/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090916.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, September 16, 2009, Vol. 13, No. 257 Headlines 2008 ASSET: To Pay 2% of $112 Million Debt Under Plan 3660 BROADWAY: Meeting of Creditors Scheduled for October 8 ACCO BRANDS: Moody's Changes Outlook on 'B3' Rating to Positive ACCO BRANDS: S&P Assigns 'BB-' Rating on $425 Mil. Senior Notes AGA MEDICAL: Moody's Downgrades Corporate Family Rating to 'B3' ALTRA NEBRASKA: Uncompleted Ethanol Plant Auctioned on Oct. 28 ALTUS PHARMACEUTICALS: Begins Winding Down of Business AMERCABLE INC: S&P Affirms Corporate Credit Rating at 'B-' ASARCO LLC: Judge Schmidt to Make 2nd Ruling on Plans Sept. 21 ASARCO LLC: To Allow Bondholders' $600 Mil. Claims ASARCO LLC: Union Objects to Parent Plan, Schmidt Recommendation AURORA OIL: Paid $92,289 to Huron Consulting for July Work AVAYA INC: S&P Puts 'B' Corp. Rating on CreditWatch Negative AVIZA TECHNOLOGY: Nasdaq to Delist Shares Effective September 18 BABCOCK & BROWN: Younan CD Portfolio Loan Issues Resolved BARZEL INDUSTRIES: Files for Bankruptcy to Sell to Chriscott BETAWAVE CORP: Posts $2.58MM Net Loss in Quarter Ended June 30 BH S&B HOLDINGS: Can Avoid Chapter 7 Liquidation BLOCK COMMUNICATIONS: Moody's Affirms 'Ba3' Corp. Family Rating CARDINAL ETHANOL: Earns $1.44 Million in Quarter Ended June 30 CENTRAL GARDEN: S&P Assigns 'CCC+' Senior Unsecured Debt Rating CITIGROUP INC: Working on Reducing Gov't's 34% Stake CONSECO INC: Receives Regulatory Approvals for Wilton Re Deal CRESCENT RESOURCES: Siemens Protests Lift Stay in Toxic Suit CRUCIBLE MATERIALS: Seeks to Terminate Steelworkers' Contracts CYNERGY DATA: Has Court Nod for ComVest-Led Auction on Oct. 5 DELTA AIR: Expects $400MM in NWA Merger Savings for Jan.-Sept. DELTA AIR: Moody's Affirms Corporate Family Rating at 'B2' DIRECTV HOLDINGS: Moody's Assigns 'Ba2' Rating on $2 Bil. Bonds DUKE REALTY: Under 40% Accept Cash Offer for 7.75%, 5.25% Notes ELI LILLY: To Cut Work Force by 14%, Revamp Units ENERGY PARTNERS: Posts $33.6MM Net Loss for June 30 Quarter FINLAY ENTERPRISES: Delays Filing of August 1 Form 10-Q Report FIRST AMERICAN: Fitch Downgrades Rating on Senior Debt to 'BB+' FIRST NATIONAL: Swings to $20MM Net Loss in Q3 of 2009 FIRST STATE FIN'L: Nasdaq to Delist Shares Effective Sept. 18 FLA OWNER: U.S. Trustee Sets Meeting of Creditors for October 6 FORD MOTOR: Returns to Minivan Market by Adapting Car From Europe FORUM HEALTH: Creditors Try to Block Exclusivity Period Extension FRONTIER AIRLINES: Stipulation Resolving B/E Aerospace Claim GENERAL GROWTH: Bakersfield Mall's Schedules of Assets & Debts GENERAL GROWTH: Bakersfield Mall's Statement of Financial Affairs GENERAL GROWTH: Lancaster Trust's Schedules of Assets & Debts GENERAL GROWTH: Lancaster Trust's Statement of Financial Affairs GENERAL MOTORS: EU to Scrutinize Opel Restructuring Plan GENMAR HOLDINGS: Wants December 31 Plan Submission Deadline GREEKTOWN HOLDINGS: To Send 2 Rival Plans to Creditors for Voting GREEKTOWN HOLDINGS: Differences Between Two Competing Plans GREEKTOWN HOLDINGS: Creditors Seek Discovery on Competing Plans HERON LAKE: Posts $12.8MM Net Loss in Nine Months Ended July 31 HUNTINGTON BANCSHARES: Fitch Affirms Issuer Default Rating INNOVATIVE SPINAL: Integra Acquires Assets for $9.25 Million ISAAC SANDERS: Files for Bankruptcy, Faces Sexual Assault Lawsuit LANDAMERICA FINANCIAL: Files Joint Liquidation Plan LEAR CORP: Creditors Committee Supports Reorganization Plan LEAR CORP: Seeks December 15 Extension of Removal Period LEHMAN BROTHERS: Barclays Got at Least $5-Bil. Windfall From Deal LEHMAN BROTHERS: Administrators to Restructure Property Loans LEHMAN BROTHERS: Judge OKs Mediation for Derivative, Swap Disputes LEHMAN BROTHERS: Numerix to Provide Valuation on Derivatives Deals LEHMAN BROTHERS: LB 2080 Proposes to Reject 13 Contracts & Leases LYONDELL CHEMICAL: Files Joint Chapter 11 Plan of Reorganization LYONDELL CHEMICAL: Treatment of Claims Under Joint Plan LYONDELL CHEMICAL: To Seek Court Nod of Plan Outline Oct. 14 MAGNA ENTERTAINMENT: MEC Lone Star Sent to Ch. 11 to Sell Track MAGNA ENTERTAINMENT: Harrah's Entertainment Buys Thistledown MAGNACHIP: Committee Offers 72% Recovery in Cash to Sr. Lenders MERUELO MADDUX: Posts $127.5MM Net Loss for March 31 Quarter MERUELO MADDUX: Stephen Taylor Sees Shareholder Recovery METALDYNE CORP: Committee Balks at Exclusive Period Extension Plea MOHAWK INDUSTRIES: Moody's Cuts Ratings on Senior Notes to 'Ba2' MPF CORP: Gets Access to $750,000 of DIP Financing NAMWEST LLC: Owes Town $4.4MM for 2005 RiverWinds Contract NATIONAL HOLDINGS: Grants Warrants to Bedford Oak for Forbearance NATIONAL PROCESSING: S&P Puts 'B-' Rating on Developing Watch NORTHPORT NETWORK: Discloses Going Concern Doubt on Debt Woes ONE LAND: Wants Access to Cash Securing Comm 2006-C8 Loan PACIFIC ENERGY: Can Abandon Alaska Assets Amidst Gov't Protest PARALLEL PETROLEUM: To Be Sold to Apollo for $483 Million PARMALAT SPA: Bank of America Liable for Fraud, SPVs Say PHILADELPHIA NEWSPAPERS: Bid Procedures Hearing Moved to Sept. 21 PILGRIM'S PRIDE: Amended Summary of Schedules PILGRIM'S PRIDE: Proposes to Reject 51 Contract-Grower Agreements PRIMARY ENERGY: S&P Withdraws 'BB' Rating on $152.5 Mil. Loan POMARE LTD: Court Okays Hilo Hattie Reorganization Plan PROTEIN SCIENCES: Wins Dismissal of Involuntary Ch. 7 Case QWEST COMMUNICATIONS: Fitch Assigns BB+ Rating on $300 Mil. Notes QWEST COMMUNICATIONS: Moody's Puts 'Ba3' Rating on $300 Mil. Notes QWEST COMMUNICATIONS: S&P Puts 'B+' Rating on $300 Mil. Notes RED TRAIL: No Waiver for June 30 Covenant Violations So Far RENAISSANCE RESIDENTIAL: Wants Access Cash Securing Two Loans RH DONNELLEY: Proposes Jan. 22 Extension for Plan Filing RH DONNELLEY: Proposes Incentive Plan for Business.Com SELECT MEDICAL: S&P Puts 'B-' Rating on CreditWatch Positive SEMGROUP LP: Judge Shannon Directs Key Parties to Mediation SEMGROUP LP: Manchester Requests Admin. Bar Date Extension SEMGROUP LP: Manchester Securities, et al., Want Plan Denied SEMGROUP LP: SemMaterials Proposes to Sell Equipment to Vance SIX FLAGS: Noteholders Propose "Superior" Alternative Plan SKYPOSTAL NETWORKS: June 30 Balance Sheet Upside-Down by $2.4MM SL MANAGEMENT: Lender Pursues Principal for Deficiency Claim SLM CORPORATION: Fitch Downgrades Preferred Stock Rating to 'BB' SPORTSCLICK INC: Green Swan Terminates Sale Agreement STALLION OILFIELD: Nonpayment of Notes Cues Moody's 'D' Rating STALLION OILFIELD: S&P Downgrades Corporate Credit Rating to 'D' STANFORD GROUP: Canada Court Recognizes U.S. Receiver Over Vantis STANFORD GROUP: Fraud Victims Want to File Involuntary Chapter 11 STANFORD GROUP: Pulman Cappuccio Files $80-Million Lawsuit STANT PARENT: PBGC Assumes Underfunded Pension Plans STAR TRIBUNE: Expects to Exit Chapter 11 Bankr. on Sept. 28 STEPHEN BALDWIN: Seeks Banker Meeting on Home Foreclosure SUNWEST MANAGEMENT: To Sell 148 Properties to Blackstone SYNCHRONOUS AEROSPACE: Moody's Affirms 'B3' Corp. Family Rating TEXTRON INC: Fitch Expects to Assign BB+ Rating on $500 Mil. Notes TOYS R US: Plans 80 Temporary Stores to Capture Holiday Sales TRANSAMERICAN ENERGY: To File Financial Statements by Sept. 28 TXCO RESOURCES: Can Transfer Oil Exploration & Production Rights TXCO RESOURCES: Paid $408,000 to FTI for June-July Work VISTEON CORP: 27 Affiliates' Schedules of Assets & Debts VISTEON CORP: 27 Affiliates' Statements of Financial Affairs VISTEON CORP: D&M Wants Prompt Decison on Contract VISTEON CORP: Lease Decision Deadline, Removal Periods Extended VISTEON CORP: VSL's Schedules of Assets & Liabilities VISTEON CORP: VSL's Statement of Financial Affairs WARNACO GROUP: Moody's Gives Positive Outlook on 'Ba2' Rating WILIAM DEL BIAGGIO: Nashville Predators Stake Yet to Be Resolved WILL PERRY: Lessors Amended Claim Allowed Over Debtor's Objection WWS CAMPING: U.S. Trustee Sets Meeting of Creditors for October 1 WWS CAMPING: Has Until September 28 to File Schedules & Statements YELLOWSTONE CLUB: Credit Suisse Executives Receive Subpoenas * Cost of Personal Bankruptcy in Ontario to Double, Says Hoyes * IATA Predicts Worldwide Airline Losses of $11 Billion in 2009 * LeFrak, Ross Bid on FDIC Troubled Assets * Reader's Digest, Taylor Bean Led Bankruptcies Since Mid-August * Retailers, Suppliers See Spending to Lag Market Recovery * Lawline.com and WKLB to Tackle Financial Reform * Konstantin Konstantinov Rejoins Chadbourne & Parke in Moscow * Upcoming Meetings, Conferences and Seminars ********* 2008 ASSET: To Pay 2% of $112 Million Debt Under Plan ----------------------------------------------------- 2008 Asset Holding Corp. will pay back only 1% to 2% of its $112 million in debt under its Chapter 11 reorganization plan filed in the U.S. Bankruptcy Court for the Southern District of New York. The plan allows for the company to dissolve itself after paying back, according to Law360. Based in New York, 2008 Asset Holding Corp. is a real estate- related securities investment firm that was managed by financial advising company GSC Group. The Company together with two subsidiaries filed for Chapter 11 on June 30, 2009 (Bankr. S.D.N.Y. Case No. 09-14264). Shannon Lowry Nagle, Esq., at O'Melveny & Myers, LLP, in New York, serves as counsel. The petition says assets range from $1,000,001 to $10,000,000 while debts are between $100,000,001 and $500,000,000. 3660 BROADWAY: Meeting of Creditors Scheduled for October 8 ----------------------------------------------------------- The U.S. Trustee for Region 2 will convene a meeting of creditors in 3660 Broadway Associates LP's Chapter 11 case on Oct. 8, 2009, at 2:30 p.m. The meeting will be held at the Office of the United States Trustee, 80 Broad Street, Fourth Floor, New York City. 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. New York City-based 3660 Broadway Associates LP filed for Chapter 11 on Aug. 28, 2009 (Bankr. S.D.N.Y. Case No. 09-15281). David Cohen, Esq., represents the Debtor in its restructuring effort. In its schedules, the Company said it has at least $14,504,378 in assets, and total debts of $13,108,832. ACCO BRANDS: Moody's Changes Outlook on 'B3' Rating to Positive --------------------------------------------------------------- Moody's Investors Service changed ACCO Brands Corporation's rating outlook to positive from negative primarily as a result of a significant increase in financial flexibility as a consequence of ACCO's proposed re-financing and anticipated improvement in operating results. The positive outlook incorporates the transformation of ACCO's balance sheet following the refinancing of senior secured bank debt with the issuance of $425 million of senior secured notes and a $175 million ABL revolving credit facility alleviating the pressures of covenant compliance and an upcoming maturity. The outlook also considers the sizable restructuring efforts the company has undergone in order to address lower demand. In addition, Moody's affirmed the ACCO's existing ratings including the B3 corporate family and probability of default ratings, the Caa2 senior subordinated note rating and assigned a B2 rating to the proposed senior secured notes. The B2 rating on the new senior secured notes reflects the benefit of subordinated debt but is limited by the first lien status on certain of the company's assets (primarily account receivables and inventory) of the company's proposed ABL revolving facility. In addition, Moody's upgraded ACCO's speculative grade liquidity rating to SGL-2 from SGL-3 as a result of the anticipated improvement in liquidity following the transaction. Following the close of the transaction, Moody's will withdraw the B1 ratings on the senior secured bank facilities. Ratings affirmed: * Corporate Family rating at B3; * Probability of Default rating at B3; * Senior subordinated notes at Caa2 (LGD5, 82%, adjusted) Rating upgraded: * Speculative grade liquidity rating to SGL-2 from SGL-3. Rating assigned: * Senior Secured Notes assigned a B2 (LGD3, 36%) Rating to be withdrawn: * Secured credit facilities at B1 (LGD2, 26%) The rating outlook is positive. ACCO's B3 corporate family rating reflects the negative secular trend in office supplies, exacerbated by the recession, competition from private label and lower priced products as well as its vulnerability to its customer base. ACCO's credit metrics deteriorated precipitously with the sizable decline in demand as a result of the global recession. Leverage has increased to greater than 5 times debt-to-EBITDA and interest coverage after capital expenditures is under 2 times. The rating benefits from ACCO's global scale and market position. Moreover, Moody's anticipates that declines in operating margin driven by the company's fixed cost base should begin to moderate as ACCO's restructuring efforts become evident. Lower input costs and potential increase in market share should provide some ongoing stability to operating cash flow and drive modest free cash flow. Moody's last rating action was on March 2, 2009, when Moody's lowered ACCO's CFR to B3 from B1, lowered all existing ratings down two notches and affirmed the SGL-3 rating. The outlook remained negative. ACCO Brands Corporation is a leading supplier of branded office products, which are marketed in over 100 countries to retailers, wholesalers, and commercial end-users. The company reported net sales of approximately $1.3 billion for the twelve months ended June 30, 2009. ACCO BRANDS: S&P Assigns 'BB-' Rating on $425 Mil. Senior Notes --------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its issue-level and recovery ratings to Lincolnshire, Illinois-based ACCO Brands Corp.'s proposed new $425 million senior secured notes due 2015, which were issued under Rule 144A with registration rights. The proposed notes are rated 'BB-', one notch higher than the 'B+' corporate credit rating on the company. The recovery rating is '2', indicating S&P's expectation for substantial (70%- 90%) recovery in the event of a payment default. The company, which supplies branded office products to the office products resale industry, will use the net proceeds from this proposed new issue, along with borrowings under a proposed new multicurrency $175 million asset-based revolving credit facility (unrated), to refinance and replace its existing senior secured credit facilities and accounts receivable securitization program (unrated) and pay transaction and related costs. S&P will withdraw its ratings on the company's existing secured credit facilities following the completion of the refinancing. At the same time, Standard & Poor's lowered its issue-level rating on ACCO's existing senior subordinated notes to 'B-' (two notches lower than the issuer's corporate credit rating) from 'B' following a revision in the recovery rating on this unsecured subordinated debt to '6' from '5', indicating S&P's expectation for negligible (0%-10%) recovery in the event of a payment default. The change in recovery rating reflects the increase in senior secured debt that will rank ahead of the unsecured subordinated debt, as a result of the company's proposed refinancing. As of June 30, 2009, ACCO had about $725 million of debt outstanding. The ratings on ACCO reflect the highly competitive and cyclical operating environment in which it operates, some customer concentration, and the company's leveraged financial profile. ACCO benefits from its leading market position, a portfolio of well-known brands, and wide geographic distribution. The outlook on the 'B+' corporate credit rating is negative. Although this proposed transaction addresses S&P's prior concern about the company's ability to maintain adequate cushion on its financial covenants in the second half of 2009, given the seasonal nature of ACCO's business, along with S&P's ongoing concerns about the continuing effects of the weak economic environment on the company's operating results, S&P believes that credit measures will likely remain near current levels in the very near-term. S&P could lower the ratings on ACCO if leverage increases further. S&P believes this would occur if 2009 sales fell by more than 25% and adjusted EBITDA margin remained near current levels, which S&P estimate could result in average debt to EBITDA of about 6.5x. An outlook revision to stable is unlikely in the near term, unless ACCO can meaningfully improve its credit metrics, including average debt to EBITDA at or less than 5.5x. Ratings List Corporate credit rating B+/Negative/-- Rating lowered To From -- ---- Senior subordinated debt B- B Recovery Rating 6 5 New rating Senior secured debt BB- Recovery rating 2 AGA MEDICAL: Moody's Downgrades Corporate Family Rating to 'B3' --------------------------------------------------------------- Moody's Investors Service downgraded the corporate family rating of AGA Medical Corporation to B3 from B2. The rating outlook is negative. This concludes the review for downgrade initiated on March 11, 2009. The downgrade reflects increased credit risk as a result of an aggressive growth strategy that has eroded liquidity and the potential impact of a recent adverse jury verdict in a patent infringement case. In Moody's opinion, the ratings remain under pressure due to these ongoing challenges which offset the company's underlying fundamental performance. Moody's believes that the legacy business (involving the manufacture and distribution of medical devices to address structural heart defects and vascular diseases) continues to maintain high gross margins and generate strong levels of EBITDA. The lower rating considers Moody's view of AGA's weak liquidity profile. Since the end of 2008, the company has accelerated its debt-funded acquisitions of certain distribution rights, inventory, equipment, intangible assets and goodwill from several foreign distributors in order to further enhance its profitability. This, combined with working capital pressures stemming from the change in distribution strategy, has resulted in minimal balance sheet cash and a fully drawn $25 million credit facility at June 30, 2009. Moreover, in Moody's opinion, AGA faces the possibility of covenant compliance issues in late 2009 or early 2010. Without a material improvement in the liquidity situation in the near-term, the B3 rating is likely to be further pressured. The downgrade also incorporates the legal issues that, in Moody's opinion, could have a material effect on AGA's future performance. While Moody's recognizes that litigation may be common in the medical device space, over the past few years, the company has had a $30 million settlement with NMT Medical, Inc. and one other party regarding a patent infringement lawsuit and has entered into a Deferred Prosecution Agreement in regards to the Foreign Corrupt Practices Act. Most recently, AGA reported that a jury found that it had infringed on some of the patents of Medtronic, Inc. (A1/stable). According to certain reports, the jury recommended that the company be held liable for approximately $58 million in past damages, and the company may be obligated to make future royalty payments to Medtronic. While Moody's understands that there is significant uncertainty regarding the timing or magnitude of any final judgment, the verdict creates a meaningful overhang for a company of AGA's small size which would be challenged to finance such an obligation independently. The company's ongoing legal issues and history of adverse judgments remain significant ratings constraints. The negative rating outlook reflects the continued pressure on the ratings as a result of the precarious liquidity position and the uncertainties regarding the impact of the jury verdict. The ratings could be downgraded if (i) there is not a near-term material improvement in liquidity, (ii) there is a ruling that required AGA to pay significant cash penalties over the near-term, or (iii) operating and financial performance were expected to deteriorate to levels inconsistent with the current rating. Ratings affected by the actions include: * Corporate Family Rating lowered to B3 from B2 * Probability of Default Rating lowered to B3 from B2 * Senior secured revolving credit facility lowered to B2 (LGD 3; 37%) from B1 (LGD 3; 42%) * Senior secured term loan rating lowered to B2 (LGD 3; 37%) from B1 (LGD 3; 42%) * Outlook is negative The prior rating action was on March 11, 2009, when the ratings were placed under review for possible downgrade. AGA Medical Corporation is a manufacturer of nitinol-based occlusion devices for the treatment of cardiovascular defects and peripheral vascular disease. The company had approximately $180 million in revenues for the twelve month period ended June 30, 2009. ALTRA NEBRASKA: Uncompleted Ethanol Plant Auctioned on Oct. 28 -------------------------------------------------------------- Maas Companies of Rochester, MN, will auction the 110 MGY partially-completed ethanol plant on October 28, 2009, at 10 a.m. on-site at 2182 Road 5600, Carleton, Nebraska. Altra Nebraska, LLC, began construction of this facility in 2006 and work halted in November 2007 when additional financing could not be obtained due to unseen economic challenges. The plant was expected to be one of Nebraska's largest ethanol plants employing more than 50 people and utilizing 36 million bushels of corn for feedstock. The liquidation of assets is part of the Chapter 11 filing last month. The option to purchase the plant as an entirety is available to potential buyers who submit bids prior to October 13 at 5:00 p.m. After this date, the property will be sold in piecemeal at auction. The auction manner of sale will include all real estate as one tract and the equipment or equipment lots individually. The auction will offer buyers the option of bidding on-site or live via the internet. Potential buyers are encouraged to attend the following open houses: -- Monday, Sept. 28, 10 a.m. - 5 p.m. -- Tuesday, Sept. 29, 10 a.m. - 5 p.m. -- Monday, Oct. 26, 10 a.m. - 5 p.m. -- Tuesday, Oct. 27, 10 a.m. - 5 p.m. Other times by appointment Details of the sale are available at http://maascompanies.com/or by contacting the auction company directly at 507-285-1444. Healdsburg, California-based Altra Nebraska, LLC, filed for Chapter 11 on August 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 effort. 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. ALTUS PHARMACEUTICALS: Begins Winding Down of Business ------------------------------------------------------ Altus Pharmaceuticals Inc. on September 11, 2009, determined to commence a process to wind down its business. To that end, the Company is in discussion with creditors and vendors, and is making efforts to maximize the value of its assets. In connection with this process, the Company has suspended its pediatric Phase 2 clinical trial of ALTU-238, the Company's hGH product candidate for growth hormone deficiency. In connection with the winding down, the Company is implementing a reduction in headcount of substantially all of its remaining employees on a phased basis in September and October of 2009. Employees affected by the restructuring plan have received notification and will be provided with severance payments. Severance expenses will be paid in a lump sum. The Company expects to record a restructuring charge of approximately $1.3 million in the third quarter of 2009 and $1.4 million in the fourth quarter of 2009, primarily representing cash payments for severance and related expenses. The Company may also incur further restructuring charges that could be significant due to events that may occur as a result of, or associated with, the restructuring plan, including the termination of contractual obligations and facilities-related costs. About Altus Pharmaceuticals Based in Cambridge, Massachusetts, Altus Pharmaceuticals Inc. is a developer of oral and injectable protein supplements. At June 30, 2009, the Company's balance sheet showed total assets of $26,521,000, total liabilities of $20,696,000 and stockholders' equity of $5,825,000. As reported in the Troubled Company Reporter on March 13, 2009, Ernst & Young LLP, independent registered public accounting firm for Altus Pharmaceuticals Inc., said that there is substantial doubt about the company's ability to continue as a going concern following its audit of the Company's 2008 results. AMERCABLE INC: S&P Affirms Corporate Credit Rating at 'B-' ---------------------------------------------------------- Standard & Poor's Rating Services said it affirmed its 'B-' corporate credit rating on El Dorado, Arkansas-based AmerCable Inc., along with all issue-level ratings on the company's debt. At the same time, S&P removed the ratings from CreditWatch, where they had been placed on July 23, 2009, following an amendment request by the company to use up to $20 million of internally generated cash and equity sponsor contributions to repurchase first-lien notes at less than par through a series of modified Dutch tender auctions. "AmerCable's inability to secure requisite lender consent for this amendment prompted the affirmation," said Standard & Poor's credit analyst Susan Madison. Another factor is S&P's view that a modified amendment currently being contemplated (which significantly reduces the amount of debt that could potentially be repurchased), would not constitute a distressed exchange. ASARCO LLC: Judge Schmidt to Make 2nd Ruling on Plans Sept. 21 -------------------------------------------------------------- Bankruptcy Judge Richard Schmidt ordered ASARCO LLC, its parent Grupo Mexico and other parties to prepare by Monday, September 21, 2009, noon-time, a 10-page brief as to which Chapter 11 plan is the best. ASARCO LLC has filed a plan built upon a sale to Sterlite Industries (Indiana) Ltd. Its parent, Grupo Mexico has filed its own Chapter 11 plan for ASARCO LLC under which it will buy ASARCO for $2.5 billion. The Parent's Plan, valued at $3.6 billion, complies with all of the requirements of the Bankruptcy Code and should be confirmed," Judge Schmidt said in his 137-page report and recommendation dated August 31, 2009. "Confirmation of the Debtors' Plan should be denied," he added. Both Plans are confirmable, Judge Schmidt said in his ruling, but decided that the Parent Plan is superior. Judge Schmidt recommended to District Court Judge Andrew S. Hanen to confirm the Plan of Reorganization proposed by Grupo Mexico's affiliates Asarco Inc. and Americas Mining Corporation. However, as reported by the TCR on September 14, 2009, Sterlite Industries (India) Ltd. recently increased its offer, to top rival Grupo Mexico's offer for ASARCO LLC by almost 3%. Grupo Mexico had offered $2.5 billion last month. Sterlite has further increased the total cash consideration it commits to pay for the ASARCO LLC assets by $435 million, thus raising its bid from $2.135 billion to $2.565 billion. In July 2008, Sterlite originally offered $2.6 billion for ASARCO's operating assets. Sterlite withdrew that offer in October 2008, citing reduced copper prices, among others. Steven Church at Bloomberg reports that lawyers for Grupo Mexico SAB said Sterlite Industries (India) Ltd. shouldn't be allowed to increase its bid for Asarco LLC following the auction and confirmation hearings before the Bankruptcy Court. District Judge Hanen is expected to rule on the Plan in November 2009. The Debtors are expected to emerge from bankruptcy by the end of 2009 should Judge Hanen accept the Bankruptcy Court's recommendation, Grupo Mexico SAB de C.V., AMC's ultimate parent, said in a press release. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for Chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for Chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its Chapter 11 case. On October 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: To Allow Bondholders' $600 Mil. Claims -------------------------------------------------- ASARCO LLC issued these unsecured long term bond debt prepetition: (1) $150 million in original principal amount of CSFB Corporate Debentures at 8.5% due 2025; (2) $100 million in original principal amount of CSFB JP Morgan Sec. Debentures at 7.875% due 2013; (3) $34.8 million in original principal amount of Lewis and Clark County, Montana Env. Bonds (IRB) at 5.85% due 2033; (4) $27.74 million in original principal amount of Nueces River Env. Bonds (IRB) at 5.6% due 2027; (5) $33.16 million in original principal amount of Lewis and Clark County, Montana Env. Bonds (IRB) at 5.6% due 2027; (6) $71.9 million in original principal amount of Gila County Installment Bonds at 5.55% due 2027; and (7) $22.2 million in original principal amount of Nueces River Env. Bonds (IRB) Series 1998A at 5.6% due 2018. Harbinger Capital Partners Master Fund I, Ltd., and CitiGroup Global Markets, Inc., together, are holders of a majority of the Bonds. Wilmington Trust Company, Wells Fargo Bank, National Association, and Deutsche Bank Trust Company Americas are each indenture trustees under one or more Indentures governing the Bonds. On behalf of all the Bondholders, the Indenture Trustees filed over 200 proofs of claim, which assert damages for principal, prepetition accrued interest, postpetition interest, interest on prepetition and postpetition interest, prepayment "no-call" damages, and prepayment premiums in connection with the Bonds, including these claims: -- Wilmington filed Claim No. 18575, including Claim Nos. 10415 and 18291 incorporated therein; -- Wells Fargo filed Claim No. 18576, including Claim Nos. 189 and 18293 incorporated therein; -- Deutsche Bank filed: * Claim No. 18590, including Claim No. 10222 incorporated therein; * Claim No. 18589, including Claim No. 10219 incorporated therein; * Claim No. 18588, including Claim No. 10221 incorporated therein; * Claim No. 18587, including Claim No. 10218 incorporated therein; * Claim No. 18591, including Claim No. 10220 incorporated therein; and * certain other proofs of claim relating to the Bonds to which the Debtors have objected as being duplicative of the Deutsche Bank's claims; and -- Other proofs of claim relating the Bonds. ASARCO LLC, certain Bondholders, and other parties-in-interest have widely contested the rights and interests of the Bondholders in the Bondholder Claims, says Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas. He notes that both the Bondholders and ASARCO LLC, and their representatives, have spent hours researching and analyzing the propriety of the Claims and arguing their respective positions. As a result of extensive negotiations and consultations with counsel, the parties reached a settlement agreement, which amicably resolves all matters relating to the Bondholder Claims, and settles amounts and treatments for the Claims. Pursuant to Sections 105, 501, and 502 of the Bankruptcy Code and Rule 9019 of the Federal Rules of Bankruptcy Procedure, ASARCO LLC asks Judge Schmidt to approve its compromise and settlement with the Bondholders in connection with the Bondholders Claims. ASARCO submitted to the Court, through a separate notice, a copy of the Bondholder Settlement. The key terms of the Bondholder Settlement are: (a) The Bondholders will receive an allowed claim amounting to $447.6 million on account of the principal amounts of the Bonds and all accrued but unpaid prepetition interest, provided that the Allowed Claims will be payable pari passu with the Allowed General Unsecured Claims for principal and prepetition interest; (b) The Bondholders will receive Allowed Claims in the approximate aggregate amount of $162 million for postpetition interest, calculated at the non-default contract rate, compounded based on the dates that interest payments were due under the contracts; provided that the Allowed Claims will only be payable after all General Unsecured Claims for principal and prepetition interest have been paid in full, and the payment for postpetition interest will be pari passu with Allowed General Unsecured Claims for postpetition interest; (c) Holders of the Montana 2033 Bonds, Nueces 2027 Bonds, Montana 2027 Bonds, Gila Bonds, and Nueces 2018 Bonds will receive Allowed Claims in the amount specified under the Indenture governing the Bonds on account of prepayment premiums, estimated at $1,898,000, in the aggregate; provided that the Allowed Claims will only be payable after the all General Unsecured Claims for postpetition interest have been paid in full, and the payment will be pari passu with the Allowed Claims for prepayment damages of the holders of the 2013 Bonds and the 2025 Bonds; (d) Holders of the 2013 Bonds will receive Allowed Claims in the aggregate amount of $5 million, calculated as 5% of the original principal amount, for alleged prepayment damages. Holders of the 2025 Bonds will receive Allowed Claims in the aggregate amount of $15 million, calculated as 10% of the original principal amount, for alleged prepayment damages. The Allowed Claims will be payable after Allowed General Unsecured Claims for postpetition interest have been paid in full, and the payments will be pari passu with the Allowed Claims of the holders of the Montana 2033 Bonds, the Nueces 2027 Bonds, the Montana 2027 Bonds, the Nueces 2018 Bonds and the Gila Bonds; (e) In recognition of the contribution of the Harbinger's plan of reorganization, the Debtors will support an administrative expense claim by the Majority Bondholders for attorneys' fees and expenses reasonably incurred in connection with the Harbinger Plan, up to a maximum of $6 million; (f) The Indenture Trustee will be allowed an administrative expense claim for fees and expenses incurred under the Bonds, aggregating $5.2 million as of July 20, 2009; and (g) The Bondholders will release and discharge all of their claims or rights against all the Debtors, including all the proofs of claims filed by or on behalf of the Bondholders. ASARCO LLC believes that settlement of the Bondholder Claims is in the best interests of the Debtors and their bankruptcy estates, as it (i) saves significant attorneys' fees and expenses that would otherwise be expended in litigating the validity and amount of the Bondholder Claims, and (ii) eliminates the risks, uncertainties, and delay in connection to continued litigation. Entering into the Bondholder Settlement will also allow valuable Court time to be allocated to other contested matters arising in the reorganization cases, Mr. Kinzie points out. ASARCO LLC also sought and obtained the Court's nod for an emergency hearing on its request to be held on September 15, 2009, at 9:00 a.m. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for Chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for Chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its Chapter 11 case. On October 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Union Objects to Parent Plan, Schmidt Recommendation ---------------------------------------------------------------- The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union AFL-CIO says that it opposes Judge Schmidt's August 31, 2009 report and recommendation to the extent that it raises four dispositive issues on whether Asarco Incorporated and Americas Mining Corporation's Plan can be confirmed and if so, whether the Bankruptcy Court erred in recommending confirmation of the Parent Plan rather than the Debtors' Plan, which provides for a sale of the ASARCO LLC assets to Sterlite (USA). The four issues are: (1) The Parent Plan cannot be confirmed because it is in violation of the special successorship clause of the 2007 collective bargaining agreement between the USW and ASARCO LLC, which constitutes the law of this case. The SSC requires that in the event of a change of control, which is defined to include a plan of reorganization, the buyer must recognize the USW and negotiate a new CBA. (2) In comparing recoveries for creditors as part of the analysis under Section 1129(c) of the Bankruptcy Code, the Bankruptcy Court failed to consider that health insurance will continue for retiree creditors through at least December 2013 under a collective bargaining agreement negotiated by Sterlite pursuant to the SSC. The treatment of those claims under the Parent Plan is uncertain. (3) In reviewing the likelihood of a strike in relation to a feasibility requirement for the Parent Plan and a determination of which plan to confirm, the Bankruptcy Court, without citation of authority, concluded that the "no-strike" clause in the current CBA will still be binding on the USW if the Parent Plan is confirmed. The USW contends that the conclusion is without legal basis and is in any event premature, and that the Bankruptcy Court's factual conclusions about the likelihood of a strike are also unsupported. (4) The Bankruptcy Court did not give appropriate consideration to the views of creditors, including governmental creditors in their regulatory capacity. The USW argues that these legal issues cannot be resolved by a Court order directing the Parent to offer to extend the current CBA for a year for they require careful analysis of the relevant language, history and context of the labor agreement, among other things. Patrick M. Flynn, Esq., in Houston, Texas, argues that the Bankruptcy Court's conclusion in the Recommendation is contrary to the language of the 2007 CBA Special Successorship Clause, which applies broadly to prevent the Debtor's "consummation" of any plan of reorganization. He asserts that the conclusion is also contrary to the Court's own Order approving the CBA, which confirmed that the SSC applies broadly to any plan, including one where the Parent retained its equity. Mr. Flynn adds that Judge Schmidt alternatively held, without stated analysis or textual support, that if the SSC applied to the Parent Plan, the Bankruptcy Court could terminate the SSC under a SSC provision providing for that termination, inter alia, if in light of "exigent" circumstances it was necessary to the success of the Chapter 11 process. However, he argues, the language of the SSC explicitly provides that it is only the Company or the Creditors Committee that can make an application allowing the Court to terminate application of the SSC based on exigent circumstances. The USW subsequently filed a supplemental response. Arizona Leaders Afraid of Repercussions Political and business leaders in Arizona are afraid of negative repercussions if Grupo Mexico gets back ASARCO LLC after Judge Schmidt recommended to the District Court the approval of the Parent Plan, The Arizona Republic has reported. Andrew Johnson of the Arizona Republic said that the Arizona legislators are concerned that the USW will strike resulting to economic hardships, at this time when Arizona's mining communities are trying to recover from recession. The legislators have pointed out to past dealings with Grupo Mexico. "They were bad for morale, they were bad for the environment, they were bad as far as being a good business partner for the state of Arizona," The Arizona Republic quoted Rep. Barbara McGuire, D-Kearny, as saying. Ms. McGuire's husband is a truck driver at the Debtors' Ray mines. Competing Plans As reported by the TCR on Sept. 14, 2009, Sterlite Industries (India) Ltd. topped rival Grupo Mexico's offer for ASARCO LLC by almost 3% percent. The offer was increased to $2.57 billion in cash from $2.14 billion, Mumbai-based Sterlite said September 11 in a statement to the National Stock Exchange. ASARCO LLC's proposed plan is built upon a sale to Sterlite. Grupo Mexico had filed a rival plan that offered to pay $2.5 billion for ASARCO LLC last month. Judge Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas at the end of August recommended to District Court Judge Andrew S. Hanen to confirm the Plan of Reorganization proposed by Asarco Incorporated and Americas Mining Corporation for ASARCO LLC and its debtor affiliates. The Parent's Plan, valued at $3.6 billion, complies with all of the requirements of the Bankruptcy Code and should be confirmed," Judge Schmidt said in his 137-page report and recommendation dated August 31, 2009. "Confirmation of the Debtors' Plan should be denied," he added. Both Plans are confirmable, Judge Schmidt said in his ruling, but decided that the Parent Plan is superior. Judge Schmidt's recommendation came after a two-week hearing on the Plans of Reorganization filed by each of ASARCO LLC and Asarco Inc. and AMC. Judge Schmidt has also recommended that the District Court issue all injunctions set forth in the Parent's Plan. Judge Hanen is expected to rule on the Plan in November 2009. A full-text copy of Judge Schmidt's Recommendation is available for free at: http://bankrupt.com/misc/ASARCO_Recommendation_083109.pdf About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for Chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for Chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its Chapter 11 case. On October 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) AURORA OIL: Paid $92,289 to Huron Consulting for July Work ---------------------------------------------------------- Aurora Oil & Gas Corporation disclosed paying Huron Consulting $92,289 for services rendered from July 13 to 26, 2009. Sanford R. Edlein, Managing Director at Huron, serves as Aurora Oil's Chief Restructuring Officer. Aurora Oil also paid ordinary course professionals a total of $26,038, consisting of $18,000 to Schlumberger Technology, a critical vendor; $2,928 to Ed Sines; and $5,110 to John Cole. Aurora Oil and its affiliate, Hudson Pipeline & Processing Co., LLC, have filed separate Monthly Operating Reports for the 12 days ended July 12, 2009 (pre-petition), 16 days ended July 31, 2009 (post-petition), one and seven months ended July 31, 2009 and balances as of July 12, 2009 (filing date) and July 31, 2009. Hudson Pipeline & Processing is a limited liability company that owns and operates various pipelines and processing facilities located in Hudson Township area of the Michigan Antrim play. Aurora Oil holds a 96.1% interest in HPPC. Aurora Oil recorded total revenues of $1,050,748 in July 2009, and $7,675,645 year-to-date ended July 2009. Aurora Oil posted a net loss of $2,877,294 in July 2009 and a net loss of $66,555,594 year-to-date ended July 2009. As of July 31, 2009, Aurora Oil had total assets of $97,740,375 and total liabilities of $138,397,608. Hudson recorded total revenues of $316,003 in July and $2,210,674 year-to-date ended July 2009. Hudson posted net income of $78,728 in July and $355,346 year-to-date ended July 2009. As of July 31, 2009, Hudson had $11,461,201 in total assets and $432,905 in total current liabilities and $251,810 in deferred gain on sale of natural gas compressor equipment. A full-text copy of Aurora Oil's July Monthly Operating Report is available at no charge at http://ResearchArchives.com/t/s?44bf A full-text copy of Hudson Pipeline Monthly Operating Report is available at no charge at http://ResearchArchives.com/t/s?44c0 About Aurora Oil & Gas Based in Traverse City, Michigan, Aurora Oil & Gas Corporation (Pink Sheets: AOGS) is an independent energy company focused on unconventional natural gas exploration, acquisition, development and production, with its primary operations in the Antrim Shale of Michigan, the New Albany Shale of Indiana and Kentucky. The Company and one affiliate filed for Chapter 11 protection on July 12, 2009 (Bankr. W.D. Mich. Case Nos. 09-08254 and 09-08255). Judge Scott W. Dales presides over the case. Stephen B. Grow, Esq., at Warner Norcross & Judd, LLP, in Grand Rapids, Michigan; and Joel H. Levitin, Esq., and Richard A. Stieglitz, Jr., at Cahill Gordon & Reindel LLP, in New York, serve as the Debtors' counsel. Aurora listed between $100 million and $500 million each in assets and debts. AVAYA INC: S&P Puts 'B' Corp. Rating on CreditWatch Negative ------------------------------------------------------------ Standard & Poor's Ratings Services said it placed its ratings, including the 'B' corporate credit rating, on Avaya Inc. on CreditWatch with negative implications, following the company's announcement that it has been accepted as the buyer of Nortel Networks Corp.'s (not rated) Enterprise Solutions businesses, for US$900 million. "The CreditWatch listing reflects the company's announcement that it has been accepted as the buyer of Nortel Networks' Enterprise Solutions businesses for $900 million," said Standard & Poor's credit analyst Bruce Hyman. The acquisition is subject to court and regulatory approval. As a privately held company, Avaya has not disclosed its financing plans for the acquisition, nor have its financial results been disclosed. "Still," added Mr. Hyman, "the financing would likely entail some increase in debt and/or reduction in liquidity, while integration of the acquisition could be challenging." To resolve the CreditWatch, S&P will meet with management to review Avaya's plans for funding the acquisition, as well as its plans to integrate Nortel's sales force, customer support, maintenance, product development, and other operations. AVIZA TECHNOLOGY: Nasdaq to Delist Shares Effective September 18 ---------------------------------------------------------------- The Nasdaq Stock Market, Inc., has determined to remove from listing the common stock of Aviza Technology, Inc., effective at the opening of the trading session on September 18, 2009. Based on review of information provided by the Company, Nasdaq Staff determined that the Company no longer qualified for listing on the Exchange pursuant to Listing Rules 5450(a)(1), 5100, 5110(b), and IM-5100-1. The Company was notified of the Staffs determination on September 24, 2008. The Company requested a review of the Staffs determination before the Listing Qualifications Hearings Panel. Upon review of the information provided by the Company, the Panel issued a decision dated June 17, 2009, notifying the Company that it did not qualify for inclusion on the Exchange based on its failure to comply with Listing Rules 5450(a)(1), 5100, 5110(b), and IM-5100-1. Trading in the Companys securities was suspended on June 19, 2009. The Company did not request a review of the Panels decision by the Nasdaq Listing and Hearing Review Council. The Listing Council did not call the matter for review. The Panels Determination to delist the Company became final on August 3, 2009. As reported by the Troubled Company Reporter on September 4, 2009, Aviza Technology will conduct an auction on September 29 to test whether there will be additional offers for its business. Sumitomo Precision Products Co. is under contract to buy the assets for $50 million, subject to higher and better offers. Competing bids are due September 18. The sale hearing will be held the same day as the auction. 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. BABCOCK & BROWN: Younan CD Portfolio Loan Issues Resolved --------------------------------------------------------- Younan Properties, Inc., a privately held real estate investment and asset management firms, announced September 15 that all issues have been resolved between the borrower and the special servicer LNR in connection with a $261 million loan for one of its portfolios. The loan, which is in "good standing," will be transferred back to its normal loan servicer. Zaya S. Younan, chairman and chief executive officer, commented on the announcement, "We consistently stated that this dispute had nothing to do with our ability to meet our financial obligations, but rather stemmed from a technical dispute over approval provisions that led to a freeze of our own funded reserves, which we were using to fund tenant improvements. As a result, this loan was referred to its special servicer earlier this year." Mr. Younan added, "We were single-minded in our efforts to correct this servicing issue and we are pleased with the outcome." The loan, representing four office properties in Chicago and three office properties in Dallas, was moved to special servicing in the first quarter of 2009. The servicing dispute centered around 200 N. LaSalle in the Chicago CBD, which is 92% leased and performing better than its submarket. Babcock & Brown, the former mezzanine lender, sought to prohibit Mr. Younan from accessing its own reserve funds used for tenant improvements and leasing commissions. Babcock & Brown subsequently filed for bankruptcy protection in the first quarter of 2009. Mr. Younan continued, "This is a 2.1 million SF stabilized office portfolio with about an 85% average occupancy and positive cash flow. This portfolio has a healthy DSCR, and we have achieved 830,000 SF of new leases and renewals in the last 18 months. The portfolio is performing better than expected, and actual occupancy has increased during the past 12 months." The four office properties in the Chicago metropolitan area include 200 N. LaSalle, a high-rise office building in the Chicago CBD; 1600 Corporate Center, Rolling Meadows; Bannockburn Corporate Center, Bannockburn; and Kensington Corporate Center, in Mount Prospect. The portfolio also includes three Dallas office buildings: Energy Square I, II and III, located on the North Central Expressway. "While this servicing issue received more public scrutiny than it deserved because of the current economic climate, we are proud of the fact that we were able to successfully resolve it using the same prudent business policies and practices that have made Younan Properties so successful in the past," Younan said. "This severe recession has been challenging for all businesses, but moving forward our superior property management and operational expertise provide the platform for Younan to continue to grow as the economy improves," he concluded. Headquartered in Los Angeles, Younan Properties specializes in acquiring Class A office properties in high-growth U.S. markets. Known for its detailed, hands-on approach to improving operational efficiencies while maintaining top building standards for tenants, Mr. Younan is recognized for turning around undervalued assets and maximizing the value of stabilized assets. Mr. Younan has accumulated nearly 15 million square feet of Class A office buildings valued at more than $2.0 billion in California, Texas, Illinois and Arizona. About Babcock & Brown Headquartered in Sydney, Australia, Babcock & Brown Limited (ASX:BNB) -- http://www.babcockbrown.com/-- is a global alternative asset manager specializing in the origination and management of asset in sectors, where the company has a franchise and proven track record, and where there are opportunities to add scale, infrastructure, air operating leasing and selected real estate. Babcock & Brown operates from 31 offices across Australia, North America, Europe, Asia and the United Arab Emirates. The company has established a specialized funds and asset management platform across the operating divisions that have resulted in the establishment of a number of listed and unlisted focused investment vehicles in areas, including real estate, renewable energy and infrastructure. * * * As reported in the Troubled Company Reporter-Asia Pacific on March 13, 2009, Babcock & Brown appointed voluntary administrators after investors in the company's subordinated notes listed in New Zealand voted on March 13 against a special resolution to restructure the terms of the notes. Under the special resolution, the company's equity and subordinated note holders won't receive any return. Babcock & Brown appointed David Lombe and Simon Cathro of Deloitte Touche Tohmatsu as Voluntary Administrators. BARZEL INDUSTRIES: Files for Bankruptcy to Sell to Chriscott ------------------------------------------------------------ Barzel Industries Inc. and its U.S. subsidiaries on September 15, 2009, filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware seeking relief under the provisions of the Bankruptcy Code and the Canadian subsidiaries of the Company filed an application with the Ontario Superior Court of Justice -- Commercial List seeking relief under the provisions of the Canadian Companies' Creditors Arrangement Act. A day before the filing, on September 14, 2009, Barzel Industries and substantially all of its U.S. and Canadian subsidiaries entered into an Asset Purchase Agreement with Chriscott USA Inc. and 4513614 Canada Inc. pursuant to which the Buyer will purchase substantially all of the assets of the Sellers for an aggregate purchase price of $65.0 million in cash, subject to certain adjustments relating principally to the level of working capital as of closing, and the Buyer will assume certain liabilities from the Sellers associated with the purchased assets. The Company and its affiliates currently lease a manufacturing facility, located in Mississauga, Ontario and a tube mill, located in St. Hubert, Quebec, from the Buyer and its affiliates. Further, the Company previously acquired all of the outstanding stock of Barzel Industries Canada Inc., formerly Novamerican Steel Canada Inc., and formerly Novamerican Steel Inc., on November 15, 2007, pursuant to an arrangement agreement dated June 21, 2007. The controlling shareholder of the Buyer was the majority owner of Novamerican Steel Inc. The Asset Purchase Agreement contains covenants of the Sellers and the Buyer, including, among others, an agreement by the Company and its subsidiaries to file petitions for relief under Chapter 11 and the CCAA, and an agreement of each Seller to use its commercially reasonable efforts to obtain the entry of orders of the Bankruptcy Court and the Canadian Court, as applicable, approving certain auction and sale procedures in accordance with various milestones. The obligations of the Sellers and the Buyer to complete the Asset Purchase are subject to a number of closing conditions, including, among others, conditions relating to governmental filings and the expiration or termination of applicable waiting periods, obtaining certain third-party consents, the accuracy of the representations and warranties of the parties (subject to a materiality standard), material compliance by the parties with their obligations under the Asset Purchase Agreement, and the absence of a material adverse change with respect to the Company since the date of the Asset Purchase Agreement. The Asset Purchase will be conducted under the provisions of 11 U.S.C. Sec. 363 and will be subject to proposed bidding procedures and receipt of a higher and better bid at auction. The bidding procedures order will provide that the Buyer is the "stalking horse" bidder for substantially all of the assets of the Sellers at the Auction. The Asset Purchase Agreement calls for the Company to pay a termination fee equal to approximately $1.95 million in certain circumstances, including the consummation of an acquisition of the purchased assets by another bidder. In the event that the Company breaches the Asset Purchase Agreement or consummates a transaction with another bidder, the Asset Purchase Agreement also provides for the reimbursement of the Buyer's reasonable expenses incurred in connection with the Asset Purchase and the bankruptcy case, up to a maximum of $750,000. The Company intends to request the Canadian Court to authorize the sale of substantially all of the assets of the Canadian subsidiaries as part of the Auction, and will thereafter ask the Canadian Court to approve the sale which arises out of the Auction. The Bankruptcy Case will be jointly administered with the Canadian Case, and the Company intends to request that the Courts approve a cross-border insolvency protocol. During the pendency of the Bankruptcy Case and the Canadian Case, the Sellers intend to operate their businesses as debtors-in-possession under the jurisdiction of the Bankruptcy Court or the Canadian Court, as applicable, and in accordance with the applicable provisions of the Bankruptcy Code and the CCAA and orders of the Courts. About Barzell Industries Barzell Industries, Inc., processes and distributes steel. The Company manufactures steel for the construction and industrial manufacturing industries, and produces finished commercial racking products. Barzell recorded assets of $370,145,000 against debts of $375,412 as of May 30, 2009. BETAWAVE CORP: Posts $2.58MM Net Loss in Quarter Ended June 30 -------------------------------------------------------------- Betawave Corporation posted a net loss of $2,581,790 for three months ended June 30, 2009, compared with a net loss of $3,562,052 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $6,995,457 compared with a net loss of $7,741,450 for the same period in 2008. The Company's balance sheet at June 30, 2009, showed total assets of $8,874,840, total liabilities of $3,832,991 and stockholders' equity of $5,041,849. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?44be Betawave Corporation (OTC:BWAV), fka GoFish Corporation, is a digital media company. The Company has assembled some of the casual gaming, virtual world, social play and entertainment Websites into a network of sites. It generates revenue by selling advertising campaigns on those sites to brand advertisers. The Betawave Network delivers scale with a monthly audience of over 25 million and attention with an average audience engagement of more than 48 minutes per month. Some of the publishers in the Betawave portfolio include Miniclip.com, Cartoon Doll Emporium, Shutterfly and Cookie Jar Entertainment. Going Concern Doubt On March 30, 2009, Rowbotham & Company LLP in San Francisco, California expressed substantial doubt about Betawave Corporation's ability to continue as a going concern after auditing the Company's financial statements for the fiscal years ended Dec. 31, 2008, and 2007. The auditor noted that the Company incurred net loss since its inception, has experienced liquidity problems, negative cash flows from operations, and a working capital deficit at Dec. 31, 2008. BH S&B HOLDINGS: Can Avoid Chapter 7 Liquidation ------------------------------------------------ Tiffany Kary at Bloomberg News reports that BH S&B Holdings can avoid converting to a Chapter 7 liquidation under an agreement that transfers most of its remaining cash directly to its lenders and bankruptcy professionals. As reported by the TCR on August 13, 2009, the U.S. Bankruptcy Court for the Southern District of New York has adjourned until September 15, the hearing on the motion of Ableco Finance LLC for an order converting BH S&B Holdings LLC, et al.'s Chapter 11 cases to cases under chapter 7 of the Bankruptcy Code. BH S&B has objected to Ableco's proposal, saying it is well on its way to reconciling its outstanding claims and that a Chapter 11 plan is still a possibility. Ableco Finance had insisted that the cases should be converted on these grounds: -- The Debtors have ceased operations and finished liquidating their assets back in January and therefore have no ability to rehabilitate. During the past four months the Debtors have not generated any operating revenues, and the estates continue to incur administrative expenses well in excess of any collections. -- There are no unusual circumstances present such that conversion would not be in the best interests of creditors and these estates. Other than prosecuting claim objections and estate causes of action and taking steps to ensure that any remaining rights of the estates to cash and other assets are recovered, there is nothing else to do. To the extent there are any distributions to be made to creditors, they can be made more economically in Chapter 7. -- The Debtors have had more than three months to analyze administrative claims to determine whether a Chapter 11 plan is even feasible in these cases, but have failed to get that done. -- The Debtors' extended stay in Chapter 11 benefits only the 6 professional firms employed at the expense of the Debtors' estates, including 3 professional firms retained by the Creditors Committee. A Chapter 7 trustee, with 1 or 2 professionals can perform the remaining tasks required to bring these cases to an expeditious close and do so in a manner compatible with the best interests of all parties involved. About BH S&B BH S&B Holdings LLC filed for bankruptcy protection together with seven other affiliates on November 19, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-14604). The seven debtor-affiliates are BH S&B Distribution LLC, BH S&B Lico LLC, BH S&B Retail LLC, BHY S&B Intermediate Holdco LLC, Cubicle Licensing LLC, Fashion Plate Licensing LLC, and Heritage Licensing LLC. BH S&B was formed by investment firms Bay Harbour Management and York Capital Management in August 2008 to acquire the business operations and assets of bankrupt retailer Steve & Barry's for $163 million in August 2008. Steve & Barry's had 240 locations when it was bought and the new owners had planned to cut that down to 173 stores. Due to disappointing sales, Steve & Barry's returned to bankruptcy in November 2008. BH S&B and its affiliates' Chapter 11 cases are presided over by the Honorable Martin Glenn. Joel H. Levitin, Esq., and Richard A. Stieglitz, Jr., Esq., at Cahill Gordon & Reindel LLP, in New York, serve as bankruptcy counsel to BH S&B and its affiliates. RAS Management Advisors LLC acts as restructuring advisors, and Kurtzman Carson Consultants LLC as claims and n BLOCK COMMUNICATIONS: Moody's Affirms 'Ba3' Corp. Family Rating --------------------------------------------------------------- Moody's Investors Service affirmed the Ba3 corporate family and probability of default ratings of Block Communications, Inc. Notwithstanding the negative impact of secular and cyclical pressure in its newspaper segment, Block's cable operations continue to perform well. This segment, combined with good liquidity, has enabled the company to manage through challenging economic conditions without material deterioration of its credit profile. However, an ongoing inability to improve the currently unprofitable newspaper segment over time could have negative ratings implications. The rating outlook remains stable. Moody's also affirmed instrument ratings as shown below. Block Communications, Inc. -- Affirmed Ba3 Corporate Family Rating -- Affirmed Ba3 Probability of Default Rating -- Affirmed Ba1 rating on Senior Secured Bank Credit Facility, adjusted to LGD2, 16% from LGD2, 19% -- Affirmed B1 rating on Senior Unsecured Bonds, adjusted to LGD5, 71% from LGD5, 73% -- Rating Outlook, Stable Block's strong cable operations and diversified set of media assets continue to support its Ba3 corporate family rating, even though the newspaper and broadcast segments, with margins below rated industry peers, continue to depress consolidated operating performance -- of particular note, EBITDA margins. Ongoing changes in media consumption habits also continue to pressure newspaper revenue and cash flow, and the advertising-reliant publishing and broadcast segments continue to expose the company to economic cycles. Lack of scale, for both individual operating segments and the overall entity, further constrains ratings. However, good liquidity and expectations for modestly positive free cash flow lend support to ratings. The most recent rating action for Block was on September 20, 2007, when Moody's upgraded the corporate family rating to Ba3 from B1. Block Communication Inc.'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 Block's core industry and Block's ratings are believed to be comparable to those of other issuers of similar credit risk. A privately held diversified media company, Block Communications, Inc., has operations in cable television, newspaper publishing, and television broadcasting. Its cable operations serve the greater Toledo, Ohio metropolitan area (including Michigan suburbs) and the Sandusky, Ohio area. It operates newspapers in Pittsburgh, Pennsylvania, and Toledo, Ohio, and television stations in Louisville, Kentucky; Lima, Ohio; Boise, Idaho, and Decatur, Illinois. The company maintains its headquarters in Toledo, Ohio, and generates annual revenue of approximately $450 million. CARDINAL ETHANOL: Earns $1.44 Million in Quarter Ended June 30 -------------------------------------------------------------- Cardinal Ethanol, LLC, reported a net income of $1,445,144 for three months ended June 30, 2009, compared with a net loss of $180,188 for the same period in 2008. For nine months ended June 30, 2009, the Company posted a net loss of $4,680,795 compared with a net loss of $124,158 for the same period in 2008. The Company's balance sheet at June 30, 2009, showed total assets of $160,884,785, total liabilities of $97,663,159 and members' equity of $63,221,626. The Company said that there is substantial doubt about its ability to continue as a going concern. The Company noted that due to current commodity markets, it may produce at negative margins and is, therefore, evaluating its liquidity needs for the upcoming months. The management's plans to address liquidity needs involves accelerating collections with their marketer and working with vendors to possibly extend payment terms and replace deposits with letters of credit. The Company has a $10,000,000 revolving line of credit through December 2009. The Company currently has $9,444,000 available to draw on the revolving line of credit. The Company also has outstanding long term debt for which principal and interest payments began in July 2009 and certain financial covenants will go into effect beginning in August 2009. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?44bd Cardinal Ethanol, LLC, was organized to develop, construct, own, and operate a 100 million gallon per year ethanol plant in east central Indiana near Union City, Indiana. The two principal products of the Company include ethanol, a fuel component made primarily from corn and various other grains, and distiller grains, a high protein, high-energy animal feed supplement primarily marketed to the dairy, beef, poultry, and swine industries. Raw carbon dioxide gas is another co-product of the ethanol production process. CENTRAL GARDEN: S&P Assigns 'CCC+' Senior Unsecured Debt Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its preliminary 'CCC+' senior unsecured debt rating and preliminary 'CCC+' subordinated debt rating (two notches lower than the 'B' corporate credit rating) to Walnut Creek, California-based Central Garden & Pet Co.'s Well-Known Seasoned Issuer shelf registration. This new shelf registration replaces the $500 million shelf registration that expired in December 2008. The outlook on the company is positive. Total reported debt as of June 27, 2009, was about $409 million. The shelf registration covers senior unsecured and subordinated debt, as well as common and preferred stock. The company expects to use drawings under the new shelf for general corporate purposes, including but not limited to, acquisitions, repayment or refinancing of borrowings, working capital, or capital expenditures. If the company issues additional secured debt, or refinances and pays off existing secured debt, Standard & Poor's would reevaluate all existing and preliminary issue-level ratings. Ratings List Corporate credit rating B/Positive/-- New Ratings Preliminary senior unsecured CCC+ Preliminary subordinate debt CCC+ CITIGROUP INC: Working on Reducing Gov't's 34% Stake ---------------------------------------------------- The U.S. Treasury is in talks about plans to sell its 34% stake in Citigroup Inc. at a profit. The U.S. Treasury, which owns 7.69 billion common shares after a recent preferred-stock conversion designed to shore up the bank's capital, may start selling the shares in October and over the next six to eight months, Robert Schmidt and Bradley Keoun at Bloomberg reported, citing people familiar with the matter. Because the stock price of Citigroup has gained since $25 billion of bailed- out funds from the government were exchanged for common shares, the Treasury is sitting on a paper profit of $9.77 billion, Bloomberg News said. Citing people familiar with the matter, David Enrich at The Wall Street Journal relates that top Citigroup executives have been devising plans for a possible multibillion-dollar stock offering in which the Company would issue new shares to the public, while the Treasury Department would sell at least a portion of its holdings in the Company. According to the report, the sources said that talks remain preliminary. The report, citing the sources, states that Citigroup has yet to present the idea to the Treasury Department, although Citigroup officials have already discussed their plans with federal banking regulators. The sources said that through a joint stock sale, Citigroup would issue as much as $5 billion in new shares, while the government would simultaneously sell an undetermined amount of the stock it is holding, according to The Journal. The report says that executives hope the offering could take place as soon as the fourth quarter, and people familiar with the matter said that Citigroup could use the proceeds from a stock sale to redeem some of the preferred stock the Treasury is holding. The Journal reports that some analysts think it would be premature for the government to start reducing its stake in Citigroup. The report quoted Sanford C. Bernstein & Co. banking analyst John McDonald as saying, "For both Citi and the government to get out with credibility, they'll have to show at least a few quarters of decent results [and] be on a clear path toward consistent profitability." Citigroup, the third-biggest U.S. bank, received $52 billion in bailout aid, and a sale of the common stock would leave the Treasury with a $27 billion investment. Other bailed-out banks, including Bank of America Corp., Wells Fargo & Co., have pledged to repay TARP money. JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, repaid TARP funds in June. About Citigroup Inc. Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com/-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. At June 30, 2009, Citigroup had total assets of $1.84 trillion and total liabilities of $1.69 trillion. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. As part of the agreement, the U.S. Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CONSECO INC: Receives Regulatory Approvals for Wilton Re Deal ------------------------------------------------------------- Conseco, Inc., last week received the required regulatory approvals for the transaction under which two insurance companies in its Conseco Insurance Group are coinsuring, with an effective date of January 1, 2009, approximately 104,000 non-core life insurance policies with Wilton Reassurance Company, a Minnesota reinsurance company. "This transaction improves Conseco's consolidated risk-based capital ratio and increases statutory capital," said Conseco CEO Jim Prieur. "In addition, it further simplifies our administrative operations as we focus on our core insurance businesses." In the transaction, Wilton Re is paying a ceding commission of approximately $57.5 million, 100% coinsuring the policies, and will take over responsibility for future administration of the coinsured policies. The Conseco companies are transferring to Wilton Re approximately $409 million in cash and policy loans and approximately $466 million of statutory policy and other reserves. Most of the policies involved in the transaction were issued by companies that were later acquired by Conseco. Approximately 70% of the policies being coinsured are from Washington National Insurance Company and the remainder are from Conseco Insurance Company. As a result of the transaction, Conseco expects to record an increase to its deferred tax valuation allowance of approximately $20 million in the third quarter of 2009. Conseco also expects to record a deferred gain of approximately $23 million. In accordance with generally accepted accounting principles, this gain will be recognized over the remaining life of the block. In the first six months of 2009, the coinsured block generated GAAP after-tax earnings before overhead of approximately $5.0 million. Looming Liquidity Crisis in 2010 Conseco has warned in its quarterly report on Form 10-Q for the period ended June 30, 2009, that there is a significant risk it will be unable to pay holders of $293 million in Debentures who exercise their right to require the Company to purchase their Debentures for cash on September 30, 2010; or unable to refinance the Debentures. Conseco said the amendment in March 2009 to its Second Amended Credit Facility prohibits the Company from redeeming or purchasing the Debentures with cash from certain sources. Without a further amendment of the Second Amended Credit Facility or a waiver from the lenders, the Company said it will not be able to make any payments to the holders of the Debentures on September 30, 2010 -- assuming the holders of the Debentures elect to exercise their right to require the Company to repurchase their Debentures for cash on that date. The Company has had discussions with certain holders of the Debentures regarding an exchange of the Debentures for a combination of new senior, unsecured debt or convertible debt maturing after October 2014 and shares of the Company's common stock. The Company expects to have additional discussions with holders of the Debentures regarding an exchange of the Debentures. There can be no assurance that any such discussions will be successful. Conseco's principal repayments and other debt service and holding company requirements in 2010 currently exceed the liquidity the Company expects to have at the holding company. The debt repayment obligations in 2010 are: 3.50% convertible debentures $293,000,000 Secured credit agreement 8,800,000 6% Senior Health Note 25,000,000 ------------- $326,800,000 ============= "We are continuing to explore various alternatives to address our 2010 debt service requirements and remain in compliance with our debt covenants, including, without limitation, exchanges and other financing transactions, reinsurance transactions, asset sales, transactions to improve statutory capital and debt modification. Failure to generate sufficient cash to meet our debt obligations in 2010 could have material adverse consequences on the Company," Conseco has said. As of June 30, 2009, the Company had $29.4 billion in total assets and $27.0 billion in total liabilities The current financial strength ratings of Conseco's primary insurance subsidiaries from A.M. Best Company, S&P and Moody's Investor Services, Inc., are "B (Fair)", "BB-" and "Ba2", respectively. About Conseco Inc. Headquartered in Carmel, Indiana, Conseco Inc. (NYSE: CNO) -- http://www.conseco.com/-- is the holding company for a group of insurance companies operating throughout the United States that develop, market and administer supplemental health insurance, annuity, individual life insurance and other insurance products. The company became the successor to Conseco Inc. (Old Conseco), in connection with its bankruptcy reorganization. CNO focuses on serving the senior and middle-income markets. The company sells its products through three distribution channels: career agents, professional independent producers and direct marketing. CNO operates through its segments, which includes Bankers Life, Conseco Insurance Group, Colonial Penn, other business in run-off and corporate operations. CRESCENT RESOURCES: Siemens Protests Lift Stay in Toxic Suit ------------------------------------------------------------ Siemens Corp. has objected to a motion to modify the automatic stay in the Chapter 11 proceedings of Crescent Resources LLC that, if granted, would allow discovery to continue in a number of toxic tort actions pending in Florida against Crescent, Siemens and other companies, according to Law360. The Florida plaintiffs' motion to modify the stay, the report says, does not comprehensively address the manner in which the plaintiffs' claims against Crescent will be resolved, Siemens and two subsidiaries said. Crescent Resources, LLC -- http://www.crescent-resources.com/-- is a land management and real estate development company with interests in 10 states in the southeastern and southwestern United States. Based in Charlotte, North Carolina, Crescent Resources is a joint venture between Duke Energy and the Morgan Stanley Real Estate Funds. Established in 1969, Crescent creates mixed-use developments, award-winning country club communities, single- family neighborhoods, apartment and condominium communities, Class A office space, business and industrial parks and shopping centers. Crescent Resources and 120 affiliates filed separate chapter 11 petitions on June 10, 2009 (Bankr. W.D. Tex. Lead Case No. 09- 11507). The Hon. Craig A. Gargotta presides over the case. Attorneys at Weil Gotshal Manges LLP represent the Debtors in their Chapter 11 cases. Eric J. Taube, Esq., at Hohmann, Taube & Summers, L.L.P., serves as the Debtors' co-counsel. Garden City Group serves as claims and notice agent. The Debtors disclosed more than $1 billion each in assets and debts when they filed for bankruptcy. CRUCIBLE MATERIALS: Seeks to Terminate Steelworkers' Contracts -------------------------------------------------------------- Crucible Materials Corp. is asking the Bankruptcy Court for permission to terminate retiree benefits and several collective bargaining agreements with the Steelworkers union, Bill Rochelle at Bloomberg News reports. According to the report, with the Bankruptcy Court scheduled to hold a September 25 hearing for approval of sales of the assets, Crucible says there's no longer a need for the agreements. As reported by the TCR on September 1, 2009, Crucible Materials obtained permission from Judge Mary Walrath to conduct a September 21 auction for substantially all its assets. Crucible Materials is seeking to sell virtually all its assets at an auction, although it has reached a contract only with a buyer for its compact and research divisions. Under the proposed timetable, all bids to compete in the auction would have to be submitted by September 17. Crucible said that the DIP lenders set an August 14 deadline to identify a stalking horse bidder for all of its assets and obtain entry of a sales procedures order. Crucible says that despite its best efforts, it has not been able to identify a stalking horse for, or negotiate an asset purchase agreement covering, substantially all of its assets. Crucible says that while negotiations with DIP lenders are ongoing, it is presently in a "technical state of default" under the loan agreement. The Debtors have decided to enter into an asset purchase agreement with Carpenter Technology Corp. for the sale of their compaction and research divisions, subject to any higher and better offers. Carpenter will pay $20 million, subject to adjustments, for the two divisions. The parties agree to closing not later than October 31. Carpenter will receive a $600,000 break-up fee plus reimbursement of expenses of up to $300,000 in the event another party emerges as the winning bidder for the two divisions. The Debtors have not received any firm offers for the remaining assets, which they intend to auction off at the same time as the compaction and research divisions. Crucible said it does not intend to conduct a fire sale for the remaining assets. Instead, it wants an orderly process pursuant to which, if acceptable bids are received for all or some substantial portion of the remaining assets, the bids can be considered at an expedited time frame. About Crucible Materials Based in Syracuse, New York, Crucible Materials Corporation -- aka Crucible Specialty Metals, Crucible Service Centers, Crucible Compaction Metals, Crucible Research and Trent Tube -- makes stainless and alloy steel for use in the aircraft, automotive, petrochemical, and other industries. The Company is currently employee-owned. Its Web site is http://www.crucible.com/ The Company and its affiliate, Crucible Development Corporation, filed for Chapter 11 protection on May 6, 2009 (Bankr. D. Del. Lead Case No. 09-11582). Mark Minuti, Esq., at Saul Ewing LLP represents the Debtors in their restructuring efforts. The Debtors engaged Duff & Phelps Securities LLP as investment banker; RAS Management Advisors LLC as business advisor; and Epiq Bankruptcy Solutions LLC as claims agent. Roberta A. DeAngelis, United States Trustee for Region 3, appointed five creditors to serve on the Official Committee of Unsecured Creditors. The Debtors listed assets and debts both ranging from $100 million to $500 million. CYNERGY DATA: Has Court Nod for ComVest-Led Auction on Oct. 5 ------------------------------------------------------------- Cynergy Data LLC will hold an auction on October 5 under which ComVest will be the stalking horse bidder. Competing bids must be submitted by October 2 and must exceed ComVest's initial offer by $4.46 million. Secured lenders are allowed to submit credit bids. The Court will consider approving the results of the auction at an October 7 hearing. According to the bid procedures submitted to the Court, ComVest will receive a break-up fee of $1,620,000 and expense reimbursement of up to $648,000 in the event the Debtor closes a sale with another party. The ComVest Group is a leading private investment firm focused on providing debt and equity solutions to middle-market companies with enterprise values of less than $350 million. Since 1988, ComVest has invested more than $2 billion of capital in over 200 public and private companies worldwide ComVest is represented by: Akerman Senterfitt LLP, 335 Madison Ave., Suite 2600, New York, NY 10017, Attn: Susan F. Balaschak, Esq. Merchant Cash and Capital, LLC, in the business of providing funding to restaurants, and which has Cynergy as credit card processor, says it reserves its right to object to the sale. MCC notes that Cynergy has member interest in MCC, and their operating agreement provides that other members have rights of first refusal to a sale of membership interests to a third party. MCC believes that Cynergy intends to sell its membership interests in MCC to ComVest. About Cynergy Data Launched in 1995, Cynergy Data LLC is a merchant credit card processing service provider that gives business owners excellent customer support and unparalleled merchant services. The company emphasizes honest, service-oriented business practices and customer-friendly products and services. During the past 14 years, Cynergy Data has rapidly expanded from a two-person operation to one that employs over 130 service-oriented team members. Headquartered in New York City, Cynergy Data manages a portfolio of nearly 80,000 merchants processing in excess of $10 billion annually. Marcelo Paladini owns 92% of Cynergy. The Company and two affiliates -- Cynergy Data Holdings, LLC, and Cynergy Prosperity Plus, LLC -- filed for Chapter 11 on September 1, 2009 (Bankr. D. Del. Case No. 09-13038). The Company's legal advisor is Nixon Peabody LLP; its financial and restructuring advisor is CM&D Management Services LLC; its industry expert is Unicorn Partners, LLC; and its investment bankers are Stifel, Nicolaus & Company and Peter J. Solomon Company. Aside from Nixon peabody, Pepper Hamilton LLP has been hired as bankruptcy and restructuring counsel. Charles D. Moore of Conway MacKenzie, Inc., serves as chief restructuring officer. Kurtzman Carson & Consultants LLC serves as claims and notice agent. Cynergy Data said that it had assets of $109,546,132 against debts of $186,183,032 as of June 30, 2009. DELTA AIR: Expects $400MM in NWA Merger Savings for Jan.-Sept. -------------------------------------------------------------- Delta Air Lines said in an investor update that it expects to achieve more than $400 million in merger synergies for the first nine months of 2009. "Synergies achieved year to date have improved revenue from increased market share, Delta's affinity card agreement and alignment of frequent flyer programs. In addition, costs have been reduced through streamlined overhead, facilities and technology, elimination of dedicated freighter flying and supply chain savings. The company is on track with its integration efforts and expects to receive its Single Operating Certificate by the end of 2009," Delta said in the investor update, a copy of which was filed with the Securities and Exchange Commission. Delta Air has also raised its estimate for third-quarter 2009 margins 3% to 4%, compared with July's forecast of 1% to 3%, as fuel costs slightly drop below expectations, averaging at $2.14 a gallon, rather than $2.17. Delta expects a break even for full year 2009. Delta expects EBITDAR Margin to be 9% to 10% for the third quarter of 2009, and 6% to 8% for the full year. A copy of the Investor Update is available for free at: http://researcharchives.com/t/s?44ca With its acquisition of Northwest Airlines, Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- is now the world's largest airline. From its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its Northwest subsidiary and Delta Connection carriers offer service to more than 376 destinations worldwide in 66 countries and serves more than 170 million passengers each year. Delta's marketing alliances allow customers to earn and redeem either SkyMiles or WorldPerks on more than 16,000 daily flights offered by SkyTeam and other partners. The merger closed on October 29, 2008. Northwest and 12 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington, represented the Northwest Debtors in their restructuring efforts. On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. Delta and 18 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. (Bankruptcy Creditors Service Inc. publishes Delta Air Lines Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000). As reported by the TCR on June 29, 2009, Fitch Ratings has downgraded the debt ratings of Delta Air Lines, Inc., and its wholly owned subsidiary Northwest Airlines, Inc. -- (i) DAL's Issuer Default Rating to 'B-' from 'B', First-lien senior secured credit facilities to 'BB-/RR1' from 'BB/RR1', and Second-lien secured credit facility to 'B-/RR4' from 'B/RR4', and (ii) NWA's IDR to 'B-' from 'B'; and Secured bank credit facility to 'BB- /RR1' from 'BB/RR1'. The downgrade of DAL's ratings reflects the continued erosion of the airline's near-term cash flow generation potential that has resulted from extremely weak business travel demand and large year-over-year declines in passenger revenue per available seat mile. DELTA AIR: Moody's Affirms Corporate Family Rating at 'B2' ---------------------------------------------------------- Moody's Investors Service affirmed its B2 corporate family and probability of default ratings of Delta Air Lines, Inc., and of Northwest Airlines Corporation. Moody's changed the outlook to negative from stable. Moody's affirmed its ratings on each of these companies' first lien and second lien senior secured credit facilities and on the respective rated tranches of certain of their Enhanced Equipment Trust Certificates. Moody's also affirmed the SGL-2 speculative grade liquidity ratings of each of Delta and of Northwest. "Despite the current weak credit metrics profile, Moody's is maintaining the B2 corporate family ratings of Delta and of Northwest because of the potential for merger synergies to offset pressure from ongoing weak industry fundamentals," said Moody's Vice President, Jonathan Root. Since the October 29, 2008 merger (whereby Northwest became a subsidiary of Delta), management has been focused on executing its merger plan which contemplates obtaining a single operating certificate from the FAA. This is a requirement for completing the legal merger of Northwest and Delta, whereby Delta would effectively assume the contractual obligations of Northwest, and to commence the full-scale integration of single operating systems (e.g. flight scheduling, revenue management, crew scheduling, and aircraft management). DAL expects the achievement of these two milestones to drive the realization of the planned merger synergies. Increasingly, Delta and Northwest are being managed on an enterprise basis. Nonetheless, Moody's maintains a corporate family rating for each airline, and will continue to do so until the formal merger of the airlines occurs. This is because of the Enhanced Equipment Trust Certificates at each airline. The change in outlook to negative reflects Moody's belief that DAL could be challenged in upcoming periods to restore credit metrics to levels indicative of the B2 rating category. Debt to EBITDA and EBIT to Interest approximated 13 times and 0.2 times, respectively, at June 30, 2009. These weak levels were largely due to 2008's high fuel cost environment and ongoing weak yields. Moody's expects metrics in upcoming quarters to strengthen from these levels as 2008's Q3 and Q4 and 2009's Q1 fuel expense annualizes, as long as oil prices do not meaningfully increase from current levels or yields take another leg down, particularly if there is a wide outbreak of the H1N1 virus this fall. Merger synergies should also positively contribute, particularly after DAL receives a single operating certificate from the FAA. However, even with expected improvement, the company's overall credit metrics will remain particularly vulnerable to downside risks until a sustained economic recovery occurs. Moody's anticipates that the recovery of airline yields, including those of DAL, is likely to lag any recovery in economic activity, and the magnitude of the recovery in yields will be smaller than those the sector realized in other post-recession periods. Unemployment rates are likely to remain meaningfully higher than those after other recent post-recession periods, which should constrain the pace of recovery of leisure demand. Similarly, recovery of demand for forward cabins is also likely to lag because businesses are likely to continue to focus on cost containment measures. Moody's believes that these factors are likely to continue to maintain pressure on the sector's yields. This could challenge DAL to fully achieve the revenue synergies it plans to realize as it executes its merger strategy, leading to lower than planned operating cash flow. The affirmation of each of the SGL ratings of SGL-2 reflects the sufficient cash balance Delta and Northwest have maintained to date and the expectation of positive free cash flow generation in upcoming periods. The ratings could be downgraded if credit metrics do not show meaningful improvement from the June 30, 2009 levels. Debt to EBITDA that remains above 7.0 times, Funds from Operations + Interest to Interest that remains below 2.0 times or an EBITDA margin of less than 12.5% could result in a downgrade as could unexpected large increases in the barrel price of oil from the current trading range that hovers at about $70 per barrel. The planned merger synergies can help mitigate pressure on earnings and operating cash flow from potentially worse than expected fundamental conditions. Any meaningful shortfall, particularly related to intended revenue benefits of the merger, which account for a majority of the planned synergies, could adversely affect the credit profile and could result in a downgrade of the ratings. The inability to maintain unrestricted cash above $3.5 billion could also pressure the rating. Demonstrated improvement in credit metrics relative to the levels at June 30, 2009, would be required for Moody's to consider returning the outlook to stable. Moody's would look for Debt to EBITDA of less than 7.0 times, Funds from Operations + Interest to Interest greater than 2.0 times and an EBITDA margin above 13%. Annual Free Cash Flow that is sustained above $1.0 billion could also lead to an outlook change to stable. The last rating action was on December 24, 2008, when Moody's confirmed the respective B2 corporate family and probability of default ratings of Delta and of Northwest and changed the outlooks to stable. Upgrades: Issuer: Delta Air Lines, Inc. -- Senior Secured Bank Credit Facility, Upgraded to LGD4, 54% from LGD4, 56% Issuer: Northwest Airlines, Inc. -- Senior Secured Bank Credit Facility, Upgraded to LGD3, 32% from LGD3, 35% Outlook Actions: Issuer: Delta Air Lines, Inc. -- Outlook, Changed To Negative From Stable Issuer: Delta Air Lines, Inc. (Old) -- Outlook, Changed To Negative From Stable Issuer: Northwest Airlines Corporation -- Outlook, Changed To Negative From Stable Issuer: Northwest Airlines, Inc. -- Outlook, Changed To Negative From Stable Delta Air Lines, Inc., headquartered in Atlanta, Georgia, is the world's largest airline, providing schedule air transportation for passengers and cargo throughout the U.S. and around the world. On October 29, 2008, a subsidiary of Delta merged into Northwest Airlines Corporation. Northwest and its subsidiaries, including Northwest Airlines, Inc., are wholly-owned subsidiaries of Delta. DIRECTV HOLDINGS: Moody's Assigns 'Ba2' Rating on $2 Bil. Bonds --------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to DIRECTV Holdings LLC's (Ba1 Corporate Family Rating) new $2.0 billion senior unsecured bond offering. The notes are expected to rank pari passu with the existing Ba2-rated senior unsecured notes, and while they may not possess the same financial covenant protection, they have cross default protection which provides some comfort as long as the older notes are outstanding. Net proceeds from the offering will be used for general corporate purposes, which may include the repurchase of the company's 8.375% senior unsecured notes due 2013 (tender offer announced) and a distribution to DIRECTV's parent, DIRECTV Group, Inc for the repayment of the Greenlady Debt which will be assumed by DTVG after its proposed merger with Liberty Entertainment, Inc., is completed. LGD point estimates for DIRECTV's debts were updated to reflect the expected debt mix. The rating outlook is stable. Assignments: Issuer: DIRECTV Holdings LLC -- Senior Unsecured Regular Bond/Debenture, Assigned Ba2 (LGD4- 69%) DIRECTV's Ba1 CFR reflects Moody's continuing expectation that competition from stand alone triple-play providers will gradually pressure subscriber churn, margins and cash flow generation. These concerns are somewhat mitigated by the company's strong financial profile, conservative balance sheet management and the consistent and sizeable cash flows DIRECTV generates from its position as one of the leading video providers in the U.S. "However, the Ba1 CFR is also notably constrained below the investment-grade threshold by Moody's residual concern over influence by Dr. John Malone, the Chairman of The DIRECTV Group, Inc. (DIRECTV's parent), who is expected to have 24% voting control following its merger with Liberty Entertainment, and specifically his history of using debt more aggressively and overall speculative credit posture," said Neil Begley, a Moody's Senior Vice President. Moody's last rating action was on July 1, 2009, when it upgraded DIRECTV's CFR to Ba1 from Ba2. DIRECTV'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 DIRECTV's core industry and DIRECTV's ratings are believed to be comparable to those of other issuers of similar credit risk. DIRECTV Holdings LLC is a wholly-owned, U.S. operating company of DIRECTV Group, Inc., and is the largest direct-to-home digital television service provider in the United States with 18.3 million subscribers as of 6/30/2009. Annual revenues of DTVG and DIRECTV approximate $20.4 billion and $17.9 billion, respectively. DTVG's additional revenues are generated by its Latin American operations. DUKE REALTY: Under 40% Accept Cash Offer for 7.75%, 5.25% Notes --------------------------------------------------------------- Duke Realty Corporation announced the expiration and final results of the offer by its operating partnership, Duke Realty Limited Partnership, to purchase any and all of its 7.75% Senior Notes due 2009 and 5.25% Senior Notes due 2010. As of 5:00 p.m., New York City time, on September 11, 2009, the expiration date for the Any and All Tender Offer, the aggregate principal amount of 7.75% Notes tendered in the Any and All Tender Offer was $39,299,000, representing 32.36% of the $121,440,000 aggregate principal amount of 7.75% Notes outstanding and the aggregate principal amount of 5.25% Notes tendered in the Any and All Tender Offer was $57,879,000, representing 36.70% of the $157,728,000 aggregate principal amount of 5.25% Notes outstanding. All of the Any and All Notes that were tendered have been accepted for payment, with settlement occurring earlier September 14. The holders of the 7.75% Notes that were accepted for purchase received the tender offer consideration of $1,010.55 per $1,000 principal amount of 7.75% Notes, plus accrued and unpaid interest from and including the last interest payment date (May 15, 2009) to, but not including, September 14. The holders of the 5.25% Notes that were accepted for purchase received the tender offer consideration of $1,012.50 per $1,000 principal amount of 5.25% Notes, plus accrued and unpaid interest from and including the last interest payment date (July 15, 2009) to, but not including, September 14. The Any and All Tender Offer was made pursuant to an offer to purchase dated August 31, 2009, which set forth a complete description of the terms of the Any and All Tender Offer. Also described in the Offer to Purchase is an offer by the Operating Partnership to purchase up to the maximum aggregate principal amount of its 6.95% Senior Notes due 2011, 5.625% Senior Notes due 2011, 5.875% Senior Notes due 2012 and 5.45% Senior Notes due 2012 that the Operating Partnership can purchase for $50,000,000 -- excluding accrued interest and subject to increase in the Operating Partnership's sole discretion, the "Maximum Payment Amount". The Operating Partnership refers to its offer to purchase the Maximum Tender Offer Notes as the "Maximum Tender Offer." The Maximum Tender Offer will expire at 11:59 p.m., New York City time, on September 28, 2009, unless extended or earlier terminated. Duke Realty also announced that it has received tenders of 6.95% Notes representing aggregate tender offer consideration (excluding accrued interest) in excess of the $50,000,000 Maximum Payment Amount as of 5:00 p.m., New York City time, on September 14, 2009, the withdrawal deadline for the Maximum Tender Offer. Because the aggregate tender offer consideration (excluding accrued interest) with respect to the 6.95% Notes tendered exceeds the Maximum Payment Amount, the 6.95% Notes validly tendered at or prior to 11:59 p.m., New York City time, on September 28, 2009, Maximum Tender Offer Expiration Date, will, if accepted for purchase, be purchased on a pro rata basis as described in the Offer to Purchase. Holders of 6.95% Notes tendering after, 5:00 p.m., New York City time, on September 14, 2009, will not be entitled to receive the early tender premium described in the Offer to Purchase. The proration factor for the 6.95% Notes cannot be determined until the Maximum Tender Offer Expiration Date. Because the 6.95% Notes have a purchase acceptance priority over the 5.625% Notes, the 5.875% Notes and the 5.45% Notes in the Maximum Tender Offer and the aggregate tender offer consideration (excluding accrued interest) with respect to the 6.95% Notes tendered exceeds the Maximum Payment Amount, the Operating Partnership has terminated the tender offer with respect to the 5.625% Notes, the 5.875% Notes and the 5.45% Notes. Any 5.625% Notes, 5.875% Notes and 5.45% Notes previously tendered will be promptly returned to the tendering parties, and no 5.625% Notes, 5.875% Notes or 5.45% Notes will be accepted for purchase. As reported by the Troubled Company Reporter on September 2, 2009, the consideration for each of the Notes are: Accept- Tender Early Total Principal ance Offer Tender Consider- Amount Priority Consider- Premium ation Title of Notes Outstanding Level ation (1) (1) (1)(2) ----------- -------- --------- ------- --------- Any and All Tender Offer 7.75% Senior Notes due 2009 $121,440,000 N/A $1,010.55 N/A N/A CUSIP - 26441YAC1 5.25% Senior Notes due 2010 157,728,000 N/A 1,012.50 N/A N/A CUSIP - 26441YAE7 Maximum Tender Offer 6.95% Senior $156,815,000 1 $1,012.50 $30.00 $1,042.50 Notes due 2011 CUSIP - 26441YAD9 5.625% Senior 218,347,000 2 998.75 30.00 1,028.75 Notes due 2011 CUSIP - 26441YAL1 5.875% Senior 150,000,000 3 997.50 30.00 1,027.50 Notes due 2012 CUSIP - 264411AB5 5.45% Senior 50,000,000 4 983.75 30.00 1,013.75 Notes due 2012 CUSIP - 26441QAD6 (1) Per $1,000 principal amount of Notes tendered. (2) Includes Early Tender Premium. The complete terms and conditions of the Maximum Tender Offer are set forth in the Offer to Purchase and Letter of Transmittal. Holders are urged to read the Tender Offer documents carefully before making any decision with respect to the Maximum Tender Offer. Copies of the Offer to Purchase and Letter of Transmittal may be obtained from D.F. King & Co., Inc., the Information Agent for the tender offers, at (800) 848-3416 (toll-free) or (212) 269- 5550 (collect). Questions regarding the tender offers may be directed to Wells Fargo Securities, dealer manager for the tender offers, at (866) 309-6316 (toll-free) or (704) 715-8341 (collect). About Duke Realty Duke Realty Corporation -- http:www.dukerealty.com/ -- owns and operates approximately 136 million rentable square feet of Industrial and office space in 20 U.S. cities. Duke Realty Corporation is publicly traded on the NYSE under the symbol DRE and is listed on the S&P MidCap 400 Index. ELI LILLY: To Cut Work Force by 14%, Revamp Units ------------------------------------------------- Peter Loftus at The Wall Street Journal reports that Eli Lilly & Co. said that it will lay off almost 14% or 5,500 of its workers, and revamp its operating structure into five global business units: oncology, diabetes, established markets, emerging markets and the Elanco animal-health unit by January. Eli Lilly, The Journal states, expects its work force to decrease to 35,000 by the end of 2011 from 40,500 this year. According to The Journal, Eli Lilly is faced with the possibility of a steep revenue drop due to looming patent expirations and the Company said that the layoffs and other measures would lessen its costs by $1 billion by the end of 2011. The Journal relates that between 2010 and 2013, drugs accounting for more than half of Eli Lilly's revenue will face generic competition as U.S. patents expire on four of its five top-selling products. The report says that sales of those drugs will decline by as much as 80% from almost $11 billion in 2008. According to the report, Eli Lilly doesn't have the product array to offset the lost revenue. Eli Lilly and Company (NYSE: LLY) is a global pharmaceutical company. Its global headquarters is located in Indianapolis, Indiana, in the U.S. ENERGY PARTNERS: Posts $33.6MM Net Loss for June 30 Quarter ----------------------------------------------------------- Energy Partners, Ltd., filed with the Securities and Exchange Commission on September 9, 2009, its Form 10-Q: -- for the quarterly period ended June 30, 2009 See http://ResearchArchives.com/t/s?44c2 -- for the quarterly period ended March 31, 2009 See http://ResearchArchives.com/t/s?44c3 Energy Partners Ltd. posted a net loss of $33,661,000 for the three months ended June 30, 2009, from net income of $3,996,000 for the same quarter in 2008. It posted a net loss of $65,532,000 for the first half ended June 30, 2009, from net income of $6,311,000 for the first half ended June 30, 2008. Energy Partners posted a net loss of $31,871,000 for the three months ended March 31, 2009, from net income of $2,315,000 for the same quarter in 2008. As of June 30, 2009, Energy Partners had $697,745,000 in total assets; and $703,536,000 in total liabilities, including $146,704,000 in total current liabilities. On August 20, 2009, the Company filed Amendment No. 1 to its Annual Report on Form 10-K, originally filed with the SEC on August 5 solely to correct a clerical error with respect to the beneficial ownership of Wexford Capital and its affiliates. A full-text copy of Amendment No. 1 is available at no charge http://ResearchArchives.com/t/s?44c4 On July 31, 2009, the Company filed its second amended joint plan of reorganization, as modified as of July 31, with the Bankruptcy Court. On August 3, the Bankruptcy Court entered an order confirming the Plan. To become effective, all conditions under the Plan, which include the Company's closing of an exit facility, had to be satisfied by either September 10, 2009 or, with the approval of the Company and the Majority Consenting Holders (as such term is defined in the Plan), by September 25. To provide additional time for the Company to negotiate and close its exit financing, the Majority Consenting Holders and the Company mutually agreed to extend the time frame for the satisfaction of conditions under the Plan to September 25, 2009. On September 10, the Company filed a notice with the Bankruptcy Court notifying the Bankruptcy Court of the extension of the deadline for the Plan's effectiveness. About Energy Partners Ltd. Based in New Orleans, Louisiana, Energy Partners, Ltd., (Pink Sheets: ERPL.PK) is an independent oil and natural gas exploration and production company. The Company had interests in 24 producing fields, six fields under development and one property on which drilling operations were then being conducted, all of which are located in the Gulf of Mexico Region. Energy Partners, Ltd., and its affiliates filed for Chapter 11 on May 1, 2009 (Bankr. S.D. Tex. Lead Case No. 09-32957). Paul E. Heath, Esq., at Vinson & Elkins LLP, represents the Debtors in their restructuring efforts. The Debtors propose to employ Parkman Whaling LLC as financial advisor. The Debtors' financial condition as of December 31, 2008, showed total assets of $770,445,000 and total debts of $708,370,000. FINLAY ENTERPRISES: Delays Filing of August 1 Form 10-Q Report -------------------------------------------------------------- Finlay Enterprises, Inc., and Finlay Fine Jewelry Corporation, its wholly owned subsidiary, will delay the filing of their Form 10-Q report for the period ended August 1, 2009. Finlay explained that following the commencement of their Chapter 11 cases, the Company's management has been particularly strained by the considerable attention required for administering the Chapter 11 Cases and marketing, negotiating and consummating the sale of the Company's businesses and assets. Consequently, the Company believes that it will not be in a position to file the Form 10-Q by the fifth calendar day following the required filing date, as prescribed in Rule 12b-25, and further cannot make any assurances as to when it will complete and file the Form 10-Q. The inability to file the Form 10-Q could not have been eliminated by the Company without unreasonable effort or expense, Finlay said. Finlay said it has been actively marketing the sale of its businesses and assets to potential bidders pursuant to a competitive bidding process that has been approved by the U.S. Bankruptcy Court for the Southern District of New York. Finlay said reasonable estimates of its financial results cannot be made due to the burdens imposed on the Company's available management. The Company will prepare for the Court, pursuant to the Bankruptcy Code, monthly operating reports which will be filed as a matter of public record and will include financial disclosures. The MORs will also be filed with the Securities and Exchange Commission. September 23 Auction As reported by the Troubled Company Reporter on August 31, 2009, the Court granted the Debtors' requests: (i) approve procedures in connection with the sale of all or substantially all of their assets, subject to higher and better offers at an auction; (ii) authorize the Debtors to enter into an agency agreement (the "stalking horse agreement") with Gordon Brothers Retail Partners, LLC in connection with the sale; and (iii) approve the payment of a break-up fee of $850,000 in accordance with the terms of the stalking horse agreement. The stalking horse agreement provides for Gordon Brothers to act as the Debtors' agent to liquidate (a) all of the merchandise located in 106 of its specialty retail store locations and the Debtors' distribution centers and other offsite locations by means of a "going out of business," "sale on everything," "store closing," or similar sale, and (b) the Debtors' owned furniture, fixtures and equipment located at the stores. The stalking horse agreement provides a guaranty of payment of an amount the Debtors believe to be roughly $116 million. A full-text copy of the Agency Agreement is available at no charge at http://researcharchives.com/t/s?4148 The bid deadline is August 26, 2009, at 4:00 p.m. in accordance with the approved bid procedures. Bids must have a value greater than or equal to the sum of (x) $116,500,000, which is the value determined by the Debtors of the stalking horse agreement, plus (y) $850,000, the amount of the break-up fee, plus (z) an initial overbid of $100,000. The Debtors reserve the right to reject any or all bids. The auction will be conducted at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153 on September 23, 2009, at 10:00 a.m. The sale hearing will be held on September 25, 2009, at 10 a.m. or such other time that the Court may direct. Objections to the sale were due September 14, 2009, at 5:00 p.m. by the Objection Notice Parties. Melvin Retirement Joseph M. Melvin -- Executive Vice President and Chief Operating Officer of Finlay Enterprises and President and Chief Operating Officer of Finlay Fine Jewelry -- retired effective August 14, 2009. In connection with his retirement, on August 12, Finlay Jewelry and Mr. Melvin entered into a Severance Agreement and General Release. Pursuant to the terms of the Agreement, Mr. Melvin is entitled to certain benefits under Finlay Jewelry's regular policies and to certain conditional benefits following his retirement. Under the terms of the Agreement, Mr. Melvin has agreed, among other things, to release Finlay Enterprises and Finlay Jewelry from all claims and to not disclose confidential or proprietary information obtained during his employment. Pursuant to the Agreement, Mr. Melvin will receive, subject to his compliance with these obligations, a severance payment in the amount of 12 weeks' salary, or $107,320.62, less applicable taxes and other withholding, payable in six installments. Any payment in excess of two months' base salary will be reduced by an amount equal to the gross amounts Mr. Melvin receives or earns from employment or engagement in any business or activity with Finlay during the period for which the Mitigated Benefits are payable. As a condition to receipt of payment of the Mitigated Benefits, Mr. Melvin is required, no later than seven days prior to the date such payment is due, to certify in writing all amounts of Other Income earned during the preceding payroll period so that the appropriate offsets can be made. About Finlay Enterprises Finlay Enterprises, Inc. (OTC Bulletin Board: FNLY) through its wholly owned subsidiary, Finlay Fine Jewelry Corporation, is a retailer of fine jewelry operating luxury stand-alone specialty jewelry stores and licensed fine jewelry departments in department stores throughout the United States and achieved sales of $754.3 million in fiscal 2008. The number of locations at the end of the second quarter ended August 1, 2009, totaled 182, including 67 Bailey Banks & Biddle, 34 Carlyle and four Congress specialty jewelry stores and 77 licensed departments with The Bon Ton. The Company and seven affiliates filed for Chapter 11 on August 5, 2009 (Bankr. S.D.N.Y. Case No. 09-14873). Weil, Gotshal & Manges LLP, serves as bankruptcy counsel. Alvarez & Marsal North America, LLC, is engaged as restructuring advisor in the Chapter 11 case, and the firm's David Coles is appointed as chief restructuring officer. Epiq Bankruptcy Solutions, LLC, serves as claims and notice agent. Judge James Peck presides over the case. In its bankruptcy petition, Finlay Enterprises disclosed assets of $331,824,000 against debts of $385,476,000 as of July 4, 2009. As of the petition date, Finlay owes $38 million outstanding under a first lien credit agreement, $24.7 million under second lien notes, $176.6 million outstanding under third lien notes (in addition to $17.5 million to secured vendors), and $40.6 million under remaining unsecured obligations under the senior notes. FIRST AMERICAN: Fitch Downgrades Rating on Senior Debt to 'BB+' --------------------------------------------------------------- Fitch Ratings has affirmed the 'A-' Insurer Financial Strength of the First American Insurance Companies with a Negative Outlook. Additionally, Fitch has downgraded all holding company obligations one notch: First American Corporation -- Issuer Default Rating to 'BBB-' from 'BBB'; -- Senior unsecured debt to 'BB+' from 'BBB-'. First American Capital Trust -- Trust preferred securities to 'BB' from 'BB+'. All ratings remain on a Negative Outlook. The expanded notching of the holding company ratings reflects a heightened scrutiny of the company's 47% debt to tangible capital ratio as of June 30, 2009 given the current stressful environment. Fitch notes that the company is actively looking to spin-off the title and specialty insurance segment. The proposed spin-off, which was initially announced on Jan. 15, 2008, and has been delayed to a 2010 event, will likely bring a significant change in capital structure as a sizeable amount of debt and goodwill is expected to remain with the Information Solutions segment. However, unfavorably Fitch notes that FAF will be losing the benefits of unregulated cash flows of the Information Solutions segment. Thus, any rating actions following the spin-off of the title insurance segment will depend heavily on the ultimate capitalization. Fitch's affirmation of the current ratings is a reflection of the company's improved profitability, high quality investment portfolio, and adequate liquidity position. Through the first half of 2009, the company has reported $106.3 million in net income, a 117% improvement over prior year. The current Negative Outlook is indicative of not only negative trends in the title insurance industry, but also some concerns over First American's quality of capital and the potential for adverse reserve development. In particular, Fitch notes that growth in statutory capital at the title insurance entities has mainly come from sources other than net income. While these improvements in capital are beneficial, the quality of infused capital is below a direct cash infusion. Operating losses out of step with industry peers or material deterioration in capital would place further downward pressure on First American's ratings. Fitch notes that any topics that are covered in its criteria reports not specifically mentioned above are considered neutral to the rating as of the date of this publication. Fitch has downgraded these ratings with a Negative Outlook: The First American Corporation -- IDR to 'BBB-' from 'BBB'; -- Senior debt to 'BB+' from 'BBB-'; -- $200 million senior unsecured notes due 2014 to 'BB+' from 'BBB-'; -- $100 million senior unsecured debentures due 2028 to 'BB+' from 'BBB-'. First American Capital Trust -- $100 million trust preferred security due 2012 to 'BB' from 'BB+'. Fitch has affirmed the 'A-' IFS Rating with a Negative Outlook for these entities: * First American Title Insurance Company * First American Title Insurance Co. of New York * First Title Insurance (UK) PLC. * Ohio Bar Title Insurance Co. * Pacific Northwest Title Ins Co Fitch has affirmed the 'A-' IFS ratings with a Negative Outlook of these entities and has withdrawn them: * First American Title Insurance Co. of Oregon * First American Title Insurance Co. of North Carolina * Land Title Insurance Co. of St. Louis * Port Lawrence Title & Trust Co. * Mortgage Guaranty & Title Co. * Massachusetts Title Insurance Co. * Western National Title Insurance Company * United General Title Insurance Co. * Censtar Title Ins Co * T.A. Title Ins Co * First American Title Ins Co of KS FIRST NATIONAL: Swings to $20MM Net Loss in Q3 of 2009 ------------------------------------------------------ First National Bancshares, Inc. posted a net loss of $20,029,000 for three months ended June 30, 2009, compared with a net income of $189,000 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net income of $21,391,000 compared with a net income of $924,000 for the same period in 2008. The Company's balance sheet at June 30, 2009, showed total assets of $834,696,000, total liabilities of $815,830,000 and a stockholders' equity of $18,866,000. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?44b7 First National Bancshares, Inc. -- http://www.fnbwecandothat.com/ -- (NASDAQ: FNSC) is an $812-million asset bank holding company based in Spartanburg, South Carolina. It provides a wide range of financial services to consumer and commercial customers through its wholly owned banking subsidiary, First National Bank of the South, which has 12 full-service branches in five South Carolina counties. A 13th office is expected to open its doors in the Fort Mill/Tega Cay community of York County in the second quarter of 2009. Going Concern Doubt As reported in the Troubled Company Reporter on May 6, 2009, Elliot Davis LLC in Greenville, South Carolina, has raised substantial doubt about First National Bancshares' ability to continue as a going concern. In its April 29 audit report, Elliot Davis said the Company's nonperforming assets have increased to $75.5 million related primarily to deterioration in the credit quality of its acquisition and development loans, causing the Company to be out of compliance with certain covenants for its line of credit. The uncertainty of the Company's ability to repay or replace the line of credit or to mitigate actions by their lender if the lender declares an event of default, revokes the line of credit or attempts to foreclose on the stock of the subsidiary that is pledged as collateral, raises substantial doubt about the Company's ability to continue as a going concern. FIRST STATE FIN'L: Nasdaq to Delist Shares Effective Sept. 18 ------------------------------------------------------------- The Nasdaq Stock Market, Inc., has determined to remove from listing the common stock of First State Financial Corporation, effective at the opening of the trading session on September 18, 2009. Based on a review of the information provided by the Company, Nasdaq Staff determined that the Company no longer qualified for listing on the Exchange pursuant to Listing Rules 5100, 5110(b), and IM-5100-1. The Company was notified of the Staffs determination on August 12, 2009. The Company did not appeal the Staff determination to the Hearings Panel, and the Staff determination to delist the Company became final on August 21, 2009. Meanwhile, First State said the Company has determined that it is unable to timely file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, and the Company was not be able to file the Form 10-Q within the five-day extension permitted by the rules of the U. S. Securities and Exchange Commission. On August 7, 2009, the Florida Office of Financial Regulation closed the Company's former subsidiary, First State Bank and subsequently, the Federal Deposit Insurance Corporation was appointed as receiver. The FDIC informed the Company that Stearns Bank, National Association, St. Cloud, Minnesota, assumed all of the deposits of the Bank, excluding those from brokers, and purchased essentially all of the Bank's assets in a transaction facilitated by the FDIC. The only source of income for the Company was the Bank. The Company will conduct no business. The Company recorded a loss for the year ended December 31, 2008, of $21.1 million and for the first quarter of 2009 of $16.3 million. In addition, the Bank's capital ratios as of December 31, 2008, and March 31, 2009, severely deteriorated and are expected to continue to deteriorate through the second quarter of 2009 unless the Company is able to secure new capital or reduce the size of the loan portfolio. Failure to meet regulatory capital requirements may expose the Company and the Bank to additional regulatory sanctions including mandatory asset disposition and seizure. In the Company's 2008 financial statements filed on Form 10-K/A, on May 15, 2009, indicate these factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans to mitigate the effects of the losses incurred and other matters are 1) to raise additional equity capital; 2) reduce the size of the loan portfolio; and 3) to pursue its business plan and seek to generate positive operating cash flow. The Company's ability to continue as a going concern is dependent on the implementation and success of these plans and management believes that these plans can be effectively implemented during 2009. However, there can be no assurance that management's plans can be achieved. First State Financial Corporation is the parent of First State Bank, a community bank headquartered in Sarasota, Florida with offices in Sarasota and Pinellas counties. FLA OWNER: U.S. Trustee Sets Meeting of Creditors for October 6 --------------------------------------------------------------- The U.S. Trustee for Region 11 will convene a meeting of creditors in FLA Owner VI, Inc.'s Chapter 11 case on Oct. 6, 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, in 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. Chicago, Illinois-based FLA Owner VI, Inc., filed for Chapter 11 on Aug. 28, 2009 (Bankr. N.D. Ill. Case No. 09-31877). Scott R. Clar, Esq., at Crane Heyman Simon Welch & Clar, represents the Debtor in its restructuring effort. In its schedules, the Company said it has assets of at least $17,264,396, and total debts of $25,270,313. FORD MOTOR: Returns to Minivan Market by Adapting Car From Europe ----------------------------------------------------------------- According to Keith Naughton at Bloomberg News, Ford Motor Co. will start selling a new small U.S. minivan in late 2011, five years after exiting the market for those vehicles, by adapting a model from Europe. At the Frankfurt Motor Show, Ford unveiled the Grand C-Max, based on the Focus compact car. The Grand C-Max will seat seven and have minivan-style sliding rear doors, said Derrick Kuzak, Ford's product development chief. The U.S. minivan market peaked at 1.4 million vehicles in 2000 and fell 57% to 592,000 last year, according to researcher Autodata Corp. of Woodcliff Lake, New Jersey. Meanwhile, Ford Motor, which has lost $30 billion in the past three years, is on target with its plans to slow cash losses in this year's second half, Chief Financial Officer Lewis Booth said in an interview with Bloomberg at the Frankfurt Motor Show. "I'm comfortable with our guidance that we will do better in the second half," Mr. Booth said. Ford is targeting a profit for 2011 after failing to post a positive annual result since 2005. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The Company provides financial services through Ford Motor Credit Company. The Company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin-American regions, including Argentina and Brazil. As reported in the Troubled Company Reporter on Sept. 7, 2009, Moody's upgraded the Corporate Family Rating of Ford Motor Company to Caa1 from Caa3, and also raised the company's Speculative Grade Liquidity rating to SGL-3 from SGL-4. The rating outlook was changed to Stable from Negative. Ford's Probability of Default Rating remains at Caa3. In a related action, Moody's placed the Caa1 senior unsecured rating of Ford Motor Credit Company LLC on review for possible upgrade. The rating actions reflect Moody's belief that after a period of intensive restructuring of its operations and balance sheet, Ford's business viability has significantly improved. The positioning of the CFR rating at Caa1 balances the substantial achievements the company has made in restructuring its operations and rebuilding competitiveness against the expectation that even with these improvements meaningful earnings and cash flow generation will not be evident before 2011. Moody's believes that Ford has adequate liquidity to bridge itself until 2011 as reflected in the upgrade of the SGL rating to SGL-3. Notwithstanding the upgrade of the CFR rating, Ford's PDR is being maintained at Caa3 due to the continuing potential that the company might undertake further balance sheet restructuring initiatives (such as an exchange offer or below-par tender for outstanding obligations) that Moody's would view as a default for rating purposes. FORUM HEALTH: Creditors Try to Block Exclusivity Period Extension ----------------------------------------------------------------- Vindy.com reports that Forum Health's major secured creditors has asked the U.S. Bankruptcy Court for the Northern District of Ohio to deny the Company's request to extend its exclusive right to draft a reorganization plan. Forum Health's actions have led to a "crisis of confidence in its management," Vindy.com relates, citing the creditors. According to the report, the creditors said that they would seek the appointment by the court of a Chapter 11 trustee, "one with experience in running health-care systems." Forum Health said in court documents that if exclusivity ends any progress made to date would be at risk from the threat of competing plans. Vindy.com states that Forum Health said that the moves it has made have slowed the cash drain. Based in Warren, Ohio, Forum Health -- http://www.forumhealth.org/ -- offers health care services. The primary service area consists of the northeast Ohio counties of Mahoning, Trumbull and Columbiana; and northeast Ohio counties of Ashtabula, Geauga and Portage and the Pennsylvania counties of Mercer and Lawrence. Forum Health and its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. N.D. Ohio Lead Case No. 09-40795). Paul W. Linehan, Esq., and Shawn M Riley, Esq., at McDonald Hopkins LLC, serve as lead counsel to the Debtors. The Debtors have also tapped Michael A. Gallo, Esq. at Nadler Nadler & Burdman Co., LPA as co- counsel; Kurtzman Carson Consultants LLC as claims, noticing and balloting agent; and Huron Consulting Services LLC as financial advisors. Alston & Bird LLP represents the official committee of unsecured creditors formed in the Chapter 11 cases. At the time of its filing, Forum Health estimated that it had assets and debts both ranging from $100 million to $500 million. FRONTIER AIRLINES: Stipulation Resolving B/E Aerospace Claim ------------------------------------------------------------ B/E Aerospace Inc., Commercial Aircraft Products Group provided goods to Frontier Airlines, Inc., prior to the Petition Date. In May 2008 and June 2009, B/E Aerospace filed these claims in the Debtors' cases: * Reclamation Claim No. 910 for $3,521,342; * Administrative Claim No. 1124 for $656,688; and * Administrative Claim No. 1122 for $3,599,031, as amended by Claim No. 1548 for $1,873,270 To settle the Claims, the parties agree that B/E Aerospace will have: (1) an allowed administrative expense Claim No. 1548 for $936,630; and (2) an allowed non-priority, general unsecured Claim No. 1122 for $1,728,186. The effectiveness of the Claims Settlement Agreement also provides for the expungement of Claim Nos. 910, 1123, and 1124. The Debtors and B/E Aerospace agree to release and discharge each other from all actions and demands that arise from prepetition acts or agreements other than (i) the Settled Claims, (ii) any claims relating to environmental liabilities or indemnification rights and (iii) any avoidance preference or other similar actions pursuant to Section 510 or Subchapter III of Chapter 5 of the U.S. Code. B/E Aerospace will be deemed to have withdrawn (x) its Reclamation Demand, (y) its objection to the Debtors' Reclamation Report and (z) all other motions, objections, notices, proofs of claim or other actions filed or that may be filed in the Chapter 11 cases. The Debtors believe that settling the Settled Claims is favorable to the Debtors and is in the best interest of their estates and creditors. They note that the settlement of the General Unsecured Claim and the 503(b)(9) Claim is in light of: (i) there being no amount actually in controversy; (ii) the unknown probability of the Debtors' success if the issue were to be litigated or not otherwise resolved by the Settlement; (iii) the favorable terms of the Settlement for the Debtors' Estates; and (iv) the unknown complexity, expense and duration of any litigation, arbitration or other resolution. The Court will consider approval of the Stipulation on September 23, 2009. Objections, if any, must be filed by September 18. About Frontier Airlines Holdings Frontier Airlines Holdings, Inc. (Pink Sheets: FRNTQ) -- http://www.FrontierAirlines.com/-- is the parent company of Denver-based Frontier Airlines. Currently in its 15th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation has 51 aircraft with one of the youngest Airbus fleets in North America. In conjunction with a fleet of 10 Bombardier Q400 aircraft operated by Lynx Aviation -- a subsidiary of Frontier Airlines Holdings, Inc. -- Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. The Debtors' exclusive period to file a plan of reorganization will expire on October 9, 2009. Their exclusive period to solicit and obtain acceptances of that plan will expire December 9, 2009. As reported by the TCR on August 14, Republic Airways Holdings, Inc. has been declared the winning bidder in the auction to acquire Frontier, beating Southwest Airlines. 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: Bakersfield Mall's Schedules of Assets & Debts -------------------------------------------------------------- A. Real Property Owned Mall - Bakersfield, California $4,630,989 Mall - Bakersfield, California 112,666,529 B. Personal Property B.1 Cash on hand Petty cash - cash drawer 1,580 B.2 Checking accounts Bank of America 8,058 B.9 Interests in insurance policies Lexington Insurance Company Lead & Various Others 42,559 Liberty Insurance Co. - GL, WC, Auto 2,362 B.13 Stock and interests in incorporated and unincorporated Undetermined See http://bankrupt.com/misc/B13Interests.pdf B.14 Interests in partnerships or joint ventures Undetermined B.16 Accounts receivable 3,160,249 B.21 Other contingent and unliquidated claims Valley Plaza Mall Personal Property Audit/2008 2,000 B.22 Patents, copyrights and other intellectual property Domain Names Undetermined B.24 Customer lists or other compilations Undetermined B.28 Office equipment, furnishings, and supplies 8,333 B.29 Machinery, fixtures, equipment and supplies 490,315 B.35 Other personal property Prepaid expenses and other assets 79,733 TOTAL SCHEDULED ASSETS $121,092,707 ========================================================== D. Creditors Holding Secured Claims Secured Debt Wachovia Securities $95,299,167 Mechanics Liens Focus Micro 33,328 McIntosh & Associates 30,486 Whiting Turner 903,489 Secured Tax Claims Kern County Treasurer/Tax Collector 0 E. Creditors Holding Unsecured Priority Claims Priority Claims - Sales and Use Tax Liabilities State Board of Equalization 0 Priority Claims - Franchise Tax Claims City of Bakersfield 0 Delaware- Secretary of State 0 Franchise Tax Board 0 Internal Revenue Service 0 F. Creditors Holding Unsecured Non-priority Claims Accounts Payable 532,428 See http://bankrupt.com/misc/F1AccountsPayable.pdf Litigation Gallegos, Sergio Unliquidated Karr, Tressie Unliquidated Pena Grading & Demolition, Inc. Unliquidated Roger McIntosh & Associates Unliquidated Roger McIntosh doing business as McIntosh & Associates Unliquidated Tenant Obligations AT&T 2,463 Body Shop, The 58,390 Forever 21 30,000 Sprint 51 Toy Land 400 TOTAL SCHEDULED LIABILITIES $96,890,202 =========================================================== 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 GROWTH: Bakersfield Mall's Statement of Financial Affairs ----------------------------------------------------------------- Bakersfield Mall LLC reports that during the two years preceding the Petition Date, it received income from gross sales from operations, excluding intercompany operations: Year Income ---- ------ 2007 $24,285,416 2008 25,029,467 2009 6,419,532 Edmund Hoyt, senior vice president and chief financial officer of the Debtors, notes that two years preceding the Petition Date, the Debtor received income from sources other than the operation of its business: Year Income ---- ------ 2007 $562,298 2008 400,930 2009 67,612 Mr. Hoyt says that the Debtor made payments aggregating $2,451,187 creditors within 90 days immediately preceding the Petition Date. A schedule of the payments made to creditors is available for free at: http://bankrupt.com/misc/bakersfield_paymentstocreditors.pdf Similarly, the Debtor made payments totaling $8,296,969, within one year immediately preceding the Petition Date to creditors who are or were insiders. A schedule of the payments made to insiders is available for free at: http://bankrupt.com/misc/bakersfield_paymentstoinsiders.pdf Moreover, the Debtor is party to seven suits. In the ordinary course of business, Bakersfield Mall may be obligated to withhold amounts from the paychecks of various regular employees in connection with garnishment orders or other state law withholding orders. As Bakersfield Mall believes that these amounts do not constitute property of the estate, it did not list those amounts. Bakersfield Mall also has not listed any garnishment out of concerns for the confidentiality of its employees. Moreover, in the ordinary course of its business prior to the Petition Date, Bakersfield Mall routinely agreed to provide rent credits or other setoffs to tenants under real property leases as a result of tenant overpayments of non-rent items, tenant improvement allowances and other matters. In light of their size, Bakersfield Mall has not reflected those setoffs. 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 GROWTH: Lancaster Trust's Schedules of Assets & Debts ------------------------------------------------------------- A. Real Property Owned Mall - Lancaster, PA $171,070,690 B. Personal Property B.1 Cash on hand Petty cash - cash drawer 660 B.2 Checking accounts Sovereign Bank 3,610 B.9 Interests in insurance policies Lexington Insurance Company Lead & Others 14,132 Liberty Insurance Co. - GL, WC, Auto 2,116 B.13 Stock and interests in incorporated and unincorporated Undetermined See http://bankrupt.com/misc/B13Interests.pdf B.14 Interests in partnerships or joint ventures Undetermined B.16 Accounts receivable 5,268,585 B.22 Patents, copyrights and other intellectual property Domain Names Undetermined B.24 Customer lists or other compilations Undetermined B.25 Automobiles, trucks, trailers, and other vehicles 2,903 B.28 Office equipment, furnishings, and supplies 5,775 B.29 Machinery, fixtures, equipment and supplies 664,319 B.35 Other personal property Prepaid expenses and other assets 1,683,437 B.35(b) Accounts Payable Debit UPS 11 Officemax 38 Federal Building Services, Inc. 49 TOTAL SCHEDULED ASSETS $178,716,323 ========================================================== D. Creditors Holding Secured Claims Secured Debt Midland Loan Services, Inc. $149,686,918 Secured Tax Claims City of Lancaster, PA 0 Lancaster County Treasurer 0 Manheim Township 0 Manheim Township School District 0 School District of Lancaster 0 E. Creditors Holding Unsecured Priority Claims Priority Claims - Sales and Use Tax Liabilities Commonwealth of Pennsylvania, Dept. of Revenue 0 Priority Claims - Franchise Tax Claims Dept. of the Treasury 0 Illinois Secretary of State 0 Pennsylvania Dept. of Revenue 0 F. Creditors Holding Unsecured Non-priority Claims Accounts Payable 360,522 See http://bankrupt.com/misc/F1AccountsPayable.pdf Litigation Synder, Lawrence & Jeanne Unliquidated Tenant Obligations AT&T Unliquidated Bon Ton, The 251 Honey Baked Ham 910 International Environmental Mgmt. Inc. 833 Plumb Gold 650 Sprint 377 Walking Company, The 50,000 TOTAL SCHEDULED LIABILITIES $150,100,462 =========================================================== 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 GROWTH: Lancaster Trust's Statement of Financial Affairs ---------------------------------------------------------------- Lancaster Trust declares that during the two years preceding the Petition Date, it received income from gross sales from operations, excluding intercompany operations: Year Income ---- ------ 2007 $28,829,353 2008 29,458,905 2009 7,428,840 Edmund Hoyt, senior vice president and chief financial officer of the Debtors, says that two years preceding the Petition Date, the Debtor received income from sources other than the operation of its business: Year Income ---- ------ 2007 $818,752 2008 644,766 2009 103,894 Mr. Hoyt says that the Debtor made payments aggregating $1,969,787 creditors within 90 days immediately preceding the Petition Date. A schedule of the payments made to creditors is available for free at: http://bankrupt.com/misc/lancaster_paymentstocreditors.pdf Similarly, the Debtor made payments totaling $8,296,969, within one year immediately preceding the Petition Date to creditors who are or were insiders. A schedule of the payments made to insiders is available for free at: http://bankrupt.com/misc/lancaster_paymentstoinsiders.pdf Moreover, the Debtor is a defendant to an action commenced by Lawrence Snyder and Jeanne M. Snyder. The Debtor incurred a loss of $105 due to mall property damaged by floor scrubber one year before the Petition Date. In addition, Lancaster Trust sold its site of Boscov's Department Store at Park City Center for $500,000 to Pax Mall Realty Company, LP two years before the Petition Date. In the ordinary course of business, Lancaster Trust may be obligated to withhold amounts from the paychecks of various regular employees in connection with garnishment orders or other state law withholding orders. Lancaster Trust believes that these amounts it do not constitute property of the estate so it did not list those amounts. Lancaster Trust also has not listed any garnishment out of concerns for the confidentiality of its employees. Moreover, in the ordinary course of its business prior to the Petition Date, Lancaster Trust routinely agreed to provide rent credits or other setoffs to tenants under real property leases as a result of tenant overpayments of non-rent items, tenant improvement allowances and other matters. In light of their size, Lancaster Trust has not reflected those setoffs. 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: EU to Scrutinize Opel Restructuring Plan -------------------------------------------------------- Matthew Newman at Bloomberg News reports that Germany must submit its restructuring plan for General Motors Co.'s Opel unit to European Union competition chief Neelie Kroes. According to Bloomberg, the European Commission said it hasn't been formally notified of Germany's plan to provide Opel with EUR3 billion (US$4.38 billion) in loan guarantees. Bloomberg relates Neelie Kroes, the EU's competition commissioner, warned Germany against any "protectionist motives" in its support plan for GM's Opel unit as the carmaker's new owner announced plans to cut about 10,500 jobs. Ms. Kroes, as cited by Bloomberg, said no job or investment conditions are allowed to be tied to the aid by the government of German Chancellor Angela Merkel, who is seeking re-election in two weeks. "Such conditions would create unacceptable distortions in the internal market and could trigger a subsidy race which would significantly damage the European economy in the present delicate moment," Bloomberg quoted Ms. Kroes as saying. "We will be scrutinizing the process very carefully to make sure it is based on commercial considerations." Job Cuts Bloomberg reports that, at a press conference in Frankfurt yesterday, Magna International Inc. Co-Chief Executive Officer Siegfried Wolf said he expects the elimination of about 10,500 jobs at Opel. Daniel Schafer and John Reed at The Financial Times report that Mr. Wolf, Magna's co-chief executive, said that Opel and its UK business, Vauxhall, would have to cut their combined workforce of more than 50,000 by a fifth in the next 12 months. According to the FT, more than 4,000 of the job cuts would be in Germany, where 25,000 are employed, and the rest elsewhere in Europe. The FT relates Mr. Wolf confirmed that Magna might have to close Opel's Belgian plant in Antwerp, which employs 2,580 and builds the Astra compact model. Opel's new owners plan to invest EUR600 million (US$877 million) in the Russian market, the FT discloses. The FT notes Mr. Wolf said Opel's new owners plan to repay the government loans by 2015 and return the company to profitability before that date. Antwerp RIA Novosti, citing Belgian media, reports the Antwerp plant could be saved should Belgian authorities allocate EUR200 million (US$290 million). RIA Novosti relates the media quoted Opel top labor representative Klaus Franz as saying Opel's plants in Europe, planned for closure, can be kept running if EUR1.6 billion (US$2.3 billion), including EUR200 million in state aid for the Belgian plant, is allocated by the countries where the plants are situated. Vauxhall Richard Wachman at The Guardian reports that UK business secretary Lord Mandelson is seeking talks with senior executives at Magna when he could offer up the prospect of GBP400 million of taxpayer's money, if the company agrees to safeguard the future of Vauxhall's Luton plant. According to the Guardian, GM's Luton van factory is considered to the most vulnerable to closure as a contract to produce van models expires in 2013, and the company has said nothing about a replacement. Ellesmere Port and Luton employ more than 5,000 employees. As reported in the Troubled Company Reporter-Europe on Sept. 11, 2009, Magna and Savings Bank of the Russian Federation said their joint offer to acquire a 55% interest in Opel has been selected by both GM and the Opel Trust as the preferred solution to address the future of Opel. Under the offer, the acquired 55% interest in Opel would be owned 50:50 by a Magna/Sberbank consortium with GM retaining a 35% interest and Opel employees acquiring 10% as part of a new labour framework. The offer contemplates a total equity investment by the consortium of EUR500 million over time. Completion of the purchase remains subject to finalization of definitive agreements and other conditions, including government-backed financing and regulatory approvals. Viability John Reed and Bernard Simon at The Financial Times report analysts raised questions about Magna's ability to execute a restructuring needed to return Opel to profitability, even with the help of EUR4.5 billion (US$6.5 billion) of mostly German government aid. According ot the FT, while Magna's original bid document spoke of cutting costs by axing 10,000 jobs across Europe, in an industry driven by volumes, however, profitability hinges less on cost- cutting than on manufacturers' ability to build scale by selling more cars. GM currently builds 450,000 units a year on the production platform that makes its Astra model, a volume analysts describe as too small to recoup costs, the FT notes. "The critical volume per platform is at 600,000 to 800,000 units for a mass carmaker," the FT quoted Arndt Ellinghorst, head of automotive research at Credit Suisse, as saying. "Unless Opel can reach that level, its business model remains fragile." U.K. to Support Magna Bid Robert Hutton at Bloomberg reports that Prime Minister Gordon Brown said the U.K. government is planning to support Magna's bid for General Motors' operations in the U.K. "We have and will continue to support the development of the car industry at Ellesmere Port and Luton," Mr. Brown told an audience of union leaders in Liverpool on September 14. "We're prepared to support with finance the Magna operation." 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) GENMAR HOLDINGS: Wants December 31 Plan Submission Deadline ----------------------------------------------------------- Court documents say that Genmar Holdings Inc. has asked the U.S. Bankruptcy Court for the District of Minnesota to extend its exclusive period to file a plan until December 31, 2010. It also wants the period to solicit acceptances of the plan to expire Feb. 28, 2010. A hearing on the request is scheduled for Sept. 24. Trade Only quoted Genmar chairman Irwin Jacobs as saying, "The reason for that is we're very close to the financing for the entire transaction to come out of the [Chapter] 11, and we are hoping to have something public before this week is out. I feel very pleased, and I'm optimistic that we'll have something to say before the week is out relative to that. There's no sales included in that. For the most part, the entire plan is for Genmar to be intact." Genmar, according to court documents, has started implementing exit strategies, like sale of assets, and these transactions will form the basis of any plan. Pulaski, Wisconsin-based Carver Italia, LLC, and its affiliates, including Genmar Holdings, Inc. -- http://www.genmar.com/-- manufacture recreational boats. The Debtors filed for Chapter 11 bankruptcy protection on June 1, 2009 (Bankr. D. Minn. Case No. 09-33773, and 09-43537). James L. Baillie, Esq., and Ryan Murphy, Esq., at Fredrikson & Byron, PA, assist the Debtors in their restructuring efforts. Carver Italia listed $10 million to $50 million in assets and $100 million to $500 million in debts. GREEKTOWN HOLDINGS: To Send 2 Rival Plans to Creditors for Voting ----------------------------------------------------------------- Bankruptcy Judge Walter Shapero of the U.S. Bankruptcy Court for the Eastern District of Michigan approved on September 3, 2009, the competing Disclosure Statements of the Chapter 11 plans filed by Greektown Holdings LLC and Merrill Lynch Capital Corporation, as administrative agent for the Debtors' Lenders, on the one hand; and Luna Greektown LLC and Plainfield Asset Management LLC, on the other hand, as containing "adequate information" within the meaning of Section 1125 of the Bankruptcy Code. The Court issued its ruling in light of a stipulation among the Debtors, Merrill Lynch, the Luna Plan Sponsors and the Official Committee of Unsecured Creditors dated September 2, 2009. Under the stipulation, the parties agreed on the form of the disclosure statement order, the form of the ballots, the plan solicitation procedures, and the Creditors Committee Recommendation Letter, among others. All unresolved objections to the form of the Disclosure Statements have been addressed on the record of the hearings held by the Court on the Disclosure Statements and by the Court's order entered on August 20, 2009, Judge Shapero held. By virtue of the Disclosure Statement Order, the Debtors are permitted to solicit acceptances for their Chapter 11 plan. The Debtors and the Luna Plan Sponsors have also agreed that the Debtors' Plan and the Luna Plan will be served on creditors simultaneously. Hence, the Debtors' Balloting Agent will serve one package on creditors, which will comprise of: * A single cover letter agreed upon by the Plan Sponsors * A letter from the Official Committee of Unsecured Creditors * A Solicitation Package of the Debtors' Plan * A Solicitation Package of the Luna Sponsors' Plan The Solicitation Package of each Plan Sponsor will include (i) a copy of that Sponsor's Chapter 11 Plan and Disclosure Statement, (ii) a copy of the Disclosure Statement Order, (iii) the Confirmation Hearing Notice, (iv) the appropriate Ballot and voting instructions, (v) a list identifying the names of holders of claims in Classes 10 and 11 with respect to the Debtors' Plan, and Classes 12 and 13 with respect to the Luna Plan, and (vi) a pre-addressed, postage pre-paid return envelope. The Court has established August 31, 2009, as the voting record date to determine (i) the holders of claims that are entitled to receive solicitation packages; (ii) the holders of Claims in each of the voting classes; and (iii) whether Claims have been transferred properly to an assignee. Holders of any claim filed after the Voting Record Date will not be entitled to vote. The Voting Deadline will be October 8, 2009, at 7:00 p.m. prevailing Eastern Time. However, with regard to holders of Class 5 Bondholder Claims who submit their ballots through a nominee, the submission deadline will be October 5, 2009. The Court has also approved the proposed form of ballots and proposed voting and tabulation procedures submitted by both Plan Sponsors. Judge Shapero will commence the Confirmation Hearing on November 3, 2009, at 10:00 a.m., prevailing Eastern Time. Any party who wishes to file an objection to the Competing Plans has until October 13, 2009, at 5:00 p.m. Prevailing Eastern Time, to formally submit its objection to the Court. Any objection to the Plan must be in writing, must state the identity of the objecting party and the nature of the objector's claim, and must state with particularity the basis and nature of any objection to the Plan. Full-text copies of the Debtors' Disclosure Statement Order and the Sept. 2 Stipulation among the Plan Sponsors is available for free at http://ResearchArchives.com/t/s?44c7 Debtors' Aug. 27 Plan Supplements, Luna's Aug. 28 Amended Disclosure Statement About five days before the Court entered the Disclosure Statement Order, on August 27, 2009, the Debtors submitted corrected plan exhibits on the liquidation analysis, their historical financial results, and additional historical financial information, full- text copies of which are available for free at: http://bankrupt.com/misc/GrktnAmLiqAn.pdf http://bankrupt.com/misc/GrktnAmFinRes.pdf http://bankrupt.com/misc/GrktnAddFinInf.pdf A redlined copy of the Liquidation Analysis is available for free at http://bankrupt.com/misc/GrktnAmExBRed.pdf The Debtors also presented to the Court an exit financing term sheet, which contemplates an exit facility of up to $290 million to be provided by a syndicate of lenders and to be arranged by Banc of America Securities LLC and Wells Fargo. Proceeds of the Exit Facility will be used to refinance the indebtedness set forth in the Plan. A full-text copy of the Exit Financing Term Sheet is available for free at: http://bankrupt.com/misc/GrktnPlanTrmSht.pdf Furthermore, the Debtors submitted to the Court a redline version of the Second Amended Disclosure Statement, a full-text copy of which is available for free at: http://bankrupt.com/misc/Grktn2ndAmDSRed.pdf The Luna Plan Sponsors also presented to the Court an Amended Disclosure Statement on August 28, 2009, reflecting, among others, additional information on the company structure of the Luna Sponsors, the addition of Class 40 Deficiency Claims, clarifications of the treatment of certain claims, and the creation of a litigation trust. Clean and redlined copies of the August 28 Luna Disclosure Statement are available for free at: http://bankrupt.com/misc/GRKTWN_Aug28LunaDS.pdf http://bankrupt.com/misc/GRKTWN_Aug28LunaDS_Red.pdf Discovery Requests & Deposition Notices In connection with Plan confirmation process and pursuant to Section 33 and 34 of the Federal Rules of Civil Procedure, the Debtors served their first set of discovery requests separately on MFC Global Investment Management U.S. LLC and Deutsche Bank Trust Company Americas on September 8, 2009. Among others, the Debtors seek information on the identity of witnesses MFC and Deutsche Bank may call at the Confirmation Hearing, the documents MC and Deutsche Bank may offer as exhibit at the Confirmation Hearing, and the bases for MFC's and Deutsche Bank's contention that the Debtors' Plan was not filed in good faith. Full-text copies of the Discovery Requests are available for free at: http://bankrupt.com/misc/GrktnDiscReq1.pdf http://bankrupt.com/misc/GrktnDiscReq2.pdf Also, Merrill Lynch, as a plan proponent of the Debtors' Plan and as administrative agent of the Debtors' Lenders, informed the Court on September 8, 2009, that it served notices of deposition on Deutsche Bank, MFC Global and the Creditors Committee. Merrill Lynch intends to conduct an oral examination of one or more representatives of the Deposition Parties on these dates: Deposition Party Date of Deposition ---------------- ------------------ Creditors Committee Oct. 19, 2009, 9:00 a.m. Deutsche Bank Oct. 20, 2009, 9:00 a.m. MFC Global Oct. 21, 2009, 9:00 a.m. Essentially, Merrill Lynch wants to take testimony from the Deposition Parties of their bases for contending that the Debtors' Plan should be denied confirmation. The examinations will take place at the offices of Schafer & Weiner PLLC, at 40950 Woodward Ave., Ste. 100, in Bloomfield Hills, Michigan. The depositions will continue day to day until completed. Merrill Lynch seeks that the Deposition Parties identify their representatives by October 2, 2009. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GREEKTOWN HOLDINGS: Differences Between Two Competing Plans ----------------------------------------------------------- Greektown Holdings LLC and its units, Merrill Lynch Capital Corporation as administrative agent of the Debtors' Lenders, Luna Greektown LLC and Plainfield Asset Management LLC have agreed on the form of a cover letter to accompany the Solicitation Packages to be sent out to creditors entitled to vote on the Competing Plans. The Competing Plans refer to the Chapter 11 Plan filed the Debtors and Merrill Lynch, as amended on August 26, 2009; and the Chapter 11 Plan filed by Luna and Plainfield Asset, as amended on August 28, 2009. Under the Cover Letter, the Competing Plan Sponsors noted the differences between their respective Plans: Debtors' Plan Luna Plan ------------------------ ------------------------ General Structure: Reorganized Debtors will Reorganized Debtors will issue 100% new equity on issue new equity having a pro rata basis to the an aggregate value of Prepetition Lenders. $485 million. Deemed Enterprise Value: $540 million $485 million Exit Financing: $275 million $275 million Cash Contribution: -- The Luna Sponsors will contribute new cash of $16.45 million and their prepetition secured claim for $11.17 million to the Reorganized Debtors. In exchange, the Luna Sponsors will get 29.41% of new Common Units and Plan Proponents Warrants, with the remaining 70.59% of the New Common Units to be distributed on a pro rata basis to the Prepetition Lenders. Alternative To continue to market None. Proposal: the Debtors' assets for sale. Claim Recovery Debtors' Plan Luna Plan ------------ ------------- --------- DIP Lenders 100% recovery 100% recovery Prepetition Lenders 98-99% recovery 77% recovery Trade Creditors of Greektown Casino 33.23% recovery 44.31% recovery Bondholder Claims Against Greektown Holdings 0% recovery depends on value of the Avoidance Actions General Unsecured Claims Against Greektown Casino 0.32% recovery 0.32% plus warrants Other General Unsecured Claims 0% recovery depends on value of the Avoidance Actions A copy of the Solicitation Package Cover Sheet and a more detailed list of the Competing Plan differences is available for free at http://bankrupt.com/misc/GRKTOWN_SolPackageCoverSheet.pdf About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GREEKTOWN HOLDINGS: Creditors Seek Discovery on Competing Plans --------------------------------------------------------------- The Official Committee of Unsecured Creditors in Greektown Holdings LLC's cases, Deutsche Bank Trust Company Americas, as indenture trustee, and MFC Global Investment Management ask the Court for authority to conduct discovery in relation to (i) the Debtors' Second Amended Joint Plan of Reorganization, and (ii) Luna Greektown LLC and Plainfield Asset Management LLC and its affiliates' First Amended Joint Plan of Reorganization, including any subsequent Plan amendments. As previously reported, the Creditors Committee, Deutsche Bank, and MFC Global objected to confirmation of the Debtors' Disclosure Statement, asserting that the Debtors' Plan significantly undervalues both the Debtors' enterprise and gaming license; relies upon deficient financial projections; and proposes a distribution scheme in violation of the Bankruptcy Code. Accordingly, Joel D. Applebaum, Esq., at Clark Hill PLC, in Birmingham, Michigan, contends that Discovery is thus critical to explore (i) how the Debtors and their professionals arrived at the Debtors' Plan valuations and projections, and (ii) whether the Debtors' Plan is actually feasible, passes the best interest of creditors test and has been proposed in good faith. Certain critical issues were excluded from discovery at the disclosure statement stage, with the understanding that the issues would be dealt with at the confirmation stage, Mr. Applebaum points out. He notes that Moelis & Company, the Debtors' financial advisor, has not produced documents and has not been deposed pursuant to an agreement by the parties that the discovery would be delayed until confirmation. Mr. Applebaum reminds the Court that the Debtors fiercely argued for limited disclosure statement discovery on the grounds that the requests are related to confirmation. Ultimately, the Debtors produced only a small portion of the documents requested and refused to produce either documents or witnesses deemed by the Debtors to be related to confirmation objections, which failed to light on numerous issues that are directly relevant to the confirmability of the Debtors' Plan. "Without further disclosure, the Debtors' Plan's feasibility is impossible to determine," Mr. Applebaum says. For these reasons, the Committee, MFC Global and Deutsche Bank seek to conduct more plan-related discovery. The Movants tell the Court that they may seek to depose: -- Clifford J. Vallier, the Debtors' chief financial officer and assistant manager; -- D. Joe McCoy, a member of the Debtors' Board of Directors; -- Jake Miklojcik, a member of the Debtors' Board of Directors; -- Louis Glazier, a member of the Debtors' Board of Directors; -- Merrill Lynch Capital Corporation; -- Moelis & Company by Thane Carlson, Co-Head of Recapitalization and Restructuring Group, investment banker of the Debtors, or any other officer, director, or employee of Moelis that will be called as an expert witness; -- The Fine Point Group LLC by Randall Fine, managing director, chief executive officer of the Debtors; and -- Conway MacKenzie & Dunleavy by Charles Moore and Alex Calderone, financial advisor to the Debtors, or any other officer, director, or employee of CMD that will be called as an expert witness. The Movants add that they may also ask the production of documents from the Deposition Parties. With regard to the Luna Plan, Mr. Applebaum contends that the Committee, Deutsche Bank and MFC Global have not had any opportunity to conduct discovery. As a result, discovery will be needed with respect to: (1) the Luna Plan Proponents' determination of the Debtors' "going concern" or "business enterprise" value; (2) the value, if any, that the Luna Plan Proponents attribute to the Debtors' gaming license; (3) the value, if any, that the Luna Plan Proponents attribute to the Debtors' non-core assets; (4) the justification for the Competing Proposal and Other Restructuring Transactions; (5) who prepared the Luna Plan Proponent's Plan; (6) on what information or valuation was the Luna Plan based; (7) how and with whom the Luna Plan was negotiated; and (8) Luna's efforts to obtain exit financing and the terms of exit financing. Without the requested discovery, the Committee, et al., say they will be unable to determine the feasibility of the Luna Plan, and whether the Plan's treatment of creditors satisfies the best interest test. Parties React These parties filed responses to the Discovery Request of the Committee, MFC Global and Deutsche Bank: -- the City of Detroit, which concurs to the relief sought by the Movants and asks permission to participate in the discovery; -- the Debtors, who argue that the Movants requests are substantially duplicative, overly burdensome, and unreasonable; -- the Fine Point Group, which joins in the Debtors' objection; and -- in separate filings, Merrill Lynch Capital Corporation, Luna Greektown LLC, and Plainfield Asset Management LLC, who assert that the documents sought by the Movants are subject to attorney-client privileges. The Debtors maintain that the Movants have already received a large amount of significant relevant information and documents, which rendered the Movants' additional requests duplicative. The Debtors further note, in a separate filing, that they agree to the general proposition that parties-in-interest should be permitted to take discovery from each other in connection with the confirmation hearing on their Second Amended Plan and the Luna Plan. The Debtors, however, do not concur in the scope of the Movants' discovery requests. Fine Point contends that the Movants seem to seek discovery to assist them in the preparation for objections to confirmation of each of the Plans, since both Plans essentially leave the Movants and their constituents "out of the money." In a subsequent filing, Fine Point tells the Court that it reached out to the Movants in an effort to resolve the dispute, however, the Movants seem unwilling to move off from their current requests. For these reasons, the Debtors and Fine Point ask the Court to deny the Movants' Request. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HERON LAKE: Posts $12.8MM Net Loss in Nine Months Ended July 31 --------------------------------------------------------------- Heron Lake Bioenergy, LLC posted a net loss of $3,785,147 for three months ended July 31, 2009, compared with a net income of $5,709,514 for the same period in 2008. For nine months ended July 31, 2009, the Company posted a net loss of $12,809,885 compared with a net income of $16,425,332 for the same period in 2008. The Company's balance sheet at July 31, 2009, showed total assets of $113,605,678, total liabilities of $75,832,380 and a members' equity of $37,773,298. The Company said that there is substantial doubt about its ability to continue as a going concern. The Company noted that at July 31, 2009, as at April 30, 2009, and Jan. 31, 2009, the Company was out of compliance with the minimum working capital requirement provision of its master loan agreement with AgStar Financial Services, PCA. In addition, the Company anticipates that the minimum net worth and fixed charge coverage ratio covenants will not be met through or as of fiscal year end 2009 unless amended. At Jan. 31, 2009, the Company reclassified the long-term debt related to this agreement to current liabilities because the Company was not in compliance with the minimum working capital requirement. That reclassification remains as of July 31, 2009, because of the actual and anticipated covenant default. Additionally, the Company expensed the remaining unamortized loan costs totaling approximately $445,000 associated with this debt during the quarter ended Jan. 31, 2009. If AgStar exercises its right to accelerate the maturity of the debt outstanding under the master loan agreement or the line of credit, the Company will not have adequate available cash to repay the amounts currently outstanding at July 31, 2009. Further, while an event of default exists, the Company is not permitted to borrow additional funds under its line of credit or revolving term note without AgStar's consent. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?44b8 Heron Lake Bioenergy, LLC -- http://www.heronlakebioenergy.com/ The Company owns and operates a 50 million gallon ethanol plant near Heron Lake, Minnesota with ethanol distribution to upper Midwest states. In addition, the Company produces and sells distillers grains with solubles as co-products of ethanol production. HUNTINGTON BANCSHARES: Fitch Affirms Issuer Default Rating ---------------------------------------------------------- Fitch Ratings affirms Huntington Bancshares, Inc. and Huntington National Bank's ratings, including the Long-term Issuer Default Rating at 'BBB' and 'BBB+', respectively. The Rating Outlook remains Negative. Improving HBAN's relatively low tangible common equity position had been an area of focus for management in 2009 and efforts to boost tangible common equity have been successful. Largely through the issuance of new common stock, the company has raised its tangible common equity to assets ratio approximately 200 bps since year end 2008 (YE08) with the bulk of the capital raising being completed in second quarter-2009 (2Q'09). HBAN also recently announced an additional $150 million equity issuance, which will complete the company's previously announced capital raising efforts. Fitch's April 2009 rating action (ratings downgraded to current levels) reflected the view that HBAN's earnings will be pressured for the remainder of 2009 as nonperforming loans and credit costs pressure the bottom line. This view remains unchanged. Additionally, Fitch was concerned with HBAN's low levels of tangible common equity and the relatively high level of preferred in the capital structure which could hinder holding company financial flexibility. Reflecting this, the notching between the bank and the holding company as well as holding company and certain preferred issues was widened to further indicate the heightened level of pressure for the company to address capital issues and enhance holding company financial flexibility. While the company's efforts to date have been successful and remove some near-term ratings pressure, the continued difficult operating environment indicates that operating losses over the near term are likely to continue. Additionally, Fitch expects that asset quality metrics will likely weaken further, especially in the commercial real estate portfolio maintaining the negative pressure and Negative Outlook on the company's ratings. That said, the increased capital and liquidity at the holding company has improved financial flexibility. Fitch believes the holding company has sufficient cash (currently approximately $1.2 billion) to support relatively nominal near-term obligations. However, Fitch expects the holding company will need to downstream capital to the bank over the coming quarters to offset operating losses. Fitch will maintain the notching between the bank and holding company until greater clarity is apparent that holding company resources are sufficient to meet bank capital needs, while still providing the holding company with adequate flexibility to meet its own needs, including preferred dividends. Fitch has affirmed these ratings: Huntington Bancshares, Inc. -- Long-term Issuer Default Rating at 'BBB'; -- Short-term IDR at 'F2'; -- Individual at 'C'; -- Preferred stock at 'BB'; -- Support at '5'; -- Support Floor at 'NF'. Huntington National Bank -- Short-term debt FDIC guaranteed under TLGP at 'F1+'; -- long-term debt FDIC guaranteed under TLGP at 'AAA'; -- Long-term deposits at 'A-'; -- Long-term IDR at 'BBB+'; -- Senior unsecured at 'BBB+'; -- Subordinated debt at 'BBB'; -- Short-term IDR at 'F2'; -- Short-term deposits at 'F1'; -- Individual at 'C'; -- Support at '5'; -- Support Floor at 'NF'. Huntington Capital I-III -- Preferred stock at 'BB+'. Sky Bank -- Subordinated debt at 'BBB'. Sky Financial Capital Trust I-IV -- Preferred stock at 'BB+'. The Rating Outlook for Huntington Bancshares, Inc., and Huntington National Bank is Negative. INNOVATIVE SPINAL: Integra Acquires Assets for $9.25 Million ------------------------------------------------------------ Joao-Pierre Ruth at NJBIZ.com reports that Integra LifeSciences Holdings Corp. said that it acquired Innovative Spinal Technologies Inc.'s assets for $9.25 million through an auction. According to NJBIZ.com, Integra LifeSciences acquired Innovative Spinal's: -- product inventory, -- trademarks, and -- a portfolio of more than 100 patents and patent applications. Innovative Spinal Technologies filed for Chapter 7 bankruptcy protection on May 15, 2009 (Bankr. D. Mass. Case No. 09-14415). ISAAC SANDERS: Files for Bankruptcy, Faces Sexual Assault Lawsuit ----------------------------------------------------------------- The Associated Press reports that former East Stroudsburg University Vice President for Advancement Isaac Sanders has filed for bankruptcy, listing more than $200,000 in debt. According to The AP, six current and former students filed a lawsuit against Mr. Sanders in February 2009, claiming that he either attacked them or used gifts and scholarships to pressure them for sex, which he denied. The AP relates that Mr. Sanders' bankruptcy filing listed a $150,000 claim from the suit. The AP states that arguments in the civil case will be heard in federal court in January. LANDAMERICA FINANCIAL: Files Joint Liquidation Plan --------------------------------------------------- LandAmerica Financial Group, Inc., and LandAmerica 1031 Exchange Services, Inc., filed on September 9, 2009, with the United States Bankruptcy Court for the Eastern District of Virginia, Richmond Division, a form of proposed joint plan of liquidation and a corresponding form of proposed disclosure statement. The primary purpose of the Plan is to sell substantially all of the Debtors' assets in an expeditious manner and to distribute the proceeds to creditors. The Plan is a non-substantively consolidated liquidating plan, which generally means that it will effectuate the liquidation of LFG and its Debtor subsidiaries, and that the proceeds of the liquidation of each legal entity will be distributed to the creditors of that entity, rather than pooled together in one common fund for distribution to all creditors. The Plan contemplates, among other terms, for the cancellation of LFG's common stock upon the effective date of the Plan. The holders of LFG common stock are not expected to participate in any future distribution of cash or other property from LFG's estate. The Plan provides for these creditor recoveries: Treatment & Class Description of Claim Est. Recovery ----- -------------------- ------------- LES 1 LES Priority Non-Tax Claims Not impaired, not entitled to vote, 100% LES 2 LES Secured Claims Not impaired, not entitled to vote ___% LES 3 LES Escrow Exchange Claims Entitled to vote, 97% LES 4 Segregated Exchange Entitled to vote, Principal Claims ___% LES 5 Note Exchange Entitled to vote, Collectible Claims ___% LES 6 LES General Unsecured Claims Entitled to vote, ___% LES 7 LES Damages Claims Entitled to vote, [0]% LES 8 LES Equity Interests Entitled to vote, [0]% LFG 1 LFG Priority Non-Tax Claims Not impaired, not entitled to vote, ___% LFG 2 LFG Secured Claims Not impaired, not entitled to vote ___% LFG 3 LFG General Unsecured Claims Entitled to vote, ___% LFG 4 LFG Exchange Guarantee Entitled to vote, Claims ___% LFG 5 LFG Securities Law Claims Entitled to vote, ___% LFG 6 LFG Equity Interests Not entitled to vote, 0% SD 1 Subsidiary Priority Non-Tax Not entitled to Claims vote, ___% SD 2 Subsidiary Secured Claims Not entitled to vote, ___% SD 3 Subsidiary General Entitled to vote Unsecured Claims ___% SD 4 Subsidiary Equity Interests Entitled to vote, ___% On the Effective Date, a liquidating trust for each Debtor will be created to prosecute the legal causes of action held by the Debtors, and to administer the liquidation and distribution of the assets of each Debtor, including the sale or dissolution of the non-Debtor subsidiaries of LFG. Between $2.5 million and $5 million in cash will be reserved from each of the estates of LFG and LES to fund the activities of their respective Trusts. The Trusts shall terminate once all of the assets that they are liquidating, including the claims and causes of action of the Debtors, are monetized, distributed or abandoned, but in no event later than the fifth anniversary of the Effective Date, unless an extension has been approved by the Bankruptcy Court. The official committees of unsecured creditors for LandAmerica Financial Group and LandAmerica 1031 Exchange Services support confirmation of the Plan and urge all holders of claims whose votes are being solicited to accept the plan. The hearing to approve the Disclosure Statement and solicitation procedures is scheduled for October 13, 2009, as may be adjourned by the Bankruptcy Court from time to time. The deadline to object to the adequacy of the Disclosure Statement is October 5, 2009. The Debtors said nothing in the Plan or Disclosure Statement should be construed as constituting a solicitation of acceptances of the Plan unless and until the Disclosure Statement has been approved by the Bankruptcy Court and distributed to holders of claims and interests as and to the extent required by Bankruptcy Code section 1125. There can be no assurance that the Disclosure Statement will be approved by the Bankruptcy Court, that the Plan will be confirmed by the Bankruptcy Court, or, if confirmed, that the Plan will become effective, the Debtors added. A full-text copy of the Disclosure Statement filed September 9 is available at no charge at http://ResearchArchives.com/t/s?44c8 A full-text copy of the Plan filed September 9 is available at no charge at http://ResearchArchives.com/t/s?44c9 About LandAmerica Financial LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Dion W. Hayes, Esq., and John H. Maddock III, Esq., at McGuireWoods LLP, are the Debtors' bankruptcy counsel. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LEAR CORP: Creditors Committee Supports Reorganization Plan ----------------------------------------------------------- Lear Corporation is soliciting votes from impaired creditors for its proposed reorganization plan with a letter of support from the Official Committee of Unsecured Creditors. The Creditors Committee says the Plan benefits the holders of general unsecured claims. Among other things, the Plan proposes to (i) pay trade claims in full, (ii) provide a meaningful recovery for other unsecured creditors (especially compared to the treatment in many other automotive chapter 11 cases), and (iii) assume and honor pension obligations, domestic collective bargaining agreements, and retiree benefits without modification. The Committee believes that it is important for the Debtors to confirm the Plan quickly -- confirmation is now scheduled for November 2009 -- even ahead of the targeted deadlines set pre- bankruptcy by the Debtors. The Committee, therefore, recommends that all creditors review the Plan and Disclosure Statement enclosed herewith and vote in favor of the Plan. Meanwhile, the Chamberlain Group, Inc., and Johnson Controls Interiors, LLC, object to the approval of the Disclosure Statement saying that it does not contain "adequate information" as required by Section 1125(b) of the Bankruptcy Code. Approval of the Disclosure Statement is required before Lear can begin solicitation of votes on the Plan. Chamberlain and Johnson are creditors and plaintiffs in a patent infringement litigation against the Lear Corporation. Karl R. Fink, Esq., at Fitch, Even, Tabin & Flannery, in Chicago, Illinois, attorney for The Chamberlain Group, Inc., asserts that Lear's failure to identify the patent litigation with Claimants and reveal the potential effects of that litigation renders the information in its Disclosure Statement inadequate. Mr. Fink adds that a judgment against Lear would: (a) result in a significant postpetition money judgment that would be a default under Lear's debtor-in-possession financing agreement, a default under Lear's exit financing agreement if the debtor-in-possession financing is converted into exit financing and a default under Lear's prepetition plan support agreements with its lenders if action is taken under the DIP Financing in respect of that event of default; (b) prevent Lear from continuing one of its major lines of business, thereby causing significant loss in revenues and enterprise value; and (c) result in the allowance of a large prepetition claim that would dilute the recoveries of other creditors. Mr. Fink avers that without information about these matters, creditors in the impaired classes will be unable to make an informed judgment about the Plan. Copies of the Debtors' 1st Amended Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/Lear_1stAmPlan.pdf http://bankrupt.com/misc/Lear_1stAmDisclosure.pdf About Lear Corp Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India and Mexico, among others. Lear Corporation and its affiliates filed for Chapter 11 on July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Affiliates part of the Chapter 11 filing include Lear South Africa Limited, Lear Corporation (Germany) Ltd., Lear Corporation Canada Ltd., Lear Mexican Holdings Corporation, and Lear South American Holdings Corporation. Attorneys at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. McCarthy Tetrault LLP has been engaged as CCAA counsel. Bodman LLP has been hired as special Michigan counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also been tapped as special counsel. Alvarez & Marsal North America LLC, is the Debtors' restructuring advisors. Ernst & Young LLP is the Debtors' auditors and tax advisors. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. Simpson Thacher & Bartlett LLP represents JP Morgan, as admin. agent for senior secured lenders and DIP lenders. As of May 30, 2009, Lear has assets of $1,270,800,000 against debts of $4,536,000,000. Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000) LEAR CORP: Seeks December 15 Extension of Removal Period -------------------------------------------------------- Lear Corp. and its affiliates are a party to dozens of civil actions pending in various state and federal courts. Many of the Civil Actions are subject to removal pursuant to Section 1452 of the Judiciary Procedures Code, which applies to claims relating to bankruptcy cases, says Marc Kieselstein, Esq., at Kirkland & Ellis LLP, in New York. The Debtors relate that their primary focus in the Chapter 11 Cases, thus, far has been advancing their restructuring efforts with the goal of a successful and expeditious emergence from bankruptcy. To that end, since the Petition Date, the Debtors have worked diligently on a number of critical matters. Specifically, the Debtors and their professionals have focused on, among other things: * stabilizing their businesses from an operational standpoint; * negotiating and obtaining final approval of their postpetition debtor-in-possession financing; * obtaining relief that has enabled them to continue operating their businesses, including obtaining approval to pay certain prepetition claims of their suppliers and other trade creditors; * negotiating commercial terms with many of their suppliers and other trade creditors; * negotiating and obtaining substantial consensus regarding their Plan and proposed restructuring among all major creditor constituents in the Chapter 11 Cases; * finalizing and filing the Plan and accompanying disclosure statement; and * preparing and filing their extensive schedules of assets and liabilities and statements of financial affairs. The Debtors assert that as a result of their attention to these critical matters, they have not yet completed a thorough analysis of the Civil Actions and have not yet decided whether to remove any of the Civil Actions. Accordingly, the Debtors ask the Court to extend the time within which they may file notices of removal with respect to any actions that are subject to removal under Section 1452 or Rule 9027 of the Federal Rules of Bankruptcy Procedure to the earlier of December 15, 2009, or the effective date of the Plan. The Debtors further ask that their request be without prejudice to: (a) any position the Debtors may take regarding the applicability of the automatic stay under Section 362 of the Bankruptcy Code, and (b) the Debtors' right to seek future extensions of the Removal Period. Rule 9027 and Section 1452 govern the removal of pending civil actions, says Mr. Kieselstein. Section 1452 provides that: "A party may remove any claim or cause of action in a civil action other than a proceeding before the United States Tax Court or a civil action by a governmental unit to enforce such governmental unit's police or regulatory power, to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under section 1334 of this title." Rule 9027 provides that: "If the claim or cause of action in a civil action is pending when a case under the [Bankruptcy] Code is commenced, a notice of removal may be filed in the bankruptcy court only within the longest of (A) 90 days after the order for relief in the case under the Code, (B) 30 days after entry of an order terminating a stay, if the claim or cause of action in a civil action has been stayed under Section 362 of the [Bankruptcy] Code, or (C) 30 days after a trustee qualifies in a chapter 11 reorganization case but not later than 180 days after the order for relief." However, Bankruptcy Rule 9006(b) provides in pertinent part, when an act is required or allowed to be done at or within a specified period by these rules or by a notice given thereunder or by order of Court, the court for cause shown may at any time in its discretion . . . with or without motion or notice order the period enlarged if the request therefor is made before the expiration of the period originally prescribed or as extended by a previous order. 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: Barclays Got at Least $5-Bil. Windfall From Deal ----------------------------------------------------------------- Lehman Brothers Holdings Inc. asks the Bankruptcy Court to modify the order it entered in connection with the fast-tracked sale of assets to Barclay's Plc, which received a $5 billion windfall as part of its asset purchase. Lehman Brothers, which is now headed by Bryan Marsal of Alvarez & Marsal, says the sale order was entered on an inaccurate record due to "mistake, inadvertence or misrepresentations to the Court." Lehman Brothers, which filed hundreds of pages of documents to defend its allegations, says there were multiple factors that led to that result, including (i) the failure of certain Lehman and Barclays representatives to disclose key components of the transaction as it was originally presented to the Court on September 17, 2008; (ii) the failure to disclose critical changes in the deal that took place between September 17, and the hearing held on Friday, September 19 to approve the sale transaction; and (iii) the failure to disclose critical changes in the deal that were made after the Court issued the sale order and before the transaction closed on September 22. The fact is that the deal was actually structured to give Barclays an immediate and enormous windfall profit, says Robert W. Gaffey, Esq., at Jones Day, representing Lehman. According to Mr. Gaffey, certain Lehman executives agreed to give Barclays an undisclosed $5 billion discount off the book value of securities transferred to Barclays, and later agreed to give billions more in so-called "additional value" that Barclays demanded, but the Court never approved. He relates that this immediate windfall to Barclays (i) was not disclosed to the boards of LBHI or LBI, (ii) was not revealed in the agreement the Court was asked to approve, and (iii) was never disclosed to the Court until now. To right the wrong that resulted, it is not necessary for the Court to undo the sale, Lehman Brothers says. "Rather, the Court needs only to require Barclays to return to the Sellers' estates the value it took in excess of what the Sellers were entitled to convey based on the record before the Court." Meanwhile, Hugh Son at Bloomberg reports that billionaire Warren Buffett said he was approached a year ago about insuring Lehman LBHI's assets while Barclays weighed a bid for the investment bank. Mr. Buffett said he asked for material to be sent to him by facsimile and didn't receive the requested documents. 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: Administrators to Restructure Property Loans ------------------------------------------------------------- According to The Wall Street Journal, Bryan Marsal, chief restructuring officer of Lehman Brothers Holdings Inc., says they are restructuring loans at 900 properties in a bid to salvage the bankrupt firm $16 billion real estate assets. The Journal relates that Lehman is generating new loans or buying condominium mortgages to keep projects going. Lehman's property portfolio includes huge apartment blocks, offices, and condominiums, and the way it handles them may be used as a blueprint by other banks faced with troubled real estate assets. 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: Judge OKs Mediation for Derivative, Swap Disputes ------------------------------------------------------------------ Lehman Brothers Holdings Inc. and its affiliated debtors obtained authority from Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York to implement a set of procedures for prosecuting their claims under pre-bankruptcy derivative contracts with monetary recovery potential. As of September 15, 2008, the Debtors have more than 900,000 derivative contracts, most of which have recovery potential, according to Lori Fife, Esq., at Weil Gotshal & Manges LLP, in New York. Those contracts, she says, are "in the money" to the Debtors, constituting significant assets of their estates. Ms. Fife told the Court that given the complex nature of the contracts, the enforcement of the Debtors' claims could result in litigation that may cause delay in the administration of their bankruptcy and loss of the current value in those contracts. Accordingly, the Debtors proposed alternative dispute resolution procedures to reduce the cost associated with enforcing the Debtors' affirmative claims under the derivative contract with recovery potential, preserving the value available under such contracts, and promoting judicial efficiency in these complex Chapter 11 cases. Under the Court-approved procedures, the Debtors will designate a dispute as to any derivative contract with recovery potential by serving a copy of an order approving the proposed procedures on the counterparty, and a notice containing information about their claim and demand for settlement to be determined through consultation with the Official Committee of Unsecured Creditors. Each of the Debtors and the counterparty served with the order and notice have to comply with the procedures, unless otherwise provided in a specific order applicable to a particular dispute. The procedures do not require the Debtors and the counterparty to settle any dispute but each party is required to serve and answer in response to the proposed settlement; engage in settlement discussions; participate in any mediation; follow the directions of the mediator;, and follow the procedures. Prior to the Court's approval of the procedure, various parties objected. Barclays Bank PLC, Russell Investment Group, The Bank of New York Mellon, and several other companies objected to the proposed process on grounds that the process is overly burdensome, and is procedurally biased in favor of the Debtors, among other things. 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: Numerix to Provide Valuation on Derivatives Deals ------------------------------------------------------------------ Numerix has been selected by Lehman Brothers Holdings Inc. to provide independent real time valuations in the largest, most comprehensive derivatives valuation project of its kind, to date. The signing of Numerix is a critical step in unwinding LBHI's derivatives book and the ultimate reconciliation of outstanding creditor claims. "Lehman performed an extensive search to identify a partner that could provide the analytics and technology capable to value the depth and breadth of derivatives products that were transacted in the Lehman derivatives portfolios," said Daniel Ehrmann, Managing Director of Alvarez & Marsal and co-head of LBHI's Derivatives Asset Team. "It became clear that Numerix was best positioned not only to provide LBHI with the valuations we need to resolve derivatives claims, but also to flex the market inputs and transaction terms to ensure that those valuations are reasonable." LBHI selected Numerix to accelerate the resolution of intercompany accounts and systems and resolve derivative claims. The Numerix team of on-site financial engineers sit side-by-side with LBHI traders and risk managers and provide ad hoc, real-time valuation services along with software support and project management. Numerix is actively aggregating existing trade information from all of LBHI's legacy systems onto a single platform -- Numerix Portfolio -- and providing independent valuations on the entire LBHI book. The selection of Numerix was approved by the U.S. Bankruptcy Court, Southern District of New York (Manhattan) in April of 2009. "We are honored to be working on the most unique and unquestionably the largest valuation deal in history," said Steven R. O'Hanlon, President and COO of Numerix. "Numerix brings the best capabilities and focus to providing LBHI with a single platform and the analytics necessary for the ultimate resolution of its intercompany accounts and the integration of existing legacy systems. We are delighted to be partnering with the derivatives team on this important and exciting mandate." Numerix -- http://www.numerix.com/-- is an independent service provider of cross-asset analytics for structuring, pre-trade price discovery, trade capture, valuation and risk analysis of derivatives and structured products. Since its inception in 1996, more than 375 financial institutions and 45 strategic partners across 25 countries rely on Numerix analytics in valuing and managing financial instruments. Numerix has offices in New York, London, Tokyo, Hong Kong, Singapore and Dubai. 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: LB 2080 Proposes to Reject 13 Contracts & Leases ----------------------------------------------------------------- Debtor LB 2080 Kalakaua Owners LLC seeks the Court's authority to reject, effective August 26, 2009, 13 executory contracts and non-residential real property leases with these counterparties: Counterparties Contract Date -------------- ------------- CB Richard Ellis Hawaii Inc. 11/01/2004 CB Richard Ellis Inc. 02/05/2009 Chem Systems Inc. 09/10/2001 Elite Mechanical 11/10/1998 Hawaiian Building Maintenance 08/19/2002 Nike Retail Services Inc. 08/07/1995 Oceanfront Hawaii Inc. 07/01/2003 SimplexGrinnell 01/01/2006 Standard Parking 11/17/1997 Tenance Co LLC 08/21/2000 World Wide Window Cleaning 09/07/2005 Mitsubishi Elevators and Escalators Inc. 10/26/1998 Shai Waisman, Esq., at Weil Gotshal & Manges LLP, in New York, says LB 2080 no longer needs the contracts and leases and that they represent a drain on its estate and resources. Mr. Waisman will present a motion on the proposed rejection of the contracts and leases to Judge James Peck for signature on September 4, 2009. Creditors and other concerned parties have until September 3, 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) LYONDELL CHEMICAL: Files Joint Chapter 11 Plan of Reorganization ---------------------------------------------------------------- Lyondell Chemical Company and its 93 debtor affiliates delivered to the United States Bankruptcy Court for the Southern District of New York their Joint Chapter 11 Plan of Reorganization and accompanying Disclosure Statement on September 11, 2009. Debtors' counsel, Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, says that the Debtors' Plan rationalizes the Debtors' balance sheet and incorporates a restructuring that accomplishes two goals: (1) structuring the postpetition enterprise in a way to maximize tax, reporting, and systems efficiencies, and allow for tradable equity; and (2) limiting or eliminating the impact of guarantees issued by non-filing European entities and discharge obligations of European entities with respect to a certain "Bridge Loan Agreement" and "2015 Notes." The Bridge Loan Agreement, dated as of December 20, 2007, as amended and restated on April 30, 2008 and October 17, 2008, is among LyondellBasell Finance Company, the Obligor Debtors, the Obligor Non-Debtors, Merrill Lynch Capital Corporation, as administrative agent; Citibank, N.A., as collateral agent; Merrill Lynch, Pierce, Fenner & Smith Inc., Goldman Sachs Credit Partners, L.P., Citigroup Global Markets Inc., ABN AMRO Inc., and UBS Securities LLC, as joint lead arrangers, and the Bridge Lenders. The 2015 Notes, on the other hand, refers to the 8.375% senior notes due 2015 in the principal amounts of $615 million and EURO500 million issued pursuant to the 2015 Notes Indenture. Mr. Palmer notes that the restructuring incorporated in the Plan, among others: (i) simplifies the overall corporate structure; (ii) simplifies financial and tax reporting; (iii) solves numerous tax basis/reporting/consolidation issues; (iv) matches business reporting with legal structure and applicable financial reporting systems; and (v) concentrates accounts receivable and inventory into fewer legal entities. To effectuate structuring of the postpetition enterprise, the Debtors may (i) cause any or all of the Debtors to be merged into one or more of the Debtors or dissolved; (ii) cause transfer the assets between or among the Debtors; or (iii) engage in any other transaction in furtherance of the Plan. Any of those transactions will be effective as of the Plan Effective Date without any further action by the stockholders of directors of the Debtors, or any other person, Mr. Palmer says. In addition, on or after the effective date of the Plan, and in the Reorganized Debtors' discretion, certain transactions to be listed in a schedule to be filed in a Plan Supplement will be effectuated to simplify the overall corporate structure of the Reorganized Debtors. LyondellBasell will have this simplified organizational structure following the Plan Effective Date: Creditors New Shareholders | | New Topco N.V. | --------------------------------- | | LyondellBasell LyondellBasell Finance Company Holdings B.V. | | | | LBFC LBIH and its Subsidiaries Subsidiaries (U.S. entities/ (non-U.S. entities/ operations) operations) The Plan provides that the Reorganized Debtors will continue to operate under a non-U.S. parent company and intend to organize their new parent company, New Topco, in The Netherlands. New Topco will be a public limited liability company (naamloze vennootschap) formed under the laws of The Netherlands. The initial members of the supervisory board of New Topco will be disclosed at or before the Confirmation Hearing. Each of the members of the initial board will serve in accordance with applicable Dutch law, the New Topco Supervisory Board charter, applicable corporate governance principles and the New Topco Articles of Association, as the same may be amended from time to time. As of the Plan Effective Date, the initial New Topco Manager will be newly incorporated LyondellBasell Holdings B.V., a wholly owned subsidiary of New Topco. LBHBV will have five directors, one of whom will be the Chief Executive Officer, one of whom will be the Chief Operating Officer/Chief Financial Officer and three of whom will be key employees who are Dutch residents. New Topco's Manager will be appointed by the shareholders of New Topco every four years for a four year term. The New Topco Articles of Association and the New Topco Supervisory Board charter will provide that New Topco will be represented by the New Topco Supervisory Board with respect to the appointment by New Topco as shareholder of LBHBV of the members of LBHBV's management board. According to Mr. Palmer, although the Debtors' Chapter 11 cases are jointly administered pursuant to an order of the Bankruptcy Court, the Debtors are not proposing the substantive consolidation of their estates. Thus, although the Plan generally applies to all of the Debtors, (i) the Plan constitutes 94 distinct Chapter 11 plans, one for each Debtor, (ii) for voting purposes, each holder of a Claim in a Class will vote its Claims in that Class by individual Debtors, and (iii) the claims classification scheme in the Plan applies to each Debtor. Moreover, the Debtors are submitting a Joint Plan covered by a single Disclosure Statement, to simplify drafting and avoid duplicative costs relating to distribution of multiple plans and disclosure statements, he says. Although the plans for the Debtors are substantially similar, there are variances in certain Classes and distributions depending on whether the applicable Debtor is: (i) an Obligor Debtor, (ii) a Obligor Debtor with unencumbered assets that may be available to its General Unsecured Creditors like Lyondell Chemical and Basell USA Inc., and (iii) a Non-Obligor Debtor, explains Mr. Palmer. An Obligor Debtors means those Debtors that are obligors, issuers, borrowers or guarantors under the Debtors' Senior Secured Credit Agreement, the Bridge Loan Agreement, and the 2015 Notes Indenture. Nov. 30 Confirmation Hearing The Debtors ask the Court to set November 30, 2009, as the hearing date to consider confirmation of the Plan. Objections to confirmation of the Plan must be filed with the Court and served so as to be actually received no later than November 23, 2009. Global Restructuring, Release of Bridge Guarantee Claims and 2015 Notes Guarantee Claims Mr. Palmer notes that certain Obligor Non-Debtors are obligated under the Bridge Loan Agreement and 2015 Notes Indenture. Pursuant to an Intercreditor Agreement, the debt under the Bridge Loan Agreement is secured by liens junior to those securing the debt under the Senior Secured Credit Agreement, and the 2015 Notes are contractually subordinated. To effectuate the bargained-for priorities among the Senior Secured Lenders, the Bridge Lenders and the 2015 Noteholders, the Plan provides for an "Enforcement Sale" against collateral pledged by the Obligor Non-Debtors, thereby releasing them of any liens and claims of the Bridge Lenders and claims of the 2015 Noteholders. The resulting distribution scheme under the Plan, therefore, takes into account the value of the 2015 Notes Claims and Bridge Claims against Non-Debtor Affiliates. Specifically, the Plan provides that on or prior to the Effective Date, these transactions will be effectuated in the order set forth: * New Topco is formed outside the existing corporate structure of LyondellBasell. New Topco may be formed prior to the Effective Date. * New Topco forms LBHBV, which may be formed prior to the Effective Date. * LyondellBasell Industries Holdings B.V., the direct parent of Basell Germany and certain non-U.S. Non-Debtor Affiliates, distributes its single share of LyondellBasell Industries AF S.C.A. to non-Debtor Basell Funding S.a.r.l. * The holders of Senior Secured Claims and Bridge Loan Claims will transfer their claims against the Obligor Non-Debtors and Basell Germany -- including guarantee claims, liens, rights and interests under the Senior Secured Credit Agreement and the Bridge Loan Agreement -- to New Topco in exchange for New Common Stock and any other consideration they are to receive under the Plan other than Subscription Rights. * New Topco will contribute the claims and security interests to LBHBV. * The security agent under the Intercreditor Agreement will sell the stock of LBIH -- subject to its senior secured debt -- to LBHBV for a nominal amount of cash, thereby releasing all guarantee claims and liens against Obligor Non-Debtors under the 2015 Notes Indenture and the Bridge Loan Agreement. Obligations of Obligor Debtors will be Discharged pursuant to the Plan. * Pursuant to the Plan, Debtor LyondellBasell Finance Company will cancel its existing stock and will issue new capital stock to New Topco. * LBFC may assign a portion of the LCC/LBFC Intercompany Note -- the intercompany note in the approximate amount of $7.2 billion owed by Lyondell Chemical to LBFC -- to New Topco in consideration for cash and a portion of the New Common Stock. New Topco will transfer the remaining New Common Stock to be issued on account of Claims against the U.S. Debtors to LBFC as a capital contribution. LBFC will contribute as capital the remainder of the LCC/LBFC Intercompany Note to Lyondell Chemical. All distributions of New Common Stock to holders of Claims against the U.S. Debtors will be made by LBFC or a subsidiary of LBFC, and the value of the New Common Stock will be equal to the net value of the U.S. Debtors. * Pursuant to the Plan, LBIAF and its general partner, LyondellBasell AF GP S.a.r.l., will be liquidated or dissolved. In addition, the North American Restructuring will occur. Rights Offering Pursuant to a rights offering sponsor agreement among New Topco, the Debtors and a Rights Offering Sponsor, New Topco has agreed to sell certain shares of its New Common Stock in a Rights Offering at a subscription purchase price of New Common Stock aggregating $3 billion. On the Effective Date, the Rights Offering Sponsor will purchase any unsubscribed shares at a price per share of New Common Stock. No Subscription Rights may be exercised for fractional shares of New Common Stock. The closing date of the Rights Offering will be the Effective Date of the Plan. On the Effective Date, the proceeds received by New Topco from the Rights Offering will be used to fund emergence and provide necessary post-emergence liquidity Listing of New Common Stock New Topco will use its reasonable efforts to cause the shares of New Common Stock to be listed on the New York Stock Exchange as soon as reasonably practicable after the Effective Date. New Topco will use its commercially reasonable efforts to file a Form 10 with the Securities and Exchange Commission and seek to have the Form 10 be declared effective by the Commission as soon as reasonably practicable after the Effective Date in order to enable the shares of New Common Stock to be listed on the New York Stock Exchange. Prior to the listing of the shares, the Debtors expect that the New Common Stock will be held in global form by a transfer agent in the form of one or more bearer global share certificates for the account of Cede & Company, the nominee of the Depository Trust Company. Subject to compliance with Dutch law and the rules of the Depository Trust Company, transfers of New Common Stock prior to listing may only be made by the transfer of a book entry position in the relevant global bearer share certificate. Securities to be Issued The New Notes will have (i) a present value equal to all accrued principal and interest due with respect to the DIP Roll-Up Loans as of the effective date of the Plan; (ii) maturity not exceeding the earlier of (a) the date that is five years from the Effective Date, and (b) the earliest maturity or redemption date applicable to any of the Senior Secured Credit Facility or Bridge Loan Facility or any securities or financial instruments that replace the Senior Secured Credit Facility; and (iii) affirmative and negative covenants and events of default as agreed upon by the parties and will enjoy guarantees and security as provided in the DIP Term Loan Agreement. The terms of the New Notes will be included in a Plan Supplement to be submitted by the Debtors. Moreover, pursuant to a New Topco Articles of Association in effect upon emergence, New Topco will be authorized to issue shares of New Common Stock and will not have any authorized shares of preferred stock. Upon consummation of the Plan, the shares of New Common Stock are expected to be outstanding. Each share of New Common Stock will have a nominal value of EUR0.04, will carry one vote in New Topco's general meeting of shareholders and will be entitled to dividends to the extent declared on a record date on or after the issue date of the New Common Stock. The issuance of the New Common Stock and New Notes, if any, by a member of the Reorganized LyondellBasell and the issuance or guarantee, as applicable, by all securities, notes, stock, instruments, certificates and other documents or agreements required to be issued, executed or delivered to the Plan, and any actions necessary, will be authorized without further action under applicable law and regulation. Upon the Effective Date, the authorized capital stock or other equity securities of New Topco and the Reorganized Debtors will be set forth in the Plan Supplement. Litigation Reserved Common Stock The Official Committee of Unsecured Creditors appointed in the Debtors' Chapter 11 Cases is currently prosecuting the Committee Litigation against, among others, the Senior Secured Lenders and the Bridge Lenders seeking, among other things, to avoid certain of their liens and subordinate or disallow certain of their Claims. If the Committee Litigation is successful in avoiding the liens securing the Senior Secured Claims and Bridge Loan Claims or in avoiding or equitably subordinating the claims, some or all of the holders of Allowed General Unsecured Claims of certain of the Debtors may be entitled to a distribution. Accordingly, to preserve value for these holders of Allowed General Unsecured Claims in the event that the Committee Litigation is successful, an amount of shares of New Common Stock as determined by the Bankruptcy Court will be authorized and issued on the Effective Date and held in reserve, pending resolution or settlement of the Phase I Trial and Phase IA Trial. To the extent the Committee Litigation is successful, the Litigation Reserved Common Stock will be distributed, as determined by the Bankruptcy Court, to some or all of the holders of Allowed General Unsecured Claims as if it had been distributed on the Effective Date. Any residual amount of the Litigation Reserved Common Stock not distributed to holders of Allowed General Unsecured Claims will be distributed to the Senior Secured Lenders. To the extent the Committee Litigation is not successful, the Litigation Reserved Common Stock will be distributed to the Senior Secured Lenders pursuant to the Plan as if it had been distributed on the Effective Date. Intercompany Claims No distribution will be made with respect to Intercompany Claims, which will be fully subordinated and cancelled, left in place or compromises as determined by Reorganized LyondellBasell. Exit Facility On or before the Effective Date, Reorganized LyondellBasell will enter into an Exit Facility, which will contain terms and conditions as contemplated by a commitment letter that will be included in the Plan Supplement and approved by the Bankruptcy Court. Injunction for Non-Debtor Affiliates The Plan contains and provides for an injunction for the benefit of the Non-Debtor Affiliates. On the Effective Date and except as otherwise provided, all holders of Senior Secured Claims, Bridge Loan Claims and 2015 Notes Claims who assert claims against Non-Debtor Affiliates based on the Senior Secured Claims, Bridge Loan Claims and 2015 Notes Claims or any guaranty thereof, and all holders of claims against Non-Debtor Affiliates for which Debtors also are obligated will be permanently enjoined from taking (i) any action with respect to claims or causes of actions released pursuant to the Plan, (ii) commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding of any kind against the Non-Debtor Affiliates, (iii) enforcing, levying, attaching, collecting or otherwise recovering by any manner or means, whether directly or indirectly, any judgment, award, decree or order against the Non- Debtor Affiliates and (iv) creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any encumbrance against the Non-Debtor Affiliates. Closing of Chapter 11 Cases When all disputed claims against any Debtor have become Allowed or have been disallowed by final order, and no disputed matter remains outstanding, the Reorganized Debtors will seek the Bankruptcy Court's authority to close the applicable Debtor's Chapter 11 case. Early Payment The Plan will not prevent any of the Debtors or the Reorganized Debtors from making any payments prior to the date provided for in the Plan, and neither the Debtors nor the Reorganized Debtors will suffer any penalty from making those payments. Disbursement Trust On or before the Effective Date, a Disbursement Trust Agreement will be executed by the Schedule III Debtors and the Disbursement Trustee, and all other necessary steps will be taken to establish the Disbursement Trust and its beneficial interests, which will be for the benefit of the Disbursement Trust Beneficiaries, as provided in the Plan, whether their Claims are Allowed on or after the Effective Date. In the event of any conflict between the Plan and the terms of the Disbursement Trust Agreement, the terms of the Disbursement Trust Agreement will govern. A list of the Schedule III Debtors is available for free at: http://bankrupt.com/misc/LyondellSchedIIIDebtors.pdf Litigation Trust On or after the Effective Date, the Debtors or the Reorganized Debtors, as applicable, on their own behalf and on behalf of the holders of Allowed Class 7-A Claims, if any, will execute the Litigation Trust Agreement and will take all other steps necessary to establish the Litigation Trust in accordance with the Plan. The Debtors or the Reorganized Debtors and the Official Committee of Unsecured Creditors on behalf of holders of Allowed Class 7-A Claims will transfer to the Litigation Trust all of their right, title, and interest and the claims identified in the Case Management Order to be tried in the Phase I, Phase IA and Phase II Trials and their proceeds pursuant to an action commenced by the Creditors' Committee against the Debtors' secured lenders and directors. Moreover, the Plan Supplement will include a list of all causes of action being prosecuted that will be transferred to the Litigation Trust. Any recoveries on account of the causes of action transferred to the Litigation Trust will be distributed to holders of Allowed Class 7-A Claims in accordance with the Plan and the Litigation Trust Agreement. On the Confirmation Date, the Creditors' Committee will be dissolved and the Litigation Trustee will continue to prosecute any claims related to the Phase I, Phase IA and Phase II Trials. Equity Compensation Plan In addition, New Topco will adopt an Equity Compensation Plan, whereby New Topco will implement an equity-based program under which participants will receive either or some combination of restricted stock, restricted stock units, stock options, stock appreciation rights or other types of equity-based awards related to New Common Stock. The terms of the Equity Compensation Plan will be included in the Plan Supplement. Feasibility To determine whether the Plan satisfies the feasibility requirements of Section 1129(a)(11) of the Bankruptcy Code, the Debtors have analyzed their ability to meet their obligations under the Plan. As part of this analysis, the Debtors have prepared the projections. Based upon the Financial Projections, the Debtors believe that the Reorganized Debtors will be a viable operation following the Chapter 11 Cases thus, the Plan will meet the feasibility requirements of the Bankruptcy Code. A chart reflecting the Debtors' estimate of the future performance of the Reorganized Debtors and non-Debtors on an aggregate basis, for approximately the next five years, and the ten years thereafter may be accessed for free at: http://bankrupt.com/misc/Lyondell_PlanProjections.pdf Alternatives to Plan Confirmation If the Plan is not confirmed and consummated, the Debtors' alternatives include (i) liquidation of all of the Debtors under Chapter 7 of the Bankruptcy Code and (ii) the preparation and presentation of an alternative plan or plans of reorganization. The Debtors, or any other party in interest, may attempt to formulate an alternative chapter 11 plan, which might provide for the liquidation of the Debtors' remaining assets other than as provided by the Plan. However, any attempt to formulate an alternative chapter 11 plan would necessarily delay creditors' receipt of distributions and, due to the incurrence of additional administrative expenses during the period of delay, may provide for smaller distributions to holders of Allowed General Unsecured Claims and Equity Interests than are currently provided for under the Plan. Accordingly, the Debtors believe that the Plan will enable all creditors to realize the greatest possible recovery on their Claims or Equity Interests with the least delay. Conditions Precedent to Occurrence of the Plan Effective Date The conditions precedent to the occurrence Effective Date of the Plan are: (1) The Bankruptcy Court will have entered the Confirmation Order, which will approve the Plan on substantially the same terms and conditions set forth in the Plan; (2) The Plan approved by the Bankruptcy Court pursuant to the Confirmation Order will be in form and substance satisfactory to each of the Debtors; (3) No stay of the Confirmation Order will be in effect at the time the other conditions set forth in the Plan for are satisfied or waived; (4) All documents, Instruments and agreements provided for under, or necessary to implement, the Plan will have been executed and delivered by the parties thereto, in form and substance satisfactory to each of the Debtors, unless the execution or delivery has been waived by the parties benefited thereby and all documents, Instruments and agreements will be effective on the Effective Date; (5) All of the payments to be made by the Debtors by or on the Effective Date will have been made or will be made on the Effective Date; (6) The Debtors or the Reorganized Debtors, as applicable, will have entered into an Exit Facility providing for $[____] of financing, and all conditions precedent to funding under the Exit Facility will have been satisfied or waived; (7) The Debtors will have raised $[__] in cash (or not less than $[__] in cash, in the event of a reduction in the size of the Rights Offering) pursuant to the Rights Offering net of any fees and expenses to be paid pursuant to the Rights Offering Sponsor Agreement; (8) The Debtors or the Reorganized Debtors, as applicable, will have obtained all governmental and other regulatory approvals or rulings that may be necessary for consummation of the Plan or that are required by law, regulation or order; and (9) The Debtors will have distributed the appropriate amount of New Common Stock to the Rights Offering Sponsors in accordance with the terms and conditions in the Rights Offering Sponsor Agreement, and will have paid the Rights Offering Fees and Expenses, in full in Cash, without the need for any of the Rights Offering Sponsors to file retention applications or fee applications with the Bankruptcy Court unless otherwise required by order of the Bankruptcy Court. Plan Supplement The Debtors will file with the Court their liquidation analysis, projected financial income and Plan Supplement on November 13, 2009, or 10 days prior to a November 23, 2009 deadline to vote to accept or reject the Plan. A full-text copy of the Debtors' Joint Plan is available for free at: http://bankrupt.com/misc/Lyondell_Sept11JointReorgPlan.pdf A full-text copy of the Debtors' Disclosure Statement is available for free at: http://bankrupt.com/misc/Lyondell_Sept11DisclosureStat.pdf About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Treatment of Claims Under Joint Plan ------------------------------------------------------- The Joint Chapter 11 Plan of Reorganization proposed by Lyondell Chemical Company and its debtor affiliates provides for the designation of various claims and interests asserted against the Debtors: Estimated Estimated Class/Designation Treatment Recovery Claim Amt ----------------- --------- --------- ------------ -- Administrative Paid in full, 100% $229 mil. - Expenses in cash. $342 mil -- DIP New Money Paid in full, 100% $2.2 bil. - Claims and DIP in cash. $4.9 bil. ABL Claims -- Priority Tax Paid in full, 100% $11 mil. - Claims in cash. $58 mil. 1 Priority Non-Tax Paid in full, 100% $0.7 mil. - Claims in cash. $5 mil. 2 Secured Tax Paid in full, 100% $98 mil. - Claims in cash. $104 mil. 3 DIP Roll-Up Pro rata share 100% $3.25 bil. Claims of the New Notes, or cash. 4 Senior Secured Pro rata share Recovery % $9.46 bil. Claims of [__%] of depends on the New Common valuation Stock; Right to receive that holder's pro rata share of Litigation Reserved Common Stock; right to purchase Rights Offering Pro Rata Share of Rights Offering New Common Stock; and a deficiency claim and Allowed Claim in in Class 7-E up to $9.46 billion against the Debtors. 5 Bridge Loan Pro rata share [__]% $8.297 bil. Claims of [__]% of the New Common Stock; Right to receive that holder's pro rata share of Litigation Reserved Common Stock; right to purchase its Rights Offering pro Rata Share of the Rights Offering New Common Stock; and a deficiency claim and Allowed Claim in Class 7-E up to $8.3 bil. against the Debtors. 6 Other Secured Will be 100% $290 mil. - Claims reinstated or $371 mil. Rendered unimpaired; or will be paid (i) in the ordinary course, or (ii) by transfer of the collateral. 7-A General Unsecured Depends on [__]% $711 mil. - Claims against resolution of the $970 mil. Obligor Debtors, Committee Action. Plus excl. Lyondell Deficiency Chemical, Basell Claims USA, Inc., and Schedule III Debtors 7-B General Depends on [__]% $684 mil - Unsecured resolution $958 mil. Claims against of the Committee Plus Lyondell Action. Deficiency Chemical Claims Company 7-C General Depends on [__]% $326 mil. - Unsecured resolution $373 mil. Claims against of the Committee Plus Basell USA Inc. Action. Deficiency Claim 7-D General Depends on [__]% $20 mil. - Unsecured resolution $32 mil. Claims of the Committee Against Non- Action. Obligor Debtors 7-E General Depends on [__]% $1.11 bil. - Unsecured resolution $1.72 bil. Claims against of the Committee Schedule III Action. Debtors 8 2015 Notes Depends on 0% $1.35 bil. Claims resolution of the Committee Action. 9 Securities Will not receive n/a $0 Claims any interest under the Plan. 10 Subordinated Will not receive n/a $0 Claims any interest under the Plan. 11 Equity Will be cancelled. n/a $0 Interests in LyondellBasell Finance Company 12 Equity No distribution n/a $0 Interests in will be made. LyondellBasell Industries AF S.C.A. 13 Equity No distribution n/a $0 Interests will be made unless in Schedule III all creditors have Debtors been paid. 14 Equity Will either be n/a $0 Interests in unaffected by the Debtors other Plan; or will be than LBFC, LBIAF cancelled and new and Schedule III equity will be issued. Debtors Specifically, holders of claims under Classes 7-A to 7-E and 8 to 7-E will receive on the Effective Date either (i) Pro Rata Share of New Common Stock; (ii) Pro Rata Share of the series of Disbursement Trust Beneficial Interests applicable to the respective Debtors; (iii) Pro Rata Share of the amount of the Litigation Reserved Common Stock; or (iv)share of the Litigation Trust. Moreover, the Administrative Expenses, DIP New Money Claims and DIP ABL Claims, and Priority Tax Claims have no voting status. Classes 1, 2, 6, and 14 are unimpaired; not entitled to vote; and are deemed to accept the Plan. Classes 3, 4, 5, 7-A, 7-B, 7-C, 7-D, 7-E, and 8 are impaired, and entitled to vote on the Plan. Classes 9, 10, 11, 12, and 13 are impaired; not entitled to vote; and are deemed to reject the Plan. As of September 30, 2009, the Debtors anticipate that they will have paid the various retained professionals, including the Debtors' professionals and the Committee's professionals, an aggregate of approximately $81 million since the Commencement Date and certain lenders' professionals, pursuant to the Final DIP Financing Order and DIP Term Loan Agreement, an aggregate of approximately $41 million. Assuming confirmation of the Plan at or near the end of the year 2009, the Debtors estimate that various retained professionals will seek compensation for $187 million in the aggregate, inclusive of potential success bonuses, and certain lenders' professionals will seek compensation for $92 million in the aggregate. Moreover, the Debtors estimate that, as of the Effective Date, (i) the DIP New Money Claim will be approximately $[2.167 billion]; (ii) the DIP Roll-Up Claim will be approximately $[3.24 billion]; and (iii) the DIP ABL Claim will be approximately $[555 million]. All Allowed Priority Tax Claims that are not due and payable on or before the Effective Date will be paid in the ordinary course of business by the applicable Debtor as the obligations become due. At the election of New Topco, all Equity Interests in a Debtor held by a Debtor (i) will be unaffected by the Plan, in which case the entity holding an Equity Interest in the Debtor- subsidiary will continue to hold the Equity Interest in the applicable reorganized Debtor-subsidiary following the Effective Date, (ii) will be cancelled and new equity in the applicable reorganized Debtor will be issued pursuant to the Plan, or (iii) will be transferred pursuant to the Plan. In the case of Equity Interests in Basell Germany, which are held by LBIH, the Equity Interests will be unaffected by the Plan and LBIH will continue to hold the Equity Interest following the Effective Date. A schedule of the Claims Classification is available for free at: http://bankrupt.com/misc/Lyondell_ClaimsClassification.pdf About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: To Seek Court Nod of Plan Outline Oct. 14 ------------------------------------------------------------ Lyondell Chemical Company and its debtor affiliates ask the Court to approve the Disclosure Statement accompanying their Joint Plan of Reorganization filed on September 11, 2009. Section 1125 of the Bankruptcy Code provides that a plan proponent must provide holders of impaired claims with adequate information regarding a proposed plan of reorganization for a debtor. Specifically, Section 1125(a)(1) provides: "Adequate information" means information of a kind, and in sufficient detail, as far as is reasonably practicable in light of the nature and history of the debtor and the condition of the debtor's books and records, that would enable a hypothetical reasonable investor typical of holders of claims or interests of the relevant class to make an informed judgment about the plan. Accordingly, the Debtors ask the Court to find that their Disclosure Statement contains adequate information that would enable creditors and interest holders to make an informed decision on whether to vote for or against the Plan. Mr. Palmer notes that the Disclosure Statement contains all or substantially all of the information typically considered by bankruptcy courts, including: * the businesses of the Debtors; * the circumstances that gave rise to the filing of the Debtors' bankruptcy cases; * pending litigation involving the Debtors; * significant events that have occurred in the Debtors' Chapter 11 cases; * information regarding claims against the Debtors' estates; * the treatment of creditors and equity interest holders under the Plan; * which parties-in-interest are entitled to vote on the Plan; * selected historical financial information; * governance of the reorganized Debtors; * how distributions under the Plan will be made; * certain factors that creditors should consider before voting; * procedures for confirming the Plan; and * certain U.S. and Dutch tax consequences. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, relates that the Debtors' debtor-in-possession financing provides milestones for completion. He says that the Debtors have met the first two DIP Financing Milestones, which required (a) delivery of a draft Plan and Disclosure Statement to the DIP lenders by August 15, 2009, and (b) filing of the Plan and Disclosure Statement by September 15, 2009. The DIP Financing Milestones further require the Debtors to (i) obtain approval of the Disclosure Statement by October 15, 2009; (ii) hold a confirmation hearing of the Plan by December 1, 2009; and (iii) obtain confirmation of the Plan by December 15, 2009. Judge Gerber will consider the adequacy of the Disclosure Statement on October 14, 2009, at 10:30 a.m. Parties have until 4:00 p.m. on October 7, 2009, to file objections. The Debtors also ask the Court to approve voting and solicitation procedures with respect to their Joint Chapter 11 Plan of Reorganization. The Debtors also ask the Court to set October 14, 2009, as the record date for the purpose of determining (a) the creditors who are entitled to vote on the Plan; and (b) in the case of non- voting classes, the creditors and interest holders who are entitled to receive a notice of non-voting status, regardless of the date on which the order approving the Disclosure Statement is entered. The Debtors will mail solicitation packages, no later than October 21, 2009, to creditors entitled to vote on the Plan. The Solicitation Packages will contain copies of: * a cover letter describing the contents of the Solicitation Package; * the approved Disclosure Statement, in electronic format on a CD-ROM; * an appropriate Ballot and return envelope; * solely to Eligible Holders (a) a Notice of Rights Offering, and (b) a Subscription Form, as well as instructions for the payment of the applicable purchase price; * notice of Confirmation Hearing; and * and other materials the Court may direct. The Debtors will not send Solicitation Packages to: (i) members of Classes 1, 2, 6, and 14, which classes are unimpaired and not entitled to vote on the Plan; (ii) members of Classes 9, 10, 11, 12 and 13, which classes are receiving no distribution and are deemed to reject the Plan; (iii) holders of claims that were paid pursuant to, or expunged by, a prior order of the Court; (iv) holders of claims against the Debtors that have not been classified in the Plan pursuant to Section 1123(a)(1) of the Bankruptcy Code; and (v) holders of claims listed in the Debtors schedules of assets and liabilities as contingent, unliquidated, or disputed for which a proof of claim was not filed by the applicable bar date for the filing of proofs of claim. Instead, the Debtors will send a Notice of Non-Voting Status and the Confirmation Hearing Notice to holders of claims or equity interests that are classified as unimpaired or that will receive no distribution under the Plan. A Notice of Non-Voting Status will (i) identify the treatment of the classes designated; (ii) set forth the manner in which a copy of the Plan and Disclosure Statement may be obtained; and (iii) provide notice of the Confirmation Hearing and the time fixed for filing objections to the Plan. The Debtors anticipate that some notices may be returned as undeliverable, which could be costly to the Debtors' estates. Accordingly, the Debtors seek to be excused from distributing Solicitation Packages, Notices of Non-Voting Status and Confirmation Hearing Notice to parties with undeliverable addresses until the Debtors are provided with accurate addresses before October 21, 2009. Forms of Ballot The Debtors propose to distribute to certain creditors forms of ballots, which are based upon Official Form No. 14 but have been modified to address the particular aspects of the Debtors' Chapter 11 cases and to include certain additional information that the Debtors believe are relevant for each class of claims entitled to vote on the Plan. The appropriate Ballot forms will be distributed to holders of claims in Classes 3, 4, 5, 7-A, 7-B, 7-C, 7-D, 7-E and 8, which are impaired and are entitled to vote. All other classes are either unimpaired and conclusively presumed to have accepted the Plan, or are receiving no distribution and conclusively presumed to have rejected the Plan. With respect to members of the Voting Classes who are beneficial holders of public securities of the Debtors and who are entitled to vote, the Debtors propose to deliver Solicitation Packages to record holders of those claims to distribute to Beneficial Holders of the claims on behalf of which the Voting Nominee acts. Master ballots will be delivered to Voting Nominees after the Solicitation Packages have been delivered to Voting Nominees. The Debtors further propose that all Voting Nominees be required to keep the original Beneficial Ballots received from Beneficial Holders, or, in the case of pre-validated ballots, a list of Beneficial Holders to whom pre-validated Beneficial Ballots were sent, for a period of at least a year after November 23, 2009. Transmittal of Solicitation Packages to any holders of securities held exclusively through Euroclear Bank and Clearstream Bank will be deemed adequate, and sufficient if it is delivered on or before October 21, 2009, on Euroclear and Clearstream. Voting Deadline The Debtors propose that in order to be counted as a vote to accept or reject the Plan, each Ballot must be properly delivered to Epiq Financial Balloting Group LLC,as the Debtors' voting agent by November 23, 2009. Voting Procedures Solely for the purpose of voting to accept or reject the Plan, the Debtors propose that each holder of a claim within a class of claims entitled to vote to accept or reject the Plan be entitled to vote the amount of that claim as set forth in a timely filed proof of claim, or, if no proof of claim was filed, the amount of that claim as set forth in the Schedules, subject to certain exceptions. The Debtors further propose, in accordance with Rule 3018 of the Federal Rules of Bankruptcy Procedure, that as to any creditor filing a motion, that creditor's Ballot should not be counted unless temporarily allowed by the Court for voting purposes, after notice and a hearing. With respect to the tabulation of Master Ballots and Ballots cast by Voting Nominees and beneficial owners, the amount that will be used to tabulate acceptance or rejection of the Plan will be the principal amount held as of the Record Date. Rights Offering Procedures Pursuant to the Plan, holders of Allowed Claims in Classes 4 and 5 Senior Secured Claims and Bridge Loan Claims, on the Subscription Rights Record Date or October 14, 2009, will have the right to subscribe for their pro rata shares of a designated amount of new common stock in the Reorganized Debtors. The Debtors propose to distribute to Eligible Holders a form on which to exercise their Subscription Rights. With regard to claims arising under the Senior Secured Credit Agreement and the Bridge Loan Agreement, the Debtors propose either to (i) distribute Subscription Forms to the administrative agents under each loan agreement for the agents to transmit to the individual lenders; or (ii) distribute the Subscription Forms directly to the lenders as of the Record Date. With regard to claims arising under the ARCO Notes and the Equistar Notes held through The Depository Trust Company by a bank or brokerage firm on behalf of beneficial owners, the Debtors propose to distribute Subscription Forms to the bank or brokerage firm holding those notes, which bank or brokerage firm will be required to forward information with respect to the Rights Offering to beneficial owners of those securities. The Debtors will also send a notice of the commencement of the Rights Offering. After November 23, 2009, as the Rights Offering Expiration Date, the Debtors will deliver to each Eligible Holder that has sought to exercise its Subscription Rights a written statement specifying the portion of the Subscription Rights that was validly and effectively exercised by that holder. To exercise the Subscription Rights, each Eligible Holder must: (i) return a duly completed Subscription Form to the Subscription Agent so that the form is actually received by the Subscription Agent on or before the Rights Offering Expiration Date; and (ii) pay or arrange for payment to the Subscription Agent on or before the Rights Offering Expiration Date, or by DTC to the Subscription Agent, that holder's purchase price. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MAGNA ENTERTAINMENT: MEC Lone Star Sent to Ch. 11 to Sell Track --------------------------------------------------------------- According to Bill Rochelle at Bloomberg News, Magna Entertainment Corp. put MEC Lone Star LP, one of its previously non-bankrupt subsidiaries, into Chapter 11 protection September 14 to carry out the sale of Lone Star Park, a track near Dallas. Global Gaming LSP LLC made the highest offer for Lone Star, though it requires selling the assets through a bankruptcy sale. Beforehand, Magna was hoping the buyer would purchase the stock so the subsidiary itself need not file bankruptcy. At the auction, Global will be the stalking horse bidder for Lone Star Park. About Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a 50% interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720). Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, have been engaged as bankruptcy counsel. Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J. Finnegan, Esq., at Richards, Layton & Finger, P.A., are the Debtors' local counsel. Miller Buckfire & Co. LLC is the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent for the Debtors. Magna Entertainment Corp. had total assets of US$1.054 billion and total liabilities of US$947.3 million based on unaudited consolidated financial statements as of December 31, 2008. MAGNA ENTERTAINMENT: Harrah's Entertainment Buys Thistledown ------------------------------------------------------------ Harrah's Entertainment Inc., the world's biggest casino company, emerged as the winning bidder for Magna Entertainment Corp.'s e Thistledown racetrack near Cleveland, Ohio, Beth Jinks and Dunstan McNichol at Bloomberg report. According to the report, Harrah's agreed to pay $42 million, with the final price to be determined after certain adjustments including changes in the track's working capital. The state of Ohio has legalized slot machines in racetracks. Bloomberg earlier reported that the state of Ohio is counting on raising up to $933 million in two years in application fees and taxes from seven racetracks that would install slot machines. All seven racetracks have applied for permits to install up to 2,500 machines each. Governor Ted Strickland authorized the slot machines through executive order on July 13 as part of an effort to bridge a $3.4 billion deficit. Three lawsuits against the plan are pending. About Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a 50% interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720). Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, have been engaged as bankruptcy counsel. Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J. Finnegan, Esq., at Richards, Layton & Finger, P.A., are the Debtors' local counsel. Miller Buckfire & Co. LLC is the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent for the Debtors. Magna Entertainment Corp. had total assets of US$1.054 billion and total liabilities of US$947.3 million based on unaudited consolidated financial statements as of December 31, 2008. MAGNACHIP: Committee Offers 72% Recovery in Cash to Sr. Lenders --------------------------------------------------------------- The official committee of unsecured creditors formed in MagnaChip Semiconductors LLC's cases filed with the U.S. Bankruptcy Court for the District of Delaware an amended Chapter 11 plan of reorganization and related documents. "Absent acceptance of the Committee's Plan, the Debtors will likely be liquidated pursuant to a chapter 7 liquidation or sold in exchange for minimal value pursuant to the Debtors' Plan," the Committee said in the Amended Disclosure Statement. According to the Amended Disclosure Statement, under the Committee's Plan, first lien lenders will recover 72% to 100% of their allowed claims, and the unsecured creditors will recover 10%. Second lien noteholders will recover 2% of their claims plus a chance to participate in the rights offering and holders of subordinated debt claims will recover up to 8%. As reported by the Troubled Company Reporter on Aug. 28, 2009, Judge Peter Walsh approved the disclosure statement explaining the proposed Chapter 11 plan proposed by the Creditors Committee. With the approval, creditors of MagnaChip will be choosing between competing plans submitted by the Creditors Committee and the MagnaChip. Ballots are due September 21. The Plan confirmation hearing is scheduled for September 25. The Official Committee of Unsecured Creditors, under the its plan, seeks to reorganize the Debtors' operations and provide for the satisfaction of claims against the Debtors through (a) payment or issuance to first lien lenders owed an aggregate of US$95 million (i) cash equal to 72% of the claim of the first lien lender ("Treatment A"), or (ii) cash equal to 35% of the first lien lender's secured claim and a pro rata share of term loans with principal equal to the remaining amount of the claim ("Treatment B"), (b) the distribution of 5% of the new stock and rights to participate in a US$25 million offering for new common stock to holders of second lien notes aggregating US$500 million, (d) distribution, as a "gift" from second lien noteholders, cash equivalent to 10% of their allowed claims to holders of unsecured claims expected to aggregate US$3.23 million, (e) distribution, as a "gift" from second lien noteholders, of 1% of the new stock plus warrants to purchase 5% of the New stock with a strike price equivalent to a US$600 million total enterprise value to holders of US$250 million subordinated notes claims. Under the Original Plan, the Committee offered full recovery for the lenders through the issuance of a new term loan in full and complete satisfaction of the first lien lender claims aggregating US$95 million. The Company will launch an offering of no less than $35 million and no more than $50 million in aggregate new common units to second lien noteholders. Copies of the Committee's Plan and the explanatory Disclosure Statement, as amended, are available for free at: http://bankrupt.com/misc/MagnaCh_Creditors_AmendedPlan.pdf http://bankrupt.com/misc/MagnaCh_CreditorsAmendedDS.pdf MagnaChip Plan MagnaChip's Chapter 11 plan is co-sponsored by UBS AG, Stamford Branch, as agent to the first lien lenders. The Debtors' Plan provides for the satisfaction of Claims against the Debtors and the enforcement of first lien lender secured Claims through the authorization by the Debtors of the sale of substantially all of the assets of mostly non-debtor subsidiaries located in Korea and other foreign countries. Under MagnaChip's plan, creditors will receive these recoveries: Estimated Creditor Class Treatment of Claims Recovery -------------- ------------------- -------- First Lien Payment from most 70.6% Lenders Owed of the proceeds US$95 Million of the sale Second Lien Noteholders Payment from the US$1 million 0.2% owed about allocated to unsec. Creditors US$500 million and noteholders Unsec. Creditors Payment from the US$1 million 0.1% Owed US$3.2 million allocated to unsec. creditors and noteholders. The 0.1% recovery by unsecured creditors is contingent on their support of the plan. Unsecured creditors would get nothing if they vote to reject the plan. About MagnaChip Semiconductor Headquartered in South Korea, MagnaChip Semiconductor LLC -- http://www.magnachip.com/-- is a leading, Asia-based designer and manufacturer of analog and mixed-signal semiconductor products for high volume consumer applications. The Company has a broad range of analog and mixed-signal semiconductor technology and intellectual property, supported by its 29-year operating history, large portfolio of registered and pending patents and extensive engineering and manufacturing process expertise. Citigroup Venture Capital Equity Partners LP was part of the investor group that acquired MagnaChip in 2004 from Hynix Semiconductor Inc. MagnaChip Semiconductor S.A. and five other entities filed for Chapter 11 on June 12, 2009, in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 cases are jointly administered under Case No. 09-12008, MagnaChip Semiconductor Finance Company. Judge Peter J. Walsh handles the case. Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors as counsel. Howard A. Cohen, Esq., at Drinker Biddle & Reath serves as counsel for the official committee of unsecured creditors. Omni Management Group LLC is the Debtors' claims agent. In their formal schedules, MagnaChip Semiconductor S.A. disclosed US$951,917,782 in assets against US$845,903,186 in debts while MagnaChip Semiconductor B.V. disclosed assets of US$762,465,739 against debts of US$1,800,612,084. MERUELO MADDUX: Posts $127.5MM Net Loss for March 31 Quarter ------------------------------------------------------------ Meruelo Maddux Properties, Inc., filed on September 9, 2009, its quarterly report on Form 10-Q for the period ended March 31, 2009. Meruelo Maddux recorded total revenues of $6,033,000 for the quarter ended March 31, 2009, from $6,003,000 for the same quarter in 2008. Meruelo Maddux posted a net loss of $127,585,000 for the quarter ended March 31, 2009, from a net loss of $4,039,000 for the same period a year ago. As of March 31, 2009, the Company had $605,089,000 in total assets; and $100,636,000 in liabilities not subject to compromise and $292,297,000 in liabilities subject to compromise. During the three months ended March 31, 2009, the Company paid cash related reorganization items, which are primarily composed of professional fees, of roughly $500,000. On and before June 12, 2009, the Debtors filed with the Bankruptcy Court schedules and statements of financial affairs setting forth, among other things, the assets and liabilities of the Debtors, subject to the assumptions contained in certain notes filed in connection therewith. All of the schedules will be subject to further amendment or modification. Differences between amounts scheduled by the Debtors and claims by creditors will be investigated and resolved in connection with the claims resolution process. In light of the expected number of creditors, the claims resolution process may take considerable time to complete. Accordingly, the ultimate number and amount of allowed claims is not presently known, nor can the ultimate recovery with respect to allowed claims be presently ascertained, the Company said. On June 22, 2009, the Bankruptcy Court entered an order setting the last day for filing proofs of claim in the Debtors' Chapter 11 cases as September 24. As a result, any and all claims against the Debtors will be barred if not filed before the Bar Date. The Debtors have the exclusive right to file a Chapter 11 plan or plans prior to November 22, 2009, and the exclusive right to solicit and obtain acceptances thereof until January 21, 2010. Pursuant to Section 1121 of the Bankruptcy Code, the exclusivity periods may be expanded or reduced by the Bankruptcy Court, but in no event can the exclusivity periods to file and solicit acceptance of a plan or plans of reorganization be extended beyond 18 months and 20 months from the petition date, respectively. A full-text copy of the Company's March 2009 Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?44c5 About Meruelo Maddux Based in Los Angeles, California, Meruelo Maddux Properties, Inc. -- http://www.meruelomaddux.com/-- together with its affiliates, engage in residential, commercial and industrial development. Meruelo Maddux and its affiliates filed for Chapter 11 protection on March 26, 2009 (Bankr. C.D. Calif. Lead Case No. 09-13356). Aaron De Leest, Esq., John J. Bingham, Jr., Esq., and John N. Tedford, Esq., at Danning Gill Diamond & Kollitz, represent the Debtors in their restructuring efforts. Peter C. Anderson, the United States Trustee for Region 16, appointed five creditors to serve on the Creditors Committee. Asa S. Hami, Esq., Tamar Kouyoumjian, Esq., and Victor A. Sahn, Esq., at SulmeyerKupetz, A Professional Corporation, represent the Creditors Committee as counsel. The Debtors' financial condition as of December 31, 2008, showed estimated assets of $681,769,000 and estimated debts of $342,022,000. MERUELO MADDUX: Stephen Taylor Sees Shareholder Recovery -------------------------------------------------------- Stephen S. Taylor and Taylor Asset Management, Inc., said in a regulatory filing with the Securities and Exchange Commission that they are pleased with Meruelo Maddux Properties, Inc.'s progress to date in restructuring its obligations. "We continue to believe that the Company's assets far exceed its liabilities. Mr. Taylor and TAM believe that it is likely that the Company may emerge from bankruptcy proceedings with substantial equity value in tact. We further believe the common stock of [the Company] remains substantially undervalued," the filing said. "From time to time, Mr. Taylor and TAM may have discussions with members of management, other shareholders, and may present various proposals and concepts regarding corporate strategy, financial alternatives, and methods to increase shareholder value." Mr. Taylor and TAM said they continue to strongly support the current management team. Mr. Taylor and TAM disclosed holding 12,343,687 shares or roughly 14.05% of the common stock of Meruelo Maddux as of September 1, 2009. Mr. Taylor acquired 1,798,897 shares of the Company for total consideration of $468,747.57. The source of the funds was his personal resources. Taylor Asset Management acquired for Taylor International Fund, Ltd., 1,729,428 shares for total consideration of $335,151.85. The source of the funds was from Mr. Taylor and other investors. Mr. Taylor serves as the President of TAM, which is the Investment Manager of TIF. The Taylor entities have purchased the Company shares "to obtain long term capital appreciation." Mr. Taylor and TAM said they may, from time to time, purchase additional shares or sell shares depending on various factors including market price and availability of shares. Mr. Taylor has no current, definitive plans or proposals which relate to or which would result in: (a) The acquisition by any person of additional securities of the Company, or the disposition of securities of the Company; (b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (c) A sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (d) Any change in the present board of directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) Any material change in the present capitalization or dividend policy of the Company; (f) Any other material change in the Company's business or corporate structure including but not limited to, if the Company is a registered closed end investment company, any plans or proposals to make any changes in its investment policy for which a vote is required by section 13 of the Investment Company Act of 1940; (g) Changes in the Company's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any person; (h) Causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; and (i) A class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g) (4) of the Act. About Meruelo Maddux Based in Los Angeles, California, Meruelo Maddux Properties, Inc. -- http://www.meruelomaddux.com/-- together with its affiliates, engage in residential, commercial and industrial development. Meruelo Maddux and its affiliates filed for Chapter 11 protection on March 26, 2009 (Bankr. C.D. Calif. Lead Case No. 09-13356). Aaron De Leest, Esq., John J. Bingham, Jr., Esq., and John N. Tedford, Esq., at Danning Gill Diamond & Kollitz, represent the Debtors in their restructuring efforts. Peter C. Anderson, the United States Trustee for Region 16, appointed five creditors to serve on the Creditors Committee. Asa S. Hami, Esq., Tamar Kouyoumjian, Esq., and Victor A. Sahn, Esq., at SulmeyerKupetz, A Professional Corporation, represent the Creditors Committee as counsel. The Debtors' financial condition as of December 31, 2008, showed estimated assets of $681,769,000 and estimated debts of $342,022,000. METALDYNE CORP: Committee Balks at Exclusive Period Extension Plea ------------------------------------------------------------------ The Official Committee of Unsecured Creditors objects to the request by Metaldyne Corporation and its debtor-affiliates for an extension of their exclusive plan filing periods, arguing that the exclusivity should not provide the Debtors with unfair leverage in the negotiation of a chapter 11 plan, particularly in a liquidating chapter 11 case where the Debtors have sold substantially all of their assets. The Committee notes that the Debtors' sale of substantially all of their assets to MD Investors is scheduled to close on Oct. 1, 2009 -- four days after the end of the Debtors' exclusive plan filing period. Upon the closing, the Debtors will have paid their prepetition secured term loan debt, prepetition secured asset- based loan debt, and their postpetition secured debtor-in- possession financing debt. After the closing of the sale to MDI, the unsecured creditors will be the only significant constituency with an economic interest in the liquidation of the Debtors' remaining assets under a liquidating trust. The Committee points out that any Chapter 11 plan filed by the Debtors will be a liquidating plan providing for the transfer of any remaining assets, including avoidance actions and any other litigation claims, to a liquidating trust for the benefit of the Debtors' unsecured creditors. The Committee says that it has a significant interest in the terms of any such plan, including the identity of the liquidating trustee and the terms of the liquidating trust. On the other hand, the liquidating Debtors have much less of an interest in the terms of any such plan. Counsel to the Committee, Mark D. Silverschotz, Esq., at Reed Smith LLP, says the panel expects to continue its amicable working relationship with the Debtors. To that end, the Committee would prefer to file a joint liquidating plan with the Debtors. The Debtors are unwilling to confirm that they do not intend to use the Chapter 11 plan process to impose third-party releases/exculpations on unsecured creditors. Mr. Silverschotz further says the Committee opposes the third- party releases/exculpations and believes that the liquidating trust should have the opportunity to investigate any such claims before they are released. At a minimum, unsecured creditors should be entitled to vote on a plan that does not contain nonconsensual, third party releases and that permits the Committee to select a liquidating trustee to act under a liquidating trust agreement acceptable to the Committee. According to the Troubled Company Reporter, the Debtors wanted to file a Chapter 11 plan until Jan. 22, 2010; and solicit acceptances of that plan until March 23, 2010. The Debtors said the extension of time will allow them to (i) continue their efforts to complete and close the sale to MD Investor Corporation the sale of substantially all of their assets, (ii) develop and implement a plan for winding down and monetizing the assets not sold in the transaction, and (iii) work with their other stakeholders to develop and obtain confirmation of the Chapter 11 plan. The Court authorized the Debtors to move on with the sale of all their assets to MD Investors on Aug. 12, 2009. Richard H. Engman, Esq., at Jones Day in New York, said, presently, due to the timing of receiving necessary governmental approvals, the Debtors anticipate that the MD Investors Transaction is likely to close in late September 2009, and the Debtors recently secured the agreement of their postpetition lenders and their prepetition working capital lenders to extend the Debtors' ability to borrow money and use cash collateral until Oct. 2, 2009. About Metaldyne Corporation Metaldyne Corporation and its affiliates filed for Chapter 11 protection on May 27, 2009 (Bankr. S.D.N.Y. Case No. 09-13412). The filing did not include the company's non-U.S. entities or operations. Richard H. Engman, Esq., at Jones Day represents the Debtors in their restructuring efforts. Judy A. O'Neill, Esq., at Foley & Lardner LLP serves as conflicts counsel; Lazard Freres & Co. LLC and AlixPartners LLP as financial advisors; and BMC Group Inc. as claims agent. A committee of Metaldyne creditors is represented by Mark D. Silverschotz, Esq., and Kurt F. Gwynne, Esq., at Reed Smith LLP, and the committee tapped Huron Consulting Services, LLC, as its financial advisor. For the fiscal year ended March 29, 2009, the company recorded annual revenues of approximately US$1.32 billion. As of March 29, 2009, utilizing book values, the company had assets of approximately US$977 million and liabilities of US$927 million. Judge Glenn approved the sale of substantially all assets to Carlyle Group earlier this month for approximately $496.5 million. MOHAWK INDUSTRIES: Moody's Cuts Ratings on Senior Notes to 'Ba2' ---------------------------------------------------------------- Moody's Investors Service downgraded its ratings on Mohawk Industries Inc.'s senior unsecured notes to Ba2 from Ba1 following the company's announcement that it entered into a $600 million secured ABL revolving credit facility. At the same time, Moody's affirmed all other existing ratings including the Ba1 CFR, Ba1 PDR and SGL 2 speculative grade liquidity rating. The rating outlook is still negative. The downgrade of the unsecured notes reflects the structural subordination that was created when the company replaced its two unsecured revolving credit facilities with a new 4 year ABL revolver, which has security on the company's most liquid assets: inventory and accounts receivable. "Inclusion of a $600 million secured obligation in the company's capital structure increases the potential loss of unsecured creditors in a default scenario as the ABL lenders would have priority over the unsecured lenders" said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. Affirmation of the Ba1 CFR rating reflects Mohawk's leading market share in the carpet segment, floor tiling segment and the Unilin (laminate) segment, its scale with close to $6 billion in revenue, strong cash flow and its generally conservative financial policies. These factors help offset the continuing weakness in housing and discretionary consumer spending and deterioration in Mohawk's credit metrics. However, Moody's expects improvement in Mohawk's credit metrics in 2010 as the company has lowered its breakeven levels with significant cost reductions and the lack of warranty reserve of over $100 million recorded in Q1 2009. Affirmation of the SGL 2 liquidity rating reflects Moody's belief that Mohawk will maintain its good liquidity profile over the next 12-18 months. The liquidity profile is highlighted by the lack of maintenance financial covenants in the new $600 million 4 year ABL revolving credit facility, strong annual operating cash flow of around $600 million, cash balances of over $200 million and the lack of dividends or share repurchases. The principal constraint to Mohawk's liquidity is the $500 million maturity in January 2011, which Moody's believes will be repaid with a combination of free cash flow, ABL revolver borrowings and possibly additional capital market transactions. Additional constraints on the company's liquidity is the reduction of the size of revolving credit facility to $600 million from over $700 million (US and European revolver combined) and the elimination of the $250 million accounts receivable securitization facility. The continuing negative outlook reflects Moody's concern over declining demand trends, which are caused by the continuing weakness in the housing market, discretionary consumer spending and capital spending. The negative outlook also reflects Moody's apprehension over future discretionary consumer spending patterns even when the macro economy and housing market starts to grow as consumers are likely to be cautious with their discretionary spending in the near term. Ratings affirmed: * Corporate Family Rating at Ba1; * Probability of Default Rating at Ba1; * Speculative Grade Liquidity rating at SGL-2; Ratings downgraded/assessments assigned: * $900 million 6.125% senior unsecured notes, due 2016 to Ba2 (LGD 4, 67%) from Ba1 (LGD 4, 60%); * $500 million 5.75% senior unsecured notes, due January 15, 2011 to Ba2 (LGD 4, 67%) from Ba1 (LGD 4, 60%); * $400 million 7.20% senior unsecured notes, due April 15, 2012 to Ba2 (LGD 4, 67%) from Ba1 (LGD 4, 60%); Headquartered in Calhoun, Georgia, Mohawk Industries is a leading producer of floor covering products for residential and commercial applications in the U.S. Mohawk products includes brands such as Mohawk, Unilin, Karastan, Ralph Lauren, Lees, Bigelow, Dal-Tile and American Olean. Revenue for the twelve months ended June 30, 2009, approximated $5.9 billion. The last rating action was taken on February 25, 2009, when Moody's downgraded the ratings to Ba1 with a negative outlook. MPF CORP: Gets Access to $750,000 of DIP Financing -------------------------------------------------- The U.S. Bankruptcy Court granted MPF Corp.'s motion for an interim order approving post-petition secured financing. The DIP facilities will be available to the Debtors up to an aggregate principal amount of $750,000 pending entry of a final order, according to BankruptcyData.com. The Debtor will be able to access DIP loans aggregating $5 million upon final approval of the loans. The final hearing is scheduled for September 23, 2009, the report notes. Headquartered in Bermuda, MPF Corp. Ltd. -- http://www.mpf- corp.com/ -- engages in deep water oil and gas exploration. The company was established on April 25, 2006. The company and debtor-affiliate MPF Holding US LLC filed separate petitions for Chapter 11 relief on Sept. 24, 2008 (Bankr. S.D. Tex. Case Nos. 08-36086 and 08-36084). MPF-01 followed on Sept. 25, 2008. D. Bobbitt Noel, Jr., Esq. at Vinson & Elkins LLP, represents the Debtors as counsel. When the Debtors filed for protection from creditors, they listed assets of $100 million to $500 million, and the same range of debts. The Bermuda Proceedings and the Chapter 11 cases in the U.S. run as parallel proceedings, which is coordinated to effectuate the Debtors' goal of providing for a restructuring of their businesses or sale of assets as may be in the best interests of their estates and creditors. The Debtors are in possession of their properties and continue to operate and manage their businesses as debtors-in-possession. Due to the size and complexity of the Debtors' businesses, and their prepetition focus on restructuring their financial affairs to avoid Chapter 11 filings, the Debtors failed to complete the drafting of the Schedules and Statements, and do not anticipate having the Schedules and Statements ready for filing within the 15-day period. NAMWEST LLC: Owes Town $4.4MM for 2005 RiverWinds Contract ---------------------------------------------------------- Jeremy Rosen at Courier-Post report that Docimo and Eric Campo, West Deptford township administrator, said that Namwest LLC owes the town $4.4 million of a $10 million contract signed in 2005 for the development of RiverWinds. According to Courier-Post, township officials attribute most of the 2009 12-cent property tax increase to Namwest. Headquartered in Phoenix, Arizona, Namwest LLC -- http://www.namwest.com/-- builds single-family houses and condominiums. The company has under contract and development, over $250 million in single-family home and condominium neighborhoods in Arizona. The Company filed for Chapter 11 bankruptcy protection on October 9, 2008 (Bankr. D. Ariz. Case No. 08-13935). It affiliates, including Namwest-Glenrosa & 35th Avenue, LLC; Namwest-101 Building, LLC; and SWB Enterprises, LLC, also filed for bankruptcy. Carolyn J. Johnsen, Esq., at Jennings, Strouss & Salmon, P.L.C., assists the Debtors in their restructuring efforts. Namwest LLC listed $50 million to $100 million in assets and $50 million to $100 million in debts. NATIONAL HOLDINGS: Grants Warrants to Bedford Oak for Forbearance ----------------------------------------------------------------- National Holdings Corporation on September 9, 2009, agreed to issue Bedford Oak Partners, L.P., a five-year warrant to purchase 12,500 shares of the Company's common stock at $0.75 per share, as consideration for the forbearance agreements entered into by the parties. As consideration for a separate forbearance agreement, the Company also agreed to (i) reduce the exercise price of Christopher C. Dewey's warrant to purchase 125,000 shares of the Company's common stock from $1.00 to $0.75 per share and (ii) to issue Mr. Dewey a five-year warrant to purchase 100,000 shares of the Company's common stock at $0.75 per share. Christopher Dewey is a member of the Company's board of directors. In February 2007, the Company completed a financing transaction under which certain investors purchased 10% promissory notes in the principal amount of $1.0 million, which notes matured in February 2009. The investment included $500,000 by Mr. Dewey. The Company entered into a forbearance agreement under which Bedford Oak agreed to defer its rights under the note until it was fully repaid $250,000 on May 29, 2009. Under its forbearance agreement with the Company, Mr. Dewey agreed to not exercise any of his rights under his note until June 1, 2010 and agreed to lower the interest rate on his note from 10% to 7% per annum. About National Holdings National Holdings Corp. operates primarily through broker subsidiaries National Securities Corporation, vFinance Investments, Inc. and EquityStation, Inc. The Broker Dealer Subsidiaries conduct a national securities brokerage business through its main offices in New York, New York, Boca Raton, Florida, and Seattle, Washington. Through its Broker Dealer Subsidiaries, the Company offers (1) full service brokerage servicing approximately 45,000 accounts, consisting of retail, high net worth and institutional clients, (2) provides investment banking, merger, acquisition and advisory services to micro, small and mid-cap high growth companies, and (3) engages in trading securities, including making markets in over 3,500 micro and small cap stocks and provides liquidity in the United States Treasury marketplace. National Holdings had $22,006,000 in assets against debts of $19,076,000 as of June 30, 2009. NATIONAL PROCESSING: S&P Puts 'B-' Rating on Developing Watch ------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed its ratings, including its 'B-' corporate credit rating, on Louisville, Kentucky-based National Processing Co. Group Inc. on CreditWatch with developing implications. "These actions result from the company's current amendment proposal, which, along with other requests, would amend the required ratio levels for financial maintenance covenants contained in NPC's senior secured credit facility to provide greater headroom," explained Standard & Poor's credit analyst Susan Madison. "We believe that headroom provided under covenant financial ratios contained in the current amendment proposal will be sufficient, despite expectations for modest near-term pressure on revenues and EBITDA," said Ms. Madison. As a result, if approved, S&P would likely raise the rating on NPC to 'B', reflecting the enhanced flexibility provided by the new covenant package. If the company is not able to get requisite lender consent for the proposed amendment, S&P could lower the rating to 'CCC+' since it is unlikely that operational performance and discretionary debt pay- down will be sufficient to meet the Dec. 31, 2009, ratio step- downs. Additionally, in reviewing the proposed amendment, S&P is unlikely to view the request for very limited ability to repurchase debt below par as distressed. NORTHPORT NETWORK: Discloses Going Concern Doubt on Debt Woes ------------------------------------------------------------- Northport Network Systems, Inc., and its affiliates incurred a net loss of $184,312 on net sales of $743,533 for six months ended June 30, 2009, compared with a $304,191 net loss on net sales of $3.682 during the same period in 2008. The Company had total assets of $5,008,881 against total debts of $1,949,486 as of June 30, 2009. Current assets total $1,493,584 while all debts were current. Cash and cash equivalents were $346,425 as of June 30. The Company has an accumulated deficit of $2,046,258 at June 30, 2009. The Company's current liabilities also exceed its current assets by $455,902 and the Company used cash in operations of $305,910. "These factors raise substantial doubt about its ability to continue as a going concern," the Company said. A copy of the Form 10-Q filed with the Securities and Exchange Commission is available at: http://researcharchives.com/t/s?44b4 About Northport Network Northport Network Systems, Inc. was incorporated under the laws of the State of Colorado on July 25, 2000 as Dotcom-netmgmt.com Inc.. Dalian Beigang Information Industry Development Company Limited was incorporated in the People's Republic of China on June 20, 1997 with its principal place of business in Dalian, PRC. Dalian Beigang is principally engaged in the provision of platforms, among other things, to customers in Dalian for electronic filing of tax returns and payment of taxes and color photo printing business in the PRC. The Company owns a trade name "Colorstar" which was registered with the China State Administration for Industry and Commerce in China as well as a Chinese patent which was applied for on the color photo printing technology. In accordance with the business permit, the Company's right of operation expires on June 20, 2026 and is renewable. On June 23, 2005, Northport Network entered into a definitive agreement with the stockholders of Dalian Beigang in which Northport Network exchanged 100% of the registered and fully paid up capital of Dalian Beigang for $150,000 satisfied by the issue of 1,500,000 shares of common stock of $0.001 par value to the stockholders of Dalian Beigang. As both companies are under common management, the exchange of shares has been accounted for as a reorganization of entities under common control. ONE LAND: Wants Access to Cash Securing Comm 2006-C8 Loan --------------------------------------------------------- One Land LLC filed asks the U.S. Bankruptcy Court for the Central District of California for authorization to: -- use cash securing repayment of loan with Comm 2006-C8 Calabasas Road Limited Partnership; and -- grant adequate protection to the secured lender. The outstanding loan due to the lender as of Sept. 1, 2009, is $14.31 million. The Debtor required the immediate use of cash collateral to finance its daily operations. The Debtor related that the lender consented to the use of cash collateral but only upon the specific terms and conditions set in the stipulation reached on Sept. 2, 2009. As adequate protection, the Debtor will grant the lender a replacement lien equivalent to its lien on the Debtors' prepetition assets. As to the postpetition assets, the prepetition lender will receive a lien on its postpetition assets only to cover any decline in the value of the lender's collateral during the two month period of the limited cash collateral agreement. Lender Objects Comm 2006-C8 Calabasas Road Limited Partnership, senior secured lender, has filed an objection, saying that the budget and terms of the cash use is unacceptable. The creditor opposed to these provisions in the budget: 1. payroll expenses line item; 2. real property tax and insurance premium line items; 3. franchise fee line item; 4. 120% provision; 5. miscellaneous line item; 6. excess revenues; and 7. attorneys' fees provision. A full-text copy of the Budget is available for free at: http://bankrupt.com/misc/OneLand_Budget.pdf About One Land One Land LLC operates a hotel named County Inn & Suites at Calabasas, California. The Company filed for Chapter 11 on Aug. 24, 2009 (Bankr. Case C.D. Calif. No. 09-20989). Robert M. Yaspan, Esq., at Law Offices of Robert M. Yaspan, represents the Debtor in its restructuring effort. In its petition, the Debtor listed total assets of $15,000,000 and total debts of $15,196,799. PACIFIC ENERGY: Can Abandon Alaska Assets Amidst Gov't Protest -------------------------------------------------------------- Pacific Energy Resources Ltd. has won the right to abandon oil and gas production assets near Alaska's Cook Inlet -- despite opposition from government regulators over potential environmental liabilities. The Hon. Kevin J. Carey of U.S. Bankruptcy Court for the District of Delaware approved the abandonment but granted key concessions to state regulators, 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. PARALLEL PETROLEUM: To Be Sold to Apollo for $483 Million --------------------------------------------------------- Parallel Petroleum Corporation said September 15 that it has entered into a definitive agreement for the Company to be acquired by an affiliate of Apollo Global Management, LLC, a leading global alternative asset manager, in a transaction valued at approximately $483 million, including the assumption or repayment of approximately $351 million of net indebtedness. The agreement was unanimously approved by Parallel's Board of Directors. Under the terms of the agreement, Parallel stockholders would receive $3.15 per share in cash, representing a premium of 56% over Parallel's average closing share price over the past thirty trading days and 63 percent over Parallel's average closing share price over the past sixty trading days. An affiliate of Apollo will commence a tender offer to purchase for cash all of the outstanding shares of the Company's Common Stock, and the associated preferred stock purchase rights, at a price of $3.15 per share, for a total consideration of approximately $132 million. The tender offer is expected to commence on or before September 24, 2009 and to expire on the 20th business day following and including the commencement date, unless extended in accordance with the terms of the merger agreement and the applicable rules and regulations of the Securities and Exchange Commission. Following the completion of the tender offer, the parties will complete a second-step merger in which any remaining shares of the Company will be converted into the right to receive the same price per share paid in the tender offer. "The Board considered a range of potential alternatives, including continuing to operate as an independent entity, the returns and dilution associated with issuing additional equity in a public or private offering, the possibility of the sale of certain assets, and combinations with other merger partners," said Jeffrey Shrader, Parallel's Chairman of the Board. "After conducting an exhaustive evaluation of recapitalization and corporate sale alternatives, our board of directors unanimously concluded, after in-depth consideration, that this transaction with Apollo is in the best interests of our shareholders." Commenting on the transaction, Sam Oh, Partner at Apollo, said, "We believe Parallel's high-quality assets and its outstanding management team will be a positive addition to our investment portfolio and we look forward to working with the Company." Larry Oldham, Parallel's President and Chief Executive Officer commented, "Apollo's interest in the Company is a clear recognition of the attractiveness of Parallel, its business plan and the success that has been achieved. Apollo has a strong track record of growing businesses. Under its ownership, Parallel will be better capitalized to execute its current business plan and develop new opportunities for growth." There is no financing condition to the obligations to consummate the transaction, and funds managed by Apollo have committed to provide $283.2 million of equity to complete the transaction. The transaction does not require the consent of Parallel's bondholders, but as required by its indenture, the Company will offer to repurchase all $150 million of the Company's 10.25% Senior Notes due 2014, at 101% of face value. In connection with the transaction, BofA Merrill Lynch Securities, Jefferies & Company, Inc., Stonington Corporation, and Sunrise Securities Corp. served as financial advisors to Parallel. Lynch, Chappell & Alsup, P.C. and Haynes and Boone, LLP served as Parallel's legal counsel. RBC Richardson Barr and BNP Paribas served as financial advisors to Apollo, and Akin Gump Strauss Hauer & Feld LLP served as its legal counsel. About Apollo Management Apollo is a leading global alternative asset manager with offices in New York, Los Angeles, London, Singapore, Frankfurt and Mumbai. Apollo had assets under management of over $38 billion, as of June 30, 2009, in private equity and credit-oriented capital markets invested across a core group of industries where Apollo has considerable knowledge and resources. About Parallel Petroleum Parallel Petroleum (NASDAQ: PLLL) is an independent energy company headquartered in Midland, Texas, engaged in the exploitation, development, acquisition and production of oil and gas using 3-D seismic technology and advanced drilling, completion and recovery techniques. Parallel's primary areas of operation are the Permian Basin of West Texas and New Mexico, North Texas Barnett Shale, Onshore Gulf Coast of South Texas, East Texas and Utah/Colorado. Additional information on Parallel is available via the Internet at http://www.plll.com/ Parallel Petroleum carries "B3" long term corporate and probability of default ratings from Moody's and "B" issuer credit ratings from Standard & Poor's. PARMALAT SPA: Bank of America Liable for Fraud, SPVs Say -------------------------------------------------------- U.S. District Judge Lewis Kaplan on September 14 began trial on the lawsuit commenced by Food Holdings Ltd. and Dairy Holdings Ltd. against Bank of America Corp. Food Holdings and Dairy Holdings Ltd. were two special purpose entities created by BofA. Their liquidators have sued the bank, claiming that it knew of the Parmalat fraud and should be forced to pay hundreds of millions of dollars in notes to Parmalat investors that the vehicles issued. Parmalat went bankrupt after revealing that a EUR3.95 billion account at Bank of America didn't exist. Bank of America should be held liable for the 2003 collapse of Parmalat, lawyers for the two Cayman Island entities told U.S. District Judge Lewis Kaplan September 14, at the start of a $500 million civil trial, Bloomberg News said. Liquidators for two special purpose vehicles created by Bank of America -- Food Holdings Ltd. and Dairy Holdings Ltd. -- later sued the bank, claiming it knew of the Parmalat fraud and should be forced to pay hundreds of millions of dollars in notes to Parmalat investors that the vehicles issued. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The Company's U.S. operations filed for Chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on December 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On January 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presides over the Parmalat Debtors' U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat permanent injunction. PHILADELPHIA NEWSPAPERS: Bid Procedures Hearing Moved to Sept. 21 ----------------------------------------------------------------- Bankruptcy Judge Stephen Raslavich has deferred until September 21 to consider approval of a proposed sale process for the assets of Philadelphia Newspapers LLC. Judge Raslavich postponed the hearing to give the Debtor and senior lenders time to negotiate procedures for the sale, Sophia Pearson at Bloomberg News reported. The Company has proposed an auction where a group of local investors, led by Bruce E. Toll, would be stalking horse bidder and credit bidding would be prohibited. The Debtors have filed a proposed Chapter 11 plan built around the sale of the business to Mr. Toll or to the highest bidder. The Company has contemplated an October 22 auction. Philadelphia Newspapers filed a Chapter 11 plan of reorganization on August 20. The Plan provides for the sale of substantially all of the Debtors' assets to Mr. Toll-led Philly Papers, LLC, absent higher and better bids at an auction. Under the deal, Philly Papers is expected to pay over $41,000,000, after payment of approximately $6,000,000 in administrative and priority claims. According to the disclosure statement explaining the Plan, holders of secured claims, including $66 million, senior secured claims, will recover 100 cents on the dollar. Holders of $350 million prepetition unsecured debt claims will recover less than 1% of their claims. Holders of prepetition unsecured trade claims will recover up to 6%. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/PhillyNews_DiscStatement.pdf A copy of the Insider Plan is available for free at: http://bankrupt.com/misc/PhillyNews_Ch11Plan.pdf Senior lenders, including CIT Group Inc., have proposed their own reorganization plan that would allow the Company to emerge from bankruptcy with about $60 million in debt. Led by Citizens Bank of Pennsylvania, as agent, senior lenders would own about 95% of the Company with the remainder going to unsecured mezzanine debt holders. Other unsecured creditors will recover up to 10% of their claims in cash. About Philadelphia Newspapers Philadelphia Newspapers -- http://www.philly.com/-- owns and operates numerous print and online publications in the Philadelphia market, including the Philadelphia Inquirer, the Philadelphia Daily News, several community newspapers, the region's number one local Web site, philly.com, and a number of related online products. The Company's flagship publications are the Inquirer, the third oldest newspaper in the country and the winner of numerous Pulitzer Prizes and other journalistic recognitions, and the Daily News. Philadelphia Newspapers and its debtor-affiliates filed for Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D. Pa. Case No. 09-11204). Proskauer Rose LLP is the Debtors' bankruptcy counsel, while Lawrence G. McMichael, Esq., at Dilworth Paxson LLP is the local counsel. The Debtors' financial advisor is Jefferies & Company Inc. The Garden City Group, Inc. serves as claims and notice agent. Philadelphia Newspapers listed assets and debts of $100 million to $500 million in its bankruptcy petition. PILGRIM'S PRIDE: Amended Summary of Schedules --------------------------------------------- Pilgrim's Pride Corp. submitted its Third Amended Summary of Schedules of Assets and Liabilities, disclosing this information: A. Real Property Land and Buildings, Cincinnati OH 100% ownership $20,783 Richardson Data Center 100% ownership 10,648,154 Land - Sulphur Springs, TX 100% ownership 137,033 Land & Buildings - Sulphur springs, TX 677,885 Total - as previously Reported 709,271,024 B. Personal Property 2,014,709,084 Total Assets $2,735,463,964 ============================================================= C. Property Claimed as Exempt $0 D. Creditors Holding Secured Claims 1,437,193,843 E. Creditors Holding Unsecured Priority Claim 6,285,664 F. Creditors Holding Unsecured Non-priority Claim 900,870,001 Total Liabilities $2,344,349,509 ============================================================= About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- employs roughly 41,000 people and operates chicken processing plants and prepared-foods facilities in 14 states, Puerto Rico and Mexico. The Company's primary distribution is through retailers and foodservice distributors. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC, is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The Company's claims and noticing agent is Kurtzman Carson Consulting LLC. A nine-member committee of unsecured creditors has been appointed in the case. As of December 27, 2008, the Company had $3,215,103,000 in total assets, $612,682,000 in total current liabilities, $225,991,000 in total long-term debt and other liabilities, and $2,253,391,000 in liabilities subject to compromise. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the Chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. PILGRIM'S PRIDE: Proposes to Reject 51 Contract-Grower Agreements ----------------------------------------------------------------- Pursuant to Section 365(a) of the Bankruptcy Code and Rule 6006 of the Federal Rules of Bankruptcy Procedure, Pilgrim's Pride Corp. and its affiliates seek the Court's authority to reject 51 Pullet Grower Agreements. A schedule of the contracts to be rejected is available for free at http://bankrupt.com/misc/PPC_rej_Pulletgrowers13.pdf The Court issued a Confidentiality Order that governs the contested matters with regards to the Debtors' Motions to reject Contract-Grower Agreements and their related responses. The order intends to uphold the confidentiality of information in the resolution of contested matters. A full-text copy of the confidentiality order is available for free at: http://bankrupt.com/misc/PPC_Growers_conforder.pdf Walter Starling, a broiler farm operator, informed Judge Lynn of his objection to the Debtors motion to reject growers' contract with the Debtors. About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- employs roughly 41,000 people and operates chicken processing plants and prepared-foods facilities in 14 states, Puerto Rico and Mexico. The Company's primary distribution is through retailers and foodservice distributors. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC, is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The Company's claims and noticing agent is Kurtzman Carson Consulting LLC. A nine-member committee of unsecured creditors has been appointed in the case. As of December 27, 2008, the Company had $3,215,103,000 in total assets, $612,682,000 in total current liabilities, $225,991,000 in total long-term debt and other liabilities, and $2,253,391,000 in liabilities subject to compromise. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the Chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. PRIMARY ENERGY: S&P Withdraws 'BB' Rating on $152.5 Mil. Loan ------------------------------------------------------------- Standard & Poor's Ratings Services said it withdrew its 'BB' preliminary rating on Primary Energy Operation LLC's proposed $152.5 million five-year term loan. The company intended to use the loan to help refinance an existing revolving facility (unrated) for a portfolio of four recycled energy facilities and a 50% interest in a pulverized coal-injection facility collectively located at steel mills of U.S. Steel Corp. (BB/Stable/--) and ArcelorMittal (BBB/Negative/--). The power assets use a combination of waste heat and blast furnace gas produced in the course of mill operations to generate "behind-the-meter" electricity, steam, and processed water for mill consumption. S&P is withdrawing the preliminary rating on the proposed term loan due to management's intention to pursue a different capital structure from that to which S&P originally rated. Ratings List Rating Withdrawn Primary Energy Operations LLC To From -- ---- Senior Secured NR BB/Stable Recovery Rating NR 4 NR - Not Rated Action POMARE LTD: Court Okays Hilo Hattie Reorganization Plan ------------------------------------------------------- The Associated Press reports that the Hon. Robert Faris of the U.S. Bankruptcy Court for the District of Delaware has confirmed Pomare Ltd.'s reorganization plan, which would wipe out $14 million in debt to keep the Company in business while preserving numerous vendor relationships. The AP relates that Royal Hawaiian Creations, Pomare's largest unsecured creditor, will invest an additional $3 million to pay claims needed for the Company to exit bankruptcy. According to the report, the approval of the Plan will let Pomare to emerge from Chapter 11 bankruptcy on October 4. Based in Honolulu, Hawaii, Pomare Ltd., dba Hilo Hattie, is a tourist-destination retailer with operations chiefly in Hawaii. It has seven stores in Hawaii and two in California. The Company filed for Chapter 11 relief on October 2, 2008 (Bankr. D. Hawaii Case No. 08-01448). Chuck C. Choi, Esq., and James A. Wagner, Esq., at Wagner Choi & Verbrugge, represent the Debtor as counsel. Alexis M. McGinness, Esq., and Ted N. Pettit, Esq., at Case Lombardi & Pettit, represent the official committee of unsecured creditors. In its schedules, the Debtor listed total assets of $15,825,657, and total debts of $13,767,047. PROTEIN SCIENCES: Wins Dismissal of Involuntary Ch. 7 Case ---------------------------------------------------------- Protein Sciences Corporation said September 14 that the U.S. Bankruptcy Court for the District of Delaware granted its motion to dismiss the involuntary bankruptcy case filed against it by Emergent BioSolutions, Inc. The Court found the involuntary bankruptcy was not in the best interests of PSC and its creditors. In a statement, Emergent said the Bankruptcy Court ruled that: 1. PSC is insolvent under the federal bankruptcy laws, because it generally was not paying its debts as they become due; 2. Emergent and two other petitioning creditors held valid claims against PSC without bona fide dispute; and 3. Emergent's claim in excess of $11.5 million is due and owing. The Court, according to Emergent's statement, however, abstained from putting Protein Sciences into bankruptcy because it found that Emergent's claims more appropriately should be pursued in its other pending lawsuits, including the "replevin" or foreclosure action in the Connecticut state court. The breach of contract and tort claims properly may be heard in the pending New York state and Connecticut federal court actions. Emergent intends to continue to pursue its rights in those courts and remains confident that it will be able to achieve a full recovery. As reported by the Troubled Company Reporter on June 23, 2009, creditors of Protein Sciences filed an involuntary Chapter 7 petition against the Company (Bankr. D. Del. Case No. 09-12151). The Creditors wanted the company liquidated to satisfy claims. A unit of Emergent BioSolutions Inc. holds the bulk of the debt listed on the petition at $11.5 million. Emergent BioSolutions Inc. is a biopharmaceutical company focused on the development, manufacture and commercialization of vaccines and therapeutics that assist the body's immune system to prevent or treat disease. Protein Sciences Corp. is a biopharmaceutical company that started making a vaccine to protect humans against the H1N1 influenza virus last week. Protein Sciences said in June it has started manufacturing "the first and only" vaccine, PanBlok, that would be able to combat the virus. The company said it would be able to produce at least 100,000 doses of the vaccine a week. QWEST COMMUNICATIONS: Fitch Assigns BB+ Rating on $300 Mil. Notes ----------------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to Qwest Communications International, Inc.'s proposed $300 million issuance of senior unsecured notes due 2015. The new notes will be guaranteed by wholly owned subsidiaries Qwest Services Corporation and Qwest Capital Funding, Inc., on a senior unsecured basis. The notes will rank pari passu with Qwest's existing senior unsecured notes due February 2011 and 2014, and will be governed by the same indenture, dated Feb. 5, 2004, as the existing senior unsecured notes issued by Qwest. The proceeds from the issuance are expected to be used for general corporate purposes, including refinancing existing indebtedness. Qwest and its wholly owned subsidiaries have an Issuer Default Rating of 'BB'. The Rating Outlook for Qwest and its subsidiaries is Stable. As of June 30, 2009, Qwest had approximately $14.1 billion of debt outstanding. Overall the ratings assigned to Qwest and its subsidiaries incorporate the scope, scale and relatively consistent cash flow generated by Qwest Corporation's local exchange business, and the stable trends of Qwest's enterprise segment. Fitch's ratings also reflect Qwest's financial flexibility, solid liquidity position in relation to near-term scheduled maturities and Fitch's expectation of continued, albeit pressured, generation of free cash flow. Fitch believes that Qwest's credit profile is strong within the current ratings category, however, its competitive position is weaker when compared to its regional bell operating company peer group. Qwest's business profile is more wire-line voice and consumer centric relative to its RBOC peer group. These businesses arguably are most exposed to competitive and technology threats. In Fitch's opinion Qwest lacks the revenue growth opportunities, particularly a strong facilities-based wireless business, that can offset competitive, economic and technology issues that continue to erode Qwest's land-line business. During the second quarter of 2009, Qwest reported that consolidated revenues declined by 8.6% on a year over year basis to approximately $3.1 billion. Overall, Qwest lost approximately 333,000 access lines during the second quarter of 2009 reflecting a year over year decline of nearly 10.7%. Fitch continues to believe that Qwest has sufficient capacity within the current ratings to withstand the continued weakening of its operating profile due to ongoing competitive, technology substitution and economic factors. Balancing the operational concerns is Fitch's expectation that Qwest will continue to generate relatively stable amounts of free cash flow as Fitch believes that the company has a significant level of flexibility within its capital budget to manage free cash flow generation. During the first half of 2009, the company generated approximately $722 million of free cash flow (defined as cash from operations less capital expenditures and dividends and adjusted for one-time items) marking a significant increase when compared with $234 million of free cash flow generated during the first half of 2008. Contributing to the large free cash flow growth was a 28% year over year reduction in capital expenditures experienced during the first half of 2009. For all of 2009 Qwest expects to generate free cash flow before dividends of $1.5 to $1.6 billion. Qwest's liquidity position and overall financial flexibility are strong and are supported by expected free cash flow generation, cash on hand ($1.8 billion as of June 30, 2009) and available borrowing capacity from Qwest's $910 million senior secured revolver (Fitch notes that Qwest's revolver was expanded to $945 million in July 2009), which expires October 2010. Qwest repaid the $562 million of the 7% Qwest Capital Funding, Inc. senior notes due on Aug. 3, 2009, with available cash on hand satisfying the last significant scheduled maturity in 2009. During 2010 Qwest has approximately $917 million of scheduled maturities, including $500 million of QC maturities, which was essentially prefunded by QC's senior note issuance during April 2009. Fitch notes that the holders of $1.265 billion of Qwest's 3.5% convertible notes due 2025 have a put option exercisable on Nov. 15, 2010. Outside of the potential cash requirements associated with the convertible notes in 2010, near-term maturities are well within Fitch's free cash flow expectations during the same time frame. The execution of the put option will increase the refinancing risk attributable to Qwest's credit profile. In addition to anticipated levels of capital expenditures, dividends and scheduled maturities, cash requirements during 2010 may include up to $300 million of pension funding. The Stable Outlook reflects Fitch's expectation that the company's operating strategies, in particular the continued strengthening of Qwest's service bundle and investment in high speed data, will preserve operating margins and slow the rate of erosion of Qwest's Mass Market operating segment. QWEST COMMUNICATIONS: Moody's Puts 'Ba3' Rating on $300 Mil. Notes ------------------------------------------------------------------ Moody's Investors Service has assigned a Ba3 rating to Qwest Communications International Inc.'s proposed $300 million senior unsecured notes due 2015. The Company intends to use the proceeds for general corporate purposes, including repayment of maturing debt. In conjunction with the rating action, Moody's has affirmed the Company's Ba2 corporate family rating with a stable outlook, along with the SGL-1 short term liquidity assessment. Moody's analyst Dennis Saputo said "Qwest's Ba2 corporate family rating continues to be supported by the Company's still sizable subscriber base, predictable cash generating capabilities, moderate leverage, and expectations for additional debt reduction. Although Qwest faces challenges including growing competition within its local markets, accelerating access-line losses, and a tough macroeconomic environment, the Company continues to effectively manage costs and is expected to generate significant free cash flow in both 2009 and 2010." Despite these expectations, the Company faces significant annual debt maturities and is reliant on market access to meet upcoming obligations. Moody's views the debt issuance as the beginning steps towards addressing these maturities. "However, the declining trends in revenue and access lines are unlikely to reverse over the rating horizon. As a result, Moody's believe that longer-term, Qwest faces many challenges in sustaining its credit profile in a tough operating environment while balancing the demands of its shareholders," said Saputo. Ratings actions include these: Issuer: Qwest Communications International Inc. * $300 million new Senior Unsecured notes -- Assigned Ba3 (LGD5- 75%) * Corporate Family Rating -- Affirmed Ba2 * Probability of Default Rating -- Affirmed Ba2 * Outlook is stable Moody's most recent rating action related to QCII was taken on April 7, 2009, at which time Moody's assigned a Ba1 rating to Qwest Corporation's senior note offering. Qwest is a RBOC and nationwide inter-exchange carrier headquartered in Denver, CO. QWEST COMMUNICATIONS: S&P Puts 'B+' Rating on $300 Mil. Notes ------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned a 'B+' issue-level rating and a '6' recovery rating to Qwest Communications International Inc.'s proposed $300 million senior notes due 2015. The '6' recovery rating indicates the expectation for negligible (0-10%) recovery of principal in the event of payment default. The notes are to be issued under rule 144A with registration rights with proceeds for general corporate purposes including debt refinancing. At the same time, S&P affirmed its ratings, including the 'BB' corporate credit rating, on parent Qwest International Corp. and related entities. The Denver-based diversified telecommunications provider reported over $14 billion of debt at June 30, 2009. "The ratings reflect the secular decline of the company's core wireline business, an industry-wide trend," said Standard & Poor's credit analyst Richard Siderman. Other factors include leverage of 3.9x debt/EBITDA for the rolling 12 months ended June 30, 2009 (adjusted for operating leases and OPEBs), which is high for the rating, and significant debt maturities. Tempering factors include solid cash flow generation, which, in combination with material cash balances and a $945 million revolver, provide good liquidity. Additionally, Qwest remains the dominant local telephone exchange carrier in most areas of its 14-state market, a legacy of its former status as the regulated, but protected, monopoly telephone carrier. RED TRAIL: No Waiver for June 30 Covenant Violations So Far ----------------------------------------------------------- Red Trail Energy, LLC, posted a net loss of $1,259,653 for three months ended June 30, 2009, compared with a net income of $5,064,044 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $3,310,627 compared with a net income of $7,800,243 for the same period in 2008. The Company's balance sheet at June 30, 2009, showed total assets of $94,612,342, total liabilities of $64,408,265 and a members' equity of $30,204,077. The Company said that there is substantial doubt about its ability to continue as a going concern, noting these factors: (i) poor market conditions in the ethanol industry have led the Company to incur operating losses and negative operating cash flow since August 2008; (ii) the Company first violated certain of its loan covenants at Dec. 31, 2008, and was granted a waiver of those violations by the Bank, the Company was also found to be in violation of the same loan covenants at March 31, 2009, and June 30, 2009, and has not been granted a waiver of those violations; (iii) the Company projects that it will continue to be in violation of its loan covenants through 2009 and into 2010 and has not been granted a waiver of these projected covenant violations. The ability of the Company to continue as a going concern is dependent on improving its profitability and cash flow, possibly securing additional financing or raising additional equity, and working with the bank to structure debt payment terms that are achievable given current and applicable operating conditions. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?44bb Red Trail Energy, LLC owns and operates a 50 million gallon per year corn-based ethanol manufacturing plant located near Richardton, North Dakota in Stark County in western North Dakota. Fuel grade ethanol and distillers grains are the Company's primary products. Both products are marketed and sold primarily within the continental United States. RENAISSANCE RESIDENTIAL: Wants Access Cash Securing Two Loans ------------------------------------------------------------- The Hon. John H. Squires of the U.S. Bankruptcy Court for the Northern District of Illinois authorized, on an interim basis, Renaissance Residential of Countryside LLC to: -- use cash collateral securing repayment of loans with Parkway Bank and Trust Company and Puritan Finance Corporation; and -- grant adequate protection to the prepetition lenders. A final hearing on the Debtor's use of cash collateral is set for Sept. 24, 2009, at 01:00 p.m. at 219 South Dearborn, Courtroom 680, Chicago, Illinois. Objections, if any, are due Sept. 21, 2009, at 5:00 p.m. The Debtor will use the cash collateral to finance its everyday operations. As of Renaissance Residential's petition date, the Debtor owed $45.80 million to Parkway Bank and Trust Company and Puritan Finance Corporation. As adequate protection, the Debtor will grant the lenders (i) replacement and additional liens in most of the property of the Debtor's estate; and (ii) 100% of all net proceeds of all the Debtor's sales of condominiums that closed postpetition, and 100% of all rental income received by the Debtor after all payments. About Renaissance Residential of Countryside Palatine, Illinois-based Renaissance Residential of Countryside, LLC filed for Chapter 11 on Aug. 26, 2009 (Bankr. N.D. Ill. Case No. 09-31460). Richard H. Fimoff, Esq., at Robbins, Salomon & Patt Ltd., represents the Debtor in its restructuring effort. In its petition, the Debtor listed $50,000,001 to $100,000,000 in assets and $10,000,001 to $50,000,000 in debts. RH DONNELLEY: Proposes Jan. 22 Extension for Plan Filing -------------------------------------------------------- Under Section 1121 of the Bankruptcy Code, debtors have the exclusive right to file a plan or plans of reorganization within the initial 120-day period after the Petition Date. Furthermore, debtors have the exclusive right during the 180-day period after the Petition Date to solicit and obtain acceptances of that plan. However, Section 1121(d) permits courts to extend the Exclusive Periods "for cause" but not beyond 18 months after the date of the court's order. R.H. Donnelley Corp. and its debtor affiliates' Exclusive Plan Filing Period is set to expire on September 25, 2009, and their Plan Solicitation Period will expire on November 24, 2009. By this motion, the Debtors ask Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware to extend the Exclusive Plan Filing Period through and including January 22, 2010, and the Exclusive Solicitation Period through and including January 31, 2010. James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois, relates that the Debtors are on their way to completing the milestones associated with a plan process, like: -- the filing of a Plan of Reorganization and Disclosure Statement on or before July 27, 2009; -- the approval of the adequacy of the Disclosure Statement by October, 31, 2009; and -- confirmation of the Plan by January 15, 2010. As previously reported, the Debtors submitted their Plan and Disclosure Statement on July 27, 2009. Mr. Conlan contends that cause exists to extend the Exclusive Periods because the Debtors have worked expeditiously to address all critical issues and move their Chapter 11 cases forward. He notes that the Debtors have simultaneously addressed a variety of issues to stabilize their operations, including vendor and customer relations, the preparation and filing of schedules, and other operational and case management issues, which resulted in the stability of the Debtors' business operations. The Debtors are proceeding diligently to achieve confirmation of the pre-arranged Plan and their progress warrants the extension of the Exclusive Periods, Mr. Conlan tells the Court. He says the chances of obtaining confirmation of the Plan will be decidedly increased if the Debtors are allowed to continue to work with their key creditor constituencies, free from the distractions of a competing plan of reorganization. To deny an extension of the Exclusive Periods would jeopardize the significant progress the Debtors have made to date, thereby defeating the very purpose of Section 1121 of the Bankruptcy Code to afford a debtor a meaningful and reasonable opportunity to negotiate with creditors and propose and confirm a plan of reorganization, Mr. Conlan argues. 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: Proposes Incentive Plan for Business.Com ------------------------------------------------------ R.H. Donnelley Corp. and its affiliates seek the Bankruptcy Court's authority to institute a short-term incentive plan for debtor affiliate Business.Com, Inc., for 2009. James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois, notes that Business.Com depends its success on approximately 140 employees, whose specialized knowledge, creativity, and understanding of the business made the Debtor's successes possible. To motivate the Employees to reach the highest levels of performance, Business.Com historically has utilized two types of incentive plans, one individual based and one corporate based. The individual plan, with quarterly payouts and individual performance metrics, remains in effect, Mr. Conlan tells the Court. He adds that a certain corporate-based "Company Performance Plan," however, has lost all capacity to motivate the employees. The CPP utilizes for 2009 BDC and RHD Interactive corporate revenue and EBITDA targets that were set in the middle of 2007. However, he says that the severe economic downturn and changes in the strategic role and operations of Business.Com, have rendered the targets completely unattainable. Recognizing that without the possibility of earning any incentives associated with the CPP goals and targets established in 2007, compensation for the Debtor's employees in 2009 would fall far below the median for comparable-sized software and technology companies and the Debtors' stated compensation philosophy, Mr. Conlan says. In early 2009 RHD retained compensation consultant Semler Brossy Consulting Group, LLC, to provide an independent assessment of market norms and to assist RHD in designing and evaluating the reasonableness and competitiveness of a new incentive compensation program to update and improve Business.Com's current compensation system, Mr. Conlan tells the Court. Together, the Debtors and Semler Brossy developed and announced a series of 2009 business goals for the Debtor that involved a mix of revenue and operational targets and the achievement of specific development projects. Mr. Conlan says attainment of the goals was to have been tied into a new 2009 short-term incentive plan. However, before the new STIP could be finalized and implemented in early 2009, the pertinent Debtor executives were forced to turn their attention to the events that culminated in the Debtors seeking bankruptcy protection and their ensuing operation in bankruptcy. Consequently, BDC employees were left without a viable corporate performance incentive plan. For these reasons, the Debtors ask the Court to grant their request. In a separate filing, the Debtors ask the Court for authority to file the exhibits of their Request under seal and not be available to anyone except: -- the United States Trustee; -- the Official Committee of Unsecured Creditors; and -- parties who signed an appropriate confidentiality agreement. Mr. Conlan contends that the Exhibits would divulge confidential and sensitive information relating to the compensation of several of the Debtors' officers and their dissemination would provide the Debtors' competitors with a substantial and unfair competitive advantage. 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) SELECT MEDICAL: S&P Puts 'B-' Rating on CreditWatch Positive ------------------------------------------------------------ On Sept. 14, 2009, Standard & Poor's Ratings Services placed its ratings on Select Medical Corp. and its direct parent, Select Medical Holdings Corp., including the 'B-' corporate credit rating on Select Medical Corp., on CreditWatch with positive implications. The CreditWatch listing is prompted by the plans of Select Medical Holdings Corp., Select's ultimate parent, to sell 33 million shares of common stock for an estimated average offering price of $12 million (with proceeds totaling $373 million, or $429 million if the underwriters exercise their full allotment). The purpose of the initial public offering is to reduce $186 million of senior secured debt required under the company's credit agreement, and make $18 million of long-term incentive payments. The company will likely use remaining proceeds for additional debt reduction. S&P also expect that 22 million preferred shares will be converted into 55 million common shares (assuming $12 per common share) by the company's financial sponsors--Welsh, Carson, Anderson & Stowe and Thoma Cressey Bravo--and management, which will retain about 77% ownership after the IPO. If the proposed IPO is successful, S&P believes Select's financial risk profile would improve since proceeds will be targeted for debt repayment. Adjusted debt to EBITDA could fall to less than 5.5x, from 8.0x (assuming completion of the conversion). Moreover, the increased cushion under the company's senior secured facility covenants will allow Select to contend with step-downs in loan covenant ratios that it faces over the next few quarters. In addition, S&P expects credit measures to strengthen further in 2009 because of improving operating performance stemming from higher reimbursement, and due to specialty hospitals opened in 2008. SEMGROUP LP: Judge Shannon Directs Key Parties to Mediation ----------------------------------------------------------- During a September 9, 2009 hearing, Judge Brendan Linehan Shannon of the United States Bankruptcy Court ordered the Official Committee of Unsecured Creditors, producers and the Secured Lenders of SemGroup, L.P. and its affiliates' Chapter 11 cases to meet and confer with a mediator on September 13, 2009 for a possible resolution of a dispute over $253 million and $400 million allegedly owed by SemGroup to oil and gas producers, Tulsa World reported. In the Court-ordered mediation, the parties will appear before Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware, Tulsa World disclosed. Judge Shannon was quoted as saying that the Court will try to get as many parties to join in the mediation despite the short notice, Tulsa World noted. 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) 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: Manchester Requests Admin. Bar Date Extension ---------------------------------------------------------- Manchester Securities Corp. and Debtor SemGroup Holdings, L.P., are parties to a loan agreement dated June 25, 2008, whereby SemGroup Holdings owed Manchester Securities $176,838,479 as of the Petition Date. The obligations were secured pursuant to a pledge agreement between Manchester Securities and SemGroup Holdings dated June 25, 2008. Pursuant to a credit agreement dated June 17, 2008, General Electric Capital Corporation loaned SemCrude Pipeline, L.L.C. $120 million. Based on accounting, SemCrude Pipeline transferred $50 million of the $120 million to SemGroup Holdings prepetition and subsequently, SemGroup Holdings transferred the $50 million to SemCrude Pipeline. Pauline K. Morgan, Esq., at Young Conway Stargatt & Taylor, LLP, in Wilmington, Delaware, points out that SemGroup Holdings has a fiduciary duty to the creditors of its estate, including Manchester Securities, to preserve and maximize its assets, including claims against third parties and affiliates. Moreover, the deletion of the previously undisputed SemGroup Holdings' $50 million claim against SemCrude Pipeline from SemCrude Pipeline's amended schedules of assets and liabilities raise serious questions as to whether SemGroup Holdings is capable of fulfilling its fiduciary duties. She also points out that while the Bar Date Order seems to exempt SemGroup Holdings from having to file a proof of claim against SemCrude Pipeline, the Bar Date Order is less clear as to its applicability to the SemGroup Holdings' Claim. Accordingly, Manchester Securities asks the Court to (i) clarify that SemGroup Holdings is not required to file a proof of claim pursuant to the Bar Date Order, or (ii) extend the deadline by which SemGroup Holdings or any entity authorized to act on its behalf to file a claim until December 10, 2009. 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: Manchester Securities, et al., Want Plan Denied ------------------------------------------------------------ In separate filings, Manchester Securities Corp.; Department of Revenue for the State of Louisiana; Commonwealth of Pennsylvania, Department of Revenue; ACE American Insurance Company; Westchester Fire Insurance Company; Enbridge Gathering L.P.; Koch Materials, LLC, KMC Enterprises, LLC, and Koch Materials Mexico, B.V. ask the Court to deny confirmation of the Third Amended Joint Plan of Reorganization dated August 25, 2009. Manchester Securities, as largest creditor of Debtor SemGroup Holdings L.P., asserts that the Third Amended Plan cannot be confirmed because it will wipe out SemGroup Holdings' $50 million-claim against SemCrude Pipeline, L.L.C. The Plan places all general unsecured claims against Pipeline in Class 209, which will have an estimated distribution value of under three cents on the dollar, Manchester Securities stresses. At best, the Plan (i) violates the best interests test; (ii) provides for the de facto substantive consolidation of SemCrude Pipeline's assets with those of the other Debtors' estates; (iii) has not been proposed in good faith; (iv) is not fair and equitable; and (v) is not feasible, Manchester Securities insists. Moreover, Tidal Energy and Enbridge Gathering point out that in light of the Debtors' failure to file the plan supplement that will contain material information regarding the Plan and certain post-confirmation matters, the creditors have not received adequate information to enable them to vote on the Plan. The Koch Entities allege that the Plan violates (i) Section 1129 of the Bankruptcy Code by requiring the Koch Entities to perform under a contract with the Debtors while relieving the Debtors to perform under that contract; and (ii) Section 1124 of the Bankruptcy Code by conditioning the receipt of certain benefits of the Plan on a vote to accept the Plan. The Louisiana Department of Revenue argues that the treatment of priority tax claims in the Plan does not comply with Sections 1129(a)(9)(c) and 511 of the Bankruptcy Code. The Louisiana Department of Revenue asserts that it will not accept any lesser non-bankruptcy rate than is required by Section 1129(a)(9)(c) and 511. Similarly, the Pennsylvania Department of Revenue contends that the Plan should specifically provide that the Debtors and their successor will remain current in filing and payment of postpetition and postconfirmation taxes. Moreover, ACE and Westchester Fire object to the extent that the Debtors intend to assume and assign their insurance policies to entities other than the named insureds absent the Insurance Companies' consent. Specifically, Westchester Fire further contends that it should not be required to maintain bonds where the Debtors or the Reorganized Debtors absolve themselves of any obligation to third parties to maintain the Bonds. To the extent the Reorganized Debtors maintain the Bonds postconfirmation, the Reorganized Debtors must be required to execute an indemnity in the place of SemGroup, L.P, Westchester Fire says. Samson Resources Company, Samson Lone Star, LLC, and Samson Contour Energy E&P, LLC; Tidal Energy Marketing (U.S.) L.L.C. object to the Second Amended Plan, which was superseded by the Third Amended Plan, and incorporate their previous objections to the Disclosure Statement, as amended. Third Amended Plan SemGroup, L.P., and its debtor affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware on August 25, 2009, a Third Amended Joint Plan of Reorganization and the Disclosure Statement explaining that Plan. Under the Third Amended Plan, the Debtors expect their total available distributable value as of the Effective Date to be $2.354 billion, consisting of: * $1.019 billion in Cash, * $300 million in Second Lien Term Loan Interests, and * $1.035 billion in New Common Stock and Warrants. The $1.019 billion in Cash consists of (i) $618 million of Cash generated during the Debtors' Chapter 11 cases from the operations of the Debtors, which includes $112.4 million in restricted Cash, (ii) $164 million of Cash of the Canadian subsidiaries of SemGroup to be distributed pursuant to the Canadian Plans, (iii) $157 million in Cash from sales of assets by the SemGroup Companies and (iv) approximately $80 million of Cash expected to be received from the Canadian subsidiaries of SemGroup for crude settlements occurring after the Effective Date. In addition, the Debtors and Prepetition Lenders will contribute certain Causes of Action to the Litigation Trust. The Debtors will distribute interests in the Litigation Trust to the holders of certain Allowed Claims. The Debtors have not placed a value on the Litigation Trust. The Debtors propose an October 26, 2009 hearing to consider confirmation of the Plan. Objections to confirmation of the Plan, or to proposed modifications to the Plan, if any, must be filed so as to be actually received no later than 4:00 p.m. (Eastern Time) on October 21, 2009. A full-text copy of the Third Amended Plan dated August 25, 2009, is available for free at: http://bankrupt.com/misc/semgroup_Aug25Plan.pdf A full-text copy of the Disclosure Statement explaining the Third Amended Plan is available for free at: http://bankrupt.com/misc/semgroup_Aug25DiscStat.pdf 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: SemMaterials Proposes to Sell Equipment to Vance ------------------------------------------------------------- SemMaterials, L.P., its parent SemGroup, L.P., and certain direct and indirect subsidiaries of SemGroup, ask the Court to approve a sale of SemMaterials' assets, pursuant to a non-binding offer submitted by Vance Brothers, Inc., subject to higher bids. Specifically, SemMaterials will sell certain equipment and miscellaneous assets found in its facilities in Fort Lauderdale Florida; Garden City, Georgia; and Halstead Kansas to Vance Brothers for $520,000. In light of the nature and size of the Assets, the Debtors believe that conducting a public auction is costly and would unduly diminish the proceeds from the proposed sale transaction. Parties wishing to submit a higher offer for the Assets must do so before September 17, 2009. The Court will consider the Debtors' Motion to Sell on September 24, with an objection deadline on September 17. 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) SIX FLAGS: Noteholders Propose "Superior" Alternative Plan ---------------------------------------------------------- The Informal Committee of holders of 12.25% Senior Notes Due 2016 issued by Six Flags Operations, Inc., asks the U.S. Bankruptcy Court for the District of Delaware to enter an order (i) terminating Six Flags Inc. and its units' exclusive periods to file a plan of reorganization and solicit acceptances thereof, in connection with the Debtors' chapter 11 cases, and (ii) delaying the hearing to the disclosure statement to Six Flag's proposed Chapter 11 plan. On behalf of the noteholders, Howard A. Cohen, Esq., at Drinker Biddle & Reath LLP, asserts that Exclusivity should be terminated in these cases because (i) the Debtors have turned a blind eye on a superior, fully committed alternative proposal, (ii) creditors should have the right to choose which plan is superior, and (iii) the Debtors' management team and board of directors are racing ahead with a plan that enriches themselves at the expense of virtually every other creditor constituency. Conversely, the Alternative Plan proposed by the Informal Committee, which includes a fully backstopped equity rights offering for $450 million, provides each of the Debtors' stakeholders (other than the six members of the Debtors' senior management team) with the same treatment provided under the Management Plan, except for three classes of creditors, which receive better treatment than what is provided under the Management Plan. Specifically: * SFI Noteholders: while the Management Plan provides SFI Noteholders with merely 1.0% of the New Common Stock, the Alternative Plan provides SFI Noteholders with (i) 3.6% of the New Common Stock, (ii) warrants to purchase up to an additional 5.0% of the New Common Stock and (iii) rights to participate in the equity offering to purchase up to an additional 6.1% of the New Common Stock. * SFO Noteholders: while the Management Plan provides SFO Noteholders with only 7% of the New Common Stock, the Alternative Plan provides SFO Noteholders with (i) approximately 28% of the New Common Stock and (ii) rights to participate in the equity offering to purchase up to an additional 61.7% - 69.4% of the New Common Stock (depending on the degree of participation in the rights offering by the SFI Noteholders). * Lenders: while the Management Plan provides Lenders with 92% of the New Common Stock, the Alternative Plan pays off the Lenders in full in cash and gives them the opportunity to participate in the New Term Loan. "Despite the fact that the Alternative Plan is a viable alternative and provides the Debtors' creditors with over 375% more value in enhanced recoveries, the Management Team has failed to give the Alternative Plan any meaningful consideration. Rather than embrace (or, at a minimum, investigate) this proposal, the Debtors have employed a letter-writing campaign aimed at slowing down the Informal Committee and has held steadfast to the timetable mandated by the Debtors' Lock-Up Agreement with certain of their Lenders, pursuant to which, among other things, the Debtors' Disclosure Statement must be approved on or before October 15, 2009," Mr. Cohen points out. Six Flags Plan Judge Christopher S. Sontchi is scheduled to convene a hearing on October 8, 2009, at 10:00 a.m., prevailing Eastern Time, to consider the adequacy of the Disclosure Statement explaining the First Amended Joint Plan of Reorganization filed by Six Flags, Inc., and its debtor affiliates. Objections are due October 1, 2009, at 4:00 p.m. Prevailing Eastern Time. As previously reported by the TCR, Six Flags, Inc., Premier International Holdings, Inc., and their debtor affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware a first amended joint plan of reorganization and an accompanying disclosure statement, dated August 20, 2009. Under the Plan, the holders of Prepetition Credit Agreement Claims against Six Flags Theme Parks Inc. and certain of its wholly-owned domestic subsidiaries will convert those Claims into (i) approximately 92% of the New Common Stock to be issued by Reorganized SFI, subject to dilution by the Long-Term Incentive Plan, and (ii) a new term loan in the aggregate amount of $600 million. Based on the Debtors' estimate of Allowed Claims as of an assumed December 31, 2009 Plan Effective Date in these Reorganization Cases, the First Amended Plan provides for a recovery of: -- approximately 92.2% to 112.8% to holders of Six Flags Theme Parks, Inc. Prepetition Credit Agreement Claims; -- a 100% recovery for the holders of all Other Secured Claims; -- a 100% recovery for the holders of Unsecured Claims against all Debtors other than SFO and SFI; -- 8.2% to 12.4% to holders of Unsecured SFO Claims; -- 0.4% to 0.6% to holders of Unsecured SFI Claims; and -- no recovery for holders of Funtime, Inc. Claims, Subordination Securities Claims and Pre-confirmation Equity Interests in SFI. A blacklined version of the First Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/sixf_1stplanblackline.pdf A blacklined version of the First Amended Chapter 11 Plan is available for free at: http://bankrupt.com/misc/sixf_1stdsblackline.pdf About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SKYPOSTAL NETWORKS: June 30 Balance Sheet Upside-Down by $2.4MM --------------------------------------------------------------- SkyPostal Networks, Inc.'s balance sheet at June 30, 2009, showed total assets of $2,977,075 and total liabilities of $5,416,149, resulting in a stockholders' deficit of $2,439,074. For three months ended June 30, 2009, the Company posted a net loss of $1,941,728 compared with a net income of $378,487 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $2,421,117 compared with a net loss of $641,234 for the same period in 2008. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?44bc SkyPostal Networks, Inc. -- http://www.skypostal.com/-- is an international wholesale mail distribution company that specializes in hand delivery of commercial mail, periodicals and parcel post into the Latin America-Caribbean (LAC) region. SkyPostal is the largest private postal network in Latin America, delivering more than 60 million mail items each month through its network of local private postal operators. SkyPostal handles mail from European postal administrations, major publishers, mail consolidators, international mailers and financial institutions that require time-defined and reliable delivery of their mail, magazines and mail order parcels. Going Concern Doubt On March 31, 2009, Morrison, Brown, Argiz and Farra, LLP, expressed substantial doubt about SkyPostal Networks, Inc.'s ability to continues as a going concern after auditing the Company's financial statements for the fiscal years ended Dec. 31, 2008, and 2007. The auditor noted that the Company suffered recurring losses from operations, has a deficiency in working capital and has a net capital deficiency. SL MANAGEMENT: Lender Pursues Principal for Deficiency Claim ------------------------------------------------------------ WestLaw reports that a declaratory judgment action brought by a guarantor of the debt of a corporate Chapter 11 debtor, for a determination that the debtor's debt had been fully satisfied by the distribution provided to the creditor under the confirmed plan, and that the creditor, in pursuing its remedies against the guarantor, was violating the provisions of the debtor's confirmed plan, was a cause of action over which bankruptcy court could exercise continuing postconfirmation jurisdiction, as one which necessarily involved interpretation of the confirmed plan. Accordingly, the cause of action would be referred to the bankruptcy court, but only to submit proposed findings of fact and conclusions of law, and not to finally decide. The guarantor bringing suit was a nonparty to the bankruptcy case. Weaver v. Texas Capital Bank, N.A., --- B.R. ----, 2009 WL 2195886 (N.D. Tex.). Represented by Eric A. Liepins, Esq., in Dallas, Tex., SL Management LLC sought chapter 11 protection (Bankr. N.D. Tex. Case No. 08-40143) on January 16, 2008, reporting $4,307,500 in assets and $3,761,332 in liabilities. On September 2, 2008, Judge Nelms confirmed SL's Plan of Reorganization, and the bankruptcy action was closed on December 16, 2008. On April 9, 2008, Texas Capital Bank, a creditor in the SL bankruptcy proceeding, filed an action in Texas state court against Dewey Weaver, alleging that he'd executed "a series of Commercial Guarantee agreements" to "personally guaranty [sic] payment of all amounts" owed by SL. The state court suit sought to recover on four promissory notes executed to facilitate the purchase of several tracts of residential property in Tarrant County, Texas. The suit alleged that, contemporaneously with SL's execution of each note, Mr. Weaver executed a Commercial Guarantee. The Weaver Guaranties provided that Weaver "absolutely and unconditionally guaranteed full and punctual payment and satisfaction of SL[ ]'s indebtedness to Plaintiff," and that Texas Capital could enforce the Weaver Guaranties against him without first exhausting its remedies against SL. The state court petition further alleged that SL defaulted on the Notes, that Texas Capital made written demand on Mr. Weaver, as guarantor, to pay the Notes, and that Mr. Weaver failed to do so, thereby breaching the Weaver Guaranties. Texas Capital acknowledges in its petition the bankruptcy filing by SL, stating that it sought separate relief in the bankruptcy court, including foreclosing its security interest in the real property securing the promissory notes. In the state suit, Texas Capital sought relief only as to Mr. Weaver. Mr. Weaver failed to answer or otherwise respond to the state court suit, and on December 15, 2008, Texas Capital obtained a default judgment against him. Texas Capital foreclosed on its security interest in the real property, sold the property, and obtained an abstract of judgment against Mr. Weaver for the deficiency, plus attorney's fees, costs, and interest. On February 25, 2009, Texas Capital initiated proceedings in Louisiana state court to enforce its Texas judgment against Mr. Weaver. On February 27, 2009, Mr. Weaver filed suit in the U.S. District Court for a declaratory judgment, alleging that the default judgment obtained by Texas Capital against him violated the Plan of Reorganization of SL, i.e., that pursuant to the confirmed Plan, the debt of SL to Texas Capital was satisfied, in full, by a conveyance of the security to Texas Capital. Mr. Weaver argues that Texas Capital "is bound by the confirmed Plan to receive the properties in full satisfaction of the debt and therefore no debt was owed to Defendant for which the Plaintiff could be held liable for after the Effective Date of the Plan," in part because Texas Capital did not seek a determination from the bankruptcy court that the value of the properties surrendered under the Plan was less than the amount of the debt owed to Texas Capital. On April 1, 2009, Texas Capital moved to transfer Weaver v. Texas Capital Bank, N.A., Case No 09-cv-380 (N.D. Tex.), to Judge Nelms, contending the claims are core proceedings relating to the SL bankruptcy action and that, under 28 U.S.C. Sec. 1412, the District Court should therefore refer the case to the bankruptcy court. Ruling on this motion, the Honorable Barbara M.G. Lynn ruled that (1) the declaratory judgment action is a cause of action over which the bankruptcy court could exercise continuing postconfirmation jurisdiction, as one which necessarily involved interpretation of the confirmed plan, but (2) this matter will be referred to the bankruptcy court only to submit proposed findings of fact and conclusions of law, and not to finally decide. SLM CORPORATION: Fitch Downgrades Preferred Stock Rating to 'BB' ---------------------------------------------------------------- Fitch Ratings has taken these rating actions on SLM Corporation: -- Long-term Issuer Default Rating downgraded to 'BBB-' from 'BBB'; -- Short-term IDR affirmed at 'F3'; -- Senior Debt downgraded to 'BBB-' from 'BBB'; -- Short-term debt affirmed at 'F3'; -- Preferred Stock downgraded to 'BB' from 'BB+'. The Rating Outlook is Negative. Approximately $34.4 billion of debt and preferred stock is affected by these actions. The downgrade reflects the expectation that SLM will continue to transition into a fee-for-service business model with a bank subsidiary that originates higher-risk private education loans. If pending education legislation is passed in its current form, Fitch would expect SLM to be a meaningful participant in the servicing and collection of government guaranteed loans under the Department of Education's servicing contract. This should generate relatively stable earnings performance over time given the company's cost structure and scalable business model. If the legislation is altered to retain the FFELP program, Fitch believes SLM will remain one of the largest originators of the product, which will provide a boost to fee income and could allow for a greater share of the ED's servicing contract. Either way, Fitch believes the funding of government guaranteed student loans will continue to be outsourced to the Treasury, as is the current practice under the Ensuring Continued Access to Student Loans Act (ECASLA). The current ratings also reflect Fitch's expectation that unsecured debt outstanding will be repaid as it comes due with available liquidity and cash flows from the legacy business model. Fitch believes portfolio cash flows are sizeable and relatively predictable and include ABS trust servicing cash flows, ABS residual cash flows, which are backed largely by lower-risk FFELP loan collateral, loan principal repayments, and other operating cash flows. On June 30, 2009, non-bank liquidity included about $4 billion of cash and unrestricted investments and unencumbered FFELP loans amounted to $3.2 billion. The most meaningful unsecured debt maturities occur in 2010 and 2011, at $6.9 billion and $6.6 billion, respectively. The company's capitalization is expected to increase materially over time as unsecured debt is repaid. SLM is expected to remain an originator of private education loans, which will be funded out of its subsidiary Sallie Mae Bank. The profitability of this product is expected to increase modestly from more recent levels as market yields trend up; due in part to a reduction in competition, and provision expense eventually stabilizes. Management expects credit losses on the product to peak in the third quarter of 2009, as non-traditional loans and loans without a co-borrower account for a lower percent of loans entering repayment. Fitch remains cautious about near-term asset quality trends and believes it will be some time before it can assess the credit quality of more recent originations. All new loans are expected to be funded in the bank, initially with bank deposits, but longer-term Fitch will look for the company to develop more funding flexibility through term ABS issuance, although the economics of these transactions are currently unclear. Rating constraints continue to include legislative and political risk in the sector, as the servicing contract is subject to a renewal in five years and the ED has discretion over the distribution of servicing volume. Should the FFELP program be retained, the benefits for SLM include an additional fee stream from the origination of FFELP loans and a potential boost to its market share on the servicing side, as SLM, which has the most significant school channel relationships, would likely be able to retain servicing on all loans it originated. Fitch believes the retention of FFELP would serve to solidify the company's ratings at their current level. While Fitch has outlined its expectations for the business, certain factors continue to develop. In the shorter term, negative rating action could result from an inability to refinance the ABCP facility ahead of its April 2010 maturity, or uneven distribution of the ED servicing contract, which impairs the company's profitability prospects. Resolution of these issues could result in rating stability. Longer-term, negative rating momentum could result from free cash flow generation below Fitch's expectations, which impairs the company's ability to meet its debt service obligations, continued deterioration in private education loan asset quality metrics, and/or legislative change which removes private sector involvement from the government guaranteed student lending business. SPORTSCLICK INC: Green Swan Terminates Sale Agreement ----------------------------------------------------- Green Swan Capital Corp. entered into an agreement in principle with SportsClick Inc., dated April 27, 2009, whereby SportsClick would purchase all of the issued and outstanding shares of Green Swan. On June 26, 2009, the Bank of Montreal, a secured creditor of SportsClick, issued a notice of intent under the Bankruptcy and Insolvency Act to reclaim its loan from SportsClick. On July 17, 2009, Ernst & Young Inc. became the Receiver in respect of the property of SportsClick. Green Swan said, after having engaged in a process of canvassing and assessing all reasonable alternatives with due diligence, and considering the continuing delays and difficulties of implementing any suitable workout arrangement, it will terminate the Proposed Transaction. Green Swan continues to investigate its options for obtaining the return of the refundable deposit to SportsClick pursuant to the Proposed Transaction. The receivership process introduces a significant operating risk and management believes the return of the deposit is unlikely. Green Swan is continuing to pursue and review other businesses and assets with a view to completing a qualifying transaction. Green Swan cannot offer any assurances that a qualifying transaction will be completed. Green Swan (TSX VENTURE:GSW.P) is a capital pool company which was listed on the TSXV on October 7, 2008, following the completion of its initial public offering of $400,000, including $104,000 raised from founders. Green Swan is listed on the TSX Venture Exchange under the symbol "GSW.P". SportsClick Inc. (TSX VENTURE:SCV) sells licensed authentic sports merchandise & apparel, including team jerseys, NASCAR hats, JH design jackets, Diecasts, and sports collectibles. STALLION OILFIELD: Nonpayment of Notes Cues Moody's 'D' Rating -------------------------------------------------------------- Moody's Investors Service downgraded Stallion Oilfield Services Ltd.'s Probability of Default Rating to D from Caa3 and its Corporate Family Rating to Ca from Caa3. Moody's also downgraded the company's $75 million senior secured term loan and $175 million senior secured revolver ratings to B3, LGD 2 (13%) from B2, LGD 2 (12%). The $265 million senior unsecured notes and $250 million senior unsecured term loan ratings remain unchanged at Ca, LGD 4 (69% changed from 68%). The outlook is negative. This rating action follows Stallion's non-payment of the required interest on its senior unsecured notes and term loan in August 2009 and the expiration of the respective 30 day cure periods. This missed interest payment is also an event of default under the company's senior secured credit agreements. Stallion is currently in negotiations with all of its lenders to restructure its debts. Moody's views a missed interest payment not made within the cure period as a default and Moody's have accordingly lowered the PDR to D. Moody's used a 50% recovery rate assumption under Moody's Loss Given Default Methodology to arrive at the instrument ratings and LGD assessments. This recovery rate is consistent with Moody's standard LGD assumption but also falls within a range of reasonable enterprise valuation assumptions based on EBITDA multiples. The severity of the current downturn in onshore North American oilfield services, relatively short history of Stallion's core workforce accommodations business and limited liquidation value of its tangible assets results in great uncertainty regarding the company's enterprise value and ultimate recovery for creditors. The last rating action was on March 27, 2009, when Moody's downgraded Stallion's CFR to Caa3 from B3, PDR to Caa3 from Caa1 and correspondingly downgraded the debt instrument ratings. Stallion Oilfield Services Ltd. is a privately held oilfield services company based in Houston, TX. STALLION OILFIELD: S&P Downgrades Corporate Credit Rating to 'D' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Stallion Oilfield Services Ltd. to 'D' from 'CCC'. At the same time, S&P lowered the rating on the senior unsecured debt to 'D' from 'CCC' and kept the recovery rating at '4', indicating average (30% to 50%) recovery in the event of default. S&P also lowered the rating on the senior secured debt to 'D' from 'B-', and kept the recovery rating at '1', indicating S&P's expectation for very high (90% to 100%) recovery in the event of default. "The rating actions reflect Stallion's failure to make its required interest payments," said Standard & Poor's credit analyst Kenneth Cox. On Aug. 1, 2009, Stallion failed to make an interest payment in the amount of $12.9 million on its senior unsecured notes. Additionally, on Aug. 6, 2009, the company failed to make a $4.8 million interest payment on its senior unsecured term loan. STANFORD GROUP: Canada Court Recognizes U.S. Receiver Over Vantis ----------------------------------------------------------------- The Joint Liquidators of Stanford International Bank Limited, Nigel Hamilton-Smith and Peter Wastell, said a verbal judgment from the Montreal Superior Court, Canada, issued on September 11, 2009, concluded that Ralph Janvey, the Receiver appointed by the U.S. Securities and Exchange Commission, be formally recognized as the party to whom control of the Canadian assets should be passed. The Joint Liquidators confirmed that, contrary to allegations made, all copies taken of the data were to international forensic standards and their actions have at all times been in accordance with the terms of the order of the High Court of Antigua and Barbuda under which they were appointed, including taking steps to ensure that client data is kept confidential. Commenting on the judgment, Nigel Hamilton-Smith, Client Partner at Vantis Business Recovery Services and Joint Liquidator of SIB, says, "We fully anticipate appealing this decision and will be closely studying the judgment with our legal counsel. It is hoped that the Court of Appeal in Canada will have an opportunity to fully consider all the relevant legal issues." "Despite this recent judgment, legal proceedings issued by the Attorney General in Ontario, Canada, are continuing for control of the same assets located in Canada. This follows a request from the US Department of Justice (DOJ) that the assets be passed to the DOJ as proceeds of crime." The Joint Liquidators are already recognized in United Kingdom as the party to whom control of the assets of SIB should be passed. Legal proceedings continue in the US and Switzerland for the control of the assets of SIB, and the Joint Liquidators remain committed to communicating accurate and timely information for the benefit of all SIB investors located in a number of jurisdictions across the world. The recently developed Online Claims Management System provides investors with a cost efficient and secure method of registering their claims against SIB online. Since the site went live in July 2009, 17,000 SIB investors have accessed the service. Once registered, investors are able to monitor the status of their claim and receive updates directly from the Joint Liquidators on the progress of the liquidation. Investors may register their claims against SIB by visiting https://stanford.vantisplc.com/ Stanford Trust Company Limited remains in receivership and is not currently in a position to formally agree claims with its clients and creditors. The liquidators of SIB are, however, aware of the position of STC, and its clients and creditors, and know that STC's clients' claims will be formally registered with SIB in due course. Further communications will be issued when practicable. For further information, SIB and STC investors and creditors should visit http://www.vantisplc.com/Stanfordor email stanfordenquiries@vantisplc.com Vantis Business Recovery Services is a trading division of Vantis Group Ltd, which is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. Vantis Group Ltd is a Vantis plc group company. AIM listed Vantis plc is a leading UK accounting, tax and business recovery and advisory group. For more information about Vantis, visit http://www.vantisplc.com/ About Stanford Group Stanford companies operated by selling certificates of deposit in more than 100 discrete locations spanning 15 states in the United States and 13 countries in Europe, the Caribbean, Canada and Latin America. Stanford claimed to have more than 30,000 clients located in 133 countries. Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management serves more than 70,000 clients in 140 countries. On February 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The U.S. Securities and Exchange Commission, on Feb. 17, charged before the U.S. District Court in Dallas, Texas, Mr. Stanford and three of his companies for orchestrating a fraudulent, multi- billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. A criminal case was pursued against him in June before the U.S. District Court in Houston, Texas. Mr. Stanford pleaded not guilty to 21 charges of multi-billion dollar fraud, money-laundering and obstruction of justice. Assistant Attorney General Lanny Breuer, as cited by Agence France-Presse News, said in a 57-page indictment that Mr. Stanford could face up to 250 years in prison if convicted on all charges. Mr. Stanford surrendered to U.S. authorities after a warrant was issued for his arrest on the criminal charges. The criminal case is U.S. v. Stanford, H-09-342, U.S. District Court, Southern District of Texas (Houston). The civil case is SEC v. Stanford International Bank, 3:09-cv-00298-N, U.S. District Court, Northern District of Texas (Dallas). See: http://www.usdoj.gov/criminal/vns STANFORD GROUP: Fraud Victims Want to File Involuntary Chapter 11 ----------------------------------------------------------------- Victims of Stanford International Bank Ltd.'s alleged $7 billion Ponzi scheme have urged the court to let them file an involuntary bankruptcy petition that would take the administration of Stanford's estate out of the receiver's hands, according to Law360. On Sept. 10, 2009, investors urged U.S. District Judge David C. Godbey of the Northern District of Texas to lift the stay preventing an involuntary bankruptcy petition. About Stanford Group Stanford companies operated by selling certificates of deposit in more than 100 discrete locations spanning 15 states in the United States and 13 countries in Europe, the Caribbean, Canada and Latin America. Stanford claimed to have more than 30,000 clients located in 133 countries. Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management serves more than 70,000 clients in 140 countries. On February 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The U.S. Securities and Exchange Commission, on Feb. 17, charged before the U.S. District Court in Dallas, Texas, Mr. Stanford and three of his companies for orchestrating a fraudulent, multi- billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. A criminal case was pursued against him in June before the U.S. District Court in Houston, Texas. Mr. Stanford pleaded not guilty to 21 charges of multi-billion dollar fraud, money-laundering and obstruction of justice. Assistant Attorney General Lanny Breuer, as cited by Agence France-Presse News, said in a 57-page indictment that Mr. Stanford could face up to 250 years in prison if convicted on all charges. Mr. Stanford surrendered to U.S. authorities after a warrant was issued for his arrest on the criminal charges. The criminal case is U.S. v. Stanford, H-09-342, U.S. District Court, Southern District of Texas (Houston). The civil case is SEC v. Stanford International Bank, 3:09-cv-00298-N, U.S. District Court, Northern District of Texas (Dallas). See: http://www.usdoj.gov/criminal/vns STANFORD GROUP: Pulman Cappuccio Files $80-Million Lawsuit ---------------------------------------------------------- Pulman, Cappuccio, Pullen & Benson, LLP, filed a lawsuit in a San Antonio, Texas, state court on behalf of 97 former investors at Stanford International Bank. The lawsuit, styled Rupert, et al. v. Winter, et al., seeks almost $80 million in damages from insurance brokers Willis Group Holdings, Ltd., and Bowen, Miclette & Britt, Inc., and from a trust company, Aleman, Cordero, Galindo & Lee, affiliated with a Panamanian law firm. "Allen Stanford didn't build this bank all by himself," said lead attorney and firm managing partner Randy Pulman. "He had help. Companies like Willis, Bowen Miclette, and the Aleman firm and trust company were too close to the action at Stanford International Bank to avoid responsibility for this debacle." Stanford International Bank took in $7.2 billion in deposits from all over the United States and Latin America until it was shut down this February by the Securities and Exchange Commission. The SEC claims that the bank was a "massive Ponzi scheme" whose founder, Allen Stanford, is in jail outside of Houston, Texas awaiting trial. The lawsuit against the insurance brokers seeks to hold them responsible for "Safety and Security" letters they sent to the plaintiffs saying that deposits at Stanford International Bank were protected by insurance and that the bank was made up of "first class business people." "Allen Stanford counted on these insurance companies to help him separate our clients from their money -- now, we're counting on them to put it back. It is against the law in Texas for an insurance broker to tell someone something is insured when it's not," explained Mr. Pulman. Many of the plaintiffs' Stanford deposits were held in trust accounts served by Stanford Trust Company Limited and Aleman, Cordero, Galindo & Lee Trust (BVI) Limited as trustees. The lawsuit alleges that the trust company, the firm, and its principals breached fiduciary duties to the trusts. The lawsuit also seeks damages from several individual employees of those companies, and several former employees at Stanford Fiduciary Investor Services and Stanford Trust Company. The suit alleges that all the defendants are also liable for securities fraud. Randy Pulman has already filed suit on behalf of five Stanford depositors against Lloyd's of London and the Stanford Receiver in a Dallas, Texas federal court. The lawsuit, styled De Leon v. Lloyd's of London, seeks damages and a declaration from the court that the proceeds of Stanford International Bank's "Bankers Blanket Bond" insurance policies should be held for the depositors. Pulman, Cappuccio, Pullen & Benson, LLP -- http://www.pulmanlaw.com/-- is a 15-lawyer firm in San Antonio, Texas that specializes in representing investors and businesses in litigation and transactions. The firm is also home to San Antonio's second largest bankruptcy practice. About Stanford Group Stanford companies operated by selling certificates of deposit in more than 100 discrete locations spanning 15 states in the United States and 13 countries in Europe, the Caribbean, Canada and Latin America. Stanford claimed to have more than 30,000 clients located in 133 countries. Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management serves more than 70,000 clients in 140 countries. On February 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The U.S. Securities and Exchange Commission, on Feb. 17, charged before the U.S. District Court in Dallas, Texas, Mr. Stanford and three of his companies for orchestrating a fraudulent, multi- billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. A criminal case was pursued against him in June before the U.S. District Court in Houston, Texas. Mr. Stanford pleaded not guilty to 21 charges of multi-billion dollar fraud, money-laundering and obstruction of justice. Assistant Attorney General Lanny Breuer, as cited by Agence France-Presse News, said in a 57-page indictment that Mr. Stanford could face up to 250 years in prison if convicted on all charges. Mr. Stanford surrendered to U.S. authorities after a warrant was issued for his arrest on the criminal charges. The criminal case is U.S. v. Stanford, H-09-342, U.S. District Court, Southern District of Texas (Houston). The civil case is SEC v. Stanford International Bank, 3:09-cv-00298-N, U.S. District Court, Northern District of Texas (Dallas). See: http://www.usdoj.gov/criminal/vns STANT PARENT: PBGC Assumes Underfunded Pension Plans ---------------------------------------------------- The Pension Benefit Guaranty Corporation is moving to assume responsibility for the underfunded pension plans covering about 900 employees and retirees of Stant Manufacturing Inc. and its Standard-Thomson Corp. affiliate, based in Connersville, Ind., with other facilities in Pine Bluff, Ark. and Troy, Mich. Stant and its U.S. subsidiaries, makers of specialized parts for automotive heating, cooling and emission control applications, entered chapter 11 bankruptcy on July 27, 2009. The pension insurer's action comes as Stant and its domestic subsidiaries seek approval for the sale of substantially all assets, at a hearing set for September 15 in the U.S. Bankruptcy Court for the District of Delaware. The proposed transaction currently will not include the pension plans. After the sale, no entity would remain to finance or administer the pension plans. By taking action prior to the asset sale, the PBGC matures a claim for the entire pension shortfall against Stant's foreign assets. If the PBGC delayed action until after the sale closes, the possibility of recovering on the agency's claims for unfunded pension liabilities would be severely diminished. Collectively, the Stant Pension Plan (Hourly Employees), the Pension Plan for Hourly Employees of Standard-Thomson (IUE) and the Pension Plan for Hourly Employees of Standard-Thomson (IAM) are 61 percent funded, with $14.3 million in assets to cover $23.4 million in benefit liabilities, according to PBGC estimates. The agency expects to be liable for $8.9 million of the $9 million shortfall. The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plans, which end on September 15, 2009. Retirees and beneficiaries will continue to receive their monthly benefit checks without interruption, and other workers will receive their pensions when they are eligible to retire. Until the PBGC becomes trustee of the pension plan, the plan will remain ongoing under company sponsorship. The agency will send notification letters to all plan participants when it becomes trustee. Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2009 is $54,000 per year. The maximum guaranteed amount is lower for those who retire earlier or elect survivor benefits. In addition, certain early retirement subsidies and benefit increases made within the past five years may not be fully guaranteed. Workers and retirees with questions may consult the PBGC Web site, http://www.pbgc.gov/or call toll-free at 1-800-400-7242. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask for 800-400-7242. Retirees of Stant Manufacturing Inc. and Standard-Thomson Corp. who draw a benefit from the PBGC may be eligible for the federal Health Coverage Tax Credit. Further information may be found on the PBGC Web site at: http://www.pbgc.gov/workers-retirees/benefits- information/content/page13692.html Assumption of the plans' unfunded liabilities will increase the PBGC's claims by $9 million and was not previously included in the agency's fiscal year 2008 financial statements. The PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 30,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns. About Stant Parent Connersville, Indiana-based Stant Parent Corp. and its affiliates filed for Chapter 11 on July 27, 2009 (Bank. D. Del. Lead Case No. 09-12647). Sandra G.M. Selzer, Esq., and Scott D. Cousins, Esq., at Greenberg Traurig, LLP, represent the Debtors in their restructuring efforts. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five creditors to serve on the Official Committee of Unsecured Creditors in the Debtors' case. In their petition, the Debtors listed assets and debts both ranging from $50,000,001 to $100,000,000. STAR TRIBUNE: Expects to Exit Chapter 11 Bankr. on Sept. 28 ----------------------------------------------------------- Jeff Baenen at The Associated Press reports that The Star Tribune Company expects to emerge from Chapter 11 bankruptcy protection on September 28, as a federal judge is expected to approve the Company's reorganization plan after a hearing in New York on Thursday. The Star Tribune's plan includes replacing its current owners, including majority stakeholder Avista Capital Partners, with its main lenders -- led by investment group Angelo, Gordon & Co. According to The AP, the Star Tribune has delayed posting some in- depth Sunday stories online to keep readers buying the newspaper. The report says that the Star Tribune has experimented with a TV- style newscast online and may charge readers for access to some or all stories on the Internet. Headquartered in Minneapolis, Minnesota, The Star Tribune Company -- http://www.startribune.com/-- operates the largest newspaper in the state of Minnesota and published seven days each week in an edition for the Minneapolis-Saint Paul metropolitan area. The Company and its affiliate, Star Tribune Holdings Corporation, filed for Chapter 11 protection on January 15, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-10244). Marshall Scott Huebner, Esq., James I. McClammy, Esq., and Lynn Poss, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Blackstone Advisory Services L.P. is the Debtors' financial advisor. The Garden City Group, Inc., serves as noticing and claims agent. Scott Cargill, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC, represent the official committee of unsecured creditors. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. STEPHEN BALDWIN: Seeks Banker Meeting on Home Foreclosure --------------------------------------------------------- Michael Bathon at Bloomberg News reports that Stephen Baldwin wants to hold discussions with lenders about foreclosure proceedings against his home, which forced him to seek bankruptcy protection. Mr. Baldwin filed a "loss mitigation" request to enter into talks with Bankers Trust Company as the trustee for a mortgage on his home on Mountain Road South in Rockland County, New York, according to court documents in the U.S. Bankruptcy Court in White Plains, New York. Actor Stephen Baldwin is known for films like "The Usual Suspects" and recently appeared on the reality television show "I'm a Celebrity Get Me Out of Here." He is the youngest of the acting Baldwin brothers, which include Alec. He and his wife Kennya lives in Upper Grandview, New York. Mr. Baldwin and his wife filed for Chapter 11 bankruptcy protection on July 21, 2009 (Bankr. S.D. N.Y. Case No. 09-23296). Bruce Weiner, Esq., at Rosenberg, Musso & Weiner, LLP, assists the Debtors in their restructuring efforts. The Debtors listed $1,000,001 to $10,000,000 in assets and $1,000,001 to $10,000,000 in debts. SUNWEST MANAGEMENT: To Sell 148 Properties to Blackstone -------------------------------------------------------- According to Bloomberg News, Sunwest Management agreed to sell as many as 148 properties to Blackstone Group LP's real estate unit as part of its plan to emerge from bankruptcy protection. The report relates that Blackstone made its offer for the properties in partnership with Emeritus Senior Living, which manages 309 communities in a number of states, and with a company controlled by Emeritus's chairman and co-chief executive officer, Dan Baty. Baty's company is called Columbia Pacific Management Inc. According to Bloomberg, if the court reviewing Sunwest's reorganization plan approves the sale, Emeritus would take over management of the facilities and have the option to invest as much as 10 percent of the equity in the partnership with Blackstone and Columbia Pacific, Sunwest and Blackstone said in a statement. As reported by the TCR on August 28, 2009, the court-appointed receiver and chief restructuring officer overseeing the reorganization of Sunwest Management on August 25 filed a distribution plan with the U.S. District Court in Eugene, Oregon. A product of intensive financial, legal and business analysis and summer-long mediations involving numerous stakeholders -- including investors, creditors, Sunwest insiders and secured lenders -- the proposed plan consists of two key elements: (1) a process for enhancing the value of Sunwest assets, and (2) a methodology for equitably distributing that value to stakeholders owed as much as $2 billion. In March, U.S. District Judge Michael Hogan appointed Michael Grassmueck as receiver after the Securities and Exchange Commission filed suit against Sunwest and former CEO Jon Harder, alleging securities fraud. Overview of the Proposed Plan To increase the value of existing assets and create a viable business and investment vehicle, the receiver and CRO have proposed to unite core Sunwest assets under the umbrella of a single real estate investment trust (REIT) with an affiliated master limited partnership. Over time, the new structure -- with future operations under professional leadership to be selected by a new board of directors -- should maximize the value of the reorganized company through economies of scale, favorable financing, and significantly greater business flexibility. The enterprise will issue securities to provide returns and liquidity to creditors and investors. At some point in the future, a merger, public offering, or other transaction is expected to provide additional value. To implement the reorganization, the plan proposes to utilize a brief Chapter 11 process as a tool to modify loan terms and issue securities. The receivership plan and the bankruptcy case will have no impact on the continued delivery of quality care to residents at Sunwest communities, nor on employees or vendors. Together, the receivership and Chapter 11 plans seek to place Sunwest on sound financial footing and position it to provide top- notch care and service to its residents well into the future. Key elements of the Proposed Plan: * Approximately 150 core senior living and certain other revenue-generating properties conveyed into a REIT structure with an affiliated MLP. -- The REIT/MLP combination greatly simplifies Sunwest's existing ownership structure, bringing hundreds of separate legal entities under a single corporate umbrella. -- The new enterprise is expected to maximize value to stakeholders through restructured, stable financing on favorable terms; economies of scale; significantly improved business flexibility; and a likelihood of future merger, public offering, or other transaction to provide additional liquidity. -- The new structure offers several options to investors for holding and cashing out on their investments, including continued tax deferral options for tenant- in-common investors. -- A brief, carefully planned pre-packaged Chapter 11 process will be utilized to implement the plan. The bankruptcy will not disrupt service to residents or payments to employees and vendors. * An independent board of prominent professionals with expertise in finance, audits, healthcare, management and REITs will govern the REIT/MLP. * Sunwest as a management company will be reorganized and will contract to manage the senior living properties held by the REIT/MLP. -- The reorganized management company will have an independent board of qualified industry professionals, which will hire a new CEO. * Former CEO Jon Harder, COO Darryl Fisher and general counsel Wally Gutzler will contribute all of their Sunwest- affiliated assets to effect the reorganization. Collectively the three principals may participate in 5% to 25% ownership of the new enterprise, but only after investors and creditors have received $500 million to $1 billion in distributions of cash or marketable shares. * Approximately 100 senior living, commercial and land properties that will not be retained in the core business structure will be sold or turned back to lenders. Cash from sales will be distributed to creditors and investors. * The receiver will pursue third parties who received ill- gotten gains or were complicit in the losses suffered by investors and creditors and distribute any recoveries or settlements to creditors and investors. By its terms, the plan does not and as a matter of law cannot have any impact on the SEC and its enforcement action against certain Sunwest insiders or on any other government authority investigating the Sunwest matters. About Sunwest Management Founded in Oregon in 1991, Sunwest Management -- http://www.sunwestmanagement.com/-- is one of the largest private senior living providers in the country and is a significant Oregon employer. In March 2009, U.S. District Judge Michael Hogan appointed Michael Grassmueck as receiver after the Securities and Exchange Commission filed suit against Sunwest and former CEO Jon Harder, alleging securities fraud. The Company engaged Clyde Hamstreet as chief restructuring officer in late November 2008 to serve as CRO, an appointment continued in March by the U.S. District Court after the SEC lawsuit was filed. Sunwest Management has put 10 assisted living centers -- two in Oregon -- into Chapter 11 bankruptcy. Briarwood Retirement and Assisted Living Community LLC, which owns a retirement center in Springfield, and Century Fields Retirement and Assisted Living Community LLC, which owns a center in Lebanon, filed for Chapter 11 on Aug. 19, 2008. On Aug. 17, 2008, eight Sunwest-affiliated LLCs filed for Chapter 11 bankruptcy protection from creditors in Tennessee. SYNCHRONOUS AEROSPACE: Moody's Affirms 'B3' Corp. Family Rating --------------------------------------------------------------- Moody's Investors Service affirmed the debt ratings of Synchronous Aerospace Group, including the B3 corporate family and Caa1 probability of default ratings. The rating outlook remains negative. The B3 affirmation reflects Synchronous' position as a small manufacturer of specialized parts for several aircraft platforms, especially the B737 and other Boeing legacy models. Financial leverage, currently high for the B3 rating, will probably remain elevated due to the limited opportunity for near term debt reduction because of weak free cash flow. The operating margin has been volatile in the past, and could be under some further downward pressure should there be cuts in airplane production. Synchronous' multiple plant locations, as a result of a series of acquisitions, constrains the operating margin at this time, but better manufacturing efficiency and improvements to supply arrangements could provide room for margin improvement over time. Low near debt maturities, expectation of continued near-term covenant compliance, and a sufficient amount of liquidity to support working capital needs lends support to the B3 corporate family rating. The negative outlook reflects delayed Boeing 787 progress and risk of 737 intermediate-term production cuts. Although Synchronous has notably improved its cost structure, without revenue growth, realization of EBITDA and free cash flow levels needed to sustain the B3 could prove difficult. The ratings could be pressured down should EBITDA not improve approximately 35% from the last twelve months ended June 2009 level, or if free cash flow to debt is expected to be below 2%. Further drawdowns under the revolver to fund acquisitions could also pressure the rating down if the remaining liquidity was considered to be insufficient to cover working capital needs. The outlook could be revised to stable with an expectation of sustained EBIT to interest of at least 1.2 times, and a continued adequate liquidity profile. The ratings are: * Corporate family at B3 * Probability of default at Caa1 * $20 million senior secured revolver due August 2013 at B3 LGD 3, 35% * $74 million senior secured term loan due August 2014 at B3 LGD 3, 35% Moody's last rating action on Synchronous occurred October 17, 2008, when a corporate family rating of B3 was reinstated. Synchronous Aerospace Group headquartered in Santa Ana, CA, is a manufacturer of structural components for the commercial and military aerospace and space industries. Synchronous is majority owned by the private equity firm Littlejohn & Co., LLC. TEXTRON INC: Fitch Expects to Assign BB+ Rating on $500 Mil. Notes ------------------------------------------------------------------ Fitch Ratings expects to assign a rating of 'BB+' to Textron Inc.'s planned issuance of $500 million of five-year and 10-year senior unsecured notes. The Rating Outlook is Negative. Proceeds from the new debt will be available for general corporate purposes, including debt repayment related to a cash tender offer by TXT and Textron Financial Corporation for up to $650 million of outstanding debt. The combination of tender offers and new debt is intended to lengthen TXT's and TFC's maturity profiles. The ratings and Outlook for TXT reflect weak operating results in the company's Cessna and industrial manufacturing businesses and concerns about asset quality and liquidity at TFC as it exits its non-captive portfolio. Fitch believes TXT has sufficient flexibility to manage its manufacturing businesses through the current recession and could be a weak investment grade company on a stand-alone basis. However, TXT is obligated to support TFC, which has a weaker stand-alone financial profile. With regard to TFC, Fitch's chief concern is its continued ability to meet maturing debt obligations from the combination of existing cash balances, net interest income, and cash flow from the liquidation of portfolio receivables. Fitch continues to believe TXT has sufficient liquidity to provide modest support to TFC. However, recognition of higher than expected credit losses on TFC's non-captive portfolio would necessitate a higher degree of expected support from TXT. TFC faces the potential of continued deterioration in portfolio credit quality and the recognition of further losses, particularly in the resort and golf mortgage portfolios. Fitch also notes that a sale or the liquidation of resort and golf mortgage receivables may prove more problematic. Thus, it is unclear to what degree TFC might need to rely on TXT for support to meet its future cash requirements. The Rating Outlook could be revised to Stable if available asset quality pressures lessen and cash balances coupled with cash-flow generated via either liquidation or sale of portfolio receivables continues to support full repayment of debt. Leverage at TXT's manufacturing businesses is expected to be elevated in the near term until operating results improve. As a result, if large contributions to TFC were required, the ratings could be pressured on the downside. This concern is mitigated by Fitch's expectation that TXT's operating performance is beginning to stabilize and that leverage will improve gradually in 2010 after peaking toward the end of 2009. Textron took a number of steps earlier in 2009 to strengthen its overall liquidity. These include a 91% cut to the company's dividend payout equivalent to approximately $200 million annually, the receipt of $750 million of net proceeds from the issuance by TXT of equity and convertible debt, the addition of a $500 million Ex-Im Bank facility to fund Cessna's and Bell's international customers, and the drawdown of TXT's and TFC's bank facilities that generated $1.2 billion of proceeds after repaying commercial paper. In addition, TXT divested HR Textron for $275 million of net cash proceeds. As a result, TXT expects to maintain consolidated cash balances of at least $1.5 billion at the end of 2009 and 2010, compared to nearly $1.9 billion on July 4, 2009. The majority of cash is located at TXT. TFC's liquidity will depend on the pace of its continued portfolio liquidation and on cash conversion rates that will determine its ability to meet scheduled debt maturities. In addition, the bank facilities mature in 2012 that will either need to be repaid or refinanced. Covenant compliance under the bank facilities is a material issue. Fitch estimates that TXT is well within the required range of its debt to capitalization covenant. Due to continued recognition of operating losses, TFC is expected to continue to rely on TXT to help maintain its fixed charge ratio at 1.25 times (x). Furthermore, Fitch does not think recognition of additional operating losses will materially impair TFC's ability to remain in compliance with its other loan covenants, which include a minimum net worth requirement of $200 million and maximum debt to equity of 9.0x. At TXT's manufacturing businesses, the sharp downturn in demand for business jets is expected to reduce deliveries at Cessna by more than 40% to around 275 aircraft in 2009. The Industrial segment has also been negatively affected by the economic recession and can be expected to produce minimal profit until demand stabilizes and restructuring takes full effect. These operating challenges are partly offset by relative strength in the Bell segment and to a lesser degree in Textron Systems due to military spending and a large installed base. Manufacturing cash flow was negative in the first half of 2009 due largely to the large reduction in Cessna deliveries but it should be positive for the full year as high working capital requirements related to Cessna are reversed. Earnings and cash flow could gradually improve as economic conditions stabilize although business jet production may remain at low levels at least through 2010. Fitch expects that TXT should produce free cash flow consistent with its forecast of $300-$400 million in 2009 from its manufacturing businesses, before dividends and certain other items such as pension contributions and discontinued operations. As a result of lower earnings and higher debt levels, gross debt to EBITDA increased to 3.3x on July 4, 2009 compared to 1.5x at the end of 2008. Fitch estimates leverage could increase to a level near 4.0x by the end of 2009 before declining in 2010 after results gradually begin to improve. An ongoing concern for TXT is its support for TFC through required capital contributions under its support agreement. TFC continues to rely on TXT to help maintain its fixed charge ratio at 1.25x. In 2008 TXT contributed $625 million to TFC. Much of the cash can be returned to TXT through dividends, but the support agreement highlights TXT's exposure to TFC. At TXT there are minimal scheduled debt maturities until 2010 when $250 million is scheduled to mature. The debt due in 2010 is included in the cash tender offer. Other cash requirements include pension contributions that are expected to be modest at around $50-$55 million in 2009 but could increase substantially in later periods depending on asset returns. The current ratings for Textron Inc. and Textron Financial Corporation are: TXT -- Issuer Default Rating 'BB+'; -- Senior unsecured bank facilities 'BB+'; -- Senior unsecured debt 'BB+'; -- Convertible senior unsecured notes 'BB+'. -- Short-term IDR 'B'; -- Commercial paper 'B'. TFC -- IDR 'BB+'; -- Senior unsecured bank facilities 'BB+'; -- Senior unsecured debt 'BB+'; -- Junior subordinated notes 'B+'; -- Short-term IDR 'B'; -- Commercial paper 'B'. Due to the existence of a support agreement and other factors, TFC's ratings are linked to TXT's ratings. The support agreement requires TXT to maintain TFC's floor net worth and fixed charge coverage at $200 million and 1.25x, respectively. The ratings affect approximately $10.4 billion of debt as of July 4, 2009, including $3.3 billion at TXT and $7.1 billion at TFC. TOYS R US: Plans 80 Temporary Stores to Capture Holiday Sales ------------------------------------------------------------- Allison Abell Schwartz at Bloomberg News, Toys "R" Us Inc. will open more than 80 temporary locations across the country starting next month, a year after the worst holiday-shopping season in four decades. According to the report, the Holiday Express "pop-up" stores will open in malls and shopping centers on short-term leases, along with more than 260 temporary stores within Babies "R" Us locations, the Wayne, New Jersey-based company said. That represents an additional million square feet of selling space, according to Chairman and Chief Executive Officer Jerry Storch. U.S. retail sales of toys generated $21.6 billion in 2008, a 3% drop from 2007, according to researcher NPD Group Inc. The International Council of Shopping Centers reported a About Toys "R" Us Toys "R" Us, headquartered in Wayne, New Jersey, is the largest specialty retailer of toys, with annual revenues of around $14 billion. It operates stores both in the U.S. and internationally, as well as the Babies "R" Us format. As of August 1, 2009, the company had $8.172 billion in total assets; total current liabilities of $2.085 billion, long-term debt of $5.496 billion, deferred tax liabilities of $55 million, deferred rent liabilities of $269 million, and other non-current liabilities of $372 million. As of August 1, 2009, the company had Toys "R" Us, Inc. stockholders' deficit of $214 million and noncontrolling interest of $109 million, and total stockholders' deficit of $105 million. The Company carries a 'B2' probability of default rating from Moody's, "B" issuer credit ratings from Standard & Poor's, and "B-" long term issuer default rating from Fitch. TRANSAMERICAN ENERGY: To File Financial Statements by Sept. 28 -------------------------------------------------------------- TransAmerican Energy Inc. said it is nearing completion of its annual audited financial statements for the year ended April 30, 2009, which should have been filed by August 28, 2009 as required by National Instrument 51-102 Continuous Disclosure Obligations. The Company anticipates filing the Annual Financial Statements by September 28, 2009. The Company intends to satisfy the provisions of 12-203 by filing a bi-weekly Default Status Report containing the information prescribed by 12-203, as long as the Company remains in default of the financial statement filing requirement. TransAmerican Energy Inc. (TSX VENTURE:TAE)(FRANKFURT:YQJ) is not currently subject to any insolvency proceedings. If the Company provides any information to any of its creditors during the period in which it is in default of filing the Annual Financial Statements, the Company confirms that it will also file material change reports on SEDAR containing such information. TXCO RESOURCES: Can Transfer Oil Exploration & Production Rights ---------------------------------------------------------------- The Hon. Ronald B. King of the U.S. Bankruptcy Court for the Western District of Texas approved TXCO Resources Inc.'s bid to transfer oil exploration and production rights in three Texas counties to Redemption Oil & Gas LLC, the company having quelled the fears of a group of mineral lien holders who had objected to the transfer, according to Law360. About TXCO Resources TXCO Resources Inc. is an independent oil and gas enterprise with interests in the Maverick Basin, the onshore Gulf Coast region and the Marfa Basin of Texas, and the Midcontinent region of western Oklahoma. TXCO's business strategy is to acquire undeveloped mineral interests and internally developing a multi-year drilling inventory through the use of advanced technologies, such as 3-D seismic and horizontal drilling. It accounts for its oil and gas operations under the successful efforts method of accounting and trades its common stock on Nasdaq's Global Select Market under the symbol "TXCO." The Company and its affiliates filed for Chapter 11 protection on May 17, 2009 (Bankr. W.D. Tex. Case No. 09-51807). The Debtors hired Deborah D. Williamson, Esq., and Lindsey D. Graham, Esq., at Cox Smith Matthews Incorporated, as general restructuring counsel; Fulbright and Jaworski, L.L.P., as corporate counsel & conflicts counsel; Albert S. Conly as chief restructuring officer and FTI Consulting Inc. as financial advisor; Goldman, Sachs & Co. as financial advisor for assets sale; Global Hunter Securities, LLC, as financial advisors and investment bankers; and Administar Services Group LLC as claims agent. Gardere Wynne Sewell LLP represents the Committee. As reported in Troubled Company Reporter on July 6, 2009, in their schedules of assets and liabilities, the Debtors have $357,855,952 in total assets and $331,422,792 in total liabilities. TXCO RESOURCES: Paid $408,000 to FTI for June-July Work ------------------------------------------------------- TXCO Resources Inc. paid $761,357 to bankruptcy professionals in July 2009: Cox & Smith $157,289.15 Fulbright & Jaworski $395,333.65 FTI Consulting Inc. $208,734.47 The Debtor paid FTI $200,000.00 for services in June 2009. KPMG and Gardere Wynne Sewell LLP are also involved in the Debtor's case. No payments were made to both firms in June and July, according to the Debtor's operating report for July. Payments to the Debtor's insiders swelled to $208,040.28 in July from $30,068.18 from May 18 to 31; and $170,286.11 in June. TXCO Resources Inc. is an independent oil and gas enterprise with interests in the Maverick Basin, the onshore Gulf Coast region and the Marfa Basin of Texas, and the Midcontinent region of western Oklahoma. TXCO's business strategy is to acquire undeveloped mineral interests and internally developing a multi-year drilling inventory through the use of advanced technologies, such as 3-D seismic and horizontal drilling. It accounts for its oil and gas operations under the successful efforts method of accounting and trades its common stock on Nasdaq's Global Select Market under the symbol "TXCO." The Company and its affiliates filed for Chapter 11 protection on May 17, 2009 (Bankr. W.D. Tex. Case No. 09-51807). The Debtors hired Deborah D. Williamson, Esq., and Lindsey D. Graham, Esq., at Cox Smith Matthews Incorporated, as general restructuring counsel; Fulbright and Jaworski, L.L.P., as corporate counsel & conflicts counsel; Albert S. Conly as chief restructuring officer and FTI Consulting Inc. as financial advisor; Goldman, Sachs & Co. as financial advisor for assets sale; Global Hunter Securities, LLC, as financial advisors and investment bankers; and Administar Services Group LLC as claims agent. Gardere Wynne Sewell LLP represents the Committee. As reported in Troubled Company Reporter on July 6, 2009, in their schedules of assets and liabilities, the Debtors have $357,855,952 in total assets and $331,422,792 in total liabilities. VISTEON CORP: 27 Affiliates' Schedules of Assets & Debts -------------------------------------------------------- About 27 affiliates of Visteon Corporation submitted to the Court separate schedules of assets, ranging from $0 to $700 million, and liabilities, ranging from $0 to $450 million. They are: Entity Assets Liabilities ------ ------------ ------------ Visteon International Holdings, Inc. $707,871,590 $28,279,061 Visteon European Holdings Corporation 444,394,221 26,488 VC Regional Assembly & Manufacturing 330,965,020 451,887,400 Visteon Global Treasury, Inc. 195,145,550 112,592,629 Visteon Holdings, LLC 176,902,009 0 GCM/Visteon Automotive Systems LLC 130,365,822 132,943,923 Visteon Electronics Corporation 99,894,683 172,061,281 Visteon Int'l. Business Development Inc 22,821,975 29,960,467 VC Aviation Services, LLC 18,201,555 0 MIG-Visteon Automotive Systems, LLC 6,179,554 7,143,412 Fairlane Holdings, Inc. 5,442,925 0 Visteon Caribbean, Inc. 5,069,516 57,427,168 GCM/Visteon Automotive Leasing Systems 4,083,500 12,080,069 Visteon Asia Holdings, Inc. 3,574,337 205,243,562 Visteon Remanufacturing Incorporated 2,183,223 1,346,252 The Visteon Fund 881,323 0 Visteon Climate Control Systems Ltd. 36,042 134,396,263 SunGlas, LLC 100 5,632,999 ARS, Inc. 0 0 Visteon Automotive Holdings, LLC 0 0 Visteon Domestic Holdings, LLC 0 0 Infinitive Speech Systems Corp. 0 0 Visteon Financial Corporation 0 0 Tyler Road Investments, LLC 0 0 Visteon LA Holdings Corp. 0 0 Visteon Technologies, LLC 0 0 Visteon AC Holdings Corp. 0 0 About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: 27 Affiliates' Statements of Financial Affairs ------------------------------------------------------------ Twenty-seven debtor-affiliates of Visteon Corporation separately filed with the Court their statements of financial affairs: (1) Visteon International Holdings, Inc. (2) Visteon European Holdings Corporation (3) VC Regional Assembly & Manufacturing, LLC (4) Visteon Global Treasury, Inc. (5) Visteon Holdings, LLC (6) GCM/Visteon Automotive Systems, LLC (7) Visteon Electronics Corporation (8) Visteon International Business Development, Inc. (9) VC Aviation Services, LLC (10) MIG-Visteon Automotive Systems, LLC (11) Fairlane Holdings, Inc. (12) Visteon Caribbean, Inc. (13) GCM/Visteon Automotive Leasing Systems, LLC (14) Visteon Asia Holdings, Inc. (15) Visteon Remanufacturing Incorporated (16) The Visteon Fund (17) Visteon Climate Control Systems Limited (18) SunGlas, LLC (19) ARS, Inc. (20) Visteon Automotive Holdings, LLC (21) Visteon Domestic Holdings, LLC (22) Infinitive Speech Systems Corp. (23) Visteon Financial Corporation (24) Tyler Road Investments, LLC (25) Visteon LA Holdings Corp. (26) Visteon Technologies, LLC (27) Visteon AC Holdings Corp. Five Debtor-Affiliates earned income from employment or the operation of their businesses within two years prior to the commencement of their bankruptcy cases. They are: Debtor Amount ------ ------------- Visteon Electronics Corporation $1,042,656,666 VC Regional Assembly & Manufacturing, LLC 813,499,089 GCM/Visteon Automotive Systems, LLC 559,549,273 Visteon Climate Control Systems Limited 91,343,816 Visteon Remanufacturing Incorporated 41,744,263 Other Debtor-Affiliates also earned income other than from employment or the operation of their businesses. They are: Debtor Amount ------ ------------ Visteon International Holdings, Inc. $996,194,107 Visteon Global Technologies, Inc. 708,000,000 Visteon European Holdings Corporation 115,280,000 Visteon Automotive Holdings, LLC 41,797,678 VC Aviation Services, LLC 14,000,000 Visteon Caribbean, Inc. 6,752,720 VC Regional Assembly & Manufacturing, LLC 4,755,604 Fairlane Holdings, Inc. 3,700,000 Visteon Electronics Corporation 2,900,000 Visteon Asia Holdings, Inc. 996,532 Two Debtor-Affiliates disclosed that they made payments to creditors within 90 days before the Petition Date: Debtor Amount ------ ------------ Visteon Global Treasury, Inc. $231,990 MIG-Visteon Automotive Systems, LLC 80,978 About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: D&M Wants Prompt Decison on Contract -------------------------------------------------- On November 19, 2004, Boston Acoustics, Inc., and Visteon Corporation entered into an amendment of a Global Goods and Services Agreement. Boston Acoustics became an affiliate of D&M Holdings Inc. in 2005. D&M and Visteon then entered into an Amended Joint Development and Intellectual Property Agreement, which was subsequently amended by a Termination Agreement, executed by D&M on May 27, 2009. Pursuant to the Contracts, D&M, through its subsidiary PSS Hong Kong, Ltd., and Visteon supply products to General Motors Company. Through the Joint Development Agreement, D&M, through its subsidiary Boston Acoustics, Inc., and Visteon jointly supply products to the Chrysler, Jeep, and Dodge vehicle divisions of DaimlerChrysler, now Chrysler Group, LLC. The products that D&M and Visteon supply to the Original Equipment Manufacturers are referred to as Branded Products. The physical components of the Branded Products are an automotive auto amplifier and certain Boston Acoustics brand speakers. D&M manufactures the Branded Speakers and supplies them to Visteon, who in turn completes the manufacture of the Branded Products and provides the Branded Products to the OEM Customers. OEM Customers issue electronic orders or releases to D&M and Visteon, specifying the amount of the Branded Products needed. Mark Minuti, Esq., at Saul Ewing LLP, in Wilmington, Delaware, attorney for D&M Holdings, Inc., relates that the Global Agreement explicitly provide that each Release is an independent offer to enter into a contract, which can be accepted or rejected by D&M. He adds that since the Petition Date, the OEM Customers have continued to issue Releases for Branded Products, and D&M continued to provide Visteon with Branded Speakers pursuant to those Releases. According to Mr. Minuti, notwithstanding the fact that the Global Agreement provides that each Release is a separate offer to sell the Branded Speakers, Visteon has taken the position that the D&M Contracts amount to "requirement contracts" and thus, are executory contracts under Section 365 of the Bankruptcy Code. Mr. Minuti tells the Court that the Debtors have threatened D&M with a significant damages claim if D&M were to fail to fulfill a Release. Accordingly, D&M asks the Court to: (a) rule that their Contracts are not executory contracts under the Bankruptcy Code and that they may accept or reject all future Releases; or (b) in the alternative, compel the Debtors to decided on whether to assume or reject the D&M Contracts. Mark S. Horvath, P.E., vice president of Sales for D&M Holdings, Inc., filed with the Court a declaration in support of D&M's request. In a separate filing, D&M seeks the Court's authority to file under seal certain contracts with Visteon Corporation and an unredacted copy of the Motion to Compel. D&M has redacted all references to the Confidential Contracts in the text of the Motion to Compel, and has not attached copies of the Confidential Contracts to preserve its confidentiality. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Lease Decision Deadline, Removal Periods Extended --------------------------------------------------------------- Judge Christopher Sontchi has extended Visteon Corp.'s deadline to assume or reject unexpired leases through December 24, 2009. In a separate order, Judge Sontchi has enlarged by 120 days the Debtors' deadline to seek removal of pending actions through December 24, 2009, without prejudice to the Debtors' right to seek further extensions. The Debtors certified to the Court that no objection was filed as to their request for extensions About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: VSL's Schedules of Assets & Liabilities ----------------------------------------------------- A. Real Property $0 B. Personal Property B.1 Cash on hand 0 B.2 Bank Accounts 0 B.3 Security Deposits 0 B.4 Household goods 0 B.5 Collectibles 0 B.6 Wearing apparel 0 B.7 Furs and Jewelry 0 B.8 Firearms and other equipment 0 B.9 Interests in Insurance Policies 0 B.10 Annuities 0 B.11 Interests in an education IRA 0 B.12 Interests in IRA, ERISA or other Pension Plans 0 B.13 Business Interests and stocks Undetermined B.14 Interests in partnerships 0 B.15 Government and Corporate Bonds 0 B.16 Accounts Receivable Visteon Corporation 8,779,448,304 VC Regional Assembly & Manufacturing, LLC 230,295,925 GCM/Visteon Automotive Systems, LLC 74,828,343 Trade-Accounts Receivable 66,989,493 Visteon S.A. 18,891,878 Visteon Sistemas Automotivos Ltda. 17,413,737 Visteon Amazonas Ltda. 8,113,951 Halla Climate Systems Alabama Corp. 7,094,880 Visteon Electronics Korea Ltd. 3,182,446 Visteon Poland S.A. 2,154,005 Visteon Systemes Interieurs SAS 2,006,509 Cadiz Electronica, S.A. 332,067 Visteon Sistemas Interiores Espana, S.L. 270,771 Halla Climate Control Corporation 199,591 Halla Climate Control Canada Inc. 196,054 Visteon International Holdings, Inc. 168,793 Visteon Philippines, Inc. 161,064 Visteon Japan, Ltd. 142,020 Visteon Portuguesa, Ltd. 136,775 Visteon Asia Holdings, Inc. 131,231 Trade-Aggregate Accounts Payable Credits 118,322 Visteon Automotive Systems India Private Limited 106,080 Visteon South Africa (Pty) Limited 84,494 Visteon (Thailand) Limited 74,384 Visteon Remanufacturing, Incorporated 54,653 Visteon Global Treasury, Inc. 42,980 Coclisa S.A. De C.V. 40,082 Carplastic S.A. De C.V. 16,101 Climate Systems Mexicana, S.A. De C.V. 11,085 Visteon De Mexico S. de R.L. 6,238 Visteon Asia Pacific, Inc 338 B.17 Alimony B.18 Other Liquidated Debts 0 B.19 Equitable or Future Interests 0 B.20 Interests in estate of a debt benefit plan 0 B.21 Other Contingent & Unliquidated claims Tax-Pennsylvania Income - 2008 refund 20,000 B.22 Patents and other intellectual property 0 B.23 Licenses, franchises, and other intangibles 0 B.24 Customer lists or other compilations 0 B.25 Vehicles 0 B.26 Boats, motors, and accessories 0 B.27 Aircraft and accessories 0 B.28 Office equipment, furnishings and supplies Office Furniture and Equipment 434,752 Computers 361,766 Software 85,220 B.29 Machinery Manufacturing Equipment 150,338,600 Tooling 20,169,067 Dunnage 5,576,534 B.30 Inventory Production 47,939,238 Non-Production 8,149,168 Reserves (11,942,901) B.31 Animals 0 B.32 Crops 0 B.33 Farming Equipments and implements 0 B.34 Farm supplies, chemicals, and feed 0 B.35 Other Personal Property Prepaid Expenses 55,846 TOTAL SCHEDULED ASSETS $9,433,899,882 ======================================================== C. Property Claimed as Exempt $0 D. Secured Claims 0 E. Unsecured Priority Claims 0 F. Unsecured Non-priority Claims Visteon Corporation 3,337,732,637 Altec Electronica 6,590,200 Coclisa S.A. De C.V. 8,526,000 Freescale Semiconductor 1,291,123 Freescale Semiconductor 1,185,725 Freescale Semiconductor 1,740,360 Ogura Corp 3,290,301 Visteon Brasil Trading Company Ltd. 2,767,270 Visteon Global Treasury, Inc. 8,205,179 Visteon S.A. 1,748,202 Others 39,274,846 See http://bankrupt.com/misc/VisteonSystems_SchedF.pdf TOTAL SCHEDULED LIABILITIES $3,412,351,842 ======================================================== About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: VSL's Statement of Financial Affairs -------------------------------------------------- William G. Quigley, III, vice president of Visteon Corp., discloses that Visteon Systems, LLC, earned income from employment or operation of business within two years immediately preceding the Petition Date: Source Amount ------ ------------- 2009 Total Sales through May 2009 $242,078,381 2008 Total Sales 1,142,228,776 2007 Total Sales 1,782,524,530 Mr. Quigley further discloses that the Company earned income other than from employment or operation of business within two years before the Petition Date: Source Amount ------ --------- Rental Income - North Penn $62,000 Asset Sales - Bedford land and building 2,500,000 Asset Sales - Small value machinery and equipment 9,500,000 Engineering Services 100,000 Prototype sales 4,200,000 Tooling sales 100,000 The Company also made payments to these creditors within 90 days before the Petition Date, totaling $4,018,111: Name Amount ---- ------ Automotive Components $2,971 Cerion MPI LLC 39,905 Clarity Technologies Inc. 8,460 Colonial Diversified Polymers 137,508 Cybernetics Infotech Inc. 4,230 Dayco Ensa Portugal PCA 555 Fidelity Investments 334,401 Master Automatic Inc 286,943 Northern Trust 1,400,000 Saturn Electronics & Engrg Inc 73,811 Serigraph Inc 526,381 Signature Aluminum Inc 20,431 Spring Engineering & Manuf Corp 136,065 Thompson Licensing 20,210 Tyco Electronics 926,240 XM Satellite Radio Inc. 99,995 Moreover, Mr. Quigley relates that the Company made payments, ranging between $5.5 billion to $5.6 billion, to creditors who were insiders within one year before the Petition Date. A list of the insider payments is available for free at: http://bankrupt.com/misc/VisteonSystems_3C.pdf The Company was also a party to several lawsuits and administrative proceedings within one year before the Petition Date, a list of which is available for free at: http://bankrupt.com/misc/VisteonSystems_4a.pdf Visteon Systems gave gifts or charitable contributions within one year before the Petition Date to these entities: Recipient Value --------- ----- Jayc Food Store $1,000 L.I.F.E. (Bedford Food Pantry) 3,174 Rule Food Store 500 Jayc Food Store 500 Limestone Heritage Fest. Parade 100 Stone City Lodge 94 F.O.P. 670 Otis Park Men's Club 200 Blue River Wood Products Baseball Team 200 National Multiple Sclerosis Society 4,000 North Penn Chamber of Commerce 1,000 Manna on Main Street 500 Skippack Fire Co 500 Volunteer Medical Service Corp 500 Upper Gwynedd Township Fire Dept 500 Let's Get Real 1,000 Worcester Volunteer Fire Dept 500 The Vision Group Property Development LLC 2,500,000 Various 9,500,000 The Company also avers that it held several properties owned by another person, a list of which is available for free at: http://bankrupt.com/misc/VisteonSystems_Sofa14.pdf About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) WARNACO GROUP: Moody's Gives Positive Outlook on 'Ba2' Rating ------------------------------------------------------------- Moody's Investors Service revised Warnaco Group, Inc.'s outlook to positive from stable. At the same time, Moody's affirmed Warnaco's existing ratings, including the Corporate Family and Probability of Default ratings, at Ba2. The revision in Warnaco's outlook to positive reflects the company's continued improvement in financial metrics and its maintenance of consistent operating performance in the midst of the very challenging economic environment. "Warnaco has continued its successful expansion overseas while maintaining positive same store sales in its direct-to-consumer business and increased overall revenues on a constant currency basis in the first half of 2009", stated Moody's Senior Analyst Scott Tuhy. "The rating action also reflects the faster-than-expected reduction in financial leverage resulting from a combination of EBITDA growth and voluntary debt repayment", Mr. Tuhy said. Ratings could be upgraded if the company continues to demonstrate consistent execution while maintaining strong financial metrics. These ratings were affirmed: * Corporate Family Rating at Ba2 * Probability of Default Rating at Ba2 * $270 million senior secured asset-backed revolving credit facility at Baa2 (LGD 2, 12%) * $30 million senior secured asset-backed revolving credit facility at Baa2 (LGD 2, 12%) This rating was affirmed and its LGD estimate adjusted: * $161 million senior unsecured notes at Ba3 (LGD 5, 71%) from Ba3 (LGD 5, 72%) Moody's last rating action on Warnaco was on September 4, 2008, when the company's Corporate Family and Probability of Default Ratings were upgraded to Ba2 from Ba3. The Warnaco Group, Inc., headquartered in New York, designs, sources, markets, licenses and distributes a broad line of intimate apparel, sportswear and swimwear worldwide under a variety of brands such as Calvin Klein, Speedo, Chaps, Warner's and Olga. Revenues for the twelve months that ended July 4, 2009, were approximately $1.9 billion WILIAM DEL BIAGGIO: Nashville Predators Stake Yet to Be Resolved ---------------------------------------------------------------- John Glennon at The Tennessean reports that William Del Biaggio III's minority interest in the Nashville Predators will have to be resolved in bankruptcy court. As reported by the TCR on September 11, 2009, U.S. District Court Judge Charles Breyer sentenced Mr. Del Biaggio to more than eight years in prison for fraud. Mr. Del Baggio pleaded guilty to defrauding lenders when he was obtaining financing to purchase his share of the team last winter. Mr. Del Biaggio has to repay the victims a total of $67.4 million. The Tennessean notes that Mr. Del Biaggio's assistance proved influential in helping a team of local investors led by David Freeman in purchasing the Predators from Leipold. According to The Tennessean, a group of local investors led by David Freeman has offered to buy out the stake at a reduced price. Menlo Park, California-based BDB Management LLC and its affiliates filed for Chapter 11 protection on June 7, 2008 (Bankr. N.D. Calif. Lead Case No. 08-31001). William J. del Biaggio, III, an interest holder of the companies, filed for personal chapter 11 bankruptcy on June 6, 2008. Judith Whitman, Esq., at Diemer Whitman and Cardosi LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $50 million to $100 million in assets and $50 million to $100 million in debts. The TCR reported on July 9, 2008, that Sara L. Kistler, acting U.S. Trustee for Region 17, appointed R. Todd Nelson as the chapter 11 trustee in BDB Management LLC and its debtor- affiliates' bankruptcy cases. Sand Hill Capital Partners III, the investment fund that Mr. Del Biaggio co-founded, also filed for chapter 7 bankruptcy. Sand Hill disclosed $10.6 million in debts. Established in 1996, Sand Hill Capital has four debt funds under management, of which two are actively investing. Sand Hill has provided debt financing and equity co-investing in multiple portfolio companies of top-tier venture capital firms, including Broadcom, a semiconductor company specializing in VoIP, wireless networking, and broadband communications solutions; Commerce One, a provider of On-Demand Supplier Relationship Management solutions and The Open Supplier Network; IBahn, a provider of secure broadband-to-go at premium hospitality locations; and Odwalla, maker of fruit drinks and snacks. WILL PERRY: Lessors Amended Claim Allowed Over Debtor's Objection ----------------------------------------------------------------- WestLaw reports that an amended proof of claim filed by a commercial lessor after the claims bar date had expired, in which the lessor relied on an acceleration clause in the lease to assert a claim, not just for the missed rental payments set forth in its original proof of claim, but for the total rent to which it was entitled over the remaining term of the breached lease agreement, would be allowed over an objection to its timeliness by an individual Chapter 11 debtor-guarantor. The amended proof of claim did not assert any new grounds of liability, but merely utilized a different theory of recovery based on facts set forth in the original proof of claim. In re Perry, --- B.R. ----, 2009 WL 2496295 (Bankr. S.D. Tex.). Will Clay Perry sought Chapter 11 protection (Bankr. S.D. Tex. Case No. 08-32362) on April 11, 2008, represented by Matthew Brian Probus, Esq., at Wauson & Associates, P.C., in Sugar Land, Tex., and estimating assets and debts of $1 million to $10 million. WWS CAMPING: U.S. Trustee Sets Meeting of Creditors for October 1 ----------------------------------------------------------------- The U.S. Trustee for Region 1 will convene a meeting of creditors in W.W.S. Camping Area and Marina, L.L.C's Chapter 11 case on Oct. 1, 2009, at 3:00 p.m. The meeting will be held at 1000 Elm Street, 7th Floor - Room 702, Manchester, New Hampshire. 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 Ossipee, New Hampshire-based W.W.S. Camping Area and Marina, L.L.C. filed for Chapter 11 on Aug. 28, 2009 (Bankr. D. N.H. Case No. 09-13292.) Two of its debtor-affiliates filed separate Chapter 11 on July 9, 2009 (Bankr. D. N.H. Case Nos. 09-12552 to 09-12553.) Michael A. Fagone, Esq. at Bernstein, Shur, Sawyer & Nelson, P.A., represents the Debtors in their restructuring effort. In its petition, W.W.S. listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. WWS CAMPING: Has Until September 28 to File Schedules & Statements ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of New Hampshire extended until Sept. 28, 2009, W.W.S. Camping Area and Marina, L.L.C.' time to file its schedules of assets and liabilities, statements of financial affairs, lists of equity security holders and lists of executory contracts and leases. West Ossipee, New Hampshire-based W.W.S. Camping Area and Marina, L.L.C. filed for Chapter 11 on Aug. 28, 2009 (Bankr. D. N.H. Case No. 09-13292.) Two of its debtor-affiliates filed separate Chapter 11 on July 9, 2009 (Bankr. D. N.H. Case Nos. 09-12552 to 09-12553.) Michael A. Fagone, Esq. at Bernstein, Shur, Sawyer & Nelson, P.A., represents the Debtors in their restructuring effort. In its petition, W.W.S. listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. YELLOWSTONE CLUB: Credit Suisse Executives Receive Subpoenas ------------------------------------------------------------ The Blixseth Group issued a statement saying that 31 senior officials of Credit Suisse, Switzerland's second-largest bank, received subpoenas September 15 demanding that they turn over internal documents that explain why they engaged in what a federal judge called "predatory lending practices" involving the exclusive Yellowstone Club resort in Montana. Brady Dougan, the Chief Executive Officer of Credit Suisse First Boston, and Hans-Ulrich Doerig, Chairman of the Board of Directors, received the subpoenas along with past and current Executive Board officials and Credit Suisse's Board of Directors. Credit Suisse loaned $375 million to the Yellowstone Club resort in 2005, in an unorthodox and lucrative deal for the bank that federal bankruptcy judge Ralph B. Kirscher described in May as a case of "naked greed" that "shocks the conscience of this court." Tim Blixseth, the founder of the Yellowstone Club in Montana, subpoenaed the 31 Credit Suisse officials to try to uncover how and why the bank developed the syndicated loan scheme. "Bank officials have testified that Credit Suisse created a Cayman Islands 'branch' in 2005 to sell these loans," Mr. Blixseth said. "In reality, there was no phone and no staff in the bank's phony branch. They used the Caymans to circumvent U.S. banking laws and to issue inflated loans that Credit Suisse executives called a 'gravy train' in internal memos. Credit Suisse pocketed tens of millions in fees in the process." As Judge Kirscher explained in a May Interim Order, Credit Suisse used the Caymans "branch" to skirt federal banking law and appraise the Yellowstone Club and other private resorts at grossly inflated values. The bank used a "total net value" appraisal method that Judge Kirscher ruled does not comply with the Financial Institutions Recovery Reform Act of 1989, or FIRREA. When Mr. Blixseth owned the Yellowstone Club, he kept current on the Credit Suisse loan and never missed a payment. He said that when his ex-wife assumed ownership of the mountain resort in 2008, however, the Yellowstone Club quickly defaulted on the loan. It became a common occurrence at other exclusive U.S. resorts that also had taken the "Cayman Islands" loans, as Judge Kirscher wrote. "Numerous entities that received Credit Suisse's syndicated loan product have failed financially, including Tamarack Resort, Promontory, Lake Las Vegas, Turtle Bay and Ginn," Judge Kirscher wrote. "If the foregoing developments were anything like this case, they were doomed to failure once they received their loans from Credit Suisse." Judge Kirscher found that Credit Suisse's greedy executives only earned fees if they sold the hyped loans. "The higher the loan amount, the fatter the fee to Credit Suisse. This program essentially puts the fox in charge of the hen house and was clearly self-serving for Credit Suisse," Judge Kirscher ruled. In a blistering rebuke to the bank, Judge Kirscher added: "The naked greed in this case combined with Credit Suisse's complete disregard for the Debtors or any other person or entity who was subordinated to Credit Suisse's first lien position, shocks the conscience of this Court. While Credit Suisse's new loan product resulted in enormous fees to Credit Suisse in 2005, it resulted in financial ruin for several residential resort communities. Credit Suisse lined its pockets on the backs of the unsecured creditors." Blixseth's new subpoenas will unearth the internal documents Credit Suisse generated when devising their so-called "gravy train" loans. Judge Kirscher described those loans as examples of "predatory lending practices." "In our ongoing discovery, we have had the opportunity to speak to many other Credit Suisse borrowers and their horror stories are shocking," Blixseth said. "The evidence indicates that this loan program was designed to fail -- mostly through technical defaults -- which in turn generated millions more in fees for Credit Suisse." About Yellowstone Club Located near Big Sky, Montana, Yellowstone Club -- http://www.theyellowstoneclub.com/-- is a private golf and ski community with more than 350 members, including Bill Gates and Dan Quayle. The Company was founded in 1999. Yellowstone Mountain Club LLC and its affiliates filed for Chapter 11 on November 10, 2008 (Bankr. D. Montana, Case No. 08- 61570). The Company's owner affiliate Edra D. Blixseth, filed for Chapter 11 on March 27, 2009 (Case No. 09-60452). Connie Sue Martin, Esq., David A. Ernst, Esq., Lawrence R Ream, Esq., Richard G. Birinyi, Esq., Stephen Deatherage, Esq., Thomas L. Hutchinson, Esq., and Troy Greenfield, Esq., at Bullivant Houser Bailey PC; and James A. Patten, Esq., at Patten, Peterman, Bekkedahl & Green PLLC, represent the Debtors as counsel. The Debtors hired FTI Consulting Inc. and Ronald Greenspan as CRO. The official committee of unsecured creditors in the case are represented by J. Thomas Beckett, Esq., and David P. Billings, Esq., at Parsons, Behle and Latimer, as counsel, and James H. Cossitt, Esq., at local counsel. Credit Suisse, the prepetition first lien lender, is represented by Skadden, Arps, Slate, Meagher & Flom. * Cost of Personal Bankruptcy in Ontario to Double, Says Hoyes -------------------------------------------------------------- Ontario-based firm Hoyes, Michalos & Associates Inc., says that the Canadian Federal Government has announced that significant changes to bankruptcy law that were first passed by Parliament in 2005 will be brought into force on September 18. Under these new rules the length of bankruptcy (and therefore the cost of filing bankruptcy) will more than double for many insolvent individuals, the firm said. "The timing of these new rules is incredibly bad," notes Douglas Hoyes, a bankruptcy trustee with Hoyes. "The government created these rules during the boom in 2005, but now Canadians are suffering through the worst recession since the Great Depression, and now even bankruptcy relief will be harder to get," says Hoyes. "Personal bankruptcy filings over the last year are up by more than 32%," adds Hoyes. "We meet with people every day who are losing their jobs. Now, to add insult to injury, the cost of obtaining the relief for these people will be significantly more," says Ted Michalos, a bankruptcy trustee with Hoyes. "The timing shows a blatant disregard for the current financial hardships facing many Canadians," adds Mr. Michalos. What does the new law mean to those facing financial dire straits? Under current rules most personal bankruptcies end in nine months. Effective September 18 all bankrupts will be subject to an income test, and those earning more than $200 per month over the limit set by the government will see their bankruptcy period automatically extended to at least 21 months. This change in timing will significantly increase the cost of bankruptcy for many individuals. The government has also added a curious new disclosure requirement for persons filing for bankruptcy protection. Effective September 18, all individuals must disclose their level of education in a sworn statement to creditors. "Forcing debtors to admit they didn't finish high school or university just adds insult to injury, for no good reason," says Mr. Michalos. "Calls to our 310-PLAN help line have almost doubled this year. We know that people are extremely worried about the economy, and the impact of these new rules," says Mr. Hoyes. "There are two positive elements to the harsher bankruptcy rules. First, more Canadians will choose to file a consumer proposal as an alternative to bankruptcy," notes Ted Michalos. "In addition, banks will no longer be able to repossess a car or foreclose on a house simply because of a bankruptcy. This will provide some relief to many already stressed individuals," concludes Mr. Michalos. Hoyes, Michalos & Associates Inc. -- http://www.hoyes.com/-- a trustee in bankruptcy firm with offices throughout Ontario, helps people in financial difficulty. For further information: Douglas Hoyes, CA, Trustee in Bankruptcy, E-mail: doug@hoyes.com, Tel: (519) 568-4020; Ted Michalos, CA, Trustee in Bankruptcy, E-mail: ted@hoyes.com, Tel: 310-PLAN (310-7526, no area code required) or 1-866-747-0660 * IATA Predicts Worldwide Airline Losses of $11 Billion in 2009 --------------------------------------------------------------- The International Air Transport Association said September 15 a revised global financial forecast predicting airline losses totaling US$11 billion in 2009. This is US$2 billion worse than the previously projected US$9 billion loss due to rising fuel prices and exceptionally weak yields. Industry revenues for the year are expected to fall by US$80 billion (15%) to US$455 billion compared with 2008 levels. IATA also revised its loss estimates for 2008 from a loss of US$10.4 billion to a loss of US$16.8 billion. This revision reflects restatements and clarification of the accounting treatment of very large revaluations to goodwill and fuel hedges. IATA industry profit figures strip-out such extra-ordinary items which are not realized in cash terms. "The bottom line of this crisis -- with combined 2008-9 losses at US$27.8 billion -- is larger than the impact of 9/11," said Giovanni Bisignani, IATA's Director General and CEO. Industry losses for 2001-2002 were US$24.3 billion. "This is not a short- term shock. US$80 billion will disappear from the industry's top line. That 15% of lost revenue will take years to recover. Conserving cash, careful capacity management and cutting costs are the keys to survival. The global economic storm may be abating, but airlines have not yet found safe harbor. The crisis continues," said Mr. Bisignani. Three main factors are driving the expected losses: * Demand: Passenger traffic is expected to decline by 4.0% and cargo by 14% for 2009 (compared to declines of 8.0% and 17% respectively in the June forecast). By July, cargo demand was -11.3% and passenger demand was -2.9%. While both are improvements over the lows of -23.2% for cargo (January) and -11.1% for passenger (March), both markets remain weak. * Yield: Yields are expected to fall 12% for passenger and 15% for cargo, compared to declines of 7% and 11% respectively in the June forecast. The fall in passenger yield is led by the 20% drop in demand for premium travel. Cargo utilization remains at less than 50% despite the removal of 227 freighters from the global fleet. There is little hope for an early recovery in yields in either the passenger or cargo markets. * Fuel: Spot oil prices have been driven up sharply in anticipation of improved economic conditions. Oil is now expected to average US$61 per barrel (Brent) for the year (up from US$56 per barrel in the June forecast). This will add US$9 billion in cost for a total expected fuel bill of US$115 billion. "The optimism in the global economy has seen passenger and freight volumes rise, but that is the only bright spot. Rising costs and falling yields have squeezed airline cash flows. The sharp decline in yields will leave a lasting mark on the industry's structure. And revenues are not likely to return to 2008 levels until 2012 at the earliest," said Mr. Bisignani. "With cash flows substantially down over the first half of the year, the situation is critical. Larger carriers have built-up cash reserves of US$15 billion - a war chest that is warding off a major cash crisis. But the outlook for small and medium sized carriers - with limited options to raise cash - is much more severe," said Mr. Bisignani. The regional picture is varied: * North American carriers are expected to post losses of US$2.6 billion, more than double the previously forecast loss of US$1.0 billion. Early resizing of capacity matched the slump in demand. But yields remain weak and recovery in travel demand is being held back by high levels of debt and unemployment. * European carriers are expected to post the largest losses, US$3.8 billion. This is also more than double the previously forecast US$1.8 billion loss. Key long-haul markets were hit by the world trade collapse and delays in relaxing slot regulations prevented a timely reduction in capacity. * Asia-Pacific carriers will post losses of US$3.6 billion, similar to the US$3.3 billion previously forecast. Worst hit by the recession and fuel hedging losses at the end of 2008, the region's carriers are the first to benefit from reviving Asian economic growth and the modest restocking of inventories in the West. * Latin American carriers are expected to break even, an improvement from the previously forecast loss of US$0.9 billion and the best performance among the regions. Airlines in this region are benefiting from more robust economies and less of the consumer debt headwind seen in North America. * Middle East carriers will also see an improved outlook, from a loss of US$1.5 billion to a loss of US$0.5 billion. Airlines continue to gain long-haul market share with expanded capacity and hub connectivity. The weakness of economic recovery, however, could mean continued excess capacity and further losses. * The outlook for Africa's carriers is unchanged with an expected loss of US$0.5 billion. In spite of many economies on the continent continuing to grow during the global recession, African airlines were not able to benefit and lost market share. Further losses are expected in this region next year. "This is not an airline-only crisis. There is less cash coming into the industry and the entire value chain must be prepared for change. All our business partners - including airports, air navigation service providers, global distribution systems - must be prepared to cut costs and improve efficiencies. Some airports have delivered cost reductions, but not in line with the magnitude of the changes to the industry cash flow," said Mr. Bisignani. "Governments need a wake-up call to create a policy framework that supports a competitive air transport sector capable of driving economic expansion. But European governments are fixated on using environment as an excuse to squeeze more taxes out of the industry. And the US is not moving fast enough to deliver the critical advantages to competitiveness that NextGen air traffic management will bring," said Mr. Bisignani. "We don't want bailouts. But we need governments to look more seriously at this sector by (1) investing in efficient infrastructure, (2) replacing the proliferation of environmental taxes with a global solution for the environment and (3) giving airlines normal commercial freedoms to merge where it makes sense and to access markets and global capital like any other business," said Mr. Bisignani. 2010 IATA expects losses to continue into 2010 with the industry expected to report a US$3.8 billion net loss. This is based on a limited revival of growth in traffic volumes of 3.2% for passenger and 5% for cargo; very little increase in yields of 1.1% for passenger and 0.9% for cargo and oil at US$72 per barrel. IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic. * LeFrak, Ross Bid on FDIC Troubled Assets ------------------------------------------ Real estate developer Richard LeFrak and investor Wilbur Ross bid on some Federal Deposit Insurance Corp. troubled assets at a recent auction, Lefrak told CNBC, according to Bloomberg News. "We expect to hear what results of that auction were, and it could very well be that there was vigorous bidding at that auction and that vigorous bidding will establish values for some of the toxic assets," Mr. LeFrak told CNBC. The FDIC is encouraging private-equity investors to bid on assets of collapsed banks as the pace of failures reaches a 17-year high with 92 so far this year. The surge has forced the FDIC to enter loss-sharing arrangements and absorb other costs to unload the assets of failed lenders. 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's deposit insurance fund 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. Meanwhile, Senator Carl Levin, a Michigan Democrat, sent a letter asking FDIC Chairman Sheila Blair to spare smaller banks from additional fees to replenish agency reserves being drained by bank failures. Sen. Levin said the FDIC should instead borrow money from the U.S. Treasury. * Reader's Digest, Taylor Bean Led Bankruptcies Since Mid-August ---------------------------------------------------------------- The Reader's Digest Association, Inc., and Taylor Bean & Whitaker Mortgage Corp. are the billion-dollar cases filed since mid-August 2009. Reader's Digest had $2.2 billion in total assets and $3.4 billion in total liabilities when it filed for bankruptcy. Reader's Digest filed together with 47 affiliates in the U.S. Bankruptcy Court for the Southern District of New York. Taylor Bean & Whitaker Mortgage Corp. disclosed more than $1 billion in both total assets and total debts when it filed for bankruptcy before the U.S. Bankruptcy Court for the Middle District of Florida. The number of bankruptcy filings by companies with assets exceeding $1 billion has increased to 19 since April 16: Total Total Petition Bankruptcy Assets Debts Company Date Court ($ in MM) ($ in MM) ------- -------- ---------- --------- --------- AbitibiBowater 04/16/09 Delaware $9,900 $8,700 General Growth 04/16/09 Manhattan $29,500 $27,200 Source Interlink 04/27/09 Delaware $2,400 $1,900 Chrysler LLC 04/30/09 Manhattan $39,300 $55,200 Thornburg Mortgage 05/01/09 Maryland $24,400 $24,700 Hayes Lemmerz 05/11/09 Delaware $1,300 $1,400 ION Media 05/19/09 Manhattan $1,855 $1,936 Visteon 05/28/09 Delaware $4,577 $5,324 General Motors 06/01/09 Manhattan $82,290 $172,810 Fontainebleau 06/09/09 S. Florida More Than More than Las Vegas $1 Bil. $1 Bil. Crescent Resources 06/10/09 W. Texas More Than More than $1 Bil. $1 Bil. Six Flags 06/13/09 Delaware $2,907 $3,432 Extended Stay 06/15/09 Manhattan $7,100 $7,600 Opus West Corp. 07/06/09 N. Texas $1,275 $1,462 Lear Corp 07/07/09 Manhattan $1,271 $4,536 Station Casinos 07/28/09 Nevada $5,725 $6,482 Cooper-Standard 08/04/09 Delaware $1,733 $1,785 Reader's Digest 08/24/09 Manhattan $2,200 $3,400 Taylor Bean 08/24/09 M. Florida More Than More than $1 Bil. $1 Bil. Lehman Brothers Holding Corp. remains the biggest corporate bust in history. Lehman, which filed in 2008, had $639 billion in total assets and $613 billion in total debts at that time of its filing. General Motors is the biggest bankruptcy of 2009, thus far. Of the 19 mega cases filed since April 15, six cases went to Delaware and another seven cases went to Southern District of New York in Manhattan. (A) Reader's Digest Reader's Digest is a global multi-brand media and marketing company that markets books, magazines, and music, video and educational products. 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 approximately 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. 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. Curtis Mallet-Prevost, Colt & Mosle LLP serves as conflicts counsel. Ernst & Young LLP acts as auditor. Miller Buckfire & Co, LLC, serves as financial advisor. AlixPartners, LLC, serves as restructuring consultant. Kurtzman Carson Consultants serves as notice and claims agent. Prior to the filing, more than 80% of the Company's senior secured lenders signed on to a plan agreement in principle, under which holders of the Company's $1.6 billion in senior secured debt will receive (i) a $300 million second priority term loan, (ii) reinstatement of the prepetition Euro Term Loan, (iii) 100% of the new stock of reorganized Reader's Digest. Holders of unsecured claims related to operations will receive payment in full in the ordinary course. Recovery by holders of other unsecured claims is yet to be determined. The Plan does not provide for any recoveries to the Debtors' senior subordinated noteholders or current equity. There is an "equity buy in" feature that would allow qualifying holders of the Debtors' senior subordinated notes to purchase up to $50 million to 100 million of the shares of the reorganized company, for total ownership of no more than 10% to 20%. A full-text copy of the Restructuring Support Agreement is available for free at http://researcharchives.com/t/s?422e According Reader's Digest, its senior secured debt, during 2009, traded between 25% and 50% of face amount. At the time of the filing, the current market indication for its unsecured senior subordinated notes was 1% of face amount. The filing applies only to the U.S. businesses -- operations in Canada, Latin America, Europe, Africa, Asia and Australia-New Zealand are not part of the filing. Reader's Digest's senior lender group committed $150 million in new debtor-in-possession financing, which is convertible into exit financing upon emergence. Diana G. Adams, the United States Trustee for Region 2, has appointed a seven-member Official Committee of Unsecured Creditors in the case, which consists of -- The Bank of New York Mellon; Wilfrid Aubrey LLC; Thomas M. Kenney; RR Donnelley & Sons Company; Madison Paper Company (ALSIP Location); Williams Lea, Inc.; and New Page Corporation. (B) Taylor Bean Taylor Bean is a 27-year-old company that grew from a small Ocala- based mortgage broker to become one of the largest mortgage bankers in the United States. In 2009, Taylor Bean was the country's third largest direct-endorsement lender of Federal Housing Administration-insured loans of the largest wholesale mortgage lenders and issuer of mortgage backed securities. It also managed a combined mortgage servicing portfolio of roughly $80 billion, and employed more that 2,000 people in offices located throughout the United States. On August 3, 2009, the FHA suspended Taylor Bean's authority to issue FHA-insured loans, which was immediately followed by notices from the Government National Mortgage Association (Ginnie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) suspending Taylor Bean as an issuer of mortgage-backed securities and mortgage seller/servicer. These agencies immediately transferred servicing from Taylor Bean to other providers. Taylor Bean appealed the termination but had no way to continue normal business operations in the interim, forcing the Company to abruptly lay off about 2,000 employees on August 5. The Company said the events are related to various investigations surrounding the failure of Colonial Bank, which for years was Taylor Bean's primary bank. On August 6, 2009, approximately 100 Taylor Bean bank accounts were frozen by Colonial Bank. This action created myriad problems in processing borrower payments and making payments on their behalf -- such as homeowner's insurance premiums and real estate taxes. This also resulted in the issuance of cease and desist orders and other administrative proceedings by numerous state regulators. Taylor Bean filed for Chapter 11 on August 24 (Bankr. M.D. Fla. Case No. 09-07047). Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, in Tampa, Florida, represents the Debtor. Troutman Sanders LLP acts as special counsel. BMC Group Inc. serves as claims agent. Neil Luria at Navigant Capital Advisors was named Chief Restructuring Officer. According to Ocala.com, Taylor Bean's lawyer, J. David Dantzler Jr., Esq., at Troutman Sanders said "[Chapter 11 bankruptcy] was not filed with the specific intention that it would restructure. . . . We're trying to get the Chapter 11 on footing so [the company] can sort out a lot of issues. As time goes forward, a lot of the options that were available a week ago may not be available, but . . . new options might become available." Notable Filers On September 1, 2009, Freedom Communications Holdings, Inc., and 50 affiliates, filed for Chapter 11 in Delaware. The Irvine, California-based company disclosed $757 million in total assets and $1.077 billion in total debts. Latham & Watkins, LLP and Young Conaway Stargatt & Taylor LLP serve as legal counsel. During the past 30 days ended September 14, six companies with at least $100 million in total assets filed for bankruptcy: -- Long Island, NY-based Cynergy Data LLC and 2 affiliates; -- Mansfield, MA-based Samsonite Company Stores, LLC; -- Nevada, TX-based Everest Holdings, LLC; -- Salt Lake City, UT-based Formidable LLC; -- Royal Oak, MI-based FormTech Industries LLC and 1 affiliate; and -- Aventura, FL-based Cabi Downtown, LLC Freedom Communications is a national privately owned information and entertainment company of print publications, broadcast television stations and interactive businesses. Freedom Communications had $757,000,000 in assets against debts of $1,077,000,000 as of July 31, 2009. Freedom Communications filed with the Bankruptcy Court its plan support agreement reached with lenders prepetition. 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. Launched in 1995, Cynergy Data is a merchant credit card processing service provider. Cynergy Data said that it had assets of $109,546,132 against debts of $186,183,032 as of June 30, 2009. Cynergy Data filed for Chapter 11 to complete the sale of all of its assets to Cynergy Holdings, LLC, an affiliate of The ComVest Group, which will serve as stalking horse bidder in an auction. Samsonite Company Stores, the U.S. retail division of Samsonite Corporation, filed a proposed Chapter 11 plan together with its bankruptcy petition. Under the plan, 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. However, claims in connection with certain real property leases that the Debtor rejects in the Chapter 11 case or pursuant to the Plan will be capped by operation of the Bankruptcy Code. The Debtor intends to reject up to 84 of its 173 store leases. Samsonite disclosed $233 million in total assets and $1.5 billion in total liabilities as of July 31. An affiliate of Everest Holdings owns The Landmark and The Meridian residential condominium towers, and The Village Shops retail project. Under Chapter 11, the Everest Holdings debtors will seek to restructure and extend an existing construction financing with senior lender, Hypo Real Estate Capital Corporation. Formidable LLC is in the oil and gas industry. Lon A. Jenkins, Esq., and Troy J. Aramburu, Esq., at Jones Waldo Holbrook & McDonough, represent the Debtor in its restructuring effort. FormTech Industries is among the largest independent manufacturers of forged automotive parts in North America. FormTech was adversely impacted by the precipitous decline in automotive production in the first half of 2009. Through this time period, FormTech remained a highly reliable supplier and substantially restructured its operations. HHI Funding LLC has been named stalking-horse bidder for the Debtors' assets. HHI Funding is the Debtors' DIP lender and has agreed to provide $8.5 million in financing. Cabi Downtown operates a real estate business. Cabi Downtown is selling condominium units in Everglades on the Bay, free and clear of all liens, and encumbrances. Owed $209 million, BofA has filed a motion asking for dismissal of the bankruptcy, claiming it was filed in "bad faith" to prevent foreclosure. Another filer -- Trident Resources Corp. and four affiliates, which filed for bankruptcy September 8 -- had $10 million to $50 million in total assets, and $500 million to $1 billion in total liabilities. Bankruptcy Filings Continue to Climb The total number of U.S. bankruptcies filed during the first six months of 2009 increased 36% over the same six month period in 2008, according to data released in August by the Administrative Office of the U.S. Courts. Total filings reached 711,550 during the first half of the calendar year of 2009 (January 1-June 30), compared to 522,205 cases filed over the same period in 2008. "The increase in filings through the first half of this year is a product of continued financial stresses weighing on both consumers and businesses," said American Bankruptcy Institute Executive Director Samuel J. Gerdano. "In this challenging economic environment, we expect bankruptcies to surge past 1.4 million by year end." Business filings for the six-month period ending June 30, 2009, totaled 30,333, representing a 64% increase over the first-half 2008 total of 18,456. Chapter 11 business reorganizations increased 113% to 7,396 during the first half of 2009 from 3,470 in the same period of 2008. Chapter 7 business liquidations increased to 20,375 in the first half of 2009, a 57% increase over the 13,002 business chapter 7 filings during the same period in 2008. The 381,073 total filings for the second calendar quarter 2009 (April 1-June 30) represented a 38% increase from the second quarter 2008 filing total of 276,510. Business filings in the second quarter of 2009 increased 64% to 16,014 over the 9,743 business filings in the second quarter 2008. The second quarter 2009 business filings were the highest total since the second quarter of 1993 when business filings reached 16,424. Consumer filings increased 37% from 266,767 recorded in the second quarter of 2008 to 365,059 filings in the second quarter 2009. * Retailers, Suppliers See Spending to Lag Market Recovery ---------------------------------------------------------- Faced with one of the most challenging years on record, retailers and those who supply them believe that consumer spending will lag the turnaround of the U.S. financial markets, according to a new study released by CIT Group Inc. According to the study, 47% of retail respondents believe the financial markets will turn around next year; separately, 45% believe that consumer spending will not return to 2007 levels until 2011 or 2012. The continuing softness in the retail market has caused many retailers to reevaluate and adjust their business models. They are taking a more conservative and cautious approach to the upcoming holiday season by controlling their inventories, and are planning more aggressive discounts earlier in the season. Other key findings among retail respondents include: -- 67% will stock less inventory than in 2008; -- 69% will expand online and direct selling; -- 56% will advertise more aggressively; -- 66% will offer greater discounts; and -- 68% will hold clearance and other sales prior to New Year's Day. The research report, "U.S. Small and Middle Market Outlook 2009: Retailers and Suppliers Take Stock of Economic Downturn," examines how retailers and their suppliers are navigating through the current financial crisis. It is the third in a series of four studies that Forbes Insights has produced this year in association with CIT. "These results corroborate what we have been hearing anecdotally from the marketplace," said Burt Feinberg, Managing Director and Industry Group Head of Retail Finance at CIT. "Many retailers continue to be concerned about consumer demand and are following conservative inventory and pricing tactics in anticipation of the upcoming holiday season, trying to maintain liquidity, so that they can be better positioned for what is hopefully resumption in consumer spending in 2010." Jon Lucas, Executive Vice President and Chief Sales Officer of Trade Finance at CIT, said, "The decline in consumer spending has trickled down from retailers to the manufacturers and vendors that supply them. Many of these suppliers are managing through this business cycle by cutting expenses, imposing more stringent credit terms on their retail customers, and doing less business with slow paying retailers. In addition, many have turned to factoring and credit protection services to protect the value of their accounts receivable, if they do not already have those relationships in place." Noteworthy findings: -- Cautiously awaiting the return of consumer confidence. While half of middle-market retailers saw their revenues decline over the past 12 months, 41% expect their revenues to grow over the next year. However, growth rates may be tempered by consumer spending issues; only about one-third (32%) indicated that they expect consumer spending to reach 2007 levels in 2010, while nearly 45% thought it would take at least until 2011 or 2012 for such spending to resume, and 17% said it would occur after 2012. -- Cutting costs and conserving cash. In light of the economic downturn, retailers have had to alter their strategies. Forty-six percent have reduced their staff levels, 42% halted planned expansions, 29% delayed store renovations, 29% re-merchandised their shelves, and 21% closed stores. In addition, 40% renegotiated their rent and 38% received other concessions from their landlords. -- Increased M&A activity on the horizon. Nearly half (48%) of all respondents expect M&A activity to increase over the next 12 months. They believe that the primary drivers of M&A activity will be the greater availability of credit (34%), reduced valuations (32%) and the need for weaker companies to merge (26%). -- Inventory issues: Many retailers have already reduced their inventory levels -- 43% indicated that their current inventory levels are lower or significantly lower than they were a year ago. The cuts may not be deep enough; as nearly half (48%) of respondents said that they should have carried less inventory during the first half of 2009. The end result: 46% of retailers have cut prices in order to accelerate inventory turns. -- Retailer bankruptcies impacting suppliers. Two-thirds (66%) of suppliers have been affected by a retail customer bankruptcy and 59% expect additional retail bankruptcies in the next 12 months. In addition, 23% of suppliers said that they are using factoring and credit insurance more to protect themselves from possible customer bankruptcies. -- Managing customer relationships. To protect their businesses, more than half (60%) of suppliers are doing less business with retail customers with weak finances; 60% are monitoring their accounts receivable more closely; 54% are imposing more stringent credit terms and 39% are requiring deposits for new customers. At the same time, 30% are offering incentives to retail customers who pay early. Middle market companies, a key component of the U.S. economy, account for more than $6 trillion in sales and employ almost 32 million Americans. U.S. small businesses employ nearly 59 million Americans (approximately half of all private-sector jobs), constitute approximately 97% of all identified exporters, and produce approximately 29% of the known export value. Complimentary copies of the report are available for download at: http://middlemarket.cit.com/ The information in the U.S. Small and Middle Market Outlook 2009: Retailers and Suppliers Take Stock of Economic Downturn is based on the results of two surveys and a series of one-on-one interviews conducted by Forbes Insights in July and August 2009. The first survey questioned 110 executives and financial decision makers at middle market retailers. All companies had revenues of $25 million to $1 billion. Respondents represented a broad range of retail segments, including specialty apparel, consumer electronics, appliances, sporting goods, convenience stores, housewares, and discount chains. All respondents held senior- level titles (including CEO, COO, CFO, and VP) and had functional responsibility for finance, strategy and business development, or general management. The second survey queried 104 executives and financial decision makers at suppliers to the middle market retailer sector. All companies had revenues of $2 million to $1 billion; slightly under half weighed in at less than $50 million. These suppliers represented a broad range of market segments, including apparel and accessories, consumer electronics, housewares, footwear, home furnishings, and other retail. All respondents held senior-level titles (including CEO, COO, CFO, and VP) and/or held functional responsibility for a business unit or department. Over half were either a CEO or owner. The interviewees were not clients of CIT. About CIT The CIT Group -- http://www.cit.com/-- is a bank holding company with more than $60 billion in finance and leasing assets that provides financial products and advisory services to small and middle market businesses. Operating in more than 50 countries across 30 industries, CIT provides an unparalleled combination of relationship, intellectual, and financial capital to its customers worldwide. CIT maintains leadership positions in small business and middle market lending, retail finance, aerospace, equipment and rail leasing, and vendor finance. Founded in 1908 and headquartered in New York City, CIT is a member of the Fortune 500. About Forbes Insights Forbes Insights -- http://www.forbes.com/forbesinsights-- is the custom research practice of Forbes Media, publisher of Forbes magazine and Forbes.com, whose combined media properties reach nearly 50 million business decision makers worldwide on a monthly basis. Taking advantage of a proprietary database of senior-level executives in the Forbes community, Forbes Insights' research covers a wide range of vital business issues, including talent management, corporate social responsibility, financial benchmarking, risk and regulation, and doing business in emerging markets. * Lawline.com and WKLB to Tackle Financial Reform ------------------------------------------------- Lawline.com, a leading provider of Online Continuing Legal Education, along with CCH and Aspen Publishers, part of Wolters Kluwer Law & Business, a leading provider of research products and software solutions in key legal specialty areas, have come together with a shared vision to provide timely high quality education to professionals in a rapidly fluctuating economic environment. Since the fall of Lehman Brothers one year ago today, Lawline.com has seen a tremendous increase in the demand for its courses in both banking and securities law. As a response, it supplemented its programs in these practice areas to better serve the legal and financial community. Through the CCH Financial Crisis News Center, Lawline.com customers will be able to read about the most recent news and happenings affecting the financial community. "The fallout from the financial crisis has been sweeping, and we realize now just how close the system came to collapse last year," says David Schnurman, President of Lawline.com. "With President Obama addressing Wall Street and the nation today about the need for reform and strengthening oversight, we know it's more important than ever to ensure we offer the best, most timely information. It just made sense for us to team with CCH and Aspen Publishers as they are the leaders in legal and financial information." Lawyers and other professionals will be able to link with special promotion codes to Lawline.com banking and securities courses through the CCH Financial Crisis News Center. "Teaming with Lawline.com, a leading provider of online CLE course delivery, is another example of how CCH and Aspen customers can count on us to deliver the most valuable and specific tools and services to help in their day-to-day practice and career training," said Steve Errick, Legal Education Managing Director, Wolters Kluwer Law & Business. The courses will be available through the CCH Financial Crisis News Center web site starting this week. Topics include securities fraud, bankruptcy, SEC, lending regulations, foreclosures, among many others. For more information on the courses visit: http://www.lawline.com/cch For more information on the Financial Crisis News Center visit: http://www.financialcrisisupdate.com/ About Lawline.com Established in 1999, Lawline.com has rapidly become a leading provider of Online Continuing Legal Education courses for attorneys across the country. Focusing on its customers, technology, and content has always been its primary mission. In 2009, Lawline.com was nominated as a finalist for Best Practices in Customer Service by the New York Enterprise Report. In addition to producing its own high quality programming, Lawline.com has partnered with bar associations, law schools, and CLE providers across the country to bring the best possible course catalog to its diverse customer base of attorneys. To learn more about Lawline.com's goals and philosophy please visit: http://www.lawline.com/information/about.html/ About Wolters Kluwer Law & Business Wolters Kluwer Law & Business is a leading provider of research products and software solutions in key specialty areas for legal and business professionals, as well as casebooks and study aids for law students. Its major product lines include Aspen Publishers, CCH, Kluwer Law International and Loislaw. Its markets include law firms, law schools, corporate counsel and professionals requiring legal and compliance information. Wolters Kluwer Law & Business, a unit of Wolters Kluwer -- http://www.wolterskluwer.com/-- is based in New York City and Riverwoods, Ill. Wolters Kluwer is a global information services and publishing company * Konstantin Konstantinov Rejoins Chadbourne & Parke in Moscow -------------------------------------------------------------- Chadbourne & Parke LLP said Konstantin Konstantinov has rejoined Chadbourne's practice in the Russian Federation as a partner in its Moscow office. Mr. Konstantinov had practiced with Chadbourne for over 11 years. For a short period of time he worked at Dechert LLP which established a presence in Russia recently. He has now returned to Chadbourne. Mr. Konstantinov, a Harvard educated Russian advocate, is admitted to practice in both New York and Russia. He advises clients on international commercial and financial matters, including project finance, securities regulation, secured finance, debt restructuring and mergers and acquisitions. "We are very pleased to welcome back Konstantin as the sixth resident partner in our Moscow office," said Chadbourne Managing Partner Charles K. O'Neill. "Our lawyers and our clients know him as an outstanding transactional lawyer and an extremely valued colleague and advisor." Chadbourne's Moscow office was established in 1990 and has been recognized as one of the leading law offices in Russia, most recently by Acquisition Finance Magazine and International Law Office. The firm's St. Petersburg office opened in 2005. Each of the partners in Moscow and St. Petersburg has more than a decade of experience advising clients on Russian transactions. Chadbourne's Moscow office is a full service practice, providing Russian, English and U.S. legal advice to clients on a wide range of matters, including corporate, finance and litigation. It is supported by over 400 lawyers in 11 other Chadbourne offices, including Kyiv, Almaty and Warsaw. "As it has been for almost 20 years, Chadbourne & Parke continues to be committed to Russia and to our CIS practice," said Moscow Senior Partner Mikhail Rozenberg. Added Jennifer Handz, Moscow Managing Partner, "I echo the sentiments expressed by Charlie O'Neill in New York and Mikhail Rozenberg here in Moscow. We intend to take full advantage of Konstantin's prominent reputation as a leading international practitioner, and we are delighted to have him back." About Chadbourne & Parke Chadbourne & Parke LLP -- http://www.chadbourne.com/-- an international law firm headquartered in New York City, provides a full range of legal services, including mergers and acquisitions, securities, project finance, private funds, corporate finance, energy, communications and technology, commercial and products liability litigation, securities litigation and regulatory enforcement, special investigations and litigation, intellectual property, antitrust, domestic and international tax, insurance and reinsurance, environmental, real estate, bankruptcy and financial restructuring, employment law and ERISA, trusts and estates and government contract matters. Major geographical areas of concentration include Central and Eastern Europe, Russia, the Middle East and Latin America. The Firm has offices in New York, Washington, DC, Los Angeles, London (an affiliated partnership), Moscow, St. Petersburg, Warsaw (a Polish partnership), Kyiv, Almaty, Dubai and Beijing. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Sept. 10-11, 2009 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 2, 2009 AMERICAN BANKRUPTCY INSTITUTE ABI/GULC "Views from the Bench" Georgetown University Law Center, Washington, D.C. Contact: http://www.abiworld.org/ Oct. 7-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Oct. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Paris Las Vegas, Las Vegas, Nev. Contact: http://www.abiworld.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 21-23, 2010 INSOL International Annual Regional Conference Madinat Jumeirah, Dubai, UAE Contact: 44-0-20-7929-6679 or http://www.insol.org/ Apr. 29-May 2, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2010 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Ritz-Carlton Amelia Island, Amelia, Fla. Contact: http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 6-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Last Updated: August 10, 2009 ********* 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 **