, PC, represent the Debtor in its
restructuring efforts. In its petition, the Debtor listed
$10,000,001 to $50,000,000 in assets and $50,000,001 to
$100,000,000 in debts.
ALTERNATIVE DISTRIBUTION: Files Chapter 11 for Debt-Swap Sale
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Alternative Distribution Systems Inc. filed for Chapter 11 with
plans for selling its business under 11 U.S.C. Sec. 363. The
first lien lenders will credit bid a portion of their claims at an
auction for the assets or business. Alternative Distribution owes
$32.5 million on a first-lien revolving credit and term loan plus
$4.1 million on a second-lien loan.
The lenders, led by General Electric Capital Corp., as agent, are
providing a $3,976,000 loan to fund the Chapter 11 case.
Chesterton, Indiana-based Alternative Distribution Systems Inc. is
a leading provider of integrated transportation, distribution and
logistics services for the metals industry. It operates
facilities located in 14 states and Canada and has 280 employees.
Alternative Distribution together with two affiliates filed for
Chapter 11 on September 2, 2009 (Bankr. D. Del. Case No. 09-
13099). Attorneys at Proskauer Rose LLP serve as general
bankruptcy counsel. Attorneys at Cole, Schotz, Meisel, Forman &
Leonard, P.A., serve as local counsel. EVE Partners LLC serves as
financial advisor. BMC Group Inc. serves as claims and notice
agent.
AMBRILIA BIOPHARMA: CCAA Stay Period Extended to October 30
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Ambrilia Biopharma Inc. has obtained an order from the Superior
Court of Quebec (Commercial Division) extending in its effect the
initial order issued by the Court on July 31, 2009, until
October 30, 2009, pursuant to the Companies' Creditors Arrangement
Act (Canada).
The purpose of the extension is to provide Ambrilia with an
opportunity to develop, file a plan of arrangement for
consideration by its creditors and complete its restructuring
process.
Ambrilia has been operating under the protection of the CCAA since
July 31, 2009.
On August 25, 2009, Ambrilia Biopharma provided its first
bi-weekly Default Status Report under National Policy 12-203
-Cease Trade Orders for Continuous Disclosure Defaults.
On August 11, 2009, Ambrilia announced that the filing of its
interim financial statements, management's discussion and analysis
and related CEO and CFO certifications for the second quarter
ended on June 30, 2009, was being delayed beyond the filing
deadline of August 14.
Ambrilia said since its default announcement on August 11, there
have not been any material changes to the information contained
therein; nor any failure by Ambrilia to fulfill its intentions as
stated therein with respect to satisfying the provisions of the
alternative information guidelines, and there are no additional
defaults subsequent to such announcement. Further, there have
been no additional material changes respecting Ambrilia and its
affairs. Ambrilia intends to file, if required, its next Default
Status Report by September 8, 2009.
Any recovery for creditors and other stakeholders, including
shareholders, is uncertain and is highly dependent upon a number
of factors, including the outcome of Ambrilia proceedings under
the Companies' Creditors Arrangement Act (Canada).
On August 14, 2009, Ambrilia Biopharma said Dr. Philippe Calais,
the former President and CEO of the Company, has resigned as a
Member of its Board of Directors, effective immediately. Dr.
Calais will serve as a Consultant to the Company for the next six
months, ensuring a smooth and orderly transition and assisting
Management in certain of its ongoing projects.
About Ambrilia Biopharma
Ambrilia Biopharma Inc. (CA:AMB) -- http://www.ambrilia.com/-- is
a biotechnology company focused on the discovery and development
of novel treatments for viral diseases and cancer. Ambrilia's
head office, research and development and manufacturing facilities
are located in Montreal.
AMERICAN CAPITAL: Gets Forbearance from Unsecured Noteholders
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American Capital, Ltd., said in a regulatory filing that following
the receipt of certain acceleration notices, it has entered into
forbearance agreements with the holders of at least 99% in
principal amount of its privately placed unsecured notes.
On August 28, 2009, American Capital received notices of
acceleration and reservation of rights from the Required Holders
of the Notes issued by the Company under (i) the Note Purchase
Agreement dated as of September 1, 2004 relating to $82,000,000 of
5.92% Senior Notes, Series A, due September 1, 2009 and
$85,000,000 of 6.46% Senior Notes, Series B, due September 1,
2011; (ii) the Note Purchase Agreement dated as of August 1, 2005
relating to $126,000,000 of 6.14% Senior Notes, Series 2005-A, due
August 1, 2010; (iii) the Note Purchase Agreement dated as of
September 26, 2005 relating to $75,000,000 of Floating Rate Senior
Notes, Series 2005-B, due October 30, 2020; and (iv) the Note
Purchase Agreement dated as of February 9, 2006 relating to EUR
14,000,000 of 5.177% Senior Notes, Series 2006-A and GBP 3,000,000
of 6.565% Senior Notes, Series 2006-B due February 9, 2011,
declaring the unpaid principal amount of the Notes currently
outstanding plus all accrued and unpaid interest thereon and the
respective make-whole amount for each series, determined in
respect of such principal amounts, immediately due and payable.
The holders constitute the holders of a majority in principal
amount of the Notes issued under each NPA, which is the requisite
percentage of holders necessary to declare all of the outstanding
Notes issued thereunder immediately due and payable.
The Notices list events of default under the NPAs resulting from
the Company's breach of the minimum consolidated tangible net
worth covenant, the available debt asset coverage covenant, the
asset coverage covenant and the ratio of consolidated debt to
consolidated shareholders' equity covenant in the respective NPAs.
The Notices further provide that the entire unpaid principal
amount of the Notes currently outstanding plus all accrued and
unpaid interest thereon and the respective make-whole amount for
each series, determined in respect of such principal amounts have
all become immediately due and payable. From and after March 30,
2009, interest is accruing on any unpaid portion of the principal,
any overdue payment of interest and any unpaid portion of the
make-whole amount at the default rate, which is 2.00% over the
applicable interest rate on the Notes. Pursuant to the terms of
the NPAs, the holders of the Notes were not entitled to a make-
whole amount or interest at the default rate prior to
acceleration. The failure of the Company to immediately pay all
of the amounts due under the NPAs has also resulted in an
additional event of default under (i) each of the NPAs and (ii)
the Credit Agreement dated as of May 16, 2007, among the Company,
the several banks and other financial institutions from time to
time parties to the Credit Agreement and the administrative agent
thereunder.
American Capital entered into a forbearance agreement with
virtually all of the noteholders under each NPA on September 3,
2009, under which the noteholders agreed to forbear from
exercising certain rights and remedies with respect to events of
default that have occurred under the NPA. The forbearance period
under each Forbearance Agreement is effective until the Required
Holders under the applicable Notes elect to terminate the
forbearance period upon written notice to the Company. In
addition, the forbearance period will generally immediately and
automatically terminate (i) in the event of a voluntary or
involuntary insolvency proceeding involving the Company or any of
its consolidated subsidiaries, (ii) if an acceleration occurs
under the Credit Agreement, or the indenture governing certain
public bonds issued by the Company, (iii) if there are material
amendments or modifications to the Credit Agreement or such
indenture or collateral is provided to the holders of debt issued
under such instruments or (iv) if a judgment involving an
aggregate liability of $15 million or more relating to debt that
is due and remains unpaid, is entered against the Company or any
of its consolidated subsidiaries in favor of the creditor.
Following the termination of the forbearance period under a
particular Forbearance Agreement, the noteholders may proceed to
enforce any or all of their rights and remedies under the
applicable NPA with respect to the then existing events of
default.
As of August 31, 2009, the aggregate amount due under the Notes as
a result of the acceleration was (i) $185,692,838 under the 2004
NPA, which includes a make-whole amount of $11,680,009; (ii)
$136,281,536 under the 2005-A NPA, which includes a make-whole
amount of $8,263,024; (iii) $75,566,260 under the 2005-B NPA; and
(iv) EUR 15,394,825 and GBP 3,311,818 under the 2006 NPA, which
includes a make-whole amount of EUR 842,253 and GBP 263,524,
respectively. There is no make-whole amount required under the
2005-B NPA. In consideration of the noteholders' agreement to
forbear during the Forbearance Period, the Company paid them all
of the accrued and unpaid interest due as of September 1, 2009 in
respect of the outstanding principal amount of the Notes, overdue
interest and the make-whole amounts at the default rate as
follows: (i) $6,944,150 under the 2004 NPA; (ii) $2,018,512 under
the 2005-A NPA; (iii) $566,260 under the 2005-B NPA; and (iv) EUR
552,572 and GBP 48,294 under the 2006 NPA.
The Company has retained Miller Buckfire & Co. LLC as a financial
advisor to assist it in restructuring its borrowing arrangements
and intends to use the forbearance period to continue to work with
its lenders.
American Capital
American Capital Ltd., formerly American Capital Strategies, Ltd.,
is an equity firm and a global asset manager. The Company invests
in private equity, private debt, private real estate investments,
early and late-stage technology investments, special situation
investments and alternative asset funds managed by American
Capital and structured finance investments. It operates in two
segments: investment portfolio and alternative asset management
business. In August 2008, the Company announced that it completed
the sale of Contec Holdings, Ltd. to an affiliate of Bain Capital
Partners, LLC. In March 2009, the Company completed the
acquisition of the shares of its affiliate European Capital
Limited, which it did not already own. In April 2009, the Company
completed the combination of three portfolio companies within its
Financial Services Group to create Core Financial Group, a
diversified commercial finance holding company.
American Capital has $6,628,000,000 in assets against debts of
$4,738,000,000 as of June 30, 2009.
As reported by the TCR on Aug. 25, 2009, Standard & Poor's Ratings
Services said that it has lowered its ratings on Bethesda,
Maryland-based American Capital Ltd., including lowering the long-
term counterparty credit rating to 'B-' from 'BB-'. The outlook
is negative.
AMERICAN MEDICAL: AM Best Downgrades FSR to 'B'
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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 American Medical and Life Insurance Company (American Medical)
(New York, NY). These ratings also have been placed under review
with negative implications.
The rating downgrades of American Medical reflect its past poor
enterprise risk management practices, which led to the recent
public disciplinary actions taken by the New York State Insurance
Department. In addition, these regulatory actions have negatively
impacted the company's reputation and drastically altered its
strategic business plan.
Recently, the New York State Insurance Department cited American
Medical with market conduct and compliance issues resulting in a
sizeable fine, required its national television advertisements be
terminated and that it cease selling its limited medical benefit
policies in the state of New York with reconsideration at a later
date. The negative publicity could expose American Medical to
market, competitive and legal challenges.
American Medical's current claims audit and actuarial review have
delayed the release of its second quarter 2009 statutory financial
statements. The full impact of the claims audit and actuarial
review is currently unknown and potentially may be material.
The ratings will remain under review with negative implications
until American Medical's second quarter 2009 results have been
reviewed and A.M. Best has had additional discussions with the
company. Should there be a further delay in filing the company's
financial statements or its risk-adjusted capital position falls
below A.M. Best's expectations for its current ratings, further
downgrades would likely result.
AMERICAN NATURAL ENERGY: Grant Has Option Purchase 50,000 Shares
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American Natural Energy Corporation reports that pursuant to the
terms of the Company's 2001 Stock Incentive Plan, under the
Automatic Option Grant Program provisions of the Plan and as a
non-employee member of the Company's Board of Directors, William
A. Grant, III, was granted an option to purchase 50,000 shares of
the Company's common stock exercisable at a price of $0.07 per
share, the fair market value on August 26, 2009, the date of his
election to the Board.
Effective August 26, 2009, as permitted by the Company's By-Laws,
the Board of Directors voted to increase the size of the Board to
five persons and elected Mr. Grant to fill the vacancy created.
Mr. Grant will serve on the Board of Directors until the next
annual meeting of stockholders and until the election and
qualification of his successor. It is anticipated that Mr.
Grant's appointment to certain Committees of the Board will be
acted upon in the future, however, it is presently expected that
he will be appointed to the Audit Committee of the Board.
According to ANEC, since January 1, 2008, there have been no
transactions and there are no currently proposed transactions in
which the Company was or will be a participant and the amount
involved exceeds $120,000 in which Mr. Grant had or will have a
direct or indirect material interest which are required to be
reported in response to Item 404(a) of Regulation S-K.
Going Concern Doubt
The Company has said it currently has a severe shortage of working
capital and funds to pay its liabilities. The Company's
debentures in the amount of $10,825,000 which were due on
September 30, 2006, have been in default since that time. As of
August 7, 2009, certain debentures have been re-purchased and the
remainder of the debentures has agreed upon repurchase terms.
As of June 30, 2009, interest in the amount of $2,815,000 on the
debentures had accrued and was unpaid when due. The Company has
no current borrowing capacity with any lender. The Company
incurred a net loss of $1,908,000 for the six months ended
June 30, 2009. The Company has sustained substantial losses
during the years ended December 31, 2008 and December 31, 2007,
totaling roughly $61,000 and $3.2 million, respectively, and
has a working capital deficiency and an accumulated deficit at
June 30, 2009 which leads to substantial doubt concerning the
ability of the Company to meet its obligations as they come due.
The Company also has a need for substantial funds to develop its
oil and gas properties and repay borrowings as well as to meet its
other current liabilities.
American Natural Energy Corporation (TSX Venture:ANR.U) is a
Tulsa, Oklahoma-based independent exploration and production
company with operations in St. Charles Parish, Louisiana.
As of June 30, 2009, ANEC had total assets of $3,313,407 and total
liabilities of $23,467,408.
ANTHRACITE CAPITAL: Misses Interest Payment on 11.75% Notes
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Anthracite Capital, Inc., did not make an interest payment due
September 1, 2009, on its outstanding $51,049,000 11.75%
Convertible Senior Notes due 2027. Under the indenture governing
these notes, the failure to make an interest payment is subject to
a 30-day cure period before constituting an event of default.
On August 17, 2009, as reported by the Troubled Company Reporter,
Anthracite Capital issued 5,000,000 shares of its common stock,
par value $0.001 per share, in exchange for $15,000,000 aggregate
principal amount of its 11.75% Convertible Senior Notes due 2027
with a holder of the notes pursuant to an exchange agreement
entered into on August 14 with that holder.
On August 13, the Company agreed to issue 915,000 shares of its
common stock in exchange for $3,000,000 aggregate principal amount
of its 11.75% Convertible Senior Notes due 2027 with another
holder of the notes pursuant to an exchange agreement with the
holder. The exchange was expected to settle on August 18.
In each of the transactions, the shares of the Company's common
stock were or are expected to be issued in reliance upon the
exemption set forth in Section 3(a)(9) of the Securities Act of
1933 for securities exchanged by the issuer and an existing
security holder where no commission or other remuneration is paid
or given directly or indirectly by the issuer for soliciting such
exchange.
About Anthracite Capital
Anthracite Capital, Inc., is a specialty finance company focused
on investments in high yield commercial real estate loans and
related securities. Anthracite is externally managed by BlackRock
Financial Management, Inc., which is a subsidiary of BlackRock,
Inc., one of the largest publicly traded investment management
firms in the United States with roughly $1.307 trillion in global
assets under management at December 31, 2008. BlackRock Realty
Advisors, Inc., another subsidiary of BlackRock, provides real
estate equity and other real estate-related products and services
in a variety of strategies to meet the needs of institutional
investors.
At June 30, 2009, the Company's balance sheet showed total assets
of $2.74 billion, total liabilities of $2.198 billion, resulting
to a stockholders' equity of $504.67 million.
Going Concern Doubt
After auditing the Company's 2008 report on Form 10-K, the
Company's independent registered public accounting firm issued an
opinion saying that the uncertainty relating to the outcome of the
Company's ongoing negotiations with its lenders have raised
substantial doubt about the Company's ability to continue as a
going concern. The Company obtained agreements from its secured
credit facility lenders on March 17, 2009, that the going concern
reference in the independent registered public accounting firm's
opinion to the consolidated financial statements was waived.
APPALACHIAN OIL: Court Okays Sale to Florida Sunshine Investments
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According to Convenience Store News, Appalachian Oil Co. said that
the Hon. Marsha Parsons of the U.S. Bankruptcy Court for the
Eastern District of Tennessee has approved the sale of its assets
to Florida Sunshine Investments for $6.25 million.
CSNews relates that the sale was backed by real estate magnate
Jeff Greene. According to CSNews, Florida Sunshine has beaten out
Appalachian Oil's initial suitor, Empire Petroleum, which had cut
its $9.1 million offer to $5.5 million.
P. A. (Andy) Weber, III -- senior vice president of NRC Realty &
Capital Advisors LLC, the company handling the sale, and who has
been serving as chief restructuring officer for Appalachian --
said in a statement, "I'm pleased that Florida Sunshine will
retain all of APPCO's [Appalachian] stores, a portion of its
dealer business, and the vast majority of employees. It is the
end of a long road in APPCO's history and the beginning of a new
chapter in APPCO's bright future. I appreciate the help of the
DIP Lender, the creditors committee and most importantly the APPCO
employees who continued to serve their customers during this
process."
CSNews quoted Mr. Weber as saying, "I think buyers realize the
store assets are of good quality and in good shape, and that
Appco's challenges have been driven more by capital structure and
owner/lender relationships than anything else."
According to CSNews, Florida Sunshine will be acquiring rights to
Appalachian's private brand name, APPCO, as well as the Company's
47 sites. The stores, which are leasehold properties, are located
in eastern Tennessee, southeastern Kentucky, and southwest
Virginia.
The transaction for the assets, which include convenience stores
and are located in Kansas, Oklahoma, and Missouri, would close by
September 4, CSNews states.
Appalachian Oil sought Chapter 11 protection before the U.S.
Bankruptcy Court for the Eastern District of Tennessee on
February 9, 2009 (Case No. 09-50259). Mark S. Dessauer, Esq., at
Hunter, Smith & Davis, in Kingsport, Tennessee, represents the
Debtor as counsel. In its petition, the Debtor listed assets
between $10 million and $50 million and the same range of debt.
The Company's creditors with the biggest unsecured claims are BP
Plc's Amoco/BP, owed $2.41 million, and fuel distributor Crescent
Oil Co., owed $1.6 million.
APRIL TYLER: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: April B. Tyler
12410 Woodhull Landing
Fenton, MI 48430
Bankruptcy Case No.: 09-34668
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Eastern District of Michigan (Flint)
Judge: Daniel S. Opperman
Debtor's Counsel: Peter T. Mooney, Esq.
Simen, Figura & Parker
5206 Gateway Centre #200
Flint, MI 48507
Tel: (810) 235-9000
Email: pmooney@sfplaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$1,472,885, and total debts of $1,421,957.
A list of the Company's 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/mieb09-34668.pdf
The petition was signed by Ms. Tyler.
ARROWHEAD & GATEWAY: Files for Chapter 11 in Phoenix
----------------------------------------------------
Arrowhead & Gateway LLC filed a "barebones" Chapter 11 petition in
Phoenix, Arizona. Arrowhead & Gateway owns the Arrowhead Gateway
shopping center in Glendale, Arizona. The property, with almost
72,000 square feet of retail space, is listed for sale at
$30.7 million.
The Company filed for Chapter 11 on August 31 (Bankr. D. Ariz.
Case No. 09-21167). Edwin B. Stanley, Esq., at Simbro & Stanley,
PLC, represents the Debtor in its Chapter 11 effort. The petition
says that assets and debts range $10,000,001 to $50,000,000.
ASAP WILDFIRE: Case Summary & 10 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: ASAP Wildfire Suppression, LLC
dba ASAP Fire
dba ASAP Fire Suppression
799 Hwy 181 N
Elephant Butte, NM 87935
Bankruptcy Case No.: 09-13979
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
New Mexico (Albuquerque)
Judge: Robert H. Jacobvitz
Debtor's Counsel: Russell C. Lowe, Esq.
PO Box 90536
Albuquerque, NM 87199-0536
Tel: (505) 263-0602
Email: plainduckantiques@yahoo.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$528,000, and total debts of $3,247,978.
A list of the Company's 10 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/nmb09-13979.pdf
The petition was signed by Paul J. Petersen, managing member of
the Company.
AUTOBACS STRAUSS: Plan Filing Deadline Moved to October 18
----------------------------------------------------------
According to Bill Rochelle at Bloomberg, Autobacs Strauss Inc.,
obtained from the Bankruptcy Court a second extension of its the
exclusive right to file a Chapter 11 plan. Under the new deadline,
the Debtor won't receive competing plans until after Oct. 18.
Headquartered in South River, New Jersey, Autobacs Strauss Inc. --
http://www.straussauto.com/-- sells after-market automotive parts
and accessories, and operate automotive service centers located in
New York, New Jersey, Philadelphia, Bethlehem and Pennsylvania.
The Company operates 86 retail store locations and has about 1,450
employees. The Company filed for Chapter 11 protection on
February 4, 2009 (Bankr. D. Del. Case No. 09-10358). Edward J.
Kosmowski, Esq., at Young Conaway Stargatt & Taylor, LLP,
represents the Debtor in its restructuring efforts. As of
January 3, 2009, the Debtor had total assets of $75,000,000 and
total debts of $72,000,000.
The Chapter 11 case is Strauss's third. The preceding Chapter 11
case ended with confirmation of a Chapter 11 plan in April 2007.
The Company was then named R&S Parts & Service Inc.
AVIS BUDGET: Has Deal to Purchase Vehicles From Ford Dealers
------------------------------------------------------------
Avis Budget Group, Inc., reports that on August 28, 2009, its
subsidiary Avis Budget Car Rental, LLC, and Ford Motor Company
entered into a letter agreement -- dubbed the Avis Budget Car
Rental, LLC 10 Model Year Program Letter -- for the purchase of
vehicles from Ford dealers.
The Agreement sets forth the terms and conditions related to
ABCR's purchase of vehicles from Ford dealers for the 2010 vehicle
model year. The Agreement also sets forth the terms and
conditions related to Ford's guaranteed auction value program,
which guarantees the price of certain vehicles purchased by ABCR
under the Agreement when sold at auction.
A redacted copy of the letter agreement is available at no charge
at http://ResearchArchives.com/t/s?43db
About Avis Budget Group
Avis Budget Group -- http://www.avisbudgetgroup.com/-- provides
vehicle rental services, with operations in more than 70
countries. Through its Avis and Budget brands, the Company is a
general-use vehicle rental company in each of North America,
Australia, New Zealand and certain other regions based on
published airport statistics. Avis Budget Group is headquartered
in Parsippany, N.J. and has roughly 24,000 employees.
* * *
As reported by the Troubled Company Reporter on April 30, 2009,
Standard & Poor's Ratings Services assigned a '6' recovery rating
to Avis Budget Car Rental LLC's (CCC+/Developing/--) unsecured
notes, indicating expectations of negligible (0%-10%) recovery of
principal in the event of a payment default. Avis Budget Car
Rental LLC is a subsidiary of Avis Budget Group Inc.
(CCC+/Developing/--).
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.
Ford Motor carries a 'Ca' issuer credit and a 'Caa3' long term
corporate ratings, with negative outlook, from Moody's.
Fitch Ratings said via Business Wire on August 26 that it has
revised the Rating Outlook on Ford Motor Company and Ford Motor
Credit Company to Stable from Negative. In addition, the Issuer
Default Rating of Ford is affirmed at 'CCC'.
AVIZA TECHNOLOGY: Sumitomo's $50MM is Lead Bid at Sept. 29 Auction
------------------------------------------------------------------
Aviza Technology Inc. will conduct an auction on September 29 to
test whether there will be additional offers for its business,
Bill Rochelle at Bloomberg News reported. Sumitomo Precision
Products Co. is already under contract to buy the assets for $50
million, unless another party outbids it. Competing bids are due
September 18. The sale hearing will be held the same day as the
auction.
As reported by the Troubled Company Reporter on August 14, 2009,
SPP has agreed to pay Aviza a purchase price comprised of three
components:
-- approximately $15 million in cash at closing, subject to
certain adjustments;
-- a recourse promissory note with an aggregate principal
amount of $10 million that will bear interest at the prime
rate, will mature 18 months after the closing date, will
be secured by the purchased accounts receivable and
inventory and certain purchased intellectual property,
will be subject to mandatory monthly prepayments of
principal to the extent that SPP's collection of accounts
receivable and sales of inventory securing the note,
subject to certain adjustments, exceed $10 million, and
will be guaranteed by SPP; and
-- a non-recourse promissory note with an aggregate principal
amount that will be finalized after the closing date but
which Aviza currently expects to be approximately $31.5
million that will not bear interest, will mature 18 months
after the closing date, will be secured by the purchased
accounts receivable and inventory, and will be subject to
mandatory monthly prepayments of principal to the extent
that SPP's collection of accounts receivable and sales of
inventory securing the note, as adjusted, exceed $20
million. On the maturity date, SPP will have the option of
either repaying the outstanding principal amount of the
non-recourse note in full or returning any remaining
uncollected accounts receivable and unsold inventory to
Aviza.
SPP has also agreed to assume certain liabilities of Aviza and its
subsidiaries, including the lease for Aviza's facility in South
Wales and approximately $5 million of operating liabilities.
Pursuant to the terms of the agreement, Aviza has agreed to sell
to SPP substantially all of Aviza's assets related to its system,
service, parts, spares and upgrade businesses for batch thermal
products and technologies, atmospheric-pressure chemical vapor
deposition products and technologies, physical vapor deposition
products and technologies, chemical vapor deposition products and
technologies, and plasma etch products and technologies, as well
as its service, parts, spares and upgrade business for atomic
layer deposition products and technologies.
Aviza's headquarters and batch systems manufacturing facilities in
Scotts Valley, California and the property on which they are
located are not being sold to SPP pursuant to the terms of the
agreement.
About Aviza Technology Inc.
Headquartered in Scotts Valley, California, Aviza Technology Inc.
(NASDAQ GM:AVZA) -- http://www.aviza.com/-- designs,
manufactures, sells and supports semiconductor capital equipment
and process technologies for the global semiconductor industry and
related markets. The Company's systems are used in a variety of
segments of the semiconductor market for advanced silicon for
memory devices, 3-D packaging and power integrated circuits for
communications. The Company's manufacturing, R&D, sales and
customer support facilities are located in the United Kingdom,
Germany, France, Taiwan, China, Japan, Korea, Singapore and
Malaysia.
The Company and two of its subsidiaries, Aviza Inc. and Trikon
Technologies Inc., filed for Chapter 11 bankruptcy protection on
June 9, 2009 (Bankr. N.D. Calif. Case No. 09-54511). Judge Roger
L. Efremsky presides over the Chapter 11 case. Attorneys at the
Law Offices of Murray and Murray represent the Debtors. At the
time of the filing, Aviza Technology estimated assets and debts of
$10 million to $50 million.
BALLY TOTAL: Oritani Wants Lift Stay to Pursue Rights Under Loan
----------------------------------------------------------------
In June 2008, Oritani Bank, formerly known as Oritani Savings
Bank, made a loan to H&S Journal Square Associates LLC in the
original principal amount of $14,250,000. To evidence its
indebtedness under the Loan, H&S executed and delivered to Oritani
a promissory note in the original principal amount of $14,250,000.
To secure payment of the Note, H&S executed and delivered a
Mortgage and Security Agreement in favor of Oritani in the
original principal amount of $14,250,000. The Mortgage encumbers
all real property -- including all improvements -- in (i) 912-20
Bergen Avenue and 922 Bergen Avenue, Jersey City, NJ, and (ii) Lot
42.H in Block 1868.5 and Lot 42J.99 in Block 1868.5, formerly
known as Lot 42J in Block 1868.K, in the City of Jersey City,
Hudson County, New Jersey.
To further secure the Note, H&S executed and delivered an
Assignment of Rents and Leases in favor of Oritani. The
Assignment of Rents irrevocably, unconditionally and absolutely
assigned, granted, transferred and set over any and all rights in
and to the leases, subleases, licenses, rental contracts and any
other agreements relating to any then existing or future tenancies
on or in connection with the Mortgaged Property.
Prior to the Loan transaction, Empress Enterprises 920, Inc.,
predecessor-in-interest to H&S, leased a portion of the Premises
to Bally Total Fitness Of Greater New York, Inc. formerly known as
Jack La Lanne Fitness Centers, Inc., pursuant to a lease
agreement.
According to William L. Waldman, Esq., at Forman Holt Eliades &
Ravin, LLC, in Paramus, New Jersey, H&S failed to make payments on
the principal balance and interest due pursuant to the terms of
the Loan Documents from May 1, 2009, to the present. Accordingly,
Oritani declared the Loan in default and, in accordance with the
terms of the Loan Documents, accelerated the payment of the sums
due under the Loan Documents.
Similarly, Mr. Waldman explains, the Debtors have failed and
continue to fail to make payments under the Lease to H&S, which
failure has ostensibly contributed to H&S's default on its
obligations to Oritani. Hence, it is necessary and appropriate
that Oritani name the Debtor in a Foreclosure Action in order to
extinguish or otherwise adjudicate the Debtors' rights as to the
Mortgaged Property under the Lease.
Mr. Waldman points out that upon the effective date of the
Debtors' Plan, the automatic stay will evaporate and Oritani would
be free to pursue the contemplated foreclosure against the Debtor
without restriction from the Chapter 11 cases.
In this regard, Mr. Waldman says, relief from the automatic stay
under Section 362(d)(1) of the Bankruptcy Code should be granted
because the Debtors have failed to tender payments due to H&S
which has declared a breach of the Lease. As a result, Oritani
should be permitted relief from the Stay to name the Debtors in
the foreclosure to extinguish the Lease.
About Bally Total Fitness
Bally Total Fitness operates nearly 300 fitness centers across the
United States. With more than 3 million active members and over 30
years of experience, Bally is among the most popular health club
brands in America. The professionals at Bally Total Fitness help
motivate members to improve their physical health and reach their
personal fitness goals with many affordable membership choices -
including options with no long-term commitment.
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. The Bankruptcy Court confirmed the
Company's Chapter 11 plan and the Company emerged from bankruptcy
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. The Plan was confirmed August 19, 2009, and the
Company emerged from bankruptcy September 1, 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)
BASIN WATER: Assets Sold to Amplio for $2 Million
--------------------------------------------------
The Bankruptcy Court has authorized Basin Water Inc. to sell its
assets to Amplio Group SA for $2 million. Although an auction in
August resulted in revised terms, the contract price didn't rise
from unit Amplio Filtration Holdings Inc.'s original stalking-
horse bid, Bill Rochelle at Bloomberg said.
Based in Rancho Cucamonga, California, Basin Water, Inc. --
http://www.basinwater.com/-- designed, built and implemented
systems for the treatment of contaminated groundwater, industrial
process water and air streams from municipal and industrial
sources.
The Company and its affiliate, Basin Water-MPT Inc., filed for
Chapter 11 protection on July 16, 2009 (Bankr. D. Del. Lead Case
No. 09-12526). Jaime Luton, Esq., and Michael R. Nestor, Esq., at
Young Conaway Stargatt & Taylor LLP, represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $50,599,051 in total
assets and $14,235,275 in total liabilities.
BEAZER HOMES: Moody's Assigns 'B1' Rating on $160 Mil. Notes
------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to the proposed new
$160 million of eight-year second lien senior secured notes (which
could be upsized) of Beazer Homes USA, Inc., proceeds of which
will be used to repurchase existing senior unsecured notes in the
open market and to replenish cash that has already been used to
fund these repurchases. At the same time, Moody's affirmed the
company's Caa2 corporate family, probability of default, and
senior unsecured note ratings. The outlook is negative.
The Caa2 corporate family rating reflects Moody's expectation that
Beazer's cash flow performance will weaken in 2009 and be followed
by an even weaker 2010, as the benefits of inventory liquidation
play themselves out. The rating also considers that while the
company's revenue run rate has deteriorated by over 80% since
fiscal 2006 and net worth by even more, total homebuilding debt
has declined over this time period by substantially less, thus
driving fully adjusted debt leverage to over 90%. Moody's
anticipates that the thin current net worth position of about
$160 million will be further reduced by continuing impairment
charges during the year, despite the benefits from debt
repurchases at a discount. Moody's is also projecting that the
company will continue generating operating losses well into 2010.
Finally, although the company has identified and capped its
ultimate exposure to the investigations of its mortgage
origination business by the U.S. Attorney's Office in the Western
District of North Carolina and by various other federal and state
agencies, there still remain additional potentially unquantifiable
charges for the myriad lawsuits that have been filed against the
company pertaining to ERISA claims and derivative shareholder
actions.
At the same time, the ratings are supported by the company's
unrestricted cash position at June 30, 2009 of about $465 million,
which may be augmented by retention of a portion of the proceeds
of the proposed new $160 million note offering.
The negative rating outlook reflects risks associated with general
economic weakness that may continue to hamper new household
creation and new home purchases, industry-wide lack of pricing
power, and large inventory of unsold homes, including foreclosures
in most markets.
Going forward, the ratings could be lowered further if the company
were to deplete its cash reserves either through sharper-than-
expected operating losses or through a sizable investment or other
transaction. The outlook could stabilize if the company were to
generate sizable amounts of operating cash flow (after excluding
contributions, if any, from tax refunds) and reduce debt leverage
to a more manageable 70% target level.
As a result of the proposed note issuance, these rating actions
were taken:
-- B1 (LGD2, 10%) assigned to proposed $160 million senior
secured second lien notes;
-- Corporate family rating affirmed at Caa2;
-- Probability of default rating affirmed at Caa2;
-- Senior unsecured notes affirmed at Caa2 (LGD4, 59%) vs. Caa2
(LGD4, 54%);
-- Speculative grade liquidity assessment affirmed at SGL-3.
All of Beazer's debt is guaranteed by its principal operating
subsidiaries.
The B1 rating assigned to the proposed second lien notes reflects
the seniority of the debt instrument as well as the benefits of
the collateral package, which consists of (i) a second priority
interest in substantially all of the assets of Beazer and its
guarantor subsidiaries; (ii) upstream guarantees from these
subsidiaries; and (iii) the loss absorption provided by Beazer's
junior capital.
Moody's most recent announcement concerning the ratings for Beazer
was on August 21, 2009, at which time Moody's temporarily lowered
the company's probability of default rating to Caa2/LD from Caa2
and the ratings on the senior unsecured notes to Ca from Caa2 in
connection with a distressed exchange.
Headquartered in Atlanta, Georgia, Beazer Homes USA, Inc., is one
of the country's ten largest single-family homebuilders with
operations in 17 states. Homebuilding revenues and consolidated
net income the trailing 12 months ended June 30, 2009, were
approximately $1.4 billion and ($700) million, respectively.
BEAZER HOMES: Fitch Assigns 'B+/RR1' Rating on $160 Mil. Notes
--------------------------------------------------------------
Fitch Ratings expects to assign a 'B+/RR1' rating to Beazer Homes
USA, Inc.'s proposed private offering of $160 million of 12%
second lien senior secured notes due 2017. The company intends to
use the net proceeds from the offering to fund the repurchase of
senior unsecured notes and/or to replenish cash that has been used
to fund open-market repurchases of outstanding senior unsecured
notes.
Fitch has also affirmed these ratings:
-- Issuer Default Rating at 'CCC';
-- Secured revolving credit facility at 'B+/RR1';
-- Senior unsecured notes at 'CC/RR5';
-- Convertible senior notes at 'CC/RR5';
-- Junior subordinated debt at 'C/RR6'.
The Rating Outlook is Negative.
The Recovery Rating of 'RR1' on the proposed second-lien secured
notes and the company's secured revolving credit facility
indicates outstanding recovery prospects for holders of this debt
issue. The 'RR5' on Beazer's senior unsecured notes indicates
below-average recovery prospects for holders of these debt issues.
Beazer's exposure to claims made pursuant to performance bonds and
joint venture debt and the possibility that part of these
contingent liabilities would have a claim against the company's
assets were considered in determining the recovery for the
unsecured debt holders. The 'RR6' on Beazer's junior subordinated
notes indicates poor recovery prospects in a default scenario.
Fitch applied a liquidation value analysis for these RRs.
The ratings and Outlook for Beazer reflect the current very
difficult U.S. housing market and Fitch's expectations that the
housing environment remains challenging for the remainder of the
year. Nevertheless, there are more positive signals and
developments for housing and related industries now than at any
time previously in the downturn. Of course, challenges remain or
are on the horizon that may not prevent a near-term bottom, but
are likely to meaningfully moderate the early stages of a
recovery.
Through the first nine months of its fiscal year 2009, Beazer
repurchased, in several individual open-market transactions,
$115.5 million of its outstanding senior notes for a purchase
price of $58.2 million plus accrued and unpaid interest. These
repurchases resulted in a gain on extinguishment of debt of
$55.2 million. Subsequent to the end of its fiscal third quarter
(3Q'09; ended June 30, 2009), the company repurchased (or agreed
to repurchase) approximately $139.3 million in aggregate principal
amount of its outstanding senior notes for an aggregate purchase
price of $102.5 million plus accrued and unpaid interest. These
repurchases are expected to result in a gain on extinguishment of
debt of $34.5 million. While the company has significantly
reduced its debt over the past year, Beazer's leverage (as
measured by total debt to capitalization) remains very high at 90%
after adjusting for the additional debt repurchases subsequent to
the end of 3Q'09.
The company completed the 3Q'09 with $464.9 million of cash on the
balance sheet. Although the company has generated $292.6 million
of cash from operations during the latest 12-month (LTM) period
(ending June 30, 2009), cash from operations during the first nine
months of fiscal 2009 was only $1.5 million. For all of fiscal
2009, Fitch expects Beazer to be slightly cash flow negative,
excluding a second-quarter tax refund of $169.1 million. The
company has limited near-term debt maturities, with $127.3 million
(subsequent to the repurchase or agreement to repurchase
$47.7 million of its 8 5/8% senior notes due 2011) maturing in May
2011.
Beazer recently amended its secured revolving credit facility and
reduced the size from $150 million to $22 million and the facility
will now be provided by one lender. The amended facility will
continue to provide for working capital and letter of credit needs
collateralized by either cash or assets of the company. Beazer
also entered into three stand-alone, cash-secured, letters of
credit agreements with banks to maintain pre-existing letters of
credit that had been outstanding under the $150 million revolver.
Consistent with Fitch's comment on certain homebuilders'
termination of revolving credit facilities, in the absence of a
revolving credit line, a consistently higher level of cash and
equivalents than was typical should be maintained on the balance
sheet, especially in these still uncertain times.
Future ratings and Outlooks will be influenced by broad housing
market trends as well as company specific activity, such as trends
in land and development spending, general inventory levels,
speculative inventory activity (including the impact of high
cancellation rates on such activity), gross and net new order
activity, debt levels and especially free cash flow trends and
uses, and the company's cash position.
BEAZER HOMES: S&P Assigns 'CCC+' Rating on $160 Mil. Notes
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC+' issue
rating and its '2' recovery rating to Beazer Homes USA Inc.'s
proposed $160 million senior secured note offering, due 2017. The
'2' recovery rating indicates S&P's expectation for substantial
(70%-90%) recovery in the event of a payment default. Beazer
intends to use proceeds of the new notes to replenish cash it used
to repurchase the company's senior unsecured notes during its
third fiscal quarter (ended June 30, 2009) and to fund similar
repurchases in the future. In connection with the note offering,
S&P revised S&P's recovery rating on the company's senior
unsecured notes to '6', which indicates its expectation for a
negligible (0%-10%) recovery. S&P's 'CCC' corporate credit rating
on Beazer, its negative outlook, and its 'D' issue rating on the
company's senior unsecured notes were unaffected by these actions.
Atlanta-based Beazer is a moderately sized homebuilder that
delivered 5,143 homes during the 12 months ended June 30, 2009, at
an average price of approximately $239,000. S&P's 'CCC' corporate
credit 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 the small estimated cushion over a
minimum tangible net worth covenant governing many of the
company's senior unsecured notes. 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.
Rating List
Beazer Homes USA Inc.
Corporate credit CCC/Negative/--
Rating Assigned
Beazer Homes USA Inc.
$160 million senior secured (2nd lien) due 2017 CCC+
Recovery rating 2
Rating Revised To From
-------------- -- ----
Senior unsecured D D
Recovery rating 6 5
BELLEVUE PETROLEUM: Case Summary & 6 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Bellevue Petroleum, Inc.
14008 NE 8th
Bellevue, WA 98007
Bankruptcy Case No.: 09-19029
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Western District of Washington (Seattle)
Debtor's Counsel: Larry B. Feinstein, Esq.
Vortman & Feinstein
500 Union St., Suite 500
Seattle, WA 98101
Tel: (206) 223-9595
Email: lbf@chutzpa.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
According to the schedules, the Company has assets of at least
$1,391,200, and total debts of $984,655.
A full-text copy of the Debtor's petition, including a list of its
6 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/wawb09-19029.pdf
The petition was signed by Farhad Ansari, president of the
Company.
BENESSERE LLC: Case Summary & 2 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Benessere, LLC
905 Juniper Street
Atlanta, GA 30309
Bankruptcy Case No.: 09-83119
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Northern District of Georgia (Atlanta)
Debtor's Counsel: Herbert C. Broadfoot II, Esq.
Ragsdale, Beals, Seigler, et al.
2400 International Tower
229 Peachtree Street, N.E.
Atlanta, GA 30303
Tel: (404) 588-0500
Fax: (404) 523-6714
Email: broadfoot@rbspg.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
2 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/ganb09-83119.pdf
The petition was signed by Riccardo Ullio, president of the
Company.
BERNARD MADOFF: SEC Overlooked Fraud Due to Inexperienced Staff
---------------------------------------------------------------
Inspector General H. David Kotz released on August 31, 2009, a
report on the investigation of failure of the U.S. Securities and
Exchange Commission to uncover Bernard Madoff's ponzi scheme,
saying that the agency missed numerous opportunities to uncover
the fraud, partly due to inexperienced staff and delays in
examinations.
Mr. Kotz said in his report that the SEC got six warnings about
Mr. Madoff's trading business over 16 years, but its staff failed
to follow up adequately. There was also poor communication within
SEC's divisions, according to Mr. Kotz.
SEC Chairperson Mary L. Schapiro said in a statement that since
Mr. Madoff's fraud came to light in 2008, Mr. Kotz has been
investigating why the SEC failed to detect it. The report makes
clear that the agency missed numerous opportunities to discover
the fraud. "It is a failure that we continue to regret, and one
that has led us to reform in many ways how we regulate markets and
protect investors. In an effort to provide a full accounting as
quickly as possible, we are releasing the Executive Summary of the
Inspector General's report, to be followed by the 450-page report
in the coming days," Ms. Schapiro said.
The OIG found that between June 1992 and December 2008 when
Mr. Madoff confessed, the SEC received SIX substantive complaints
that raised significant red flags concerning Mr. Madoff's hedge
fund operations and should have led to questions about whether
Madoffwas actually engaged in trading. The SEC was also aware of
two articles regarding Mr. Madoff's investment operations that
appeared in reputable publications in 2001 and questioned Mr.
Madoff's unusually consistent returns.
The OIG investigation found the SEC conducted two investigations
and three examinations related to Mr. Madoff's investment advisory
business based upon the detailed and credible complaints that
raised the possibility that Madoff was misrepresenting his trading
and could have been operating a Ponzi scheme. Yet, at no time did
the SEC ever verify Mr. Madoff's trading through an independent
third party, and in fact, never actually conducted a Ponzi scheme
examination or investigation of Madoff.
A summary of Mr. Kotz's report is available at:
http://researcharchives.com/t/s?43e3
"When I took office in January in the wake of the Madoff fraud, I
decided that we would not simply wait for the Inspector General's
report before taking action. Instead we have been reviewing our
practices and procedures, addressing shortcomings, and
implementing the lessons learned. The findings contained in the
report reinforce my view that the many changes we have made since
January will help the agency better detect fraud. We have
streamlined our enforcement procedures and are putting more
experienced staff on the frontlines. We also have bolstered our
inspection program, started to revamp the way we handle hundreds
of thousands of tips received annually, begun to hire new skill
sets, increased internal training, and sought more resources to
keep pace with financial fraudsters," Ms. Schapiro stated.
A copy of the SEC Post-Madoff Reforms is available at:
http://sec.gov/spotlight/secpostmadoffreforms.htm
Kara Scannell at The Wall Street Journal relates that Ms. Schapiro
said in a letter to Sen. Charles Grassley -- who called the SEC's
failures "further evidence of a culture of deference toward the
Wall Street elite at the SEC" -- that she expected to have
approval from the full commission to distribute the full, 450-page
inspector general report on Friday.
According to The Journal, Ms. Schapiro said that she "wouldn't
permit redacting the substance of the findings but sought to
safeguard the names of junior employees who didn't play central
roles in the reviews".
According to Bloomberg News, Mr. Madoff, according to the OIG,
thought regulators had caught him in 2006 and was "astonished" SEC
investigators never followed up on information he gave them.
Mr. Madoff told Mr. Kotz' office this year that after being
questioned in May 2006 and giving his account number at Depository
Trust Co., an independent clearing agency, "I thought it was the
end game, over. Monday morning they'll call DTC and this will be
over." When that never happened, Madoff was "astonished,"
according to a summary Kotz issued yesterday. The Ponzi scheme
continued for two and a half years.
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.
BIOBASED TECHNOLOGIES: Case Summary & 20 Largest Unsec. Creditors
-----------------------------------------------------------------
Debtor: BioBased Technologies LLC
fdba BioBased Sytems, LLC
fdba BioBased Insulation, LLC
fdba BioBased Chemicals, LLC
dba BioBased Technologies
1475 W. Cato Springs Road
Fayetteville, AR 72701
Bankruptcy Case No.: 09-74400
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Western District of Arkansas (Fayetteville)
Debtor's Counsel: Jill R. Jacoway, Esq.
Jacoway Law Firm
P.O. Drawer 3456
Fayetteville, AR 72702-3456
Tel: (479) 521-2621
Email: jacowaylaw@sbcglobal.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/arwb09-74400.pdf
The petition was signed by Michael Johnson, chief legal counsel of
the Company.
BI-LO LLC: Creditors & Term Lenders Offer Alternative Plan
----------------------------------------------------------
The official committee of unsecured creditors in Bi-Lo LLC's
Chapter 11 cases asks the U.S. Bankruptcy for the District of
South Carolina to (i) deny the Company's request for an extension
of its exclusive periods to propose a Chapter 11 plan, or (ii)
allow the Committee to file an alternative plan with the term
lenders.
On behalf of the Committee, G. William McCarthy Jr., Esq., at
McCarthy Law Firm, LLC, notes that the Debtors, by their own
admissions, are not independent, but are controlled by Lone Star
Funds, their equity security holder. The Creditors Committee is
concerned that the Debtors have concluded -- prematurely -- that
there is equity value in the Debtors' estates and, accordingly,
that the Debtors are predisposed to file a plan skewed in favor of
equity. The Committee is also distressed over the ability of the
Debtors to propose a plan that is feasible and otherwise
confirmable, if new equity in the Debtors is not one of the
"currencies" available for distribution to creditors.
By contrast, the Committee points out, there are parties in the
Debtors' capital structure -- most particularly, the prepetition
term loan lenders, holding approximately $260 million in debt
secured by first and second liens on substantially all of the
Debtors' assets -- that have advised it that they do not believe
there is value for current equity in these cases and have
different ideas about restructuring the Debtors.
Because of the Committee's concern over the lack of meaningful
communication between the Debtors and its major constituencies,
beginning approximately five months ago the Term Lenders and the
Committee initiated discussions regarding the general parameters
of a plan of reorganization. Shortly thereafter, C&S Wholesale
Grocers, Inc. -- whose supply and distribution agreement requires
modification for a successful reorganization -- joined these
discussions. The centerpiece of those negotiations was a
significant de-leveraging of the Debtors' balance sheet -- that
is, the Debtors carry too much debt, and unless that debt is
reduced, reorganized BI-LO is a likely candidate for a "Chapter
22."
The Committee's discussions have resulted in a term sheet for a
plan of reorganization that resolves this primary concern. In
order to de-lever the Debtors' balance sheet, the Creditors' Term
Sheet provides, as a key element, for the conversion of a
substantial portion of the Term Lenders' secured debt to equity
and an investment of new equity by one or more of the Term
Lenders. Specifically, approximately $110 million of the Term
Lender's secured debt will be converted to equity and the $72
million of new equity capital will be infused and will be used to
repay all amounts under the DIP facility, and pay all
administrative and priority claims, among other things, thereby
leaving the proposed new $125 Revolving Exit Facility virtually
unused, other than usual standby Letters of Credit.
A copy of the Creditors' Term Sheet is available for free at:
http://bankrupt.com/misc/BI-LO_Creditors_Plan_TermSheet.pdf
Based on the Creditors' Term Sheet, the reorganized Debtors would
be significantly de-levered and would be projected to have net
borrowing availability of at least twice the amount that the
Debtors had upon entry into Chapter 11.
The Committee has committed to support the plan envisioned in the
Creditors' Term Sheet, while reserving its right, in its fiduciary
capacity, with respect to other proposals that may arise.
According to Mr. McCarthy, in the current economic environment, it
is highly unusual for a retailer attempting to reorganize in
Chapter 11 to have an agreement between an official committee of
unsecured creditors (the fiduciary for general unsecured
creditors) and secured lenders whereby secured debt is converted
into equity, have a plan sponsor willing to infuse significant
equity capital, and simultaneously reaching agreement with a key
stakeholder, which controls the supply and distribution of
approximately 70% of a debtors' inventory. It has been the lack
of one or more of these items that has been a primary factor in
the increased number of retail Chapter 11 cases that have resulted
in liquidation, he says.
The Committee wants to avoid a confirmation fight regarding the
feasibility of a plan of reorganization of the type that it
suspects is likely to be proposed by the Debtors that preserves
Lone Star's equity intact and keeps excessive debt on the Debtors'
balance sheet. "Such a fight runs the significant risk that the
Debtors will be unable to confirm a plan and liquidation will
ensue, particularly in view of the significant time constraints
imposed on retail debtors since the enactment of the 2005
amendments to the Bankruptcy Code," Mr. McCarty asserts.
About Bi-Lo LLC
Greenville, South Carolina-based BI-LO LLC -- http://my.bi-lo.com/
-- is a chain of 215 supermarkets based in Greenville, South
Carolina. Founded in 1964 by Frank Outlaw, the Company and its
affiliates operate supermarkets around South Carolina, North
Carolina, Georgia, and Tennessee and have about 17,000 employees.
Dallas-based Lone Star Funds bought the business in 2005 from
Koninklijke Ahold NV, the Dutch supermarket operator. Lone Star
also owns Bruno's Supermarkets LLC, a chain of 66 stores
that filed under Chapter 11 in February in Birmingham, Alabama.
BI-LO and its affiliates filed for Chapter 11 bankruptcy
protection on March 23, 2009 (Bankr. D. S.C. Case No. 09-02140).
George B. Cauthen, Esq., Frank B. Knowlton, Esq., at Nelson
Mullins Riley & Scarborough, L.L.P; Josiah M. Daniel, III, Esq.,
Katherine D. Grissel, Esq., at Vinson & Elkins L.L.P. in Dallas;
and Dov Kleiner, Esq., Alexandra S. Kelly, Esq., at Vinson &
Elkins L.L.P. in New York, serve as counsel. Kurtzman Carson
Consultants LLC serves as notice and claims agent. The Companies
listed between $100 million and $500 million each in assets and
debts.
BI-WAY CONCRETE: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Bi-Way Concrete Pumping, Inc.
P.O. Box 2063
Channelview, TX 77530
Bankruptcy Case No.: 09-36583
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Marvin Isgur
Debtor's Counsel: Margaret Maxwell McClure, Esq.
Attorney at Law
909 Fannin, Suite 3810
Houston, TX 77010
Tel: (713) 659-1333
Fax: (713) 658-0334
Email: mccluremar@aol.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 Brian E. Brooks, president of the
Company.
BIZCOM USA: Defaults on Bridge Loan; CX2 Seeks to Keep Licenses
---------------------------------------------------------------
Michael Rand, Chief Executive Officer and President of CX2
Technologies, Inc., stated that the Company is in negotiations
with a creditor of BizCom USA, Inc.
Since February 26, 2007, CX2 has licensed its technology from
BizCom USA, Inc., through an amended agreement that allows CX2 the
rights to use and develop the patented BizCom technology.
BizCom's intellectual property and some of its FCC 220MHz licenses
were used as collateral to secure a bridge loan. When BizCom
defaulted on the loan, it forfeited these IP assets and licenses
which had been licensed to CX2.
This default invalidated the BizCom/CX2 agreement.
According to Mr. Rand, the Company's highest priority is to retain
intellectual property rights to the BizCom technology.
If negotiations successfully result in a final agreement, Mr. Rand
said CX2 will begin the process of filing for an FCC type
acceptance for the CX2-BS1000 (20-watt base station) design. With
type acceptance, CX2 will be able to sell a low-cost system to
current 220-222MHz Licenses. Over the past year CX2 has been
developing a program whereby 220MHz Licenses will be able to
trade-up their antiquated voice systems to a newly designed
digital 20 Watt base station with an upgrade kit.
CX2 Technologies, Inc. provides low-cost, spectrum-efficient
wireless solutions that operate in the 220-222 MHz frequency band.
The Company's proprietary wireless data technology and software is
designed to work optimally within very narrow 5 KHz channels. CX2
has strongly advocated the use of 220 MHz spectrum for public
safety and homeland security, and has expressed these views to the
Katrina Panel (the Independent Panel Reviewing the Impact of
Hurricane Katrina on Communications Networks).
BLOCKBUSTER INC: Sells XTRA-VISION(R) Chain to Birchhall for $45MM
------------------------------------------------------------------
Blockbuster Inc. and its subsidiary Blockbuster Entertainment
(Ireland) entered into an agreement on August 28, 2009, with
Birchhall Investments Limited, an affiliate company of NCB Group
Limited, pursuant to which the Buyer acquired all of the
outstanding capital stock of Blockbuster Holdings Ireland, a
subsidiary of the Company, from the Company and BEI.
The Purchase Agreement calls for a total cash purchase price of up
to EUR32 million, or approximately $45 million based on recent
exchange rates, structured as follows:
-- EUR20 million paid at closing on August 28; and
-- up to EUR12 million payable in the first fiscal quarter of
2010, with the amount of such payment based upon
achievement by Xtra-Vision of certain operating targets
for the remainder of fiscal 2009.
As of the sale date, BHI operated roughly 186 XTRA-VISION(R) video
and home entertainment stores throughout Ireland and Northern
Ireland through its affiliate company, Xtra-Vision Limited.
The Purchase Agreement contains customary representations and
warranties of the parties and an agreement of the Company and its
affiliates not to compete against Xtra-Vision under terms set out
in the Purchase Agreement.
Birchhall Investments is an Irish company owned by NCB Ventures
and clients of NCB Group Limited, one of Ireland's largest
independent securities firms.
Blockbuster expects to use a majority of the proceeds from the
sale for incremental liquidity. Financo Inc. served as financial
advisor to Blockbuster for the transaction.
Jim Keyes, Blockbuster Chairman and Chief Executive Officer, said,
"[the] announcement furthers our goal of improving liquidity and
underscores our intent to advance the sale and licensing of our
international assets as we focus on the continued transformation
of our North American business. Xtra-vision is the leading
entertainment chain in Ireland and one of the most recognizable
brand names in the country. It has performed very well during our
ownership and we believe it is well positioned for ongoing success
under the ownership of Birchhall Investments."
"We're pleased to have participated in this acquisition, which
adds one of Ireland's leading brands to our portfolio," said
Michael Murphy, Managing Partner of NCB Ventures. "We look
forward to working with the management team at Xtra-vision to
build on its success and grow the business long-term. We think
there are great opportunities to build on Xtra-vision's high brand
recognition and visibility in the home entertainment market in
Ireland. The transaction will be seamless for members and
employees of Xtra-vision Limited."
Blockbuster purchased Xtra-vision Limited, Ireland's leading home
entertainment company, in 1997. With stores throughout the
Republic of Ireland and Northern Ireland, the chain offers an
extensive range of products and services including movies and
games for rental and retail purchase, music, consumer electronics
and mobile phones.
Blockbuster remains committed to the long-term diversification of
its domestic business and development of a multi-channel platform
designed to provide customers convenient access to media
entertainment through BLOCKBUSTER(R) stores, the Company's By-Mail
program, BLOCKBUSTER Express(TM) branded DVD vending machines and
digitally via BLOCKBUSTER OnDemand(R).
About Blockbuster
Blockbuster Inc. (NYSE: BBI, BBI.B) -- http://www.blockbuster.com/
-- headquartered in Dallas, Texas, is a global provider of in-home
movie and game entertainment, with more than 7,100 stores
throughout the Americas, Europe, Asia and Australia.
As of July 5, 2009, the Company had $1.93 billion in total assets
and $1.71 billion in total liabilities.
Blockbuster continues to hold Moody's Investors Service's Caa3
Probability of Default Rating, B1 secured bank credit facilities
rating and B1 senior secured rating of B1. Blockbuster also holds
Standard & Poor's Ratings Services' 'CCC' corporate credit rating.
S&P has lowered the issue-level ratings on both its secured debt
to 'CCC+' from 'B' and its subordinated debt to 'CC' from 'CCC'.
Fitch Ratings has affirmed Blockbuster's long-term Issuer Default
Rating at 'CCC'.
BLOCKBUSTER INC: Viacom Split-Off Deal Amended; L/Cs Reduced
------------------------------------------------------------
As part of its ongoing liquidity improvement initiatives,
Blockbuster Inc. said Wednesday it has reduced the face amount of
certain letters of credit it maintains on behalf of its former
parent company, Viacom Inc., from $75 million to approximately
$25 million, paralleling a reduction in Viacom's exposure to
Blockbuster lease obligations.
The letters of credit required to be provided by the Company for
the benefit of Viacom are collateralized at 105% of the face
amounts.
Blockbuster said the reduction of the letters of credit follows
the Company's sale of its 186-store XTRA-VISION(R) chain in
Ireland for cash proceeds of up to $45 million.
Blockbuster and Viacom on August 27, 2009, entered into Amendment
No. 2 to their Amended and Restated Initial Public Offering and
Split-Off Agreement dated June 18, 2004. Pursuant to the IPO and
Split-Off Agreement, Blockbuster is required to deliver updated
semi-annual lease schedules to Viacom each April 30 and October 31
for so long as any Guarantees remain in effect. Since the
issuance of the Lease Schedule dated as of April 30, 2009,
Blockbuster has (i) secured the releases of various Guarantees
under certain Guaranteed Leases in the United Kingdom, and (ii)
delivered letters to various landlords under certain Guaranteed
Leases in the United States and Canada, pursuant to which
Blockbuster has waived any and all rights to renew or otherwise
extend the terms of the Waiver Leases.
Blockbuster requested that Viacom agree to accept an interim lease
schedule as of August 10, 2009, reflecting the effects of the
Releases, the Waiver Letters and other changed circumstances.
Viacom agreed to accept the Interim Schedule on condition that
Blockbuster agrees to amend certain provisions of the IPO and
Split-Off Agreement.
The letters of credit are maintained by Blockbuster for Viacom's
benefit to cover Viacom's potential liability under existing
BLOCKBUSTER(R) store leases in place prior to Blockbuster's 1999
initial public offering. Since 2004, many of those leases have
been renegotiated or renewed without reliance on Viacom's credit,
thereby further facilitating the reduction in the face amount of
the letters of credit.
"We are pleased to have reached this agreement with Viacom, which
delivers on our promise to improve liquidity through a number of
initiatives," said Jim Keyes, Blockbuster Chairman and CEO. "This
agreement, combined with strong cash from operations from our core
business and proceeds from the sale of our Xtra-vision chain, will
allow us to continue development of the multi-channel offering of
Blockbuster."
A full-text copy of Amendment No. 2 is available at no charge at:
http://ResearchArchives.com/t/s?43df
About Blockbuster
Blockbuster Inc. (NYSE: BBI, BBI.B) -- http://www.blockbuster.com/
-- headquartered in Dallas, Texas, is a global provider of in-home
movie and game entertainment, with more than 7,100 stores
throughout the Americas, Europe, Asia and Australia.
As of July 5, 2009, the Company had $1.93 billion in total assets
and $1.71 billion in total liabilities.
Blockbuster continues to hold Moody's Investors Service's Caa3
Probability of Default Rating, B1 secured bank credit facilities
rating and B1 senior secured rating of B1. Blockbuster also holds
Standard & Poor's Ratings Services' 'CCC' corporate credit rating.
S&P has lowered the issue-level ratings on both its secured debt
to 'CCC+' from 'B' and its subordinated debt to 'CC' from 'CCC'.
Fitch Ratings has affirmed Blockbuster's long-term Issuer Default
Rating at 'CCC'.
BROOKFIELD PROPERTIES: S&P Assigns 'BB+' Rating on Share Offering
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' global scale
rating and its 'P-3 (High)' Canadian national scale rating to
Brookfield Properties Corp.'s recent C$250 million series L
preferred share offering. The company intends to use the proceeds
for general corporate purposes.
The new preferred share issue follows a July equity offering that
raised roughly $1 billion in capital, proceeds of which went to
reduce borrowings under Brookfield's $388 million revolver (due
2011). In addition, the company recently refinanced or extended
more than $450 million in debt, including a loan backed by a large
office property in Calgary (which Brookfield jointly owns with an
institutional investor). In the aggregate, S&P believes these
transactions have bolstered the company's liquidity position while
modestly extending debt maturities and reducing reliance upon the
revolver.
Recently reported second-quarter results for this Canada-domiciled
owner of U.S. and Canadian office properties were favorable
relative to most peers, despite Brookfield's higher exposure to
financial services tenants relative to the peer average and the
weakening Manhattan office property market. Occupancy for the
company's managed portfolio dipped slightly but remained a healthy
95%, and lease renewals rolled higher by roughly 32% (to $25 per
sq. ft.). This resulted in positive same-store net operating
income of 3% (excluding the impact of foreign exchange and lease
termination gains). In addition, following the completion in the
quarter of the large (1.2 million-sq.-ft.) Bay Adelaide Centre
West development project, which is 73% preleased, the company
currently has no projects under development.
Notwithstanding the generally favorable second-quarter results and
benefits the company has derived from recent capital transactions,
S&P's outlook on Brookfield remains negative. S&P remain
concerned that the current environment of weak operating
fundamentals, lower office property valuations, and more-
restrictive lending in the U.S. will pose challenges to
Brookfield's efforts to recapitalize its highly leveraged U.S.
property fund (debt that comes due in late 2011).
Rating List
Brookfield Properties Corp.
Corporate credit rating BBB/Negative/--
Rating Assigned
Brookfield Properties Corp.
C$250 million preferred shares
Global scale BB+
Canadian scale P-3 (High)
BROWN SHOE: S&P Downgrades Corporate Credit Rating to 'B-'
----------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on St. Louis-based Brown Shoe Co. Inc. to 'B-' from
'B'. At the same time, S&P lowered the issue-level rating on the
company's unsecured notes to 'B-' from 'B'. The recovery rating
on the senior unsecured debt remains unchanged at '4'.
"The downgrade reflects the ongoing performance deterioration as
evidenced by negative comparables, reduced wholesale revenues, and
negative operating leverage," said Standard & Poor's credit
analyst David Kuntz, "which has resulted in a substantial
weakening of the company's credit protection metrics." It also
reflects S&P's expectation for these trends to continue over the
near term.
BUILDERS FIRSTSOURCE: Has Restructuring Proposal From JLL/Warburg
-----------------------------------------------------------------
Builders FirstSource, Inc., has received a proposal from its two
largest stockholders, JLL Partners Fund V, L.P. and Warburg Pincus
Private Equity IX, L.P., to restructure the Company's outstanding
$275.0 million aggregate principal amount of second priority
senior secured floating rate notes and a common stock rights
offering to Builders FirstSource common stockholders.
As of August 31, 2009, JLL and Warburg together beneficially owned
approximately 50% of the outstanding shares of Builders
FirstSource common stock. Builders FirstSource has been informed
by JLL and Warburg that, as of August 31, 2009, they collectively
beneficially owned approximately $98 million aggregate principal
amount of the Notes.
The Board of Directors of Builders FirstSource has formed a
Special Committee comprised of independent and disinterested
directors to evaluate the proposal from JLL and Warburg. The
Special Committee will review and evaluate the proposal to
determine what action, if any, is in the best interests of the
Builders FirstSource stockholders, other than JLL and Warburg, and
to make a recommendation to the Board of Directors of the Company
with respect to the proposal. No decisions have been made by the
Special Committee with respect to the response, if any, to the
JLL/Warburg proposal. There can be no assurance that the proposal
from JLL and Warburg or any other transaction will be approved or
completed.
About Builders FirstSource
Headquartered in Dallas, Texas, Builders FirstSource (NasdaqGS:
BLDR) -- http://www.bldr.com/-- is a leading supplier and
manufacturer of structural and related building products for
residential new construction. The Company operates in 9 states,
principally in the southern and eastern United States, and has 55
distribution centers and 51 manufacturing facilities, many of
which are located on the same premises as our distribution
facilities. Manufacturing facilities include plants that
manufacture roof and floor trusses, wall panels, stairs, aluminum
and vinyl windows, custom millwork and pre-hung doors. Builders
FirstSource also distributes windows, interior and exterior doors,
dimensional lumber and lumber sheet goods, millwork and other
building products.
The Company has total assets of $457,192,000 against total
liabilities of $405,038,000 as of June 30, 2009.
Builders FirstSource has corporate credit ratings of 'Caa1'
from Moody's Investors Service and 'CCC+' from Standard & Poor's.
BUILDERS FIRSTSOURCE: S&P Puts 'CCC+' Rating on Negative Watch
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it placed its
ratings, including the 'CCC+' corporate credit rating, on Dallas-
based manufacturer and supplier of residential new construction
building products Builders FirstSource Inc. on CreditWatch with
negative implications.
The CreditWatch placement follows the regulatory filing by BLDR
that it has received a letter from JLL Partners Fund V L.P. and
Warburg Pincus Private Equity IX L.P. proposing a comprehensive
recapitalization of BLDR. JLL and Warburg are BLDR's two largest
stockholders and 35% holders of the company's outstanding
$275 million second-lien floating-rate notes due 2012. Terms of
the recapitalization plan include a $75 million rights offering to
existing shareholders, the exchange of existing notes owned by JLL
and Warburg into common equity, and the option of remaining
holders of the existing notes to exchange holdings into new
second-lien debt, equity, or any combination thereof.
In response to receipt of the letter, the Board of Directors of
BLDR has formed a special committee to review and evaluate the
proposal set forth by JLL and Warburg.
S&P will monitor the developments regarding the proposed
recapitalization plan. In addition, S&P will discuss with
management and assess its near-to-intermediate term operating
prospects, given the challenging operating environment, and its
ability to maintain sufficient liquidity.
BVI RETAIL: Two Banks Win Auction for Belle Island Village
----------------------------------------------------------
The Knoxville News Sentinel and Knoxville's WATE television
station report that BIV Retail LLC's Belle Island Village was sold
to its lenders at a foreclosure auction on Monday.
Regions Bank, which was owed more than $50 million on a
construction loan by BVI retail and won the Company's Chapter 7
liquidation case dismissal, won all of the development except for
the hotel, offering to forgive $23.9 million of its claim,
Jacqueline Palank posted at The Wall Street Journal blog
Bankruptcy Beat. According to Bankruptcy Beat, First Bank picked
up the hotel portion of the project with its offer to forgive
$5.76 million in debt.
BIV Retail chief Glen Bilbo told WATE that he hopes the project
will be complete and open for business by March 2010.
BIV Retail LLC is the developer of a massive resort project in
Sevier County. The Company filed for Chapter 7 bankruptcy
protection, the TCR reported on April 1, 2009.
CANWEST MEDIA: DBRS Downgrades Issuer Rating to 'D'
---------------------------------------------------
DBRS has downgraded the Issuer Rating of Canwest Media Inc. to D
from C. This action follows the downgrade of the Issuer Rating at
Canwest LP (the operating company of Canwest Media).
Canwest Media's Senior Subordinated Notes were downgraded to D on
April 15, 2009, as a result of missed interest payments on the
notes and continuation of non-payment past the 30-day cure period.
As of May 31, 2009, the aggregate carrying value of debt at
Canwest Media amounted to $954 million. The Company has indicated
that it does not have sufficient liquidity to satisfy any such
demands for payment.
The downgrade of the Issuer Rating to D is driven by the downgrade
of Canwest LP's ratings to D and the fact that Canwest Media's
instrument rating on its Senior Subordinated Notes is also at D.
While a formal recapitalization or restructuring has not occurred,
DBRS is of the opinion that Canwest Media's Issuer Rating is now
in default as defined in DBRS's rating methodology.
DBRS also downgraded Canwest LP's instrument and Issuer Rating as
a result of missed interest and principal payments on its debt
obligations, continuation of non-payment past the 30-day cure
period and ongoing liquidity concerns.
DBRS notes that Canwest Media's non-payment of interest is
intended to provide the Company with the ability to continue to
operate its core media businesses as it continues to negotiate a
recapitalization transaction at this level and at its newspaper
subsidiary, Canwest LP.
The Issuer Rating at Canwest Media will remain at D until the
earlier of: (a) the implementation of an effective
recapitalization plan; (b) the emergence from creditor protection,
should the Company choose to file under the Companies' Creditors
Arrangement Act (CCAA); or (c) DBRS elects to withdraw this
rating.
CAPMARK FIN'L: May File Ch.11 to Sell Mortgage Biz to Berkshire
---------------------------------------------------------------
Capmark Financial Group Inc. and its wholly owned subsidiaries,
Capmark Finance Inc. and Capmark Capital Inc., on September 2,
2009, entered into an Asset Put Agreement with Berkadia III, LLC.
The Purchaser is a newly formed entity owned by Berkshire Hathaway
Inc. and Leucadia National Corporation.
The Agreement provides for a put option whereby the Sellers have
the right to sell to the Purchaser the Sellers' North American
servicing and mortgage banking businesses and all assets primarily
used in, or primarily related to, the Mortgage Business. The
Sellers paid the Purchaser $40.0 million in cash for the Put
Option. If the Put Option is exercised by the Sellers, then upon
the terms and subject to the conditions provided for in the
Agreement, the Sellers will transfer to the Purchaser the Acquired
Assets for an aggregate purchase price of $490.0 million, subject
to various closing adjustments, including an upward adjustment for
servicing advances and warehoused loans.
If the sale of the Mortgage Business occurs outside of a
bankruptcy proceeding, the purchase price will consist of a $375.0
million payment in cash at the closing, a $40.0 million holdback
retained by the Purchaser to cover indemnity claims, and a $75.0
million note payable from the Purchaser that is subject to
reduction for losses in Capmark's Fannie Mae DUS portfolio. If
the sale of the Mortgage Business occurs in a bankruptcy
proceeding under section 363 of the Bankruptcy Code, the purchase
price will consist of a $415.0 million payment in cash at the
closing and the Note.
If Capmark is in a chapter 11 proceeding, exercise of the Put
Option would be incorporated into a Bankruptcy Code Section 363
sale process in which Capmark would seek court authorization to
exercise the Put Option and close on the sale. In a Section 363
sale process, the Agreement would serve as a baseline or floor bid
price for the Mortgage Business. Under the terms of the
Agreement, Capmark has the option to pursue alternative
transactions for the sale of the Mortgage Business.
The Put Option expires if not exercised by the Sellers within
sixty days of the execution of the Agreement, unless the Sellers
file for bankruptcy prior to the sixtieth day, in which case
Sellers have an additional sixty days from the date of any such
filing to exercise the Put Option.
About Capmark
Based in Horsham, Pennsylvania, Capmark Financial Group Inc. --
http://www.capmark.com/-- is a diversified company that provides
a broad range of financial services to investors in commercial
real estate-related assets. Capmark has three core businesses:
lending and mortgage banking, investments and funds management,
and servicing. Capmark operates in North America, Europe and
Asia.
* * *
As reported by the TCR on April 30, 2009, Moody's Investors
Service downgraded the senior unsecured ratings of Capmark
Financial Group Inc. to 'Caa1' from 'B2', with the rating
remaining under review for possible downgrade. The rating action
reflects the explanatory note in Capmark's 10-K filing in which
its auditors raise doubt about the company's ability to continue
as a going concern, as well as the still unresolved nature of
Capmark's efforts to modify the terms of its bridge loan agreement
and senior credit facility, which could have implications for its
liquidity and funding.
Capmark has total assets of $20 billion against total debts of $21
billion as of June 30, 2009.
CAPMARK FIN'L: Reports $1.6-Bil. Net Loss for Second Quarter
------------------------------------------------------------
Capmark Financial Group Inc. on September 2 reported a net loss of
$1.6 billion for the quarter ended June 30, 2009 compared with a
net income of $11.5 million for the quarter ended June 30, 2008.
The operating results for the second quarter of 2009 were impacted
by continued adverse market conditions that resulted in increased
losses on loans, investments and real estate, an increased
provision for loan losses and downward valuation adjustments on
its mortgage servicing rights.
As of June 30, 2009, Capmark's stockholders' deficit was
$1.1 billion and its total assets were $20.1 billion.
Capmark has been in discussions with its lenders and the
representatives of a number of senior noteholders regarding a
restructuring of its primary debt obligations. The restructuring
efforts have included entering into a $1.5 billion Term Facility
Credit and Guaranty Agreement on May 29, 2009 and amendments to
its existing senior credit facility and bridge loan agreement.
As part of its efforts for a longer-term restructuring, Capmark
has also been exploring strategic alternatives for all of its
businesses. Specifically, Capmark and its advisors reviewed
options for its North American Servicing segment and its mortgage
banking operations, which are included in its North American
Lending and Mortgage Banking segment. The process included
contacting numerous third parties to participate and provide an
indication of interest in the Mortgage Business. Based upon these
responses, Capmark held discussions with a short list of
interested parties and ultimately proceeded with one such party.
As reported in a press release issued today, Capmark has entered
into an Asset Put Agreement which gives Capmark the right to sell
the Mortgage Business.
Capmark's restructuring efforts may also include a reorganization
under Chapter 11 of the U.S. Bankruptcy Code, the sale of certain
additional businesses and/or a material contribution of cash
and/or assets into Capmark Bank, Capmark's wholly-owned industrial
bank subsidiary chartered by the State of Utah.
The FDIC has notified Capmark Bank that it intends to issue an
administrative order, which will impose certain requirements and
restrictions on Capmark Bank, including requiring submission of
capital and liquidity plans, restrictions on affiliated party
transactions and other activities. Pending issuance of the
administrative order, the FDIC has notified Capmark Bank that it
should obtain the non-objection of the FDIC before engaging in any
transaction that would materially change the balance sheet
composition of Capmark Bank, including growth in total assets or
significant changes in its primary funding sources. Capmark
Bank's total risk-based capital ratio was 14.8 percent at June 30,
2009.
A copy of Capmark's Second Quarter report is available for free
at:
http://bankrupt.com/misc/Capmark_Quarterly_Report_063009_FINAL.pdf
Consolidated Financial Review
Three months ended June 30, 2009 compared to three months ended
June 30, 2008
The $1.6 billion increase in net loss for the quarter ended
June 30, 2009 was primarily due to lower noninterest income, a
higher provision for loan losses, higher noninterest expense and
the absence of a full income tax benefit on the losses incurred
for the three months ended June 30, 2009. Noninterest income was
a negative $632.0 million for the quarter ended June 30, 2009
compared to $116.0 million for the quarter ended June 30, 2008.
Noninterest income was impacted by continued adverse market
conditions that resulted in increased net losses on Capmark's
loans, investments and real estate of $656.0 million and declines
in its fee and investment income of $74.3 million primarily due to
equity in losses of joint ventures and partnerships resulting from
declines in fair value of the assets held through such joint
ventures and partnerships. Net losses on loans increased by
$312.3 million due to continued downward pressure on fair values.
Net losses on investments and real estate increased $343.7 million
primarily due to an increase in impairment charges on real estate
and equity investments in Capmark's Asian Operations business
segment totaling $320.3 million, of which $188.6 million was due
to management's reduction in the holding period assumption for
certain assets in the second quarter of 2009.
Capmark's provision for loan losses for the quarter ended June 30,
2009 were $345.8 million compared to $10.4 million for the quarter
ended June 30, 2008. The increase in Capmark's provision for loan
losses of $335.4 million reflects an increase in impaired loans
for which a specific allowance is recorded, a $70.0 million
provision for loan losses on its acquired non-performing loans
that were transferred from "held for investment" to "held for
sale" on June 30, 2009, and the impact of declining asset quality
on the remaining loans held for investment due to challenging
economic conditions.
Capmark's noninterest expense for the quarter ended June 30, 2009
was $632.8 million compared to $199.9 million for the quarter
ended June 30, 2008. Noninterest expense increased $432.9 million
primarily due to a $363.6 million impairment charge, through a
valuation allowance, on mortgage servicing rights and an $84.3
million impairment charge on intangible assets in the second
quarter of 2009. The impairment charge on mortgage servicing
rights was the result of decreasing the carrying value to
estimated fair value when the fair value implied in the Agreement
for the potential sale of Capmark's North American servicing and
mortgage banking businesses was considered. The intangible assets
related to customer relationships and contracts were evaluated and
fully impaired. Lastly, Capmark established a valuation allowance
on its deferred tax assets that resulted in the absence of a full
income tax benefit on the losses incurred for the three months
ended June 30, 2009.
Liquidity
As of June 30, 2009, Capmark had readily available cash (excluding
cash held at Capmark Bank) of approximately $1.2 billion and
Capmark Bank had approximately $2.7 billion in cash. As of June
30, 2009, Capmark had $159.9 million of cash that was restricted
under current regulatory and other contractual arrangements. This
represented a net increase in total cash and certain U.S. Treasury
securities of approximately $2.0 billion compared to December 31,
2008 due to an increase in cash at Capmark Bank.
For the six months ended June 30, 2009, net cash provided by
operating activities totaled $1.4 billion primarily due to the
sale of $1.3 billion of U.S. Treasury securities classified as
trading.
Capmark used net cash of $71.9 million in investing activities for
the six months ended June 30, 2009 primarily for the funding of
existing loan and investment commitments.
For the six months ended June 30, 2009, net cash provided by
financing activities totaled $2.0 billion primarily due to a net
increase of $2.7 billion in deposit liabilities at Capmark Bank,
partially offset by a net reduction in our short-term borrowings.
In the second quarter of 2009, Capmark continued to take actions
to maintain liquidity such as focusing its efforts on originating
loans for Fannie Mae and Freddie Mac ("GSEs") and third parties of
$0.9 billion and $1.8 billion for the three and six months ended
June 30, 2009, respectively. Capmark also has materially reduced
its proprietary originations, and, other than funding of
previously committed loans, substantially all of its originations
for the three and six months ended June 30, 2009 were funded by
Capmark Bank and were originated for GSEs or third parties and not
for Capmark's balance sheet.
Asset Quality
Challenging economic conditions have resulted in declining asset
quality in recent quarters, particularly during the fourth quarter
of 2008 and the first half of 2009, resulting in adverse credit
migration and unprecedented increases in non-performing loans.
Factors contributing to the decline in asset quality continue to
include weak economic conditions, market illiquidity, declining
commercial real estate fundamentals, Capmark's concentration of
transitional real estate and declining real estate values.
As of June 30, 2009, the carrying value of Capmark's loan
portfolio held for investment was $7.5 billion, net of an
allowance for loan losses totaling $263.5 million and fair value
and other adjustments totaling $41.7 million as a result of
valuation adjustments on loans transferred in a prior year from
held for sale designation.
As of June 30, 2009, Capmark's loan portfolio held for sale was
carried at a fair value of $3.2 billion representing an aggregate
discount of approximately $1.2 billion to the portfolio's
aggregate unpaid principal balance of $4.4 billion.
As of June 30, 2009, total reserves on the loan portfolios held
for investment and held for sale (including allowance for loan
losses and fair value and other adjustments) were 13% of the
unpaid principal balance of the loan portfolio.
As of June 30, 2009, Capmark's real estate investments had a
carrying value of $1.4 billion, after impairment charges of $291.3
million during the second quarter of 2009 primarily related to
real estate holdings in Asia.
Selected loan portfolio information:
* As of June 30, 2009, the carrying value of Capmark's total
loan portfolio was $10.7 billion, down from $12.2 billion as of
December 31, 2008.
* The ratio of Capmark's originated non-performing assets, net
of specific reserves, to total assets was 7.6% as of June 30, 2009
compared to 3.5% as of December 31, 2008.
* As of June 30, 2009, 96.7 % of Capmark's loan portfolio was
comprised of first lien commercial mortgage loans with an average
loan size of $8.4 million.
North American Lending and Mortgage Banking
Capmark's North American Lending and Mortgage Banking segment
incurred a loss before income taxes of $458.0 million during the
second quarter of 2009 compared to income before income taxes of
$74.0 million during the second quarter of 2008. The $532.0
million increase in loss before income taxes was driven primarily
by lower noninterest income and a higher provision for loan
losses.
Noninterest income was a negative $273.9 million for the quarter
ended June 30, 2009 compared to a positive $44.9 million for the
quarter ended June 30, 2008. The $318.8 million decrease in
noninterest income was driven by an increase in net losses, a
reduction in placement fees and an increase in losses from equity
investments in joint ventures and partnerships. Net losses totaled
$289.5 million for the three months ended June 30, 2009 compared
to net gains of $9.1 million for the three months ended June 30,
2008. The $298.6 million increase in net losses was driven by a
$233.2 million increase in downward changes in fair value on loans
held for sale, a $43.9 million increase in losses from discounted
payoffs and sales of loans, an increase of $9.2 million in losses
primarily due to impairments recognized on foreclosed real estate
assets and a decrease in all other gains. All other gains
decreased $12.3 million primarily as a result of a gain of $11.4
million in 2008 on the sale of interests in entities established
to facilitate the defeasance of securitized loans. Placement fees
declined $8.2 million due to a decrease in loan origination volume
to $1.0 billion for the three months ended June 30, 2009 from $2.7
billion for the three months ended June 30, 2008. Losses from
equity investments in joint ventures and partnerships,
specifically those related to holding foreclosed real estate
assets, increased $5.2 million.
The provision for loan losses was $210.8 million for the second
quarter of 2009 compared to $8.0 million for the second quarter of
2008. The $202.8 million increase in provision for loan losses was
primarily due to the impact of challenging economic conditions on
the loan portfolio held for investment, resulting in deteriorating
credit quality, and an increase in impaired loans for which a
specific allowance is recorded.
Noninterest expense for the quarter ended June 30, 2009 was $50.7
million compared to $47.7 million for the quarter ended June 30,
2008. The $3.0 million increase in noninterest expense was
primarily due to an increase in FDIC deposit insurance premiums,
partially offset by a reduction in compensation and benefits.
North American Investments and Funds Management
Capmark's North American Investments and Funds Management segment
incurred a loss before income taxes of $46.9 million during the
second quarter of 2009 compared to a loss of $33.9 million during
the second quarter of 2008. The $13.0 million increase in loss
before income taxes was primarily driven by lower noninterest
income. In addition, the net loss attributable to noncontrolling
interests declined $9.0 million.
Noninterest income for the quarter ended June 30, 2009 was a
negative $42.7 million compared to a negative $27.6 million for
the quarter ended June 30, 2008. The $15.1 million decrease in
noninterest income was primarily the result of an increase of
$29.3 million in losses from equity investments in joint ventures
and partnerships and a decrease of $3.6 million in asset
management fees. These unfavorable variances were partially offset
by net gains of $1.3 million for the three months ended June 30,
2009 compared to $16.4 million of net losses for the three months
ended June 30, 2008. Capmark's income from equity investments in
joint ventures and partnerships includes the results of certain
commingled funds that it consolidates and is allocated to the
noncontrolling interest holders of such funds. Income from equity
investments in joint ventures and partnerships decreased primarily
due to declines in the fair value of assets held through such
joint ventures and partnerships. Asset management fees declined
primarily due to fees earned in 2008 related to achieving certain
performance criteria that were not achieved in 2009. The net gains
for the three months ended June 30, 2009 included net gains on
investment securities of $1.3 million compared to net losses on
investment securities of $9.6 million for the three months ended
June 30, 2008 primarily due to market conditions. The net losses
for the three months ended June 30, 2008 also included $6.8
million in downward changes in fair value of loans, compared to
none for the three months ended June 30, 2009. This segment's loan
portfolio, which created the losses in 2008, was transferred in
April 2009 to the North American Lending and Mortgage Banking
segment.
Net loss attributable to noncontrolling interests was $3.9 million
for the second quarter of 2009 compared to $12.9 million for the
second quarter of 2008. The $9.0 million decrease in net loss
attributable to noncontrolling interests was primarily due to
lower downward changes in fair value recognized for the three
months ended June 30, 2009 compared to the three months ended June
30, 2008 for certain commingled funds that Capmark consolidates.
The downward changes in fair value resulted in a net loss
attributable to noncontrolling interests equal to the third-party
investors' share of such losses.
North American Servicing
Capmark's North American Servicing segment reported a loss before
income taxes of $223.3 million during the second quarter of 2009
compared to income before income taxes of $26.4 million during the
second quarter of 2008. The $249.7 million decrease in income
before income taxes was primarily driven by an increase in
noninterest expense and lower noninterest income.
Noninterest income for the three months ended June 30, 2009 was
$62.1 million compared to $76.0 for the three months ended June
30, 2008. The $13.9 million decrease in noninterest income was
driven by lower trust fees and mortgage servicing fees. Trust fees
are interest rate sensitive and decreased $7.6 million due to the
lower interest rate environment and lower escrow balances.
Mortgage servicing fees decreased $5.3 million primarily as a
result of a decrease in the servicing portfolio and lower
assumption fees. Assumption fees are a component of mortgage
servicing fees in Capmark's condensed consolidated statement of
operations, and Capmark earns an assumption fee when an existing
borrower's mortgage is assumed by a new borrower. Assumption
transactions and related fees have declined due to declining real
estate transaction volumes resulting from the real estate market
downturn, including a lack of transactions due to market
inactivity.
Noninterest expense for the second quarter of 2009 was $282.6
million compared to $45.9 million for the second quarter of 2008.
Noninterest expense increased $236.7 million due to a $238.2
million impairment charge on mortgage servicing rights in the
second quarter of 2009. The impairment charge on mortgage
servicing rights was the result of decreasing the carrying value
to estimated fair value when the fair value implied in the
Agreement for the potential sale of Capmark's North American
servicing and mortgage banking businesses was considered. The
intangible assets related to customer relationships and contracts
were evaluated and fully impaired.
Asian Operations
Capmark's Asian Operations segment incurred a loss before income
taxes of $494.0 million during the second quarter of 2009 compared
to a loss before income taxes of $9.4 million during the second
quarter of 2008. The $484.6 million increase in loss before income
taxes was driven by a reduction in net interest income and
noninterest income and an increase in provision for loan losses,
partially offset by a reduction in noninterest expense.
Net interest income during the three months ended June 30, 2009
was a negative $4.7 million compared to a positive $2.1 million
for the three months ended June 30, 2008. The $6.8 million
decrease in net interest income was primarily attributable to the
reversal of accrued but uncollected interest income on loans that
became 90 days contractually delinquent in the three months ended
June 30, 2009 and a reduction in the size of Capmark's portfolio
of acquired non-performing loans, which resulted in real estate
investments that are not interest-earning assets comprising a
larger percentage of the Asian Operations segment balance sheet.
Noninterest income for the second quarter of 2009 was a negative
$348.7 million compared to a positive $13.6 million for the second
quarter of 2008. The $362.3 million decrease in noninterest income
was driven primarily by increases in real estate and equity
investment impairment charges of $320.3 million, of which $188.6
million was due to management's reduction in the holding period
assumption for certain assets in the second quarter of 2009 and
downward changes in fair value of loans held for sale of $24.9
million.
The provision for loan losses was $122.3 million for the three
months ended June 30, 2009 compared to $2.6 million for the three
months ended June 30, 2008. The $119.7 million increase in the
provision for loan losses was primarily due to the impact of
deteriorating credit quality on Capmark's portfolio of loans held
for investment, including a $70.0 million provision for loan
losses on its acquired non-performing loans that were transferred
from "held for investment" to "held for sale" on June 30, 2009.
Noninterest expense for the second quarter of 2009 was
$18.3 million compared to $22.6 million for the second quarter of
2008. The $4.3 million decrease in noninterest expense was
primarily due to a reduction in compensation and benefits and
professional fees.
European Operations
Capmark's European Operations segment incurred a loss before
income taxes of $56.1 million during the second quarter of 2009
compared to a loss before income taxes of $44.6 million for the
second quarter of 2008. The $11.5 million increase in loss before
income taxes was primarily due to an increase in the provision for
loan losses and a decrease in noninterest income, partially offset
by a decrease in noninterest expense.
Noninterest income for the three months ended June 30, 2009 was a
negative $39.1 million compared to a negative $35.9 million for
the three months ended June 30, 2008. The $3.2 million decrease
in noninterest income was primarily due to $6.9 million of
downward changes in the fair value recognized on Capmark's
portfolio of loans held for sale, a $3.8 million increase in
losses from equity investments in joint ventures and partnerships,
a $1.6 million decrease in servicing fees and a $1.0 million
decrease in placement fees, partially offset by the sale of the
European servicing business. The European servicing business was
sold in June 2009 to a third-party for $20.5 million and resulted
in a $10.4 million gain on sale, before income taxes. As a result
of the sale of the European servicing business, servicing fees
also decreased $1.6 million. Placement fees decreased $1.0
million following the curtailment of European lending operations.
The $16.3 million increase in the provision for loan losses to
$15.7 million for the second quarter of 2009 was primarily due to
deteriorating credit quality on one specific loan held for
investment.
Noninterest expense was $4.9 million for the three months ended
June 30, 2009 compared to $15.0 million for the three months ended
June 30, 2008. The $10.1 million decrease in noninterest expense
was primarily due to a reduction in compensation and benefits and
professional fees.
North American Affordable Housing
Capmark's North American Affordable Housing segment incurred a
loss before income taxes of $25.4 million during the second
quarter of 2009 compared to a loss before income taxes of $11.1
million during the second quarter of 2008. The $14.3 million
increase in loss before income taxes was primarily attributable to
a decrease in noninterest income, partially offset by a reduction
in noninterest expense.
Noninterest income for the three months ended June 30, 2009 was a
negative $21.9 million compared to a negative $4.4 million for the
three months ended June 30, 2008. The $17.5 million decrease in
noninterest income was primarily due to a $9.1 million increase in
net losses on investments and real estate and a $9.8 million
decrease in structuring fees and investment syndication income due
to an increase in losses related to LIHTC yield guarantees,
partially offset by a $2.2 million decrease in losses from equity
investments in joint ventures and partnerships. The increase in
net losses on investments and real estate included impairment
charges of $7.3 million on investment securities classified as
available for sale that were in an unrealized loss position that
Capmark determined it is more-likely-than-not to sell, and
impairments recognized on equity investments of $5.3 million,
partially offset by $2.7 million of gains on asset dispositions
during the three months ended June 30, 2009 compared to $0.8
million of losses on asset dispositions during the three months
ended June 30, 2008.
Noninterest expense was $4.9 million for the second quarter of
2009 compared to $9.8 million for the second quarter of 2008. The
$4.9 million decrease in noninterest expense was primarily due to
a reduction in professional fees.
About Capmark
Based in Horsham, Pennsylvania, Capmark Financial Group Inc. --
http://www.capmark.com/-- is a diversified company that provides
a broad range of financial services to investors in commercial
real estate-related assets. Capmark has three core businesses:
lending and mortgage banking, investments and funds management,
and servicing. Capmark operates in North America, Europe and
Asia.
* * *
As reported by the TCR on April 30, 2009, Moody's Investors
Service downgraded the senior unsecured ratings of Capmark
Financial Group Inc. to 'Caa1' from 'B2', with the rating
remaining under review for possible downgrade. The rating action
reflects the explanatory note in Capmark's 10-K filing in which
its auditors raise doubt about the company's ability to continue
as a going concern, as well as the still unresolved nature of
Capmark's efforts to modify the terms of its bridge loan agreement
and senior credit facility, which could have implications for its
liquidity and funding.
Capmark has total assets of $20 billion against total debts of $21
billion as of June 30, 2009.
CAPMARK FIN'L: Berkshire Commits $650MM in Debt Finance for Deal
----------------------------------------------------------------
Warren Buffett's Berkshire Hathaway Inc. committed about
$650 million of debt financing to the partnership created to
acquire the mortgage business of Capmark Financial Group Inc.,
according to a regulatory filing.
Leucadia National Corporation said in a filing with the Securities
and Exchange Commission that on September 2, 2009, Berkadia III,
LLC, a Delaware limited liability company owned 50% by Berkshire
Hathaway Inc. and 50% by Leucadia, entered into an Asset Put
Agreement with Capmark Financial Group Inc., Capmark Finance Inc.
and Capmark Capital Inc.
Pursuant to the APA, subject to satisfaction of certain closing
conditions, Capmark will have the option to cause Berkadia to
acquire assets comprising Capmark's mortgage origination and
mortgage servicing businesses. Capmark paid $40 million to
Berkadia for this put right. The put right expires on the 60th
day after the commencement of any Capmark bankruptcy proceeding
(or, if no such proceeding is commenced within 60 days from
signing, on the 60th day after the signing of the APA).
If Capmark exercises its put right, Berkadia will (i) acquire the
mortgage origination and servicing businesses from Capmark for
total consideration of $490 million, subject to adjustment, , a
portion of which is payable in Berkadia notes and (ii) acquire
from Capmark, at par, Capmark's owned mortgage loans and servicer
advances outstanding on the closing date for cash consideration
currently estimated to be approximately $600 million. Leucadia
and Berkshire have each provided a guarantee in respect of
Berkadia's obligations under the APA. Berkadia's purchase
obligation to consummate the transaction is subject to
satisfaction of certain closing conditions, including receipt of
requisite approvals from governmental agencies. Berkadia has
agreed to pay Capmark $20 million if Berkadia terminates the APA
as a result of the failure to satisfy certain specified closing
conditions.
Berkadia will fund the transaction through cash equity
contributions of approximately $188 million from each of Berkshire
and Leucadia, the $40 million put price and debt financing to be
provided by Berkshire, currently estimated to be $650 million.
The debt financing provided by Berkshire will be part of a
$1 billion secured warehouse line which can be used to fund
mortgage loans, servicer advances and working capital needs.
Leucadia's cash contribution to the transaction will be paid from
Leucadia's available cash.
A copy of the APA is available for free at:
http://researcharchives.com/t/s?43e1
According to Bloomberg News, Mr. Buffett is using the cash hoard
he built in the real estate boom for Berkshire to pick up assets
from companies hobbled by the property market's decline. Last
year, he agreed to buy a portfolio of loans backing factory-built
homes from CIT Group Inc.
About Capmark
Based in Horsham, Pennsylvania, Capmark Financial Group Inc. --
http://www.capmark.com/-- is a diversified company that provides
a broad range of financial services to investors in commercial
real estate-related assets. Capmark has three core businesses:
lending and mortgage banking, investments and funds management,
and servicing. Capmark operates in North America, Europe and
Asia.
* * *
As reported by the TCR on April 30, 2009, Moody's Investors
Service downgraded the senior unsecured ratings of Capmark
Financial Group Inc. to 'Caa1' from 'B2', with the rating
remaining under review for possible downgrade. The rating action
reflects the explanatory note in Capmark's 10-K filing in which
its auditors raise doubt about the company's ability to continue
as a going concern, as well as the still unresolved nature of
Capmark's efforts to modify the terms of its bridge loan agreement
and senior credit facility, which could have implications for its
liquidity and funding.
Capmark has total assets of $20 billion against total debts of $21
billion as of June 30, 2009.
CARUSO HOMES: To Exit Ch 11 in 2 Weeks, After Creditors OK Plan
---------------------------------------------------------------
Caruso Homes has had its plan of reorganization filed under
Chapter 11 of the bankruptcy code confirmed by Judge F. Schneider
of the U.S. Bankruptcy Court for the District of Maryland,
Baltimore Division, according to Jeffrey Caruso, president of the
firm he founded in 1986.
Caruso Homes expects to emerge from Chapter 11 bankruptcy
protection within the next two weeks.
In his closing statement Judge Schneider said, "This case is an
example of how the bankruptcy code should work." He also
complimented all those involved in the case including Caruso
Homes' bankruptcy counsel Joel I. Sher of Shapiro, Sher, Guinot
and Sandler; Jeff Caruso's personal attorney Paul Nussbaum of
Whiteford, Taylor Preston LLP, each of the 10 banks working with
Caruso Homes, the members of the creditors' committee, their
counsel, the subcontractor community and Caruso.
The Caruso Homes' emergence plan includes a provision where
certain future profits will be shared with creditors. Caruso
explained he will be able to remobilize the newly positioned
company with minimal personal and corporate debt and a strong
balance sheet.
The Company will immediately begin selling seven communities out
of two regional models located in the Maryland suburbs of
Washington DC.
"This is one of the most challenging real estate markets and
economic environments in recent history. This is a big day in the
history of Caruso Homes and we are thankful that our creditors
made this possible," Caruso said after the September 2 hearing.
Caruso Homes has won more than 100 local and national awards for
excellence in service, building systems, home design and many
other categories. However, even though the company has well
developed policies, systems and procedures, when the sales of
Caruso's more than 20 communities began failing in 2005, the debt
service on the 3,000 lots tied up by the company forced it into a
Chapter 11 bankruptcy filing in June, 2008.
"Caruso Homes, along with its lenders and trade partners, have
worked together to fashion a plan that allows us to emerge as a
competitive and profitable community developer and builder,"
Caruso Homes executive vice president Chris Block stated. "The
flexibility granted under the plan allows us to navigate business
during these unprecedented times and beyond. I am confident that
the company and its partners will succeed together."
The firm is already talking with investors interested in working
with a company long on experience and short on debt.
With the continued support of SNS Property Finance, a Dutch
corporation; Caruso Homes' Symphony Village has maintained its
position as the most successful active adult community on
Maryland's Eastern Shore. Mark Somerville, Caruso Homes' vice
president of land development noted that, "We are fortunate that
out lender had the foresight to fund the completion of clubhouse
the pools and all the roadwork for this 400 lot community, in
Centerville Maryland. Our sales have continued and we are
entering our final section of this successful community."
About Caruso Homes
Headquartered in Crofton, Maryland, Caruso Homes Inc. --
http://www.carusohomes.com/-- is a custom home builder in
Maryland and Virginia. The Company and 24 of its debtor-
affiliates filed for Chapter 11 protection on June 23, 2008 (D.
Md. Lead Case No. 08-18254). Joel I. Sher, Esq., at Shapiro Sher
Guinot & Sandler P.A, represents the Debtors as counsel. The
Debtors' schedules showed assets of $16,105,716 and liabilities of
$115,809,357.
CASCADES INC: S&P Changes Outlook to Stable, Affirms 'BB-' Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it revised the outlook on
Cascades Inc. to stable from negative. At the same time, S&P
affirmed the 'BB-' long-term corporate credit rating on the
company.
S&P also affirmed the issue-level rating on Cascades' senior
secured debt at 'BB+' (two notches above the corporate credit
rating on the company). The recovery rating is unchanged at '1',
indicating the expectation for very high (90%-100%) recovery in
the event of a payment default. In addition, S&P affirmed the
issue-level rating on the company's senior unsecured debt at 'B+'
(one notch below the corporate credit rating on the company). The
'5' recovery rating is unchanged, indicating modest (10%-30%)
recovery in the event of default.
"This outlook revision reflects recent improvement in credit
metrics and S&P's expectations that Cascades' profitability will
improve in the next 12 months," said Standard & Poor's credit
analyst Jatinder Mall.
"The ratings on Cascades reflect its good market position in
consolidated markets, a diverse revenue stream, and vertical
integration. These risks are partially mitigated, in S&P's
opinion, by what S&P view as the company's high debt levels,
recent history of lower profitability, and exposure to cyclical
boxboard and containerboard prices and volumes," Mr. Mall added.
Cascades is an integrated packaging and tissue company that
manufactures, converts, collects, and processes recycled paper.
It is the No. 1 containerboard producer in Canada and the third-
largest producer of coated recycled boxboard in North America.
Cascades operates facilities in Canada, the U.S., and to a lesser
extent, Europe.
The stable outlook reflects recent improvement in credit metrics
and S&P's expectations that Cascades' profitability will improve
in the next 12 months. Standard & Poor's could lower the ratings
if increasing fiber and energy costs lead to lower EBITDA
generation, placing pressure on credit metrics and resulting in a
leverage ratio of more than 5x. On the other hand, an upgrade
would probably require Cascades to pay down debt and demonstrate
its ability to sustain a leverage ratio of about 3.5x-4.0x.
CAVIATA ATTACHED: Section 341(a) Meeting Scheduled for Sept. 21
---------------------------------------------------------------
The U.S. Trustee for Region 17 will convene a meeting of creditors
in Caviata Attached Homes, LLC's Chapter 11 case on Sept. 21,
2009, at 3:00 p.m. The meeting will be held at 300 Booth Street,
Room 2110, Reno, Nevada.
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.
Reno, Nevada-based Caviata Attached Homes, LLC, operates a real
estate business. The Company filed for Chapter 11 on Aug. 18,
2009 (Bankr. D. Nev. Case No. 09-52786). Alan R. Smith, Esq.,
represents the Debtor in its restructuring efforts. In its
petition, the Debtor listed assets and debts both ranging from
$10,000,001 to $50,000,000.
CCS MEDICAL: Court Refuses Official Committee for 2nd Lien Lenders
------------------------------------------------------------------
The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for
the District of Delaware refused to appoint an official committee
of second-lien lenders, leaving it to the investors to fund their
own opposition to the Company's plan negotiated prepetition with
first lien lenders, according to Law360.
CCS Medical Inc. has sent its proposed Chapter 11 plan to
creditors for voting. The Plan swaps the Debtors' first lien
lender debt for $200 million in new notes and 100% of the new
equity.
Second lien lenders owed $130 million had earlier requested
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.
The Plan, however, provides for potential recovery to unsecured
creditors in the form of cash or warrant, based on a "gift"
provided by first lien lenders, who will recover 66% and 82% of
their claims. 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.
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.
CEYLON HOTELS: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Ceylon Hotels Investment LLC
fdba St. Michael Plaza Inn
fdba Howard Johnson Plaza Inn
c/o Firoz M. Noor
5215 Sepulveda Blvd., Unit 27-A
Culver City, CA 90230-5255
Bankruptcy Case No.: 09-12477
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Western District of Texas (Austin)
Debtor's Counsel: B. Weldon Ponder Jr., Esq.
Building 3, Suite 200
4601 Spicewood Springs Rd
Austin, TX 78759-7841
Tel: (512) 342-8222
Fax: (512) 342-8444
Email: welpon@austin.rr.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/txwb09-12477.pdf
The petition was signed by Firoz M. Noor, member and manager of
the Company.
CHEMTURA CORP: Aims to Emerge From Ch 11 Bankruptcy by March 2010
-----------------------------------------------------------------
Chemtura Corp. CEO Craig Rogerson told ICIS that the Company is on
track with its goal to exit bankruptcy by March 2010, just a year
after its filing. He said that all parties are working towards
this goal. Chemtura has already sent a five-year business plan to
unsecured creditors and has set an October 30 deadline for proofs
of claim.
Mr. Rogerson, according to ICIS, wants a quick bankruptcy exit,
noting that legal fees and interest payments have cost 18% of the
Company's $400 million DIP financing. Chemtura filed for
bankruptcy after liquidity woes and looming maturity of a $374
million debt. He, however, said that since filing for bankruptcy,
business has stabilized, payments to suppliers are on schedule,
and customers have remained.
Before exiting bankruptcy, Chemtura has to obtain approval of a
Chapter 11 plan that addresses how to pay off creditors and has to
secure exit financing.
ICIS reported mid-August that that Chemtura had put its polyvinyl
chloride additives business up for sale.
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC.
As of December 31, 2008, the Debtors had total assets of
$3.06 billion and total debts of $1.02 billion.
Bankruptcy Creditors' Service, Inc., publishes Chemtura
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings undertaken by Chemtura Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: 18 Old CarCo Units' Schedules of Assets & Debts
-------------------------------------------------------------
Eighteen debtor-affiliates of Old Carco LLC, formerly known as
Chrysler LLC, reported assets ranging from $0 to $160 million:
Debtor Assets Liabilities
------ ------ -----------
TPF Asset, LLC $160,154,059 $14,183,499,693
Old Carco Vans LLC 131,435,030 14,046,427,067
Old Carco Service Contracts Inc. 26,154,741 14,264,935,386
TPF Note, LLC 23,203,559 13,986,064,329
Global Electric Motorcars, LLC 13,471,098 13,986,116,663
DCC 929, Inc. 11,702,063 14,012,656,226
Old Carco Transport Inc. 5,483,545 14,016,558,095
Dealer Capital, Inc. 2,853,014 13,987,295,452
Old Carco International Ltd. LLC 2,431,390 13,986,064,329
Old Carco Service Contracts Florida 2,037,562 13,986,564,902
Old Carco Tech. Middle East Ltd. 25,080 13,986,087,248
Utility Assets LLC -- 14,069,063,875
Nev Mobile Service, LLC -- 13,986,064,329
Nev Service, LLC -- 13,986,064,329
Peapod Mobility LLC -- 4,958,679,590
Alpha Holding LP -- 300
Old Carco Dutch Operating Group LLC -- --
Old Carco Institute of Engineering -- --
A large chunk of the Debtors' liabilities are owed to JPMorgan
Chase Bank, N.A., for a certain first lien credit agreement.
About Chrysler LLC
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge,
Mopar(R) and Global Electric Motors (GEM) brand vehicles and
products. With the resources, technology and worldwide
distribution network required to compete on a global scale, the
alliance builds on Chrysler's culture of innovation -- first
established by Walter P. Chrysler in 1925 -- and Fiat's
complementary technology -- from a company whose heritage dates
back to 1899.
Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's
product lineup features some of the world's most recognizable
vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram.
Fiat will contribute world-class technology, platforms and
powertrains for small- and medium-sized cars, allowing Chrysler
Group to offer an expanded product line including environmentally
friendly vehicles.
Chrysler LLC and 24 affiliates on April 30 sought Chapter 11
protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case
No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut
Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group
LLC, and Greenhill & Co. LLC, for financial advisory services; and
Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has
changed its corporate name to Old CarCo following its sale to a
Fiat-owned company. As of December 31, 2008, Chrysler had
$39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler
had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC. Fiat has a 20
percent equity interest in Chrysler Group.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: 18 Old CarCo Units' Statement of Financial Affairs
----------------------------------------------------------------
Eighteen debtor-affiliates of Old Carco LLC, formerly known as
Chrysler LLC, separately filed with the Court their statements of
financial affairs:
(1) Alpha Holding LP;
(2) DCC 929, Inc.;
(3) Dealer Capital, Inc.;
(4) Global Electric Motorcars, LLC;
(5) NEV Mobile Service, LLC;
(6) NEV Service, LLC;
(7) Old Carco Institute of Engineering;
(8) Old Carco Service Contracts Florida, Inc.;
(9) Old Carco Transport Inc., fka Chrysler Transport Inc.;
(10) Old Carco Vans LLC, formerly known as Chrysler Vans LLC;
(11) Peapod Mobility LLC;
(12) TPF Asset, LLC;
(13) TPF Note, LLC;
(14) Utility Assets LLC;
(15) Old Carco Dutch Operating Group LLC, formerly known as
Chrysler Dutch Operating Group LLC;
(16) Old Carco International Limited, LLC, formerly known as
Chrysler International Limited, LLC;
(17) Old Carco Service Contracts Inc., formerly known as
Chrysler Service Contracts Inc.; and
(18) Old Carco Technologies Middle East Ltd., formerly known
as Chrysler Technologies Middle East Ltd.
The Debtor-Affiliates disclosed that they earned these amounts
from employment or operation of business within two years prior to
the commencement of the bankruptcy cases:
YTD 2009 FY 2008 FY 2007
-------- ------- -------
Old Carco Service $56,899,399 $182,475,063 $207,166,520
Contracts Inc.
Old Carco Transport 14,186,386 59,428,656 73,276,980
Global Electric 7,174,363 39,601,276 34,145,377
Motorcars, LLC
Old Carco Vans LLC 6,288,464 122,653,555 137,411,610
Old Carco Service 1,557,703 4,217,529 248,485
Contracts Florida Inc.
These Debtor-Affiliates also earned income other than from
employment or operation of business:
YTD 2009 FY 2008 FY 2007
-------- ------- -------
Old Carco Service 18,647 364,054 182,963
Contracts Florida Inc.
Old Carco Service 1,285,996 22,438,443 44,637,393
Contracts Inc.
Old Carco Technologies 49,336 -- --
Middle East Ltd.
Old Carco Vans LLC 4,936 ($140,872) 113,145
DCC 929, Inc. 518,440 693,425 10,776,148
Dealer Capital, Inc. 31,070 -- --
Global Electric 54,885 227,951 390,002
Motorcars, LLC
Old Carco Transport (1,056,307) 15,729,992 (10,260,451)
Ronald E. Kolka, Old Chrysler's chief executive officer, disclosed
that Global Electric Motorcars LLC paid (i) $5,148,199 to
creditors on account of debts, which are not primary consumer
debts, and (ii) $316,144 to Rick Kasper, its president and chief
operating officer, in various dates.
Within one year before the Petition Date, these Debtor-Affiliates
gave gifts:
Debtor-Affiliates Amount
----------------- ------
Old Carco Service Contracts Inc. $24,857
Old Carco Service Contracts Inc. 124
Old Carco Service Contracts Inc. 15,689
Old Carco Service Contracts Inc. 187
Global Electric Motorcars, LLC 200
Global Electric Motorcars, LLC 500
Global Electric Motorcars, LLC 1,000
Mr. Kolka told the Court that Global Electric Motorcars LLC
incurred $133,430 in losses within a year immediately prior to the
commencement of its bankruptcy case due to a flood. He further
disclosed that within 90 days preceding the Petition Date, Daimler
AG made a set-off amounting to $1,950,109 against Old Carco Vans
LLC.
About Chrysler LLC
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge,
Mopar(R) and Global Electric Motors (GEM) brand vehicles and
products. With the resources, technology and worldwide
distribution network required to compete on a global scale, the
alliance builds on Chrysler's culture of innovation -- first
established by Walter P. Chrysler in 1925 -- and Fiat's
complementary technology -- from a company whose heritage dates
back to 1899.
Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's
product lineup features some of the world's most recognizable
vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram.
Fiat will contribute world-class technology, platforms and
powertrains for small- and medium-sized cars, allowing Chrysler
Group to offer an expanded product line including environmentally
friendly vehicles.
Chrysler LLC and 24 affiliates on April 30 sought Chapter 11
protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case
No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut
Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group
LLC, and Greenhill & Co. LLC, for financial advisory services; and
Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has
changed its corporate name to Old CarCo following its sale to a
Fiat-owned company. As of December 31, 2008, Chrysler had
$39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler
had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC. Fiat has a 20
percent equity interest in Chrysler Group.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Canada Also Has Cash for Clunkers Program
-------------------------------------------------------
Chrysler Canada launched a new program that will see the company
kicking in up to $1,500 to supplement the current federal program
to encourage drivers to scrap old cars for new, fuel-efficient
vehicles, according to the Canadian Press.
Chrysler Canada's cash for clunkers is in addition to its current
sales incentives. To qualify for the program, customers must be
owners of a 1995 or older model year vehicle that is in running
condition and has been registered and insured in Canada for the
previous consecutive six or 12 months, depending on the province,
according to the report.
Customers must first enroll in the federal program at
www.retireyourride.ca to be eligible for the Chrysler offer. Once
everything has been approved and the old vehicle has been picked
up for recycling, a letter will be issued which the customer can
take to a Chrysler dealership to get the additional rebate after
purchasing a new car, according to a report by Canada.com.
About Chrysler LLC
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge,
Mopar(R) and Global Electric Motors (GEM) brand vehicles and
products. With the resources, technology and worldwide
distribution network required to compete on a global scale, the
alliance builds on Chrysler's culture of innovation -- first
established by Walter P. Chrysler in 1925 -- and Fiat's
complementary technology -- from a company whose heritage dates
back to 1899.
Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's
product lineup features some of the world's most recognizable
vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram.
Fiat will contribute world-class technology, platforms and
powertrains for small- and medium-sized cars, allowing Chrysler
Group to offer an expanded product line including environmentally
friendly vehicles.
Chrysler LLC and 24 affiliates on April 30 sought Chapter 11
protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case
No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut
Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group
LLC, and Greenhill & Co. LLC, for financial advisory services; and
Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has
changed its corporate name to Old CarCo following its sale to a
Fiat-owned company. As of December 31, 2008, Chrysler had
$39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler
had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC. Fiat has a 20
percent equity interest in Chrysler Group.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
COEUR D'ALENE: Files New Shelf Registration Statement
-----------------------------------------------------
Coeur d'Alene Mines Corporation on August 31, 2009, filed a shelf
registration statement in connection with its planned issuance
from time to time of:
-- common stock;
-- preferred stock;
-- debt securities, which may be senior or subordinated and
secured or unsecured and which may include guarantees of
the debt securities by some or all of the Company's
subsidiaries;
-- warrants entitling the holders to purchase common stock,
preferred stock or debt securities;
-- depositary shares;
-- purchase contracts;
-- guarantees; and
-- units.
The Company may sell the securities either separately or in units.
The Company may issue debt securities convertible into shares of
its common stock or preferred stock. The preferred stock also may
be convertible into shares of the Company's common stock or
another series of preferred stock.
The prospectus provides a general description of the securities
that may be offered. "Each time we sell securities, we will
provide a supplement to this prospectus that contains specific
information about the offering and the specific terms of the
securities offered. That prospectus supplement may include a
discussion of any risk factors or other special considerations
applicable to those securities," the Company said.
A full-text copy of the Registration Statement is available at no
charge at http://ResearchArchives.com/t/s?43d1
As a result of the filing of a new automatic shelf registration
statement, the Company filed a Post-Effective Amendment No. 1 to
its automatic shelf registration statement on Form S-3 (File No.
333-154391) filed October 17, 2008, to deregister all securities
that were registered under the Registration Statement but remain
unsold to date. Coeur d'Alene Mines said as of March 2, 2009, the
relevant determination date, it did not qualify as a well known
seasoned issuer for continued use of the 2008 Registration
Statement.
About Coeur d'Alene Mines
Coeur d'Alene Mines Corporation (NYSE:CDE, TSX:CDM, ASX:CXC) is
one of the world's leading silver companies and also a significant
gold producer. Coeur common shares are traded on the New York
Stock Exchange under the symbol CDE, the Toronto Stock Exchange
under the symbol CDM, and its CHESS Depositary Interests are
traded on the Australian Securities Exchange under symbol CXC.
As of June 30, 2009, the Company had $3.05 billion in total
assets and $924.8 million in total liabilities, resulting in
$1.95 billion in stockholders' equity. Coeur d'Alene Mines had
$402.2 million in accumulated deficit as of June 30, 2009.
As reported by the Troubled Company Reporter on August 11, 2009,
Standard & Poor's Ratings Services raised its corporate credit
rating on Coeur D'Alene Mines to 'B-' from 'CCC' and raised the
ratings on the company's $180 million senior unsecured notes due
2024 ($106 million outstanding) and $230 million senior unsecured
notes due 2028 ($150 million outstanding) to 'CCC+' from 'CCC-'.
The recovery rating on the notes remains unchanged at '5'. S&P
removed the corporate credit and issue-level ratings from
CreditWatch, where they were placed with positive implications on
May 18, 2009. The outlook is positive.
COEUR D'ALENE: Swaps $11.88MM Bond Debt for 784,466 Common Shares
-----------------------------------------------------------------
Pursuant to privately negotiated agreements dated August 7, 2009,
August 11, 2009, August 24, 2009, and August 27, 2009, Coeur
d'Alene Mines Corporation agreed to exchange $11.88 million
aggregate principal amount of its 1.25% Convertible Senior Notes
due 2024 for 784,466 shares of its common stock, par value $0.01.
The Company issued:
232,000 shares on August 17,
145,280 shares on August 19,
136,000 shares on August 27 and
271,186 shares on September 1, 2009.
The Company issued the Shares pursuant to the exemption from the
registration requirements afforded by Section 3(a)(9) of the
Securities Act of 1933, as amended.
About Coeur d'Alene Mines
Coeur d'Alene Mines Corporation (NYSE:CDE, TSX:CDM, ASX:CXC) is
one of the world's leading silver companies and also a significant
gold producer. Coeur common shares are traded on the New York
Stock Exchange under the symbol CDE, the Toronto Stock Exchange
under the symbol CDM, and its CHESS Depositary Interests are
traded on the Australian Securities Exchange under symbol CXC.
As of June 30, 2009, the Company had $3.05 billion in total
assets and $924.8 million in total liabilities, resulting in
$1.95 billion in stockholders' equity. Coeur d'Alene Mines had
$402.2 million in accumulated deficit as of June 30, 2009.
As reported by the Troubled Company Reporter on August 11, 2009,
Standard & Poor's Ratings Services raised its corporate credit
rating on Coeur D'Alene Mines to 'B-' from 'CCC' and raised the
ratings on the company's $180 million senior unsecured notes due
2024 ($106 million outstanding) and $230 million senior unsecured
notes due 2028 ($150 million outstanding) to 'CCC+' from 'CCC-'.
The recovery rating on the notes remains unchanged at '5'. S&P
removed the corporate credit and issue-level ratings from
CreditWatch, where they were placed with positive implications on
May 18, 2009. The outlook is positive.
COMSTOCK HOMEBUILDING: To Present Compliance Plan to Nasdaq Panel
-----------------------------------------------------------------
Comstock Homebuilding Companies is scheduled to appear before a
NASDAQ Stock Market Listing Qualifications Panel on September 23,
2009, to present its current plans to regain compliance and
request time to implement its plans. Pursuant to the procedures
set forth in the NASDAQ Marketplace Rule 4800 Series, the Company
will be required to provide a plan to regain compliance with
respect to all deficiencies at the September 23, 2009 hearing.
Currently the Company is non-compliant in three areas: (i) the
Minimum Bid Price Rule requires a closing bid price of $1.00 for a
minimum of 10 consecutive days, (b) the Market Value of Publicly
Held Shares Rule requires an aggregate market value of publicly
traded shares of $5 million or more for a minimum of 10
consecutive days, and (c) the Shareholder Equity Rule requires
minimum shareholder equity of $10 million.
Upon hearing the Company's plan to regain compliance, there can be
no assurance that the Panel will grant the Company's request for
continued listing. During the appeal process, the Company's
common stock will continue to trade on the NASDAQ Global Market.
On August 11, 2008, the Company said it had received notice from
NASDAQ stating that for 30 consecutive business days the Company's
common stock had not maintained a minimum market value of publicly
held shares of $5 million for 10 consecutive trading days over the
previous 30 consecutive trading days, and, as a result, did not
comply with NASDAQ Marketplace Rule 5450(b)(1)(C). Therefore, in
accordance with Marketplace Rule 5810(c)(3)(D), the Company was
provided 90 calendar days, or until November 4, 2008, to regain
compliance with the Minimum Market Value Rule. However, prior to
November 4, 2008 NASDAQ suspended enforcement of the MVPHS
requirement from October 16, 2008 through July 28, 2009. When the
suspension of the Minimum Market Value Rule began, the Company had
20 calendar days remaining in its MVPHS compliance period.
Therefore, upon NASDAQ's reinstatement of the MVPHS requirement on
August 3, 2009, the Company had 20 days, or until August 24, 2009
to regain compliance. At August 24, 2009, the Company had not
regained compliance with the Rule 5810(c)(3)(D). Additionally, as
previously announced, the Company is concurrently in the NASDAQ
Hearings process for failing to maintain a $1.00 per share bid
price. Furthermore, the Company reported stockholders' equity of
$425,000 in its Form 10-Q for the period ended June 30, 2009,
below the minimum $10 million stockholder's equity requirement set
forth in NASDAQ Marketplace Rule 5450(b)(1)(A). The failure to
regain compliance with any of the aforementioned NASDAQ
Marketplace Rules during the compliance period serves as basis for
delisting the Company's securities.
At the close of the market on September 1, 2009, the Company has
been in compliance with the $5,000,000 minimum MVPHS requirement
for 7 of the required 10 consecutive trading days. The Company is
continuing its efforts to regain compliance with all of the
applicable NASDAQ Marketplace Rules and will present its plan for
regaining compliance at the September 23, 2009 hearing before a
NASDAQ Listing Qualifications Panel.
"We look forward to meeting with the NASDAQ Listing Qualifications
Panel to present our plan for regaining compliance with all NASDAQ
Marketplace Rules and to request an opportunity to implement our
plan," said Christopher Clemente, Comstock's Chairman and Chief
Executive Officer. "Although we have not completed restructuring
all of our debts, we have made significant progress in that regard
and we continue to focus on completing this process and on
stabilizing our business platform. We continue to work on
developing solutions with our lenders that are aimed at
potentially securing the Company's ability to survive the economic
downturn that is affecting the homebuilding industry.
Additionally, there are signs that the market downturn is easing
which gives us reason to be optimistic about the future."
About Comstock Homebuilding Companies
Established in 1985, Comstock Homebuilding Companies, Inc. --
http://www.comstockhomebuilding.com/-- is a publicly traded,
diversified real estate development firm with a focus on a variety
of affordably priced for-sale residential products. The Company
currently actively markets its products under the Comstock Homes
brand in the Washington, D.C. metropolitan area. Comstock
Homebuilding Companies Inc. trades on NASDAQ under the symbol
CHCI.
CONTINENTAL AIRLINES: S&P Junks Issue-Level Rating on Senior Debt
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it has lowered its issue-
level ratings on all senior unsecured debt of Continental Airlines
Inc. to 'CCC+' from 'B-' and revised the recovery ratings on
certain unsecured debt issues, excluding industrial revenue bonds,
to '6' from '5'. At the same time, S&P affirmed its 'B' corporate
credit rating and secured debt ratings on Continental.
The ratings on Continental's unsecured debt are based principally
on declining aircraft values caused by the global aviation
downturn. This could result in reduced asset protection for
unsecured creditors if Continental were to file for bankruptcy.
"With values of the company's principal asset, its fleet, under
some pressure (which would intensify in a default scenario), S&P
judged that the value remaining for unsecured creditors after
satisfying the claims of secured creditors could be less than S&P
previously estimated," said Standard & Poor's credit analyst Betsy
Snyder.
The corporate credit rating on Houston-based Continental reflects
its participation in the high-risk airline industry and a heavy
debt and lease burden, but also better-than-average operating
performance among its peer large U.S. hub-and-spoke airlines.
Continental, the fourth-largest U.S. airline based on revenue
passenger miles, serves markets mainly in the southern and eastern
U.S. International routes serve the central Pacific, selected
Asian destinations, Latin America, and Europe. Continental's
route system is more balanced among these various markets than
those of other large U.S. airlines, reducing risk somewhat.
Continental posted a pretax loss of $349 million in the first half
of 2009, higher than the $177 million loss in the same period of
2008. However, Continental's pretax loss was better than those of
some of its peers, although worse than those of the low-cost
airlines. Continental's losses on fuel hedges (which were
included as part of fuel expense) were not as large as those
reported by most of its peers because the company reduced its
hedge position in late 2008.
Like other U.S. airlines, Continental is grounding older, less
fuel-efficient aircraft (including 67 B737-300s and B737-500s, as
well as various regional jets). Some of these are being replaced
by new, more fuel-efficient planes, but the net effect is to
shrink the size of its fleet overall (the company forecasts 5.8%
lower capacity for the full year 2009).
Revenue generation and operating performance should improve in the
seasonally strong third quarter and in the seasonally weak fourth
quarter, as Continental and other airlines reduce capacity further
(improving the balance of supply and demand for seats) and as the
economy begins to recover. Standard & Poor's economists expect
U.S. GDP to improve slightly in the second half of 2009 and in
2010. S&P currently expect Continental's loss to narrow in 2009
to about $300 million to $350 million from $585 million in 2008.
Assuming improving demand and pricing and no significant increase
in fuel prices, S&P expects Continental's loss to be substantially
reduced in 2010.
Continental has a substantial debt and lease burden stemming from
an extensive modernization and expansion of its fleet since the
mid-1990s and several years of losses since 2001. Debt and
leases, net of unrestricted cash, are greater relative to the
company's size than those of all other legacy airlines. However,
the company has also generated more consistent operating results,
with higher operating margins, than most of its peers.
In contrast to some other large U.S. airlines, Continental
continues to take delivery of a significant number of new
aircraft. Total commitments are now $5.3 billion through 2016.
Given the scale of these commitments and expected internal cash
flow, S&P expects further increases in total debt. However, the
benefit of this fleet plan is that it allows Continental to
continue improving fuel efficiency.
Liquidity is adequate. The company had unrestricted cash and
short-term investments of $2.8 billion at June 30, 2009, up
slightly from the $2.6 billion at year-end 2008. The company
forecasts this will decline to $2.4 billion at the end of the
third quarter (excluding $158 million of proceeds from the July
equity issuance), which is normally when cash declines for the
airline industry as tickets paid for earlier in the year for
summer flying are used and fewer new tickets are purchased.
The outlook is negative. S&P expects Continental to maintain
adequate liquidity for the next several quarters, despite an
expected prolonged weak, albeit improving, travel environment, as
long as fuel prices do not increase significantly. S&P could
lower the ratings if these conditions were to deteriorate, causing
unrestricted cash and short-term investments to fall below
$2 billion on a sustained basis (cash levels fluctuate with
seasonal ticket purchasing patterns, with the end of the second
quarter near the high point and the end of the fourth quarter near
the low point). S&P could revise the outlook to stable in the
next several quarters if industry conditions improve, most likely
due to stronger demand as the U.S. and other major economies begin
to recover, absent any large increases in fuel prices.
COYOTES HOCKEY: Sports League Doesn't Trust Balsillie
-----------------------------------------------------
According to Steven Church at Bloomberg News, the National Hockey
League owners asked the Bankruptcy Court to deny Jim Balsillie's
bid to buy the Phoenix Coyotes for $212 million and move the team
from Arizona to Ontario. The NHL says it does not trust the head
of Research In Motion Ltd., who was involved in botched deals to
purchase the Nashville Predators in 2007 and the Pittsburgh
Penguins in 2006.
In the Penguins transaction, the NHL said that Mr. Balsillie
committed in negotiations to keeping the team in Pennsylvania, but
later dropped out after he was asked to sign a contract precluding
him to transfer the team.
The report relates that Mr. Balsillie's attorney, Jeffrey Kessler,
countered that the lack of trust is an excuse being used by the
NHL to justify for rejecting Mr. Balsillie, the first proposed
owner ever denied because of "character" issues. Mr. Kessler
pointed out that Cablevision Systems Corp. Chief Executive Officer
James Dolan is disliked by many NHL owners because the New York
Rangers, which Cablevision owns, sued the league.
As reported by the Troubled Company Reporter on August 27, 2009,
the NHL has submitted a $140 million offer to buy the Phoenix
Coyotes and keep the team in Arizona after sports entrepreneur
Jerry Reinsdorf withdrew his $150 million bid. "[T]he League
filed its own bid to purchase the Phoenix Coyotes' franchise out
of bankruptcy in an effort to maximize the likelihood that the
Club ultimately will be sold to an acceptable purchaser who is
committed to operating the franchise in Glendale," NHL Deputy
Commissioner Bill Daly said in an August 25 statement.
A second bidder, Jim Balsillie, has reaffirmed its bid for the
Phoenix Coyotes. He has offered $212.5 million but his bid
requires a move of the team to Hamilton, Ontario, which is being
opposed by the NHL.
A third bidder, Ice Edge Holdings, LLC, also submitted a formal
bid for the Phoenix Coyotes. Ice Edge has pledged to retain the
Coyotes in Glendale. Ice Edge's Anthony Le Blanc, a former
executive at BlackBerry maker Research In Motion Ltd., has offered
to buy the team in exchange for assuming most of its debt. That
plan requires Ice Edge to renegotiate some of the Coyotes' debts.
Ice Edge said it has negotiated an agreement in principal with
secured creditor SOF Investments, LP.
SOF Investments, the largest secured creditor with debts of $80
million, said it has reached an agreement with Ice Edge Holdings
for repayment of its claim. The investment firm, however, said
that doesn't rule out also reaching a similar agreement with the
NHL.
About Coyotes Hockey
Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes
Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of
the Phoenix Coyotes National Hockey League team -- filed for
Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on
May 5, 2009. The Debtors are represented by Thomas J. Salerno,
Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate
their assets and liabilities are between $100 million and
$500 million.
Jim Balsillie, Research in Motion Ltd.'s co-chief executive
officer, offered to buy the Phoenix Coyotes for $212 million and
move the NHL team to Hamilton, Ontario, and the League balked at
the relocation proposal. Mr. Balsillie was unsuccessful in 2007
when he attempted to buy and relocate the Nashville Predators, and
lost a similar bid in 2006 to buy and relocate the Pittsburgh
Penguins.
COYOTES HOCKEY: Bidder Ice Edge Reaches Pact With SOF to Pay Debt
-----------------------------------------------------------------
The Toronto Star reports that SOF Investments LP, the Phoenix
Coyotes' largest creditor, has reached an agreement with bidder
Ice Edge Holdings to repay the debt.
The Toronto Star relates that Phoenix Coyotes owes SOF Investments
about $80 million. According to the Toronto Star, SOF Investments
didn't rule out reaching a similar deal with the National Hockey
League, which also is bidding on the team.
SOF Investments and two other investment groups -- White Tip
Investments LLC and Donatello Investments LLC -- asked the U.S.
Bankruptcy Court in Phoenix in May 2009 to keep open Jim
Balsillie's $213 million offer to take over the club and move it
to Hamilton, Ontario. White Sox Chairperson and owner Jerry
Reinsdorf submitted in June 2009 a $148 million bid that was
backed by the NHL but withdrew it in August. The NHL said that it
would make its own bid for the Coyotes.
Chris Casacchia at Phoenix Business Journal states that the Ice
Age bid is $150 million and seeks to change the arena lease at
Jobing.com Arena requiring that five regular-season games be
played in Saskatoon, Saskatchewan.
Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes
Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of
the Phoenix Coyotes National Hockey League team -- filed for
Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on
May 5, 2009. The Debtors are represented by Thomas J. Salerno,
Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate
their assets and liabilities are between $100 million and
$500 million.
Jim Balsillie, Research in Motion Ltd.'s co-chief executive
officer, offered to buy the Phoenix Coyotes for $212 million and
move the NHL team to Hamilton, Ontario, and the League balked at
the relocation proposal. Mr. Balsillie was unsuccessful in 2007
when he attempted to buy and relocate the Nashville Predators, and
lost a similar bid in 2006 to buy and relocate the Pittsburgh
Penguins.
COYOTES HOCKEY: Court Reluctant to Toss Out Any Bids
----------------------------------------------------
Mike Sunnucks at Phoenix Business Journal reports that the Hon.
Redfield T. Baum of the U.S. Bankruptcy Court for the District of
Arizona said that he is reluctant to reject any bids for the
Phoenix Coyotes. The National Hockey League owners asked the
Bankruptcy Court to deny Jim Balsillie's bid to buy the Phoenix
Coyotes for $212 million and move the team from Arizona to
Ontario.
Judge Baum, however, said, according to Business Journal, that he
wants as many offers for Phoenix Coyotes as possible.
According to the report, Judge Baum also told Jim Balsillie to
change his September 14 deadline to buy Phoenix Coyotes or pull
his bid, as rulings on the NHL request and on the September 10
auction of Phoenix Coyotes may not be finalized by that date.
Aside from Mr. Balsillie, the NHL has submitted a $140 million
offer to buy the Phoenix Coyotes and keep the team in Arizona
after sports entrepreneur Jerry Reinsdorf withdrew his $150
million bid.
A third bidder, Ice Edge Holdings, LLC, also submitted a formal
bid for the Phoenix Coyotes. Ice Edge has pledged to retain the
Coyotes in Glendale, and has offered to buy the team in exchange
for assuming most of its debt. Ice Edge has already reached an
agreement with SOF Investments, the largest secured creditor with
a $80 million claim, for repayment of the claim.
Canwest News notes that even if NHL wins the auction, it wouldn't
guarantee that the Coyotes will remain in Phoenix over the long
term. Court documents say that a winning bid by NHL would ensure
the team remains in Arizona for at least one season, but the
league said that it would consider relocating the team if local
buyers couldn't be found within a year.
According to Canwest News, legal observers have warned that NHL
could face antitrust lawsuits in the U.S. and a battle over
territorial rights in Canada after the Coyotes auction.
Anthony Perez at Phoenix Coyotes Examiner relates that Judge Baum
will also set hearing dates to decide whether Wayne Gretzky is a
creditor and for Jerry Moyes' contempt of court hearing.
About Coyotes Hockey
Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes
Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of
the Phoenix Coyotes National Hockey League team -- filed for
Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on
May 5, 2009. The Debtors are represented by Thomas J. Salerno,
Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate
their assets and liabilities are between $100 million and
$500 million.
Jim Balsillie, Research in Motion Ltd.'s co-chief executive
officer, offered to buy the Phoenix Coyotes for $212 million and
move the NHL team to Hamilton, Ontario, and the League balked at
the relocation proposal. Mr. Balsillie was unsuccessful in 2007
when he attempted to buy and relocate the Nashville Predators, and
lost a similar bid in 2006 to buy and relocate the Pittsburgh
Penguins.
CYNERGY DATA: Case Summary & 25 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Cynergy Data, LLC
30-40 47th Avenue, 9th Floor
Long Island, NY 11101
Case No.: 09-13038
Debtor-affiliates filing separate Chapter 11 petition:
Entity Case No.
------ --------
Cynergy Data Holdings, Inc. 09-13039
Cynergy Prosperity Plus, LLC 09-13040
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Judge: Kevin Gross
Debtor's Counsel: David B. Stratton, Esq.
Pepper Hamilton LLP
Hercules Plaza, Suite 5100
1313 Market Street
Wilmington, DE 19899-1709
Tel: (302) 777-6500
Fax: (302) 421-8390
Email: strattond@pepperlaw.com
Evelyn J. Meltzer, Esq.
Pepper Hamilton LLP
Hercules Plaza
Suite 5100, 1313 N. Market Street
Wilmington, DE 19899
Tel: (302) 777-6500
Fax: (302) 421-8390
Email: meltzere@pepperlaw.com
Estimated Assets: $100,000,001 to $500,000,000
Estimated Debts: $100,000,001 to $500,000,000
The petition was signed by Charles M. Moore, the company's chief
restructuring officer.
A. Cynergy Data's List of 25 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Process America trade debt $2,807,231
Paymentech trade debt $2,629,783
TSYS trade debt $1,460,140
WWWMYGRANTSITENET trade debt $1,377,254
8774951145
Second Source trade debt $1,057,199
DJMP*LIFSTYLEFIT.COM trade debt $900,764
WWW FEDGRANTUSA COM trade debt $812,629
Merchant Processing trade debt $756,782
Services, Corp
Pivotal Payments trade debt $509,068
Fast Transact trade debt $503,110
BUSINESSFUND 8004101682 trade debt $493,692
SignaPay trade debt $465,507
Nation Wide Home Warranty trade debt $415,585
US Online America Group trade debt $400,135
Vacation Clubs trade debt $397,924
Epay Data trade debt $382,829
Debit Technologies, Inc. trade debt $382,263
QUICKGRANTPRO8663707270 trade debt $319,347
NETWORKAGENDACOM8004189320 trade debt $315,277
Cal Nutrasciences Inc. trade debt $292,513
I Fortuity trade debt $266,347
Gravity Payments trade debt $263,702
Tribul Merchant Services trade debt $263,543
World Ventures trade debt $260,000
VCOMM trade debt $255,858
DEL MONTE: To Refinance Portion of Debt Within Next 9 Months
------------------------------------------------------------
Del Monte Foods Company disclosed that within the next 9 months,
it expects to pursue a refinancing of portions of its debt
structure. The Company currently estimates that fees and expenses
related to a refinancing of its debt under its senior credit
facility would impact GAAP earnings per share by approximately
$0.07 to $0.09 in the year of the transaction. The timing of the
action, the Company said, is subject to market and other
conditions and could be in either fiscal 2010 or fiscal 2011.
Accordingly, the Company said, the estimated fees and expenses are
not included in its Fiscal 2010 guidance.
On September 3, Del Monte Foods reported net sales for the first
quarter fiscal 2010, which ended August 2, 2009, of $813.7 million
compared to $726.2 million last year, an increase of 12.0%.
Income from continuing operations was $58.9 million, or $0.30
earnings per share from continuing operations, compared to $8.0
million loss, or $0.04 EPS loss in the previous year.
The Company posted net income of $58.6 million for the fiscal
first quarter 2009 from a net loss of $10.1 million for the same
period a year ago.
As of August 2, 2009, the Company had $4.45 billion in total
assets and $2.78 billion in total liabilities.
In its Annual Report on Form 10-K for the fiscal year ended May 3,
2009, filed in July, the Company disclosed that as of May 3, it
had a total of $1.56 billion of indebtedness. The Company said
its level of indebtedness could have important consequences, such
as:
-- limiting its ability to obtain additional financing to
fund growth, acquisitions, working capital, capital
expenditures, debt service requirements or other cash
requirements;
-- limiting its operational flexibility due to the covenants
contained in its debt agreements;
-- limiting its ability to invest operating cash flow in its
business due to debt service requirements;
-- limiting its ability to compete with companies that are
less leveraged and that may be better positioned to
withstand economic downturns;
-- reducing its flexibility to adjust to changing business
and market conditions and making us more vulnerable to
economic downturns; and
-- making it vulnerable to fluctuations in market interest
rates, to the extent that its debt is subject to floating
interest rates or needs to be refinanced.
"Continuing disruptions in the financial markets, a ratings
downgrade or other factors could affect our ability to refinance
our debt on reasonable terms, or at all," the Company also said in
its Form 10-K filing.
The revolving credit facility and Term A loan facility that are a
part of the Company's Senior Credit Facility each mature on
February 8, 2011; and the Term B loan facility that is part of its
Senior Credit Facility matures on February 8, 2012. The Company's
8-5/8% senior subordinated notes mature on December 15, 2012.
Parent Del Monte Foods Company carries Fitch's 'BB' Long-term
Issuer Default Rating and operating subsidiary Del Monte
Corporation carries Fitch's 'BB' Long-term IDR; 'BB+' Senior
secured bank facility rating; and 'BB-' Senior subordinated notes
rating.
About Del Monte Foods
Based in San Francisco, California, Del Monte Foods Company (NYSE:
DLM) -- http://www.delmonte.com/-- is one of the country's
largest and most well-known producers, distributors and marketers
of premium quality, branded food and pet products for the U.S.
retail market, generating approximately $3.6 billion in net sales
in fiscal 2009. Its brands including Del Monte(R), S&W(R),
Contadina(R), College Inn(R), Meow Mix(R), Kibbles `n Bits(R),
9Lives(R), Milk-Bone(R), Pup-Peroni(R), Meaty Bone(R),
Snausages(R) and Pounce(R), Del Monte products are found in eight
out of ten U.S. households. The Company also produces,
distributes and markets private label food and pet products.
DESTINATION MATERNITY: Moody's Affirms 'B2' Corp. Family Rating
---------------------------------------------------------------
Moody's Investors Service revised its rating outlook for
Destination Maternity Corporation to stable from negative. At the
same time, Moody's affirmed the company's B2 Corporate Family
Rating and B3 Probability of Default Rating, and the B2 rating on
its senior secured term loan.
The outlook change to stable reflects the notable improvement in
Destination Maternity's profitability that, when coupled with
improved free cash flow, has led to significant debt reduction and
ample cushion under its financial covenants. While economic
conditions are expected to remain weak through the remainder of
calendar 2009, Moody's believes that continued cost control,
positive free cash flow and the October 2009 re-launch of the Two
Hearts maternity leased departments in Sears and K-Mart should
enable the company to maintain fairly stable, if not improved,
financial metrics over the near-to-intermediate-term.
Destination Maternity's B2 CFR reflects the company's very small
scale relative to other specialty retailers, its low operating
margins with profitability that is well below its peer group, and
its moderate seasonality, as most of its cash flow from operations
is typically generated during the fiscal first and third quarters.
In addition, the rating reflects the company's weak, but
improving, credit metrics, and is constrained by ongoing negative
comparable store sales results. The rating is supported by
Destination Maternity's leading position in the competitive
maternity apparel sub-sector of the retail market, and its
national geographic footprint with locations in 50 states, and the
expectation for good near term liquidity.
These ratings were affirmed:
-- Corporate Family Rating at B2;
-- Probability of Default Rating at B3;
-- Senior Secured Term Loan-B at B2 (LGD3, 35%)
The ratings outlook is stable.
The last rating action on Destination Maternity was on April 17,
2008, when Moody's affirmed the company's B2 CFR, lowered the PDR
to B3, and changed the outlook to negative from stable.
Destination Maternity Corporation, with headquarters in
Philadelphia, Pennsylvania, is the largest independent retailer of
maternity apparel in the United States. The company operates
1,087 retail locations, including 730 stores in 50 states, Puerto
Rico and Canada under the Motherhood Maternity, A Pea in the Pod
and Destination Maternity trade names, in addition to its brand-
specific Internet web stores. Revenue for the LTM period ending
June 30, 2009, was about $540 million.
DEVELOPERS DIVERSIFIED: Increases Size of Cash Tender Offers
------------------------------------------------------------
Developers Diversified Realty has increased the maximum payment
amount for its offer to purchase for cash its 5.00% Notes due 2010
and 4.625% Notes due 2010 by $3,000,000 and the maximum payment
amount for its offer to purchase for cash its 5.25% Notes due 2011
and 5.375% Notes due 2012 by $25,000,000.
Developers Diversified is now offering to purchase the maximum
aggregate principal amount of its 5.00% Notes due 2010 and 4.625%
Notes due 2010 available for $73,000,000 (excluding accrued
interest and subject to increase) and the maximum aggregate
principal amount of its 5.25% Notes due 2011 and 5.375% Notes due
2012 available for $115,000,000 (excluding accrued interest and
subject to increase).
As of 10:00 a.m., New York City time, on September 2, 2009, the
aggregate principal amount of each series of Notes validly
tendered pursuant to the 2010 Tender Offer and the 2011 and 2012
Tender Offer was:
Aggregate Principal
Notes Amount Tendered
------------------------- -------------------
2010 Notes
5.00% Notes due 2010 $89,420,000
4.625% Notes due 2010 $134,998,000
2011 and 2012 Notes
5.25% Notes due 2011 $75,222,000
5.375% Notes due 2012 $229,844,000
Developers Diversified is also extending the early participation
deadline for the 2010 Tender Offer and the 2011 and 2012 Tender
Offer until midnight, New York City time, on September 16, 2009,
and the expiration time for the 2010 Tender Offer and the 2011
and 2012 Tender Offer until midnight, New York City time, on
September 16, 2009.
The Troubled Company Reporter on August 24, 2009, reported each
series of Notes and other information relating to the Tender
Offers:
Total
Consider-
Early ation
Outstanding Particip (Acceptable
Principal -ation Bid Price
Notes CUSIP No. Amount Payment Range)(1)(2)
----- --------- ------------ -------- ------------
2010 Notes 251591AL7 $193,574,000 $40 $960 - $990
5% Notes
due 2010
4.625% Notes
due 2010 251591AG8 $259,776,000 $40 $950 - $980
2011 and
2012 Notes
5.25% Notes
due 2011 251591AK9 $185,169,000 $40 $940 - $980
5.375% Notes
due 2012 251591AN3 $346,575,000 $40 $900 - $940
2015 and
2018 Notes
5.50% Notes
due 2015 251591AM5 $200,000,000 $40 $800 - $840
7.50% Notes
due 2018 25159NAW5 $100,000,000 $40 $830 - $870
(1) Per $1,000 principal amount of Notes that are accepted
for purchase.
(2) Includes the Early Participation Payment. The price at
the low end of the range constitutes the "Base Price" for
each series of Notes.
Holders who validly tender Notes pursuant to the 2010 Tender Offer
or the 2011 and 2012 Tender Offer at or prior to the Early
Participation Deadline will receive the applicable "Total
Consideration," including an early participation payment of $40.00
per $1,000 principal amount of Notes tendered in such Tender
Offer.
Developers Diversified has not increased the maximum payment
amount for its offer to purchase for cash the maximum aggregate
principal amount of its 5.50% Notes due 2015 and 7.50% Notes due
2018 available for $40,000,000 (excluding accrued interest and
subject to increase). The early participation period for the 2015
and 2018 Tender Offer expired at 5:00 P.M., New York City time, on
August 27, 2009, and the 2015 and 2018 Tender Offer remains
scheduled to expire at midnight, New York City time, on September
11, 2009.
In each of the Tender Offers, the price will be determined in
accordance with a modified Dutch auction procedure on the terms
and conditions set forth in the Offer to Purchase, dated August
13, 2009. Holders no longer have the right to withdraw their
tender of Notes in any Tender Offer.
The Tender Offers are conditioned upon the satisfaction or waiver
of certain conditions as described in the Offer to Purchase.
The Company has retained Goldman, Sachs & Co. to act as the dealer
manager for the Tender Offers and has retained Global Bondholder
Services Corporation to act as the information agent and
depositary for the Tender Offers. Questions regarding the Tender
Offers should be directed to Goldman, Sachs & Co. at (800) 828-
3182 (toll-free) or (212) 902-5183 (collect). Requests for
documentation relating to the Tender Offers should be directed to
Global Bondholder Services Corporation at (866) 952-2200 (toll-
free) or (212) 430-3774 (banks and brokers only).
Developers Diversified -- http://www.ddr.com/-- as of June 30,
2009 owned and managed approximately 690 retail operating and
development properties in 45 states, plus Puerto Rico, Brazil and
Canada totaling approximately 151 million square feet. The
Company is a self-administered and self-managed real estate
investment trust operating as a fully integrated real estate
company which acquires, develops and leases shopping centers.
DIAMOND MFG: Case Summary & 5 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Diamond Mfg, Inc.
P.O. Box 203
Beasley, TX 77417-0203
Bankruptcy Case No.: 09-36458
Chapter 11 Petition Date: August 31, 2009
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Marvin Isgur
Debtor's Counsel: J Craig Cowgill, Esq.
Attorney at Law
8100 Washingto, Suite 120
Houston, TX 77007
Tel: (713) 956-0254
Fax: (713) 956-6284
Email: jccowgill@cowgillholmes.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
5 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/txsb09-36458.pdf
The petition was signed by Scott C. Shook, president of the
Company.
DOMINION GROUP: Meeting of Creditors Scheduled for September 28
---------------------------------------------------------------
The U.S. Trustee for Region 16 will convene a meeting of creditors
in Dominion Group LLC's Chapter 11 case on Sept. 28, 2009, at
11:00 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.
West Hollywood, California-based Dominion Group LLC filed for
Chapter 11 on Aug. 17, 2009 (Bankr. C.D. Calif. Case No. 09-
31855). Scott F. Gautier, Esq., represents the Debtor in its
restructuring efforts. In its petition, the Debtor listed assets
and debts both ranging from $10,000,001 to $50,000,000.
DORAL ENERGY: Has Lender's Forbearance Until October 15
-------------------------------------------------------
Doral Energy Corp. and Macquarie Bank Limited on August 31, 2009,
entered into an agreement pursuant to which Macquarie agreed to
forbear from exercising any of its remedies under the terms of its
$50,000,000 Senior First Lien Secured Credit Agreement with the
Company until October 15, 2009. In exchange, the Company has
agreed to reacquire from Macquarie the net profit overriding
royalty interest conveyed to Macquarie in connection with the
Macquarie Credit Agreement for $750,000 by October 15, 2009. The
NPORRI covers the Company's oil and gas properties located in Eddy
County, New Mexico acquired from Hanson Energy in July 2008. The
NPORRI grants Macquarie 35% of all proceeds from the sale of
hydrocarbons produced from the Eddy County Properties net of
production and capital costs until the total paid to Macquarie
reaches $5,000,000, after which the NPORRI decreases to 20% of
proceeds net of production and capital costs. The Forbearance
Agreement is dated effective as of August 28, 2009.
Doral Energy Corp. is licensed oil and gas operator in the state
of New Mexico. On July 29, 2008, the Company acquired certain oil
and gas properties and changed their business focus to that of a
company engaged in the acquisition, operation, exploration and
development of oil and gas properties and prospects. On July 29,
2008, the Company acquired a working interest in 66 producing oil
fields and approximately 186 wells in and around Eddy County, New
Mexico. The Eddy County Properties consist of approximately 7,800
acres and are located along the Artesia-Vacuum Trend near the
northwestern edge of the Permian Basin. As a result of the
acquisition of the Eddy County Properties, Doral holds a 100%
working interest and an average of a 74.7% net revenue interest in
55 of the 66 leases. In addition, the Company holds an average of
an 84.4% working interest and an average of a 67.1% net revenue
interest in the remaining 11 leases.
EAGLE PUBLICATIONS: Court Tentatively Okays Sale to Sample News
---------------------------------------------------------------
The Associated Press reports that U.S. Bankruptcy Judge J. Michael
Deasy has tentatively approved the sale of The Eagle Times to
Sample News Group.
The AP states that Sample News offered $261,000 for The Eagle
Times, along with:
-- a three-month subscription extension or a refund, and
-- $52,000 payment of debt owed to G.E. Capital Corp. for
various pieces of equipment, which would leave only $6,000
to be distributed to all the other creditors.
According to The AP, Judge Deasy asked Victor Dahar, the court-
appointed bankruptcy trustee, to amend some paperwork to clarify
the terms of the deal by September 9. To ensure subscribers'
personal information is protected when handed over to the new
owners, the bid must be reviewed by a consumer privacy ombudsman
by that date, says The AP.
The AP relates that George Sample at Sample News Group said that
he hopes to operate The Eagle Times under Eagle Printing and
Publishing before the end of September.
The Eagle Times was a daily newspaper based in Claremont, New
Hampshire, serving the Connecticut River Valley in New Hampshire
and Vermont. The paper was independently owned by publisher
Harvey Hill. It was published from the 1970s through July 10,
2009, when it shut down.
The paper circulated in Claremont, Charlestown, Cornish, Newport,
Plainfield and Unity, New Hampshire, and Ascutney, Springfield,
Weathersfield, and Windsor, Vermont. Reporting was focused on
local features and local government. The paper produced A&E and
Sunday Magazine sections.
The daily newspaper had an estimated circulation of more than
8,000 before Eagle Publications declared Chapter 7 bankruptcy.
The newspaper closed in July 2009.
EASTBOURNE 59/GRAND: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Eastbourne 59/Grand Parkway LP
5599 San Felipe, Suite 110
Houston, TX 77056
Bankruptcy Case No.: 09-36481
Chapter 11 Petition Date: August 31, 2009
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Letitia Z. Paul
Debtor's Counsel: Douglas S. Draper, Esq.
Heller Draper et al
650 Poydras St., Suite 2500
New Orleans, LA 70130
Tel: (504) 299-3300
Fax: (504) 299-3399
Email: ddraper@hellerdraper.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company says it does not have unsecured creditors who are non
insiders when they filed their petition.
The petition was signed by Christopher Hotze.
EASTON-BELL: Cures Non-Compliance of Wachovia Credit Agreement
--------------------------------------------------------------
Easton-Bell Sports, Inc., as of July 4, 2009, was not in
compliance with the maximum total leverage ratio test as set forth
in its senior secured Credit and Guaranty Agreement with Wachovia
Bank, National Association, as the administrative agent, and a
syndicate of lenders.
However, the non-compliance was cured on August 14, 2009, as
provided for in the credit facility through the exercise of a cure
right with a cash equity infusion of $12.9 million by existing
investors and members of management. As a result of the equity
infusion, the Company is currently in compliance with all of its
debt covenants.
The Credit Agreement provided for (i) a $335 million term loan
facility, (ii) a $70 million U.S. revolving credit facility and
(iii) a C$12 million Canadian revolving credit facility. All
three facilities are scheduled to mature in March 2012. At
July 4, 2009, the Company had $315 million outstanding under the
term loan facility and zero outstanding under both the U.S. and
the Canadian revolving credit facilities.
According to the Company, the cure right provides the Company the
right to receive cash common equity infusions in an amount that is
necessary to satisfy the financial covenant tests on a pro-forma
basis. The cure right capital contribution amount is considered
additional consolidated adjusted EBITDA, as defined in the Credit
Agreement, for purposes of measuring compliance with the financial
covenants for the Company's fiscal quarter ended July 4, 2009.
EB Sports Inc. said in subsequent periods, this cure amount will
continue to be considered a component of consolidated adjusted
EBITDA for the next three fiscal quarters on a trailing four
quarter calculation basis. The cure amount is limited such that
it cannot exceed the amount required for purposes of complying
with the financial covenants nor can this cure right be exercised
again in the following two succeeding quarters. Additionally,
the cure amount is limited in any case to a maximum amount of
$15 million in the aggregate since March 16, 2006.
EB Sports Inc. explained the cure right cash common equity
infusion necessary to cure the Company's non-compliance with the
financial covenants tested as of July 4, 2009, was received by
parent company, Easton-Bell Sports, LLC, and EB Sports Corp. from
certain existing investors in the Parent and members of
management, including Paul Harrington, the Company's Chief
Executive Officer and President, on August 14, 2009. To finance
this common equity infusion, the Parent issued Class C Common
Units and EB Sports issued shares of Series A preferred stock to
the participants of the financing, which included certain existing
investors of the Parent and Mr. Harrington. The Parent used the
proceeds of its issuance of Class C Common Units to pay its
expenses related to the financing of the cure right and to
maintain a balance for the Parent's future expenses. EB Sports
used a portion of the proceeds from its issuance of Series A
preferred stock to pay its expenses related to the financing of
the cure right and the balance of the proceeds was contributed to
the capital of RBG Holdings Corp. -- the parent of EB Sports Inc.,
and a wholly owned subsidiary of EB Sports Corp. -- which in turn
contributed the necessary cash equity infusion, in the amount of
$12.9 million, to the Company's capital. As a result of the
exercise of this cure, EB Sports Inc. is currently in compliance
with the covenants of the Credit Agreement, and is deemed to
have satisfied the requirements of the financial covenants as of
July 4, 2009.
EB Sports Inc. cautioned it may not be able to continue to satisfy
the financial covenant requirements in subsequent periods. "If we
are unable to maintain compliance with the financial covenants
contained in the Credit Agreement, an event of default would
occur. During the continuance of an event of a default, the
lenders under the Credit Agreement are entitled to take various
actions, including accelerating amounts due under the Credit
Agreement, terminating our access to our revolving credit
facilities and all other actions permitted to be taken by a
secured creditor. An event of default could have a material
adverse effect on our financial position, results of operations
and cash flow," EB Sports Inc. said.
The Company posted lower net income of $3.89 million for the
fiscal quarter ended July 4, 2009, compared to $15.4 million for
the fiscal quarter ended June 28, 2008. The Company posted net
income of $4.86 million for two fiscal quarters ended July 4,
2009, compared to $17.8 million for two fiscal quarters ended
June 28, 2008.
The Company had net sales of $187.3 million for the second quarter
of fiscal 2009, a decrease of 15.2% as compared to $220.8 million
of net sales for the second quarter of fiscal 2008, or a 12.6%
decline on a constant currency basis. The Company had net sales
of $372.1 million for the first half of fiscal 2009, a decrease of
7.6 % as compared to $402.9 million of net sales for the first
half of fiscal 2008, or a 4.9% decline on a constant currency
basis.
As of July 4, 2009, the Company has $1.00 billion in total assets
and $644.4 million in total liabilities. Net debt totaled
$402.6 million (total debt of $455.1 million less cash of
$52.5 million) as of July 4, 2009, a decrease of $37.7 million
over such amount at June 28, 2008. The decrease in net debt
versus this time last year is due to an increase in cash of
$24.3 million and a decrease in debt and capital lease obligations
of $13.3 million. Working capital as of July 4, 2009, was
$311.8 million, as compared to $298.3 million as of June 28, 2008.
A full-text copy of the Company's quarterly report is available at
no charge at http://ResearchArchives.com/t/s?43dc
Easton-Bell Sports, Inc. -- http://www.eastonbellsports.com/--
designs, develops and markets innovative sports equipment,
protective products and related accessories under authentic
brands. The Company markets and licenses products under such
well-known brands as Easton, Bell, Riddell, Giro and Blackburn.
Headquartered in Van Nuys, California, the Company has 29
facilities worldwide.
EL DIAMANTE ASSOCIATES: Voluntary Chapter 11 Case Summary
---------------------------------------------------------
Debtor: El Diamante Associates, LLC
3746 Scarlet Oak
Corpus Christi, TX 78418
Bankruptcy Case No.: 09-20557
Chapter 11 Petition Date: August 31, 2009
Court: United States Bankruptcy Court
Southern District of Texas (Corpus Christi)
Judge: Richard S. Schmidt
Debtor's Counsel: Patricia Reed Constant, Esq.
Attorney & Mediator
800 N Shoreline, Suite 320 S
Corpus Christi, TX 78401-3733
Tel: (361) 887-1044
Fax: (361) 887-1043
Email: prconstant@swbell.net
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 Brian R. Tucker, managing member of the
Company.
ESCADA AG: Five-Member Creditors' Committee Formed in U.S. Case
---------------------------------------------------------------
Pursuant to Section 1102 of the Bankruptcy Code, Diana G. Adams,
the United States Trustee for Region 2, appointed on September 3,
2009, five creditors to serve as members of the Official Committee
of Unsecured Creditors in Escada (USA) Inc.'s Chapter 11 case.
The Committee members are:
(1) Bayerische Hypo-und Veriensbank
c/o William H. Schrag
Duane Morris
1540 Broadway
New York, NY 10036
Tel.: 212-692-1049
Fax: 212-202-7555
(2) The Bank of New York Mellon Trust Company, N.A.
c/o Stephanie Wickouski
Drinker Biddle & Reath LLP
140 Broadway - 39th Floor
New York, NY 10005
Tel.: 212-248-3170
Fax: 212-248-3141
(3) Basil David Postan
c/o Edward Sassower
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
Tel.: 212-446-4800
Fax: 212-446-4900
(4) Century Direct LLC
c/o Michael Kellogg
30-00 47th Avenue
Long Island City, NY 11101
Tel.: 212-763-0609
Fax: 718-349-9528
(5) Specialty Transport Solutions Int'l Inc.
63 Old Wood Road
Berlin, CT 06037
Tel.: 860-829-1629
Fax: 860-828-7527
Bayerische Hypo-und holds a guaranty claim amounting to
EUR13,000,000 and $18,400,000, and is one of the largest creditors
in the Debtor's case. Also constituting the largest creditors
list are Century Direct and Specialty Transport Solutions which
assert debt trade claims against the Debtor totaling $25,000.
About Escada AG
The ESCADA Group -- http://www.escada.com/-- is an international
fashion group for women's apparel and accessories, which is active
on the international luxury goods market. It has pursued a course
of steady expansion since its founding in 1976 by Margaretha and
Wolfgang Ley and today has 182 own shops and 225 franchise
shops/corners in more than 60 countries.
As of August 10, 2009 the Escada Group operated 176 owned stores
and so-called shop in shops, of which 26 owned stores are located
in the United States and operated by Escada (USA) Inc. and 2
stores are planned to be opened in the United States before year
end. Escada Group products are also sold in 163 stores worldwide
which are operated by franchisees. Escada Group had total assets
of EUR322.2 million against total liabilities of 338.9 million as
of April 30, 2009.
ESCADA AG filed of an insolvency petition in Munich, Germany, on
August 13, 2009. The competent Municipal Court of Munich has
appointed Dr. jur. Christian Gerloff as preliminary insolvency
administrator.
Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on
August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). O'Melveny &
Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson
Consultants serves as claims and notice agent. Judge Stuart M.
Bernstein handles the case. Escada US listed US$50 million to
US$100 million in assets and US$100 million to US$500 million in
debts in its petition. A copy of Escada US's Chapter 11 petition
and list of largest unsecured creditors is available for free at:
http://bankrupt.com/misc/sdny09-15008.pdf
FILENE'S BASEMENT: Seeks Extension of Exclusivity to Nov. 30
------------------------------------------------------------
Filene's Basement Inc. asks the Bankruptcy Court to extend its
exclusive period to file a Chapter 11 plan until November 30,
Bill Rochelle at Bloomberg reported. The current deadline is
September 1.
In June, Syms Corp. consummated its acquisition under 11 U.S.C.
Sec. 363 of substantially all of the assets of Filene's Basement
Inc. The total consideration to Filene's Basement amounted to
roughly $65 million plus certain additional costs of Filene's
Basement that were assumed by Syms.
About Filene's
Massachusetts-based Filene's Basement, also called The Basement,
is the oldest off-price retailer in the United States. The
Basement focuses on high-end goods and is known for its
distinctive, low-technology automatic markdown system.
Filene's Basement first filed for Chapter 11 bankruptcy protection
in August 1999. Filene's Basement was bought by a predecessor of
Retail Ventures, Inc., the following year. Retail Ventures in
April 2009 transferred the unit to Buxbaum.
Filene's Basement, Inc. and its affiliates filed for Chapter 22 on
May 4, 2009, (Bankr. D. Del. Case No. 09-11525). James E.
O'Neill, Esq., Laura Davis Jones, Esq., Mark M. Billion, Esq.,
Michael Seidl, Esq., and Timothy P. Cairns, Esq. at Pachulski
Stang Ziehl & Jones LLP, represent the Debtors in their
restructuring effort. The Debtors listed $50,000,001 to
$100,000,000 in assets and $100,000,001 to $500,000,000 in debts.
The Debtor is now formally named FB Liquidating Estate, following
the sale of all of its assets to Syms Corp. in June 2009
FIRST METALS: Completes Proposal Issuances
------------------------------------------
First Metals Inc. said September 2 it has issued 279,255,363
common shares of the Company, 25,845,406 Common Share purchase
warrants, and $2,618,000 in face value of secured promissory notes
all as required under the terms of the previously announced
proposal under the Bankruptcy and Insolvency Act.
The Proposal was approved by the creditors of First Metals on
May 6, 2009 and by the Ontario Superior Court of Justice on
June 17, 2009. The Common Shares and Warrants are being issued in
reliance on the exemption contained in section 604(e) of the TSX
Company Manual.
Under the Proposal, each person holding a proven secured claim
will receive 75 Common Shares and 8 Warrants for each $1 of proven
secured claim. Each Warrant will be exercisable for a period of
18 months and will entitle the holder thereof to acquire one
further Common Share at an exercise price of $0.03 per Common
Share for the first 12 months following the date of issue and
$0.05 for the remaining six months. Persons holding proven
secured claims will also receive $2,618,000 face value of Notes
issued and $882,000 in cash, on a pro rata basis. Each person
holding a proven unsecured claim had the option to receive 2
Common Shares for each $1 of proven unsecured claims held or a
cash payment equal to ten per cent of that person's proven
unsecured claim, up to a maximum of $500.
It is anticipated that BDO Dunwoody Limited, the proposal trustee,
will effect the distribution of the Common Shares, Warrants, Notes
and cash by September 4, 2009.
The total number of issued and outstanding Common Shares,
following the issuances announced herein is 322,106,561 and if all
Warrants were exercised, would be 347,951,967. The exercise of
the Warrants would result in cash proceeds to the Company of
approximately $775,000 to $1,292,000.
FLEETWOOD ENTERPRISES: Kendall Leads Investors Suit vs. Ex-Execs.
-----------------------------------------------------------------
Kendall Law Group said September 2 that a lawsuit has been filed
against former executives of Fleetwood Enterprises, Inc. (NYSE:
FLE) for securities violations related to public statements made
by the company between December 6, 2007 and March 10, 2009.
"Any shareholder, who purchased Fleetwood stock during the above
time period, may move the Court to serve as a plaintiff in this
class action. If you wish to serve as lead plaintiff, you must
move the Court for appointment by November 1, 2009. A lead
plaintiff is a class member who acts on behalf of other class
members in directing the litigation. If you wish to learn more
about your rights as a shareholder or serving as a plaintiff,
contact attorney Hamilton Lindley at 877-744-3728 or
hlindley@kendalllawgroup.com," the firm said.
The complaint, filed in the Central District of California,
charges certain former executives of Fleetwood with violations of
the federal securities laws concerning a series of false and
misleading statements concerning the rapid decline in demand for
manufactured houses and big homes-on-wheels, adversely affecting
the Company's liquidity. Fleetwood produces and distributes
manufactured housing in the United States and Canada. Fleetwood is
not named in this action because it filed for bankruptcy
protection in March 2009. The Company's RV Group sales were
declining because of softening consumer demand and high gasoline
prices. Due to the financial condition with Fleetwood nearing
insolvency and petitioning for bankruptcy protection, Defendants
had no reasonable basis for their positive statements regarding
their ability to control its financial condition.
On March 10, 2009, Fleetwood issued a press release announcing
that it had filed voluntary Chapter 11 petitions for itself and
certain subsidiaries and that it was closing its travel trailer
division. As a result of this announcement, the price of Fleetwood
common stock fell to $0.0103 per share.
Although every case is different, Kendall Law Group has
participated in the recovery of over $800 million for defrauded
shareholders. Led by a former federal judge and former U.S.
Attorney, the firm has the credentials to pursue any type of
complex securities litigation in the nation. If you wish to learn
more about your rights as a shareholder or serving as a lead
plaintiff, contact attorney Hamilton Lindley at 877-744-3728 or
hlindley@kendalllawgroup.com
About Fleetwood Enterprises
Founded in 1950, Fleetwood Enterprises, Inc., and its various
subsidiaries produce, distribute, and service recreational
vehicles and manufactured housing. Fleetwood employed 2,100
people in 14 plants located in 10 states.
Based in Riverside, California, Fleetwood Enterprises, Inc.,
together with 19 of affiliates, filed for Chapter 11 protection on
March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09-14254). Craig
Millet, Esq., and Solmaz Kraus, Esq., at Gibson, Dunn & Crutcher
LLP, represent the Debtors in their restructuring efforts. FTI
Consulting Inc. is the financial advisors to the Debtors. The
Debtors tapped Greenhill & Co.. LLC as its investment banker.
Fleetwood was authorized in June to sell its recreational vehicle
business for $53 million to private-equity investor American
Industrial Partners.
FLORIDA LIFESTYLE: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Florida Lifestyle Homes of Volusia, Inc.
P.O. Box 227
Daytona Beach, FL 32115-0227
Bankruptcy Case No.: 09-12965
Chapter 11 Petition Date: August 31, 2009
Court: United States Bankruptcy Court
Middle District of Florida (Orlando)
Judge: Arthur B. Briskman
Debtor's Counsel: Henry N. Portner, Esq.
Consumer Lawyers of America PA
9714 Campi Drive
Lake Worth, FL 33467
Tel: (561) 400-0027
Fax: (561) 642-5376
Email: attatlaw@hotmail.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$2,789,637, and total debts of $6,820,976.
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/flmb09-12965.pdf
The petition was signed by Patrick Sullivan, president of the
Company.
FORD MOTOR: Has Deal with Avis Budget on Vehicle Purchase
---------------------------------------------------------
Avis Budget Group, Inc., reports that on August 28, 2009, its
subsidiary Avis Budget Car Rental, LLC, and Ford Motor Company
entered into a letter agreement -- dubbed the Avis Budget Car
Rental, LLC 10 Model Year Program Letter -- for the purchase of
vehicles from Ford dealers.
The Agreement sets forth the terms and conditions related to
ABCR's purchase of vehicles from Ford dealers for the 2010 vehicle
model year. The Agreement also sets forth the terms and
conditions related to Ford's guaranteed auction value program,
which guarantees the price of certain vehicles purchased by ABCR
under the Agreement when sold at auction.
A redacted copy of the letter agreement is available at no charge
at http://ResearchArchives.com/t/s?43db
About Avis Budget Group
Avis Budget Group -- http://www.avisbudgetgroup.com/-- provides
vehicle rental services, with operations in more than 70
countries. Through its Avis and Budget brands, the Company is a
general-use vehicle rental company in each of North America,
Australia, New Zealand and certain other regions based on
published airport statistics. Avis Budget Group is headquartered
in Parsippany, N.J. and has roughly 24,000 employees.
* * *
As reported by the Troubled Company Reporter on April 30, 2009,
Standard & Poor's Ratings Services assigned a '6' recovery rating
to Avis Budget Car Rental LLC's (CCC+/Developing/--) unsecured
notes, indicating expectations of negligible (0%-10%) recovery of
principal in the event of a payment default. Avis Budget Car
Rental LLC is a subsidiary of Avis Budget Group Inc.
(CCC+/Developing/--).
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.
Ford Motor carries a 'Ca' issuer credit and a 'Caa3' long term
corporate ratings, with negative outlook, from Moody's.
Fitch Ratings said via Business Wire on August 26 that it has
revised the Rating Outlook on Ford Motor Company and Ford Motor
Credit Company to Stable from Negative. In addition, the Issuer
Default Rating of Ford is affirmed at 'CCC'.
FORD MOTOR: Post Back-To-Back Monthly Sales Increases
-----------------------------------------------------
Ford Motor Company said Ford, Lincoln and Mercury dealers reported
a 21% increase in retail sales in August as customer demand for
Ford's fuel-efficient cars, crossovers and trucks enabled the
company to post its second consecutive increase in monthly sales.
Total sales -- including fleet customer deliveries -- were
176,323, up 17% versus last year.
"We have the freshest lineup of new products in the industry,"
said Ken Czubay, Ford vice president, U.S. Marketing, Sales and
Service. "Ford's leadership in quality, fuel-efficiency, safety
and technology all are resonating with consumers, and it is being
reflected in our sales results."
Ford now has gained retail market share in 10 of the last 11
months. Plus, internal and external studies continue to show a
positive trend in favorable consumer opinion about Ford, and a
growing number of consumers are shifting consideration to Ford
vehicles.
August Sales Highlights
-- Ford Focus sales totaled 25,547, an August record and up
56% versus a year ago. The Focus is among the most fuel-
efficient compact cars in America with an EPA highway
rating of 35 mpg.
-- Ford Fusion sales totaled 21,010, a sales record for any
month and up 132% versus a year ago. Mercury Milan sales
were 3,844, up 112%. The Fusion and Milan and their
hybrid versions are the most fuel-efficient mid-size
sedans in America.
-- Ford Escape sales totaled 20,933, a sales record for
August, and up 49% versus a year ago. Mercury Mariner
sales were 3,921 (also a record for August), up 50%. The
Escape Hybrid and Mariner Hybrid are the most fuel-
efficient utility vehicles in America.
-- Ford Edge sales totaled 10,845, an August sales record and
up 9% versus a year ago.
-- Ford Flex sales totaled 4,151, an August sales record and
up 107% versus a year ago. The Flex is among the most
fuel-efficient full-size crossover utilities in America.
-- Total Ford, Lincoln and Mercury crossover utility vehicle
sales were 42,241, an August sales record and up 28%
versus a year ago.
-- Ford's hybrid vehicles - Fusion, Milan, Escape and Mariner
-- posted combined sales of 4,695, an August sales record
and up 251% versus a year ago. At 41 miles per gallon,
the Fusion Hybrid is the most fuel-efficient mid-size
sedan in America -- 8 mpg better than the Toyota Camry
Hybrid.
Signs of Economic Recovery
Early signs of economic recovery are suggested by this month's
sales results for Ford's pickup trucks and the all-new Transit
Connect van. Sales of the Ford F-Series -- America's best-selling
truck -- were 45,590, up 13%. Sales of the Ford Ranger -- the
most-fuel-efficient pickup in America -- were 7,746, up 57%.
Sales for each truck were the highest in more than a year, and it
was the first sales increase for F-Series since October 2006.
The Transit Connect, a small, fuel-efficient purpose-built van, is
the first ONE FORD global vehicle to be sold in the United States.
August sales for the Transit Connect were 2,220 versus 417 in
July, and sales were 70% higher than the company's goal for the
month.
"We're very pleased with the balanced performance of our products
-- from Focus to F-Series," said Czubay. "We are hopeful that the
sales of our pickups and all-new Transit Connect are an indication
that small business owners are seeing signs of recovery and
gaining confidence in the outlook for stronger business
conditions."
Ford Taurus and EcoBoost Gain Momentum
Sales of the all-new 2010 Ford Taurus sedan totaled 2,355 versus
309 in July. With limited availability as production continues to
ramp up, Taurus retail sales nearly matched year-ago levels and
more than double the company's goal for the month. Favorable
third-party reviews are putting Taurus on the shopping list of
even long-time foreign car owners, who cite the Taurus' design,
technology and interior luxury and comfort as reasons for
purchase.
Also gaining momentum is Ford's new EcoBoost engine -- with dealer
orders for EcoBoost-equipped models exceeding company
expectations. EcoBoost uses gasoline turbocharged direct-
injection technology for up to 20% better fuel economy, 15% fewer
CO2 emissions and superior driving performance versus larger
displacement engines. It is now on sale in the Ford Taurus SHO
and Flex and Lincoln MKS, and soon on the MKT crossover vehicle.
In these vehicles, EcoBoost provides the fuel economy of a six-
cylinder and the performance of a V-8.
"Customers tell us they love our new products, and their favorable
opinion of the Ford brand is continuing to gain strength," said
Czubay. "All of us at Ford remain absolutely committed to
building on this progress and delivering even more products that
customers truly want and value."
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.
Ford Motor carries a 'Ca' issuer credit and a 'Caa3' long term
corporate ratings, with negative outlook, from Moody's.
Fitch Ratings said via Business Wire on August 26 that it has
revised the Rating Outlook on Ford Motor Company and Ford Motor
Credit Company to Stable from Negative. In addition, the Issuer
Default Rating of Ford is affirmed at 'CCC'.
FREEDOM COMMUNICATIONS: Details of Stock-Swap Chapter 11 Plan
-------------------------------------------------------------
Freedom Communications Inc., filed with the Bankruptcy Court its
plan support agreement reached with lenders prepetition.
The document says that lenders, owed $771 million, will receive
$325 million in two secured term loans plus 100% of the stock,
subject to dilution. Unsecured creditors would split $5 million
in cash if they don't object to the plan, and nothing if they
object. Suppliers who continue to provide goods and services will
receive full payment for their prepetition claims. Existing
stockholders would get 2% of the new stock, along with warrants
for 10%, if they don't object to the plan.
The Plan Support Agreement will be terminated by the lenders if
the Debtors do not obtain confirmation of the Plan within five
months. Deadline to consummate the Plan is 11 months after the
Petition Date.
A copy of the Plan Support Agreement is available for free at:
http://bankrupt.com/misc/Freedom_PlanAgreement.pdf
About Freedom Communications
Freedom Communications, headquartered in Irvine, Calif., is a
national privately owned information and entertainment company of
print publications, broadcast television stations and interactive
businesses. The company's print portfolio includes approximately
90 daily and weekly publications, including approximately 30 daily
newspapers, plus ancillary magazines and other specialty
publications. The broadcast company's stations -- five CBS, two
ABC network affiliates and one CW affiliate -- reach more than 3
million households across the country. The Company's news,
information and entertainment Web sites complement its print and
broadcast properties.
Freedom Communications filed for Chapter 11 on Sept. 1, 2009
(Bankr. D. Del. Case No. 09-13046). Attorneys at Young Conaway
Stargatt & Taylor, and Latham & Watkins LLP serve as Chapter 11
counsel. Houlihan, Lokey, Howard & Zukin, Inc., serves as
financial advisor while AlixPartners LLC is restructuring
consultant. Logan & Co. serves as claims and notice agent.
Freedom Communications had $757,000,000 in assets against debts of
$1,077,000,000 as of July 31, 2009.
FREEDOM COMMUNICATIONS: Receives Approval of "First Day" Motions
----------------------------------------------------------------
Freedom Communications said September 2 that it has received
approval of first day motions designed to ensure that daily
operations continue normally during the Company's restructuring.
The first day relief approved today by the U.S. Bankruptcy Court
for the District of Delaware gives the Company permission to pay
pre-petition and post-petition employee wages and benefits, use
its cash management systems, and continue its advertising and
subscriber programs during its Chapter 11 restructuring.
"Quick approval of our first day motions is encouraging and puts
Freedom on strong footing as we move forward in implementing the
debt restructuring agreement we reached with our lenders," said
Freedom CEO Burl Osborne. "This action should reassure our
employees, our customers, our suppliers and the communities we
serve that we have sufficient cash to fund daily operations and
that it is business as usual."
About Freedom Communications
Freedom Communications, headquartered in Irvine, Calif., is a
national privately owned information and entertainment company of
print publications, broadcast television stations and interactive
businesses. The company's print portfolio includes approximately
90 daily and weekly publications, including approximately 30 daily
newspapers, plus ancillary magazines and other specialty
publications. The broadcast company's stations -- five CBS, two
ABC network affiliates and one CW affiliate -- reach more than 3
million households across the country. The Company's news,
information and entertainment Web sites complement its print and
broadcast properties.
Freedom Communications filed for Chapter 11 on Sept. 1, 2009
(Bankr. D. Del. Case No. 09-13046). Attorneys at Young Conaway
Stargatt & Taylor, and Latham & Watkins LLP serve as Chapter 11
counsel. Houlihan, Lokey, Howard & Zukin, Inc., serves as
financial advisor while AlixPartners LLC is restructuring
consultant. Logan & Co. serves as claims and notice agent.
In its bankruptcy petition, Freedom Communications said that it
has assets of $500 million to $1 billion and debts of more than $1
billion.
FRONTIER AIRLINES: Plan Gets Overwhelming Support From Creditors
----------------------------------------------------------------
Frontier Airlines Holdings, Inc., and its debtor-affiliates
received overwhelming support from the necessary majority of
creditors eligible to vote on their Joint Plan of Reorganization.
Specifically, 92.58 percent of the voting creditors and 99.84
percent of the dollar amount of voting claims approved the Plan.
As of the July 22, 2009 Voting Record Date, only holders of
Claims in Class 3 General Unsecured Claims were entitled to vote
to accept or reject the Plan.
Epiq Bankruptcy Solutions, LLC, the Debtors' notice and claims
agent, certified the voting results to Judge Robert D. Drain of
the United States Bankruptcy Court for the Southern District of
New York, on September 2, 2009.
------------------------------------------------
| TOTAL BALLOTS COUNTED |
------------------------------------------------
| ACCEPT | REJECT |
------------------------------------------------
| Amount | Number | Amount | Number |
---------------------------------------------------------------
Class 3 | $248,750,916 | 237 | $395,762 | 19 |
General | | | | |
Unsecured | 99.84% | 92.58% | 0.16% | 7.42% |
Claims | | | | |
---------------------------------------------------------------
Epiq's report of all tabulated votes, which lists all votes cast
on account of Bonds, is available for free at:
http://bankrupt.com/misc/FAH_VotesBondholders.pdf
A complete list of all votes cast, excluding Bonds, is available
for free at:
http://bankrupt.com/misc/FAH_VotesNon-Bondholders.pdf
A complete list of ballots not validly executed and not counted
is available for free at:
http://bankrupt.com/misc/FAH_BallotsNotCounted.pdf
In an official statement, Frontier said it gained "only a small
number of objections" to their Plan. The Objections, according
to the Company's legal representatives "are technical or
procedural in nature." In this regard, Frontier expects to be
able to consensually resolve most or all of the Objections,
setting the stage for a largely uncontested Confirmation Hearing.
"This has been the hallmark of our restructuring efforts," said
Frontier President and CEO Sean Menke. "We have been able to
completely restructure our business and reduce our costs to among
the lowest in the industry. We have also developed alternative
revenue streams through our branded AirFairs program, the
introduction of ancillary revenues and the expansion of our
network. We were able to do all of this in a cooperative manner
with the constituents in our bankruptcy case, and we expect that
to continue as we enter the final stage of our bankruptcy
proceedings."
The approval of the Plan by Frontier's majority of creditors
clears the way for the implementation of the transactions
contemplated in the Plan. Notably, Republic Airways Holdings
Inc., has agreed to serve as equity plan sponsor and to purchase
100% of the equity in the Reorganized Frontier for (i)
$108.75 million and (ii) the relinquishment of all of Republic's
rights under the Plan to any distribution on account of Republic's
allowed general unsecured claims against the Debtors.
In this regard, Republic CEO Bryan Bedford has initiated actions
to assure Frontier employees that they will still work for
Frontier following the acquisition, John Stemmler, president of
the Frontier Airlines Pilots Association, told The Denver Post in
an interview.
"He tried to give us some assurances that our lives will get
better after what we have gone through with the bankruptcy," Mr.
Stemmler added.
Mr. Menke had told The Associated Press that Frontier could
emerge from the Chapter 11 cases as a Republic subsidiary on
September 17, 2009. Mr. Bedford told Reuters in an interview
that the acquisition would likely close on October 1.
The Debtors' Plan will come before the Court for confirmation at
a hearing on September 10, 2009, at 10:00 a.m., Eastern Standard
Time.
About Frontier Airlines
Frontier Airlines Holdings, Inc. (OTCBB: FRNTQ) is the parent
company of Denver-based Frontier Airlines. Currently in its 16th
year of operations, Frontier Airlines is the second-largest jet
service carrier at Denver International Airport, employing
approximately 5,000 aviation professionals. Frontier Airlines'
mainline operation is made up of one of the youngest Airbus fleets
in North America offering 24 channels of DIRECTVR service in every
seatback along with a comfortable all-coach configuration. In
conjunction with a fleet of Bombardier Q400 aircraft operated by
Lynx Aviation (a subsidiary of Frontier Airlines Holdings, Inc.),
Frontier offers routes to more than 50 destinations in the U.S.,
Mexico and Costa Rica. In addition, Frontier and Midwest Airlines
have a codeshare partnership that allows passengers of both
airlines access to 70 destinations in the U.S., Mexico and Costa
Rica. Republic Airways Holdings, Inc. (NASDAQ: RJET) expects to
close on its purchase of Frontier Airlines on or before October 1,
2009, after which Frontier will become a unit of Republic,
alongside Midwest Airlines and Republic's other wholly owned
subsidiaries.
Frontier Airlines and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297
thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R.
McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors
in their restructuring efforts. Togul, Segal & Segal LLP is the
Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors'
Special Counsel, and Kekst and Company is the Debtors'
Communications Advisors.
The Debtors' exclusive period to file a plan of reorganization
will expire on October 9, 2009. Their exclusive period to solicit
and obtain acceptances of that plan will expire December 9, 2009.
Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Frontier Airlines Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
FRONTIER AIRLINES: Gets Plan Objections From Taxing Authorities
---------------------------------------------------------------
Bexar County, El Paso, Harris County, and Tarrant County and the
City of Memphis ask Judge Drain to deny confirmation of the
Debtors' Joint Plan of Reorganization unless treatment of their
claims is altered.
Elizabeth Weller, Esq., at Linebarger Goggan Blair & Simpson LLP,
in Dallas Texas, points out that under the Plan, the Debtors
intend to treat the Local Tax Authorities' claims as Class 2
Secured Claims, which Class is allegedly unimpaired. Ms. Weller
insists, however, that the Tax Authorities' Claims are impaired
under the Plan.
The Local Tax Authorities assert claims aggregating approximately
$185,000 and administrative claims for unpaid 2009 taxes for
$190,000. The Claims are specifically on account of delinquent
property taxes for the 2008 tax year on the Debtors' business
personal property, as well as accrued but unpaid 2009 ad valorem
taxes, Ms. Weller explains.
Ms. Weller notes that the property taxes were duly assessed and
constitute valid, liquidated secured claims against the Debtors'
property entitled to priority over other secured claims.
Section 32.05(b) of the Texas Property Tax Code gives the tax
liens securing the Property Taxes superiority over the lien of
any other claim or lien against Property. The Tax Authorities'
liens take priority over the claim of any holder of a lien on
property encumbered by the tax lien, whether or not the debt or
lien existed before the attachment of the tax lien, according to
Ms. Weller.
Accordingly, the Plan should not be confirmed unless and until it
specifically provides for the Tax Authorities' liens for pre- and
postpetition taxes to remain on their collateral until the
claims, including interest, are paid in full, as required by
Section 1129(b)(2)(A)(i)(I) of the Bankruptcy Code.
While the Plan appears to provide for interest on secured
prepetition claims as allowed under Section 506(b) of the
Bankruptcy Code, it does not specify what rate of interest should
be paid, Ms. Weller asserts. The Tax Authorities are entitled to
interest from the Petition Date through the Effective Date at
their statutory rate of 12% per annum, she argues.
Ms. Weller complains that the Plan should provide that
administrative expense claims need not be filed for taxes
incurred in the ordinary course of business. While the
Local Tax Authorities have attempted to estimate their claims for
postpetition taxes with respect to the 2009 tax year, the taxes
will not be finally determined under State law for many months,
she maintains.
In a subsequent filing, the Metropolitan Government of Nashville
and Davidson County, Tennessee, filed a joinder to the Local Tax
Authorities' assertions.
The Metropolitan Government is a secured creditor for 2007 and
2008 prepetition ad valorem utility taxes in the Debtors' cases.
It filed Claim No. 40 for an amended Claim amount of $323,095, to
include 2008 taxes and interest that have accrued at the
statutory rate of 12% per annum through July 1, 2009.
The Metropolitan Government also has an administrative claim for
2009 utility taxes that were assessed on January 1, 2009, which
have not yet been reduced to a final amount under Tennessee Law,
according to Assistant Attorney Andrew D. McClanahan of the
Department of Law of the Metropolitan Government of Nashville and
Davidson County.
About Frontier Airlines
Frontier Airlines Holdings, Inc. (OTCBB: FRNTQ) is the parent
company of Denver-based Frontier Airlines. Currently in its 16th
year of operations, Frontier Airlines is the second-largest jet
service carrier at Denver International Airport, employing
approximately 5,000 aviation professionals. Frontier Airlines'
mainline operation is made up of one of the youngest Airbus fleets
in North America offering 24 channels of DIRECTVR service in every
seatback along with a comfortable all-coach configuration. In
conjunction with a fleet of Bombardier Q400 aircraft operated by
Lynx Aviation (a subsidiary of Frontier Airlines Holdings, Inc.),
Frontier offers routes to more than 50 destinations in the U.S.,
Mexico and Costa Rica. In addition, Frontier and Midwest Airlines
have a codeshare partnership that allows passengers of both
airlines access to 70 destinations in the U.S., Mexico and Costa
Rica. Republic Airways Holdings, Inc. (NASDAQ: RJET) expects to
close on its purchase of Frontier Airlines on or before October 1,
2009, after which Frontier will become a unit of Republic,
alongside Midwest Airlines and Republic's other wholly owned
subsidiaries.
Frontier Airlines and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297
thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R.
McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors
in their restructuring efforts. Togul, Segal & Segal LLP is the
Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors'
Special Counsel, and Kekst and Company is the Debtors'
Communications Advisors.
The Debtors' exclusive period to file a plan of reorganization
will expire on October 9, 2009. Their exclusive period to solicit
and obtain acceptances of that plan will expire December 9, 2009.
Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Frontier Airlines Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
FRONTIER AIRLINES: Begins Codeshare Partnership With Midwest
------------------------------------------------------------
Frontier Airlines began a codeshare agreement with Milwaukee-based
Midwest Airlines. The agreement will allow customers of both
airlines to travel to more destinations while enjoying a seamless
ticketing and customer service experience.
The agreement will allow Frontier Airlines to sell tickets under a
Frontier code and expand its networks to additional destinations
currently served by Midwest. Frontier customers will now be able
to reach new cities like Cleveland and Pittsburgh by connecting on
Midwest through its Milwaukee hub as well as increased frequencies
to current Frontier cites like New York, Washington, D.C.,
Philadelphia and Orlando. Midwest customers will also see an
expanded network by connecting on Frontier and Lynx Aviation
flights in Denver.
"This is an important step forward as we seek to expand our route
map and grow our airline," said Vice President of Strategy and
Planning Daniel M. Shurz. "As we build this partnership with
Midwest, our customers will see the benefit with more choices to
more cities with an emphasis on the same level of service they
have come to expect with both airlines."
"Under the codeshare, customers of both airlines will be able to
go to more places, more often, with seamless connections that will
be easy to buy and easy to use," said Gregory D. Aretakis, vice
president of Planning and Revenue Management for Midwest. "As our
two companies work more closely together, the customers are the
winners."
Under the terms of this agreement, both airlines' customers will
also be able to participate in each other's respective frequent
flyer programs -- Frontier's EarlyReturns program and Midwest's
Midwest Miles program, to earn miles and redeem them for free
tickets.
Indianapolis-based Republic Airways Holdings, Inc. (NASDAQ: RJET)
expects to close on its purchase of Frontier Airlines on or
before October 1, 2009, after which Frontier will become a wholly
owned subsidiary of Republic. Midwest Airlines is already a
wholly owned subsidiary of Republic.
About Frontier Airlines
Frontier Airlines Holdings, Inc. (OTCBB: FRNTQ) is the parent
company of Denver-based Frontier Airlines. Currently in its 16th
year of operations, Frontier Airlines is the second-largest jet
service carrier at Denver International Airport, employing
approximately 5,000 aviation professionals. Frontier Airlines'
mainline operation is made up of one of the youngest Airbus fleets
in North America offering 24 channels of DIRECTVR service in every
seatback along with a comfortable all-coach configuration. In
conjunction with a fleet of Bombardier Q400 aircraft operated by
Lynx Aviation (a subsidiary of Frontier Airlines Holdings, Inc.),
Frontier offers routes to more than 50 destinations in the U.S.,
Mexico and Costa Rica. In addition, Frontier and Midwest Airlines
have a codeshare partnership that allows passengers of both
airlines access to 70 destinations in the U.S., Mexico and Costa
Rica. Republic Airways Holdings, Inc. (NASDAQ: RJET) expects to
close on its purchase of Frontier Airlines on or before October 1,
2009, after which Frontier will become a unit of Republic,
alongside Midwest Airlines and Republic's other wholly owned
subsidiaries.
Frontier Airlines and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297
thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R.
McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors
in their restructuring efforts. Togul, Segal & Segal LLP is the
Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors'
Special Counsel, and Kekst and Company is the Debtors'
Communications Advisors.
The Debtors' exclusive period to file a plan of reorganization
will expire on October 9, 2009. Their exclusive period to solicit
and obtain acceptances of that plan will expire December 9, 2009.
Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Frontier Airlines Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
FRONTIER AIRLINES: Davis Polk Charges $3 Mil. for April-July Work
-----------------------------------------------------------------
These professionals ask Judge Robert Drain to award them fees, and
reimburse the expenses they incurred for services rendered in
Frontier Airlines' Chapter 11 cases for the period from April 1,
2009, through July 31, 2009:
Professional Fees Expenses
------------ ------------ --------
Davis Polk & Wardwell $3,020,853 66,433
Deloitte Tax LLP 95,556 165
Faegre & Benson LLP 35,010 337
KPMG LLP 733,463 5,542
Jefferson Wells
International, Inc. 205,050 4,575
Seabury Transportation
Holdings LLC 700,501 16,808
Togut, Segal & Segal LLP 16,587 118
Wilmer Cutler Pickering 398,802 3,653
Hale & Dorr LLP
About Frontier Airlines
Frontier Airlines Holdings, Inc. (OTCBB: FRNTQ) is the parent
company of Denver-based Frontier Airlines. Currently in its 16th
year of operations, Frontier Airlines is the second-largest jet
service carrier at Denver International Airport, employing
approximately 5,000 aviation professionals. Frontier Airlines'
mainline operation is made up of one of the youngest Airbus fleets
in North America offering 24 channels of DIRECTVR service in every
seatback along with a comfortable all-coach configuration. In
conjunction with a fleet of Bombardier Q400 aircraft operated by
Lynx Aviation (a subsidiary of Frontier Airlines Holdings, Inc.),
Frontier offers routes to more than 50 destinations in the U.S.,
Mexico and Costa Rica. In addition, Frontier and Midwest Airlines
have a codeshare partnership that allows passengers of both
airlines access to 70 destinations in the U.S., Mexico and Costa
Rica. Republic Airways Holdings, Inc. (NASDAQ: RJET) expects to
close on its purchase of Frontier Airlines on or before October 1,
2009, after which Frontier will become a unit of Republic,
alongside Midwest Airlines and Republic's other wholly owned
subsidiaries.
Frontier Airlines and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297
thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R.
McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors
in their restructuring efforts. Togul, Segal & Segal LLP is the
Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors'
Special Counsel, and Kekst and Company is the Debtors'
Communications Advisors.
The Debtors' exclusive period to file a plan of reorganization
will expire on October 9, 2009. Their exclusive period to solicit
and obtain acceptances of that plan will expire December 9, 2009.
Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Frontier Airlines Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL GROWTH: Eurohypo, et al., Want Trade in of Claims Okayed
----------------------------------------------------------------
In separate filings, Eurohypo AG, New York Branch; Calyon New York
Branch; and Fidelity Fixed Income Trust, Fidelity Strategic Real
Return Fund - Fidelity Investments, members of the Official
Committee of Unsecured Creditors, ask the Court to approve
specific information blocking procedure and permit trading of
"Covered Claims," including securities as defined in Section
2(a)(1) of the Securities Act of 1993 and bank debt, against the
Debtors.
On behalf of Eurohypo, Brett H. Miller, Esq., at Morrison &
Foerster LLP, in New York, notes that the Lenders will not violate
their fiduciary duties as members of the Creditors' Committee by
trading in the Covered Claims during the Debtors' bankruptcy
cases, provided that the Lenders establish and adhere to the
information blocking policies and procedures that are approved by
the United States Trustee for Region 2.
In conjunction with the existing information blocking procedures,
the Lenders agree to establish and maintain these internal
procedures:
(1) Daniel Vinson, managing director at Eurohypo; Alan
Sidrane, managing director at Calyon; and Andrew Boyd, vice
president and associate general counsel, are the
representatives on behalf of the Creditors' Committee in
the Debtors' Chapter 11 cases. The Committee Personnel
will execute a letter acknowledging that they may receive
non-public Information and that they are aware of the
information blocking procedures, which are in effect with
respect to the Covered Claims and will follow these
procedures and will immediately inform the Committee's
counsel and the United States Trustee for Region 2 if those
procedures are breached.
(2) The Committee Personnel will not directly or indirectly
share any non-public information generated by, received
from or relating to Committee Activities or Committee
membership with any other employees, representatives or
agents of the Lenders.
(3) The Committee Personnel will maintain all files containing
information received in connection with or generated from
Committee activities in secured cabinets and offices not
generally accessible to other employees of the Lenders.
(4) The Committee Personnel will not receive any information
regarding the Lenders' trades in the Covered Claims in
advance of the execution of the trades, but the Committee
Personnel may submit trading reports showing the Lenders'
purchases and sales and ownership of the Covered Claims in
a biweekly basis.
(5) So long as the Lenders are members of the Committee, they
will disclose to the U.S. Trustee any decrease in dollar
amount of the Covered Claims held by the Lenders, which
results in the holdings being less than 25% of the dollar
amount of the Covered Claims held by the Lenders as of
their appointment to the Committee. Moreover, the Lenders
will disclose to the Committee counsel and the U.S. Trustee
every six months a declaration verifying continued
compliance with the Procedures. The lenders will
immediately disclose to the Committee counsel and the U.S.
Trustee any material breaches of the Procedures.
(6) If the Lenders resign from the Committee, they will
continue to follow the Procedures until a plan has been
confirmed in the Debtors' Chapter 11 cases or the Debtors'
Chapter 11 cases have been converted or dismissed.
Although members of the Committee owe fiduciary duties to the
creditors of the Debtors' estates, the Lenders' personnel also
have fiduciary duties to maximize returns through trading
securities and other financial interests, Mr. Miller points out.
Thus, if the Lenders are barred from trading the Covered Claims
during the pendency of the Debtors' bankruptcy cases because of
their duties to other creditors, they may risk the loss of a
beneficial investment opportunity and may breach also their
fiduciary duty to their shareholders, he contends. Similarly, if
the Lenders are compelled to resign from the Committee because of
their inability to trade for the benefit of their institutions,
their interests may be compromised by virtue of taking a less
active role in the reorganization of the Debtors. Against this
backdrop, the Lenders should not be forced to choose between
serving on the Committee and risking the loss of beneficial
investment opportunities, he maintains.
About General Growth
Based in Chicago, Illinois, General Growth Properties, Inc. --
http://www.ggp.com/-- is the second-largest U.S. mall owner,
having ownership interest in, or management responsibility for,
more than 200 regional shopping malls in 44 states, as well as
ownership in master planned community developments and commercial
office buildings. The Company's portfolio totals roughly ]
200 million square feet of retail space and includes more than
24,000 retail stores nationwide. General Growth is a self-
administered and self-managed real estate investment trust. The
Company's common stock is trading in the pink sheets under the
symbol GGWPQ.
General Growth Properties Inc. and its affiliates filed for
Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No.
09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq.,
Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil,
Gotshal & Manges LLP, have been tapped as bankruptcy counsel.
Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants
LLC has been engaged as claims agent. The Company also hired
AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC,
as investment bankers. The Debtors disclosed
$29,557,330,000 in assets and $27,293,734,000 in debts as of
December 31, 2008.
Bankruptcy Creditors' Service, Inc., publishes General Growth
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Growth Properties Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL MOTORS: APS Engagement Terms Modified, Rates Reduced
------------------------------------------------------------
By order effective August 28, 2009, the Bankruptcy Court approved
an amendment to the terms of engagement of AP Services LLC, which
was engaged by Motors Liquidation Co., formerly General Motors
Corp., to provide various services in connection with the pending
Chapter 11 proceedings.
Pursuant to the Amendment, among other things, these modifications
to the terms of the Engagement Letter have been effected:
(i) Hourly Fee Reductions: For hours worked after July 10,
2009, APS will reduce its standard hourly fees contemplated by the
Engagement Letter as follows: (A) for such fees up to an aggregate
amount of $60 million (calculated using 100% of standard hourly
rates), APS will discount standard hourly fees by 15% and (B) for
such fees exceeding $60 million (calculated using 100% of standard
hourly rates), APS will discount standard hourly fees by 25%.
(ii) Discretionary Fees: As contemplated by the Engagement
Letter, in addition to a success fee of $13 million (50% of which
has already been paid), APS will receive discretionary fees of (A)
$5.0 million if the total amount of allowed prepetition unsecured
claims is less than $35 billion, or $2.5 million if the total
amount of allowed prepetition unsecured claims is equal to or
greater than $35 billion but less than $42 billion; (B) $2.5
million if the Debtors confirm a plan of liquidation or any other
plan and such plan is effective on or before May 28, 2010; and (C)
$2.5 million if 70% or more of each of the common stock and
warrants of General Motors Company, a Delaware corporation and the
purchaser of substantially all of the Company's assets in a sale
pursuant to section 363 of the Bankruptcy Code, received by the
Company in the 363 Sale is distributed to unsecured creditors
within 60 days of the effective date of a confirmed plan of
liquidation.
(iii) Incentive Payments: In consideration of APS' agreement to
reduce its standard hourly billings as set forth above, APS will
receive the following incentive payments: (A) if allowed priority
claims, estimated at $100 million, against the Company are reduced
by at least $25 million, APS will receive an Incentive Payment
equal to 5% of such reduction in excess of $25 million; (B)
subject to certain terms and conditions more fully described in
the Amendment, 15% of the amount that is returned to the lenders
under the Company's debtor-in-possession financing facility.
(iv) Termination Without Cause: If the Engagement Letter is
terminated by the Debtors without Cause, APS will be entitled to
immediate payment of (A) the $6.5 million balance of its success
fee payable pursuant to the Engagement Letter; and (B) any
Incentive Payments or Discretionary Fees earned pursuant to the
Amendment, but in no event less than $2.5 million if such
termination occurs within one year of July 10, 2009 and $5.0
million if such termination occurs thereafter; (C) all fee
reductions described above in paragraph (i); and (D) all other
accrued but unpaid fees and expenses.
A copy of the Amended Engagement Letter is available for free at:
http://researcharchives.com/t/s?43d9
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: Germany, Union Balk at Indecision Over Opel Sale
----------------------------------------------------------------
General Motors Co.'s hesitation about selling its Opel and
Vauxhall units in Europe was swamped with protests by the German
government and German workers' unions. The German government and
IG Metall union are questioning whether GM -- in its reluctance to
sell Opel to Magna International, Inc. -- could afford to keep the
unprofitable Opel operations without German aid.
GM has estimated that it would need $4.3 billion to turn around
its Opel division but didn't make clear whether the amount
includes the EUR1.5 billion that the German government loaned to
Opel to keep it alive during the sale process, or if the amount is
part of what GM must repay once the Sale is concluded, Marcus
Walker of The Wall Street Journal said in a report dated
August 26, 2009.
A senior German government official told the Journal that the
German Government would be reluctant to finance Opel if GM keeps
the unit, because GM has managed Opel poorly over the years,
noting that "it would make little sense to put in more money to
support a continued botch."
Protesting GM's hesitation, Opel's 55,000 workers are planning to
rally to press for a Magna deal, Armin Schild, an official at the
Union and a member of Opel's supervisory board told Bloomberg
News. Workers at three Opel plants also withdrew their offer to
forgo vacation pay to help Opel. The Union further called on
German Chancellor Angela Merkel to take up the issue with
President Barack Obama.
Ms. Merkel also confirmed to the Associated Press that the meeting
held on August 25, 2009, between the German government and GM over
the future of Opel primarily tackled Berlin's preferred bidder,
Magna. Although there are calls to reach a decision swiftly,
substance, not speed, is paramount, according to Ms. Merkel, said
The AP.
RHJ Submits Revised Bid
RHJ International SA has increased its offer for the acquisition
of Opel by injecting more cash and seeking less in loan guarantees
from the German government.
Under the revised bid, RHJ (i) would contribute EUR300 million or
$426 million instead of EUR275 million, and (ii) foresees loan
guarantees of EUR3.2 billion instead of EUR3.8 billion, with
repayment planned by 2013, one year earlier, RHJ Spokesman Arnaud
Denis told Bloomberg in an interview.
RHJ's revised offer will "not come at the expense of future
investments in Opel," Mr. Denis said, adding that the new terms
give its bid an "optimal structure."
GM Not Keeping Opel, Board to Meet Sept. 8
Advisers are recommending that GM spurn a German-government backed
sale of Opel to retain a bigger presence in Europe and Russia, and
seek aid from other European countries to retain ownership of the
Opel division, Bloomberg reported, citing an unnamed source
familiar with the matter.
The U.K. and Spain Governments may be open to funding Opel and
Vauxhall plants; however, they are unlikely to put up funds for
Opel's core factories in Germany, the Journal said.
Striking out reports on GM's plan to keep Opel, GM has "no
interest" in keeping the German unit and is working with the
German government toward a "commercially reasonable solution,"
Fred Irwin, the chairman of the German government-backed Opel
Trust said in an interview with Germany's Deutschlandradio Kultur
broadcast, according to Bloomberg.
"[There are] reasonable people on both sides and they are trying
to sell Adam Opel to a third person," Mr. Irwin noted.
Confirming Mr. Irwin's statement, Germany's Economy Minister Karl-
Theodor zu Guttenberg said letting GM retain control of Opel, as
part of the unit's restructuring, has not been part of Germany and
GM's negotiations, Bloomberg reported.
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: JCI Disputes Cure Amounts for Assumed Pacts
-----------------------------------------------------------
Johnson Controls, Inc., and its related subsidiaries ask the Court
to compel the Debtors to submit Johnson Control's cure notice to
binding arbitration pursuant to a trade agreement entered into
between the two parties and the Cure Dispute Resolution Process.
According to Deborah J. Piazza, Esq., at Hodgson Russ LLP, in New
York, JCI's request to compel arbitration stems from its objection
to the Debtors' proposed cure amounts in relation to the Debtors'
intent to assume three unexpired leases with JCI and its
subsidiaries. The aggregate cure amount proposed by the Debtors
was $61,987,445, which JCI disagrees, contending that the amount
the Debtors ought to pay JCI to cure defaults for all three
companies was not less than $103,411,665.
On June 15, 2009, JCI objected to the Debtors' proposed cure
amount only to withdraw it pursuant to the Debtors' request and a
stipulation, which provided that the disputes would be determined
in accordance with the Cure Dispute Resolution Process, pursuant
to a Trade Agreement executed by JCI with the Debtors at the
outset of the Debtors' bankruptcy case.
As required by the Pre-Arbitration Procedure, JCI and the Debtors
have completed the 20-day negotiation period and have been unable
to resolve JCI's Disputed Cure Claim. The Cure Dispute Resolution
Process requires the issuance of a Demand for Arbitration 40 days
after submission of a cure objection. Over 60 days have passed
since JCI filed its objection on June 15.
Accordingly, pursuant to the Trade Agreement, the Debtors are
required to serve a Demand for Arbitration and initiate the
arbitration process.
On August 7, 2009, JCI wrote a request for the Debtors to issue a
Demand for Arbitration and submit the JCI Objection to
arbitration, but despite JCI's letter and mandatory language of
the Trade Agreement, the Debtors have failed to submit JCI's
Disputed Cure Claim to arbitration.
By failing to promptly issue a Demand for Arbitration when the
period contemplated by the Pre-Arbitration Procedure expired and
essentially ignoring JCI's correspondence, the Debtors have
breached their obligations under the Trade Agreement in good
faith, Ms. Piazza asserts.
A full-text copy of the Cure Dispute Resolution Process is
available for free at http://bankrupt.com/misc/GM_JCI_CDRP.pdf
The Court will convene a hearing to consider this motion on
October 6, 2009. Objections are due by September 29.
About General Motors
Headquartered in Detroit, Michigan, General Motors Corp.
(NYSE: GM) -- http://www.gm.com-- was founded in 1908. GM
employs about 266,000 people around the world and manufactures
cars and trucks in 35 countries. In 2007, nearly 9.37 million GM
cars and trucks were sold globally under the following brands:
Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.
GM Europe is based in Zurich, Switzerland, while General Motors
Latin America, Africa and Middle East is headquartered in Miramar,
Florida.
As reported by the Troubled Company Reporter, GM reported net loss
of US$6.0 billion, including special items, in the first quarter
of 2009. This compares with a reported net loss of US$3.3 billion
in the year-ago quarter. As of March 31, 2009, GM had
US$82.2 billion in total assets and US$172.8 billion in total
liabilities, resulting in US$90.5 billion in stockholders'
deficit.
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors'
restructuring officer. GM is also represented by Jenner & Block
LLP and Honigman Miller Schwartz and Cohn LLP as counsel.
Cravath, Swaine, & Moore LLP is providing legal advice to the GM
Board of Directors. GM's financial advisors are Morgan Stanley,
Evercore Partners and the Blackstone Group LLP.
General Motors changed its name to Motors Liquidation Co.
following the sale of its key assets to a company 60.8% owned by
the U.S. Government.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL MOTORS: Koenisegg's Bid for Saab Won't Get Sweden Aid
--------------------------------------------------------------
The Swedish government will not help cover the SEK3 billion, or
US$422 million, shortfall needed by Koenigsegg Group AB to
complete its purchase of General Motors Company's Swedish unit
Saab Automobile AB, Ola Kinnader of Dow Jones Newswires related in
an August 26, 2009 report.
Sweden's Deputy Prime Minister and Minister for Enterprise and
Energy Maud Oloffson, in an interview with the news agency,
commented that consent to Koenigsegg's request would mean that
Sweden will become part owner of Saab. The Swedish Government
does not want to own Saab, he said. The Swedish Government has
indicated that it is only willing to guarantee a loan for
EUR400 million from the European Investment Bank.
Christian von Koenigsegg, founder of Koenigsegg Automotive, has
previously sought the Swedish government to help raise the
$422 million by arranging a bridge loan with interest.
Koenigsegg, GM and Sweden will continue their negotiations on
September 22, 2009. The IEB will consider the approval of the
Sweden-backed $400 million loan on October 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: Old GM Proposes Nov. 9 Deadline for Claims
----------------------------------------------------------
Rule 3003(c)(3) of the Federal Rules of Bankruptcy Procedure
provides that the Court will fix the time within which claimants
must file a proof of claim in a Chapter 11 case pursuant to
Section 501 of the Bankruptcy Code. Moreover, Rule 3003(c)(2)
provides that any creditor who asserts a claim against the Debtors
that (a) is not scheduled in the Debtors' schedules of assets and
liabilities, or (b) listed on the Schedules as disputed,
contingent, or unliquidated must file a Proof of Claim by a bar
date fixed by the Court.
Motors Liquidation Company and its debtor affiliates believe that
tens of thousands of individuals or entities may be creditors in
their bankruptcy cases. Establishing bar dates will enable the
Debtors to receive, process and begin their analysis of creditors'
claims in a timely and efficient manner and proceed to formulate
and file a Chapter 11 plan and conclude the administration of
their Chapter 11 cases expeditiously, , Stephen Karotkin, Esq., at
Weil, Gotshal & Manges LLP, in New York, contends.
By this motion, the Debtors ask the Court to establish:
* November 9, 2009 at 5:00 p.m., Eastern Time, as the deadline
for all persons or entities, other than governmental units,
defined in Section 101(27) to file proofs of claim,
including claims under Section 503(b)(9); and
* November 30, 2009 at 5:00 p.m., Eastern Time, as the
deadline for all Governmental Units to file proofs of
claim.
Proofs of claim must:
-- be written in the English language;
-- be denominated in the U.S. currency as of the Petition
Date;
-- conform substantially to the Proof of Claim Form or the
Official Bankruptcy Form No. 10;
-- specify the Debtor against which the claim is filed;
-- set forth with specificity the legal and factual basis
for the alleged claim;
-- include supporting documentation or an explanation as
to why documentation is not available; and
-- be signed by the claimant or an authorized agent of the
claimant.
If a claimant asserts a claim against more than one Debtor, the
claimant must file a separate Proof of Claim against each Debtor.
Proofs of claim will be deemed timely filed only if they are
actually received by The Garden City Group, Inc., as the Debtors'
Court-approved claims agent or by the Court, on or before the
Proposed Bar Dates. Proofs of Claim sent by facsimile, telecopy,
or electronic mail transmission will not be accepted.
If by hand delivery or overnight courier, the claim must be sent
to:
The Garden City Group, Inc.
Attn: Motors Liquidation Company Claims Processing
5151 Blazer Parkway, Suite A
Dublin, Ohio 43017
If by first-class mail, the claim must be sent to:
The Garden City Group, Inc.
Attn: Motors Liquidation Company
P.O. Box 9386
Dublin, Ohio 43017-4286
If by hand delivery, the claim must be sent to:
United States Bankruptcy Court, SDNY
One Bowling Green
Room 534
New York, New York 10004
Any person or entity that asserts a claim that arises from the
rejection of an executory contract or unexpired lease must file a
Proof of Claim based on the rejection by the later of (i) the
applicable Bar Date, and (ii) 30 days following the entry of the
order approving such rejection, or be forever barred from doing
so.
Any party to an executory contract or unexpired lease that asserts
a claim on account of unpaid amounts accrued and outstanding as of
the Petition Date -- other than a rejection damages claim -- must
file a proof of claim on or before the applicable Bar Date
The Debtors will notify claimants in the event that they amend
their schedules of assets and liabilities or schedules of
executory contracts and unexpired leases to (a) designate a claim
as disputed, contingent, unliquidated or undetermined, (b) change
the amount of a claim, (c) change the classification of a claim,
or (d) add a claim that was not listed on the Schedules. The
deadline for the filing of a claim designated, changed, or added
is the later of (a) the applicable Bar Date and (b) 30 days after
the Debtors provide notice of the Amendment.
The Debtors further propose that the filing of proofs of claim be
waived for any person or entity:
-- whose claim is listed on the Schedules and (i) whose claim
is not described as "disputed," "contingent," or
"unliquidated," (ii) who does not dispute the amount or
classification of the claim set forth in the Schedules, and
(iii) who does not dispute that the claim is an obligation
of the specific Debtor against which the claim is listed on
the Schedules
-- whose claim has been paid in full;
-- that holds an interest in the Debtors, which interest is
based exclusively upon the ownership of common or preferred
stock, membership interests, partnership interests, or
warrants or rights to purchase, sell or subscribe to such a
security or interest;
-- that holds a claim that is allowable under Sections 503(b)
and 507(a)(2) of the Bankruptcy Code as an administrative
expense;
-- that holds a claim that has been allowed by the Court
before the applicable Bar Date;
-- that holds a claim for which a separate deadline is fixed
by this Court;
-- that is a Debtor having a claim against another Debtor;
-- as of the Bar Date, is an affiliate of any Debtor, as
defined in Section 101(2) of the Bankruptcy Code
-- that holds a claim that has been properly filed; or
-- whose claim is limited exclusively to the repayment of
principal, interest and other fees and expenses on or
under any agreements governing any debt security issued by
any of the Debtors pursuant to an indenture.
Pursuant to Rule 3003(c)(2), the Debtors propose that (i) any
holder of a claim against the Debtors that fails to file the claim
in a timely manner be forever barred, estopped and enjoined from
asserting the claim, and (ii) the Debtors be forever discharged
from any and all indebtedness or liability with respect to the
claim.
Moreover, the Debtors propose that a holder of the untimely claim
will not be permitted to vote to accept or reject any Chapter 11
plan filed in the Debtors' cases, participate in any claims
distribution or receive further notices with respect to the
Debtors' chapter 11 cases.
Within 10 days of the Court's approval of the Debtors' request,
the Debtors will mail a Proof of Claim Form and a Bar Date Notice
to these parties:
* the United States Trustee for the Southern District of New
York;
* the attorneys for the Statutory Committee of Unsecured
Creditors;
* all known holders of claims listed on the Schedules;
* all parties known to the Debtors as having potential claims;
* all counterparties to the Debtors' executory contracts and
unexpired leases, except for those that have been assumed;
* the attorneys of record to all parties to pending litigation
against any of the Debtors; and
* the Internal Revenue Service, the Securities and Exchange
Commission, the U.S. Attorney's Office for the Southern
District of New York, and all applicable government
entities.
At least 30 days prior to the General Bar Date, the Debtors
further propose to publish the Bar Date Notice in The Financial
Times, The Wall Street Journal, The New York Times, USA Today,
Detroit Free Press/Detroit News, Le Journal de Montreal, Montreal
Gazette, The Globe and Mail and The National Post.
The Debtors reserve all rights and defenses to, among other
things, object to any Proof of Claim on any grounds, and ask the
Court to fix a deadline by which holders of claims not subject to
the Bar Dates must file their claims, or be forever barred from
doing so.
Judge Gerber will convene a hearing on September 14, 2009, to
consider approval of the Debtors' request. Objections, if any,
must be filed by September 9.
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 Wants More Time to Decide on Leases
----------------------------------------------------------
Section 365(d)(4)(A) of the Bankruptcy Code provides for an
initial period of 120 days after the Petition Date during which a
debtor may decide to assume or reject unexpired leases of
nonresidential real property under which the debtor is the lessee.
The Debtors' current Lease Decision Deadline is until
September 29, 2009.
By this motion, pursuant to Section 365(d)(4)(B), Motors
Liquidation Co. and its affiliates ask the Court to extend their
Lease Decision Deadline by an additional 90 days until
December 28, 2009.
The Debtors remain party to 21 Unexpired Leases, a schedule of
which is available for free at:
http://bankrupt.com/misc/GM_UnexpiredLeases.pdf
Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New
York, relates that the Debtors are currently undergoing a
comprehensive review of their unexpired leases to determine which
ones to assume and which to reject. Against this backdrop, he
points out that the Debtors will be unable to make reasoned
decisions whether to assume or reject their Unexpired Leases by
September 29, 2009. Indeed, to make informed decisions regarding
their Unexpired Leases, the Debtors will require more time to
adequately assess the potential value of each Unexpired Lease in
the context of their wind-down efforts, he stresses.
While the Debtors are parties to a fewer number of Unexpired
Leases, other elements of their Chapter 11 cases -- particularly
the sale of substantially all of their assets to NGMCO, Inc., a
United States Department of the Treasury-sponsored purchaser --
have prevented the Debtors from devoting the requisite time and
effort necessary to carefully evaluate whether to assume or reject
the Unexpired Leases, Mr. Karotkin cites.
More importantly, Mr. Karotkin asserts that the Debtors do not
want to permanently forfeit the right to assume any Unexpired
Lease as a result of the "deemed rejected" provision of Section
365(d)(4), or to be compelled to assume any Unexpired Leases by
September 29, 2009. As the Debtors remain, and intend to
remain, current with respect to all undisputed postpetition
obligations under the Unexpired Leases under Section 365(d)(3),
the proposed extension does not adversely affect the Debtors'
lessors with respect to the Unexpired Leases, he maintains.
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 DOMINION: Case Summary & 18 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Global Dominion Ministries, Inc.
fka Crusade Dominion Church, Inc.
1605 Highway 138, SE
Conyers, GA 30013
Bankruptcy Case No.: 09-83212
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Northern District of Georgia (Atlanta)
Debtor's Counsel: Frank B. Wilensky, Esq.
Macey, Wilensky, Kessler & Hennings, LLC
Suite 2700, 230 Peachtree Street, NW
Atlanta, GA 30303-1561
Tel: (404) 584-1200
Fax: (404) 681-4355
Email: smcconnell@maceywilensky.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
18 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/ganb09-83212.pdf
The petition was signed by Sharon C. Milon, president of the
Company.
GLOBAL ESTATES: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Global Estates, LLC
1427 S. 11th Avenue
Maywood, IL 60153
Bankruptcy Case No.: 09-32526
Chapter 11 Petition Date: Septemeber 1, 2009
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Jack B. Schmetterer
Debtor's Counsel: Jonathan T. Brand, Esq.
Lakelaw, 420 W. Clayton Street
Waukegan, IL 60085
Tel: (847) 249-9100
Email: jbrand@lakelaw.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 Andre Nelson, managing member of the
Company.
GRACEWAY PHARMACEUTICALS: Moody's Cuts Corp. Family Rating to 'B3'
------------------------------------------------------------------
Moody's Investors Service lowered certain ratings of Graceway
Pharmaceuticals, LLC, including the Corporate Family Rating to B3
from B2 and the Probability of Default Rating to B3 from B2.
Moody's affirmed certain other ratings of Graceway, including the
Ba3 first-lien credit facilities and Caa1second-lien credit
facility based on Moody's Loss Given Default methodology. The
rating outlook is currently negative.
The downgrade of the CFR and PDR primarily reflects the
uncertainty related to whether Graceway's life cycle management
plans for Aldara will be successful and the significant reduction
in financial flexibility that would occur if a generic product is
launched in the near term. With approximately 80% of Graceway's
2008 revenue attributable to U.S. Aldara sales, execution of life
cycle management plans is critical. The downgrade also reflects
lack of progress in diversifying the company's revenue stream away
from Aldara through growth in other products or acquisitions of
new products.
Generic drugs companies are seeking approval to market generic
versions of Aldara as early as February 2010. Graceway has
recently submitted a Citizen Petition to the FDA requesting that
the FDA follow requirements before approving any abbreviated new
drug applications that reference Graceway's Aldara. An additional
component of Graceway's life cycle management plans is the pending
approval and launch of a lower-dose form of Aldara, which could
occur by year-end 2009.
Graceway's B3 Corporate Family Rating reflects limited size and
scale, significant product concentration risk, and high financial
leverage relative to the operating risks of the company. These
risks are offset by good Aldara sales performance to date,
positive free cash flow, steady reduction of debt, and good
cushion under financial covenants currently.
The negative outlook reflects the potential for further negative
rating action that would likely occur if generic companies are
successful in launching competing products in early 2010. Moody's
could revise the rating outlook to stable if it becomes clear that
generic companies are unable to launch in February 2010, and if
Graceway successfully launches the follow-on lower-dose Aldara
product. Eventually, the ratings could be upgraded if there is
greater assurance that Graceway's life cycle management plans can
provide meaningful cash flows over a multi-year horizon.
Ratings downgraded:
* Corporate Family Rating to B3 from B2
* Probability of Default Rating to B3 from B2
* Ratings affirmed with LGD point estimate revisions:
* Ba3 (LGD2, 24%) first lien senior secured Term Loan of $600
million due 2012
* Ba3 (LGD2, 24%) first lien senior secured revolving credit
facility of $30 million due 2012
* Caa1 (LGD5, 76%) second lien senior secured credit facility of
$330 million due 2013
The credit facility ratings are being affirmed based on
application of Moody's Loss Given Default Methodology. The
downgrade of the CFR and PDR increases the expected loss on these
instruments, all other factors being equal. However, Graceway's
ongoing repayment of first-lien debt including a $29 million
payment made in August 2009 has an opposite effect on the
instrument ratings. As such, the expected loss on the first-lien
credit facilities remains within Moody's range the Ba3 rating, and
the expected loss on the second-lien credit facilities remains
with Moody's range for the Caa1 rating.
Moody's last rating action on Graceway took place on April 30,
2009, when Moody's affirmed Graceway's ratings and changed the
rating outlook to negative from stable.
Headquartered in Bristol, Tennessee, Graceway Holdings, LLC, and
Graceway Pharmaceuticals, LLC, is a specialty pharmaceutical
company focused on the dermatology, respiratory, and women's
health markets.
GUARANTY FINANCIAL: D. Faulkner to Serve as Sole Officer
--------------------------------------------------------
On August 27, 2009, Guaranty Financial Group Inc.'s board of
directors determined to consolidate all of its officer positions
and appointed Dennis S. Faulkner of Lain, Faulkner & Co., an
accounting firm specializing in bankruptcy matters, as Chief
Restructuring Officer of the Company. With this action, Kevin
Hanigan, former Chairman, President and Chief Executive Officer
and Stephen A. Raffaele, former Senior Executive Vice President
and Chief Financial Officer will no longer serve in those officer
capacities.
Mr. Faulkner, as CRO, will serve as the sole officer of the
Company. The Company also acknowledged the resignations of Kevin
Hanigan, Larry Temple, David Biegler, Larry Faulkner, Edward
McPherson, Robert McTeer, Robert Rowling, John Stuart III and
James Unger from the Company's board of directors effective as of
August 27, 2009. Also on August 27, 2009, the Company's board of
directors appointed Mr. Faulkner as the Company's sole director.
Since 1986, Mr. Faulkner, age 53, has been a shareholder at Lain
Faulkner. Mr. Faulkner has more than 25 years of accounting and
management experience in bankruptcy and litigation services,
including experience assisting in the formulation and review of
reorganization plans. He has individually served as examiner,
Chapter 11 and Chapter 7 trustee, and as post-confirmation trustee
in a variety of engagements.
Pursuant to the terms of an Engagement Letter with Lain Faulkner,
dated August 25, 2009, Mr. Faulkner will continue to be employed
by Lain Faulkner and, while rendering services to the Company,
will continue to work with Lain Faulkner personnel in connection
with other unrelated matters. As a result, Mr. Faulkner will not
receive any compensation directly from the Company and will not
participate in any of the Company's employee benefit plans. The
Company will instead compensate Lain Faulkner for Mr. Faulkner's
services at a rate of $390.00 per hour.
$305MM Unsecured Debt
As of August 21, 2009, the Company had approximately $305 million
in subordinated unsecured debt securities outstanding pursuant to
an Indenture, dated as of September 15, 2006, by and between the
Company (as successor to Temple-Inland Financial Services Inc.)
and Wilmington Trust Company, as Trustee. The August 21, 2009
appointment of the FDIC as receiver of the Bank constitutes an
Event of Default under the Indenture. Under the Indenture, an
Event of Default occurs if, among other things, a receiver is
appointed for the Company or any substantial part of its property,
including the Bank. Upon such Event of Default, the principal
amount of the Debt Securities, and any premium and interest
accrued but unpaid, becomes immediately due and payable without
further action. As of July 31, 2009, the Company had
approximately $3.4 million in accrued and unpaid interest on the
Debt Securities.
About Guaranty Financial
Guaranty Financial Group Inc. -- http://www.guarantygroup.com/--
is based in Dallas, Texas. Guaranty Financial is a unitary
savings and loan holding company. The Company's primary operating
entities are Guaranty Bank and Guaranty Insurance Services, Inc.
Guaranty Financial filed for bankruptcy after the Guaranty bank
was seized by regulators and sent to receivership under the
Federal Deposit Insurance Corporation. Before the bank was taken
over, the balance sheet of the holding company had $15.4 billion
in assets as of Sept. 30, 2008.
Guaranty Financial together with affiliates filed for Chapter 11
on Aug. 27, 2009 (Bankr. N.D. Tex. Case No. 09-35582). Attorneys
at Haynes & Boone, LLP, represent the Debtors. According to the
schedules attached to its petition, the Company has assets of at
least $24,295,000, and total debts of $323,413,428, including
includes $305 million in trust preferred securit
HANESBRANDS INC: S&P Puts 'BB-' Rating on CreditWatch Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB-' corporate
credit rating for Hanesbrands Inc., as well as all issue-level
ratings for the company and its subsidiary, HBI Branded Apparel
Limited Inc., on CreditWatch with negative implications. The
ratings could be lowered or affirmed following the completion of
S&P's review.
"The CreditWatch placement reflects S&P's concern that
Hanesbrands' operating performance and credit metrics have
weakened materially through the second quarter of fiscal 2009,"
said Standard & Poor's credit analyst Jayne Ross. "Although the
company has stated that the results should improve in the second
half of the year, S&P believes that Hanesbrands may find it
difficult to achieve sufficient improvement that would result in
credit metrics returning to levels that are more appropriate for
the current rating."
To resolve the CreditWatch listing, S&P will meet with management
in the near term to assess Hanesbrands' business and financial
strategies for improving its performance over the next several
quarters.
HARRIS INTERACTIVE: Paid $3.2MM in FY2009 for AlixPartners' Work
----------------------------------------------------------------
Harris Interactive Inc. disclosed in a Form 10-K filing with the
Securities and Exchange Commission that for the fiscal year ended
June 30, 2009, it incurred $3,263,000 in expenses related to
services provided by AlixPartners LLP.
On December 16, 2008, the Company entered into an agreement with
AlixPartners pursuant to which Deborah Rieger-Paganis, an employee
of Alix, served as interim Chief Financial Officer of the Company
from December 20, 2008, through June 1, 2009. The Alix Agreement,
among its material terms, provided for the engagement of Alix to
provide interim management, financial advisory, and consulting
services to the Company, including:
-- Alix's agreement to provide Ms. Rieger-Paganis to serve as
interim Chief Financial Officer of the Company at an
hourly rate plus out-of-pocket expenses,
-- Alix's agreement to provide other consulting assistance to
the Company at hourly rates dependent upon the particular
consultant involved,
-- payment by the Company of a retainer to Alix, refundable
to the extent not earned,
-- agreement of Alix to preserve the confidentiality of non-
public confidential and proprietary information received
in the course of the engagement,
-- preservation of intellectual property rights of Alix in
its methodologies, processes, and the like, and ownership
by the Company of work product created specifically for
the Company,
-- agreement of the Company to provide specified insurance
and to indemnify Alix under specified circumstances,
-- ability of Alix or the Company to terminate the
arrangement at will,
-- limitation of Alix liability, and
-- arbitration of disputes.
In addition, the Company had separately engaged Alix beginning in
July 2008 to provide performance improvement, financial advisory
and consulting services to the Company on an hourly basis.
Of the expenses, $658,000 were in relation to the interim CFO
arrangement.
Throughout fiscal 2009, Harris Interactive Inc. has taken a number
of steps it believes is critical to its ability to restore revenue
and profitability, including:
-- restructuring the Company to better align cost structure
with expected revenue,
-- renegotiating its credit agreement to keep term loans in
place and provide a $5,000,000 line of credit to meet
short-term working capital needs,
-- creating a new integrated research and selling
organization that better serves clients,
-- forming global centers of excellence to better develop and
deliver products and solutions into the marketplace, and
-- continuing recruitment initiatives to attract top talent
to augment the strong talent already at the Company.
The Company recorded a net loss of $75,331,000 for the fiscal year
ended June 30, 2009, from a net loss of $84,618,000 in fiscal 2008
and net income of $9,076,000 in fiscal 2007.
As of June 30, 2009, the Company had $84,527,000 in total assets;
and total current liabilities of $44,543,000, long-term debt of
$15,581,000, deferred tax liabilities of $3,163,000, other long-
term liabilities of $3,117,000; resulting in shareholders' equity
of $18,123,000.
On September 21, 2007, the Company entered into a Credit Agreement
with JPMorgan Chase Bank, N.A., as Administrative Agent, and the
Lenders party thereto, pursuant to which the Lenders made
available certain credit facilities. As of December 31, 2008, the
Company was in violation of the leverage and interest coverage
covenants under the terms of the 2007 Credit Agreement.
The Company obtained a 30-day waiver of the covenant violations
from the Lenders on February 5, 2009, and in connection with the
waiver, the 2007 Credit Agreement was amended. The Company
obtained an additional 60-day extension of the waiver on March 6.
On May 6, and effective as of that date, the Company entered into
a further amendment to the 2007 Credit Agreement, pursuant to
which the prior covenant defaults were permanently waived and the
Company was again in compliance with the terms of the 2007 Credit
Agreement, as amended.
A full-text copy of the Company's Form 10-K is available at no
charge at http://ResearchArchives.com/t/s?43d6
About Harris Interactive
Based in Rochester, New York, Harris Interactive (NASDAQ:HPOL) --
http://www.harrisinteractive.com/-- provides custom market
research. Harris Interactive serves clients globally through our
North American, European and Asian offices and a network of
independent market research firms.
This concludes the Troubled Company Reporter's coverage of Harris
Interactive until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
HAYES LEMMERZ: Plan Confirmation Hearing Slated for October 15
--------------------------------------------------------------
Hayes Lemmerz International, Inc., has reached an agreement among
its DIP lenders, prepetition secured lenders and the Official
Committee of Unsecured Creditors on the terms of a plan of
reorganization.
On September 2, 2009, the Bankruptcy Court for the District of
Delaware approved the Company's disclosure statement with respect
to the first amended plan of reorganization incorporating the
terms of the agreement among the parties.
The approval of the disclosure statement allows the Company to
move forward in soliciting acceptances of the Plan from its pre-
petition secured lenders and other creditors. The hearing to
confirm the Plan has been scheduled for October 15, 2009.
"We appreciate the efforts of our DIP lenders, pre-petition
secured lenders and the Creditors' Committee in developing a
consensual plan of reorganization that is in the best interests of
all creditors," said Curtis J. Clawson, Chairman and Chief
Executive Officer of the Company. "We look forward to emerging
from our restructuring as a leaner, stronger competitor well
positioned to continue our leadership in the global wheel market.
Our strategy remains intact: extend our lead in high-growth
regions of the world in each of our major market segments--
aluminum wheels, steel wheels and commercial highway wheels. Our
customers and suppliers will see no change in our business during
or following our restructuring."
The Company also confirmed that it remains on track with its other
restructuring goals. It has adequate DIP financing available and
enjoys the support of its DIP lenders, pre-petition secured
lenders and the Creditors' Committee in its restructuring efforts.
The Company is taking the necessary steps to address its pension
and retiree medical liabilities.
The Company is in negotiations with representatives of its
retirees and the Pension Benefit Guaranty Corporation and is
optimistic that it will reach a consensual resolution to reduce
these liabilities.
As reported by the Troubled Company Reporter, the Disclosure
Statement was revised to provide, among other things, that the
Unsecured Creditors Committee supports the Plan. The Creditors
Committee previously objected to the Plan, and the terms of the
Plan was revised to address objections of the Committee. The
revisions also provide for a new creditor class, specifically
claims by the Pension Benefit Guaranty Corp.
Under the Revised Plan, certain of the Debtors' prepetition
secured lenders, which funded the operations of the Debtors
through a $200 million of debtor-in-possession financing, will
receive majority ownership of the reorganized Company upon
emergence from Chapter 11.
Specifically, upon consummation of the Plan, the DIP Lenders will
(a) receive their pro rata share of 84.5% of the new common stock
to be issued by the Company upon consummation of the Plan on
account of certain amounts the DIP Lenders advanced to the Debtors
prior to the Petition Date and (b) convert the principal amount of
the outstanding amount, as of the Plan's effective date, of the
new money loans provided to the Debtors pursuant to the debtor-in-
possession financing into a secured term loan.
The remaining equity of the Debtors will be distributed to the
Debtors' other prepetition secured lenders and their noteholders
For the discharge of their claims under the Notes, and the PBGC in
discharge of its claim for the difference between the value of
pension plan assets and pension plan liabilities on the date of
the pension plan's termination. Distributions will be made only
to those Noteholders that do not reject the Plan. In addition,
the Noteholders and PBGC will receive their agreed upon share of
$5 million and two tranches of warrants that will permit them to
purchase up to 10% of the New Common Stock (subject to certain
dilution protections) upon the satisfaction of certain conditions.
The terms of the warrants are set forth in the warrants agreements
annexed to the Plan.
The Non-DIP Lenders will receive their pro rata share of 4% of the
New Common Stock if they vote to accept the Plan. In addition,
those Prepetition Secured Lenders that (1) are not DIP Lenders
(including Affiliates of DIP Lenders or permitted successors and
assigns of DIP Lenders) and (2) consented to the DIP Financing
will receive a consent fee equal to their pro rata share of 8.5%
of the New Common Stock
Holders of certain other general unsecured claims will share pro
rata in $250,000 provided the Prepetition Secured Lenders and
Holders of Other Unsecured Claims vote to accept the Plan.
Distributions will be made only to those Holders of Other
Unsecured Claims who do not reject the Plan.
The Debtors' existing publicly traded common stock will be
canceled and no distributions will be made to such holders of
common stock. In addition, holders of any claims subordinated
pursuant to Bankruptcy Code section 510(c) will not receive a
distribution under the Plan.
The settlement embodied in the Plan provides that Noteholders who
do not reject the Plan will release (or be deemed to have
released) their Claims under the Notes against the non-Debtor
Affiliates of the Debtors (the "Non-Debtor Affiliates") in
exchange for the consideration to be provided under the Plan.
Consummation of the Plan will also result in the release and
satisfaction of any Claims the PBGC has against the Non-Debtor
Affiliates
Classification and Treatment of Claims and Interests
Class Class Description Recovery Under Plan
----- -------------------- -------------------
1 Secured Tax Claims Unimpaired. 100%
2 Other Secured Claims Unimpaired. 100%
3 Other Priority Claims Unimpaired. 100%
4 Intercompany Claims Unimpaired. N/A
5 Subsidiary Interests Unimpaired. N/A
6 Prepetition Secured
Claims Impaired. 1.1%
7 Noteholder Claims Impaired. 5%
8 PBGC Termination
Liability Claim Impaired. 5%
9 Other Unsecured Claims Impaired. .03%-.06%
10 Subordinated Securities
Claims Impaired. 0%
11 Interests in Hayes Impaired. 0%
A copy of the Revised Disclosure Statement is available for free
at http://bankrupt.com/misc/Hayes_Revised_DS_Blacklined.pdf
About Hayes Lemmerz
Originally founded in 1908, Hayes Lemmerz International, Inc.
(NasdaqGM: HAYZ) is a worldwide producer of aluminum and steel
wheels for passenger cars and light trucks and of steel wheels for
commercial trucks and trailers. The Company is also a supplier of
automotive powertrain components. The Company has global
operations with 23 facilities, including business, sales offices
and manufacturing facilities, located in 12 countries around the
world. The Company sells products to every major North American,
Asian and European manufacturer of passenger cars and light trucks
and to commercial highway vehicle customers throughout the world.
The Company and certain affiliates filed for bankruptcy on
May 11, 2009 (Bankr. D. Del. Case No. 09-11655) after reaching
agreements with lenders holding a majority of the Company's
secured debt. The Company's principal bankruptcy attorneys are
Skadden, Arps, Slate, Meagher & Flom, LLP. Lazard Freres & Co.,
LLC, serves as the Company's financial advisors. AlixPartners,
LLP, serves as the Company's restructuring advisors. The Garden
City Group, Inc., serves as the Debtors' claims and notice agent.
As of January 31, 2009, the Debtors had total assets of
$1,336,600,000 and total debts of $1,405,200,000.
This is the Company's second trip to the bankruptcy court, dubbed
a Chapter 22, which was precipitated by an unprecedented slowdown
in industry demand and a tightening of credit markets.
HEXION SPECIALTY: Admits to Facing Pressure From Vendors
--------------------------------------------------------
Hexion Specialty Chemicals, Inc., disclosed in a regulatory filing
in August it is facing increased pressure from vendors to reduce
payment terms due to the current credit environment. "We are
closely monitoring the credit quality of our customers and have
focused on receivable collections to offset a portion of the
payment term pressure by offering incentives to customers to
encourage early payment," Hexion said in a Form 10-Q filed with
the Securities and Exchange Commission.
In the first half of 2009, Hexion entered into accounts receivable
purchase and sale agreements to sell a portion of its trade
accounts receivable to an affiliate of Apollo Management, L.P. As
of June 30, 2009, through the agreements, Hexion said it
effectively accelerated the timing of cash receipts on $76 million
of its receivables.
"We are a highly leveraged company. Our primary sources of
liquidity are cash flows generated from operations and
availability under our senior secured credit facilities. Our
primary liquidity requirements are interest and capital
expenditures. In addition, over the next eighteen months, we will
continue to have cash outflows related to productivity program-
related obligations, and obligations related to the terminated
Huntsman merger," Hexion said.
On August 13, 2009, Hexion reported its results for the second
quarter and six months ended June 30, 2009. The Company recorded
revenues of $947 million in the second quarter 2009 compared to
$1.67 billion during the prior year period as the sales decline
reflected lower volumes, negative foreign currency translation and
the contractual pass through of lower raw material prices, which
more than offset pricing actions. It posted an operating loss of
$24 million for the second quarter of 2009, which included
$66 million in impairment costs associated with the idling of
certain production facilities and restructuring costs associated
with Hexion's productivity initiatives. This compares to an
operating loss of $107 million for the prior year period. Net
loss attributable to Hexion was $71 million for the 2009 quarter
versus a net loss of $181 million in the prior year period.
Sales for the first six months of 2009 were $1.86 billion, a
decrease of $1.44 billion compared to the first half of 2008,
driven primarily by volume and raw material price declines across
Hexion's major product lines. In the first half of 2009, the
Company had an operating loss of $12 million, which included $85
million in restructuring and impairment costs, compared to an
operating loss of $24 million in the first half of 2008.
Hexion posted net income of $45 million for the first six months
of 2009 versus a net loss of $193 million in the first six months
of 2008, which reflected a $32 million decrease in interest
expense and a $10 million decrease in income tax expense. In
addition, during the first six months of 2009, Hexion recognized a
gain of $182 million on the extinguishment of $217 million in face
value of outstanding debt securities. In the first six months of
2009, the Company generated $254 million in cash flow from
operations versus $11 million in 2008.
As of June 30, 2009, the Company had $2.89 billion in total assets
and $$5.05 billion in total liabilities. As of June 30, 2009, the
Company had $3.55 million of debt, including $113 million of
short-term debt and capital lease maturities (of which $56 million
is U.S. short-term debt and capital lease maturities). In
addition, at June 30, 2009, it had $420 million in liquidity
including $132 million of unrestricted cash and cash equivalents,
$219 million of borrowings available under its senior secured
revolving credit facilities, and $69 million of borrowings
available under credit facilities at certain domestic and
international subsidiaries with various expiration dates through
2011 and the financing commitment from Apollo.
"Although we anticipate the remainder of 2009 will be challenging,
we expect we will have adequate liquidity to fund our ongoing
operations and cash debt service obligations for the foreseeable
future from cash flows provided by operating activities, amounts
available for borrowings under our credit facilities and amounts
available under the $200 million financing commitment by Apollo.
We are also investigating the sale of non-core assets to further
increase our liquidity," the Company said.
During the first quarter of 2009, Hexion repurchased on the open
market outstanding debt with a carrying amount of $196 million for
$26 million. The $196 million carrying value of repurchased debt
securities consisted of $92 million of Hexion's 9.75% second-
priority senior secured notes due 2014, $80 million of its
floating rate second-priority senior secured notes due 2014, and
$24 million of its various unsecured debentures due 2016 and
beyond.
During the second quarter of 2009, the Company repurchased and
extinguished $21 million in face value of its outstanding debt
securities for $6 million. The $21 million in face value of
repurchased debt securities consisted of $5 million in face value
of its 8.375% unsecured debentures due 2016, $5 million in face
value of its 9.200% unsecured debentures due 2021 and $11 million
in face value of its 7.875% unsecured debentures due 2023.
In August 2009, Hexion purchased roughly $71 million in face value
of its outstanding debentures due 2016 and beyond for roughly
$31 million.
In the third quarter of 2009, Hexion expects to record a gain as a
result of paying down debt for amounts less than face value.
"Any future repurchases will depend on prevailing market
conditions, our liquidity requirements, contractual restrictions
and other factors. The amounts involved may be material. Future
repurchases may be funded through available cash, borrowings from
our credit facilities, and sales of accounts receivable or other
liquidity sources. Based on interest rates at June 30, 2009, we
expect annual cash interest savings of $23 million as a result of
these debt repurchases," Hexion said.
On April 21, 2009, Standard & Poor reduced the Company's corporate
credit rating to "SD" while its first quarter debt repurchases
were reviewed. On June 11, 2009, Moody's temporarily lowered the
Company's corporate rating to "Caa3/LD" in response to its debt
repurchases at below par value prices. On June 17, 2009, Moody's
raised the corporate rating to "B3." On June 30, 2009, Standard &
Poor raised the corporate credit rating to "CCC+".
Hexion does not expect any of these recent rating changes to have
a significant impact on its liquidity.
Hexion said it was in compliance at June 30, 2009, with all of the
terms of its outstanding indebtedness, including the financial
covenants. Although Hexion anticipates that the remainder of 2009
will be challenging, the Company expects to have adequate
liquidity to fund its ongoing operations and cash debt service
obligations for the foreseeable future from cash flows provided by
operating activities, amounts available for borrowings under the
credit facilities and amounts available from its parent.
A full-text copy of the Form 10-Q report is available at no charge
at http://ResearchArchives.com/t/s?43e0
Based in Columbus, Ohio, Hexion Specialty Chemicals, Inc., serves
global industrial markets through a broad range of thermoset
technologies, specialty products and technical support for
customers in a diverse range of applications and industries.
Hexion is owned by an affiliate of Apollo Management, L.P.
HICKS SPORTS: Texas Rangers Receives Six Initial Bids
-----------------------------------------------------
Tom Hicks has received six initial offers for his Texas Rangers
baseball team, Reuters reported. According to the report,
Mr. Hicks is trying to sell the team, and a September 8 deadline
has been set.
As reported by the TCR on April 15, 2009, Hicks Sports Group was
declared to be in default by a group of 40 financial institutions
and other investors holding $525 million in debt. The Company
missed a $10 million quarterly interest payment on March 31, 2009,
triggering the default notice.
About Hicks Sports
Hicks Sports Group -- http://www.hickssportsgroup.com/-- was
formed in 1999 as a sports and entertainment holding company
controlled by Thomas O. Hicks. Prior to the formation of HSG, Mr.
Hicks acquired the Dallas Stars in 1996 and then acquired the
Texas Rangers from the George W. Bush/Edward W. Rose partnership
in 1998. HSG was formed to oversee the Hicks family's sports
teams, as well as the Hicks family's sports-related real estate
developments.
In a joint venture with an affiliate of the Dallas Mavericks, HSG
owns a 50% stake in Center Operating Company, the group that
manages and leases the American Airlines Center, which is home to
the Dallas Stars and the Dallas Mavericks NBA team. Further, HSG
operates Hicks Sports Marketing Group, an entity formed in 2006 to
represent sports branding opportunities and corporate sponsorships
for HSG, most notably for the Stars, the Rangers, and real estate
projects related to Hicks' sports venues. HSG has an interest in
eight Dr. Pepper StarCenter facilities, including the StarCenter
in Frisco, Texas, that serves as the practice facility for the
Dallas Stars, and owns approximately 40 acres surrounding the Dr.
Pepper/7 Up Ballpark in Frisco, which is designated for future
mixed-use development. In Arlington, HSG is involved in the
development of over 100 acres, as an exciting mixed-use
development focused on restaurants and entertainment, planned
between the Rangers Ballpark in Arlington and the new Dallas
Cowboys Stadium.
HIGHWOOD PARK PROPERTIES: Case Summary & Largest Unsec. Creditor
----------------------------------------------------------------
Debtor: Highwood Park Properties, LLC
P.O. Box 28130
Atlanta, GA 30358
Bankruptcy Case No.: 09-83032
Chapter 11 Petition Date: August 31, 2009
Court: United States Bankruptcy Court
Northern District of Georgia (Atlanta)
Judge: James Massey
Debtor's Counsel: John J. McManus, Esq.
John J. McManus & Associates, P.C.
Building H, 3554 Habersham at Northlake
Tucker, GA 30084
Tel: (770) 492-1000
Email: jmcmanus@mcmanus-law.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$900,000 and total debts of $1,680,000.
The Debtor identified United Community Bank with a debt claim
(Units 4, 5, 12, 16, 116, 117, 145, 148, 163, 164, 171, 172, 174,
175, 178, Highwood Park Condominiums, located in Fulton county,
Georgia) for $1,680,000 ($900,000 secured) 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/ganb09-83032
The petition was signed by Betty G. Dewberry & Joel M. Roberts,
presidents of respective members of the Company.
HWY 90 OFFICE: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: HWY 90 Office Condominiums, LP
12810 Willow Centre Drive, Suite D
Houston, TX 77066-3037
Bankruptcy Case No.: 09-36479
Chapter 11 Petition Date: August 31, 2009
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Marvin Isgur
Debtor's Counsel: Margaret Maxwell McClure, Esq.
Attorney at Law
909 Fannin, Suite 3810
Houston, TX 77010
Tel: (713) 659-1333
Fax: (713) 658-0334
Email: mccluremar@aol.com
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Gurmukh S. Jolly, general partner of
the Company.
IMPERIAL INDUSTRIES: Lender Extends Line of Credit to Sept. 30
--------------------------------------------------------------
Effective August 28, 2009, Imperial Industries, Inc. as guarantor;
and its principal subsidiaries Premix-Marbletite Manufacturing
Co., DFH, Inc., and Just-Rite Supply, Inc.; Michael Phelan, as
assignee for Assignment for the Benefit of the Creditors of Just-
Rite; and Wachovia Bank, N.A., executed a Second Amendment to
Forbearance Agreement, an amendment to the Company's
Consolidating, Amended and Restated Financing Agreement dated as
of January 28, 2000. Under the Second Amendment, the Lender
agreed to extend the Line of Credit from August 31, 2009 to
September 30, 2009.
The Amendment provides for the lender's continued funding under
the credit facility, notwithstanding the Company's and assignee's
recent non-compliance of certain terms set forth in its Amended
Forbearance Agreement, subject to the Company making reductions to
its existing maximum credit of $500,000 during the month of
September.
Specifically, the Second Amendment modified the Line of Credit
principally as follows:
-- The Lender, in its sole and absolute discretion, may
continue to make revolving loans under the Line of Credit
without regard to the Company's or Assignee's compliance
with the terms of the Line of Credit, or existence of any
Event of Default.
-- The Lender will reduce the existing maximum credit of
$500,000 on each of September 4, 2009, September 11, 2009,
September 18, 2009 and September 25, 2009, by $50,000 to
$450,000, $400,000, $350,000 and $300,000 respectively.
-- The addition of a restrictive loan covenant to establish a
borrowing availability reserve in the amount of 50% of any
funds received from the Mississippi Department of
Transportation.
As of the close of business on August 28, 2009, the Company and
the Assignee had a combined outstanding balance of approximately
$400,000 under the Line of Credit. Excess availability for
borrowings under the Line of Credit at August 28, 2009 was
$100,000, after giving effect to the maximum credit of $500,000 at
that date.
On July 9, 2009, and thereafter, the Lender orally advised the
Company and the Assignee that they were not in compliance with the
borrowing formulas and certain reporting requirements under the
Forbearance Agreement and continued funding the Line of Credit in
accordance with the terms of the Forbearance Agreement. The
Lender thereafter required the Company to enter into the First
Amendment to the Forbearance Amendment as of August 7, 2009, which
was further amended by Second Amendment.
There can be no assurance that the Company will be in compliance
with the terms of its amended credit facility upon termination of
the Forbearance Agreement, or obtain continued forbearance and
funding from the Lender on terms acceptable to the Company, or
that such financing will be available at all at the end of the
Forbearance period.
A full-text copy of the Second Amendment is available at no charge
at http://ResearchArchives.com/t/s?43de
Pompano Beach, Florida-based Imperial Industries, Inc. --
http://www.imperialindustries.com/-- a building products company,
sells products throughout the Southeastern United States with
facilities in the State of Florida. The Company is engaged in the
manufacturing and distribution of stucco, plaster and roofing
products to building materials dealers, contractors and others
through its subsidiary, Premix-Marbletite Manufacturing Co.
INSIGHT COMMUNICATIONS: S&P Retains 'B+' Corporate Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said it has revised its
recovery rating on $1.74 billion of secured bank debt facilities
of Insight Communications Co. Inc. to '3' from '4'. This revision
indicates S&P's expectation for improved recovery prospects in the
event of a payment default. The 'B+' corporate credit and issue-
level ratings, as well as the stable outlook, on Insight remain
unchanged.
Specifically, the change indicates S&P's expectation for
meaningful (50%-70%) recovery for bank debtholders in the event of
a payment default. The former '4' recovery indicated expectations
for only average (30%-50%) recovery.
Ratings List
Insight Communications Co. Inc.
Corporate Credit Rating B+/Stable/--
Recovery Rating Revised
Insight Midwest Holdings LLC
To From
-- ----
$1.74 bil first-lien bank loan B+ B+
Recovery Rating 3 4
INTERMET CORP: Tries to Block Conversion of Case to Chapter 7
-------------------------------------------------------------
The Lake Gazette reports that Intermet Corp. has filed an
objection in U.S. Bankruptcy Court for the District of Delaware to
a motion by Capital Source, one of its creditors, to convert the
Company's Chapter 11 reorganization to Chapter 7 liquidation.
Intermet said in court documents that its value to its creditors
is greater if it continues to operate under Chapter 11 bankruptcy.
According to court documents, Capital Source had argued that
Intermet's "insurmountable financial problems are underscored" by
the Company's inability to find a Lender Liquidating Trustee and
it is uncertain that the company is administratively solvent".
The conversion to Chapter 7 would cause further significant
damages to customer base and the immediate loss of hundreds of
jobs if the court authorized the sale of assets at "fire-sale
prices", The Lake Gazette relates, citing Intermet. According to
the report, Intermet said that one of the customers had offered to
provide working capital and any losses during a particular plant's
orderly wind-down. The report stats that another plant is being
sold, while one was closed this week.
Based in Fort Worth, Texas, Intermet Corp. designs and
manufactures machine precision iron and aluminum castings for the
automotive and industrial markets. The Company and its debtor-
affiliates filed for Chapter 11 protection on August 12, 2008
(D. Del. Case Nos. 08-11859 to 08-11866 and 08-11868 to 08-11878).
Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Michael E.
Comerford, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New
York, serve as the Debtors' counsel. James E. O'Neill, Esq.,
Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski
Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the
Debtors' co-counsel. Kurtzman Carson Consultants LLC serves as
the Debtors' claims, notice and balloting agent. An official
committee of unsecured creditors has been formed in this case.
In its petition, Intermet Corp. listed assets of $50 million to
$100 million and debts of $100 million to $500 million.
This is the Debtors' second bankruptcy filing. Intermet Corp.,
along with its debtor-affiliates, filed for Chapter 11 protection
on September 29, 2004 (Bankr. E.D. Mich. Case Nos. 04-67597
through 04-67614). Salvatore A. Barbatano, Esq., at Foley &
Lardner LLP, represented the Debtors. In their previous
bankruptcy filing, the Debtors listed $735,821,000 in total assets
and $592,816,000 in total debts. Intermet Corporation emerged
from its first bankruptcy filing in November 2005.
ISOLAGEN INC: Terms of Court-Confirmed Reorganization Plan
----------------------------------------------------------
Isolagen, Inc., and its affiliates received from the Bankruptcy
Court on August 27, 2009, an order confirming their Joint First
Amended Plan of Reorganization.
According to a regulatory filing by Isolagen, the salient terms of
the Plan are:
A. Implementation of the Plan
1. Effective Date. On the date all of the conditions
precedent to confirmation and consummation of the Plan are
satisfied or waived, the Company will emerge from bankruptcy as a
company named "Fibrocell Science, Inc."
2. New Board of Directors. On the Effective Date, the
Company's current officers and directors will be deemed to have
resigned and a new board of directors will be determined by the
DIP Lenders and the Plan Funders. The initial board of directors
of the Company will consist of David Pernock, Paul Hopper and
Kelvin Moore. Declan Daly will remain as an executive officer of
the Company.
3. Exit Financing. On the Effective Date, the Company will
issue New Common Stock to the Plan Funders in exchange for $2
million to fund the Reorganized Debtors' continued operations and
the distributions that the Reorganized Debtors must make pursuant
to the terms of the Plan.
4. Equity Holders. All equity interests in the Company,
including without limitation common stock, options and warrants,
will be cancelled. Upon the Effective Date, the Company intends
to complete an Exit Financing of common stock in the amount of $2
million, after which the equity holders in the Company will be:
(i) 7,320,000 shares, or 49.91%, to the Pre-Petition Lender Claims
and DIP Facility Claims, collectively; (ii) 3,960,000 shares, or
27%, to the 3.5% Convertible Noteholders; (iii) 600,000 shares, or
4.09%, to Management; (iv) 120,000 shares, or 0.82%, to the
General Unsecured Claims; and (v) 2,666,666 shares, or 18.18%, for
the Exit Financing (the Pre-Petition Lender Claims, DIP Lenders
and 3.5% Convertible Noteholders will have the right to
participate in the Exit Financing; the percentages in (i) and (ii)
assume full funding of the Exit Financing and no participation by
any of the listed creditor classes). Upon the completion of the
Exit Financing, the Company will have a total of 14,666,666 shares
outstanding. Distribution of such New Common Stock will be made by
delivery of one or more certificates representing such shares as
described herein or made by means of book-entry exchange through
the facilities of DTC in accordance with the customary practices
of DTC. To the extent prohibited by Section 1123(a)(6) of the
Bankruptcy Code, the Company will not issue nonvoting equity
securities; provided, however the foregoing restriction will (a)
have no further force and effect beyond that required under
Section 1123 of the Bankruptcy Code, (b) only have such force and
effect for so long as Section 1123 of the Bankruptcy Code is in
effect and applicable to the Company, and (c) in all events may be
amended or eliminated in accordance with applicable law as from
time to time may be in effect. The Certificate of Incorporation
and By-Laws will set forth the rights and preferences under the
New Common Stock.
5. Management Incentive Plan. The management team of the
Reorganized Debtors and their subsidiaries will receive 5% of the
New Common Stock, subject to dilution by the Exit Financing. The
management team's equity state will be subject to a two-year
vesting schedule whereby 50% will vest on the Effective Date, 25%
will vest on the first anniversary, and 25% will vest on the
second anniversary.
6. Assets and Liabilities. The assets and liabilities of the
Company as the date of the Confirmation Order are as set forth in
the Plan and Disclosure Statement filed with the Bankruptcy Court,
which is attached hereto.
B. Treatment of Claims and Interests
1. Class 1 - Pre-Petition Lender Claims: Subject to and
pursuant to the terms of the Plan, the Holders of the Allowed Pre-
Petition Lender Claims have agreed that, in lieu of accepting Cash
on account of their Allowed Pre-Petition Lender Claims, the Pre-
Petition Lenders will receive, together with the DIP Lenders as
set forth in Section 3.06 of the Plan, their Pro Rata share of up
to 61% of the New Common Stock of the Company, subject to dilution
by the Exit Financing. The DIP Lenders and the Pre-Petition
Lenders have also agreed to compensate Viriathus or its assignee
10% of its Pro Rata Distribution of the New Common Stock.
2. Class 2 - Other Secured Claims: On the Distribution Date,
each Holder of an Allowed Class 2 Claim will receive in full
satisfaction, settlement, release and discharge of and in exchange
for such Allowed Other Secured Claim and at Debtors' exclusive
election, either: (i) Cash equal to the amount of such Allowed
Other Secured Claim, or (ii) the Collateral which serves as
security for such Allowed Other Secured Claim, except to the
extent that any Holder of an Allowed Other Secured Claim agrees to
less favorable treatment thereof.
3. Class 3% to 3.5% Convertible Notes: Each Holder of an
Allowed 3.5% Noteholder Claim will receive, in full and final
satisfaction, settlement, release and discharge of and in exchange
for such Allowed 3.5% Noteholder Claim the following:
(a) its Pro Rata share of an unsecured note in the principal
amount of $6 million. The New Note will have the following
features: (1) 12.5% interest payable quarterly in Cash or, at the
Company's option, 15% payable in kind ("PIK") by capitalizing such
unpaid amount and adding it to the principal as of the date it was
due; (2) maturing June 1, 2012; (3) at any time prior to the
maturity date, the Company may redeem any portion of the
outstanding principal of the New Notes in Cash at 125% of the
stated face value of the New Notes; provided that the Company will
be obligated to redeem all outstanding New Notes upon the
following events: (a) the Debtors successfully complete a capital
campaign raising in excess of $10,000,000; or (b) the Debtors are
acquired by, or sell a majority stake to, an outside party; (4)
the New Notes contain customary representations, warranties and
covenants, including a covenant that the Debtors will be
prohibited from the incurrence of additional debt without
obtaining the consent of 66 2/3% of the New Note holders.
(b) its Pro Rata share of 33% of the New Common Stock
subject to dilution by the Exit Financing.
(c) The Plan allows the 3.5% Noteholder Claims in the amount
of the outstanding principal and accrued and unpaid interest as of
the Petition Date in the approximate aggregate amount of $81
million (plus any other amounts due under the indenture and
allowable under the Bankruptcy Code).
4. Class 4-General Unsecured Claims: Each holder of an Allowed
General Unsecured Claim shall, in full and final satisfaction,
settlement, release and discharge of and in exchange for such
Allowed General Unsecured Claim, be paid their Pro Rata portion of
1% of the New Common Stock, subject to dilution by the Exit
Financing.
5. Class 5-Old Common Stock: On the Effective Date, all
Interests in Old Common Stock (which include options, warrants and
other convertible securities) will be cancelled and extinguished
under the Plan, and the Holders thereof will neither retain nor
receive any distribution of property or Assets on account of their
Interests.
6. Class 6-Intercompany Claims: No distributions will be made
under the Plan on account of Intercompany Claims, and any and all
liability on account of such Intercompany Claims will be deemed
discharged.
7. Treatment of Administrative Claims, Priority Tax and Non-
Tax Claims: Administrative Expense Claims are not impaired under
the Plan. Each Holder of an Allowed Administrative Expense Claim,
shall, in full and final satisfaction, release and discharge of
and in exchange for such Allowed Administrative Expense Claim, be
paid either (i) in Cash or (ii) on such other terms and conditions
as may be agreed between the Holder of the Allowed Administrative
Expense Claim the Debtors and/or the Reorganized Debtors, and the
Agent. Priority Non-Tax Claims are not impaired under the Plan.
Each Holder of an Allowed Priority Non-Tax Claim shall, in full
and final satisfaction, settlement, release and discharge of and
in exchange for such Allowed Priority Non-Tax Claim, receive Cash
in the amount of the Allowed Priority Non- Tax Claim, except to
the extent that any Holder of an Allowed Priority Non-Tax Claim
agrees to less favorable treatment thereof. Priority Tax Claims
are not impaired under the Plan. Each Holder of an Allowed
Priority Tax Claim shall, in full and final satisfaction,
settlement, release and discharge of and in exchange for such
Allowed Priority Tax Claim, be paid in full through deferred Cash
payments in an aggregate principal amount equal to the amount of
the Allowed Priority Tax Claim plus interest on the unpaid portion
at the rate of 4% per annum from the Effective Date through the
date of payment thereof which may be as long as 5 years from the
order for relief in the bankruptcy cases, except to the extent
that any Holder of an Allowed Priority Tax Claim agrees to less
favorable treatment thereof.
A copy of the disclosure statement explaining the Plan is
available at no charge at:
http://researcharchives.com/t/s?43da
About Isolagen
Based in Exton, Pennsylvania, Isolagen(TM), Inc., is an aesthetic
and therapeutic company committed to developing and
commercializing scientific advances and innovative technologies.
The Company's technology platform includes the Isolagen
Process(TM), a cell processing system for skin and tissue
rejuvenation which is currently in development. Isolagen also
commercializes a scientifically-advanced line of skincare systems
through its majority-owned subsidiary, Agera(R) Laboratories, Inc.
Isolagen, Inc., and its wholly owned subsidiary, Isolagen
Technologies, Inc., filed voluntary petitions for reorganization
under Chapter 11 of the United States Bankruptcy Code on June 15,
2009 (Bankr. D. Del. Case Nos. 09-12072 and 09-12073). Mary E.
Augustine, Esq., at Ciardi Ciardi & Astin, P.C., in Wilmington,
Delaware, represents the Debtors. The Debtors disclosed
$1,000,001 to $10,000,000 in estimated assets and debts.
IVIVI TECHNOLOGIES: Forbearance Pact With Emigrant Expires Sept. 9
------------------------------------------------------------------
Ivivi Technologies, Inc., entered into a Forbearance Agreement
dated August 31, 2009 with Emigrant Capital Corp. Pursuant to the
terms of the Forbearance Agreement, the Lender has agreed to
forbear, through September 9, 2009, from requiring the Company to
repay the principal and interest due under the Convertible
Promissory Note in the principal amount of $2.5 million. The
maturity date under the Note was August 30, 2009. The Forbearance
Agreement also provides for an increase in the interest rate under
the Note to the lesser of (i) 18% or (ii) the maximum rate
permitted by law during the forbearance period.
The Lender has agreed to the forbearance in order to provide the
Company with the ability to continue (i) negotiating the
previously announced potential transaction with Ajax Capital, LLC,
an entity owned by Steven Gluckstern, the Company's Chairman,
President, Chief Executive Officer and Chief Financial Officer,
and (ii) solicit other proposals. Although the Company expects to
continue discussing further extensions of the repayment of the
loan with the Lender as needed to complete a transaction, the
Company may not be able to successfully enter into such extensions
as needed. In the event the Company does not successfully
negotiate with the Lender, the Company will not be able to meet
its obligations under the Note and the Lender will have the right
to foreclose under the Note, which is secured by all of the
Company's assets. In such an event, the Company would have
to cease its operations or seek alternatives, including filing for
bankruptcy protection. In addition, there can be no assurance
that the Company will be able to complete a transaction with Ajax
or any other potential acquirer or investor.
About Ivivi Technologies
Based in Montvale, New Jersey, Ivivi Technologies, Inc. is a
medical technology company focusing on designing, developing and
commercializing its proprietary electrotherapeutic technology
platform, with a primary focus on developing treatments for
cardiovascular disease.
JAMES EVERETT: Case Summary & 6 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: James Joseph Everett
7373 East Doubletree Ranch Rd., Suite B-135
Scottsdale, AZ 85258
Bankruptcy Case No.: 09-53403
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Western District of Texas (San Antonio)
Judge: Chief Bankruptcy Judge Ronald B. King
Debtor's Counsel: William R. Davis Jr., Esq.
Langley & Banack, Inc
745 E Mulberry Ave, Suite 900
San Antonio, TX 78212
Tel: (210) 736-6600
Fax: (210) 735-6889
Email: wrdavis@langleybanack.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of Mr. Everett's petition, including a list of
his 6 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/txwb09-53403
The petition was signed by Mr. Everett.
JASON MORRONE: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Jason S. Morrone
9238 Miami Valley Road
Fort Valley, GA 31030
Bankruptcy Case No.: 09-52789
Chapter 11 Petition Date: August 31, 2009
Court: United States Bankruptcy Court
Middle District of Georgia (Macon)
Judge: James D. Walker Jr.
Debtor's Counsel: Wesley J. Boyer, Esq.
Katz, Flatau, Popson and Boyer, LLP
355 Cotton Avenue
Macon, GA 31201
Tel: (478) 742-6481
Email: wjboyer_2000@yahoo.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of Mr. Morrone's petition, including a list of
his 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/gamb09-52789
The petition was signed by Mr. Morrone.
JEFFERSON COUNTY: In Talks for $25MM Bridge Loan from Regions
-------------------------------------------------------------
According to Kathleen Edwards at Bloomberg News, Jefferson
County, Alabama, is in talks with Regions Financial Corp. for a
$25 million bridge loan.
Bettye Fine Collins, president of the county's governing
commission, said the loan would allow the county to bring back
1,000 employees placed on administrative leave on Aug. 1.
"As the largest bank in the state, we feel this course of action
best serves the interests of our community and demonstrates the
value of having one of the largest banks in the nation
headquartered in Birmingham," Birmingham-based Regions said in a
statement.
In late August, the Alabama Supreme Court upheld a lower court
ruling that Jefferson County's occupational tax was repealed in
1999. The ruling means that Jefferson County won't have access to
the tax money it collected but placed in escrow.
While Governor Bob Riley signed a new bill approving a new
occupational tax for Jefferson County, the County wanted the
Supreme Court to allow it to spend the funds collected under the
previous version of the levy.
Alabama's Senate and House of Representatives have separately
approved a measure authorizing a new occupational tax for
Jefferson County, which is on the brink of insolvency. The new
tax legislation authorizes a 0.45% levy on businesses in the
county and a referendum on the tax in 2012. If voters reject the
levy, it will be phased out by 2016.
Bloomberg relates that the county's occupational tax problems have
superseded a sewer debt crisis that began last year when interest
rates on $3 billion of sewer debt soared as high as 10% amid Wall
Street's credit crunch. Banks, including JPMorgan Chase & Co. and
Bank of America Corp., have granted the county forbearance
agreements on its sewer debt.
About Jefferson County
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000. It ended its 2006 fiscal year with a
$42.6 million general fund balance, according to Standard &
Poor's. The Birmingham firm of Bradley Arant Rose & White,
represents Jefferson County. Porter, White & Co. in Birmingham is
the county's financial adviser. A bankruptcy by Jefferson County
stands to be the largest municipal bankruptcy in U.S. history. It
could beat the record of $1.7 billion, set by Orange County,
California in 1994.
As reported by the TCR on July 24, 2009, Moody's Investors Service
has affirmed the Caa3 rating and negative outlook on Jefferson
County's (Alabama) outstanding $3.2 billion sewer revenue bonds.
Moody's underlying Caa3 rating reflects the likelihood of eventual
repayment by the county of principal, irrespective of outside
enhancement through bond insurance. It does not reflect the
claims paying ability of Syncora, which is rated Ca and failed to
fulfill its obligation to make a July 1 Bank Bond principal
payment.
JEFFERSON COUNTY: JPM Moves $105MM Payment Deadline to Oct. 30
--------------------------------------------------------------
According to reporting by Kathleen Edwards at Bloomberg, Jefferson
County, Alabama, commission President Bettye Fine Collins said
September 3 that the county has reached a deal with JPMorgan Chase
& Co. and BayernLB, regarding a delay in a $105 million payment on
its general obligation bonds due Sept. 15. The county plans to
vote next week on a forbearance agreement that extends the
deadline until October 30.
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000. It ended its 2006 fiscal year with a
$42.6 million general fund balance, according to Standard &
Poor's. The Birmingham firm of Bradley Arant Rose & White,
represents Jefferson County. Porter, White & Co. in Birmingham is
the county's financial adviser. A bankruptcy by Jefferson County
stands to be the largest municipal bankruptcy in U.S. history. It
could beat the record of $1.7 billion, set by Orange County,
California in 1994.
As reported by the TCR on July 24, 2009, Moody's Investors Service
has affirmed the Caa3 rating and negative outlook on Jefferson
County's (Alabama) outstanding $3.2 billion sewer revenue bonds.
Moody's underlying Caa3 rating reflects the likelihood of eventual
repayment by the county of principal, irrespective of outside
enhancement through bond insurance. It does not reflect the
claims paying ability of Syncora, which is rated Ca and failed to
fulfill its obligation to make a July 1 Bank Bond principal
payment.
JIMMY STEPHENSON: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Joint Debtors: Jimmy W. Stephenson
Catherine Vanette Stephenson
123 Old Campbell Rd
Seguin, TX 78155
Bankruptcy Case No.: 09-53402
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Western District of Texas (San Antonio)
Debtors' Counsel: William B. Kingman, Esq.
4040 Broadway, Suite 450
San Antonio, TX 78209
Tel: (210) 829-1199
Email: bkingman@kingmanlaw.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/txwb09-53402
The petition was signed by the Joint Debtors.
JL FRENCH: Court Confirms Plan of Reorganization
------------------------------------------------
The Bankruptcy Court has approved the proposed plan of
reorganization of J.L. French Automotive Castings Inc., according
to Michael Bathon at Bloomberg News.
The Plan contemplates a restructuring that reduces debt by more
than $240 million.
The Debtors owe the first lien lenders roughly $154 million under
various term loans and roughly $50 million in revolving loans.
Roughly $60 million is owed to Second Lien Lenders, secured by
substantially the same collateral junior to the first lien
lenders.
Under the Plan, first lien lenders will receive a secured note and
95% of the new stock. Second lien lenders will receive 5% of the
stock plus warrants to purchase additional stock. Unsecured
creditors will receive cash, and equity holders will receive
nothing.
First lien lenders will recover 56%, second lien lenders 10%,
while unsecured creditors get 7.4% of their allowed claims:
Allowed Percentage
Class Description Treatment Amount Recovery
----- ----------- --------- --------- ----
1 Other Priority Claims Unimpaired $2,953,435 100%
2 Other Secured Claims Impaired $3,332,329 100%
3 First Lien Claims Impaired $210,179,534 56%
4 Second Lien Claims Impaired $64,052,559 10%
5 General Unsecured Claims Impaired $1,623,153 7.4%
6 Preferred Equity Interests Impaired 0%
7 Common Equity Interests Impaired 0%
The lenders who provided debtor-in-possession financing will
receive payment in full in cash from the proceeds of the exit
financing or may participate in the exit financing.
A full-text copy of the disclosure statement for the Debtors'
first amended plan of reorganization is available for free at:
http://bankrupt.com/misc/jlfrench.ds.pdf
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.
JO-ANN STORES: Moody's Upgrades Corporate Family Rating to 'B1'
---------------------------------------------------------------
Moody's Investors Service upgraded Jo-Ann Stores, Inc.'s
Probability of Default Rating and Corporate Family Rating to B1
from B2. It also upgraded its rating on the company's senior
subordinated notes to B2 from B3. The outlook is stable.
The upgrade reflects the material improvement in Jo-Ann's
financial profile and operating performance despite a constraining
economic environment. The company's store remodel program, an
improved merchandizing mix and some likely market share gains, due
partly to Wal-Mart's partial exit from the fabric sector, have
resulted in same-store sales growth and profitability improvement
exceeding expectations. While the seasonal categories will remain
volatile in the near term, Moody's expect the company to continue
to generate healthy free cash flow on an annual basis and build-up
cash on the balance sheet, which already exceeds the amount of
funded debt.
The rating outlook is stable, considering that Jo-Ann's operating
strategies will continue to support sales and margins while the
company's financial policy is expected to remain disciplined and
commensurate with the rating.
These ratings were upgraded and LGD assessment adjusted:
-- Corporate Family Rating to B1 from B2
-- Probability of Default rating to B1 from B2
-- $50.5 million senior subordinated notes to B2 (LGD 5, 73%)
from B3 (LGD 5, 75%)
The last rating action for Jo-Ann was on December 9, 2008, when
Moody's upgraded the company's corporate family rating to B2 from
B3.
Jo-Ann Stores, Inc., headquartered in Hudson, Ohio, is one of the
nation's largest fabric and craft specialty retailers. The
company operates 758 retail locations in 47 states. Revenue for
the last twelve months ending August 1, 2009, was approximately
$1.9 billion.
KB TOYS: Can Sell IP Assets to CE Stories for $2.1 Million
----------------------------------------------------------
The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware approved an asset purchase agreement between
CE Stores LLC and KB Toys Inc., according to Law360. Pursuant to
the APA, the Debtor can sell certain intellectual property,
including trademarks and Web domain names, to CE Stores for
$2.1 million.
Headquartered in Pittsfield, Massachusetts, KB Toys, Inc. --
http://www.kbtoys.com/-- operates a chain of retail toy stores.
On Jan. 14, 2004, the Debtor and 69 of its affiliates filed for
protection under Chapter 11 of the Bankruptcy Code, which were
administratively consolidated under Case No. 04-10120. Two of the
200 bankruptcy cases remain open, KB Toys Inc. and KB Toy of
Massachusetts Inc. In connection with the emergence of KB Toys
from bankruptcy in August 2005, and the subsequent organizational
restructuring, the assets and operations of many of these prior
debtors were transferred among then existing debtor entities and
consolidated with KB Toys Group. Furthermore, most of the
entities involved were either dissolved or were merged into
surviving entities, and several of them changed their names.
The company, together with eight of its affiliates, again filed
for Chapter 11 on December 11, 2008 (Bankr. D. Del. Lead Case No.
08-13269). Joel A. Waite, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor LLP, represent the Debtors in
their restructuring efforts. The Debtors proposed Wilmer Cutler
Pickering Hale and Dorr LLP as their co-counsel, FTI Consulting
Inc. as financial and restructuring advisor, and Epiq Bankruptcy
Solutions LLC as claims and noticing agent.
According to Bloomberg, KB listed assets of $241 million against
debt totaling $362 million in its Chapter 11 petition filed
on December 11. The debts include $143 million in unsecured
claims; and $200 million in secured claims, including
$95.1 million owed to first-lien creditors where General Electric
Capital Corp. serves as agent; and $95 million owed to second-lien
creditors.
As reported by the Troubled Company Reporter on December 22, 2008,
the Hon. Kevin Carey of the U.S. Bankruptcy Court for the District
of Delaware allowed KB Toys Inc. to start going-out-of-business
sales.
KIRKLAND DUDLEY: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Joint Debtors: Kirkland Dudley
Tedra Dudley
6199 Preston Road
Dallas, TX 75240
Bankruptcy Case No.: 09-35839
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Debtors' Counsel: Eric A. Liepins, Esq.
12770 Coit Rd., Suite 1100
Dallas, TX 75251
Tel: (972) 991-5591
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtors did not file a list of their 20 largest unsecured
creditors when they filed their petition.
The petition was signed by the Joint Debtors.
KEARNEY CONSTRUCTION: Can Continue Paying 155 Employees, Suppliers
------------------------------------------------------------------
Janet Leiser at Tampa Bay Business Journal report that the Hon.
Caryl Delano of the U.S. Bankruptcy Court for the Middle District
of Florida has allowed Kearney Construction Co. LLC to continue
paying its 155 employees, as well as subcontractors and suppliers.
James Thorner at St. Petersburg Times notes that Judge Delano
allowed Kearney to continue operations though it was clear profits
from projects wouldn't be sufficient to pay off debts that
exceeded $30 million.
St. Petersburg relates that Kearney vowed to complete a dozen
ongoing projects -- including a pressing deadline to finish a
taxiway at Tampa International Airport -- after it filed for
bankruptcy.
St. Petersburg states that Harley Riedel, Kearney's lawyer, said
that the Company would have to devise an "exit strategy" that
could include a sale of assets.
Citing lawyers, Business Journal relates that Kearney's $4.6
million line-of-credit with Bank of America matured a few weeks
ago and the Company defaulted in April 2009 on the $17 million
mortgage on its newer Riverview headquarters. Mr. Kearney blamed
the financial woes of his 53-year-old company on the lack of
liquidity available to businesses, according to Business Journal.
Judge Delano, says Business Journal, consolidated the Chapter 11
bankruptcy cases of Kearney and its affiliated businesses,
including Florida Trucking Co., AVT Equipment LLC, and Florida
Equipment Co.
Florida-based Kearney Construction Co. LLC is among the oldest and
largest site developers in the Tampa Bay area. It was founded in
1956. It has done site development on many largest commercial
projects in the region, including International Plaza at Bay
Street and Citrus Park Mall.
The Company filed for Chapter 11 bankruptcy protection on
August 26, 2009 (Bank. M.D. Fla. Case No. 09-18848). Kearney
Construction Company, Inc.; AVT Equipment, LLC; Florida Equipment
Co., LLC; Florida Equipment Co., LLC; and Florida Trucking
Company, Inc., also filed for bankruptcy. Stephen R. Leslie,
Esq., at Stichter, Riedel, Blain & Prosser assists in Kearney
Construction's restructuring efforts. The Company listed
$10,000,001 to $50,000,000 in assets and $10,000,001 to
$50,000,000 in liabilities.
KOOSHAREM CORPORATION: Moody's Cuts Corp. Family Rating to 'B3'
---------------------------------------------------------------
Moody's Investors Service downgraded Koosharem Corporation's (dba
Select Staffing) corporate family rating to B3 from B2, the rating
on its first lien senior secured credit facilities to B2 from B1,
and the rating on its second lien term loan to Caa2 from Caa1.
The ratings outlook remains negative.
The downgrades reflect ongoing challenging conditions in the
temporary staffing industry that have resulted in a significant
contraction in Select's organic sales and contributed to weaker
than expected operating performance relative to Moody's
expectations since the last rating action in January 2009. Given
weaker than expected operating performance and higher debt levels
following the recent acquisitions of East West Staffing and
Westaff, Inc., Moody's is concerned over the company's ability to
comply with the financial covenants governing the senior secured
credit facilities, particularly for the December 2009 quarter when
there is a step-down to the leverage ratio. Notwithstanding these
risks, Moody's recognizes the company's recent cost reduction
initiatives, its ability to add new clients despite a weak
economy, and the largely successful integration of prior
acquisitions that has mitigated the impact of organic sales
declines.
These ratings were downgraded:
* Corporate Family Rating to B3 from B2;
* Probability-of-Default Rating to B3 from B2;
* $50 million senior secured first lien revolving credit facility
due 2014 to B2 (LGD3, 37%) from B1 (LGD3, 38%);
* $390 million senior secured first lien term loan B due 2014 to
B2 (LGD3, 37%) from B1 (LGD3, 38%);
* $100 million senior secured second lien term loan due 2014 to
Caa2 (LGD5, 88%) from Caa1 (LGD5, 89%).
The negative ratings outlook reflects Moody's concern that a weak
economy will continue to pressure the company's sales,
particularly as many of its corporate customers reduce the level
of temporary staffing as well as concerns over continued covenant
compliance.
The last rating action was on January 26, 2009 when Moody's
confirmed Koosharem's B2 corporate family rating, the B1 rating on
its first lien senior secured credit facilities, and the Caa1
rating on its second lien term loan. The ratings outlook was
negative.
Koosharem Corporation, headquartered in Santa Barbara, California,
is a privately-held staffing services business with a network of
more than 420 offices in over 40 states including a network of
approximately 160 franchises. The company offers temporary, temp-
to-hire, and direct placement positions and derives most of its
revenues from the placement of light industrial and clerical
staff.
KWB REAL ESTATE: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: KWB Real Estate Group, L.P.
PO Box 141
73 Main Street, Suite 1
Brattleboro, VT 05301
Bankruptcy Case No.: 09-11032
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
District of Vermont (Rutland)
Debtor's Counsel: Jennifer Emens-Butler, Esq.
PO Box 60
Bethel, VT 05032-0060
Tel: (802) 234-6244
Fax: (802) 234-6245
Email: jeb1@sover.net
Raymond J. Obuchowski, Esq.
PO Box 60
Bethel, VT 05032-0060
Tel: (802) 234-6244
Fax: (802) 234-6245
Email: obi@sover.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Todd M. Enright.
LAS VEGAS SANDS: Secures $600MM Pre-IPO Financing
-------------------------------------------------
Las Vegas Sands Corp. has secured commitments for up to
$600 million of capital through the sale of exchangeable bonds.
The bonds will be mandatorily exchangeable into common stock of
one of its subsidiaries pending its successful initial public
offering on the Hong Kong Stock Exchange.
One of Las Vegas Sands Corp.'s wholly-owned subsidiaries, Venetian
Venture Development Intermediate II (the Issuer), entered into a
placing agreement with Goldman Sachs (Asia) L.L.C. on September 1,
2009, in connection with the proposed issuance of up to
$600,000,000 in aggregate principal amount of Exchangeable Bonds
due 2014 of the Issuer.
The Bonds will mature on September 4, 2014. Under the Terms and
Conditions of the Bonds, the Bonds are mandatorily exchangeable
into common shares of a subsidiary of the Company (Listco) which
has recently filed an application for listing on the Main Board of
The Stock Exchange of Hong Kong Limited concurrently on the date
of the Listing, at an exchange price equal to 90% of the per Share
offering price pursuant to the Listing.
The Bonds will bear interest from and including the date of
issuance, which is expected to be September 4, 2009, at the
following interest rates:
(i) for the period from (and including) September 4, 2009, to
(but excluding) September 4, 2010, 9% per annum;
(ii) for the period from (and including) September 4, 2010, to
(but excluding) September 4, 2011, 12% per annum; and
(iii) for the period from (and including) September 4, 2011, to
(but excluding) September 4, 2014, 15% per annum.
More details on the financing is available at:
http://sec.gov/Archives/edgar/data/1300514/000095014209001289/form
8k_090109.htm
"The completion of this financing, which we expect to occur in a
matter of days, will enhance our current liquidity position and
further our efforts toward reaching long-term financial
stability," said Sheldon G. Adelson, Las Vegas Sands chairperson
and CEO.
Las Vegas Sands President Michael Leven said this pre-IPO
financing is another component of the Company's current efforts to
strengthen its financial position. He cited the recent completion
of an amendment to its $3.3 billion Macau credit facility and the
subsequent submission of an application by a subsidiary of the
company to be listed on the Hong Kong Stock Exchange as the other
recently completed components of the plan.
Based in Las Vegas, Nevada, Las Vegas Sands Corp. (NYSE: LVS) --
http://www.lasvegassands.com/-- owns and operates The Venetian
Resort Hotel Casino, The Palazzo Resort Hotel Casino, and an expo
and convention center. The company also owns and operates the
Sands Macao, the first Las Vegas-style casino in Macao, China.
As reported by the TCR on Aug. 4, 2009, Moody's Investors Service
has placed Las Vegas Sands, Corp.'s ratings, including its B3
Corporate Family Rating, on review for possible downgrade. The
review for possible downgrade reflects LVSC's weak fiscal 2009
second quarter operating results and Moody's heightened concern
regarding the company's ability to maintain an adequate liquidity
profile, reduce leverage, and remain in compliance with its
financial covenants.
LEADING EDGE PORK: Case Summary & 14 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Leading Edge Pork, LLC, an Illinois LLC
PO Box 367
Dunlap, IL 61525
Bankruptcy Case No.: 09-82789
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Central District of Illinois (Peoria)
Judge: Thomas L. Perkins
Debtor's Counsel: Barry M. Barash, Esq.
256 S. Soangetaha Rd., Suite 108
Galesburg, IL 61401
Tel: (309) 341-6010
Email: barashb@barashlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$2,487,908, and total debts of $7,625,860.
A full-text copy of the Debtor's petition, including a list of its
14 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/ilcb09-82789
The petition was signed by Wayne Peugh, member of the Company.
LEAR CORP: Court Approves Key Management Incentive Plan
-------------------------------------------------------
On August 10, 2009, Lear Corporation and certain of its United
States and Canadian subsidiaries filed a motion with the United
States Bankruptcy Court for the Southern District of New York to
approve a key management incentive plan. The KMIP is structured
to incentivize certain employees to, among other things,
consummate the proposed joint plan of reorganization under Chapter
11 of the United States Bankruptcy Code filed with the Court on
August 14, 2009. The Court approved the KMIP on August 28, 2009.
The KMIP provides for incentives for certain senior executives,
including Robert E. Rossiter -- Chairman, Chief Executive Officer
and President, Matthew J. Simoncini -- Senior Vice President and
Chief Financial Officer, Raymond E. Scott -- Senior Vice President
and President, Global Electrical and Electronic Systems, and Louis
R. Salvatore -- Senior Vice President and President, Global
Seating Systems. Awards under the KMIP may be earned based on
achievement of (a) certain Chapter 11 milestones within an
established timeframe (75% of total award opportunity) and (b)
certain financial performance targets (25% of total award
opportunity).
Payment of any earned Milestone Awards and Financial Performance
Awards will occur upon the effective date of a qualified plan of
reorganization; provided, that the payment of any such amounts to
Mr. Rossiter will occur 50% upon the Effective Date and 50% one
year after the Effective Date. The total target opportunities for
such senior executives under the KMIP, as a percentage of base
salary, are as follows: Mr. Rossiter -- 500%; Mr. Simoncini --
270%; Mr. Scott -- 270%; and Mr. Salvatore -- 270%.
Under the Milestone Awards, 15% of the award opportunity is earned
if an order confirming the Plan is obtained within 270 days of the
filing of the Chapter 11 petitions (April 3, 2010), and 60% of the
award opportunity is earned if the Effective Date occurs within
300 days of the filing of the Chapter 11 petitions (May 3, 2010).
If the Plan as filed with the Court on August 14, 2009 is modified
in a manner that so materially affects the equities that any
Milestone Awards based upon the modified Plan would be
unreasonable or inappropriate, any such party may move to rescind
the Milestone Awards.
Under the Financial Performance Awards, up to 25% of the total
award opportunity is earned upon achievement of quarterly adjusted
operating earnings targets (6.25% per quarter) beginning with the
3rd quarter of 2009 and prorated for any quarter in which the
Effective Date occurs. Financial Performance Awards may not be
earned for any period after the Effective Date. Payouts based on
the adjusted operating earnings targets can range from 50% of the
target up to 140% of the target for the particular quarter based
on actual result
About Lear Corp
Lear Corporation -- http://www.lear.com/-- is one of the world's
leading suppliers of automotive seating systems, electrical
distribution systems and electronic products. The Company's
products are designed, engineered and manufactured by a diverse
team of 80,000 employees at 210 facilities in 36 countries.
Lear's headquarters are in Southfield, Michigan, and Lear is
traded on the New York Stock Exchange under the symbol [LEA].
Outside the United States, Lear has subsidiaries in Germany,
Luxembourg, Sweden, Singapore, China, India and Mexico, among
others.
Lear Corporation and its affiliates filed for Chapter 11 on July
7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Affiliates part of
the Chapter 11 filing include Lear South Africa Limited, Lear
Corporation (Germany) Ltd., Lear Corporation Canada Ltd., Lear
Mexican Holdings Corporation, and Lear South American Holdings
Corporation.
Attorneys at Kirkland & Ellis LLP, serve as the Debtors'
bankruptcy counsel. McCarthy Tetrault LLP has been engaged as
CCAA counsel. Bodman LLP has been hired as special Michigan
counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also
been tapped as special counsel. Alvarez & Marsal North America
LLC, is the Debtors' restructuring advisors. Ernst & Young LLP is
the Debtors' auditors and tax advisors. Kurtzman Carson
Consultants LLC is the Debtors' claims and notice agent. Simpson
Thacher & Bartlett LLP represents JP Morgan, as admin. agent for
senior secured lenders and DIP lenders.
As of May 30, 2009, Lear has assets of $1,270,800,000 against
debts of $4,536,000,000.
Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Chicago Educ. Board Sues to Stop Swap Assumption
-----------------------------------------------------------------
The Board of Education of the City of Chicago filed an adversary
proceeding against Lehman Brothers Special Financing Inc. to
prevent LBSF from assuming and assigning their swap agreement.
In a 15-page complaint filed in the U.S. Bankruptcy Court for the
Southern District of New York, the Board asserted that LBSF
cannot assume or assign the swap agreement because of its
"material prepetition defaults" under the deal.
LBSF allegedly defaulted under the swap agreement following the
bankruptcy filing of its parent company, Lehman Brothers Holdings
Inc., which serves as the credit support provider.
"As a credit support provider under the swap agreement, the
financial condition of [LBHI] is a material and essential part of
the swap agreement. Without LBSF's inducement to the School
Board of [LBHI's] credit support, the School Board would not have
entered into the Swap Agreement," Jeff Friedman, Esq., at Katten
Muchin Rosenman LLP, in New York, said in the complaint.
The Board seeks a court ruling declaring that LBSF cannot assume
or assign the swap agreement and that the Board has no obligation
to make any payments including the $1.2 million demanded by LBSF
under the agreement.
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 NY Court Nod to Represent U.K. Estates
------------------------------------------------------------
In light of this development, Lehman Brothers Holdings Inc. and
its affiliated debtors other than Lehman Brothers Special Funding
Inc., obtained authority from the U.S. Bankruptcy Court to act as
the foreign representatives of their estates in the U.K., seek
recognition of their Chapter 11 cases on behalf of their estates,
and ask that the High Court lend assistance to the U.S. Bankruptcy
Court in protecting their estates.
Following the bankruptcy filing of Lehman Brothers Holdings Inc.
and its affiliated debtors under Chapter 11 of the U.S.
Bankruptcy Code, some of their foreign units commenced
insolvency, administration or similar proceedings.
Given the global nature of their businesses, many of the assets
and activities of these foreign units and LBHI are deeply
integrated with each other and spread across different
jurisdictions. The Lehman units recognized that the efficient
administration of each of their cases is through their
cooperation on matters that are common to their cases.
Following negotiations, LBHI and its units executed the Cross-
Border Insolvency Protocol to coordinate their proceedings. The
protocol was approved on June 17, 2009, by the U.S. Bankruptcy
Court for the Southern District of New York.
On July 7, 2009, Lehman Brothers Special Financing Inc., one of
the U.S.-based debtors, sought authorization from the U.S.
Bankruptcy Court to act as the foreign representative of its
estate in the United Kingdom to defend itself in that country
against a series of potential litigations. At that time, LBHI
and the other debtors hesitated to follow suit because they were
not certain of their need to seek recognition in the High Court
of Justice Chancery Division, Royal Courts of Justice in London.
They anticipated that they would request approval only if the
assistance of a foreign court would be necessary.
On July 17, 2009, the signatories to the insolvency protocol
convened their first meeting in London, where they discussed how
they might arrive at a settlement of inter-company claims through
a streamlined, multilaterally consistent, and transparent process
that reduces administrative expenses and avoids years of
potential litigation in various jurisdictions. To arrive at a
consensual resolution of intercompany claims, the Protocol
Signatories have set forth an aggressive timeline of milestones
that will lead to a second meeting in mid-October.
In furtherance of their effort to arrive at a settlement of
inter-company claims and to assist each other in some aspects of
their proceedings in which they share mutual interests, some of
the Lehman units indicated that they may need the assistance of
the U.K. High Court as foreign debtors subject to foreign main
proceedings pursuant to the Cross-Border Insolvency Regulations
2006, which enacts into English law the United Nations Commission
on International Trade Law (UNCITRAL) Model Law on Cross-Border
Insolvency.
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 Debt Repayment Dead With ELQ
------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliated debtors ask the
Court to approve a debt repayment agreement with a Netherlands-
based unit, ELQ Hypotheken N.V.
The deal was hammered out to continue the operations of ELQ and
its two subsidiaries, Quion 50 B.V. and ELQ Portefeuille 1 B.V.,
through a controlled liquidation of their mortgage loans and
repayment of debt to LBHI and their two other primary lenders,
Lehman Brothers Ltd. and Storm Funding Ltd.
The ELQ Entities owe EUR40,000,000 to LBHI; EUR1,021,578 to LBL;
and EUR69,231,250 to Storm Funding.
LBHI's attorney, Richard Krasnow, Esq., at Weil Gotshal & Manges
LLP, in New York, says a controlled liquidation of ELQ's mortgage
loans would yield a higher return for its creditors than a "fire-
sale" liquidation. "On a going concern basis, and assuming their
debts are restructured and paid, ELQ and its subsidiaries are
still viable businesses," Mr. Krasnow also says.
The Debt Repayment Agreement is set out in a "run-off" agreement,
conditional share transfer agreement, and four standstill
agreements, which the companies will enter into with LBHI, LBL
and Storm Funding.
The Run-Off Agreement authorizes ELQ's management to collect all
receivables from the mortgage loans while the Conditional Share
Transfer Agreement requires the management to purchase the share
capital of ELQ from its shareholders, Mable Commercial Funding
Ltd., Lehman Brothers Holdings Plc, and ELQ Holdings B.V., upon
satisfaction of certain conditions.
Meanwhile, the Standstill Agreements, which are substantially
similar in content, allow ELQ and its units to maintain their
existing borrowings under their loan agreements with LBHI, Storm
Funding and LBL. The Standstill Agreements also prohibit the
three lenders from commencing insolvency proceedings or taking
any other actions against ELQ and its units.
A full-text copy of each of the agreements is available without
charge at:
http://bankrupt.com/misc/LehmanRunOffAgreement.pdf
http://bankrupt.com/misc/LehmanTransferAgreement.pdf
http://bankrupt.com/misc/LehmanStandstillAgreements.pdf
The Court will convene a hearing on September 15, 2009, to
consider approval of the Debt Payment Agreement. Creditors and
other concerned parties have until September 10, 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: Shinsei Bank Balks at Stay, Contempt Request
-------------------------------------------------------------
Shinsei Bank Limited asks the U.S. Bankruptcy Court for the
Southern District of New York to deny Lehman Brothers Holdings
Inc.'s request to hold the bank in contempt for alleged violation
of the automatic stay.
LBHI and its affiliated debtors previously sought a bankruptcy
court ruling to hold Shinsei Bank in contempt after the bank
proposed an alternative plan of liquidation in the insolvency
proceeding of LBHI's Japanese unit, Sunrise Finance Co. Ltd.,
that would cause LBHI to lose $500 million of its claim against
Sunrise.
J. Ronald Trost, Esq., at Vinson & Elkins LLP, in New York,
describes LBHI's move as an "outrageous attempt to have this
[bankruptcy] court assert control over the insolvency proceeding
for Sunrise," which is an independent proceeding.
"Shinsei's actions do not violate the automatic stay because they
merely seek to determine the priority of the Lehman-affiliate
claims under Japanese insolvency law in the very forum where
[LBHI] and its affiliates assert them," Mr. Trost asserts in
court papers.
"The automatic stay is not a tool for Lehman to wrest
administration of a Japanese insolvency proceeding from the
Japanese courts by preventing the participation of parties who
take positions in that proceeding contrary to [LBHI's]
interests," Mr. Trost further asserts. "Otherwise, [LBHI] and
its affiliates would be free to press for equal treatment of
their $2.4 billion inter-company claims while Shinsei, and we
presume all other creditors, would be enjoined from appearing in
opposition."
The Debtors' move also drew flak from AB Svensk Exportkredit, PB
Capital Corporation, Banco Bilbao Vizcaya Argentaria S.A.,
Barclays Bank PLC, Barclays Capital Inc., and the administrators
of U.K.-based Lehman units. The Objecting Parties complained
that the motion, if granted, would prohibit creditors from
enforcing their rights in foreign insolvency proceedings while
the Debtors and their affiliates would not be subject to same
restriction. The Objecting Parties argued that filing a claim in
a foreign insolvency proceeding cannot be considered a violation
of the bankruptcy protection.
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: Taps Hudson Global as Contract Attys. Provider
---------------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliated sought and
obtained the Court's authority to employ Hudson Global Resources
Management Inc. as provider of contract attorneys effective as of
January 27, 2009.
The Debtors hired the firm to provide them with lawyers who would
review documents and assist in the production of those documents
in connection with the investigation being conducted by Anton
Valukas, the examiner appointed by the bankruptcy court in the
Debtors' cases.
Since 2006, Hudson has periodically provided the Debtors with
attorneys and other legal professionals on a temporary basis.
The attorneys worked under the supervision of LBHI's in-house and
outside counsel.
Hudson will be paid for its services at an hourly rate subject to
any agreed upon discounts. The rates are likely to be in the
range of $60 per hour for the contract attorneys, according to
the Debtors' lawyer, Richard Krasnow, Esq., at Weil Gotshal &
Manges LLP, in New York. The firm will also be reimbursed of its
expenses, he adds.
In connection with Hudson's employment, the Debtors also obtained
a court ruling exempting them from filing interim fee application
and authorizing them to pay the firm without further court order.
Each contract attorney, however, is required to execute an
affidavit and disclosure statement, certifying that he does not
represent or hold interest adverse to the Debtors and their
estates.
LEHMANN BROS FARMS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Lehmann Bros. Farms, LLC
2928 N. 2900 E. Rd.
Strawn, IL 61775
Bankruptcy Case No.: 09-91865
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Central District of Illinois (Danville)
Judge: Gerald D. Fines
Debtor's Counsel: Barry M. Barash, Esq.
256 S. Soangetaha Rd., Suite 108
Galesburg, IL 61401
Tel: (309) 341-6010
Email: barashb@barashlaw.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/ilcb09-91865
The petition was signed by Arthur W. Lehmann, member of the
Company.
LENNY DYKSTRA: Creditors Want Assets Liquidated to Pay Claims
-------------------------------------------------------------
Mortgage lender Index Investors LLC has asked the Bankruptcy Court
to allow creditors to liquidate assets of Former Major League
Baseball All-Star Lenny Dykstra. Bruce Speiser, a lawyer for
Index Investors, said Judge Geraldine Mund said this week she will
appoint a trustee who will assess the prospects for a
reorganization.
Mr. Dykstra took goods from his home including a $40,000 French
stove two weeks before the appointment of a trustee to oversee his
finances, Index Investors, a creditor in the case, said in filings
with the Bankruptcy Court. A person in bankruptcy is not allowed
to dispose of assets absent approval from the Bankruptcy Court.
Westlake Village, California-based Lenny Dykstra is a former Major
League Baseball All-Star. He was center fielder for the New York
Mets and Philadelphia Phillies. He filed for Chapter 11
bankruptcy protection on July 7, 2009 (Bankr. C.D. Calif. Case No.
09-18409). M Jonathan Hayes, Esq., at the Law Office of M
Jonathan Hayes, in Northridge, California, assists the Debtor in
his restructuring efforts. The Debtor listed up to $50,000 in
assets and $10,000,001 to $50,000,000 in debts.
LMB PROPERTIES: Case Summary & Largest Unsecured Creditor
---------------------------------------------------------
Debtor: LMB Properties, LLC
1935 Berra Court
Saint Louis, MO 63110
Bankruptcy Case No.: 09-12803
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Eastern District of Louisiana (New Orleans)
Debtor's Counsel: J. David Andress, Esq.
Grand Law Firm
10537 Kentshire Court, Suite A
Baton Rouge, LA 70810
Tel: (225) 769-1414
Fax: (225) 769-2300
Email: bankruptcy@grandtitle.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $100,001 to $500,000
According to the schedules, the Company has assets of at least
$1,600,100 and total debts of $466,620.
The Debtor identified Plaquemines Parish Sheriff/Tax Collector
with property taxes debt claim for $2,000 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/laeb09-12803
The petition was signed by Louis M. Badalamenti, manager of the
Company.
LORAL SPACE: Debtors Not Jointly & Severally Liable on All Debts
----------------------------------------------------------------
WestLaw reports that under California law, pursuant to a
prepetition apportionment agreement executed by the creditor and
the Chapter 11 debtors, one debtor-subsidiary alone was liable for
the creditor's claims, not all of the debtors jointly and
severally, a federal district court in New York has concluded,
affirming a bankruptcy court's decision. Although the agreement
defined "Loral" to refer collectively to all of the debtors, some
provisions made use of the term when they clearly pertained to an
obligation of an individual "Loral" entity. The debtor-
subsidiary's predecessor was the only "Loral" entity that was a
party to an earlier letter agreement which was referenced
throughout the apportionment agreement and which gave rise to the
creditor's claims. The predecessor also was the only "Loral"
entity that, through the debtor-subsidiary, received the funds
from a third party which were claimed by the creditor under the
apportionment agreement. The creditor's proffered extrinsic
evidence was, at best, inconclusive as to the parties' intent
concerning the meaning of "Loral" in the subject paragraph.
Finally, the court found, California's statutory presumption of
joint and several liability did not apply here. In re Loral Space
& Communications Ltd., --- F.Supp.2d ----, 2009 WL 2244429
(S.D.N.Y.) (Rakoff, J.).
Loral Space & Communications -- http://www.loral.com/-- is a
satellite communications company. It owns and operates a fleet of
telecommunications satellites used to broadcast video
entertainment programming, distribute broadband data, and provide
access to Internet services and other value-added communications
services. Loral also is a world-class leader in the design and
manufacture of satellites and satellite systems for commercial and
government applications including direct-to-home television,
broadband communications, wireless telephony, weather monitoring
and air traffic management.
The Company and various affiliates filed for Chapter 11 protection
(Bankr. S.D.N.Y. Case No. 03-41710) on July 15, 2003. Stephen
Karotkin, Esq., and Lori R. Fife, Esq., at Weil, Gotshal & Manges
LLP, represented the Debtors in their successful restructuring and
prosecution of their Fourth Amended Joint Plan of Reorganization
to confirmation on Aug. 1, 2005. As of Dec. 31, 2004, the Company
listed assets totaling approximately $1.2 billion and liabilities
totaling approximately $2.3 billion.
LUIS STAHL: Case Summary & 14 Largest Unsecured Creditors
---------------------------------------------------------
Joint Debtors: Luis Carlos Stahl
Carol Rossetta Stahl
34547 Borchard Road
Lake Elsinore, CA 92530
Bankruptcy Case No.: 09-30494
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Central District of California (Riverside)
Judge: Richard M. Neiter
Debtors' Counsel: Stuart J. Wald, Esq.
36154 Coffee Tree Pl
Murrieta, CA 92562
Tel: (310) 429-3354
Email: stuart.wald@gmail.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtors' petition, including a list of
their 14 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/cacb09-30494
The petition was signed by the Joint Debtors.
MCKINNEY SHORES HOTEL: Case Summary & 15 Largest Unsec. Creditors
-----------------------------------------------------------------
Debtor: McKinney Shores Hotel Partners, Inc.
1904 Gateway Boulevard
McKinney, TX 75069
Bankruptcy Case No.: 09-42778
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Eastern District of Texas (Sherman)
Debtor's Counsel: Joe E. Marshall, Esq.
4000 Fountain Place
1445 Ross Avenue
Dallas, TX 75202
Tel: (214) 855-7561
Email: jmarshall@munsch.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 15 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/txeb09-42778
The petition was signed by Gary M. Safady, president of the
Company.
MGC INVESTMENTS: Case Summary & 11 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: MGC Investments, LLC
1216 Baytree Road
Valdosta, GA 31602
Bankruptcy Case No.: 09-71380
Chapter 11 Petition Date: August 31, 2009
Court: United States Bankruptcy Court
Middle District of Georgia (Valdosta)
Judge: John T. Laney III
Debtor's Counsel: Thomas D. Lovett, Esq.
Kelley, Lovett, & Blakey, P.C.
P.O. Box 1164
2912-B North Oak Street
Valdosta, GA 31603-1164
Tel: (229) 242-8838
Email: rbush@kelleylovett.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
A full-text copy of the Debtor's petition, including a list of its
11 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/gamb09-71380
The petition was signed by Barbara Barker, manager of the Company.
MIG INC: Creditors' Trustee Motion Set for Nov. 5 Trial
-------------------------------------------------------
The Bankruptcy Court will convene a hearing to consider the
official committee of unsecured creditors' request for a Chapter
11 trustee to take over MIG Inc.'s cases. Under a schedule set up
by the Court, the examination of expert and other witnesses will
be finished by the end of October.
The Creditors Committee has also requested the Bankruptcy Court to
terminate the Debtor's exclusivity to file a plan due to the
"gross mismanagement" of the Debtor's operations.
In its motion for a Chapter 11 trustee or the dismissal of the
bankruptcy cases, the creditors Committee asserts that the
Debtor's Chapter 11 case is being used "for the naked purpose" of
obtaining a stay of a US$188 million judgment from the Delaware
Chancery Court resulting from an appraisal action following MIG's
acquisition in 2007. The Committee also contended that MIG had
US$40 million transferred to the account of a non-bankrupt
subsidiary in advance of the Chapter 11 filing.
The Committee said that the same facts that support a finding of
cause to dismiss the Debtor's case also support a finding of cause
to terminate the Debtor's exclusive period to file a plan. The
Committee added that MIG has "grossly mismanaged its operations by
pursuing expensive and knowingly futile litigation without
appropriately setting aside assets to pay the judgment which MIG
knew or should have known was inevitable."
As reported by the Troubled Company Reporter on July 3, Judge
Kevin Gross of the U.S. Bankruptcy Court for the District of
Delaware allowed MIG Inc. to continue an appeal of a decision in
bankruptcy court that issued a US$188.4 million judgment against
the Company.
MIG was bought in October 2007 by CaucusCom Ventures LP for
US$1.80 a share, or about US$170 million, according to data
compiled by Bloomberg. A group of preferred shareholders asked
Judge William B. Chandler of the Delaware Chancery Court to
evaluate the value of their shares at the time of the merger.
Judge Chandler ruled that each share was worth US$47.47, or a
total of about US$188.4 million. MIG appealed the ruling. But
unable to post a bond enabling an appeal, MIG filed for Chapter
11.
MIG asked the Bankruptcy Court to permit the appeal and to allow
the plaintiff to take a cross appeal, while preventing the
plaintiff from collecting a judgment. MIG believes the amount of
the judgment is "substantially overstated." MIG also believes
that the assets will turn out to be worth much more than the
judgment, even though the assets currently are illiquid.
About MIG Inc.
Based in Charlotte, North Carolina, MIG Inc. (PINK SHEETS: MTRM,
MTRMP) -- http://www.metromedia-group.com/-- through its wholly
owned subsidiaries, owns interests in several communications
businesses in the country of Georgia. The Company's core
businesses include Magticom Ltd., a mobile telephony operator
located in Tbilisi, Georgia, Telecom Georgia, a long distance
telephony operator, and Telenet, which provides Internet access,
data communications, voice telephony and international access
services.
MIG, Inc., fka Metromedia International Group, Inc., filed for
Chapter 11 bankruptcy protection on June 18, 2009 (Bankr. D. Del.
Case No. 09-12118). Scott D. Cousins, Esq., at Greenberg Traurig
LLP assists the Company in its restructuring efforts. Debevoise &
Plimpton LLP is the Company's special corporate counsel, while
Potter Anderson & Corroon LLP is the Company's special litigation
counsel. The official committee of unsecured creditors of MIG,
Inc., has retained Baker & McKenzie LLP as its bankruptcy
counsel, nunc pro tunc to June 30, 2009.
In its petition, the Company said it had US$100 million to
US$500 million in assets and US$100 million to US$500 million in
debts. In its formal schedules, the Company said it had assets of
US$54,820,681 against debts of US$210,183,657.
MITEL NETWORKS: Moody's Junks Corporate Family Rating From 'B3'
---------------------------------------------------------------
Moody's Investors Service downgraded Mitel Networks Corporation's
corporate family rating and probability of default rating to Caa1
from B3 while also revising the company's outlook to negative from
stable.
The primary influence behind the rating actions is Moody's
expectation that the prevailing business environment will cause
the recent sequence of year-over-year revenue declines to persist
and that earnings and cash flow generation will continue to be
pressured through the near to mid-term. The combination of
Mitel's history of poor free cash generation, very limited
earnings visibility as North American general economic activity
continues to be weak, and the company's recent write-down of the
carrying value of its acquired InterTel business, serve to
substantiate the view that Mitel may struggle to generate
meaningful free cash over the next six to eight quarters, and in
turn, that leverage and coverage metrics are likely to be quite
weak. In addition, this circumstance creates the potential for
financial covenant compliance issues in 2010 and 2011. And given
debt and preferred share maturities during 2012 to 2015, covenant
compliance issues would significantly complicate refinance
logistics and may force Mitel to access new capital and/or
partially restructure its debts via some form of exchange offering
in the event that credit market conditions do not provide an
ability to refinance debt and preferred share obligations
reasonable economic terms.
At this juncture, since the above sequence of events is far from
inevitable and there is still time for the company's performance
and/or the credit markets to improve so that they are avoided, the
CFR and PDR have been repositioned to Caa1. However, should
circumstances not improve there is the potential of additional
adverse rating actions. Given the uncertainties concerning
improvement in either or both of the company's performance and
credit market conditions, the ratings outlook is negative.
Issuer: Mitel Networks Corporation
Rating Actions:
-- Probability of Default Rating, Downgraded to Caa1 from B3
-- Corporate Family Rating, Downgraded to Caa1 from B3
-- Senior Secured First Lien Bank Credit Facility, Downgraded to
B3 (LGD3, 36%) from B2 (LGD3, 36%)
-- Senior Secured Second Lien Bank Credit Facility, Downgraded
to Caa3 (LGD5, 85%) from Caa2 (LGD5, 85%)
Outlook Actions:
-- Outlook, Changed To Negative From Stable
Moody's most recent rating action concerning Mitel was taken on 19
December 2008, at which time the company's B2 CFR was downgraded
to B3 while affirming the stable outlook following an evaluation
of its operating performance and financial results.
Based in Ottawa, Ontario, Mitel provides integrated internet
protocol based enterprise telephony solutions for small and medium
sized businesses.
MOORE-HANDLEY: Has Deal to Sell All Assets to Bostwick-Braun
------------------------------------------------------------
The Bostwick-Braun Company has signed an asset purchase agreement
to purchase substantially all of the assets of Moore-Handley,
Inc., and its wholly owned subsidiary, Hardware House, Inc.
The transaction remains subject to the approval of the U.S.
Bankruptcy Court for the Northern District of Alabama, which will
oversee an auction process that is designed to assure that the
assets of Moore-Handley and Hardware House are sold for the
highest and best price available.
Bostwick-Braun has stated that, if it is successful at the
auction, Moore-Handley and Hardware House will continue to go to
market under their current names, with their business being
operated out of the Pelham, Alabama facility.
"The company (Moore-Handley, Inc.) has great people and a very
loyal customer base, just like we do. Moore-Handley's product mix
is more building material/commodity oriented than ours, so
customers of both companies will benefit from a wider selection of
vendors and items. As we bring these two great organizations
together, taking the best from each to strengthen the other, we're
confident that we can truly make one plus one equal THREE!" ---
William R. Bollin, Chairman-CEO, The Bostwick-Braun Company
The Bostwick-Braun Company, headquartered in downtown Toledo,
Ohio, is a wholesale hardware distributor and industrial supplier.
Established in 1855, it is the city's second oldest business.
Bostwick-Braun has distribution centers located in Ashley,
Indiana, McKeesport, Pennsylvania and Avon, Ohio.
About Moore-Handley, Inc.
Moore-Handley, Inc. (Pink Sheets:MHCO) founded in 1882, is a
large, regional hardware and building materials distributor
headquartered in Pelham, Alabama. It is a full service
distributor that provides its customers with competitive programs
from over 1,000 major manufacturers including categories in
plumbing and electrical supplies, power and hand tools, paint and
paint sundries, lawn and garden equipment and building materials.
Moore-Handley also offers its customers a diverse range of
services such as marketing and advertising with support services
including computer generated systems for the control of inventory,
pricing and gross margin, store installation and design services.
Moore-Handley and Hardware House, Inc., its subsidiary, filed for
Chapter 11 on July 17, 2009 (Bankr. N. D. Ala. Case No. 09-04198).
Christopher L. Hawkins, Esq. and Jennifer Anne Harris, Esq., at
Bradley Arant Rose & White represent the Debtor in its
restructuring efforts. In its petition, the Debtor listed assets
and debts both ranging from $10,000,001 to $50,000,000.
MOORE-HANDLEY: Gets Interim OK to Access Cash Securing CIT Loan
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Alabama
authorized, on an interim basis, Moore-Handley, Inc., and Hardware
House, Inc., to:
-- use cash securing repayment of loan with CIT Group/Business
Credit, Inc.; and
-- grant adequate protection to CIT.
The Court has set a further hearing on the Debtors' continued use
of cash collateral on August 14, 2009, at 9:00 a.m.
The Debtors related that they have $18.83 million in secured
indebtedness:
* $11.15 million owed to CIT under a Amended and
Restated Revolving Note dated March 14, 2008, in the original
maximum principal amount of $35,000,000;
* $6.43 million owed to CIT under a Term Note dated March 14,
2008, in the original principal amount of $6,975,000; and
* $1.25 million owed to various equipment lenders who have sold
equipment to the Debtors for use at their distribution
facility, which indebtedness is secured by purchase money
security interests in the equipment.
The Debtors added that CIT claims a lien and security interest in
essentially all of the Debtors' personal property, including cash,
proceeds and other cash equivalents that constitute cash
collateral.
The Debtors need to use the cash collateral to operate their
businesses on a daily basis.
To secure the loan, the Debtors will grant CIT replacement liens
upon the Debtors' postpetition accounts, inventory and all
proceeds thereof.
The Debtors further related that CIT's interests are adequately
protected because CIT enjoys a substantial equity cushion in the
cash collateral. The value of the Debtors' trade receivables --
$12.62 million, and inventory -- $17.68 million, greatly exceeds
the outstanding balances owed on the Term Note with a principal
balance of $6.43 million and the Revolving Note with principal
balance of $11.15 million.
The Court ordered the Debtors that by 5:00 p.m., Central Time, on
each Tuesday, to provide CIT and the Bankruptcy Administrator cash
collateral reports consistent with the format of the budget
covering all activity for the prior week, and comparing actual
cash flow to those projected in the budget.
About Moore-Handley, Inc.
Pelham, Alabama-based Moore-Handley, Inc., operates a hardware and
building material distributing business. The Company and Hardware
House, Inc., its subsidiary, filed for Chapter 11 on July 17, 2009
(Bankr. N. D. Ala. Case No. 09-04198). Christopher L. Hawkins,
Esq. and Jennifer Anne Harris, Esq., at Bradley Arant Rose & White
represent the Debtor in its restructuring efforts. In its
petition, the Debtor listed assets and debts both ranging from
$10,000,001 to $50,000,000.
N & J ENTERPRISES: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: N & J Enterprises, LLC
PO Box 800221
Dallas, TX 75380
Bankruptcy Case No.: 09-35793
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Debtor's Counsel: Richard G. Grant, Esq.
Roberts & Grant, PC
7018 Primrose Lane
Colleyville, TX 76034
Tel: (214) 210-2929
Fax: (214) 224-0198
Email: rgrant@robertsandgrant.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 Natosha Deckard, managing member of the
Company.
NANURI CARE: Case Summary & 2 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Nanuri Care, Inc.
3411 W. Ball Road
Anaheim, CA 92804
Bankruptcy Case No.: 09-19305
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Central District of California (Santa Ana)
Judge: Theodor Albert
Debtor's Counsel: Joon M. Khang, Esq.
Khang & Khang LLP
1901 Avenue of the Stars 2nd FL
Los Angeles, CA 90067
Tel: (310) 461-1342
Fax: (310) 461-1343
Email: joon@khanglaw.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
2 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/cacb09-19305
The petition was signed by Soon Bok Choi, president of the
Company.
NATIONAL MENTOR: Moody's Upgrades Rating on Facility to 'Ba3'
-------------------------------------------------------------
Moody's Investors Service upgraded the rating of National Mentor
Holdings, Inc.'s credit facility to Ba3 (LGD2, 22%) from B1 (LGD2,
27%). Concurrently, all other ratings of the company were
affirmed, including the B3 Corporate Family and Probability of
Default Ratings of NMH Holdings, Inc. The outlook for the ratings
is stable.
The upgrade of the rating on the senior secured debt reflects the
amortization of term loan and the increase in unsecured and
structurally subordinated debt via the continued election of the
PIK option on the notes of NMH Holdings, Inc., the parent of
National Mentor, which would absorb losses prior to the secured
facility. The rating change reflects the application of Moody's
Loss Given Default Methodology.
The affirmation of the company's B3 Corporate Family Rating
primarily reflects Moody's belief that the company will continue
to operate with considerable financial leverage and a modest level
of interest coverage. Moody's believe the company will face a
challenging operating environment, as pressure on rates from
government payors could increase, but that National Mentor should
continue to benefit from its scale and market position.
This is a summary of Moody's rating actions.
Ratings upgraded:
National Mentor Holdings, Inc.:
* Senior Secured Revolver, due 2012, to Ba3 (LGD2, 22%) from B1
(LGD2, 27%)
* Senior Secured Term Loan B, due 2013, to Ba3 (LGD2, 22%) from B1
(LGD2, 27%)
* Senior Secured Synthetic Letter of Credit Facility, to Ba3
(LGD2, 22%) from B1 (LGD2, 27%)
Ratings affirmed/LGD assessments revised:
National Mentor Holdings, Inc.:
* Senior Subordinated Notes, due 2014, to Caa1 (LGD5, 71%) from
Caa1 (LGD5, 75%)
NMH Holdings, Inc.:
* Corporate Family Rating, rated B3
* Probability of Default Rating, rated B3
* PIK Toggle Notes, due 2014, to Caa2 (LGD6, 90%) from Caa2 (LGD6,
92%)
* Speculative Grade Liquidity Rating, SGL-2
The last rating action was on June 26, 2007, when Moody's assigned
a B3 Corporate Family Rating at NMH Holdings, Inc., and a Caa2
rating to the company's PIK toggle notes. Moody's also assigned a
Speculative Grade Liquidity Rating of SGL-2.
National Mentor's ratings were assigned by evaluating factors
Moody's believe are relevant to the credit profile of the issuer,
such as i) the business risk and competitive position of the
company versus others within its industry, ii) the capital
structure and financial risk of the company, iii) the projected
performance of the company over the near to intermediate term, and
iv) management's track record of tolerance for risk. These
attributes were compared against other issuers both within and
outside of National Mentor's core industry and National Mentor's
ratings are believed to be comparable to those other issuers of
similar credit risk.
National Mentor is a national provider of home and community-based
services to individuals with intellectual and/or developmental
disabilities; acquired brain injury and other catastrophic
injuries and illnesses; and to youth with emotional, behavioral or
medically complex challenges. The company reported revenue of
approximately $988 million for the twelve months ended June 30,
2009.
NN ENCHANTED: Case Summary & 3 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: NN Enchanted, LLC
500 Briarwood Drive
Southlake, TX 76092
Bankruptcy Case No.: 09-45454
Chapter 11 Petition Date: August 31, 2009
Court: United States Bankruptcy Court
Northern District of Texas (Ft. Worth)
Judge: Russell F. Nelms
Debtor's Counsel: Warren V. Norred, Esq.
Law Office of Warren Norred
200 E. Abram, Suite 300
Arlington, TX 76010
Tel: (817) 704-3984
Fax: (817) 549-0161
Email: wnorred@norredlegal.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least $0,
and total debts of $3,225,493.
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/txnb09-45454
The petition was signed by Nosayaba Evbuomwan, director of the
Company.
NORTEL NETWORKS: Multiple Parties Interested in LG Venture
----------------------------------------------------------
Bloomberg News reports that Nortel Networks Corp., said talks to
sell its stake in a Korean joint venture with LG Electronics are
in progress and multiple parties have show interest in the asset.
Goldman Sachs Group Inc. is managing the negotiations, said Jay
Barta, a Nortel spokesman, according to the report.
Nortel Networks Ltd. owns 50% plus one share of the LG-Nortel,
which makes equipment for wireless and fixed-line communications.
Seoul-based LG, which owns the remaining interest in the joint
venture, has said it has no plans to sell its stake.
Nortel has already obtained approval from the courts in Canada and
the United States to sell its CDMA business and LTE Access assets
to Telefonaktiebolaget LM Ericsson for a purchase price of US$1.13
billion. The sale to Ericsson has not yet been closed.
Completion of the sale is subject to regulatory and other
customary closing conditions.
About Nortel Networks
Headquartered in Ontario, Canada, Nortel Networks Corporation
(NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next-
generation technologies, for both service provider and enterprise
networks, support multimedia and business-critical applications.
Nortel does business in more than 150 countries around the world.
Nortel Networks Limited is the principal direct operating
subsidiary of Nortel Networks Corporation.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young has been appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group. The Monitor also sought recognition of the CCAA
Proceedings in the Bankruptcy Court under Chapter 15 of the
Bankruptcy Code.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary
Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll
& Rooney PC, in Wilmington, Delaware, serves as Chapter 15
petitioner's counsel.
Certain of Nortel's European subsidiaries have also made
consequential filings for creditor protection. The Nortel
Companies related in a press release that Nortel Networks UK
Limited and certain subsidiaries of the Nortel group incorporated
in the EMEA region have each obtained an administration order
from the English High Court of Justice under the Insolvency Act
1986. The applications were made by the EMEA Subsidiaries under
the provisions of the European Union's Council Regulation (EC)
No. 1346/2000 on Insolvency Proceedings and on the basis that
each EMEA Subsidiary's centre of main interests is in England.
Under the terms of the orders, representatives of Ernst & Young
LLP have been appointed as administrators of each of the EMEA
Companies and will continue to manage the EMEA Companies and
operate their businesses under the jurisdiction of the English
Court and in accordance with the applicable provisions of the
Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated and Nortel Networks (CALA) Inc., have material
operations and are not part of the bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of $11.6 billion and consolidated liabilities
of $11.8 billion. The Nortel Companies' U.S. businesses are
primarily conducted through Nortel Networks Inc., which is the
parent of majority of the U.S. Nortel Companies. As of
September 30, 2008, NNI had assets of about $9 billion and
liabilities of $3.2 billion, which do not include NNI's guarantee
of some or all of the Nortel Companies' about $4.2 billion of
unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
NORTH CAROLINA MUTUAL: AM Best Downgrades FSR to 'C+'
-----------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to C+
(Marginal) from B- (Fair) and issuer credit rating to "b-" from
"bb-" of North Carolina Mutual Life Insurance Company (NCM). The
ratings remain under review with negative implications, reflecting
the uncertainty surrounding the successful execution of a number
of initiatives designed to increase the capital position of NCM.
The rating downgrades recognize NCM's second quarter 2009
reduction in surplus and continued operating losses. However,
losses have significantly declined from the prior year. Given the
volatility of the current economic environment, A.M. Best also is
concerned with NCM's increase in below-investment grade bond
holdings in 2009 and its commercial mortgage exposure, as each
investment component represents a significant portion of its
surplus.
NCM's ratings remain under review with negative implications,
reflecting the uncertainty surrounding the successful execution of
various initiatives being undertaken to strengthen its capital
position and return to profitability. These initiatives include
the additional use of reinsurance to stabilize its surplus
position and further reduction in costs.
As NCM's risk-based capital position is marginal, it is imperative
that these initiatives come to fruition. If NCM's strategies are
unsuccessful in the near term, A.M. Best may take additional
rating actions.
NORTH VALLEY MALL: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: North Valley Mall, LLC
a California limited liability company
24532 Del Prado
Dana Point, CA 92629
Case No.: 09-19346
Chapter 11 Petition Date: September 2, 2009
Court: United States Bankruptcy Court
Central District of California (Santa Ana)
Judge: Theodor Albert
Debtor's Counsel: Jeffrey I. Golden, Esq.
650 Town Center Dr., Suite 950
Costa Mesa, CA 92626
Tel: (714) 966-1000
Email: jgolden@wgllp.com
Hutchlson B. Meltzer, Esq.
Weiland, Golden, Smiley, Wang Ekvall
& Strok, LLP
Costa Mesa, CA 92626
Tel: (714) 966-1000
Fax: (714) 966-1002
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Lucia Parks.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Logan Retoske, LLP trade debt $164,376
Commercial West Associates trade debt $30,000
Cal Invest Capital, LLC $25,000
K&L Gates trade debt $13,551
Accent Landscapes trade debt $11,006
Scott Gibson Architects trade debt $5,538
National Construction Rentals trade debt $3,474
Golden Eagle Insurance Insurance $3,396
Troy's Seal and Stripe trade debt $3,300
Incredibly Clean trade debt $2,670
Pressure Washing
Grant Andrews trade debt $2,599
General Contractor
Waste Management Services $1,847
Brookes Commercial Services trade debt $1,800
Kodlak Roofing and trade debt $1,725
Water Proofing
Waste Management Services $1,216
California Water Services $1,068
Company
RichMarc Environmental $990
Consultants
California Water Services Water Services $709
Company
Crane Pest Control Trade Debt $698
Hunter's Pest Control $645
NORVIEW BUILDERS: Case Summary & 4 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Norview Builders, Inc.
9417 South Tulley Avenue
Oak Lawn, IL 60453
Bankruptcy Case No.: 09-32588
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Jack B. Schmetterer
Debtor's Counsel: Gregory K. Stern, Esq.
53 West Jackson Blvd., Suite 1442
Chicago, IL 60604
Tel: (312) 427-1558
Fax: (312) 427-1289
Email: gstern1@flash.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
According to the schedules, the Company has assets of at least
$1,210,032, and total debts of $580,142.
A full-text copy of the Debtor's petition, including a list of its
4 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/ilnb09-32588
The petition was signed by Edward J. Concannon, president of the
Company.
NOVADEL PHARMA: Receives $108,700 From Sale of Shares to Seaside
----------------------------------------------------------------
NovaDel Pharma Inc., on August 28, 2009, had its fourth closing of
an offering pursuant to which Seaside 88 LP purchased 500,000
shares of the Company's Common Stock at a price per share of $0.26
having an aggregate value of roughly $113,620, and, the Company
received net proceeds of roughly $108,711, after deducting
commissions and $1,500 in non-accountable expenses, pursuant to
the terms of the Agreement.
In June 2009, NovaDel Pharma entered into a Common Stock Purchase
Agreement with Seaside whereby the Company agreed to issue and
sell to Seaside 500,000 shares of the Company's common stock,
$0.001 par value per share, once every two weeks for 26 closings
over a 52-week period. Pursuant to the terms of the Agreement, at
the initial closing, the offering price of the Common Stock
equaled 87% of the volume weighted average trading price of the
Common Stock during the trading day immediately prior to the
initial closing date. At each subsequent closing, on each 14th
day thereafter, the offering price of the Company's Common Stock
will equal 87% of the volume weighted average trading price of the
Common Stock for the 10-day trading period immediately preceding
each subsequent closing date. If, with respect to any subsequent
closing, the volume weighted average trading price of the
Company's Common Stock for the three trading days immediately
prior to such closing is below $0.25 per share, then the
particular subsequent closing will not occur and the aggregate
number of Shares to be purchased shall be reduced by 500,000
shares of Common Stock.
About Novadel Pharma
Flemington, New Jersey-based NovaDel Pharma Inc. (NYSE AMEX: NVD)
-- http://www.novadel.com/-- is a specialty pharmaceutical
company developing oral spray formulations for a broad range of
marketed drugs. The Company's proprietary technology offers, in
comparison to conventional oral dosage forms, the potential for
faster absorption of drugs into the bloodstream leading to quicker
onset of therapeutic effects and possibly reduced first pass liver
metabolism, which may result in lower doses. Oral sprays
eliminate the requirement for water or the need to swallow,
potentially improving patient convenience and adherence.
As of June 30, 2009, the Company had $2,358,000 in total assets
and $9,146,000 in total liabilities, resulting in $6,788,000 in
stockholders' deficit.
The Company filed with the Securities and Exchange Commission its
Annual Report for the year ended December 31, 2008, which included
an audit opinion with a "going concern" explanatory paragraph.
The going-concern explanatory paragraph from NovaDel's independent
registered public accounting firm -- J.H. Cohn LLP in Roseland,
New Jersey -- expressed substantial doubt, based upon current
financial resources, as to whether NovaDel can continue to meet
its obligations beyond 2009 without access to additional working
capital.
NOVEMBER 2005: S&P Withdraws 'D' Issuer Credit Ratings
------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'D' issuer credit
and debt ratings on November 2005 Land Investors LLC.
The company filed a voluntary petition for reorganization under
Chapter 11 of the U.S. Bankruptcy Code in Nevada on May 8, 2009.
The company had $231 million of rated bank debt at the time it
filed. S&P is also withdrawing S&P's recovery ratings on the bank
debt because S&P is not receiving the necessary post-filing
financial information that would enable us to appropriately
monitor the ratings.
The borrower is a joint venture formed for the purpose of
acquiring and entitling 2,140 net acres located approximately 12
miles northwest of the Las Vegas Strip and constructing necessary
infrastructure improvements.
Rating List
Ratings Withdrawn
November 2005 Land Investors LLC
To From
-- ----
Issuer credit NR D
First-lien term facility NR D
Recovery rating NR 4
Second-lien term facility NR D
Recovery rating NR 6
NR - Not rated.
NTK HOLDINGS: Unveils Plan to Slash $1.3BB in Debt; to File Ch. 11
------------------------------------------------------------------
NTK Holdings, Inc., and Nortek, Inc. entered into a Restructuring
and Lockup Agreement with a substantial portion of their
bondholders to effectuate a comprehensive restructuring of the
Company's debt. When concluded, the Agreement will eliminate
approximately $1.3 billion in total indebtedness, providing
considerable financial strength and flexibility to the Company's
balance sheet.
Richard L. Bready, Chairman and Chief Executive Officer, said,
"This transaction will immediately rebuild Nortek's financial
strength, providing us the flexibility for growth and a solid
foundation for long-term stability."
Under terms of the Agreement, holders of Nortek's 8-1/2% Senior
Subordinated Notes due 2014 will exchange their debt for
substantially all of the equity of the Company. Holders of NTK
Holdings' 10-3/4% Senior Discount Notes due 2014, Nortek's 9-7/8%
Series A and Series B Senior Subordinated Notes due 2011, and the
lenders under NTK Holdings' Senior Unsecured Loan Agreement will
also exchange their debt for equity in the Company.
In addition, under the Agreement, the indebtedness under Nortek's
10% Senior Secured Notes due 2013 will either be modified and
receive some portion of the equity of the Company, or reinstated.
In either case, the original principal amount of the 10% Notes of
$750 million will remain outstanding.
The Company has entered into the Agreement with certain holders
of, in aggregate, at least 66-2/3% of the outstanding principal
amount of the 8-1/2% Notes, as well as a substantial portion of
the outstanding amount of the 10-3/4% Notes and 10% Notes. The
Company expects to launch a formal process to solicit consent for
the restructuring from the remaining holders of its debt in the
upcoming weeks.
Under the terms of the Agreement, the Company intends to implement
its financial restructuring through a pre-packaged Chapter 11
filing to be initiated following the conclusion of the
solicitation period.
As part of the Agreement, the Company has entered into a
forbearance agreement for the $26.5 million semi-annual interest
payment due September 1, 2009, on the 8-1/2% Notes. The Company's
operating subsidiaries remain well supported with cash on hand in
excess of $170 million as of August 31, 2009. In addition, the
Company has excess availability under its asset-based lending
facility.
Mr. Bready added, "To date, we have made great progress in these
discussions with our debt holders. As this process continues, we
remain focused on providing our customers with quality products
and on-time deliveries. Throughout this period, it is our
intention that trade creditors, suppliers and employees will
continue to receive all amounts owed to them in the ordinary
course of business. In addition, the Agreement provides that
allowed claims of trade creditors, suppliers and employees will be
paid in full."
The Agreement between the Company and its debt holders follows an
announcement on June 17, 2009 by the Company that it had retained
the Blackstone Group and Weil, Gotshal & Manges to analyze its
capital structure. The Company has said it will provide further
updates on the process as new information warrants.
The Company had funded debt at July 4, 2009 of $2.27 billion,
consisting of:
(in millions)
-------------
NTK Holdings' 10 3/4% Senior Discount Notes
due 2014, net of unamortized discount of
approximately $6.9 million $396.1
NTK Holdings' senior unsecured loan facility
due 2014, including approximately
$69.9 million of debt accretion related to
the PIK option 271.7
Nortek's 10% Senior Secured Notes due 2013,
net of unamortized discount of $6.5 million 743.5
Nortek's 8 1/2% Senior Subordinated Notes
due 2014 625.0
Nortek's ABL Facility 165.0
Nortek's long-term notes, mortgage notes
and other indebtedness 36.9
Nortek's short-term bank obligations 18.4
Nortek's 9 7/8% Senior Subordinated Notes
due 2011, including unamortized premium 10.0
---------
Consolidated debt at July 4, 2009 $2,266.6
About NTK Holdings
NTK Holdings Inc., the parent company of Nortek Holdings and
Nortek Inc., is a diversified global manufacturer of branded
residential and commercial ventilation, HVAC and home technology
convenience and security products. NTK Holdings and Nortek offer
a broad array of products including range hoods, bath fans, indoor
air quality systems, medicine cabinets and central vacuums,
heating and air conditioning systems, and home technology
offerings, including audio, video, access control, security and
other products.
NTK Holdings and its units have assets of $1,655,200,000, against
debts of $2,778,100,000 as of July 4, 2009.
O'HARE CENTRE VENTURE: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: O'Hare Centre Venture L.P.
1350 E. Touhy Avenue, Suite 370W
Des Plaines, IL 60018
Bankruptcy Case No.: 09-32562
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Bruce W. Black
Debtor's Counsel: Paula K. Jacobi, Esq.
Barnes & Thornburg LLP
1 North Wacker Drive, Suite 4400
Chicago, IL 60606
Tel: (312) 214 4866
Fax: (312) 759-5646
Email: pjacobi@btlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Philip A. Mappa, managing partner of
the Company.
OPUS SOUTH: Deal Lifting Stay to Liquidate Carolina Bank Claim
--------------------------------------------------------------
Carolina First Bank, a South Carolina banking institution, as
successor by merger to Mercantile Bank, Shoppes of Four Comers
LLC, one of the Opus South Debtors, and Opus South Corporation
sought and obtained an agreed order from the Court lifting the
automatic stay to allow the Bank to liquidate its claim and
prosecuting its "in rem" rights against the collateral of Shoppes
through a Florida state court foreclosure process.
Carolina First Bank and Shoppes are parties to a lending
relationship pursuant to which the Debtor owes an obligation to
the Bank for the purchase of land located in Polk County,
Florida. The Obligation is in a state of default and
acceleration and is currently due and owing.
Accordingly, Carolina First Bank initiated a foreclosure action
in the Circuit Court for the 10th Judicial Circuit for Polk
County, Florida Civil Division.
According to Etta Wolfe, Esq., at Potter Anderson & Corroon LLP,
in Wilmington, Delaware, the Obligation is fully secured by a
senior mortgage lien and security interest covering all of the
Bank's collateral, including all or virtually all assets of
Shoppes. Specifically, Shoppes has granted the Bank a security
interest and mortgage lien in the Mortgaged Property.
In addition, the Obligation includes Shoppe's liability to
compensate and reimburse the Bank for unbilled and prospective
attorney's fees, court costs, and related expenses associated
with the administration of their relationship through the date of
the entry of judgment in the Foreclosure Action, to the extent
the costs and fees are allowable under the Bankruptcy Code.
The Foreclosure Action was stayed when Shoppes filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code.
About Opus South
Headquartered in Atlanta, Georgia, Opus South Corporation --
http://www.opuscorp.com/-- provides an array of real estate
related services across the United States including real estate
development, architecture & engineering, construction and project
management, property management and financial services.
The Company and its affiliates filed for Chapter 11 on April 22,
2009 (Bankr. D. Del. Lead Case No. 09-11390). Victoria Watson
Counihan, Esq., at Greenberg Traurig, LLP, represents the Debtors
in their restructuring efforts. The Debtors propose to employ
Landis, Rath & Cobb, LLP, as conflicts counsel, Chatham Financial
Corporation as real estate broker, Delaware Claims Agency LLC as
claims agent. The Debtors have assets and debts both ranging from
$50 million to $100 million.
Bankruptcy Creditors' Service, Inc., publishes Opus West
Bankruptcy News. The newsletter tracks the separate Chapter 11
proceedings of Opus West Corp. and Opus South Corp. and their
related debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
OSCIENT PHARMACEUTICALS: Court OKs Sale of Factive to Cornerstone
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts
approved Cornerstone Therapeutics Inc.'s acquisition of the
commercial rights to the antibiotic Factive(R) (gemifloxacin
mesylate) in North America and certain countries in Europe of
Oscient Pharmaceuticals Corporation. Cornerstone expects to
promptly close the transaction.
At the closing, Cornerstone will purchase the Factive assets for a
cash payment of $5,000,000 plus an amount for purchased inventory
to be mutually determined prior to closing, quarterly royalty
payments based on adjusted net sales for a period of five years
and the assumption of certain liabilities, including aggregate
cure amounts of $110,000 under certain contracts that were assumed
by the Company.
Factive is a fluoroquinolone antibiotic approved for the treatment
of acute bacterial exacerbations of chronic bronchitis (ABECB) and
community-acquired pneumonia of mild to moderate severity (CAP).
According to Wolters Kluwer Health, a third-party provider of
prescription data, in 2008, the U.S. oral solid fluoroquinolone
market generated approximately 39 million prescriptions. Factive
was launched in the U.S. in September of 2004 and is the only
fluoroquinolone approved in the U.S. for the five-day treatment of
both ABECB and CAP. Approximately 1.1 million prescriptions have
been dispensed for Factive since its launch. In 2008, Factive
generated approximately $16 million in net revenues. Factive has
composition of matter patent protection which extends into 2018,
longer than the composition of matter patent protection for any
currently marketed fluoroquinolone or other antibiotic widely used
to treat respiratory tract infections.
About Cornerstone Therapeutics
Cornerstone Therapeutics Inc., headquartered in Cary, North
Carolina, is a specialty pharmaceutical company focused on
acquiring, developing and commercializing significant products
primarily for the respiratory and related markets.
About Oscient Pharmaceuticals
Based in Waltham, Massachusetts, Oscient Pharmaceuticals
Corporation (OSCIQ.PK) -- http://www.antararx.com/and
http://www.factive.com/-- markets two FDA-approved products in
the United States: ANTARA(R) (fenofibrate) capsules, a
cardiovascular product and FACTIVE(R) (gemifloxacin mesylate)
tablets, a fluoroquinolone antibiotic. ANTARA is indicated for
the adjunct treatment of hypercholesterolemia (high blood
cholesterol) and hypertriglyceridemia (high triglycerides) in
combination with diet. FACTIVE is approved for the treatment of
acute bacterial exacerbations of chronic bronchitis and community-
acquired pneumonia of mild to moderate severity. ANTARA accountsi
for over 80% of the Debtors' 2008 revenues. The Company also has
a late-stage antibiotic candidate, Ramoplanin, for the treatment
of Clostridium difficile-associated disease.
As of December 31, 2008, Oscient's audited consolidated financial
statements reflected total assets of $174 million and total
liabilities of $255 million.
Oscient Pharmaceuticals together with an affiliate filed for
Chapter 11 on July 13, 2009 (Bankr. D. Mass. Case No. 09-16576).
Judge Henry J. Boroff presides over the case. Charles A. Dale
III, Esq., at K&L Gates LLP, represents the Debtors. The Debtors
also hired Ropes & Gray LLP as special litigation counsel, and
Broadpoint Capital Inc. as financial advisor. In its petition,
Oscient listed assets ranging from $50,000,001 to $100,000,000,
and debts ranging from $100,000,001 to $500,000,000.
PACIFIC ENERGY: Gets Green Light on Alaska Asset Exchange Pact
--------------------------------------------------------------
The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware authorized Pacific Energy Alaska Operating
LLC to begin a gas purchase and exchange agreement with Union Oil
Company of California and Marathon Oil Co. related to offshore oil
and gas production in Alaska, according to Law360.
Headquartered in Long Beach, California, Pacific Energy Resources
Ltd. -- http://www.pacenergy.com/-- engages in the acquisition
and development of oil and gas properties, primarily in the United
States. The Company and seven of its affiliates filed for
Chapter 11 protection on March 8, 2009 (Bankr. D. Del. Lead Case
No. 09-10785). Attorneys at Pachulski Stang Ziehl & Jones LLP,
represent the Debtors as counsel. The Debtors proposed Rutan &
Tucker LLP as special corporation and litigation counsel;
Schully, Roberts, Slattery & Marino, PLC, as special oil and gas
and transactional counsel; Devlin Jensen as special Canadian
counsel; Scott W. Winn, at Zolfo Cooper Management, LLC, as chief
restructuring officer; Lazard Freres & Co. LLC as investment
banker; and Albrecht & Associates, Inc., as agent for the Debtors
in the sale of their oil and gas properties. Omni Management
Group, LLC, is the claims, balloting, notice and administrative
agent for the Debtors. When the Debtors filed for protection from
their creditors, they listed between $100 million and
$500 million each in assets and debts.
PALM ENERGY: Files Chapter 11 to Ward Off Debt Demand
-----------------------------------------------------
Palm Energy Partners LLC and an affiliate filed for Chapter 11
bankruptcy in Houston (Bankr. S.D. Tex. Case No. 09-36593).
According to Christopher Scinta at Bloomberg News, the Company
said it sought bankruptcy protection after it received an
acceleration demand from its lender. Filing was the best option
in view of the unexpected demand and acceleration of indebtedness
transmitted by Macquarie Bank Limited and the consequences, the
Company said.
Palm Energy Partners LLC is an oil and gas explorer based in
Metairie, Louisiana. It said in its petition that assets and
debts both exceed $100 million. Attorneys from Haynes and Boone
LLP and Schully Roberts Slattery & Marino PC represent Palm and
affiliate Pisces Energy LLC.
PAPAGO PARAGO PARTNERS: Voluntary Chapter 11 Case Summary
---------------------------------------------------------
Debtor: Papago Parago Partners, L.L.C.
7208 East Cave Creek Road, Suite A
Carefree, AZ 85377
Case No.: 09-21329
Chapter 11 Petition Date: August 31, 2009
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Randolph J. Haines
Debtor's Counsel: Daniel E. Garrison, Esq.
Law Offices Of Daniel E Garrison PLLC
7114 E Stetson Drive, Suite 300
Scottsdale, AZ 85251
Tel: (480) 421-9449
Fax: (480) 522-1515
Email: dan@andantelaw.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
PARLUX FRAGRANCES: Obtains 60-Day Extension to Repay Loan
---------------------------------------------------------
Fort Lauderdale, Florida-based Parlux Fragrances, Inc. and its
subsidiary, Parlux Ltd., as borrowers, on August 31, 2009, entered
into a Forbearance Agreement regarding its Loan and Security
Agreement, dated as of July 22, 2008, with Regions Bank, as
lender.
The current outstanding principal balance under the Credit
Agreement is $6,680,612. Pursuant to the Credit Agreement, the
outstanding principal balance at no time shall exceed the
revolving loan availability, as defined in the Credit Agreement.
The revolving loan availability is currently $208,000, resulting
in an excess of the revolving loan availability in the amount of
$6,472,612. It is an event of default under the terms of the
Credit Agreement to not promptly make the mandatory principal
payment required to reduce the outstanding principal balance to an
amount not greater than the revolving loan availability.
Pursuant to the Forbearance Agreement, Regions Bank has agreed to
forbear from the exercise of certain rights and remedies that it
has under the Credit Agreement and supporting documents, including
the right to demand full payment of the outstanding principal
balance, until the earlier of (1) an additional event of default
under the Credit Agreement, (2) an event of default under the
Forbearance Agreement, or (3) October 28, 2009.
The Company has agreed to pay Regions Bank a forbearance fee in
the amount of $40,000, payable as follows: (1) $20,000 upon the
execution of the Forbearance Agreement and (2) $20,000 on
September 30, 2009. If the Company refinances with another
financial institution or otherwise repays, all amounts outstanding
under the Credit Agreement on or before September 30, 2009, the
Company will not be required to pay the $20,000 portion of the fee
due on September 30, 2009.
Interest will continue to accrue on the outstanding principal
balance under the Credit Agreement at the base rate provided for
in the Credit Agreement until October 28, 2009. The Company is
unable to borrow additional funds from Regions Bank pursuant to
the Forbearance Agreement.
The Company is currently negotiating replacement financing with
several potential sources and expects to have a new financing
arrangement in place in the near future. No assurance can be
given that the Company will be able to enter into a new financing
arrangement.
A full-text copy of the forbearance agreement is available at no
charge at http://ResearchArchives.com/t/s?43dd
About Parlux Fragrances
Parlux Fragrances, Inc. is a manufacturer and international
distributor of prestige products. It holds licenses for Paris
Hilton, Jessica Simpson, GUESS?, Nicole Miller, Josie Natori,
Queen Latifah, Marc Ecko, Rihanna, Kanye West, XOXO, Ocean Pacific
(OP), Andy Roddick, babyGund, and Fred Hayman Beverly Hills
designer fragrances, as well as Paris Hilton watches, cosmetics,
sunglasses, handbags and other small leather accessories.
PATIENT SAFETY: Francis Capital Discloses 14.3% Equity Stake
------------------------------------------------------------
Francis Capital Management, LLC -- FCM; John P. Francis --
Manager; Catalysis Partners, LLC -- Catalysis LLC; and Catalysis
Offshore, Ltd. -- Catalysis Ltd. -- disclose holding common stock,
par value $0.33, and five-year warrants to purchase 45,000 shares
of Common Stock.
Catalysis LLC owns 1,718,864 shares of Common Stock and Warrants
to purchase 45,000 shares of Common Stock, for a total of
1,763,864 Securities -- roughly 7.8% of the outstanding shares of
Common Stock of Patient Safety, assuming a full exercise of the
Warrants.
Catalysis Ltd. owns 1,335,336 shares of Common Stock -- roughly
5.9% of the outstanding shares of Common Stock of Patient Safety.
FCM owns 152,640 shares of Common Stock -- roughly 0.6% of the
outstanding shares of Common Stock of Patient Safety.
Because FCM has sole voting and investment power over Catalysis
LLC's and Catalysis Ltd's security holdings, and John P. Francis,
in his role as the manager of FCM, controls its voting and
investment decisions, each of FCM and Mr. Francis may be deemed to
have beneficial ownership of the 3,251,840 Securities owned of
record by Catalysis LLC, Catalysis, Ltd. and FCM, which represent
roughly 14.3% of the outstanding shares of Common Stock, assuming
a full exercise of the Warrants.
All ownership percentages are based on an assumed total of
22,666,097 issued and outstanding shares of Common Stock of
Patient Safety. The amount of shares of Common Stock includes (i)
17,197,872 shares of Common Stock outstanding as of May 15, 2009,
as reported in Patient Safety's Annual Report on Form 10-Q for the
fiscal quarter ended March 31, 2009, as filed with the Securities
and Exchange Commission on May 20, 2009, and (ii) 5,468,225 shares
of Common Stock issued as of July 29, 2009 in connection with a
Purchase Agreement and Exchange Agreement, dated as of July 29,
2009, among Patient Safety and certain purchasers.
Mr. Francis disclaims beneficial ownership of the Securities.
On June 29, 2009, FCM et al. acquired an aggregate of 1,934,640
shares of Common Stock in consideration for roughly $1,663,790 --
including the tender of $1,129,326 in Warrants held by FCM,
Catalysis LLC and Catalysis Ltd. to Patient Safety. The
acquisition of the Shares by FCM et al. was made pursuant to the
Purchase Agreement, dated as of July 29, 2009, by and among
Patient Safety, FCM, Catalysis LLC, Catalysis Ltd. and certain
other purchasers as part of a private placement of Patient
Safety's Common Stock.
PATRICIA KLINK: Section 341(a) Meeting Scheduled for September 24
-----------------------------------------------------------------
The U.S. Trustee for Region 16 will convene a meeting of creditors
in Patricia DeBlank Klink's Chapter 11 case on Sept. 24, 2009, at
9:00 a.m. The meeting will be held at 128 East Carrillo St.,
Santa Barbara, 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.
Santa Barbara, California-based Patricia DeBlank Klink filed for
Chapter 11 on Aug. 18, 2009 (Bankr. C.D. Calif. Case No. 09-
13309). William E. Winfield, Esq., represents the Debtor in its
restructuring efforts. In its petition, the Debtor listed total
assets of $29,339,248 and total debts of $22,188,596.
PATRICIA KLINK: Taps Nordman Cormany as General Bankruptcy Counsel
------------------------------------------------------------------
Patricia DeBlank Klink asks the U.S. Bankruptcy Court for the
Central District of California for authority to employ Nordman
Cormany Hair & Compton LLP as general legal counsel.
Nordman Cormany will represent the Debtor in all facets of the
Chapter 11 reorganization, including the preparation of a
disclosure statement, plan of reorganization, and any necessary
motions to Chapter 11 reorganization, and to represent the Debtor
in any legal dispute associated with the Chapter 11 filing.
Wiliam E. Winfield, a partner at Nordman Cormany, tells the Court
that the firm received a $69,290 retainer for payment of the
firm's fees and costs.
The hourly rates of Nordman Cormany's personnel are:
Mr. Winfield $350
Brian Hefelfinger, associate $235
Heidi A. O'Brien, paralegal $110
Mr. Winfield assures the Court that Nordman Cormany is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Mr. Winfield can be reached at:
Nordman Cormany Hair & Compton LLP
1000 Town Center Drive, 6t Floor
P.O. Box 9100
Oxnard, CA 93031-9100
Tel: (805) 485-1000
Fax: (805) 988-8387
About Patricia DeBlank Klink
Santa Barbara, California-based Patricia DeBlank Klink filed for
Chapter 11 on Aug. 18, 2009 (Bankr. C.D. Calif. Case No. 09-
13309). William E. Winfield, Esq., represents the Debtor in its
restructuring efforts. In its petition, the Debtor listed total
assets of $29,339,248 and total debts of $22,188,596.
PAVILLION DEVELOPMENT: Case Summary & 19 Largest Unsec. Creditors
-----------------------------------------------------------------
Debtor: Pavillion Development Corporation
9333 Bryant
Houston, TX 77075
Bankruptcy Case No.: 09-36352
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Las Terrazas Development, LLC 09-36353
Las Brisas Construction LLC 09-36354
Las Alamedas Development LLC 09-36355
Chapter 11 Petition Date: August 30, 2009
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Jeff Bohm
Debtor's Counsel: John L. Green, Esq.
Attorney at Law
4888 Loop Central Dr., Suite 445
Houston, TX 77081
Tel: (713) 660-7400
Fax: (713) 660-9921
Email: jlgreen488@aol.com
Estimated Assets: $100,001 to $500,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtors' petition, including a list of
their 19 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/txsb09-36352.pdf
The petition was signed by Gil Ramirez Sr.
PETER MATT: Files Chapter 11 in White Plains
--------------------------------------------
Peter Matt & Co. filed for Chapter 11 relief September 1 in White
Plains, New York (Bankr. S.D.N.Y. Case No. 09-23634). The Company
listed assets of $17.3 million against debt totaling
$16.9 million, including $10.2 million owing to two secured
lenders. Armonk, New York-based Peter Matt is an importer and
distributor of smaller brand wines.
PETER MATT: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Peter Matt & Co., Inc.
4 MacDonald Ave.
Armonk, NY 10504
Case No.: 09-23634
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Southern District of New York (White Plains)
Debtor's Counsel: Todd E. Duffy, Esq.
Anderson Kill & Olick, P.C.
1251 Avenue of the Americas
New York, NY 10020
Tel: (212) 278-1000
Fax: (212) 278-1233
Email: tduffy@andersonkill.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
PLAINFIELD APARTMENTS: Debt to PMUA be Deemed High-Priority Claim
-----------------------------------------------------------------
Mark Spivey at MyCentralJersey.com reports that the Hon. Morris
Stern of the U.S. Bankruptcy Court for the District of New Jersey
has ordered that Plainfield Apartments LLC's debt to the
Plainfield Municipal Utilities Authority, or PMUA, be deemed a
high-priority claim in the Company's Chapter 11 bankruptcy case.
MyCentralJersey.com relates that debt owed to PMUA, the city's
primary waste-management provider, was initially designated as an
unsecured, nonpriority claim of $203,790. PMUA appeared on a list
of creditors holding unsecured claims attached to Plainfield
Apartments' initial bankruptcy filing.
According to MyCentralJersey.com, Ted Del Guercio III at McManimon
& Scotland, who represents PMUA, said in a letter to Judge Stern
last week that the authority is owed $357,819 and has a balance
due of another $91,762, yielding a total debt of $449,581. Citing
Mr. Del Guercio, the report states that the debt was accumulated
due to unpaid sewer and solid-waste services and much of it has
been "outstanding for well over a year".
Mr. Del Guercio, MyCentralJersey.com relates, said that there is a
lack of assurance from Plainfield Apartments that those debts
eventually will be paid. Mr. Del Guercio said in court documents,
"The only assurance that Debtor has proposed with respect thereto
is a two-week "utility deposit' of only $2,313. That is not even
one-half of one percent of the balance due the Authority as of the
Chapter 11 filing date . . . clearly, that is wholly insufficient
to cover the (sum) owed to the Authority, or to give it assurance
of future payment."
MyCentralJersey.com notes that PMUA could suspend service to the
nine buildings, which is almost 300 housing units, many of which
are occupied. Mr. Del Guercio said in court documents, "Section
366(b) of the Bankruptcy Code provides that a utility company,
such as the Authority, may terminate services 30 days after the
Bankruptcy Petition is filed, if a debtor has not provided such a
utility with adequate assurances of future payment. Unless and
until such assurances are provided, the Debtor should neither be
permitted to utilize cash collateral from the apartments, or
continue to enjoy the benefits of sewer and solid waste service
from the Authority."
According to MyCentralJersey.com, a hearing on the PMUA filing is
set for September 16 in Newark. MyCentralJersey.com relates that
an initial meeting of creditors is set for September 9.
Plainfield, New Jersey-based Plainfield Apartments, LLC, filed for
Chapter 11 on Aug. 7, 2009 (Bankr. D. N.J. Case No. 09-30679).
Richard D. Trenk, Esq., at Trenk, DiPasquale, Webster, Della Fera
& Sodono, P.C., represents the Debtor in its restructuring
efforts. In its petition, the Debtor listed total assets of
$14,181,853 and total debts of $17,587,846.
An affiliate, Fulton-Harrison LLC, filed for protection in the
same court on July 29, 2009 (Case No. 09-29666).
PORT ARTHUR INTEREST: Case Summary & 17 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: Port Arthur Interest Development, LLC
9707 Chipstead Circle
Spring, TX 77379
Bankruptcy Case No.: 09-36406
Chapter 11 Petition Date: August 31, 2009
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Jeff Bohm
Debtor's Counsel: Karen R. Emmott, Esq.
Attorney at Law
4615 Southwest Freeway, Suite 500
Houston, TX 77027
Tel: (713) 739-0008
Fax: (713) 481-6262
Email: karen.emmott@sbcglobal.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$5,846,567, and total debts of $3,247,161.
A full-text copy of the Debtor's petition, including a list of its
17 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/txsb09-36406.pdf
The petition was signed by Khanh Vo, co-general manager/manager of
the Company.
PROMENADE AT RIVERWALK: Put Into Ch 11 Bankruptcy By Creditors
--------------------------------------------------------------
Thomason-Stevens LLC and Morganti Texas Inc. have filed a petition
to put Promenade at Riverwalk LLC into Chapter 11 bankruptcy
protection.
Court documents say that Thomason-Stevens and Morganti Texas
claimed that they are owed $1.2 million. Sacha Ross, Esq., at
Grimes Goebel Grimes Hawkins Gladfelter & Galvano PL of Bradenton,
represents the creditors.
Promenade at Riverwalk LLC is the developer of the Promenade at
Riverwalk in Bradenton.
PROMENADE AT RIVERWALK: Involuntary Chapter 11 Case Summary
-----------------------------------------------------------
Alleged Debtor: The Promenade at Riverwalk, LLC
808 3rd Avenue West
Bradenton, FL 34205
Case Number: 09-19712
Involuntary Petition Date: September 1, 2009
Court: Middle District of Florida (Tampa)
Judge: Michael G. Williamson
Petitioner's Counsel: Sacha Ross, Esq.
Grimes Goebel Grimes Hawkins, et al.
1023 Manatee Avenue West
Bradenton, FL 34205
Tel: (941) 748-0151
Fax: (941) 748-0158
Email: sross@grimesgoebel.com
Petitioner Nature of Claim Claim Amount
---------- --------------- ------------
Thomason-Stevens, LLC/ construction $1,256,761
Morganti Texas, Inc. indebtedness
417 12th Street West, Suite 218
Bradenton, FL 34205
PROPEX INC: Fabrics Estate Liquidating Plan Declared Effective
--------------------------------------------------------------
The Plan of Liquidation of Fabrics Estate Inc., Fabrics Estate
Holdings Inc., Concrete Estate Systems Corp., Fabrics Estate
International Holdings I Inc., and Fabrics Estate International
Holdings II Inc. has been declared effective on August 28, 2009.
The Debtors were formerly known as Propex Inc., Propex Holdings
Inc., Propex Concrete Systems Corporation, Propex Fabrics
International Holdings I Inc., and Propex Fabrics International
Holdings II, Inc. The Propex Entities sought bankruptcy
protection in January 2008 as their industrial products were
negatively impacted by the downturn in the housing market and
increasing oil prices negatively impacted the cost of the
company's raw material. With the resultant decline in revenues,
Propex defaulted on its financing facilities and was unable to
obtain new financing.
Propex subsequently entered into an asset purchase agreement to
sell substantially all of its assets to Xerxes Operating Company
LLC and Xerxes Foreign Holding Corp. for $82 million. Propex
consummated the asset sale to Xerxes in late April 2008 and,
subsequently change its name to Fabrics Estate Inc.
With the asset sale concluded, certain assets and about $4.8
million in cash remained in the Propex estates. Thus, the
Liquidation Plan contemplated (1) the winding down of the
Debtors' estates, (2) the liquidation of the remaining assets,
the distribution of any remaining cash proceeds to creditors, (3)
the resolution of outstanding claims against the Debtors, and (4)
the creation of a litigation trust for the prosecution of causes
of action. Pursuant to the Plan, the automatic stay will
continue in full force and effect until the Final Distribution
Date occurs under the Plan.
Judge John C. Cook of the U.S. Bankruptcy Court for the Eastern
District of Tennessee confirmed the Debtors' First Amended Joint
Plan of Liquidation on August 21, 2009.
Professional/Rejection Claims Bar Date
With the occurrence of the Plan Effective Date, any person
holding a Professional Fees Claim must file a final application
with the Bankruptcy Court for allowance for services rendered and
reimbursement of expenses incurred through the Effective Date by
October 12, 2009, the date which is 45 days after the Effective
Date of the Plan, or by other deadlines as may be fixed by the
Bankruptcy Court. Any person who fails to file a timely
application with the Bankruptcy Court will be forever barred from
seeking compensation from the Debtors, the Consolidated Debtor
and their estates.
Similarly, any holder of a Claim arising out of the rejection of
any executory contract or unexpired lease, whether rejected
pursuant to the Plan or pursuant to any other order of the Court,
must file a proof of claim with Court no later than Sept. 27,
2009 or the date which is 30 days after the Effective Date. Any
person seeking to assert a Claim who fails to file a proof of
claim within the period will be deemed to have waived the said
Claim.
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 changed its name to Fabrics estate following the sale of
substantially all of its assets to Xerxes Operating Company, LLC,
and Xerxes Foreign Holding Corp.
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: Fabrics Estate Professionals Final Fee Applications
---------------------------------------------------------------
Pursuant to Sections 330 and 331 of the Bankruptcy Code, four of
Fabric Estates Inc.'s bankruptcy professionals ask the Court to
award them their final payment of legal fees and reimbursement of
expenses:
Professional Period Fees Expenses
------------ ------ ---------- ----------
Miller & Martin PLLC 6/01/09-
8/31/09 $40,674 $1,162
King & Spalding LLP 1/12/08-
8/24/09 5,137,396 352,185
Akin Gump Strauss 1/30/08-
Hauer & Feld LLP 8/28/09 3,734,996 216,065
FTI Consulting, Inc. 1/31/08-
3/31/09 1,825,000 21,100
Miller & Martin also asks the Court to permit the Debtors to make
payment of the award from the prepetition retainer remaining of
$7,363.
Akin Gump also seeks reimbursement of expenses incurred by The
Garden City Group Inc., totaling $49,666, while serving as the
official communications agent for the Official Committee of
Unsecured Creditors.
For the period from June 1, 2009, through August 24, 2009, King &
Spalding seeks the allowance of $344,502 in legal fees and $7,683
in reimbursable expenses.
Miller & Martin serves as the Debtors' local counsel. King &
Spalding serves as the Debtors' bankruptcy counsel. Akin Gump
serves as the counsel for the Creditors Committee. FTI
Consulting serves as the financial advisor to the Committee.
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 changed its name to Fabrics estate following the sale of
substantially all of its assets to Xerxes Operating Company, LLC,
and Xerxes Foreign Holding Corp.
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)
QUALITY DISTRIBUTION: Exchange Offer Cues S&P's Junk Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services said that lowered its corporate
credit rating on Quality Distribution Inc. to 'CC' from 'B-'. At
the same time, S&P lowered the ratings on subsidiary Quality
Distribution LLC's senior unsecured and subordinated debt issues
to 'C' from 'CCC+'. The recovery ratings on the senior unsecured
and subordinated debt remain at '5' and '6', respectively. S&P
placed all the issue-level ratings on CreditWatch with negative
implications.
"The rating actions follow the Tampa, Florida-based bulk tank
trucking company's announcement that it is commencing an exchange
offer," said Standard & Poor's credit analyst Anita Ogbara. "The
exchange offer will purchase various securities, in addition to
soliciting consents from holders of the existing notes, to
eliminate or waive restrictive covenants and certain events of
default, and modify covenants regarding mergers and consolidations
and other provisions in the indentures," she continued. In
exchange for the Series A and B senior floating-rate notes due
2012, the company is offering 10% senior notes due 2013. In
exchange for the 9% subordinated notes due 2010, the company is
offering 11% subordinated pay-in-kind notes due 2013.
Quality Distribution has concurrently announced a tender offer to
purchase up to $7.5 million of the company's 9% subordinated notes
due Nov. 15, 2010. The exchange and tender offers expire on
Sept. 25, 2009. On the expiration of these offers, if more than
$50 million is outstanding under any of the existing debt issues,
the maturity date of the company's asset-based loan facility will
accelerate to 91 days before the next maturity date, which is
currently Nov. 15, 2010.
On completion of the proposed offers and pending results of the
consent solicitation, S&P will lower its corporate credit rating
on Quality Distribution to 'SD' (selective default) and lower
S&P's ratings on issues repurchased under the exchange offer to
'D' (default).
QSGI INC: $500,000 Financing Agreement With Victory Park
--------------------------------------------------------
QSGI Inc. said in a regulatory filing that it signed a debtor-in-
possession financing agreement with Victory Park Credit
Opportunities Master Fund, LTD for $500,000 with authorization to
increase the commitment by up to $250,000 in the lender's sole
discretion.
A copy of the Agreement is available for free at::
http://researcharchives.com/t/s?43e9
Palm Beach, Florida-based QSGI, Inc., and its affiliates provide
technology services and maintenance geared towards both uses of
enterprise class hardware as well as the uses of business -
competing hardware. The Debtors filed for Chapter 11 on July 2,
2009 (Bankr. S.D. Fla. Lead Case No. 09-23658). Bradley S.
Shraiberg, Esq. at Shraiberg, Ferrara, Landau P.A. represents the
Debtors in their restructuring efforts. The Debtors listed
between $10 million and $50 million each in assets and debts
R.W. HERTEL: Trustee Locates Assets to Be Handed to Creditors
-------------------------------------------------------------
Sandra K. McBeth, the U.S. Bankruptcy Trustee appointed for R.W.
Hertel & Sons, said in court documents that she had located assets
of the Company and would distribute them to creditors.
The Tribune relates that Robert Fowler, former partner with Ronald
Hertel, said that he was unaware that Ms. McBeth had uncovered
assets to be distributed to creditors. The report quoted him as
saying, "I haven't been given any notice yet, and I don't know
that there are any assets to administer."
According to The Tribune, Mr. Fowler said that R.W. Hertel didn't
have any assets because its projects were owned by separate
entities overseen by him and Mr. Hertel. The owners hired Mr.
Hertel as general contractor and project manager, says The
Tribune.
Mr. Fowler, The Tribune reports, said that before Hertel & Sons
collapsed, he and Mr. Hertel had been putting their own money into
the Company to pay the bills.
Stephen Nellis at Pacific Coast Business Times relates that since
R.W. Hertel was put into Chapter 7 liquidation, Ms. McBeth has
looked for assets to repay creditors, hiring a Los Angeles law
firm to help her.
Ms. McBeth said in court documents that the assets will be
administered in the case. She didn't specify the amount of assets
to be administered, Julie Lynem at The Tribune News reports.
R.W. Hertel & Sons is a Ventura-based builder, which has
residential projects in San Luis Obispo County.
As reported by the TCR on April 6, 2009, a group of creditors
filed a petition in the U.S. Bankruptcy Court for the Central
California District in Santa Barbara to force R.W. Hertel & Sons
into involuntary bankruptcy. Several creditors are seeking to
collect more than $42,000 from R.W. Hertel. Court documents say
that R.W. Hertel owes ASAP Repographics owner Roger Marlin about
$4,200. SanLuisObispo.com relates that Andy's Precision of Madera
is owed $24,130, while Marketshare Inc. is owed about $13,646.
RADLAX GATEWAY: Gets Temporary OK to Use Lender's Cash Collateral
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
authorized, on an interim basis, RadLAX Gateway Hotel, LLC, and
its debtor-affiliates to:
-- use Radisson Hotel at Los Angeles Airport's rooms revenues
and food and beverage revenues in which the lender has an
interest; and
-- grant adequate protection to a secured lender.
A final hearing on the Debtors' use of cash collateral is set for
Sept. 17, 2009, at 11:00 a.m. Objections, if any, are due on
Sept. 14, 2009, at 4:00 p.m.
As of the petition date, the Debtor and RadLAX Gateway Deck, LLC,
owed in excess of $120 million on account of the construction loan
from Amalgamated Bank, as trustee of the Longview Ultra I
Construction Loan Investment Fund, in its capacity as
administrative agent for itself and San Diego National Bank.
The Debtor related that it will use the cash collateral to pay
operating expenses of the hotel.
As adequate protection to Amalgamated Bank, the Debtor said that
the continued operation and maintenance of the hotel will preserve
the value of the lender's collateral. The Debtor is not providing
the lender with any additional liens.
The Debtors' use of cash collateral will expire on the earliest to
occur of: (a) the final date contained in the interim budget; (b)
entry of an order modifying the terms of the interim order; (c)
conversion of the Debtors' bankruptcy case to a case under Chapter
7; (d) appointment of a trustee or examiner; and (e) the
occurrence of the effective date or consummation of a plan of
reorganization.
About RadLAX Gateway Hotel
Oak Brook, Illinois-based RadLAX Gateway Hotel, LLC, operates a
hotel. The Company and its affiliates filed for Chapter 11 on
Aug. 17, 2009 (Bankr. N.D. Ill. Case Nos. 09-30047 - 09-30032).
David M. Neff, Esq., at Perkins Coie LLP represents the Debtors in
their restructuring efforts. In their petition, the Debtors
listed $50,000,001 to $100,000,000 in assets and $100,000,001 to
$500,000,000 in debts.
RADLAX GATEWAY: Has Until Sept. 14 to File Schedules and Statement
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
extended until Sept. 14, 2009, RadLAX Gateway Hotel, LLC, and its
debtor-affiliates' time to file their schedules of assets and
liabilities and statement of financial affairs.
Oak Brook, Illinois-based RadLAX Gateway Hotel, LLC, operates a
hotel. The Company and its affiliates filed for Chapter 11 on
Aug. 17, 2009 (Bankr. N.D. Ill. Case Nos. 09-30047 - 09-30032).
David M. Neff, Esq., at Perkins Coie LLP, represents the Debtors
in their restructuring efforts. In their petition, the Debtors
listed $50,000,001 to $100,000,000 in assets and $100,000,001 to
$500,000,000 in debts.
RADLAX GATEWAY: Meeting of Creditors Scheduled for September 23
---------------------------------------------------------------
The U.S. Trustee for Region 16 will convene a meeting of creditors
in RadLAX Gateway Hotel, LLC, and its debtor-affiliates' Chapter
11 cases on Sept. 23, 2009, at 1:30 p.m. The meeting will be held
at 219 South Dearborn, Office of the U.S. Trustee, 8th Floor,
Room 802, Chicago, Illinois.
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.
Oak Brook, Illinois-based RadLAX Gateway Hotel, LLC, operates a
hotel. The Company and its affiliates filed for Chapter 11 on
Aug. 17, 2009 (Bankr. N.D. Ill. Case Nos. 09-30047 - 09-30032).
David M. Neff, Esq., at Perkins Coie LLP, represents the Debtors
in their restructuring efforts. In their petition, the Debtors
listed $50,000,001 to $100,000,000 in assets and $100,000,001 to
$500,000,000 in debts.
RALF WARREN BLACKSTONE: Voluntary Chapter 11 Case Summary
---------------------------------------------------------
Joint Debtors: Ralf Warren Blackstone
aka Renny Blackstone
aka Ralf Warren Blackstone, MD
Jamie Andrian Blackstone
aka Jamie Joan Andrian
aka Jamie Joan Blackstone
aka Jamie Joan Andrian Blackstone
aka Jamie Andrian
aka Jamie Blackstone
305 Spring Court
Clearwater, FL 33755
Bankruptcy Case No.: 09-19747
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Middle District of Florida (Tampa)
Debtors' Counsel: Alberto F. Gomez Jr., Esq.
Morse & Gomez, PA
119 S. Dakota Avenue
Tampa, FL 33606
Tel: (813) 301-1000
Email: algomez@morsegomez.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtors did not file a list of their 20 largest unsecured
creditors when they filed their petition.
The petition was signed by the Joint Debtors.
READER'S DIGEST: Moody's Assigns 'Ba1' Rating on $150MM DIP Loan
----------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to The Reader's
Digest Association, Inc.'s $150 million Debtor-in-Possession term
loan facility provided by lenders as part of RDA's planned
restructuring to reduce debt and financially strengthen the
company for the future.
Tom Williams, Senior Vice President and Chief Financial Officer
for RDA, said the rating for the DIP facility was nine steps
higher than Moody's most recent rating for the company, four steps
higher than when the company was acquired and taken private in
March 2007, and equal to the prior, public-company levels circa
2005.
"We are encouraged by the Moody's assessment of our DIP loan as a
Ba1 rating, which is the highest level of speculative grade debt,"
Williams said.
Moody's said in a press release, "Moody's believes RDA has a
relatively high probability of executing its restructuring plan
based on nearly 80 percent of its lenders having signed an
agreement in principle to approve the proposed reorganization. The
agreement is likely to shorten the stay in bankruptcy and minimize
any potential adverse operational effects."
On August 24, RDA announced it had filed voluntary pre-arranged
petitions under Chapter 11 of the United State Bankruptcy Code, as
part of the company's previously announced restructuring plan.
RDA 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.
READER'S DIGEST: Advertising Revenues in Canada Up 1%
-----------------------------------------------------
With innovative partnerships, great new publications and
successful Web sites and magazines, the Reader's Digest Canadian
Operation is one of the leading multi-platform multi-brand media
organizations in the country.
Results posted on Masthead recently reveal that Reader's Digest
has retained its position as number 3 in Canada and Best Health,
the one-year-old publication, was featured on Masthead's list of
the top ten almost made-its. Advertising revenues for all the
magazines and websites were up 1% in fiscal year 2009, an
extraordinary achievement in an industry that is struggling.
"This is the way we are reacting to the challenging market
conditions -- having adapted all of the Reader's Digest properties
over the last two years, to multi-brand, multi-platform media
outlets catering to specific target communities and advertisers,
with original, relevant, interesting content," said Tony Cioffi,
CEO of Reader's Digest Canada.
Comprising five magazines, affiliated websites, and several
partnership initiatives, the Reader's Digest Canadian Operation is
well positioned to provide great content to target demographics in
the medium in which they are most comfortable. Further
announcements on properties are due in the next few months.
Reader's Digest
Reader's Digest magazine continues to reign as market leader
in audience and reader engagement. The magazine topped the PMB
list once again this year as the most-read magazine in Canada, a
position it has held since the first national PMB study conducted
in 1973. Reader's Digest not only delivers the number one
audience overall but is also number one against key segments like
Women 18-34, Upper Income Adults ($100,000+ Household Income) and
Women 25-54 with Children. http://www.readersdigest.ca "As
Canada's most trusted magazine, Reader's Digest will continue to
give its readers unique, insightful stories, such as the Campus
Safety feature in our October issue, and inspiring stories about
ordinary or influential Canadians that make a difference in our
world," said Robert Goyette, Editor-in-Chief, Magazines.
Best Health
Just over a year old and unique in design and editorial
offering, Best Health magazine provides Canadian women with
breakthrough articles on attaining and sustaining a healthy
lifestyle and is filled with relevant, meaningful editorial
presented in an enticing environment. Reader and advertising
response to both the website and the magazine has been phenomenal.
Offering "real answers for real women" in a sleek, informative and
enjoyable format, the magazine is divided into four sections: Look
Great, Get Healthy, Eat Well and Embrace Life, with the added
benefit of original articles and forums at
http://www.besthealthmag.ca "The active and engaged Best Health
community is particularly important to us. So many women have
written to tell us that this new Canadian magazine is great value
because of its 'four-magazines-in-one' approach, and say that it
has truly enhanced their lives and inspired them. Our readers and
our on-line community reach out to us and to each other all the
time with ideas and comments, and we use this feedback when
deciding on content for each issue of Best Health," said Bonnie
Munday, Editor of Best Health Magazine.
Our Canada/More of Our Canada
The most unique, proud-to-be-Canadian magazine ever! "We have so
many wonderful partnerships here at Our Canada; this is without
doubt the ultimate Canadian reader's magazine. Daily, I receive
emails and letters from Canadians telling me how much they love
our magazines and read them from cover to cover. The concept of
Our Canada is resonating," - Simon McDermott, Production Editor of
Our Canada.
With over 280,000 loyal subscribers, Our Canada has featured
thousands of Canadians' stories and photos in the last five years,
and since the launch of the All-Canadian Pet-tacular Contest, Web
site visits to http://www.ourcanada.cahave doubled over the
summer.
Our Canada delivers to a highly engaged audience committed to
their community and country. In every issue, readers celebrate
their "pride of place" by sharing their personal stories with
fellow Canadians. More than a magazine, Our Canada is a
community, a place to meet new friends, where everyone gets to
tell his or her story. Measured for the first time by PMB, Our
Canada broke the one million reader mark with a total audience of
1,016,000 readers.
"The RD Media sales team is focused on delivering innovative and
solution oriented programs for our clients that leverage the
unique aspect of our suite of assets: magazine, digital, database
and content. We believe that we are extremely well positioned to
support our clients' needs and grow all aspects of our business in
the future," said Larry Thomas, Vice President and Publisher Ad
Sales.
About The Reader's Digest Association
RDA 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 Web sites
generating 22 million unique visitors per month, and sells
40 million books, music and video products across the world each
year. Its global headquarters are in Pleasantville, N.Y.
Reader's Digest said that as of June 30, 2009, it had total assets
of $2.2 billion against total debts of $3.4 billion.
Reader's Digest, together with its 47 affiliates, filed for
Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529).
Kirkland & Ellis LLP has been engaged as general restructuring
counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as
conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire
& Co, LLC, is financial advisor. AlixPartners, LLC, is
restructuring consultant. Kurtzman Carson Consultants is notice
and claims agent.
Bankruptcy Creditors' Service, Inc., publishes Reader's Digest
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Reader's Digest and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000)
READER'S DIGEST: Application to Hire Kirkland as Bankr. Counsel
---------------------------------------------------------------
The Reader's Digest Association and its affiliates seek the
Court's permission to employ, nunc pro tunc to the Petition Date,
Kirkland & Ellis LLP as their attorneys in connection with their
Chapter 11 cases in accordance with the terms and conditions set
forth in that certain engagement letter between the Debtors and
K&E, dated as of February 26, 2009.
As lead counsel, K&E has agreed to:
(a) advise the Debtors with respect to their powers and duties
as debtors-in-possession in the continued management and
operation of their business and properties;
(b) advise the Debtors on the conduct of the Chapter 11 cases,
including all of the legal and administrative requirements
of operating in Chapter 11;
(c) attend meetings and negotiate with the representatives of
creditors and other parties-in-interest;
(d) prosecute actions on the Debtors' behalf, defend any
action commenced against them and represent their
interests in negotiations concerning litigation in which
they are involved, including objections to claims filed
against the bankruptcy estates;
(e) prepare pleadings in connection with the Chapter 11 cases,
including motions, applications, answers, orders, reports
and papers necessary or otherwise beneficial to the
administration of the estates;
(f) represent the Debtors in connection with obtaining
postpetition financing;
(g) advise the Debtors in connection with any potential sale
of assets;
(h) appear before the Court and any appellate courts to
represent the interests of the estates before those
courts;
(i) advise the Debtors regarding tax matters;
(j) assist the Debtors in obtaining approval of a disclosure
statement and confirmation of a Chapter 11 plan and all
related documents; and
(k) perform all other necessary legal services for the Debtors
in connection with the prosecution of the Chapter 11
cases, including analyzing the Debtors' leases and
contracts, analyzing the validity of liens against the
Debtors, and advising the Debtors on corporate and
litigation matters.
K&E will be paid for its professional services rendered and
reimbursed of its expenses incurred in connection with the
bankruptcy cases. K&E's current hourly rates are:
Billing Category Billing Range
---------------- -------------
Partners $625 - $965
Associates $365 - $625
Paraprofessionals $130 - $275
The Debtors expect these professionals to have primary
responsibility for providing services to the Debtors:
Attorney Hourly Rate
-------- -----------
James H.M. Sprayregen, Esq. $965
Todd F. Maynes, Esq. $955
Paul M. Basta, Esq. $895
Joshua Korff, Esq., $815
Christopher J. Marcus, Esq. $725
Leonard Klingbaum, Esq. $685
Nicole L. Greenblatt, Esq. $625
Thomas A. Williams, The Reader's Digest Association, Inc.'s chief
financial officer and senior vice president, informs the Court
that on March 13, 2009, the Debtors paid $350,000 to K&E as a
classic retainer. On June 15, 2009, the Debtors paid to K&E an
additional $150,000, increasing the retainer balance to $500,000.
On July 29, the Debtors paid $547,989 to K&E, including $300,000
to increase the retainer balance to $800,000. On August 20, the
Debtors made additional payments to K&E of $750,000 and $500,000,
increasing the retainer balance to $2,050,000.
Mr. Williams says that as of the Petition Date, the Debtors do not
owe K&E any amounts for legal services rendered prepetition.
Paul M. Basta, Esq., a partner at K&E assures the Court that his
firm is a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code.
About The Reader's Digest Association
RDA 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 Web sites
generating 22 million unique visitors per month, and sells
40 million books, music and video products across the world each
year. Its global headquarters are in Pleasantville, N.Y.
Reader's Digest said that as of June 30, 2009, it had total assets
of $2.2 billion against total debts of $3.4 billion.
Reader's Digest, together with its 47 affiliates, filed for
Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529).
Kirkland & Ellis LLP has been engaged as general restructuring
counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as
conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire
& Co, LLC, is financial advisor. AlixPartners, LLC, is
restructuring consultant. Kurtzman Carson Consultants is notice
and claims agent.
Bankruptcy Creditors' Service, Inc., publishes Reader's Digest
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Reader's Digest and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000)
READER'S DIGEST: Application for KCC as Notice & Claims Agent
-------------------------------------------------------------
The Reader's Digest Association LLC and its affiliates obtained
the Court's authority to employ Kurtzman Carson Consultants LLC as
their notice and claims agent in connection with their bankruptcy
cases, pursuant to a retention agreement.
As notice and claims agent, KCC will, among other things:
(a) notify all potential creditors of the filing of the
bankruptcy petitions and of the setting of the first
meeting of creditors, pursuant to Section 341(a) of the
Bankruptcy Code;
(b) notify all potential creditors of the existence and amount
of their claims as evidenced by the Debtors' books and
records and asset forth in the Debtors' schedules of
assets and liabilities and statement of financial affairs;
(c) docket all claims received by the Office of the Clerk of
Court, maintain the official claims registers for each
Debtor on behalf of the Clerk, and provide the Clerk with
certified duplicate, unofficial Claims Register on a
monthly basis, unless otherwise directed;
(d) maintain the official mailing list for each Debtor of all
entities that have filed a proof of claim, which list will
be available upon request by a party-in-interest or the
Clerk;
(e) assist with, among other things, solicitation and
calculation of votes and distribution as required in
furtherance of confirmation of plans of reorganization;
and
(f) at the close of the case, box and transport all original
documents, in proper format, as provided by the Clerk's
Office, to the Federal Archives Record Administration.
Thomas A. Williams, the Debtors' chief financial officer and
senior vice president, tells the Court that KCC will submit its
invoices to the Debtors monthly, provided however, where total
fees and expenses are expected to exceed $10,000 in any single
month, KCC may require advance payment, which will be due and
payable upon demand and prior to the performance of services. He
adds that KCC will be paid a retainer of $75,000 for services to
be performed and expenses to be incurred pursuant to the Retention
Agreement.
Mr. Williams also discloses that KCC's retainer will be an
"evergreen retainer;" invoices will be drawn down from the
retainer and Reader's Digest's payments will then be deposited
into the retainer to return the retainer to its original $75,000.
He notes that upon termination of the Retention Agreement, KCC
will refund any unapplied retainer balance.
An amended application was subsequently filed disclosing KCC's
payment and certain indemnification. As part of the overall
compensation payable to KCC under the terms of the Retention
Agreement, the Debtors have agreed to certain indemnification
obligations, except in circumstances of gross negligence or
willful misconduct on KCC's part, Mr. Williams tells Judge Drain.
Michael J. Frishberg, vice president of corporate restructuring
services at KCC, assures the Court that KCC is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About The Reader's Digest Association
RDA 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 Web sites
generating 22 million unique visitors per month, and sells
40 million books, music and video products across the world each
year. Its global headquarters are in Pleasantville, N.Y.
Reader's Digest said that as of June 30, 2009, it had total assets
of $2.2 billion against total debts of $3.4 billion.
Reader's Digest, together with its 47 affiliates, filed for
Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529).
Kirkland & Ellis LLP has been engaged as general restructuring
counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as
conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire
& Co, LLC, is financial advisor. AlixPartners, LLC, is
restructuring consultant. Kurtzman Carson Consultants is notice
and claims agent.
Bankruptcy Creditors' Service, Inc., publishes Reader's Digest
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Reader's Digest and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000)
READER'S DIGEST: DIP Financing Agreement Amended
------------------------------------------------
Nicole L. Greenblatt, Esq., at Kirkland & Ellis LLP, in New York,
notifies the U.S. Bankruptcy Court for the Southern District of
New York and parties-in-interest of the filing of a revised
version of the original Credit and Guarantee Agreement among The
Reader's Digest Association, Inc., as borrower, the other Debtors,
as guarantors, JPMorgan Chase Bank, N.A., as administrative agent,
and the DIP lenders for a postpetition interim financing in a
principal amount not to exceed $100,000,000 and other financial
accommodations. A blacklined copy showing the changes between the
current DIP Agreement and the Original DIP Agreement is also
filed.
The DIP Credit Agreement was amended to provide that maturity date
of the DIP Loans is May 26, 2010. The Borrower may extend the
Maturity Date -- the Twelve Month Facility Extension Option --
until August 26, 2010.
Clean and blacklined copies of the current DIP Agreement are
available for free at:
http://bankrupt.com/misc/RDA_CreditAgreement_Rev082709.pdf
The Court has approved the DIP Motion on an interim basis. Final
hearing is currently set for September 17, 2009.
The DIP Lenders have committed to provide up to $150 million of
debtor-in-possession financing.
About The Reader's Digest Association
RDA 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 Web sites
generating 22 million unique visitors per month, and sells
40 million books, music and video products across the world each
year. Its global headquarters are in Pleasantville, N.Y.
Reader's Digest said that as of June 30, 2009, it had total assets
of $2.2 billion against total debts of $3.4 billion.
Reader's Digest, together with its 47 affiliates, filed for
Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529).
Kirkland & Ellis LLP has been engaged as general restructuring
counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as
conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire
& Co, LLC, is financial advisor. AlixPartners, LLC, is
restructuring consultant. Kurtzman Carson Consultants is notice
and claims agent.
Bankruptcy Creditors' Service, Inc., publishes Reader's Digest
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Reader's Digest and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000)
READER'S DIGEST: Proposes to Keep Customer Programs
---------------------------------------------------
The Reader's Digest Association and its predecessors have been at
the forefront of the highly-competitive media and direct marketing
industry for more than 80 years; and, as a result, have engendered
strong brand loyalty among their end-user consumers and
established substantial credibility among distributors, marketing
partners and
competitors.
To develop and sustain their positive reputation in the
marketplace, the Debtors have dedicated extensive time and
resources to creating and implementing a wide-variety of
innovative marketing strategies, promotions, merchandising
practices and purchasing programs designed to acquire and retain
customers, grow market share and, ultimately, generate sales and
enhance long-term viability.
The Debtors also maintain certain programs specific to their
school and educational services businesses, which, in addition to
increasing profitability, promote school-wide literacy and develop
goodwill from an important customer -- U.S. schools. The Debtors
believe those programs and practices have been successful business
strategies that play an important role in the purchasing decisions
of customers within the Debtors' markets and distribution
channels.
The Debtors market and sell their products to a highly-diversified
customer base, which generally, though not exclusively, consists
of four main customer groups: consumers, advertisers, merchants
and school and educational customers. In turn, the customer
programs and practices that the Debtors implement and modify from
time to time in the ordinary course of business align with the
customer groups.
It is critically important to the Debtors' long-term viability
that they maintain the loyalty and trust of their customers,
preserve their brand equity and protect their reputation,
particularly while operating in Chapter 11, James H.M. Sprayregen
P.C., Esq., at Kirkland & Ellis LLP, in New York, asserts.
Indeed, the Debtors must be able to assure their customers and
send a strong message to the marketplace that they are willing and
able to honor their prepetition obligations to their customers and
continue to maintain and develop, implement and administer their
Customer Programs in the ordinary course of business consistent
with the same integrity, accountability and "back-to-basics"
values for which they are well-known.
The decision to commence the bankruptcy cases, while difficult,
will afford the Debtors the opportunity to alleviate financial
pressures by rationalizing their capital structure to better-align
their balance sheet and revised business plan, which will allow
the Debtors to emerge from Chapter 11 competitively positioned to
capitalize on future growth prospects, capture new market share
and continue their expansion into creating multi-platform
communities based on branded content across their many powerful
media brand names, Mr. Sprayregen relates. Those opportunities
will not be possible, however, if the Debtors are unable to honor
their obligations to their customers, he asserts.
Hence, the Debtors ask the Court for an interim and final order
authorizing them to continue to maintain and administer
prepetition Customer Programs, and pay and honor their obligations
to customers relating to the Customer Programs in the ordinary
course of business consistent with past practice.
The Debtors' Costumer Programs are:
(1) Consumer Programs, consisting of:
* Subscriptions;
* Refunds and billing adjustments;
* Sweepstakes and contests;
* Consumer purchasing incentives and other promotions;
* Reader-generated content;
* Worldwide country tours and other travel promotions; and
* Cooking schools;
(2) Advertiser Programs consisting of:
* Traditional advertisements; and
* Bartering arrangements;
(3) Merchant Programs consisting of:
* Retail marketing programs;
* Custom publishing; and
* Affiliate purchasing programs; and
(4) School and Educational Programs consisting of:
* Weekly reader custom publishing program;
* CompassLearning software support programs; and
* Reader's Digest scholarship program.
The Debtors believe that the relief requested will pay dividends
with respect to the long-term reorganization of their businesses,
both in terms of profitability and the engendering of goodwill,
especially at this critical time following the filing of the
Chapter 11 cases.
The Court granted the request on an interim basis. Final hearing
will be held on September 17, 2009, at 10:00 a.m.
About The Reader's Digest Association
RDA 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 Web sites
generating 22 million unique visitors per month, and sells
40 million books, music and video products across the world each
year. Its global headquarters are in Pleasantville, N.Y.
Reader's Digest said that as of June 30, 2009, it had total assets
of $2.2 billion against total debts of $3.4 billion.
Reader's Digest, together with its 47 affiliates, filed for
Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529).
Kirkland & Ellis LLP has been engaged as general restructuring
counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as
conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire
& Co, LLC, is financial advisor. AlixPartners, LLC, is
restructuring consultant. Kurtzman Carson Consultants is notice
and claims agent.
Bankruptcy Creditors' Service, Inc., publishes Reader's Digest
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Reader's Digest and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000)
REDDY ICE: Harbinger, et al., Disclose 9.8% Equity Stake
--------------------------------------------------------
Philip Falcone and his hedge funds Harbinger Capital Partners
Master Fund I, Ltd., Harbinger Capital Partners Master Fund I,
Ltd., Harbinger Capital Partners LLC and Harbinger Holdings, LLC,
disclose holding 2,200,000 shares or 9.8% of the Common Stock, par
value $0.01 per share, of Reddy Ice Holdings, Inc.
Reddy Ice Holdings, Inc. (NYSE:FRZ) is the largest manufacturer
and distributor of packaged ice in the United States. With more
than 2,000 year-round employees, the Company sells its products
primarily under the widely known Reddy Ice(R) brand to a variety
of customers in 32 states and the District of Columbia. The
Company provides a broad array of product offerings in the
marketplace through traditional direct store delivery, warehouse
programs and its proprietary technology, The Ice Factory(R).
Reddy Ice serves most significant consumer packaged goods channels
of distribution, as well as restaurants, special entertainment
events, commercial users and the agricultural sector.
Reddy Ice Holdings at June 30, 2009, had $448.3 million in total
assets; and $36.4 million in total current liabilities,
$390.6 million in long-term obligations, $21.5 million in deferred
taxes and other liabilities; resulting in $224 million in
stockholders' deficit.
* * *
According to the Troubled Company Reporter on April 13, 2009,
Standard & Poor's Ratings Services said that it lowered its
ratings on Dallas, Texas-based Reddy Ice Holdings Inc. and its
wholly-owned operating subsidiary, Reddy Ice Corp. S&P lowered
the corporate credit rating to 'B' from 'B+', and for analytical
purposes, S&P views the companies as one economic entity. The
outlook is negative.
REFCO INC: Judge Lynch Decision Junking Suit vs. Grant, E&Y
-----------------------------------------------------------
Judge Gerard E. Lynch of the U.S. District Court for the Southern
District of New York dismissed the complaint filed by Marc S.
Kirschner, Trustee of the Refco Inc. Litigation Trusts, against
Ernst & Young LLP, Grant Thornton LLP and Mayer Brown LLP,
alleging that these firms substantially assisted in, or knew of,
the fraudulent diversion of assets that led to Refco's demise.
As previously reported, the Refco Litigation Trusts initiated a
lawsuit in the New York State Supreme Court on behalf of 75
Foreign Exchange customers, against Mayer Brown, Ernst & Young
and Grant Thornton, specifically alleging that Refco's legal and
accounting advisers knowingly assisted corrupt Refco insiders in
looting customer assets deposited with Refco.
Mr. Kirschner said the lawsuit was initiated in the Litigation
Trusts' efforts to continue to vigorously seek redress for the
harm caused to Refco and its creditors. In his Complaint, he
cited that the work of Grant Thornton -- which acted as Refco's
outside auditor -- gave "a complete picture of how Refco and the
Refco fraud functioned." The Complaint also alleged that Mayer
Brown, Refco's primary law firm, "actively participated in
carrying out Refco's fraudulent misstatement of its financial
position," while Ernst & Young, which provided tax services to
various Refco entities, performed to work for Refco "despite
apprehending the scope of the fraud."
The Complaint against Grant Thornton, et al., seeks over half a
billion dollars in damages and penalties for the Defendants' role
in committing and aiding in the fraud, breaches of fiduciary
duty, and conversion through which Refco FX customer funds were
misappropriated.
In his 35-page opinion, Judge Lynch noted that the Complaint
"fails to adequately allege that the Professional Defendants had
any idea that unauthorized diversions of funds from FX customers'
accounts were occurring, or that they played any role in
assisting [the] alleged misconduct."
"Whatever the quality of the Trustee's allegations regarding the
Professional Defendants' conduct in assisting Refco insiders to
cook Refco's books or conceal Refco's uncollectible debt, the
only allegations that matter are those that support the
contention that the Professional Defendants had actual knowledge
of, as well as substantially assisted in, the siphoning of the FX
customers' assets," Judge Lynch opined.
"The allegations become all the more crucial where, as the
Trustee has acknowledged, some use of the FX customers' margin
collateral by RCM is specifically contemplated by the FX
Agreement. Accordingly . . . the Trustee must make allegations
that these defendants had actual knowledge of and substantially
assisted in this putative scheme," the District Court pointed
out.
Nevertheless, Judge Lynch gave Mr. Kirschner permission to file a
new complaint, noting that given Mr. Kirschner's access to a
"substantial trove" of Refco documents, "it is far from clear
that repleading would be futile." The District Court
specifically gave Mr. Kirschner until September 25, 2009, to
decide whether to amend his complaint.
Aimee Jasculca, spokeswoman for Mayer Brown, told Reuters that
the firm was pleased with Judge Lynch's decision and still
believes it "acted in a professional, competent and ethical
manner in its work on behalf of Refco." Susan Beck in a report
at Law.com dated August 27, 2009, noted that Mayer Brown said:
"We are pleased with the court's decision to dismiss the claims
. . . . Our review of the evidence available to us shows that the
firm acted in a professional, competent and ethical manner in its
work on behalf of Refco. We will continue to vigorously assert
our many factual and legal defenses in this and the other Refco-
related cases in which the firm is a party."
Judge Lynch's ruling follows a string of dismissals of other
lawsuits filed by Mr. Kirschner, including a $2 billion lawsuit
against Grant Thornton, which he filed on behalf of Refco
creditors, from Bank of America Corp., Deutsche Bank AG, Credit
Suisse Group AG and other entities.
Judge Lynch also dropped, for the same reason, a lawsuit that Mr.
Kirschner brought against accounting firm KPMG LLP.
A full-text copy of Judge Lynch's 35-page opinion is available
for free at:
http://bankrupt.com/misc/DSCourtRefcoRuling082509.pdf
About Refco Inc.
Headquartered in New York, Refco Inc. -- http://www.refco.com/--
is a diversified financial services organization with operations
in 14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the most
active members of futures exchanges in Chicago, New York, London
and Singapore. In addition to its futures brokerage activities,
Refco is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products. Refco is one of the largest
global clearing firms for derivatives. The Company has operations
in Bermuda.
The Company and 23 of its affiliates filed for Chapter 11
protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05-
60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher
& Flom LLP, represented the Debtors in their restructuring
efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the
Official Committee of Unsecured Creditors. Refco reported
US$16.5 billion in assets and US$16.8 billion in debts to the
Bankruptcy Court on the first day of its Chapter 11 cases.
The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its Direct and Indirect Subsidiaries,
including Refco Capital Markets, Ltd., and Refco F/X Associates,
LLC, on December 15, 2006. That Plan became effective on Dec. 26,
2006. Pursuant to the plan, RJM, LLC, was named plan
administrator to reorganized Refco, Inc. and its affiliates, and
Marc S. Kirschner as plan administrator to Refco Capital Markets,
Ltd.
Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Refco Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
REFCO INC: NASCAT Supports SEC Stand on "Primary Violators"
-----------------------------------------------------------
The U.S. Securities and Exchange Commission filed an amicus brief
in the case, PIMCO Funds, et al., v. Mayer Brown LLP, et al.,
currently pending at the U.S. Court of Appeals for the Second
Circuit in New York. Among others, the SEC brief pointed out
that U.S. District Judge Gerard Lynch's decision to dismiss
investor claims to recoup losses from Joseph Collins, former
lawyer of Refco Inc., would let a person "shield himself from
liability" by promoting fraud using another person or
anonymously," Joshua Gallu at Bloomberg News reported.
Refco concealed trading losses for almost a decade prior to its
collapse by secretly transferring them to a holding company owned
by CEO Phillip Bennett. Prosecutors have asserted that Mr.
Collins knew of the scheme and drafted legal documents that
helped the CEO deceive investors. Refco shareholders that
include RH Capital Associates LLC and Pacific Investment
Management Co. or PIMCO sought to add Mr. Collins and his law
firm to their lawsuit against Mr. Bennett. Judge Lynch, however,
dismissed the suit against Mr. Collins, saying a 1998 Supreme
Court ruling required that a false statement be publicly
attributed to an individual before the person is deemed to play a
"primary" role and be subject to private lawsuits.
The SEC disagrees with Judge Lynch's decision, saying an
individual who creates a misstatement to hide the fraud also is a
"primary violator." "You shouldn't require express attribution"
for private lawsuits, Bloomberg News quoted Salvatore Graziano,
Esq., at Bernstein Litowitz Berger & Grossman LLP, in New York,
as saying on behalf of Refco investors. "If you do that, all
it's only going to do is let a number of wrongdoers get away with
securities fraud."
In its brief, the SEC said that actual "attribution of a false or
misleading statement by a person is only one means" by which a
person may be a "primary violator" of SEC Rule 10b-5's
prohibition against making false or misleading statements to
investors, the National Association of Shareholder and Consumer
Attorneys or NASCAT noted in a public statement. A person may
also be a primary violator and, thus, held accountable to
investors, if that person provides the false or misleading
information that another person puts into a false statement, the
SEC said.
NASCAT Praises SEC's Position on "Primary Violators"
"In its brief, the SEC takes an important step toward restoring
some investor protections lost in recent years in court decisions
that have overly restricted and rolled-back investors' rights of
action and curbed their ability to recover losses from those who,
by all traditional definitions of the word, unquestionably
engaged in fraud," said Ira Schochet, NASCAT's President, said in
a public statement. "In addition, the SEC also reiterated the
long-standing position of the Commission and the Supreme Court
that private investor lawsuits are necessary to provide maximum
compensation for injured investors while also supplementing
enforcement of securities laws and deterring wrongful practices."
"Private investors form a key front-line defense against
financial fraud and abuse because they are in a unique position
to quickly identify and take action against unlawful conduct by
corporate issuers and their advisers," Mr. Schochet continued.
"Traditionally, securities market regulation and law enforcement
relied upon a 'three legged stool' of the SEC, federal and state
attorneys general and investor actions. In recent years,
however, two legs of the regulatory stool were weakened by laxity
in enforcement of federal securities law and Supreme Court
decisions, and lower court rulings interpreting those decisions,
which have curtailed investors' rights of action."
As part of its financial regulatory restructuring proposal,
NASCAT has also urged Congress to correct the problems caused by
three Supreme Court decisions:
1. In re Central Bank of Denver, N.A. v. First Interstate Bank
of Denver, N.A., the Court held in 1994 that investors
cannot assert a claim against those who "'aid and abet"'
securities fraud. Recognizing that outside advisors'
ability to detect and prevent fraud, Congress preserved the
SEC's right to bring aiding and abetting actions against
them. Congress should extend that right to private
lawsuits so that investors can recover fraud losses and
otherwise benefit from the additional protections that
private litigation would create.
2. In re Stoneridge Investment Partners, LLC v. Scientific-
Atlanta, Inc., the Court imposed in 2008 an overly
restrictive view of the circumstances under which investors
may assert a claim against secondary actors who knowingly
engage in schemes to defraud the investing public, if the
elimination of aiding and abetting liability was not
enough. If Stoneridge remains the standard, "gatekeepers"
in even the most flagrant securities frauds, including
investment bankers, feeder funds, and credit rating
agencies, will effectively be immune from legitimate claims
by injured investors.
3. In re Dura Pharmaceuticals v. Broudo, the Court issued in
2005 a ruling that resolved a split among the Circuit
Courts of Appeals on the element of loss causation and
provided a reasonable standard for establishing this
element. However, many lower courts have since used this
decision to erect a new barrier to investors obtaining a
recovery from those who defraud them. Many lower courts
have too narrowly interpreted this decision and, in so
doing, have raised artificial obstacles for defrauded
investors seeking recovery.
The National Association of Shareholder and Consumer Law
Attorneys is a non-profit organization comprised of about 100 law
firms representing consumers and investors -- including pension
funds and individuals -- in cases of securities fraud and other
forms of "white collar" wrongdoing and criminal activity.
About Refco Inc.
Headquartered in New York, Refco Inc. -- http://www.refco.com/--
is a diversified financial services organization with operations
in 14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the most
active members of futures exchanges in Chicago, New York, London
and Singapore. In addition to its futures brokerage activities,
Refco is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products. Refco is one of the largest
global clearing firms for derivatives. The Company has operations
in Bermuda.
The Company and 23 of its affiliates filed for Chapter 11
protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05-
60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher
& Flom LLP, represented the Debtors in their restructuring
efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the
Official Committee of Unsecured Creditors. Refco reported
US$16.5 billion in assets and US$16.8 billion in debts to the
Bankruptcy Court on the first day of its Chapter 11 cases.
The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its Direct and Indirect Subsidiaries,
including Refco Capital Markets, Ltd., and Refco F/X Associates,
LLC, on December 15, 2006. That Plan became effective on Dec. 26,
2006. Pursuant to the plan, RJM, LLC, was named plan
administrator to reorganized Refco, Inc. and its affiliates, and
Marc S. Kirschner as plan administrator to Refco Capital Markets,
Ltd.
Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Refco Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
REFCO INC: Plan Admin. Wants Final Decree Closing 20 Cases
----------------------------------------------------------
Pursuant to Section 350(a) of the Bankruptcy Code and Rule 3022
of the Federal Rules of Bankruptcy Procedure, Marc S. Kirschner,
the Plan Administrator of Refco, Inc., asks Judge Robert D. Drain
of the U.S. Bankruptcy Court for the Southern District of New
York to issue a final decree closing the Chapter 11 cases of
Refco's 20 reorganized debtor-affiliates:
Debtor Case No.
------ --------
Bersec International LLC 05-60009
Kroeck & Associates LLC 05-60019
Lind-Waldock Securities LLC 06-11262
Marshall Metals, LLC 05-60012
New Refco Group Ltd., LLC 05-60014
Refco Administration, LLC 05-60020
Refco Capital Holdings, LLC 05-60022
Refco Capital Management, LLC 05-60010
Refco Capital Trading LLC 05-60026
Refco Finance Inc. 05-60016
Refco Financial, LLC 05-60013
Refco Fixed Assets Management LLC 05-60029
Refco Global Capital Management LLC 05-60010
Refco Global Finance, Ltd. 05-60007
Refco Global Futures, LLC 05-60024
Refco Global Holdings, LLC 05-60028
Refco Information Services, LLC 05-60008
Refco Managed Futures LLC 06-11261
Refco Mortgage Securities, LLC 05-60021
Summit Management, (Newco) LLC 05-60025
Refco, Inc., and its 22 debtor-affiliates filed for bankruptcy on
October 17, 2005. Refco Managed Futures, Westminster-Refco
Management LLC and Lind-Waldock Securities LLC -- the "Subsequent
Debtors" -- filed their own Chapter 11 petitions on June 5, 2006.
The Chapter 11 cases of the Initial Debtors and Subsequent
Debtors were jointly administered, as directed by the Bankruptcy
Court.
Section 350(a) provides that "[a]fter an estate is fully
administered and the court has discharged the trustee, the court
shall close the case." Bankruptcy Rule 3022 further provides
that "[a]fter an estate is fully administered in a chapter 11
reorganization case, the court, on its own motion or on motion of
a party in interest, [will] enter a final decree closing the
case."
The Plan of Reorganization of Refco and its debtor-affiliates was
confirmed by the Bankruptcy Court on December 15, 2006. It
subsequently was declared effected 11 days later, on December 26,
2006. Since the Effective Date, the Refco Plan Administrator has
made substantial progress in reconciling claims and making
distributions to claimants under the Plan, Steven Wilamowsky,
Esq., at Bingham McCutchen LLP, in New York, says.
The Refco Plan contemplates the transfer of certain rights and
claims of the Closing Debtors to a Litigation Trust created under
the Plan, and the merger of the Closing Debtors with and into
Refco Inc. Those Transfers and Mergers have been consummated in
accordance with the Plan's terms, Mr. Wilamowsky discloses.
"There is no longer any reason to continue the Chapter 11 cases
of the Closing Debtors as those entities have ceased to exist and
all matters relating to the administration of the Closing
Debtors' estates are being pursued by the Refco Plan
Administrator in the remaining estates and the Litigation Trustee
with respect to any Litigation Claims," Mr. Wilamowsky says.
Mr. Wilamowsky also points out that Section 1930(a)(6) of the
Judiciary and Judicial Procedures Code requires that quarterly
fees be paid to the United States Trustee after confirmation and
consummation of a Chapter 11 plan. Thus, he notes, unless and
until the Court enters a final decree closing the Closing
Debtors' cases, the Closing Debtors may be required to continue
payment of Section 1930(a)(6) quarterly fees to the U.S. Trustee.
The Refco Plan Administrator also seeks that the requirement
under Rule 3022-1 of the Local Bankruptcy Rules for the Southern
District of New York, that a Chapter 11 debtor file and serve a
closing report, be waived with respect to the Closing Debtors.
It is intended that a consolidated closing report for all
Debtors, including the Closing Debtors, will be filed in the lead
Refco case at the appropriate time.
The entry of the Proposed Final Decree in each of the Closing
Cases will in no way prejudice (i) the Litigation Trust's pursuit
of any transferred claims, or (ii) a claimant's rights to receive
distributions under the Plan or to pursue ongoing litigation
against a Closing Debtor, Mr. Wilamowsky assures Judge Drain.
He adds that any claims and adversary proceedings that remain
open against one or more of the Closing Debtors, if any, will be
litigated under the lead Refco case.
RCMI Also Seeks Closure of Case
In a subsequent filing, Refco Commodity Management, Inc., also
asks Judge Drain to close its Chapter 11 case.
RCMI filed for bankruptcy on November 15, 2006. Although RCMI's
Chapter 11 case was jointly administered with the other Refco
Debtors, RCMI was not a proponent of Refco Plan of
Reorganization. It instead filed a plan of liquidation in May
2008. Upon the December 2006 Effective Date of the Refco Plan,
the Plan Administrators of Reorganized Refco assumed the rights,
powers and duties of the Reorganized Debtors; while the estates
of RCMI, the Official Committee of Unsecured Creditors, and the
Additional Committee of Unsecured Creditors were dissolved.
RCMI filed its own Plan of Liquidation on May 9, 2008. That Plan
became effective on October 24, 2008.
The RCMI Plan contemplated that on the plan effective date, (i)
RCMI merged with and into Reorganized Refco, with Reorganized
Refco as the surviving entity, (ii) the term of RCMI's Director
expired, and (iii) the promissory notes, share certificates,
including treasury stock, other instruments evidencing any claims
or interests, and all options, warrants, calls, rights, puts,
awards, commitments, or any other agreements of any character to
acquire the Interests, were canceled and are of no further force
and effect, Sally McDonald Henry, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, in New York, notes. The obligations of RCMI
under the notes, share certificates, other agreements and
instruments governing those Claims and Interests were discharged,
she adds.
Ms. Henry states that the property of RCMI has been distributed
to Reorganized Refco, and that all distributions required by the
RCMI Plan have been made. Furthermore, she tells the Court, all
motions, contested matters, and adversary proceedings filed in
the RCMI Chapter 11 Case have been resolved.
RCMI will file its Closing Report in its Chapter 11 case.
About Refco Inc.
Headquartered in New York, Refco Inc. -- http://www.refco.com/--
is a diversified financial services organization with operations
in 14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the most
active members of futures exchanges in Chicago, New York, London
and Singapore. In addition to its futures brokerage activities,
Refco is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products. Refco is one of the largest
global clearing firms for derivatives. The Company has operations
in Bermuda.
The Company and 23 of its affiliates filed for Chapter 11
protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05-
60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher
& Flom LLP, represented the Debtors in their restructuring
efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the
Official Committee of Unsecured Creditors. Refco reported
US$16.5 billion in assets and US$16.8 billion in debts to the
Bankruptcy Court on the first day of its Chapter 11 cases.
The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its Direct and Indirect Subsidiaries,
including Refco Capital Markets, Ltd., and Refco F/X Associates,
LLC, on December 15, 2006. That Plan became effective on Dec. 26,
2006. Pursuant to the plan, RJM, LLC, was named plan
administrator to reorganized Refco, Inc. and its affiliates, and
Marc S. Kirschner as plan administrator to Refco Capital Markets,
Ltd.
Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Refco Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
RH DONNELLEY: Court OKs Blackstone as Committee Advisor
-------------------------------------------------------
Judge Kevin Gross has approved the Official Committee of Unsecured
Creditors' application to retain Blackstone Advisory Services LP
as its financial and restructuring advisor nunc pro tunc to
June 16, 2009.
Before Judge Gross entered his order, the Debtors notified him
that they have questions regarding the amount of the base
restructuring bonus and discretionary restructuring bonus, as
well as the timing and amount by which Blackstone's monthly fees
will be credited against the aggregate restructuring bonus. The
Debtors, however, note that they will continue to endeavor, to
consensually resolve their concerns with the Committee.
In a separate filing, certain unaffiliated investors who are
holders of senior and subordinated notes of the Debtors filed an
objection arguing that Blackstone's fees are unreasonable.
The Creditors' Committee responded that the consenting
noteholders' objection is misplaced because the fees are
reasonable and far lower than the rates and fees, which the
consenting noteholders have agreed to pay their financial
advisors.
Subsequently, the Parties settled their dispute through the
submission of an amended Blackstone Engagement Letter containing
minor changes. A full-text copy of the Letter is available for
free at http://bankrupt.com/misc/RHDBlackstoneLetter.pdf
As financial advisor, Blackstone will:
(a) assist in the evaluation of the Debtors' businesses and
prospects;
(b) assist in the evaluation of the Debtors' long-term
business plan and related financial projections;
(c) assist in the development of financial data and
presentations to the Committee;
(d) analyze the Debtors' financial liquidity;
(e) analyze various restructuring scenarios including the
current proposal and the potential impact of these
scenarios on the recoveries of the unsecured creditors of
the Debtors;
(f) analyze the treatment of other creditor groups under the
current plan proposal and other various restructuring
scenarios;
(g) evaluate the Debtors' debt capacity and alternative
capital structures;
(h) participate in negotiations among the Committee, the
Debtors and its other creditors, suppliers, lessors and
other interested parties;
(i) value consideration offered by the Debtors to the
unsecured creditors of the Debtors in connection with a
Restructuring;
(j) provide expert witness testimony concerning any of the
subjects encompassed by the other financial and
restructuring advisory services; and
(k) provide such other advisory services as are customarily
provided in connection with the analysis and negotiation
of a Restructuring as requested and mutually agreed.
The Committee proposes that Blackstone be paid according to this
fee structure:
(a) A monthly advisory fee amounting $175,000 in cash, with
the first monthly fee payable upon the execution of the
Agreement by both parties and additional installments of
the Monthly Fee payable in advance on each monthly
anniversary of the Effective Date. One hundred percent of
all monthly fees paid starting with the 13th month after
the Effective Date of the Agreement will be credited
against the Restructuring Fee.
(b) An additional fee equal to $4,500,000 provided, however,
that upon consummation of a Restructuring that the
Committee believes is materially superior to the
restructuring memorialized in the Plan, then the
Restructuring Fee will be equal to $7,000,000. Except as
otherwise provided, a Restructuring will be deemed to have
been consummated upon the execution, confirmation and
consummation of a Plan of Reorganization pursuant to an
order of the Bankruptcy Court, in the case of an in-court
restructuring. The Restructuring Fee will be earned on
consummation of a Restructuring and will be payable, in
cash, on the consummation of a Restructuring.
(c) Reimbursement of all reasonable out-of-pocket expenses
incurred, including, but not limited to, travel and
lodging, direct identifiable data processing, document
production, publishing services and communication charges,
courier services, working meals, reasonable fees and
expenses of Blackstone's counsel and other necessary
expenditures, payable upon rendition of invoices setting
forth in reasonable detail the nature and amount of the
expenses. In connection, the Debtors will pay Blackstone
on the Effective Date and maintain thereafter a $25,000
expense advance for which Blackstone will account upon
termination of this Agreement.
(d) In addition to the compensation payable to Blackstone, the
Debtors agreed to the provisions of the Indemnification
Agreement which are incorporated by reference into the
Engagement Letter in their entirety.
About R.H. Donnelley
Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun
& Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/--
publishes and distributes print and online directories in the
U.S. It offers print directory advertising products, such as
yellow pages and white pages directories. R.H. Donnelley Inc.,
Dex Media, Inc. and Local Launch, Inc. are the company's only
direct wholly owned subsidiaries.
Dex Media East, LLC, is a publisher of the official yellow pages
and white pages directories for Qwest Communications International
Inc. (Qwest) in the states, where Qwest is the primary incumbent
local exchange carrier, such as Colorado, Iowa, Minnesota,
Nebraska, New Mexico, North Dakota and South Dakota.
R.H. Donnelley Corp. and 19 of its affiliates, including Dex
Media East LLC, Dex Media West LLC and Dex Media Inc., filed for
Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-
11833 through 09-11852), after missing a $55 million interest
payment on its senior unsecured notes due April 15. James F.
Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq.,
Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin
LLP, in Chicago, Illinois represent the Debtors in their
restructuring efforts. Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in
Wilmington, Delaware, serve as the Debtors' local counsel. The
Debtors' financial advisor is Deloitte Financial Advisory Services
LLP while its investment banker is Lazard Freres & Co. LLC. The
Garden City Group, Inc., is claims and noticing agent.
As of March 31, 2009, the Company had $929,829,000 in total
assets and $1,023,526,000 in total liabilities, resulting in
$93,697,000 in total shareholders' deficit.
Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings of R.H. Donnelley Corp. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
RH DONNELLEY: Court OKs Cozen as Committee's Local Counsel
----------------------------------------------------------
Judge Kevin Gross approved the application of the Official
Committee of Unsecured Creditors in R.H. Donnelley Corp.'s Chapter
11 cases to hire Cozen O'Connor as local counsel. No objections
were filed to the request.
According to the Committee's designated representative, David G.
Behenna, the Committee seeks to retain Cozen because of (i) the
firm's experience and knowledge in the field of creditors' rights
and business reorganizations under Chapter 11 of the Bankruptcy
Code; and (ii) its general familiarity with the practice and
procedure before courts in the District of Delaware.
Mr. Behenna adds that in connection with its retention, Cozen is
quickly becoming familiar with the Debtors' business and affairs
and the issues, which face creditors. Accordingly, he reasons
that Cozen's services are necessary to enable the Committee to
execute faithfully its duties and responsibilities in the Chapter
11 cases.
Cozen will be paid based on its customary hourly rates, plus
reimbursement of actual, necessary expenses incurred. The
attorneys and paralegals who will be principally involved in the
representation of the Committee and the current hourly rates for
the professionals are:
Mark E. Felger, Esq. (Shareholder) $575
Simon E. Fraser, Esq. (Associate) $395
Maryann Millis (Paralegal) $200
Other Cozen attorneys may from time to time serve the Committee
and their hourly rates range from $225 to $615.
Mark E. Felger, Esq., a shareholder at Cozen, assures the Court
that his firm is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code.
About R.H. Donnelley
Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun
& Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/--
publishes and distributes print and online directories in the
U.S. It offers print directory advertising products, such as
yellow pages and white pages directories. R.H. Donnelley Inc.,
Dex Media, Inc. and Local Launch, Inc. are the company's only
direct wholly owned subsidiaries.
Dex Media East, LLC, is a publisher of the official yellow pages
and white pages directories for Qwest Communications International
Inc. (Qwest) in the states, where Qwest is the primary incumbent
local exchange carrier, such as Colorado, Iowa, Minnesota,
Nebraska, New Mexico, North Dakota and South Dakota.
R.H. Donnelley Corp. and 19 of its affiliates, including Dex
Media East LLC, Dex Media West LLC and Dex Media Inc., filed for
Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-
11833 through 09-11852), after missing a $55 million interest
payment on its senior unsecured notes due April 15. James F.
Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq.,
Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin
LLP, in Chicago, Illinois represent the Debtors in their
restructuring efforts. Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in
Wilmington, Delaware, serve as the Debtors' local counsel. The
Debtors' financial advisor is Deloitte Financial Advisory Services
LLP while its investment banker is Lazard Freres & Co. LLC. The
Garden City Group, Inc., is claims and noticing agent.
As of March 31, 2009, the Company had $929,829,000 in total
assets and $1,023,526,000 in total liabilities, resulting in
$93,697,000 in total shareholders' deficit.
Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings of R.H. Donnelley Corp. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
RH DONNELLEY: Court OKs JHC as Committee's Forensic Accountant
--------------------------------------------------------------
Judge Kevin Gross approved the application of the Official
Committee of Unsecured Creditors in R.H. Donnelley Corp.'s Chapter
11 cases to hire J.H. Cohn LLP as financial advisors and
forensic accountants nunc pro tunc to June 16, 2009. No
objections were filed against the application.
According to David G. Behenna, the Committee's designated
representative, the Committee selected JHC based on, among other
things, the extensive experience and excellent reputation of
JHC's senior professionals in providing financial advisory and
forensic accounting services in complex Chapter 11 cases.
Specifically, the Committee needs JHC to:
(a) perform analysis and monitoring of the Debtors'
historical, current and projected financial affairs,
including without limitation, schedules of assets and
liabilities, statement of financial affairs, periodic
operating reports and cash receipts and disbursements;
(b) perform forensic and financial analyses, including the
evaluation of intercompany claims, avoidance actions,
fraudulent conveyances and preferential transfers and
provide litigation support services in connection
therewith, including expert testimony, as required by the
Committee;
(c) review and analyze certain financial information prepared
by the Debtors and their professionals related to any
business plans;
(d) review and analyze the Debtors' historical and continuing
cash management system, including tracing the flow of
funds among the Debtors;
(e) review and analyze financial information related to the
Debtors' use of cash collateral;
(f) monitor the Debtors' claims management process, analyze
claims, analyze guarantees and summarize claims by entity;
(g) analyze the impact of the bankruptcy filing on strategic
alliances and supply agreements;
(h) analyze proposed critical vendor arrangements, current
status of trade support and monitor any subsequent changes
in amounts and terms of credit extension;
(i) provide tax advisory services, as required by the
Committee;
(j) advise and assist the Committee in its assessment of
proposed severance and other employee plans;
(k) communicate findings to the Committee; and
(1) render such other forensic accounting and other financial
consulting services as the Committee and its counsel may
deem necessary.
Because the Committee is seeking approval of JHC's compensation
under Section 328(a) of the Bankruptcy Code, the Committee
believes that JHC's compensation should not be subject to any
additional standard of review under Section 330.
JHC will paid on an hourly basis. The customary hourly rates for
the partners and professionals most likely to render services
are:
Partners $540 to $695
Manager/Sr. Manager/Director 420 to 525
Other Professional Staff 180 to 350
Paraprofessional 150 to 165
Kevin P. Clancy, a certified public accountant and a member of
JHC, assures the Court that JHC is a "disinterested person"
within the meaning of Section 101(14) of the Bankruptcy Code.
About R.H. Donnelley
Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun
& Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/--
publishes and distributes print and online directories in the
U.S. It offers print directory advertising products, such as
yellow pages and white pages directories. R.H. Donnelley Inc.,
Dex Media, Inc. and Local Launch, Inc. are the company's only
direct wholly owned subsidiaries.
Dex Media East, LLC, is a publisher of the official yellow pages
and white pages directories for Qwest Communications International
Inc. (Qwest) in the states, where Qwest is the primary incumbent
local exchange carrier, such as Colorado, Iowa, Minnesota,
Nebraska, New Mexico, North Dakota and South Dakota.
R.H. Donnelley Corp. and 19 of its affiliates, including Dex
Media East LLC, Dex Media West LLC and Dex Media Inc., filed for
Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-
11833 through 09-11852), after missing a $55 million interest
payment on its senior unsecured notes due April 15. James F.
Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq.,
Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin
LLP, in Chicago, Illinois represent the Debtors in their
restructuring efforts. Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in
Wilmington, Delaware, serve as the Debtors' local counsel. The
Debtors' financial advisor is Deloitte Financial Advisory Services
LLP while its investment banker is Lazard Freres & Co. LLC. The
Garden City Group, Inc., is claims and noticing agent.
As of March 31, 2009, the Company had $929,829,000 in total
assets and $1,023,526,000 in total liabilities, resulting in
$93,697,000 in total shareholders' deficit.
Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings of R.H. Donnelley Corp. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
RH DONNELLEY: Five Units' Schedules of Assets & Liabilities
-----------------------------------------------------------
Five debtor-affiliates of R.H. Donnelley Corporation, reported
assets ranging from $10,000 to $220,000,000:
Debtor Assets Liabilities
------ ------ -----------
R.H. Donnelley Publishing & $218,080,797 $1,849,423,042
Advertising, Inc.
R.H. Donnelley, Inc. $187,939,054 $1,872,128,036
R.H. Donnelley Publishing & $177,418,046 $1,847,975,673
Advertising of Illinois
Holdings Partnership
R.H. Donnelley Apil, Inc. $16,957 $1,847,584,109
R.H. Donnelley Publishing & $10,856 $1,847,584,107
Advertising of Illinois
Holdings LLC
About R.H. Donnelley
Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun
& Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/--
publishes and distributes print and online directories in the
U.S. It offers print directory advertising products, such as
yellow pages and white pages directories. R.H. Donnelley Inc.,
Dex Media, Inc. and Local Launch, Inc. are the company's only
direct wholly owned subsidiaries.
Dex Media East, LLC, is a publisher of the official yellow pages
and white pages directories for Qwest Communications International
Inc. (Qwest) in the states, where Qwest is the primary incumbent
local exchange carrier, such as Colorado, Iowa, Minnesota,
Nebraska, New Mexico, North Dakota and South Dakota.
R.H. Donnelley Corp. and 19 of its affiliates, including Dex
Media East LLC, Dex Media West LLC and Dex Media Inc., filed for
Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-
11833 through 09-11852), after missing a $55 million interest
payment on its senior unsecured notes due April 15. James F.
Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq.,
Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin
LLP, in Chicago, Illinois represent the Debtors in their
restructuring efforts. Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in
Wilmington, Delaware, serve as the Debtors' local counsel. The
Debtors' financial advisor is Deloitte Financial Advisory Services
LLP while its investment banker is Lazard Freres & Co. LLC. The
Garden City Group, Inc., is claims and noticing agent.
As of March 31, 2009, the Company had $929,829,000 in total
assets and $1,023,526,000 in total liabilities, resulting in
$93,697,000 in total shareholders' deficit.
Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings of R.H. Donnelley Corp. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
RH DONNELLEY: Five Units' Statement of Financial Affairs
--------------------------------------------------------
Five debtor-affiliates of R.H. Donnelley Corporation, filed with
the Court their unaudited Statements of Financial Affairs:
* R.H. Donnelley Publishing & Advertising, Inc.;
* R.H. Donnelley, Inc.;
* R.H. Donnelley Publishing & Advertising of Illinois Holdings
Partnership;
* R.H. Donnelley Apil, Inc.; and
* R.H. Donnelley Publishing & Advertising of Illinois Holdings
LLC;
Mark W. Hianik, R.H. Donnelley Corp.'s senior vice-president,
general counsel, and corporate secretary, relates that R.H.
Donnelley Publishing & Advertising of Illinois Partnership and
R.H. Donnelley Publishing & Advertising, Inc. earned income from
operation of their businesses:
RHDP&A of Illinois Partnership:
01/01/09 to 05/28/09 $151,256,678
01/01/08 to 12/31/08 $26,891,331
01/01/07 to 12/31/07 $7,812,308
RHDP&AI:
01/01/09 to 05/28/09 $214,852,590
01/01/08 to 12/31/08 $572,562,917
01/01/07 to 12/31/07 $609,496,343
With regard to income other than operation of their businesses,
R.H. Donnelley, Inc. and R.H. Donnelley Apil, Inc. earned these
amounts for these periods:
RHDI:
01/01/09 to 05/28/09 $66,334,657
01/01/08 to 12/31/08 $194,786,965
01/01/07 to 12/31/07 $240,317,202
RHD Apil:
01/01/09 to 05/28/09 $28,525,073
01/01/08 to 12/31/08 $80,029,933
01/01/07 to 12/31/07 $95,700,494
With regard to debts that are not primary consumer debts, the
Debtors paid these amounts to various creditors within 90 days
before they filed for bankruptcy protection:
RHDI $163,552,099
RHDP&A of Illinois Partnership $24,379,202
RHDP&AI $19,675,372
Within one year before the Petition Date, the Debtors paid these
amounts for the benefit of creditors who are, or were, insiders:
RHDI $19,209,795
RHDP&AI $17,868
Complete copies of the Debtors' statements of assets and
liabilities are available for free at:
* http://bankrupt.com/misc/RHD_SOFA_PublishingIllinois.pdf
* http://bankrupt.com/misc/RHD_SOFA_RHDPublishing.pdf
* http://bankrupt.com/misc/RHD_SOFAApil.pdf
* http://bankrupt.com/misc/RHD_SOFAPublishing&advertisingInc.pdf
* http://bankrupt.com/misc/RHDISofas.pdf
About R.H. Donnelley
Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun
& Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/--
publishes and distributes print and online directories in the
U.S. It offers print directory advertising products, such as
yellow pages and white pages directories. R.H. Donnelley Inc.,
Dex Media, Inc. and Local Launch, Inc. are the company's only
direct wholly owned subsidiaries.
Dex Media East, LLC, is a publisher of the official yellow pages
and white pages directories for Qwest Communications International
Inc. (Qwest) in the states, where Qwest is the primary incumbent
local exchange carrier, such as Colorado, Iowa, Minnesota,
Nebraska, New Mexico, North Dakota and South Dakota.
R.H. Donnelley Corp. and 19 of its affiliates, including Dex
Media East LLC, Dex Media West LLC and Dex Media Inc., filed for
Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-
11833 through 09-11852), after missing a $55 million interest
payment on its senior unsecured notes due April 15. James F.
Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq.,
Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin
LLP, in Chicago, Illinois represent the Debtors in their
restructuring efforts. Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in
Wilmington, Delaware, serve as the Debtors' local counsel. The
Debtors' financial advisor is Deloitte Financial Advisory Services
LLP while its investment banker is Lazard Freres & Co. LLC. The
Garden City Group, Inc., is claims and noticing agent.
As of March 31, 2009, the Company had $929,829,000 in total
assets and $1,023,526,000 in total liabilities, resulting in
$93,697,000 in total shareholders' deficit.
Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings of R.H. Donnelley Corp. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ROBERT MCCADAMS: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Robert D. McCadams
Post Office Box 814
Cordele, GA 31010
Bankruptcy Case No.: 09-11623
Chapter 11 Petition Date: August 31, 2009
Court: United States Bankruptcy Court
Middle District of Georgia (Albany)
Judge: James D. Walker, Jr.
Debtor's Counsel: Thomas D. Lovett, Esq.
Kelley, Lovett, & Blakey, P.C.
P.O. Box 1164
2912-B North Oak Street
Valdosta, GA 31603-1164
Tel: (229) 242-8838
Email: rbush@kelleylovett.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of Mr. McCadams' petition, including a list of
his 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/gamb09-11623.pdf
The petition was signed by Mr. McCadams.
SAMSONITE STORES: Files Ch. 11 to Reject 84 Store Leases
--------------------------------------------------------
Samsonite Company Stores, LLC, the U.S. retail division of
Samsonite Corporation, announced September 2 a reorganization plan
to streamline its high street and regional mall store portfolio,
and concentrate its activities in the more profitable outlet store
business, resulting in a significant reduction in the number of
its operating stores. The Company filed a petition for relief
under Chapter 11 of the Bankruptcy Code, as well as a Pre-Packaged
Plan of Reorganization. The Company anticipates exiting from
bankruptcy within 45-90 days.
Samsonite Company Stores' reorganization is part of the Samsonite
Corporation out-of-court, global restructuring, which is being
undertaken with the support of its primary stakeholders, and
augments numerous initiatives aimed at reducing costs across
Samsonite's worldwide enterprise. Samsonite Corporation is not
included in the Samsonite Company Stores Chapter 11 filing.
Samsonite Company Stores, which leases and operates 173 stores in
the United States, believes that the Chapter 11 case, halving its
store count and streamlining of its operations will help return
the Company to profitability on a sustainable basis.
"The recession has caused a severe decline in consumers purchasing
travel-related goods and the Company has responded to this
critical situation with a substantial restructuring program," said
Kyle Gendreau, Secretary and Treasurer of Samsonite Company
Stores, LLC and Chief Financial Officer of Samsonite Corporation.
"Realigning the Company's real estate portfolio will increase
profitability, allowing us to further capitalize on growth
opportunities and to secure the Company's future."
The Company assures customers, vendors, and other Samsonite
Company Stores partners that day-to-day operations will continue
uninterrupted. The Company intends to seek Bankruptcy Court
approval to continue all existing customer programs, including
warranties, gift cards, returns and exchanges, maintain current
employee benefit and payroll programs, and pay its vendors and
manufacturers in full for outstanding and future invoices.
84 of 173 Stores to Be Shut
According to the disclosure statement explaining the Chapter 11
plan, the filing of the Chapter 11 case for only the Company
Stores entity is a condition to and integral part of a much larger
consensual worldwide restructuring of the Company's operations and
balance sheet. With the support of RBS and CVC, the Debtor
determined that this filing was necessary to refocus the Debtor's
unprofitable U.S. retail store business on profitable "outlet"
stores. The Debtor undertook an extensive analysis of the costs
and benefits of its current number and type of retail store
locations and concluded that a significant number of stores would
likely remain unprofitable for several years. Specifically, the
Debtor intends to reject as many as 84 store leases, thereby
decreasing the total number of the Debtor's U.S. retail stores by
as much as 47%.
The Debtor estimates that exiting from the Rejected Stores will
result in an annual run-rate improvement in EBITDA estimated at
$5.3 million at current sales levels. Exiting from these
unprofitable stores will eliminate a significant drain on the
Debtor's liquidity, thereby allowing it to focus its capital and
management resources on profitable growth initiatives.
Contemporaneously with evaluating the viability of continuing
operations at these stores, the Debtor hired Hilco Real Estate,
LLC, as special real estate advisor in order to help the Debtor
negotiate with many of the Rejected Stores' landlords.
Despite the Debtor's and Hi1co Real Estate's best efforts, these
negotiations proved unsuccessful. After extensive deliberations,
the Debtor determined that the filing of this Chapter 11 case is
the Debtor's best opportunity to streamline its operations and
successfully and comprehensively reorganize its business affairs
in an effort to maximize value for the benefit of the Debtor's
collective stakeholders.
In the Chapter 11 case, the Debtor has submitted a proposed agency
agreement with Hilco Real Estate. Hilco will serve as exclusive
agent for conducting the sale of merchandise at the closing
stores. Hilco will guarantee the Debtor a minimum recovery of
105% of the aggregate costs value of the merchandise. Hilco will
pay the Debtor 80% of the guaranteed amount. Closing sales will
begin September 18.
About Samsonite Company Stores
Samsonite Corp. is the worldwide leader in superior travel bags,
luggage and accessories, combining notable style with the latest
design technology and the utmost attention to quality and
durability. In 2006 and 2007, the Company had sales of $1.1
billion and $1.2 billion, respectively.
Offering superior travel bags, luggage and accessories, under the
Samsonite, Samsonite Black Label, and American Tourister brands,
Samsonite Company Stores LLC operates full-price and outlet stores
in 38 states across the U.S. The Company is a wholly-owned
subsidiary of Samsonite Corporation.
As of July 31, 2009, Company Stores leased 173 retail stores in
the United States located in 38 states. It employs approximately
650 people and had sales of $112 million and $108.1 million in
2007 and 2008, respectively. As of July 31,2009, it had $233
million in total assets and $1.5 billion in total liabilities.
Samsonite Company Stores filed for Chapter 11 on September 2, 2009
(Bankr. D. Del. Case No. 09-13102). Attorneys at Young Conaway
Stargat & Taylor LLP and Paul, Wess, Rifkin, Wharton & Garrison
LLP serve as bankruptcy counsel to the Debtor. Hilco Merchant
Resources LLC is liquidation agent. Epiq Bankruptcy Solutions LLC
serves as claims and notice agent. The case has been assigned to
Judge Peter J. Walsh.
SAMSONITE STORES: Plan Has All Creditors Unimpaired
---------------------------------------------------
Samsonite Company Stores, LLC, the U.S. retail division of
Samsonite Corporation, filed a proposed Chapter 11 plan of
reorganization together with its bankruptcy petition.
According to the disclosure statement attached to the Plan, all
creditors and interest holders are unimpaired under the Plan. In
other words they will recover 100% of their claims or interests.
Because all classes of claims and interests are unimpaired, the
Debtors will not be soliciting votes on the Plan, as these
stakeholders are "deemed to accept" the plan pursuant to 11 U.S.C.
Sec. 1126(f).
Secured claims and equity interests will be unaltered upon the
Company's emergence from bankruptcy. Unsecured creditors and
other claimants will receive cash in an amount equal to their
allowed claims.
The Debtor notes that claims in connection with certain real
property leases that the Debtor rejects in the Chapter 11 case or
pursuant to the Plan will be, however, capped by operation of the
Bankruptcy code. The Debtor intends to reject up to 84 of its 173
store leases.
A copy of the Plan is available for free at:
http://bankrupt.com/misc/SamsoniteCS_Chapter11Plan.pdf
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/SamsoniteCS_DiscStatement.pdf
About Samsonite Company Stores
Samsonite Corp. is the worldwide leader in superior travel bags,
luggage and accessories, combining notable style with the latest
design technology and the utmost attention to quality and
durability. In 2006 and 2007, the Company had sales of $1.1
billion and $1.2 billion, respectively.
Offering superior travel bags, luggage and accessories, under the
Samsonite, Samsonite Black Label, and American Tourister brands,
Samsonite Company Stores LLC operates full-price and outlet stores
in 38 states across the U.S. The Company is a wholly-owned
subsidiary of Samsonite Corporation.
As of July 31, 2009, Company Stores leased 173 retail stores in
the United States located in 38 states. It employs approximately
650 people and had sales of $112 million and $108.1 million in
2007 and 2008, respectively. As of July 31,2009, it had $233
million in total assets and $1.5 billion in total liabilities.
Samsonite Company Stores filed for Chapter 11 on September 2, 2009
(Bankr. D. Del. Case No. 09-13102). Attorneys at Young Conaway
Stargat & Taylor LLP and Paul, Wess, Rifkin, Wharton & Garrison
LLP serve as bankruptcy counsel to the Debtor. Hilco Merchant
Resources LLC is liquidation agent. Epiq Bankruptcy Solutions LLC
serves as claims and notice agent. The case has been assigned to
Judge Peter J. Walsh.
SAMSONITE STORES: Parent Embarks on Out-Of-Court Restructuring
--------------------------------------------------------------
Samsonite Corp. is embarking on an out-of-court, global
restructuring, which is being undertaken with the support of its
primary stakeholders, and augments numerous initiatives aimed at
reducing costs across Samsonite's worldwide enterprise.
Only Samsonite's unit, Samsonite Company Stores, is filing for
Chapter 11 in order to reject store leases pursuant to the
Bankruptcy Code.
On October 24, 2007, funds managed and advised by CVC Capital
Partners, a leading international private equity firm, acquired
Samsonite and its affiliates for approximately $1.7 billion,
including assumed debt.
To finance the Acquisition, the Company entered into a Senior
Facilities Agreement, dated as of October 23,2007, as amended and
restated from time to time, by and among several of Samsonite's
affiliates and subsidiaries, including the Debtor, as Borrowers
and Guarantors, and the Royal Bank of Scotland, pIc as Facility
Agent. The Debtor intends for its guarantee ofthe Senior Facility
to remain in full force and effect during the Chapter 11 Case and
will be unaltered by the Plan.
The Senior Facility includes a $745 million term loan, a $100
million acquisition facility, a $125 million revolving credit
facility, a $10 million swingline facility and a $275 million
second lien facility.
Samsonite, Samsonite Europe N.V. and Vespucci Investments Sad, a
parent holding company of Samsonite, are the three Borrowers under
the various credit lines that form the Senior Facility. Several
of Samsonite's subsidiaries, including the Debtor, are Guarantors.
The Senior Facility is secured by a first lien on substantially
all of the Senior Facility Parties' assets.
The Company has experienced significant financial difficulties
since the Acquisition, due mainly to exogenous macroeconomic
factors. The global economic recession of the past-year has
resulted in a sudden -- and dramatic decline in demand - of
travel-related consumer goods, the Company's primary product. As
a result, the Company's sales, revenue and margins have all
deteriorated, thereby significantly impairing the Company's
liquidity.
Since March 2009, the Company and RBS have entered into several
forbearance agreements on account of the Company's inability to
service its existing debt obligations under the Senior Facility.
After months of good faith and arm's-length discussions, the
parties recently agreed to a fully consensual out-of-court global
restructuring that will significantly reduce the Company's
outstanding indebtedness, resulting in a de-leveraging of the
Company's balance sheet, while providing sufficient liquidity to
meet its projected long term cash needs. The parties on September
2 entered into the Implementation Agreement, which outlines the
required steps in order to effectuate the Global Restructuring.
Copies of the Implementation Agreement were not filed with the
Bankruptcy Court.
About Samsonite Corp
Samsonite Corp. is the worldwide leader in superior travel bags,
luggage and accessories, combining notable style with the latest
design technology and the utmost attention to quality and
durability. In 2006 and 2007, the Company had sales of $1.1
billion and $1.2 billion, respectively.
Offering superior travel bags, luggage and accessories, under the
Samsonite, Samsonite Black Label, and American Tourister brands,
Samsonite Company Stores LLC operates full-price and outlet stores
in 38 states across the U.S. The Company is a wholly-owned
subsidiary of Samsonite Corporation.
As of July 31, 2009, Company Stores leased 173 retail stores in
the United States located in 38 states. It employs approximately
650 people and had sales of $112 million and $108.1 million in
2007 and 2008, respectively. As of July 31,2009, it had $233
million in total assets and $1.5 billion in total liabilities.
Samsonite Company Stores filed for Chapter 11 on September 2, 2009
(Bankr. D. Del. Case No. 09-13102). Attorneys at Young Conaway
Stargat & Taylor LLP and Paul, Wess, Rifkin, Wharton & Garrison
LLP serve as bankruptcy counsel to the Debtor. Hilco Merchant
Resources LLC is liquidation agent. Epiq Bankruptcy Solutions LLC
serves as claims and notice agent. The case has been assigned to
Judge Peter J. Walsh.
SAMSONITE STORES: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Samsonite Company Stores, LLC
575 West Street, Suite 110
Mansfield, MA 02048
Bankruptcy Case No.: 09-13046
Debtor-affiliates filing separate to Chapter 11 petitions on March
5, 2009:
Entity Case No.
------ --------
Lambertson Truex LLC 09-10747
Type of Business: The Debtors design and distribute luggage and
related products in more than 100 countries.
The Debtors distribute their products in about
500 retail stories operated by the company or
its affiliates, which includes 173 retail
stories operated by the company in the United
States.
See http://www.samsonitecompanystores.com/
Chapter 11 Petition Date: September 1, 2009
Court: District of Delaware (Delaware)
Judge: Brendan Linehan Shannon
Debtors' Counsel: Jeffrey D. Saferstein, Esq.
Jacob A. Adlerstein, Esq.
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019-6064
Tel: (212) 373-3000
Fax: (212) 757-3990
http://www.paulweiss.com
Debtors'
Co-Counsel: Pauline K. Morgan, Esq.
Margaret Greecher, Esq.
Ryan Bartley, Esq.
Young, Conaway, Stargatt & Taylor LLP
1000 West Street, 17th Floor
Wilmington, DE 19801
Tel: 302-571-6600
http://www.ycst.com
Debtors'
Liquidation
Agent: Hilco Merchant Resources LLC
Debtors'
Claims Agent: Epiq Bankruptcy Solutions LLC
Total Assets: $233 million as of July 31, 2009
Total Debts: $1.5 billion as of July 31, 2009
The Debtors' Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Athalon Sportgear Inc. trade debt $272,049
10 West 33rd St., Suite 1018
New York, NY 10001
Fax: (212) 268-8089
Heritage Travelware Ltd. trade debt $164,283
Lockbox 778062
Chicago, IL 60677-8000
Fax: (630) 614-7035
Briggs & Riley trade debt $98,716
Travelware LLC
PO Box 01724
Newark, NJ 07188-3724
Fax: (866) 329-2744
E & B Giftware LLC trade debt $61,441
Travelon trade debt $56,161
US Luggage trade debt $52,380
CIT Group trade debt $37,881
LC Industries LLC trade debt $33,770
Kenlo International Corp. trade debt $24,951
Tumi Inc. trade debt $23,456
Eagle Creek Inc. trade debt $20,915
Clemco Products Inc. trade debt $19,427
First Service Networks Inc. trade debt $16,259
TRG accessories trade debt $10,476
Tucker Publishing trade debt $8,205
ITW Space Bag trade debt $5,762
Brierbrook Technology trade debt $3,910
Associates
Bulbs.com trade debt $3,755
ADP Inc. trade debt $3,555
Kw2 Exhibits Inc. trade debt $2,945
The petition was signed by Donald E. Walden, assistant treasurer.
SARATOGA SHOE DEPOT: Files for Ch 11 After Cancelled Credit Line
----------------------------------------------------------------
Adam Sichko at The Business Review (Albany) reports that Saratoga
Shoe Depot has filed for Chapter 11 bankruptcy protection in the
U.S. Bankruptcy Court for the Northern District of New York, after
its bank took action to revoke the Company's credit line.
Saratoga Shoe listed $1.5 million in assets and $1.2 million in
liabilities, says Business Review. According to Business Review,
a credit line with HSBC Bank represents almost half of Saratoga
Shoe's debts.
Business Review relates that Saratoga Shoe's inventories have
declined in recent months, prompting HSBC Bank to file a lawsuit
saying that the Company had defaulted on its credit line because
it felt that Debtor had breached one of the covenants with the
loan. Saratoga Shoe president and owner Frank Panza said that the
Company has always made on-time payments, never missing a bill,
according to Business Review. "They felt their collateral
position was not enough to give them comfort. Their needs
changed; the balance shifted. Everybody's trying to survive," the
report quoted Mr. Panza as saying.
Saratoga Shoe went to court to prevent HSBC from seizing its
remaining inventory, Business Review says, citing Mr. Panza.
According to Business Review, Mr. Panza said that the Company is
seeking help from outside investors, but has had difficulty
raising capital due to the recession. Sales have declined this
year as consumers cut back on their spending, the report says,
citing Mr. Panza. Court documents say that Saratoga Shoe has had
difficulties renegotiating contracts with vendors, some of whom
are owed money from the store.
Saratoga Springs, New York-based Saratoga Shoe Depot, Inc., sells
shoes, apparel, and accessories for women, men, and children.
SCHOLL FOREST: Names Phoenix Management as Financial Advisor
------------------------------------------------------------
Scholl Forest Industries Inc. and Scholl Truss & Components Inc.
ask the U.S. Bankruptcy Court for the Southern District of Texas
for permission to employ Phoenix Management Services Inc as their
restructuring and financial advisors.
The firm has agreed to:
a) conduct assessments of the Debtors' financial condition,
strategic business plans, programs, markets and customer
base, information systems and decision making;
b) review all performance tracking reports and the related
financial impact on operating cash flow and asset balances
to assess the ongoing process of management's efforts and
ability to stabilize and improve the financial condition
of the Debtors and otherwise meet plans, goals and
objectives;
c) assist with the preparation of the Debtors' bankruptcy
schedules;
d) assist with the preparation of the cash collateral forecast;
e) maintain a cash collateral budget tracking process to
monitor the Debtors' performance and provide periodic
reporting to the Court and creditor constituencies;
f) represent the Debtors in Court and provide testimony with
regard to all financial-related matters;
g) provide guidance to the Debtors, as required, related to
asset and collateral values;
h) assist the Debtors with the analysis and preparation of all
prepetition claims, classes of claims and preferences ;
i) assist the Debtors with the development of all supporting
financial analysis to enable the preparation of a plan of
reorganization;
j) provide communication and coordination with all other
constituencies, as necessary and appropriate, with regard to
the financial matters of the Debtors;
k) undertake a review and discussion of any and all matters
related to the operation or performance of the Debtors and
to provide guidance with regard to matters related to the
Chapter 11 proceedings; and
l) perform other duties as mutually agreed.
The hourly billing rates at the firm for financial advisory
services range from $165 to $475. John Stuecheli charges $250 and
Lance Wimmer bills $370 for this engagement.
The Debtors assure the Court that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
About Scholl Forest Industries
Scholl Forest Industries Inc. is a lumber and building products
distributor. Scholl Forest, together with affiliate Scholl Truss
& Component Inc., filed for Chapter 11 on Aug. 14, 2009 (Bankr.
S.D. Tex. Case No 09-35962). In its bankruptcy petition, School
Forest estimated assets and debts of $10 million to $50 million.
SCHOLL FOREST: Selects Andrews Kurth as Bankruptcy Counsel
----------------------------------------------------------
Scholl Forest Industries Inc. and Scholl Truss & Components Inc.
ask the U.S. Bankruptcy Court for the Southern District of Texas
for permission to employ Andrews Kurth LLP as their bankruptcy
counsel.
The firm has agreed to:
a) advise the Debtors with respect to their powers and duties
as debtors-in-possession in the continued operation of their
businesses and management of their properties;
b) take all necessary actions to protect and preserve the
Debtors' estates, including the prosecution of actions on
the Debtors' behalf, the defense of any actions commenced
against the Debtors, the negotiation of disputes in which
the Debtors are involved, and the preparation of objections
to claims filed against the Debtors' estates ;
c) prepare on behalf of the Debtors, as debtors-in-possession,
all necessary motions, applications, answers, orders,
reports, and papers in connection with the orderly
administration of the estates ;
d) perform all necessary legal services in the formulation,
negotiation and confirmation of a plan of reorganization
and disclosure statement complying with the requirements
of chapter 11 of the Bankruptcy Code, which will be
submitted to parties in interest after approval by the
Court; and
e) perform any and all other legal services for the Debtors
that the Debtors determine are necessary and appropriate
after advice and consultation.
The firm's professionals and their standard hourly rates are:
David A. Zdunkewicz, Esq. $685
Chasless L. Yancy, Esq. $425
David L. Curry, Jr., Esq. $265
Joseph P. Rovira, Esq. $265
attorneys $250-$950
paralegals $180-$245
The Debtors assure the Court that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
About Scholl Forest Industries
Scholl Forest Industries Inc. is a lumber and building products
distributor. Scholl Forest, together with affiliate Scholl Truss
& Component Inc., filed for Chapter 11 on Aug. 14, 2009 (Bankr.
S.D. Tex. Case No 09-35962). In its bankruptcy petition, School
Forest estimated assets and debts of $10 million to $50 million.
SEMGROUP LP: Hires Deloitte & Touche for Accounting Services
------------------------------------------------------------
SemCrude, L.P., its parent, SemGroup, L.P., and certain
subsidiaries of SemGroup, obtained the Court's permission to
employ Deloitte & Touche LLP to provide accounting-related
consulting services, nunc pro tunc to July 8, 2009.
Deloitte & Touche is an affiliate of Deloitte Financial Advisory
Services LLP and Deloitte Tax LLP, however Deloitte & Touche is
being retained separately to perform regulatory compliance
accounting-related consulting services not already being provided
by Deloitte FAS or Deloitte Tax.
Specifically, as the Debtors' accountant, Deloitte & Touche has
agreed to:
(a) provide technical accounting support to research, advise
and document management conclusions;
(b) assist management with drafting of internal accounting
policies and position papers;
(c) assist management in drafting financial disclosures;
(d) assess existing business unit information and
Interview key financial management members key
financial management members to assist in drafting segment
disclosure policies for the Debtors;
(e) perform assessments of existing accounting and
financial reporting processes and providing observations
and recommendations based on Deloitte & Touche's knowledge
of prevalent industry practices for management's
consideration related to capturing required information
under Securities and Exchange Commission; and
(f) assist management in researching and evaluating changes
in industry and recently issued accounting literature.
The Debtors will pay Deloitte & Touche's professionals based on
their customary hourly rates:
Name/Title Rate per Hour
---------- -------------
Michael Rohrig, Partner $600
Sandy Pfeffer, Senior Manager $500
John Bayne, Manager $425
Additional financial accounting and reporting resources will be
billed at the hourly rates:
Title Rate per Hour
----- -------------
Partner/Principal/Director $385
Senior Manager $310
Manager $285
Senior Consultant $225
Consultant $185
The Debtors will also reimburse Deloitte & Touche's fees and costs
incurred.
Michael Rohrig, a partner at Deloitte & Touche, maintains that his
firm (i) is a disinterested person as the term is defined under
Section 101(14) of the Bankruptcy Code and (ii) does not hold an
interest materially adverse to the Debtors, their creditors,
shareholders for the matters for which Deloitte & Touche is to be
employed.
In a supplemental declaration, Mr. Rohrig discloses that Deloitte
Touche Tohmatsu is an association of various member firms,
including Deloitte LLP, an affiliate of Deloitte & Touche. He
notes that each of the member firms is a separate and independent
legal entity. He relates that another Member Firm in Mexico
provides certain professional services to a non-debtor affiliate
of the Debtors. He further discloses that Deloitte & Touche or
its affiliates has provided or is currently providing services,
which are unrelated in the Debtors' Chapter 11 cases to BDO
Seidman LLP; City of Las Vegas; Financial Balloting Group LLC;
Hunton & Williams LLP; Knifer River Midwest LLC; Morrison &
Foerster LLP; and Russell Reynolds Associates, Inc.
About SemGroup L.P.
SemGroup, L.P., -- http://www.semgrouplp.com/-- is a midstream
service company that provides diversified services for end users
and consumers of crude oil, natural gas, natural gas liquids and
refined products. Services include purchasing, selling,
processing, transporting, terminalling and storing energy.
SemGroup serves customers in the United States, Canada, Mexico and
Wales.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No.
08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark
D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller,
Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A.
Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors
in their restructuring efforts. Kurtzman Carson Consultants
L.L.C. is the Debtors' claims agent. The Debtors' financial
advisors are The Blackstone Group L.P. and A.P. Services LLC.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act. The CCAA stay expires on
November 21, 2008.
SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts. In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by SemGroup L.P. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-700)
SEMGROUP LP: Coffeyville Sues to Set Off Claim
----------------------------------------------
Prior to the Petition Date, Coffeyville Resources Refining &
Marketing, LLC, and SemCrude LP entered into sale contracts under
which Coffeyville sold crude oil and other petroleum products to
SemCrude on credit in the ordinary course of the parties'
business.
Coffeyville says that as of the Petition Date, SemCrude has not
paid it $4,174,746 for prepetition sales and at approximately the
same time as the prepetition sales, Coffeyville purchased
petroleum products from SemCrude in the aggregate amount of
$618,585.
Coffeyville relates that among other agreements it entered into
with SemCrude is a setoff agreement, dated September 18, 2007,
which provided that, in addition to any common law or other rights
to setoff, Coffeyville and SemCrude agree that each part has a
right to set off of any undisputed, mutual payment obligations
arising from the sale transactions between Coffeyville and
SemCrude.
Coffeyville asserts that, pursuant to the SemCrude Contracts and
the Setoff Agreements, it is a forward merchant, a financial
participant, a swap participant, or a master netting agreement
participant, and that it is entitled to exercise its setoff rights
under the Bankruptcy Code without the necessity of obtaining
relief from the automatic stay.
Though an adversary proceeding, Coffeyville asks the Court to
declare that it is entitled to exercise its setoff rights without
the necessity of obtaining relief from the automatic stay. In the
alternative, Coffeyville asks the Court to lift the automatic stay
to enforce its setoff rights or recoupment.
About SemGroup L.P.
SemGroup, L.P., -- http://www.semgrouplp.com/-- is a midstream
service company that provides diversified services for end users
and consumers of crude oil, natural gas, natural gas liquids and
refined products. Services include purchasing, selling,
processing, transporting, terminalling and storing energy.
SemGroup serves customers in the United States, Canada, Mexico and
Wales.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No.
08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark
D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller,
Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A.
Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors
in their restructuring efforts. Kurtzman Carson Consultants
L.L.C. is the Debtors' claims agent. The Debtors' financial
advisors are The Blackstone Group L.P. and A.P. Services LLC.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act. The CCAA stay expires on
November 21, 2008.
SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts. In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by SemGroup L.P. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-700)
SHA LLC: AM Best Downgrades Financial Strength to B-
----------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to B-
(Fair) from B (Fair) and issuer credit rating to "bb-"from "bb" of
SHA, LLC (SHA) (d/b/a Firstcare) and its subsidiary, Southwest
Life & Health Insurance Company (SWLH) (both of Austin, TX). The
outlook for all ratings is stable.
The downgrades reflect SHA's continued decline in capitalization
as shown by Best's Capital Adequacy Ratio, which is
undercapitalized for the current ratings. SHA's unfavorable
underwriting results, which were the highest in 2008 at more than
$10 million, continue as of second quarter 2009. Investment
losses in 2008 also were significant enough to substantially
pressure the capitalization and overall standing of the health
plans. A.M. Best does expect SHA to improve its capitalization
due to financial support from its parents, Covenant Health System
and Hendrick Health System, but A.M. Best remains concerned over
the company's underwriting results coupled with planned membership
decline.
A.M. Best's capital concerns are somewhat mitigated by financial
guarantees-filed with the Texas Department of Insurance-from both
owners, which can infuse additional capital into SHA and SWLH to
ensure their solvency. Both companies' excellent quality measures
and explicit parental support of two non-profit healthcare systems
provide for a certain competitive advantage and strong local
presence.
SOPHOI INC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Sophoi, Inc.
1000 Wilshire Blvd., Suite 1630
Los Angeles, CA 90017
Bankruptcy Case No.: 09-33583
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Judge: Richard M. Neiter
Debtor's Counsel: Martin J. Brill, Esq.
10250 Constellation Blvd., Suite 1700
Los Angeles, CA 90067
Tel: (310) 229-1234
Fax: (310) 229-1244
Email: mjb@lnbrb.com
Monica Y. Kim, Esq.
10250 Constellation Blvd., Suite 1700
Los Angeles, CA 90067
Tel: (310) 229-1234
Email: myk@lnbrb.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/cacb09-33583.pdf
The petition was signed by Satinder Raina, chief executive officer
of the Company.
SOTHEBY'S CORPORATION: Moody's Cuts Corp. Family Rating to 'Ba3'
----------------------------------------------------------------
Moody's Investors Service downgraded Sotheby's long term ratings,
including its Corporate Family Rating to Ba3 from Ba2. The rating
outlook is stable.
The downgrade reflects Moody's expectations that the current
cyclical downturn in the auction market will likely last longer
and be deeper than Moody's original expectations. This will
result in Sotheby's operating performance and credit metrics being
very weak over the next twelve months and remaining weak into
2011.
"We expect Sotheby's credit metrics to be very weak over an
extended period, and hence no longer representative of the prior
rating", stated Maggie Taylor, Vice President and Senior Credit
Officer. "However, its good liquidity, strong market position,
and balanced financial policies provide us with the comfort that
it will successfully weather the current downturn in the auction
market".
The Ba3 corporate family rating balances the expectation that
Sotheby's will have good liquidity with the expectation that it
will maintain weak credit metrics for a prolonged period given the
magnitude of the economic downturn and its negative impact on the
cyclical art auction market. In addition, the rating is supported
by Sotheby's strong qualitative factors which include a long
corporate history, strong brand name, and acknowledged expertise
in a highly specialized industry that has high barriers to entry
and is dominated by two players. Sotheby's ratings will always be
constrained by the company's high cyclicality and exposure to the
periodic dramatic declines in the art auction market such that is
being currently experienced. This cyclicality will cause
Sotheby's performance and credit metrics to experience periods of
extreme volatility over the long term.
The stable outlook reflects Moody's expectation that Sotheby's
will maintain good liquidity and balanced financial policies
providing it with the ability to weather the current downturn in
the auction market while experiencing a period of weak credit
metrics.
These ratings are downgraded and LGD point estimates changed:
* Corporate Family Rating to Ba3 from Ba2;
* Probability of Default Rating to Ba3 from Ba2;
* Senior unsecured notes to B1 (LGD 5, 74%) from Ba3 (LGD 5, 82%);
Moody's last rating action for Sotheby's occurred on June 17,
2009, when its ratings where placed on review for possible
downgrade; including its Corporate Family Rating of Ba2.
Sotheby's ratings were assigned by evaluating factors Moody's
believe are relevant to the credit profile of the issuer, such as
i) the business risk and competitive position of the company
versus others within its industry, ii) the capital structure and
financial risk of the company, iii) the projected performance of
the company over the near to intermediate term, and iv)
management's track record and tolerance for risk. These
attributes were compared against other issuers both within and
outside of Sotheby's core industry and Sotheby's ratings are
believed to be comparable to those of other issuers of similar
credit risk.
Sotheby's, headquartered in New York, is one of the two largest
auction houses in the world. Total revenues are nearly
$460 million.
SOUTH WHITNEY: Case Summary & 3 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: South Whitney Plaza Inc.
3102 Ashfield Street
Houston, TX 77022
Bankruptcy Case No.: 09-36466
Chapter 11 Petition Date: August 31, 2009
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Marvin Isgur
Debtor's Counsel: Richard L. Fuqua II, Esq.
Fuqua & Keim
2777 Allen Parkway, Suite 480
Houston, TX 77019
Tel: (713) 960-0277
Email: fuqua@fuquakeim.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 3 largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/txsb09-36466.pdf
The petition was signed by Fabian Villarreal, president of the
Company.
SPANSION INC: Pays Travis County $1.8MM for 2008 Taxes
------------------------------------------------------
Spansion Inc. and its affiliates own real property in Travis
County, Texas. Each year, Travis County determines the aggregate
value of the property and bills the Debtors for taxes based upon
these property values.
The principal amount of the 2008 taxes on the Property is
$1,708,010 of prepetition real property taxes in favor of Travis
County, plus approximately $518,000 of accrued interest and
penalties as of the end of June.
The Debtors cannot, without approval of the Court, pay
prepetition real property taxes due to the general prohibition on
payment of prepetition debt by debtors under the Bankruptcy Code.
As a result, the Debtors note, their failure to pay the entire
tax bills when they came due, delinquent penalties and interest
have attached to the 2008 Taxes amounting to $256,201.
At the behest of the Debtors, the Bankruptcy Court authorizes the
payment of $1,827,571 to Travis County in full and final
satisfaction of the County's claim for the 2008 Taxes and all
interest and pen
About Spansion Inc.
Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a
Flash memory solutions provider, dedicated to enabling, storing
and protecting digital content in wireless, automotive,
networking and consumer electronics applications. Spansion,
previously a joint venture of AMD and Fujitsu, is the largest
company in the world dedicated exclusively to designing,
developing, manufacturing, marketing, selling and licensing Flash
memory solutions.
Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion
International, Inc., and Cerium Laboratories LLC filed voluntary
petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead
Case No. 09-10690). On February 9, 2009, Spansion's Japanese
subsidiary, Spansion Japan Ltd., voluntarily entered into a
proceeding under the Corporate Reorganization Law (Kaisha Kosei
Ho) of Japan to obtain protection from its creditors as part of
the company's restructuring efforts. None of Spansion's
subsidiaries in countries other than the United States and Japan
are included in the U.S. or Japan filings. Michael S. Lurey,
Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at
Latham & Watkins LLP, have been tapped as bankruptcy counsel.
Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware
counsel. Epiq Bankruptcy Solutions LLC, is the claims agent.
The United States Trustee has appointed an official committee of
unsecured creditors in the case. As of September 30, 2008,
Spansion disclosed total assets of US$3,840,000,000, and total
debts of US$2,398,000,000.
Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009
(Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's
counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said
that Spansion Japan had US$10 million to US$50 million in assets
and US$50 million to US$100 million in debts.
SPANSION INC: Court Approves K&S as Litigation Counsel
------------------------------------------------------
Spansion Inc. and its affiliates obtained approval from the
Bankruptcy Court to employ King & Spalding pursuant to Section
327(e) of the Bankruptcy Code as their special litigation counsel
for, among other things, the ITC Action, Delaware Action, Tessera
Action, and Patent Litigation Matters, nunc pro tunc to June 1,
2009.
Prior to the entry of the order approving the Application, the
Debtors submitted with the Court a revised form of the proposed
order as to King & Spalding's Application. The Revised Proposed
Order provides that King & Spalding will withdraw its request for
ratification or validation by the Court of the charging lien the
Firm has asserted against the Debtors. The Proposed Order has
been approved by King & Spalding, counsel for the Ad Hoc
Consortium, and counsel for the Creditors Committee.
In November 2008, the Debtors filed a patent infringement
complaint against Samsung Electronics Co., Ltd., with the
International Trade Commission seeking the exclusion from the
United States market of more then one hundred million mp3
players, cell phones, digital cameras and other consumer
electronic devices containing Samsung's flash memory components.
Contemporaneously with the ITC Action, the Debtors filed a patent
infringement lawsuit against Samsung in the U.S. District Court
for the District of Delaware seeking both an injunction and
damages for alleged patent violations relating to Samsung's flash
memory chips. King & Spalding LLP represents the Debtors in the
Delaware Action and ITC Action.
The Debtors have asked King & Spalding to represent them in
connection with an action initiated by Tessera, Inc., in the ITC.
King & Spalding has also been filing and prosecuting patent
applications before the United States Patent and Trademark Office
on behalf of the Debtors.
To recall, the Court denied approval of a $70,000,000 settlement
with Samsung. The Debtors assert that because the Samsung 9019
Motion was not granted, it is clear that the Samsung Actions will
need to be litigated. Thus, the Debtors anticipate that King &
Spalding will be incurring fees and expenses beyond the $50,000
limit for ordinary course professionals.
The Debtors will pay King & Spalding pursuant to the firm's
current hourly rates:
Professional Range
------------ ------
Partners $510-$875
Associates/Counsel $280-$625
Specialists/Consultants $380-$1,000
Staff Attorneys $105-$225
Paraprofessionals $140-$445
The Debtors will also reimburse King & Spalding for actual and
necessary expenses.
Ethan Horwitz, Esq., at King & Spalding LLP, in New York, assures
the Court that his firm is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code. Mr.
Horwitz discloses that the Debtors owe King & Spalding $2,107,514
for prepetition services relating to the Samsung Actions.
About Spansion Inc.
Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a
Flash memory solutions provider, dedicated to enabling, storing
and protecting digital content in wireless, automotive,
networking and consumer electronics applications. Spansion,
previously a joint venture of AMD and Fujitsu, is the largest
company in the world dedicated exclusively to designing,
developing, manufacturing, marketing, selling and licensing Flash
memory solutions.
Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion
International, Inc., and Cerium Laboratories LLC filed voluntary
petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead
Case No. 09-10690). On February 9, 2009, Spansion's Japanese
subsidiary, Spansion Japan Ltd., voluntarily entered into a
proceeding under the Corporate Reorganization Law (Kaisha Kosei
Ho) of Japan to obtain protection from its creditors as part of
the company's restructuring efforts. None of Spansion's
subsidiaries in countries other than the United States and Japan
are included in the U.S. or Japan filings. Michael S. Lurey,
Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at
Latham & Watkins LLP, have been tapped as bankruptcy counsel.
Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware
counsel. Epiq Bankruptcy Solutions LLC, is the claims agent.
The United States Trustee has appointed an official committee of
unsecured creditors in the case. As of September 30, 2008,
Spansion disclosed total assets of US$3,840,000,000, and total
debts of US$2,398,000,000.
Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009
(Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's
counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said
that Spansion Japan had US$10 million to US$50 million in assets
and US$50 million to US$100 million in debts.
SPHERIS INC: Moody's Gives Negative Outlook, Affirms 'B3' Rating
----------------------------------------------------------------
Moody's Investors Service revised Spheris Inc.'s rating outlook to
negative from stable. At the same time, Moody's affirmed the B3
Corporate Family Rating and B3 Probability of Default rating.
The change in outlook highlights the ongoing decline in revenues
resulting from elevated customer churn rates and continued pricing
pressure within the highly fragmented clinical documentation
marketplace. The negative outlook further reflects Moody's view
that the contractual tightening of covenants, particularly the
minimum EBITDA covenant, increases the likelihood of potential
covenant violations and an effective reduction in revolver
availability over the next twelve to eighteen months, despite the
existence of an equity cure provision in the credit agreement.
While ongoing concerns regarding customer losses, data turnaround
performance and quality, and revenue declines are drivers of the
negative outlook, the company's flexible cost structure, focus on
improving utilization of its speech recognition resources and
ability to leverage its workforce in India has driven improved
earnings and profitability during the first half of 2009. In
Moody's opinion, the company's ability to stabilize its customer
base and restore top-line growth is key to sustaining its earnings
momentum, maintaining covenant compliance and supporting the B3
rating over the near term.
The B3 corporate family rating continues to reflect Spheris' high
financial leverage, modest free cash flow, lack of business
diversification and weak liquidity profile. The rating also
acknowledges the company's solid interest coverage, improved
profitability, flexible cost structure and its diversified
customer base.
These ratings were affirmed:
-- B3 Corporate Family Rating;
-- B3 Probability of Default rating; and
-- Caa1 (to LGD5, 75% from LGD5, 74%) rating on $123 million
Subordinated Notes due 2012.
The last rating action on Spheris was on September 7, 2007 when
the rating outlook was changed to stable from negative.
Headquartered in Franklin, Tennessee, Spheris Inc. is a leading
outsource provider of clinical documentation technology and
services to health systems, hospitals and group medical practices
throughout the U.S. For the twelve months ended June 30, 2009, the
company generated approximately $170 million in revenues.
STANDARD PACIFIC: Swaps $27.6MM of 6% Notes for Common Shares
-------------------------------------------------------------
Pursuant to two independently privately negotiated exchange
agreements, each dated August 26, 2009, entered into with
noteholders of Standard Pacific Corp., the Company agreed to
exchange a total of $27,637,000 aggregate principal amount of its
6% Senior Subordinated Convertible Notes due 2012 for a number of
shares of its common stock, par value $0.01 per share equal to the
sum of (i) 597,656 shares of Common Stock plus (ii) a number of
shares of Common Stock equal to $21,160,084 divided by share
prices to be determined based on the volume-weighted average price
for the Common Stock as reported on the New York Stock Exchange
for specified consecutive trading days on and after the execution
date of the agreements.
Accrued and unpaid interest will be paid in cash for a portion of
the notes. Due to the structure of the exchange agreements, the
exact number of shares of Common Stock issuable in these exchange
transactions cannot yet be determined. The Company expects to
close both of the exchange transactions on or before September 8,
2009, however, the closing of each of the exchange transactions is
subject to standard closing conditions.
The issuance of the shares of Common Stock in each of the exchange
transactions set forth is being made by the Company pursuant to
the exemption from the registration requirements of the Securities
Act of 1933, as amended, contained in Section 3(a)(9) thereunder,
on the basis that each of the exchange transactions constitutes an
exchange with existing holders of the Company's securities and no
commissions or other remuneration was paid for soliciting such
exchanges.
About Standard Pacific Corp.
Headquartered in Irvine, California, Standard Pacific Corp. (NYSE:
SPF) -- http://www.standardpacifichomes.com/-- operates in many
of the largest housing markets in the country with operations in
major metropolitan areas in California, Florida, Arizona, the
Carolinas, Texas, Colorado and Nevada. The Company also provides
mortgage financing and title services to its homebuyers through
its subsidiaries and joint ventures, Standard Pacific Mortgage
Inc., SPH Home Mortgage and SPH Title.
Standard Pacific generated a net loss of $23.1 million, or $0.10
per diluted share, for the second quarter ended June 30, 2009,
versus a net loss of $249.0 million, or $3.44 per diluted share,
for the year earlier period. As of June 30, 2009, the Company had
$1.91 billion in total assets and $1.56 billion in total
liabilities.
* * *
According to the Troubled Company Reporter on April 1, 2009,
Standard & Poor's Ratings Services lowered its issue-level rating
on Standard Pacific Corp.'s senior unsecured notes to 'CCC-' from
'CCC' and removed the rating from CreditWatch, where it was placed
with negative implications on March 4, 2009. At the same time,
S&P lowered its recovery rating on the debt to '5' from '4',
indicating that senior noteholders can expect modest (10%-30%)
recovery in the event of a payment default.
STATION CASINOS: BNP Paribas, et al., Want Examiner
---------------------------------------------------
A group of banks ask the Bankruptcy Court to appoint an examiner
in Station Casinos Chapter 11 cases.
The banks composed of Bank of Hawaii, BNP Paribas, General
Electric Capital Corp. and others, designating themselves as "The
Independent Lenders of Station Casinos Inc.," noted that Station
Casinos has three separate divisions with conflicting economic
interest and different lenders. They assert that those divisions,
known as the OpCo, PropCo and LandCo companies, have different
revenue steams that should be kept separate now that Station
Casinos is in bankruptcy.
BNP Paribas, et al., assert that their interests are being
unfairly sacrificed to benefit Deutsche Bank Trust of America and
other creditors.
The Independent Lenders note that while Station Casinos' "three
stack" debt structure probably worked well when each "stack" was
solvent back in 2007, it no longer works in today's environment,
when each "stack" is insolvent, and common management has the
ability to move value among the different "stacks." It notes that
the creditors for the three stacks are different.
Counsel to the Independent Lenders, Isaac M. Pachulsi, Esq., at
Stutman, Treister & Glatt P.C., contends that an examiner is
needed so that an independent, non-conflicted third party can
investigate and report on whether the economic interests of the
"OpCo" entities and their real economic stakeholders are being
sacrificed for the benefit of the "PropCo" and "LandCo" entities
and their creditors, as well as for the benefit of the out-of-the-
money equity holders who control the Debtors' board of directors,
as a result of the common management and control of the OpCo,
PropCo and LandCo. He says, among other subjects, an examiner is
needed to investigate and report on the following:
* Whether the Master Lease between Station Casinos, Inc
and PropCo should be rejected or renegotiated.
* Whether OpCo should seek to recharacterize the Master
Lease as a secured transaction, thereby rendering
inapplicable the requirements of 11 U.S.C. Section 365, and
enabling the Master Lease to be recharacterized as an
undersecured claim that can be bifurcated into secured and
unsecured portions, and treated accordingly under a plan.
* Whether OpCo should be paying current interest on the
LandCo Loan - a loan secured by undeveloped land in which
there is no equity for the benefit of LandCo's lenders,
which include Deutsche Bank, the Agent for the OpCo secured
lenders, and which may be using its role in that position
to cause OpCo to keep paying interest on the "underwater"
Land Loan.
* Whether (and to what extent) OpCo should be funding the
massive capital expenditures and development costs provided
for in its budge
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)
SUBURBAN PROPANE: S&P Raises Corporate Credit Rating to 'BB'
------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its corporate
credit rating on retail propane and fuel oil distributor Suburban
Propane Partners L.P. to 'BB' from 'BB-'. At the same time, S&P
raised the senior unsecured rating to 'BB-' from 'B+'. The
recovery rating of '5' is unchanged and indicates that unsecured
lenders can expect modest (10% to 30%) recovery in the event of a
payment default. The outlook is stable.
"The rating action reflects Suburban Propane's materially improved
financial metrics, strong liquidity, and the successful renewal of
their revolving credit facility," said Standard & Poor's credit
analyst Michael Grande.
S&P expects sustained improvement in Suburban's financial metrics
through the end of fiscal 2010 as a result of the previously
announced cash tender offering to purchase up to $175 million of
principal of the company's outstanding senior notes due 2013.
Also, S&P thinks the company will continue to effectively manage
its business despite ongoing customer conservation and volatile
commodity prices. When it completes the tender offer on Sept. 8,
2009, S&P expects Suburban's leverage to be greatly reduced,
resulting in funds from operations to total debt of about 55% and
total debt to EBITDA of about 1.6x as of year-end 2009. As a
result of this material deleveraging, S&P has revised S&P's risk
profile score to 'significant' from 'aggressive'. While S&P
continues to acknowledge the challenges that Suburban and its
rated peer group continue to face, specifically ongoing customer
conservation and margin pressure, S&P believes that the
partnership's flexible cost structure and its demonstrated ability
to manage through the commodity cycle partially mitigate S&P's
concerns. S&P expects Suburban to achieve FFO to adjusted debt of
about 45% and total adjusted debt to EBITDA of about 2x in fiscal
2010, even with weaker margins and minimal volume growth.
Furthermore, the partnership has a strong liquidity position, with
$265 million in cash and has eliminated its refinancing risk when
it successfully renewed its credit facility through June 2013.
S&P also views the company's ability to fund working capital needs
with internally generated funds, and strong distribution coverage
of about 1.85x as supportive of credit and the rating.
As of June 27, 2009, Whippany, N.J.-based Suburban had total debt
of about $577 million, adjusted for operating leases, pensions,
and accrued interest.
The ratings on Suburban reflect the partnership's weak business
risk profile and significant financial risk profile. Rating
concerns include a propane and fuel oil distribution business's
ongoing customer conservation, commodity price volatility, limited
organic growth opportunities, exposure to weather, and seasonal
demand patterns. The partnership's strong liquidity, improved
financial profile, favorable operating characteristics, stable
margins and flexible cost structure, and robust distribution
coverage partially mitigate these concerns.
The stable outlook reflects S&P's expectation that the company
will maintain ample liquidity, strong cash flow metrics, and low
leverage through the 2010 fiscal year. Specifically, S&P expects
FFO to debt of about 45% and total debt to EBITDA of about 2x over
this period. A positive outlook is unlikely at this time, given
the propane sector's inherent risks, particularly ongoing customer
conservation, commodity price volatility, and limited organic
growth opportunities. However, S&P could consider a positive
outlook if Suburban continues to maintain robust financial ratios,
including FFO to debt in the mid-40% range and total debt to
EBITDA below 2x, and a strong financial profile through future
commodity cycles. S&P could revise the outlook to negative or
lower the ratings if cash flows weaken due to increased customer
conservation or lower margins, resulting in FFO to debt below 35%
and total debt to EBITDA above 3.5x. A large acquisition that
negatively affects the company's financial profile or
underperforms could also adversely affect the outlook or rating.
TELETOUCH COMMUNICATIONS: Narrows FY2009 Net Loss to $1.9MM
-----------------------------------------------------------
Teletouch Communications, Inc., narrowed its net loss to
$1,922,000 for the year ended May 31, 2009, from $3,075,000 for
the prior year. The Company recorded total operating revenues of
$45,857,000 for the year ended May 31, 2009, from $54,523,000 for
the prior year.
As of May 31, 2009, the Company had $24,356,000 against total
liabilities of $34,807,000, resulting in shareholders' deficit of
$10,451,000. The Company's May 31 balance sheet showed strained
liquidity with $16,899,000 in total current assets against total
liabilities of $19,704,000.
As of May 31, 2009, the Company has roughly $4,600,000 cash on
hand. Cash provided by operating activities improved roughly
$10,500,000 from 2008 to roughly $4,200,000 for 2009 due to
improved operating results and continued management of inventory
levels, credit extension, accounts receivable turns and vendor
payables.
In 2008, a portion of the cash used in operating activities was
due to a payment of roughly $4,700,000 to AT&T, specifically
related to unpaid accounts payable as part of the June 2007
settlement with AT&T and a payment of $2,000,000 to a former
senior lender to negotiate a full release of certain contingent
obligations with no similar payment events occurring in 2009.
Additionally, the Company improved its working capital deficit
from roughly $9,000,000 as of May 31, 2008, to roughly $2,800,000
as of May 31, 2009, primarily through the restructuring of its
debt facilities with Thermo Credit LLC.
In August 2009, the Company was successful in negotiating a
restructuring and extension of its current financing facilities
with Thermo, which extends through January 2012. Under the terms
of the restructuring with Thermo, the Company was able to increase
its revolving credit facility from $5,250,000 to $18,000,000 and
retire its factoring debt payable to Thermo, which was reported as
a current obligation through the third quarter of fiscal 2009.
Under the previous factoring debt obligation with Thermo, the
Company was required to present the entire factoring debt as a
current liability on the Company's consolidated balance sheet in
accordance with EITF 95-22 because the factoring agreement
required a lockbox agreement under which customer payments on
accounts are directed to a lockbox controlled by Thermo and
because certain subjective acceleration rights were retained by
Thermo under the agreement.
As a result of the August 1, 2009 restructuring of its credit
facilities with Thermo under which the factoring debt was retired
through additional borrowings under an amended revolving credit
facility with Thermo, the Company has reclassified roughly
$7,500,000 in current obligations payable under the factoring debt
facility to a long-term liability under the amended revolver as of
May 31, 2009, in accordance with SFAS No. 6. Under the amended
revolving credit facility, the Company will report only the
required debt service payable within 12 months following each
balance sheet date.
As of May 31, 2009, the Company has no current obligation under
the revolving credit facility since the Company's borrowings are
below the $18,000,000 commitment amount.
For 2010, the Company expects its operations to continue to
improve and believes that it has sufficient cash and cash
availability under its current financing facilities to meet its
obligations during the upcoming 12 months. The impact of the
expiration of certain distribution agreements with AT&T are not
expected to have a significant negative impact on operations
during 2010, and the Company has been aggressively working to
prepare for any potential impact through the expansion of its
relationships with other cellular carriers and the continued
management of its operating expenses.
During 2008 and 2009, the Company has demonstrated its ability to
manage expenses to drive material results to the Company. For
2010, the Company anticipates to seek further cost reduction
initiatives for selling and general and administrative expenses as
it continues to maximize profitability in all its business units
by closely monitoring overhead expenses. For 2010, the total debt
service obligations for the Company are roughly $3,700,000.
Considering the cash on hand, cash availability under the new
Thermo loan facilities to fund the expansion of the business, cash
generated on a monthly basis from the billable subscriber base
under the continuing portion of the AT&T distribution agreements
and the payment terms available for obligations owing to AT&T, the
Company believes it will have sufficient cash to meet its
obligations for at least the next 12 months.
A full-text copy of the Form 10-K report is available at no charge
at http://ResearchArchives.com/t/s?43d5
In its report dated January 16, 2009, BDO Seidman, LLP, in
Houston, Texas, pointed out that the company has suffered
recurring losses from operations and negative cash flows from
operations and has a working capital deficit and a net capital
deficiency which raise substantial doubt about its ability to
continue as a going concern.
BDO Seidman's report dated August 31, 2009, doesn't contain such
opinion.
For over 40 years, Teletouch Communications, Inc. --
http://www.teletouch.com/-- has offered a comprehensive suite of
telecommunications products and services including cellular, two-
way radio, GPS-telemetry, wireless messaging and public
safety/emergency response vehicle products and services throughout
the U.S. With over 80,000 wireless customers, Teletouch's wholly-
owned subsidiary, Progressive Concepts, Inc. (PCI), is a leading
provider of ATT Mobility(R) (NYSE: T) services (voice, data and
entertainment), as well as other mobile, portable and personal
electronics products and services to individuals, businesses and
government agencies.
TELKONET INC: Receives NYSE Amex Staff Determination
----------------------------------------------------
Telkonet, Inc., said on August 27, 2009, NYSE Amex LLC delivered a
delisting notification indicating that it has not accepted
Telkonet, Inc.'s plan to regain compliance with the Exchange's
continued listing standards, as submitted by the Company on June
25, 2009.
Specifically, the notice indicated that the Company is not in
compliance with Section 1003(a)(iv) of the Company Guide in that
its financial condition has become so impaired that it appears
questionable, in the opinion of the Exchange, as to whether the
company will be able to continue operations or meet its
obligations as they mature and that the Company's plan does not
make a reasonable demonstration of the Company's ability to regain
compliance with Section 1003(a)(iv) of the Company Guide. More
specifically, the Exchange based its determination on the
Company's financial condition disclosed in the Company's 10-Q for
the period ended June 30, 2009 and the Exchange staff's doubt as
to the Company's ability to raise additional capital structured to
meet the requirements of the Exchange's rules. The Exchange staff
also determined that the Company had not adequately addressed its
plan to increase the selling price of its common stock, which
constitutes an additional deficiency, pursuant to Section
1003(f)(v) of the Company Guide.
The Company intends to exercise its limited right to appeal the
basis for the delisting determination by requesting a hearing
before an Exchange Listing Qualifications Panel, which must be
filed with the Exchange on or prior to September 3, 2009. As a
condition to any appeal, the Company is required to pay to the
Exchange the total sum of $55,000 consisting of a non-refundable
$5,000 hearing fee and unpaid listing fees totaling $50,000.
During the appeals process, the Company expects that its common
stock will remain listed on the Exchange. The Company intends to
continue to execute on the plan it submitted to the Exchange and
remains optimistic of its ability to meet the targets and
commitments set forth therein, however, there can be no assurance
that it will be able to do so or that the Exchange will grant the
Company's request for continued listing of its common stock. In
the event that the Company's common stock is delisted from the
Exchange, the Company expects its common stock to trade on the
Over-the-Counter Bulletin Board.
About Telkonet
Telkonet Inc. -- http://www.telkonet.com/-- provides energy
management and SmartGrid networking solutions that improve energy
efficiency and reduce the demand for new energy generation.
TETON ENERGY: May File Chapter 11 if Talks Unsuccessful
-------------------------------------------------------
The forbearance period related to the interest payment due on the
Teton Energy Corporation's outstanding 10.75% Senior Secured
Convertible Debentures has been extended through September 15,
2009.
The Company, however, said in a September 2 regulatory filing, it
"intends to continue to work with the holders of the Debentures
towards a more permanent solution, however, there can be no
assurance that the Company will be successful in doing so, in
which case the Company may be required to seek protection under
the United States Bankruptcy Code."
As reported by the TCR on September 2, Teton Energy, effective as
of August 26, 2009, entered into a Third Amendment to the Second
Amended and Restated Credit Agreement and Forbearance Agreement
with JPMorgan Chase Bank, N.A., as administrative agent, and each
of the financial institutions identified in the Third Amendment.
Under the terms of the Third Amendment:
(a) The Company's pre-existing borrowing base capacity was
decreased from $20,000,000 to $14,000,000 continuing until
the next scheduled redetermination, interim redetermination
or other redetermination of the borrowing base and the
conforming borrowing base thereafter.
(b) The Company, the Administrative Agent, and each of the
Lenders agreed to forbear from exercising their rights and
remedies as a result of the Specified Default (the
Company's failure to repay the Borrowing Base Deficiency of
$8,484,296 on August 25, 2009) under the Loan Documents to
(i) accelerate the outstanding principal balance of the
Loans; and (ii) to commence foreclosure proceedings under
the Security Instruments, during the period from the
Effective Date until the earlier of (A) the occurrence of
any Default or Event of Default other than the Specified
Defaults, or (B) 5:00 p.m., September 15, 2009.
(c) The definition of interest payment date has been revised to
mean, with respect to any ABR Loan, the last day of each
month and with respect to any Eurodollar Loan, the last day
of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest period that occurs at intervals
of one month's duration after the first day of such
Interest Period.
(d) From and after August 25, 2009, any payments due under the
Loan Documents are subject to a Post Default Interest Rate
calculated at a rate per annum equal to two percent (2%)
plus the rate applicable to ABR Loans or Eurodollar Loans.
(e) The Company agreed to obtain fully executed account control
agreements in a form and substance satisfactory to the
Administrative Agent and the Majority Lenders covering all
of the Company's and its subsidiaries' deposit accounts
including without limitation accounts held at Wells Fargo
Bank, N.A.
(f) the definition of loan documents has been revised to mean
the Third Amendment, the First Amendment, the Second
Amendment, the Notes, the Letter of Credit Agreements, the
Letters of Credit, the Intercreditor Agreement and the
Security Instruments.
(g) The Company, consistent with its fiduciary obligations,
will continue to pursue diligently various strategic
alternatives such as raising additional capital, merger
reorganization, restructuring, or sale of all or
substantially all of the assets of the Company and its
subsidiaries.
Teton Energy Corporation -- http://www.teton-energy.com/-- is an
independent oil and gas exploration and production company focused
on the acquisition, exploration and development of North American
properties. The Company's current operations are concentrated in
the prolific Rocky Mountain and Mid-continent regions of the U.S.
Teton has leasehold interests in the Central Kansas Uplift,
eastern Denver-Julesburg Basin in Colorado and the Big Horn Basin
in Wyoming. Teton is headquartered in Denver, Colorado.
Teton Energy had total assets of $60,000,000 against total debts
of $50,907,000 as of June 30, 2009.
TOUSA INC: To Sell CP Red Oak Interests to Lennar
-------------------------------------------------
TOUSA Inc. and Newmark Homes, L.P., Inc. ask to Court to authorize
them to enter into an agreement for the transfer and sale of their
ownership interests in CP Red Oak Partners, Ltd. and CP Red Oak
Management, L.L.C., to Lennar Homes of Texas Land and
Construction, Ltd.
On May 5, 2004, CP Red Oak Management as general partner, Lennar,
TOUSA Venture, L.L.C. and James W. Meredith formed a partnership
known as CP Red Oak Partners, Ltd., to acquire and develop real
estate in a real property located at Cedar Park City, in
Williamson County, Texas. CP Red Oak is governed by a Limited
Partnership Agreement.
Newmark Homes has a 49% stake in the Partnership. The remaining
interests in the Partnership are held 1% by CP Red Oak
Management, 1% by Mr. Meredith and 49% by Lennar. Moreover,
TOUSA Homes owns 30% of the membership interests in CP Red Oak
Management, as is governed by the Regulations of CP Red Oak
Management. The Partnership Agreement provides that the Partners
may be required to make additional capital contributions to the
Partnership. If a member of the Partnership fails to make
required capital contributions, any non-defaulting member has the
right to make a loan to the Partnership to replace the capital
contribution the defaulting partner was to have made.
The business of the Partnership is to develop the Cedar Park
Property as a single-family residential subdivision and sell the
finished lots to the members of the Partnership. To that end,
Lennar and Newmark each entered into a lot sale and purchase
agreement with the Partnership. Specifically, Newmark entered
into a Red Oaks Subdivision Lot Sale and Purchase Contract,
whereby it agreed to buy lots within the Property from the
Partnership pursuant to a take-down schedule. On April 15, 2009,
however, Newmark defaulted under the Purchase Contract by failing
to purchase seven lots. Following this default, Newmark and the
Partnership entered into a Court-approved stipulation wherein
Newmark rejected the Purchase Contract while maintaining its
rights with respect to the Partnership Agreement.
By July 2009, an interested third party approached the Debtors
and made an offer to buy TOUSA Homes' and Newmark's ownership
interests in the Partnership and CP Red Oak Management for $1
million. Upon learning of the proposal, Lennar decided to
exercise a contractual right of first refusal and matched the
third party's offer. Lennar offered to buy for $1 million
Newmark's 49% limited partnership interest in the Partnership and
TOUSA Homes' 30% ownership interest in CP Red Oak Management.
Accordingly, TOUSA Homes, Newmark and Lennar entered into a
Purchase and Sale Agreement, which provides that:
(a) TOUSA Homes and Newmark will sell their ownership
Interests in the Partnership and the General Partner for
total cash consideration of $1,000,000. At the closing,
TOUSA Homes and Newmark will each execute assignments of
their ownership interests to Lennar;
(b) TOUSA Homes, Newmark, Lennar Homes, TOUSA, Inc. and Lennar
Corporation will be released with respect to all
obligations arising under (i) the contracts related to the
Partnership or the Regulations; (ii) any agreement between
the Partnership or General Partner and any third party;
(iii) any agreement between the Partnership or General
Partner and the Debtors; and (iv) any agreement between
Lennar or Lennar Corp. and the Debtors; and
(c) Lennar Homes, Mr. Meredith, Newmark, TOUSA Homes and CP Red
Oak Management will amend the Partnership Agreement and the
Regulations to evidence the withdrawal of TOUSA Homes and
Newmark from the Partnership and the General Partner.
The Debtors have determined that the sale of the ownership
interests in the Partnership and the General Partner is
consistent with their revised business plan, Paul Steven
Singerman, Esq., at Berger Singerman, P.A., in Miami, Florida,
notes. Moreover, he points out, in light of the Debtors' revised
business plan, the Debtors will likely not be able to satisfy
their funding obligations under the Partnership Agreement and
Lennar Homes may replace those investments by its own funding in
the form of loans to the Partnership, which would affect any
potential recovery of Newmark on account of its equity interests.
Mr. Singerman continues that the Purchase and Sale Agreement will
benefit the Debtors' estates by netting $1 million in cash
proceeds. The general releases under the Agreement will also
minimize the Debtors' exposure and liability with respect to the
Partnership, and any financing agreement entered into by the
Partnership, he adds. In the contrary, the Debtors' continued
operation of the Partnership and the maintenance of their
position in the Partnership will potentially lead to significant
cost or other obligations before any profit would be generated,
he maintains.
About Tousa Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A.
Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P.,
TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder
in the United States, operating in various metropolitan markets in
10 states located in four major geographic regions: Florida, the
Mid-Atlantic, Texas, and the West.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08-
10928). The Debtors have selected M. Natasha Labovitz, Esq.,
Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta,
Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at
Berger Singerman, to represent them in their restructuring
efforts. Lazard Freres & Co. LLC is the Debtors' investment
banker. Ernst & Young LLP is the Debtors' independent auditor and
tax services provider. Kurtzman Carson Consultants LLC acts as
the Debtors' Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008
(Bankr. S.D. Fla. Case No. 08-20746). It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.
The Official Committee of Unsecured Creditors hired Patricia A.
Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff &
Sitterson, P.A., as its local counsel.
TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets
of $1,734,422,756 and total liabilities of $2,300,053,979.
Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by TOUSA Inc. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TOUSA INC: Has Claims Settlement With Strategic Capital
-------------------------------------------------------
Tousa Inc. and its affiliates seek the Court's authority to enter
into a settlement agreement with Strategic Capital Resources, Inc.
Strategic Capital and the Debtors are parties to lease
agreements, whereby the Debtors leased model homes for a specific
period. Strategic Capital and the Debtors also entered into
certain sale agreements, wherein the Debtors agreed to pay
certain costs associated with Strategic Capital's sale of the
model homes to third-party purchasers. Specifically, on Oct. 29,
2004, TOUSA Homes, Inc., and Strategic Capital entered into an
Option Agreement and a Construction Agreement that governed the
parties' relationship with respect to the purchase, development
and construction of certain real property in Orange County,
Florida, known as Rock Springs Ridge Project.
Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami,
Florida, notes that during the course of the Debtors' Chapter 11
cases, the relationship between the Debtors and Strategic Capital
has been contentious and has resulted in a series of disputes
regarding executory contracts and both prepetition and
postpetition claims. He reminds the Court that Strategic Capital
filed several pleadings in the Debtors' Chapter 11 cases related
to the Lease Agreements or the Sale Agreements, and ten proofs of
claim against the Debtors arising from the Lease Agreements and
the Sale Agreements.
Against this backdrop, the Debtors determined to enter into an
agreement with Strategic Capital to resolve all outstanding
claims and disputes concerning the Lease Agreements, the Sale
Agreements and the Option Agreement and Construction Agreement
related to the Rock Springs Ridge Project. The salient terms of
the Settlement Agreement are:
(a) Upon entry of an order approving the Settlement Agreement,
the Debtors will pay Strategic Capital $250,000 in final
payment of any and all postpetition amounts owed by the
Debtors to Strategic Capital pursuant to the Lease
Agreements, the Sale Agreement and the Rock Springs Ridge
Project;
(b) On account of the Debtors' prior payment of (i) $207,369
for Strategic Capital's applications for payment of claims;
(ii) $113,560 for renewed model homes; (iii) $86,737 for
September 2008 payment; and the final payment under the
Settlement Agreement, the parties agree to exchange mutual
releases;
(c) Claims relating to Rock Spring Ridge Project will be
reduced. Claim Nos.1737 and 1738 will be deemed withdrawn
without need for any further action by either Strategic
Capital or the Debtors. Claim Nos. 4142 and 4143 will
remain. Claim No. 4142 will be reduced to $17,900,801 and
reclassified as a general unsecured claim. Moreover, Claim
No. 4143 will be reclassified as a contingent general
unsecured claim;
(d) Claims relating to Model Homes will remain, provided that
Claim Nos. 1806 and 1807 will be reclassified as general
unsecured claims.
Essentially, Mr. Singerman relates, the Settlement Agreement will
eliminate the need for any further litigation between the Debtors
and Strategic Capital and will spare the Debtors' estates from
expenses and distraction of further litigation.
About Tousa Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A.
Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P.,
TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder
in the United States, operating in various metropolitan markets in
10 states located in four major geographic regions: Florida, the
Mid-Atlantic, Texas, and the West.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08-
10928). The Debtors have selected M. Natasha Labovitz, Esq.,
Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta,
Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at
Berger Singerman, to represent them in their restructuring
efforts. Lazard Freres & Co. LLC is the Debtors' investment
banker. Ernst & Young LLP is the Debtors' independent auditor and
tax services provider. Kurtzman Carson Consultants LLC acts as
the Debtors' Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008
(Bankr. S.D. Fla. Case No. 08-20746). It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.
The Official Committee of Unsecured Creditors hired Patricia A.
Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff &
Sitterson, P.A., as its local counsel.
TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets
of $1,734,422,756 and total liabilities of $2,300,053,979.
Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by TOUSA Inc. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TOUSA INC: Proposes to Reject 3 Alamo Ranch Agreements
------------------------------------------------------
TOUSA Inc. and its affiliates seek the Bankruptcy Court's
authority to reject:
(a) an option agreement for Alamo Ranch project between Debtor
Newmark Homes, L.P. and Hanna/Magee, L.P. #1;
(b) a cure and purchase agreement for Alamo Ranch entered into
among Newmark Homes; Hanna/Magee; Weekly Homes, L.P., as
builder; and Inwood National Bank, as lender; and
(c) a development and construction agreement for Alamo Ranch
among Newmark Homes, Hanna/Magee, as landbanker, and
Weekly Homes, as builder.
The Debtors relate that the Agreements are no longer necessary or
beneficial to their business operations.
In another request, the Debtors ask the Court to shorten the
notice period from 15 days to 14 days to permit the Rejection
Motion to be heard on September 9, 2009. The Debtors cite that
it would be impossible to file the Rejection Motion in time to
provide the 15-day notice period given that the Rejection Motion
was finalized on August 26, 2009.
About Tousa Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A.
Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P.,
TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder
in the United States, operating in various metropolitan markets in
10 states located in four major geographic regions: Florida, the
Mid-Atlantic, Texas, and the West.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08-
10928). The Debtors have selected M. Natasha Labovitz, Esq.,
Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta,
Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at
Berger Singerman, to represent them in their restructuring
efforts. Lazard Freres & Co. LLC is the Debtors' investment
banker. Ernst & Young LLP is the Debtors' independent auditor and
tax services provider. Kurtzman Carson Consultants LLC acts as
the Debtors' Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008
(Bankr. S.D. Fla. Case No. 08-20746). It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.
The Official Committee of Unsecured Creditors hired Patricia A.
Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff &
Sitterson, P.A., as its local counsel.
TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets
of $1,734,422,756 and total liabilities of $2,300,053,979.
Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by TOUSA Inc. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TOWN CENTER: Files for Chapter 11 in Milwaukee
----------------------------------------------
Town Center LLC filed a Chapter 11 petition in Milwaukee. The
Debtor is the owner of the Brookfield Town Centre shopping center
in Brookfield, Wisconsin. The center owes almost $26 million on
mortgages held by Harris Bank, one of the tenants in the center.
The property has more than 30 stores.
Town Center LLC filed for bankruptcy September 1, 2009 (Bankr.
E.D. Wisc. Case No. 09-32733). Mark L. Metz, Esq., at Leverson &
Metz, S.C., represents the Debtor in its restructuring effort.
According to the petition, assets and debts are between
$10,000,001 to $50,000,000.
TOWN CENTER: Case Summary & 18 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Town Center, LLC
c/o Thomson Realty of Wisconsin
12760 West North Avenue
Brookfield, WI 53005
Case No.: 09-32733
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Eastern District of Wisconsin (Milwaukee)
Debtor's Counsel: Mark L. Metz, Esq.
Leverson & Metz, S.C.
225 E. Mason St., Suite 100
Milwaukee, WI 53202
Tel: (414) 271-8502
Fax: (414) 271-8504
Email: mlm@levmetz.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Timothy J. Smits.
Debtor's List of 18 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Harris Bank $22,722,229
BLST - PO Box 2880
Chicago, IL 60690
Harris Bank $3,202,000
BLST - PO Box 2880
Chicago, IL 60690
Waukesha County Treasurer $215,405
Tom Thomson $118,165
c/o Thomson Realty
Thomson Management $61,000
Services Inc.
Villani Landshapers $50,627
Briohn Building Corporation $29,828
Villani Landshapers $5,163
Thomson Realty of $4,975
Wisconsin, Inc.
Wisconsin Electric $3,000
Veolia ES Solid Waste $1,750
Midwest, Inc.
Metropolitan Maintenance & $989
Landscaping, Inc.
VK Development Corporation $601
Sundance Cleaning Services $550
Innovative Signs, Inc. $315
DLC Pest Management, Inc. $125
Triad Creative Group $60
Industrial Towel & Uniform $59
UNITED COMPONENTS: S&P Raises Rating on $230 Mil. Notes to 'B-'
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its issue rating on
United Components Inc.'s $230 million, 9.375% senior subordinated
notes. The issue rating was raised to 'B-' (the same as the
corporate credit rating on UCI) from 'CCC'. The recovery rating
was raised to '4' from '6', indicating that lenders can expect
average (30% to 50%) recovery in the event of a payment default.
At the same time, S&P left its issue and recovery ratings
unchanged on UCI's $330 million term loan D bank loan due 2012 and
on parent company UCI Holdco Inc.'s $235 million, floating-rate,
payment-in-kind notes. The issue-level rating on the term loan D
facility remains at 'B+' (two notches higher than the corporate
credit rating) and at 'CCC' (two notches lower than the corporate
credit rating) on the Holdco PIK notes. The recovery rating on
the term loan D remains unchanged at '1', indicating the
expectation of very high (90% to 100%) recovery in the event of a
payment default, while the recovery rating on the Holdco PIK notes
remains unchanged at '6', indicating the expectation of negligible
(0 to 10%) recovery in the event of a payment default.
The rating action follows the maturity of UCI's $75 million
revolving credit facility due 2009. Because S&P's simulated
defaults assume full utilization of revolving credit facilities at
the point of default, the expiration of this facility reduces
priority claims. If UCI were to reinstate a similar facility in
the future, S&P would reconsider the issue and recovery ratings.
Ratings List
United Components Inc.
Corporate credit rating B-/Negative/--
Upgraded
To From
-- ----
Subordinated B- CCC
Recovery Rating 4 6
US AIRWAYS: Pilots Want PBGC Removed as Pension Plan Trustee
------------------------------------------------------------
The US Airline Pilots Association filed a lawsuit against the
Pension Benefit Guaranty Corp. in federal court seeking the
removal of the PBGC as trustee of US Airways pilots' pension plan
and requesting the immediate appointment of a temporary trustee to
perform the investigatory functions that the PBGC has refused to
perform on behalf of pension plan beneficiaries since 2003.
USAPA asserts that the PBGC breached its fiduciary duty to the
fund and its thousands of beneficiaries by failing to comply with
its duties required under the Employee Retirement Income Security
Act of 1974 (ERISA). The suit also requests the U.S. District
Court for the District of Columbia to immediately appoint and
empower another trustee of the Retirement Income Plan for Pilots
of US Airways Inc. to perform the statutory and fiduciary duties
required under ERISA and to investigate the plan's financial
affairs. These are actions that USAPA believes the PBGC failed to
take as required by federal law.
"The PBGC has not fulfilled its obligation as trustee of our
pilots' retirement fund," said Captain Mike Cleary, president of
USAPA. "Our own investigation has uncovered a number of
questionable circumstances surrounding activities and investments
of our retirement fund prior to its termination. Our request to
the PBGC for a thorough investigation has fallen on deaf ears, so
we are asking the court to appoint a trustee who will do its due
diligence in this matter and investigate the management, or
perhaps the mismanagement, of our pilots' retirement fund."
The PBGC assumed control of the pilots' pension on March 31, 2003,
when US Airways terminated the plan during its bankruptcy
proceedings over the objections of the pilots.
Headquartered in Charlotte, N.C., the US Airline Pilots
Association represents more than 5,000 US Airways pilots in seven
domiciles across the United States.
About US Airways
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) --
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways Inc., Allegheny
Airlines Inc., Piedmont Airlines Inc., PSA Airlines Inc.,
MidAtlantic Airways Inc., US Airways Leasing and Sales Inc.,
Material Services Company Inc., and Airways Assurance Limited LLC.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another Chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represented the
Debtors in their restructuring efforts. In the Company's second
bankruptcy filing, it listed $8,805,972,000 in total assets and
$8,702,437,000 in total debts.
The USAir II bankruptcy plan became effective on September 27,
2005. The Debtors completed their merger with America West on the
same date. (US Airways Bankruptcy News; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000).
* * *
According to the TCR in September 2008, Michael Lowry, project
manager for AVIATION WEEK's latest Top-Performing Companies, said
USAir has a "high risk" for a bankruptcy filing in 2009.
As reported by the Troubled Company Reporter on May 12, 2009,
Fitch Ratings affirmed the Issuer Default Rating of US Airways
Group, Inc., at 'CCC'.
As of June 30, 2009, reorganized US Airways had total assets of
$7,858,000,000 against debts of $8,194,000,000, for a
stockholders' deficit of $336,000,000.
UTSTARCOM INC: Deregisters Shares Issuable Under 3 Employee Plans
-----------------------------------------------------------------
UTStarcom, Inc., filed with the Securities and Exchange Commission
Post-Effective Amendment No. 1 to several Registration Statements
to deregister all shares of Common Stock originally issuable under
the Company's 1997 Stock Plan, 2001 Director Option Plan and 2003
Nonstatutory Stock Option Plan.
The shares issuable under the 1997 Plan, 2001 Plan and 2003 Plan
will now be issued pursuant to the Company's 2006 Equity Incentive
Plan.
Specifically:
-- On May 3, 2001, UTStarcom, filed a Registration Statement
on Form S-8 (File No. 333-60150), which registered (i)
3,816,655 shares of the Company's common stock, par value
$0.00125 per share, reserved for issuance under the
Company's 1997 Stock Plan and (ii) 1,908,328 shares of
Common Stock reserved for issuance under the Company's
2000 Employee Stock Purchase Plan. The shares of Common
Stock registered for issuance under the 2000 Plan are not
being deregistered and remain subject to issuance
thereunder.
-- On November 17, 2004, UTStarcom filed a Registration
Statement on Form S-8 (File No. 333-120564), which
registered 4,181,061 shares of the Company's common stock,
par value $0.00125 per share, reserved for issuance under
the Company's 1997 Plan.
-- On August 25, 2005, UTStarcom filed a Registration
Statement on Form S-8 (File No. 333-127850), which
registered 4,590,555 shares of the Company's common stock,
par value $0.00125 per share, reserved for issuance under
the Company's 1997 Plan.
-- On August 25, 2000, UTStarcom filed a Registration
Statement on Form S-8 (File No. 333-44548), which
registered (i) 12,547,596 shares of the Company's common
stock, par value $0.00125 per share, reserved for issuance
under the Company's 1997 Plan, (ii) 3,797,690 shares of
Common Stock reserved for issuance under the Company's
1995 Stock Plan, and (iii) 4,000,000 shares of Common
Stock reserved for issuance under the Company's 2000
Employee Stock Purchase Plan. The shares of Common Stock
reserved for issuance under the 1995 Plan were
deregistered on March 10, 2006. The shares of Common
Stock registered for issuance under the 2000 Plan are not
being deregistered and remain subject to issuance
thereunder.
-- On March 21, 2002, UTStarcom filed a Registration
Statement on Form S-8 (File No. 333-84710), which
registered (i) 1,200,000 shares of the Company's common
stock, par value $0.00125 per share, reserved for issuance
under the Company's 2001 Director Option Plan, (ii)
4,372,167 shares of Common Stock reserved for issuance
under the Company's 1997 Plan, and (iii) 208,594 shares of
Common Stock reserved for issuance under the Advanced
Communication Devices Corporation Incentive Program. The
shares of Common Stock registered for issuance under the
ACD Plan are not being deregistered and remain subject to
issuance thereunder.
-- On September 15, 2003, UTStarcom filed a Registration
Statement on Form S-8 (File No. 333-108817), which
registered (i) 1,500,000 shares of the Company's common
stock, par value $0.00125 per share, reserved for issuance
under the Company's 2003 Nonstatutory Stock Option Plan,
(ii) 4,372,112 shares of Common Stock reserved for
issuance under the Company's 1997 Plan, and (iii) 23,375
shares of Common Stock reserved for issuance under the
RollingStreams Systems, Ltd. 2001 Stock Plan. The shares
of Common Stock registered for issuance under the
RollingStreams Plan are not being deregistered and remain
subject to issuance thereunder.
UTStarcom also filed a Registration Statement on Form S-8 to
register an additional 17,775,680 shares of its common stock, par
value $0.00125 per share, issuable by the Company in connection
with awards that are available for issuance pursuant to the
UTStarcom, Inc. 2006 Equity Incentive Plan.
A full-text copy of the Registration Statement on Form S-8 is
available at no charge at http://ResearchArchives.com/t/s?43d0
The Company said its recurring losses and expected negative cash
flows from operations raise substantial doubt about the Company's
ability to continue as a going concern.
The Company incurred net losses of $150.3 million, $195.6 million
and $117.3 million during the years ended December 31, 2008, 2007
and 2006, respectively. The Company recorded operating losses in
17 of the 18 consecutive quarters in the period ended June 30,
2009. At June 30, 2009, the Company had an accumulated deficit of
$993.2 million.
As of June 30, 2009, the Company had $1.08 billion in total assets
and $756.2 million in total liabilities. Cash, cash equivalents
and short-term investments as of June 30 was $276 million compared
to $314 million on December 31, 2008.
About UTStarcom Inc.
UTStarcom Inc. -- http://www.utstar.com/-- provides IP-based,
end-to-end networking solutions and international service and
support. The Company sells its solutions to operators in both
emerging and established telecommunications markets around the
world. UTStarcom enables its customers to rapidly deploy revenue-
generating access services using their existing infrastructure,
while providing a migration path to cost-efficient, end-to-end IP
networks. The Company was founded in 1991 and is headquartered in
Alameda, California.
US AIRWAYS: Pilots Want PBGC Removed as Pension Plan Trustee
------------------------------------------------------------
The US Airline Pilots Association filed a lawsuit against the
Pension Benefit Guaranty Corp. in federal court seeking the
removal of the PBGC as trustee of US Airways pilots' pension plan
and requesting the immediate appointment of a temporary trustee to
perform the investigatory functions that the PBGC has refused to
perform on behalf of pension plan beneficiaries since 2003.
USAPA asserts that the PBGC breached its fiduciary duty to the
fund and its thousands of beneficiaries by failing to comply with
its duties required under the Employee Retirement Income Security
Act of 1974 (ERISA). The suit also requests the U.S. District
Court for the District of Columbia to immediately appoint and
empower another trustee of the Retirement Income Plan for Pilots
of US Airways Inc. to perform the statutory and fiduciary duties
required under ERISA and to investigate the plan's financial
affairs. These are actions that USAPA believes the PBGC failed to
take as required by federal law.
"The PBGC has not fulfilled its obligation as trustee of our
pilots' retirement fund," said Captain Mike Cleary, president of
USAPA. "Our own investigation has uncovered a number of
questionable circumstances surrounding activities and investments
of our retirement fund prior to its termination. Our request to
the PBGC for a thorough investigation has fallen on deaf ears, so
we are asking the court to appoint a trustee who will do its due
diligence in this matter and investigate the management, or
perhaps the mismanagement, of our pilots' retirement fund."
The PBGC assumed control of the pilots' pension on March 31, 2003,
when US Airways terminated the plan during its bankruptcy
proceedings over the objections of the pilots.
Headquartered in Charlotte, N.C., the US Airline Pilots
Association represents more than 5,000 US Airways pilots in seven
domiciles across the United States.
About US Airways
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) --
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways Inc., Allegheny
Airlines Inc., Piedmont Airlines Inc., PSA Airlines Inc.,
MidAtlantic Airways Inc., US Airways Leasing and Sales Inc.,
Material Services Company Inc., and Airways Assurance Limited LLC.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another Chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represented the
Debtors in their restructuring efforts. In the Company's second
bankruptcy filing, it listed $8,805,972,000 in total assets and
$8,702,437,000 in total debts.
The USAir II bankruptcy plan became effective on September 27,
2005. The Debtors completed their merger with America West on the
same date. (US Airways Bankruptcy News; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000).
* * *
According to the TCR in September 2008, Michael Lowry, project
manager for AVIATION WEEK's latest Top-Performing Companies, said
USAir has a "high risk" for a bankruptcy filing in 2009.
As reported by the Troubled Company Reporter on May 12, 2009,
Fitch Ratings affirmed the Issuer Default Rating of US Airways
Group, Inc., at 'CCC'.
As of June 30, 2009, reorganized US Airways had total assets of
$7,858,000,000 against debts of $8,194,000,000, for a
stockholders' deficit of $336,000,000.
VALLEJO CITY: Court Approves Rejection of Workers' CBA
------------------------------------------------------
The Hon. Michael McManus of the U.S. Bankruptcy for the Eastern
District of California has approved the city of Vallejo's reuqest
to reject a its collective bargaining agreement between the
International Brotherhood of Electrical Workers union, the union
representing administrative and public works employees. The city
was able to prove that the labor contract was "burdensome" on its
abilities to meet Chapter 9 bankruptcy requirements for solvency.
The Bankruptcy Court ruled in March that the city has the right
to terminate contracts with labor unions. The bankruptcy judge
also ruled that the more cumbersome provisions for terminating
labor contracts applicable to companies in Chapter 11 don't apply
to municipalities reorganizing in Chapter 9. The judge has
directed parties to engage in talks to resolve their contract
disputes.
The city has filed for bankruptcy due to a liquidity crisis and
failure to obtain concessions from unions.
As reported by the TCR on August 12, 2009, the U.S. Bankruptcy
Appellate Panel for the Ninth Circuit in San Francisco, California
affirmed an order by the Bankruptcy Court that allowed the city of
Vallejo to file for bankruptcy over unions' objections. The
Appellate Panel held that the District Court was correct when it
found that the City of Vallejo satisfied the elements of Chapter
9, Section 109 of the Bankruptcy Code by proving insolvency and
showing that further negotiation with the union was impractical.
About the City of Vallejo
Vallejo -- http://www.ci.vallejo.ca.us/GovSite-- is a city in
Solano County, in California. As of the 2000 census, the city had
a total population of 116,760. It is located in the San Francisco
Bay Area on the northern shore of San Pablo Bay. The City is a
charter city organized and exercising governmental functions under
its charter and the laws and constitution of the state. Its
governing body is its City Council.
The City filed for protection under Chapter 9 of the U.S.
Bankruptcy Code on May 23, 2008 (Bankr. E.D. Calif. Case No.
08-26813). Marc A. Levinson, Esq., and Norman C. Hile, Esq., at
Orrick, Herrington & Sutcliffe LLP in Sacramento, California,
represent the City.
VP PHASE II: Oct. 3 Auction Set for Veranda Park Building Offices
-----------------------------------------------------------------
Anjali Fluker at Orlando Business Journal reports that Orange
County Circuit Judge Frederick Lauten has allowed Wachovia Bank NA
to foreclose on VP Phase II Ltd.'s first floor of Offices at
Veranda Park Building 700. Business Journal relates that Judge
Lauten has set a public auction for October 3 on the building.
According to court documents, VP Phase II owed $2.7 million in
principal balance, accrued interest, late fees, costs and attorney
fees to Wachovia Bank. Court documents say that VP Phase II does
not own the 31 units on the second and third floors.
WASH.COM INC: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Wash.Com Inc
dba Flex Wash
2527 Royal Ln, #145
Dallas, Tx 75229
Bankruptcy Case No.: 09-35851
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Debtor's Counsel: Kenneth S. Harter, Esq.
Law Offices of Kenneth S. Harter
1620 E. Belt Line Road
Carrollton, TX 75006
Tel: (972) 242-8887
Fax: (972) 446-7976
Email: kharter@ctc.net
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 Kimberly Cho, president of the Company.
WCI COMMUNITIES: Emerges from Chapter 11 Protection
---------------------------------------------------
WCI Communities, Inc. announced September 3 that it has emerged
from Chapter 11 as a newly reorganized, private company,
eliminating more than $2 billion in debt and liabilities.
"This is a great accomplishment," said David Fry, president and
chief executive officer. "Now that we have successfully completed
our financial restructuring, emerging from Chapter 11 with a
rational capital structure and a strong core portfolio, we look
forward to implementing our business plan which has been designed
to provide us a flexible foundation for operating in today's real
estate market as well, as future success."
The Company also announced that five individuals have been
selected to serve on a newly constituted board of directors.
Effective immediately the board will be:
Patrick J. Bartels, Jr. is Vice President of Monarch
Alternative Capital LP, a private investment firm with
approximately $2.5 billion of assets under management.
Monarch is the largest shareholder of WCI following the
company's emergence from bankruptcy. Mr. Bartels has many
years of experience in restructuring companies in a variety
of industries and previously held senior positions with both
INVESCO and PricewaterhouseCoopers LLP.
Michelle M. Mackay is an Executive Vice President of iStar
Financial Inc., a publicly traded finance company focused on
the commercial real estate industry. Ms. Mackay has more than
20 years of experience in the real estate capital markets
industry.
John R. Peshkin is the Managing Principal of Vanguard Land,
LLC, a private real estate investment group focused on the
acquisition and development of high-quality residential
properties throughout the Southeastern United States. Prior
to forming Vanguard Land, Mr. Peshkin was the Chief Executive
Officer of Starwood Land Ventures, LLC. Mr. Peshkin also
enjoyed a 24-year career at Taylor Woodrow, where he served
as North American Chief Executive Officer.
Stephen D. Plavin is the Chief Operating Officer of Capital
Trust, a commercial mortgage REIT and investment manager. Mr.
Plavin is responsible for all lending, investing and
portfolio management activities of Capital Trust. Prior to
joining Capital Trust, Mr. Plavin was co-head of Global Real
Estate for The Chase Manhattan Bank and Chase Securities Inc.
Mark Porath is a co-founder and President of Hearthstone,
which has financed over $12 billion of development and
construction in residential real estate throughout the
United States. Prior to forming Hearthstone 18 years ago,
Mr. Porath worked for the residential joint venture division
of Home Savings and, previous to that, for Peat Marwick in
its Real Estate and Financial Services group.
"We're pleased to welcome this diverse group of highly respected
individuals to WCI and look forward to benefiting from their
guidance as we embark on our new beginning," said Mr. Fry. "The
combined experience and business acumen of this board will provide
us with a sound foundation for our future success.
About WCI Communities, Inc.
Headquartered in Bonita Springs, Florida, WCI Communities, Inc.
(Pink Sheets: WCIMQ) -- http://www.wcicommunities.com/-- is a
fully integrated homebuilding and real estate services company
with more than 50 years' experience in the design, construction
and operation of leisure-oriented, amenity rich master-planned
communities. It has operations in Florida, New York, New Jersey,
Connecticut, Virginia and Maryland. The Company directly employs
approximately 1,170 people, as well as approximately 1,800 sales
representatives as independent contractors.
The Company and 126 of its affiliates filed for Chapter 11
protection on August 4, 2008 (Bankr. D. Del. Lead Case No.
08-11643 through 08-11770). On July 1, 2009, debtor-affiliates
WCI 2009 Corporation, WCI 2009 Management, LLC and WCI 2009 Asset
Holding, LLC filed separate Chapter 11 petitions (Case Nos. from
09-12269 to 09-12271).
Thomas E. Lauria, Esq., Frank L. Eaton, Esq., and Linda M. Leali,
Esq., at White & Case LLP, in Miami, Florida, represent the
Debtors as counsel. Eric Michael Sutty, Esq., and Jeffrey M.
Schlerf, Esq., at Fox Rothschild LLP, represent the Debtors as
Delaware counsel. Lazard Freres & Co. LLC is the Debtors'
financial advisor. Epiq Bankruptcy Solutions LLC is the claims
and notice agent for the Debtors. The U.S. Trustee for Region 3
appointed five creditors to serve on an official committee of
unsecured creditors. Daniel H. Golden, Esq., Lisa Beckerman,
Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer &
Feld LLP; and Laura Davis Jones, Esq., Michael R. Seidl, Esq., and
Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP,
represent the committee in these cases. When the Debtors filed
for protection from their creditors, they listed total assets of
$2,178,179,000 and total debts of $1,915,034,000.
With WCI's emergence from bankruptcy, the Troubled Company
Reporter concludes coverage of WCI Communities until facts and
circumstances, if any, emerge that demonstrate financial or
operational strain or difficulty at a level sufficient to warrant
renewed coverage.
WHITNEY HINES: Case Summary & 13 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Whitney A. Hines
7715 Overlake Drive W.
Medina, WA 98039
Bankruptcy Case No.: 09-19026
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
Western District of Washington (Seattle)
Judge: Karen A. Overstreet
Debtor's Counsel: Larry B. Feinstein, Esq.
Vortman & Feinstein
500 Union St, Suite 500
Seattle, WA 98101
Tel: (206) 223-9595
Email: lbf@chutzpa.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$6,398,656, and total debts of $2,715,441.
A full-text copy of the Debtor's petition, including a list of its
13 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/wawb09-19026.pdf
The petition was signed by Whitney A. Hines.
WISE METALS: Working with Lenders to Extend Loan Maturity Date
--------------------------------------------------------------
Wise Metals Group LLC disclosed in a Form 10-Q filing with the
Securities and Exchange Commission it is working with lenders to
negotiate an extension to the term of its revolving and secured
credit facility, which matures on May 5, 2010.
Wise said beginning in the third quarter of 2008, management
implemented cost reduction and process improvement initiatives, as
well as negotiated more favorable sales terms with certain
customers and extended payment terms with certain vendors. On
April 30, 2009, to improve liquidity to meet the Company's 2009
operating plan, the Company amended their revolving and secured
credit facility which increased their availability by $46 million.
Management believes that these initiatives as well as the
availability under the revolving and secured credit agreement will
be sufficient to pay operating expenses, satisfy debt service
obligations and fund capital expenditures through the remainder of
2009. However, in the event they are not, the Company will seek
alternative sources of funding.
Wise said it has incurred significant losses in the past three
years as a result of unfavorable contracts, commodity pricing
pressures and liquidity issues which have had a negative impact on
cash flows. During 2008 and the first six months of 2009, Wise
said management took active steps to improve the Company's
contracts, improve productivity, reduce costs and implement new
machinery to expand product offerings to include wider coil to
supply the 14-out market. Management believes these investments
will strengthen their competitive position by increasing capacity
and product offerings and reducing operating costs while
maintaining industry-leading quality standards.
Wise said the market for the Company's products remains quite
competitive and management does not foresee a climate for
substantial price increases through the remainder of 2009. The
Company believes there are an unusually large number of long-term
industry-wide can sheet contracts which expire at the end of 2009
affecting a substantial portion of the domestic can sheet market.
Given the recent history of substantial industry losses by can
sheet makers, the Company believes there is opportunity for
substantial price increases to occur in new contracts and in this
contract renewal process for can sheet volume beginning in 2010.
There can be no assurance as to whether the Company will receive
these price increases.
At June 30, 2009, the Company had drawn $196,786,000 on the
revolving and secured credit facility. In addition, the Company
had $1,023,000 of outstanding letters of credit against the
$274,000,000 revolving credit line which was reduced on April 30,
2009, from $300,000,000 with Amendment No. 16 to the facility.
The applicable interest rates for the remaining commitment under
the revolving credit facility will range either from 1.25% to
1.75% over the prime interest rate or 3.50% to 4.00% over the
LIBOR rate, as determined by the Agent, and will be based upon the
Adjusted EBITDA of the Company for the immediately preceding two,
three or four fiscal quarter periods. The prime rate at June 30,
2009, was 3.25% and LIBOR was 1.61%.
As of December 31, 2008, and June 30, 2009, the Company was in
compliance with the financial covenants related to the revolving
credit facility. The Company was in compliance with the minimum
availability covenant and therefore was not required to meet the
capital expenditure covenant. A minimum availability covenant was
in place for the 2009 first quarter until Amendment No. 16 was
executed on April 30, 2009. The minimum availability was set at
$20,000,000 which was reduced to $15,000,000 and then $10,000,000
all within the first quarter. A minimum availability level of
$10,000,000 resulting from provisions in Amendment No. 16 was set
on May 15, 2009 and remains in place indefinitely.
Wise also disclosed that on August 20, 2009, it received a Notice
of Default from the Trustee under the Indenture governing its
senior notes due 2012, for failure to timely file its quarterly
report on Form 10-Q for the quarter ended June 30, 2009. The
Default will not become an Event of Default under the Indenture so
long as the Company files its June 30 Form 10-Q by October 3,
2009.
The June 30 Form 10-Q was filed on August 31, 2009. A full-text
copy of the Form 10-Q report is available at no charge at:
http://ResearchArchives.com/t/s?43d2
The Company issued $150,000,000 in senior notes due 2012. The
notes bear a 10.25% interest rate payable bi-annually on May 15
and November 15. Total financing costs associated with the
issuance of the senior secured notes were $8,200,000.
Wise Metals Group LLC posted wider net loss of $17,573,000 for the
three months ended June 30, 2009, from a net loss of $8,401,000
for the same period a year ago. The Company posted a net loss of
$56,243,000 for the six months ended June 30, 2009, from a net
loss of $16,688,000 for the same period in 2008.
Wise Metals recorded lower sales of $161,601,000 for the three
months ended June 30, 2009, from $350,003,000 for the same period
a year ago. The Company booked sales of $319,406,000 for the six
months ended June 30, 2009, from $665,666,000 for the same period
in 2008.
As of June 30, 2009, the Company had total assets of $481,973,000;
and total current liabilities of $554,759,000, term loans and
capital lease obligations, less current portion, of $1,933,000,
senior note obligations of $150,000,000, accrued pension and other
post retirement obligations of $13,521,000, other liabilities of
$1,279,000, redeemable preferred membership interest of
$87,875,000, resulting in total Members' deficit of $327,394,000.
About Wise Metals Group
Based in Baltimore, Maryland, Wise Metals Group LLC includes Wise
Alloys, the world's third-leading producer of aluminum can stock
for the beverage and food industries; Wise Recycling, one of the
largest, direct-from-the-public collectors of aluminum beverage
containers in the United States, operating shipping and processing
locations throughout the United States that support a network of
neighborhood collection centers; and Listerhill Total Maintenance
Center, specializing in providing maintenance, repairs and
fabrication to manufacturing and industrial plants worldwide
ranging from small on-site repairs to complete turn-key
maintenance.
* * *
As reported by the Troubled Company Reporter on July 16, 2009,
Moody's Investors Service commented that the Caa3 corporate family
rating and negative rating outlook for Wise Metals LLC would not
be immediately impacted by the company's disclosure of weak
results in its delayed first quarter financial statements filed on
July 9, 2009. The prior rating action for Wise Metals was on
September 27, 2006, when the probability of default rating of Caa3
was assigned. The credit opinion was updated on September 29,
2008.
As reported in the TCR on March 20, 2009, Standard & Poor's
Ratings Services revised its outlook on Wise Metals to negative
from developing. At the same time, Standard & Poor's affirmed its
'CCC' corporate credit rating.
YOUNG BROADCASTING: Asks FCC for Okay to Assign Albany Licenses
---------------------------------------------------------------
LOCAL PUBLIC NOTICE On August 20, 2009, an application was
tendered for filing with the Federal Communications Commission by
Young Broadcasting of Albany, Inc., Debtor-In-Possession, licensee
of Television Stations WTEN(TV) Albany, NEW YORK and WCDC-TV,
Adams, Massachusetts, requesting consent to the assignment of the
licenses of WTEN(TV) and WCDC-TV to Young Broadcasting of Albany,
Inc., in connection with Young Broadcasting of Albany, Inc.,
Debtor-In-Possession's Chapter 11 bankruptcy case. Young
Broadcasting of Albany, Inc., Debtor-In-Possession, is subsidiary
of Young Broadcasting Inc., Debtor-In-Possession. The officers,
directors, and holders of 10% or more of the capital stock of
Young Broadcasting Inc., Debtor-In-Possession, are Vincent J.
Young, Deborah A. McDermott, James A. Morgan, Daniel R. Batchelor,
Chris Eisenhardt, Robert Peterson, Peter Grazioli, Brian Greif,
Janice E. Cross, Ried Murray, Richard C. Lowe, Thomas J. Sullivan,
Anthony Cassara, and Richard Young and Margaret Young as trustees
of the Adam Young 2003 Trust. As proposed in the FCC assignment
application and upon conclusion of the Chapter 11 bankruptcy case,
Young Broadcasting of Albany, Inc. and WCDC-TV will be ultimately
controlled by New Young Broadcasting Holding Co., Inc. The
officers and directors of New Young Broadcasting Holding Co., Inc.
will be Anthony Cassara, Kevin Shea, Thomas J. Sullivan, Vincent
J. Young, and Deborah J. McDermott. The other attributable parties
of New Young Broadcasting Holding Co., Inc. will be YB Investor,
LLC, YB Manager, LLc, Raymond Wechsler, the Highland Floating Rate
Fund, The Highland Floating Rate Advantage Fund, the Pacific
Select Fund, Highland Capital Management, L.P., Strand Advisors,
Inc., James Dondero, Timothy K. Hui, Scott Kavanaugh, James F.
Leary, Bryan A. Ward, R. Joseph Dougherty, Brad Borud, Jack
Blackburn, Michael Colvin, Frederick L. Blackmon, Gale K. Caruso,
Lucie H. Moore, Nooruddin (Rudy) S. Veerjee, G. Thomas Willis,
James T. Morris, Mary Ann Brown, Robin S. Yonis, Brian D. Klemens,
Sharon E. Pacheco, Howard T. Hirakawa, Eddie Tung, Laurence E.
MacElwee, Carleton J. Muench, Audrey L. Milfs, Mark Okada, Patrick
Boyce, and Michael Pusateri. Station WTEN(TV) operates on virtual
digital channel number 10, and Station WCDC-TV operates on virtual
digital channel number 19. A copy of the application and related
material are available for public inspection during regular
business hours at the WTEN(TV) and WCDC-TV main studio located at
341 Northern Blvd. in Albany, N.Y.
Young Broadcasting, Inc. -- http://www.youngbroadcasting.com/--
owns 10 television stations and the national television
representation firm, Adam Young, Inc. Five stations are
affiliated with the ABC Television Network (WKRN-TV -Nashville,
TN, WTEN-TV - Albany, NY, WRIC-TV - Richmond, VA, WATE-TV -
Knoxville, TN, and WBAY-TV - Green Bay, WI), three are affiliated
with the CBS Television Network (WLNS-TV - Lansing, MI, KLFY-TV -
Lafayette, LA and KELO-TV - Sioux Falls, SD), one is affiliated
with the NBC Television Network (KWQC-TV - Davenport, IA) and one
is affiliated with MyNetwork (KRON-TV - San Francisco, CA). In
addition, KELO- TV- Sioux Falls, SD is also the MyNetwork
affiliate in that market through the use of its digital channel
capacity.
The Company and its affiliates filed for Chapter 11 protection on
February 13, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-10645). Jo
Christine Reed, Esq., at Sonnenschein Nath & Rosenthal LLP,
represents the Debtors in their restructuring efforts. Andrew N.
Rosenberg, Esq., at Paul Weiss Rifkind Wharton & Harrison LLP,
represents the official committtee of unsecured creditors as
counsel. The Debtors selected UBS Securities LLC as consultant;
Ernst & Young LLP as accountant; Epiq Bankruptcy Solutions LLC as
claims agent; and David Pauker chief restructuring officer.
ZOILA SANCHEZ-ESCOBEDO: Case Summary & 20 Largest Unsec. Creditors
------------------------------------------------------------------
Debtor: Zoila Sanchez-Escobedo
aka ZOILA SANCHEZ
aka ZOILA ESCOBEDO
Edmundo Escobedo
427 Louisville Drive
North Las Vegas, NV 89031
Bankruptcy Case No.: 09-26340
Chapter 11 Petition Date: September 1, 2009
Court: United States Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Bruce A. Markell
Debtor's Counsel: Jorge L. Sanchez, Esq.
Sanchez Law Group
930 S. FOURTH ST., #211
LAS VEGAS, NV 89101
Tel: (702) 635-8529
Fax: (702) 537-2800
Email: jsanchez@sanchezlawgroup.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$1,177,650, and total debts of $2,427,206.
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/nvb09-26340.pdf
The petition was signed by Satinder Raina, chief executive officer
of the Company.
* Crowe Horwath Offers Fresh Start Accounting for Ch. 11 Filers
---------------------------------------------------------------
Crowe Horwath LLP says economic conditions during the past year
have forced an increasing number of companies to file for
reorganization under Chapter 11 of the U.S. Bankruptcy Code. In
fact, for the year ended June 30, 2009, business bankruptcy
filings were up 62 percent compared to the prior year, according
to the Administrative Office of the U.S. Courts. To help
companies navigate through the complex reorganization process,
Crowe Horwath has introduced a new suite of financial advisory
services called Fresh Start Accounting.
"When a company uses Fresh Start Accounting, timelines are tight.
There is little room for error, and an ineffective plan can create
liability risks," said Mary Ann Travers, a partner in Crowe's
audit and financial advisory group. "Crowe's 'fresh start' goal is
to help companies deal with the pressures of filing for bankruptcy
protection and ultimately emerge from the process successfully. By
combining services we already offer with our years of experience
in the financial advisory field, Crowe has developed a one-stop
shopping program for companies dealing with the stress of
bankruptcy."
Ms. Travers added that each client who uses Crowe's Fresh Start
Accounting services will have a single point of contact at the
partner level to help manage these technical areas. "A single
contact from Crowe will guide company leaders through the complex
process to minimize both risk and business interruptions," she
said.
Crowe's Fresh Start Accounting services include:
* Bankruptcy and insolvency services: Assists with interim
management, reorganization plans, recovery alternatives,
exit strategies and more.
* Accounting and consulting services: Uses fair value
measurement and preferred accounting policies to help
achieve a fresh start balance sheet.
* Tax services: Accounts appropriately for net operating
losses, valuation allowances, reorganization value and other
aspects of income tax accounting and regulatory requirements
under FASB ASC 740, Income Taxes.
* Valuation: Assists management in identifying the adjustments
that are necessary to convert assets and liabilities from
historic balances to current fair values.
For more information about Crowe's Fresh Start Accounting
services, please visit:
http://researcharchives.com/t/s?43d8
About Crowe Horwath
Crowe Horwath LLP (www.crowehorwath.com) is one of the largest
public accounting and consulting firms in the United States. Under
its core purpose of "Building Value with Values(R)," Crowe assists
public and private company clients in reaching their goals through
audit, tax, risk and consulting services. With 25 offices and
2,500 personnel, Crowe is recognized by many organizations as one
of the country's best places to work. Crowe serves clients
worldwide as an independent member of Crowe Horwath International,
one of the largest networks in the world, consisting of more than
140 independent accounting and management consulting firms with
offices in more than 400 cities around the world.
* Bankruptcy Filings in Manchester Up 45% to Almost 450 in Aug.
---------------------------------------------------------------
The U.S. Bankruptcy Court in Manchester, New Hampshire, posted on
its Web site that bankruptcy filings totaled almost 447 in August
2009. New Hampshire Business Review reports that the number is
almost 10% lower compared to July 2009, but was 45% higher than
August 2008.
About 14 of the filings were by businesses, three fewer than in
July 2009.
Total filings for the first two months of 2009 increased 35% to
3416 in August 2009, compared to August 2008, Business Review
states.
* Dealers Group Says August Sales Up 1% from 2008 Level
-------------------------------------------------------
The American International Automobile Dealers Association (AIADA)
on September 2 released August 2009 sales figures for the
international nameplate automobile industry. AIADA represents
over 11,000 international nameplate franchises, which so far this
year account for 56.1 percent of all vehicles sold in the United
States. Overall sales, including domestics and unadjusted for
business days, were up one percent compared to August 2008 but
down 27.9 percent for the year-to-date.
The government's popular Car Allowance Rebate System, better known
as Cash for Clunkers, is credited with driving sales through
August, resulting in the first month-to-month increase since
October 2007. Though a post-Clunkers lull in sales is expected,
the industry's seasonally adjusted sales rate, or SAAR, spiked
from a predicted 11.2 million in July to 14.1 million in August.
That is the highest rate since May 2008. "These improved numbers
are exactly what dealers hoped for from August. Cash for clunkers
was an unparalleled success," said Wisconsin auto dealer and AIADA
Chairman Russ Darrow. "The focus now is on speeding Clunkers
reimbursements to dealers. Cash flow is the lifeblood of small
businesses, and dealers need those funds to pay our own
employees."
According to numbers from Autodata Corp., international brands
sold 747,689 vehicles in August, up from 562,988 in July and
683,328 in August 2008. Asian brands accounted for 52.3 percent
of the market, up from 48.7 percent in July 2009, and Europeans
had a 6.9 percent share, down from 7.8 in July. Domestic brands
finished the month with 40.8 percent of the market, down from 43.6
in July.
Cash for Clunkers may have done more for the economy than draw
consumers to dealerships. Consumer confidence saw a jump from
47.4 percent in July to 54.1 percent in August. In total, 16
brands - 13 of which were international nameplates - actually
increased sales over August 2008. Kia led the pack with a 60.4
percent increase from a year earlier.
For more information on automobile sales data, and to view a full
report on August automobile sales, click here:
http://www.aiada.org/newsroom/newsDetails.asp?id=57398&cmd=article
Established in 1970, AIADA is and continues to be the only
association whose sole purpose is to represent America's 11,000
international nameplate automobile franchises.
* PE Firms Turning to Bankruptcy Courts to Buy Assets
-----------------------------------------------------
As banks have toughened borrowings in the present economic
downturn, private equity firms are turning into turfs previously
dominated by vulture investors -- going into the bankruptcy court
to buy assets, instead of the customary leveraged buyouts.
According to Richard Bravo and Elizabeth Hester at Bloomberg, in
an LBO, private-equity firms usually put up about one-third of the
purchase price and borrow the rest. The Office of the Comptroller
of the Currency, however, said in July that its survey of 59 banks
holding $3.6 trillion of loans on Dec. 31 found that 86 percent of
lenders toughened lending standards, up from 52 percent in 2008.
According to the Bloomberg report, KKR & Co., the New York
takeover firm co-founded by Henry Kravis, is part of a group
converting loans made to Lear Corp. into a controlling stake in
the bankrupt car-seat maker. Another Chapter 11 filer, Hayes
Lemmerz International Inc., said that lenders who provided DIP
financing have agreed to take an equity stake in exchange for the
loans. Similar transactions are in the process in the bankruptcy
cases of Reader's Digest Association Inc. and Lyondell Chemical
Co.
Jason New, the head of distressed investing at GSO Capital
Partners LP, a unit of New York-based private-equity firm
Blackstone Group LP, said banks, the traditional providers of
bankruptcy loans, are unwilling or unable to provide the credit
because their capital is constrained, creating opportunities for
the funds.
* Wilbur Ross Sees 500 More Bank Failures by End of 2010
--------------------------------------------------------
According to Bill Rochelle at Bloomberg News, Christopher Whalen
from Institutional Risk Analytics told clients August 31 that
there will be an "implosion of the U.S. banking sector in 2010."
Basin on a second-quarter stress test of the banking industry, Mr.
Whalen predicts more than 1,000 banks will be "resolved" before
the current economic cycle is finished. Seeing the future for the
banking industry as "pretty grim," Mr. Whalen believes the
government has no more "bullets to fire at the deflation monster."
Wilbur Ross told financial news network CNBC September 1 that he
expects 500 more banks to fail by the end of 2010. A total of 84
banks have so far been shut this year.
Federal Deposit Insurance Corporation Chairman Sheila Bair said in
an interview broadcast by National Public Radio that bank failures
will continue through next year.
FDIC's Insurance Fund
The FDIC said in an August 27 report that the number of banks and
savings institutions in its "Problem List" increased to 416 at the
end of the second quarter compared with 305 at March 31.
The 416 banks have combined assets of $299.8 billion. The FDIC
said this is the largest number of "problem" institutions since
June 30, 1994, and the largest amount of assets on the list since
December 31, 1993. At the end of the 2008, there were 252 banks
on the Problem List.
"Problem" institutions are those institutions with financial,
operational, or managerial weaknesses that threaten their
continued financial viability. They are rated by the FDIC or
Office of the Thrift Supervision as either a "4" or "5", based on
a scale of 1 to 5 in ascending order of supervisory concern.
The Problem List is not divulged to the public. No advance notice
is given to the public when a financial institution is closed.
The Deposit Insurance Fund (DIF) decreased by $2.6 billion --
20.3% -- during the second quarter to $10.4 billion, based on
unaudited figures.
According to the FDIC, the reduction in the DIF was primarily due
to an $11.6 billion increase in loss provisions for bank failures.
Twenty-four insured institutions with combined assets of
$26.4 billion failed during the second quarter of 2009, the
largest number of quarterly failures since the fourth quarter of
1992, when 42 insured institutions failed. For 2009 through the
end of the second quarter, 45 insured institutions with combined
assets of $35.9 billion failed at an estimated current cost to the
DIF of $10.5 billion.
Problem Institutions Failed Institutions
-------------------- -------------------
Year Number Assets (Mil) Number Assets (Mil)
---- ------ ------------ ------ ------------
Q2'09 416 $299,800 24 $26,400
Q1'09 305 $220,047 21 $9,498
2008 252 $159,405 25 $371,945
2007 76 $22,189 3 $2,615
2006 50 $8,265 0 $0
2005 52 $6,607 0 $0
2004 80 $28,250 4 $170
A copy of the FDIC's Quarterly Banking Profile for the second
quarter of 2009 is available for free at:
http://bankrupt.com/misc/FDIC_QBP_2Q_09.pdf
The FDIC Board on August 26, adopted new guidelines for investors
interested in acquiring or investing in failed banks. The FDIC
agreed to lower to 10% from the proposed 15% the Tier 1 capital
ratio private-equity investors must maintain after buying a bank.
The FDIC is seeking to encourage private-equity investors to bid
on assets of collapsed banks as the pace of failures reaches a 17-
year high with 81 so far this year, draining the agency's
insurance fund by more than $21 billion. The surge has forced the
FDIC to enter loss-sharing arrangements and absorb other costs to
unload the assets of failed lenders.
The FDIC has twice entered into deals with investor groups this
year. In March, IndyMac Federal Bank, the entity that took over
Indymac Bank (seized by regulators last year), was sold to
investors led by Steven Mnuchin, an ex-Goldman Sachs Group Inc.
investment banker, and including buyout firm J.C. Flowers & Co.
Florida's BankUnited Financial Corp. was sold in May to firms
including Blackstone Group and WL Ross & Co.
* BOOK REVIEW: The Deregulation of the Banking and Securities
Industries
-------------------------------------------------------------
Edited by Lawrence G. Goldberg and Lawrence J. White
Publisher: Beard Books
Softcover: 362 pages
List Price: $34.95
by Henry Berry
The sixteen collected articles arose out of a May 1978 conference
sponsored by the Salomon Brothers Center for the Study of
Financial Institutions at the New York University Graduate School
of Business Administration. The editors Goldberg and White were
the organizers of the conference. The articles are grouped into
four parts. Each part concludes with comments from conference
participants. Part I contains introductory articles, the other
three Parts cover the securities industry, the banking industry,
and the intersection of the two. Because the financial industry
is so complex, basically conservative, and critical to the
economy, the topics and the discussions remain elucidating and
timely even though they reflect the framework of the financial
industry established by the Glass-Steagall Act passed in 1933 and
repealed in 1999.
The editors note in their Introduction, "Though deregulation is in
the air and is hotly discussed (particularly among economists), it
is far from a ubiquitous trend." The spread of deregulation
throughout the economy since this collection of articles was first
published in 1979 has not resulted in a laissez-faire business
environment for the banking or securities industries. Though
deregulation may have nominally been lifted with the repeal of the
Glass-Steagall Act in 1999, government continues to wield a strong
hand in the financial sector. For instance, while roughly a
decade after Glass-Steagall's repeal, there is hardly any
resistance to the principle of the freeing of prices. Prices
continue to be -- as they always have for business -- a critical
issue. Pricing decisions and changes from competitive pressures,
supply patterns, technological development, and consumer behavior
are ongoing in the airline and oil industries, to name only two.
How loan rates, securities prices, the timing of new issues,
savings rates, and bond sales are affected by this deregulation is
of keen interest to the financial sector. Accordingly, these
matters are addressed in many of the articles.
Another business phenomenon recognized by some articles is that
the increase in competition from the relaxing of regulations has
led to more business failures -- "one of the consequences of
competitive capitalism," say the editors. This includes bank
failures and the bankruptcies of large corporations; the latter
affecting the securities field especially. So, while deregulation
has allowed banks and securities firms to operate more freely in
many ways, it has also led to greater regulation to safeguard the
interests of depositors, stockholders, and investors from fraud
and incompetent management. The spectacular failures or losses of
some prominent securities firms over the past few years attest to
the necessity of safety regulation despite the widespread movement
for deregulation in other areas.
Although written before the repeal of the Glass-Steagall Act in
1999, the articles still reflect conditions and issues faced by
today's financial institutions. The articles deal with
fundamental, unchanging concerns such as pricing and the role of
government in regards to banks and securities firms. It also
looks at the many other variables, including new competition and
political concerns, that have shaped these industries.
Lawrence G. Goldberg is Professor of Finance at the University of
Miami. Lawrence J. White is the Arthur E. Imperatore Professor of
Economics at the New York University Stern School of Business.
Both authors have experience in the private and public business
sectors and have published many articles in business journals.
*********
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 **